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Bordelon v. Wells Fargo Financial Louisiana, LLC

United States District Court, E.D. Louisiana

July 26, 2018


         SECTION I

          ORDER & REASONS


         Before the Court are two motions-a motion[1] to dismiss filed by defendant Wells Fargo Financial Louisiana LLC (“WFFL”) and a partial motion[2] to dismiss filed by defendant Wells Fargo Bank, N.A. (“Wells Fargo Bank”) (collectively, “the Wells Fargo defendants”). The Wells Fargo defendants move to dismiss pro se plaintiff Donald W. Bordelon's (“Bordelon”) claims for violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), fraud, and intentional infliction of emotional distress pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the motions are granted.


         This case concerns a state court foreclosure proceeding. Bordelon alleges that the defendants[3] “have been involved in an ongoing enterprise . . . to, through a series of false or misleading statements, foreclose on his immovable property” in Metairie, Louisiana “using false documents filed with the clerk or in court.”[4] According to Bordelon, “[t]he conspiracy involves falsely alleging that [he] was in default on a mortgage note secured by . . . that property . . . and then commencing [a] state court lawsuit [in the 24th Judicial District Court] to foreclose on it when in fact that Note had been paid off.”[5]

         In his complaint, Bordelon alleges and it is undisputed that he, his parents, and his then-wife Geraldine signed a note in 2000 (“the 2000 Note”).[6] Exhibit A to Bordelon's first amended complaint is a copy of the 2000 Note, marked as “PAID.”[7]

         On February 16, 2015, Wells Fargo Bank-acting as a loan servicer for WFFL-filed a notice of reinscription on a loan recorded in Jefferson Parish in 2000.[8]According to Bordelon, the notice appears to reference the 2000 Note.[9] One year later, on February 16, 2016, attorney Herschel Adcock filed a petition in state court to enforce a note on behalf of WFFL, naming the four signatories listed on the 2000 Note as the defendants.[10] The petition states that the defendants defaulted on a note “signed by Donald and Geraldine Bordelon on July 7, 2003 ‘in the original amount of $72, 354.40'” (“the 2003 Note”) by failing to make payments when they were due.[11]

         Attached to the petition is a lost note affidavit describing the 2003 Note.[12]However, attached to the lost note affidavit is the 2000 Note-not the 2003 Note, despite the substance of the affidavit.[13] WFFL later filed an amended and supplemental petition requesting that “all references to a 2000 promissory note . . . be amended to reflect that the Note was signed in 2003.”[14] According to Bordelon, in addition to being sued by the Wells Fargo defendants, he has been receiving demand letters claiming he owes money to an “unidentified lender” “up and through at least April 26, 2018.”[15]

         Bordelon alleges that “these actions were components in a carefully constructed scheme to deprive him of his home based on a Note which had been paid and which he did not owe.”[16] As a result of “this campaign of false mailings . . . and the bogus lawsuit filed in Jefferson Parish Court, ” Bordelon asserts that he “has suffered pecuniary loss in the depreciation of the value of his home . . . [and] extreme emotional distress.”[17]


         Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a district court may dismiss a complaint or part of a complaint when a plaintiff fails to set forth well-pleaded factual allegations that “raise a right to relief above the speculative level.” See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007). The complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 547)).

         A facially plausible claim is one in which “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. If the well-pleaded factual allegations “do not permit the court to infer more than the mere possibility of misconduct, ” then “the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Id. at 679 (quoting Fed.R.Civ.P. 8(a)(2)) (alteration in original).

         The Court will generally not look beyond the factual allegations in the pleadings to determine whether relief should be granted. See Hicks v. Lingle, 370 Fed.Appx. 497, 498 (5th Cir. 2010); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). In assessing the complaint, however, a court must accept all well-pleaded facts as true and liberally construe all factual allegations in the light most favorable to the plaintiff. Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999). “Dismissal is appropriate when the complaint ‘on its face show[s] a bar to relief.'” Cutrer v. McMillan, 308 Fed.Appx. 819, 820 (5th Cir. 2009) (quoting Clark v. Amoco Prod. Co., 794 F.2d 967, 970 (5th Cir. 1986)).

         The established practice in this circuit is that pro se “complaints are held to less stringent standards than formal pleadings drafted by lawyers.” Miller v. Stanmore, 636 F.2d 986, 988 (5th Cir. 1981) (citation omitted). In accordance with this practice, the Court construes Bordelon's pleadings liberally. Harrison v. HICO, Inc., No. 05-2096, 2006 WL 508055, at *2 (E.D. La. Feb. 21, 2006) (Africk, J.) (citing United States v. Riascos, 76 F.3d 93, 94 (5th Cir. 1996)).

         Bordelon has asserted three claims against WFFL: violation of RICO, fraud, and intentional infliction of emotional distress.[18] Bordelon asserts the same claims against Wells Fargo Bank, in addition to one other claim-violation of the Fair Debt Collection Practices Act (“FDCPA”).[19] In their present motions, WFFL and Wells Fargo Bank move to dismiss Bordelon's RICO, fraud, and intentional infliction of emotional distress claims.[20] Although Wells Fargo Bank filed its motion to dismiss after WFFL, the legal arguments in both motions are identical.[21] Hence, the Court will consider them together.


         First, Bordelon asserts that the defendants violated RICO by “falsely dunn[ing] [him] for monies from the year 2000 note which had been paid in full, submitt[ing] false documents . . . and then fil[ing] a foreclosure petition” against him.[22]

         Civil RICO claims “have three common elements: ‘(1) a person who engages in (2) a pattern of racketeering activity, (3) connected to the acquisition, establishment, conduct, or control of an enterprise.'” St. Germain v. Howard, 556 F.3d 261, 263 (5th Cir. 2009) (quoting Abraham v. Singh, 480 F.3d 351, 355 (5th Cir. 2007)). RICO defines a “person” to include “any individual or entity capable of holding a legal or beneficial interest in property.” 18 U.S.C. § 1961(3).

         With respect to the second element, “[a] pattern of racketeering activity consists of two or more predicate criminal acts that are (1) related and (2) amount to or pose a threat of continued criminal activity.” Id. “The predicate acts can be either state or federal crimes.” Id.; see also 18 U.S.C. § 1961(1) (providing an extensive list of crimes that constitute “racketeering activity”). “Predicate acts are ‘related' if they ‘have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events.” In re Burzynski, 989 F.2d 733, 742 (5th Cir. 1993) (quoting H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 240 (1989)).

         To establish the continuity prong of the second element, “plaintiffs must prove ‘continuity of racketeering activity, or its threat.'” Zastrow v. Houston Auto Imports Greenway Ltd., 789 F.3d 553, 561 (5th Cir. 2015) (quoting Word of Faith World Outreach Ctr. Church, Inc. v. Sawyer, 90 F.3d 118, 122 (5th Cir. 1996)). “This may be shown by either a closed period of repeated conduct, or an open-ended period of conduct that ‘by its nature projects into the future with a threat of repetition.'” Id. (quoting H.J. Inc., 492 U.S. at 241).

Continuity over a closed period requires proof of a series of related predicates extending over a substantial period of time. . . . Predicate acts extending over a few weeks or months and threatening no future criminal conduct do not satisfy this requirement. . . . Continuity over an open period requires a threat of continued racketeering activity. . . . This may be established where the predicate acts themselves involve a distinct threat of long-term racketeering activity or are part of an ongoing entity's regular way of doing business.

Id. (internal quotation marks and citations omitted). “[W]here alleged RICO predicate acts are part and parcel of a single, otherwise lawful transaction, ” however, “[i]t is unnecessary to delve into the arcane concepts of closed-end or open-ended continuity under RICO” because, according to the Fifth Circuit, “a ‘pattern of racketeering activity' has not been shown.” Word of Faith, 90 F.3d at 123 (referencing In re Burzynski, 989 F.2d at 743, Calcasieu Marine Nat'l Bank v. Grant, 943 F.2d 1453, 1464 (5th Cir. 1991), and Delta Truck & Tractor, Inc. v. J.I. Case Co., 855 F.2d 241, 244 (5th Cir. 1988)).

         Finally, RICO defines an “enterprise” to include “any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.” 18 U.S.C. § 1961(4). “An association-in-fact enterprise ‘(1) must have an existence separate and apart from the pattern of racketeering, (2) must be an ongoing organization and (3) its members must function as a continuing unit as shown by a hierarchical or consensual decision making structure.'” Allstate Ins. Co. v. Plambeck, 802 F.3d 665, 673 (5th Cir. 2015) (quoting Calcasieu Marine Nat'l Bank, 943 F.2d at 1461).

         “RICO does not require tha[t] an enterprise be a separate business-like entity.” Id. (citation omitted). “Instead, an association-in-fact enterprise includes ‘a group of persons associated together for a common purpose of engaging in a course of conduct,' and that enterprise can be proved with ‘evidence of an ongoing organization, formal or informal, and by evidence that the various associates function as a continuing unit.'” Id. (quoting Boyle v. U.S., 556 U.S. 938, 944-45 (2009)).

         As the Fifth Circuit has explained, “The linchpin of enterprise status is the continuity or ongoing nature of the association.” Id. “The enterprise must have continuity of its structure and personnel, which links the defendants, and a common or shared purpose.” Calcasieu Marine Nat'l Bank, 943 F.2d at 1462. “Thus, two individuals who join together for the commission of one discrete criminal offense have not created an ‘association-in-fact' enterprise, even if they commit two predicate acts during the commission of this offense, because their relationship to one another has no continuity.” Montesano v. Seafirst Commercial Corp., 818 F.2d 423, 427 (5th Cir. 1987). “However, if the individuals associate together to commit several criminal acts, their relationship gains an ongoing nature, coming within the purview of RICO.” Id.

         In its present motions, the Wells Fargo defendants argue that Bordelon has failed to state a claim under RICO because he has not demonstrated that the defendants were part of an enterprise.[23] Citing the U.S. Supreme Court's decision in Boyle, the Wells Fargo defendants assert that Bordelon has not established “that this alleged enterprise is (1) a continuing unit that (2) functions with a common purpose.”[24] In addition, they argue that activity occurring over the course of a single lawsuit does not constitute a “pattern of racketeering activity” because that activity is part of a “single lawful endeavor.”[25] The Court agrees and concludes that Bordelon's civil RICO claims against the Wells Fargo defendants fail because Bordelon has not adequately alleged that the defendants engaged in “a pattern of racketeering activity” that is part of an “enterprise.” St. Germain, 556 F.3d at 263.

         All of Bordelon's allegations involving the Wells Fargo defendants are based solely on their conduct in furtherance of the state court proceeding against Bordelon and others to enforce a note.[26] However, a foreclosure proceeding “is by its nature a one-time resolution of disputed property rights.” See Castrillo v. Am. Home Mortg. Servicing, Inc., 670 F.Supp.2d 516, 531 (E.D. La. Nov. 16, 2009) (Vance, J.). “[W]here alleged RICO predicate acts are part and parcel of a single, otherwise lawful transaction, a ‘pattern of racketeering activity' has not been shown.” Word of Faith, 90 F.3d at 123. A state court foreclosure proceeding fits this mold. See Howell v. Adler, No. 16-14141, 2017 WL 1064974, at *6 (E.D. La. Mar. 21, 2017) (Africk, J.) (“Further, all of the alleged predicate acts occurred during the course of a single, otherwise lawful endeavor-a lawsuit aimed at seizing and selling Howell's mother's condo unit.”) Furthermore, even assuming that Bordelon has established that the Wells Fargo defendants committed two or more predicate criminal acts, [27] their “conduct . . . implicates, at best, ‘[p]redicate acts . . . threatening no future criminal conduct.'” Castrillo, 670 F.Supp.2d at 531 (quoting H.J. Inc., 492 U.S. at 242) (alteration in original). Such acts are not sufficient to show continuity, which is required to establish a pattern of racketeering activity. H.J. Inc., 492 U.S. at 242.

         “It is not relevant to the Court's analysis that the state court foreclosure proceeding . . . is ongoing and has not ended.” Castrillo, 670 F.Supp.2d at 531 (citing In re Burzynski, 989 F.2d at 741). “Although the state court foreclosure proceeding may extend somewhat into the future, it is unlikely to ‘continue[ ] indefinitely.' It is instead likely to be a short-term event, and ‘[s]hort-term criminal conduct is not the concern of RICO.'” Id. (internal citations omitted) (alterations in original).

         Citing a non-precedential Third Circuit case, Bordelon asserts that “RICO is not defined by long term open end continuity [i]f the conduct is sufficiently outrageous.”[28] However, well-pleaded RICO claims undoubtedly must include allegations demonstrating continuity, regardless of the “outrageous” nature of the predicate acts. See, e.g., RJR Nabisco, Inc. v. European Cmty., 136 S.Ct. 2090, 2102 n.6 (referring to the “pattern of racketeering activity” element as including a “continuity requirement”); Malvino v. Delluniversita, 840 F.3d 223, 231 (5th Cir. 2016) (explaining that, to establish a pattern of racketeering activity, “a plaintiff must show . . . the threat of continuing activity”); Calcasieu Marine Nat'l Bank, 943 F.2d at 1461 (“A RICO association in fact enterprise must be shown to have continuity.”) (citation omitted). Bordelon has not adequately alleged continuity of either racketeering activity or a relationship among the defendants intended to further multiple criminal acts. Consequently, his RICO claims must be dismissed.


         Bordelon also asserts that the Wells Fargo defendants committed fraud when they 1) filed a notice of reinscription on what he alleges was a “cancelled note” and 2) sent him demand letters for “twice the size of the debt . . . [the] foreclosure petition [says] is actually owed.”[29] According to the Wells Fargo defendants, however, Bordelon's fraud claim must be dismissed because he “has not pleaded fraud with particularity.”[30] They argue that, because Bordelon's complaint only includes one paragraph alleging facts intended to form the basis of a claim for fraud, he has failed to meet the heightened pleading requirement for fraud claims.[31] The Wells Fargo defendants also argue that Bordelon's fraud claims are barred by Louisiana's one-year prescriptive period for delictual actions.[32]

         Bordelon alleges violations of Louisiana Civil Code article 1953, which states that “[f]raud is a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other. Fraud may also result from silence or inaction.” La. Civ. Code Ann. art. 1953. To establish fraud pursuant to article 1953, two elements must be met: “(1) an intent to defraud or to gain an unfair [ ]advantage and (2) a resulting loss or damage.” Paulsen v. State Farm Ins. Co., No. 06-9546, 2008 WL 417738, at *4 (E.D. La. Feb. 13, 2008) (Africk, J.) (alteration in original) (quoting Tubos de Acero de Mex., S.A. v. Am. Int'l Inv. Corp., 292 F.3d 471, 479 (5th Cir. 2002)).

         Federal Rule of Civil Procedure 9 provides a heightened pleading standard for fraud claims. “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Fed.R.Civ.P. 9(b).[33] “To adequately plead fraudulent intent, a plaintiff must allege ‘specific facts that support an inference of fraud.'” Christensen v. WMA Consumer Servs., Inc., No. 03-1545, 2003 WL 22174240, at *2 (E.D. La. Sept. 5, 2003) (Barbier, J.) (quoting Tuchman v. DSC Commc'ns Corp., 14 F.3d 1061, 1067 (5th Cir. 1994)).

         The Fifth Circuit “interprets Rule 9(b) strictly, requiring the plaintiff to ‘specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent.'” Flaherty & Crumrine Preferred Income Fund, Inc. v. TXU Corp., 565 F.3d 200, 207 (5th Cir. 2009), cert. denied, 558 U.S. 873 (2009) (citation omitted). “In other words, ‘the who, what, when and where must be laid out. . . .'” Culotta v. Sodexo Remote Sites ...

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