United States District Court, E.D. Louisiana
ORDER & REASONS
the Court is pro se Third-Party Plaintiff Kristian
Craige's (“Craige”) Motion to Re-Urge a
Non-Prescribed Claim, R. 26. In response, Third Party
Defendants Citimortgage, Inc., Citibank, N.A., and Citigroup
Inc. (the “Citi Entities”) have filed a Motion to
Dismiss. R. 29. Craige opposes the Motion to Dismiss. R. 34.
Having reviewed the parties' briefs and the applicable
law, the Court now issues this Order & Reasons.
tort case involves a dispute arising out of a promissory note
executed by Kristian Craige, dated June 16, 2003, regarding
an Act of Mortgage executed on the same date. R. 1-1 at 1.
The note was executed in favor of New Freedom Mortgage
Corporation in the principal amount $73, 369.00 and
stipulating 6% interest per annum on the unpaid balance. R.
1-1 at 1. While the viability of the transfers is disputed,
the record indicates that New Freedom Mortgage endorsed the
mortgage note to Citimortgage, Inc., and Citimortgage, Inc.
in turn endorsed the note to Midfirst Bank. R. 1-1 at 2. On
December 17, 2014, Midfirst Bank instituted foreclosure
proceedings in state court to collect on the unpaid principal
on the note, $65, 795.39. R. 1-1 at 3. According to the
Petition filed in state Court, Craige had not made his
scheduled mortgage payments since May 1, 2014. R. 1-1 at
March 15, 2016, Craige filed a pro se counterclaim
in state court against Midfirst Bank
(“Midfirst”), Citimortgage, Inc., Citibank N.A.,
and Citigroup Inc (“the Citi Entities”). Craige
argues the Defendants conspired to commit fraud against his,
and deprive him of his property. The counterclaim alleges
numerous procedural errors committed by Midfirst during the
foreclosure process, and also claims that the assignment of
the note “has yet to be verified.” R. 1-2 at 3.
26, 2016, the Court held that Plaintiff's tort claims
were prescribed, but granted leave for Plaintiff to amend his
complaint and re-assert any non-prescribed claims. R. 19. On
August 24, 2016, Plaintiff filed a motion to “re-urge
any non-prescribed claims, ” but did not specify any of
the new claims he wished to assert against Defendants. R. 21.
The Court denied the Motion and explained that Plaintiff was
barred from re-urging the claims in the initial Complaint, as
the Court already determined those claims had prescribed. R.
23. The Court granted Plaintiff a third opportunity to file
another Complaint alleging a non-prescribed claim, if such a
claim exists. R. 23.
response, Plaintiff filed a motion to re-urge a Complaint
with non-prescribed claims against any of the parties. R. 26.
Plaintiff appears to assert four additional claims, which he
contends are not prescribed. First, Plaintiff brings a breach
of contract claim against the Citi Entities. R. 26 at 3. He
makes two arguments in relation to the breach of contract
claim. First, he explains that the note and mortgage were
bifurcated because the “promise to pay” was
placed in a trust with the SEC and later sold for profit. R.
26 at 3. Plaintiff contends that he did not consent to this
process, and argues that once the note, mortgage and deed are
bifurcated, the property can only be foreclosed if the holder
of the deed trust is the agent of the note holder. R. 26 at
3. His second argument in support of the breach of contract
claim is that he entered into a consumer credit loan, which
was subsequently endorsed to the New Freedom Mortgage
Corporation, which endorsed to note to MidFirst Bank. R. 26
at 3. Plaintiff avers that he did not consent to this
transfer, the transfer was a breach of the mortgage contract,
and therefore he is entitled to the proceeds of the trust
that was created to effectuate the transfer. R. 26 at 3.
Plaintiff asserts claims for violations of the Uniform
Commercial Code §3-305 and Recoupment. R. 26 at 3-4.
Plaintiff avers that under §3-305 there can be no holder
in due course, because such a transfer would be impossible
under the law. R. 26 at 4. Further, he alleges that a
disclaimer required under 16 CFR 433.2 was
“intentionally omitted” from the initial credit
application. R. 26 at 4-5.
Plaintiff argues that the Citi Entities violated Generally
Accepted Accounting Principles. R. 26 at 4-5. Plaintiff
contends that the banks converted the original executed note
to cash, deposited it in their bank, then loaned the value to
Plaintiff as if the loan came from the bank. R. 26 at 4-5.
According to Plaintiff, if defendants had followed GAAP at
the time of the transaction, the accounting records would
show the “promise to pay” was used to generate
credit to Plaintiff. R. 26 at 4-5.
Plaintiff alleges that he is entitled to quiet title to the
property, because of the Citi Entities fraudulent conduct,
and that he has adverse possession rights. R. 26 at 5-6.
Further, he requests that the Citi Entities counsel and/or
the mortgage servicer be named as a defendant. R. 26 at 6. In
connection to these claims, Plaintiff seeks $4, 000, 000.00
in damages. R. 26 at 6.
MidFirst's Motion to Dismiss (R. 29-1)
Citi Entities have filed a motion to dismiss Craige's
claims under Federal Rule of Civil Procedure 12(b)(6). R.
29-1 at 1-2. First, the Citi Entities argue that Craige has
not alleged any facts to support his breach of contract
claim, but instead relies on wholly conclusory statements. R.
29-1 at 5. In particular, they contend he has not stated
facts which demonstrate the Citi Entities breach an
obligation, or that he suffered damages as a result of any
alleged breach. R. 29-1 at 5. Second, The Citi Entities also
aver that Plaintiff's claim based on UCC 3-305 is not
based in law; Plaintiff alleges that the Citi Entities cannot
be a holder in due course under this provision of the UCC. R.
29-1 at 6. According to the Citi Entities this is in direct
contradiction to Louisiana law, which “specifically
sets forth the means by which the holder of an instrument may
become a holder in due course.” R. 29-1 at 6.
Similarly, the Citi Entities argue that Plaintiff claims
under the Federal Trade Commission Act (FTCA) fail, as the
FTCA does not provide a private right of action to individual
plaintiffs. R. 29-1 at 6 (citing Fulton v. Hecht,
580 F.2d 1243, 1248 (5th Cir. 1978)).
in response to Plaintiff's claim that the Citi Entities
violated Generally Accepted Accounting Principles (GAAP), the
Citi Entities respond that GAAP are a set of principles,
which do not provide a cause of action; and even if they did,
Plaintiff only makes conclusory allegation to support this
supposed claim. R. 29-1 at 6-7. Finally, the Citi Entities
argue that Plaintiff's claim for quiet title must be
dismissed. R. 29-1 at 8. Plaintiff avers that he is entitled
to quiet title to the property because of the fraud committed
by the Citi Entities; however, the Citi Entities argue that
Plaintiff's claims based on fraud have already been
dismissed with prejudice. R. 29-1 at 8. Thus, the Citi
Entities contend that Plaintiff's new claims should also
be dismissed with prejudice. Further, they ...