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Sergio P. Garcia v. Federal Home Loan Mortgage Corporation

August 28, 2012

SERGIO P. GARCIA,
PLAINTIFF,
v.
FEDERAL HOME LOAN MORTGAGE CORPORATION, ET. AL. DEFENDANTS.



ORDER RE: MOTION FOR ASSESSMENT OF COSTS AGAINST PLAINTIFF Doc. No. 8

I. INTRODUCTION

Pursuant to Federal Rule of Civil Procedure 41(d), Defendants Federal Home Loan Mortgage Corporation, Mortgage Electronic Registration Systems, Inc., and OneWest Bank, FSB, have filed a motion for a stay of proceedings and an award of costs.

II. BACKGROUND

This is a foreclosure case concerning Plaintiff's residence in Bakersfield, California. Plaintiff originally filed a complaint on August 2, 2011, listing 26 causes of action against IndyMac Bank, FSB; OneWest Bank, FSB; Mortgage Electronic Registration Systems (MERS); and Federal Home Loan Mortgage Corporation (collectively "Defendants"). Defendants removed the case to this Court on August 12, 2011, and subsequently filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiff failed to file an opposition to the motion, leading the Court to vacate the hearing and take the motion under submission on October 21, 2011.

While Defendants' motion to dismiss was under submission, Plaintiff had a pending bankruptcy case in the United States Bankruptcy Court for the Eastern District of California. On November 2, 2011, Plaintiff filed a letter informing the Court of his pending Chapter 7 bankruptcy case. On December 6, 2011, Plaintiff filed a request for dismissal, requesting that the civil suit be dismissed without prejudice. In light of the pending bankruptcy case, the Court issued an order staying the civil proceedings for thirty days and requesting the bankruptcy trustee to state whether the action should be dismissed.*fn1 The bankruptcy trustee never responded to the order and the Court dismissed the case on March 27, 2012.

On January 10, 2012 Plaintiff received a discharge of his debts. Plaintiff then initiated the instant proceeding in Kern County Superior Court on February 6, 2012. Plaintiff's current complaint lists six causes of action against Defendants OneWest Bank, MERS, and Federal Home Loan Mortgage Corporation. Plaintiff added an additional party to the instant action, Defendant MTC Financial, Inc. dba Trustee Corps. Defendants*fn2 removed the case to this Court, and subsequently filed motions to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(6) and 41(d).

III. LEGAL STANDARD

Federal Rule of Civil Procedure 41(d) provides: "If a plaintiff who previously dismissed an action in any court files an action based on or including the same claim against the same defendant, the court: (1) may order the plaintiff to pay all or part of the costs of that previous action; and (2) may stay the proceedings until the plaintiff has complied." Fed. R. Civ. P. 41(d). The language of Rule 41(d) clearly indicates that it conveys "broad discretion" on federal courts to order stays and payment of costs, and that neither is mandatory. Esquivel v. Arau, 913 F. Supp. 1382, 1386 (C.D. Cal. 1996); Bran v. Sun Pac. Farming Coop., No. CV 06-0871-LJO-TAG, 2007 WL 781865, at *4 (E.D. Cal. Mar. 13, 2007). Costs may be imposed where the plaintiff has brought a second identical, or nearly identical, claim and has requested identical, or nearly identical, relief. Esquivel, 913 F. Supp. at 1387. The purpose of awarding costs under Rule 41(d) is to compensate the defendant for the unnecessary expense that the plaintiff's litigation has caused. Id. at 1388; Cauley v. Wilson, 752 F.2d 769, 772 (7th Cir. 1985). Moreover, Rule 41(d) is "intended to serve as a deterrent to forum shopping and vexatious litigation." Bran, 2007 WL 781865, at * 4 (quoting Simeone v. First Bank Nat'l Assn., 971 F.2d 103, 108 (8th Cir. 1992)).

In resolving a motion brought under Rule 41(d), the Court should assess whether the parties and claims are the same as those in the previously dismissed action and consider whether the plaintiff's conduct satisfies the requirements and intended purpose of Rule 41(d). See Esquivel, 913 F. Supp. at 1387; Bran, 2007 WL 781865, at * 4. Finally, the Court should ask whether the circumstances of the case warrant an award of costs to prevent prejudice to the defendant. Esquivel, 913 F. Supp. at 1387.

IV. DISCUSSION

A. Motion for Costs

In the original complaint, Plaintiff alleged causes of action concerning the origination of his mortgage and the foreclosure of his home. The current complaint only concerns the foreclosure process. Defendants contend that the present lawsuit is simply an amended and abbreviated version of the prior one. In his opposition, Plaintiff states that an attorney informed him that he did not have the right to maintain the civil case while his bankruptcy case was pending, but could dismiss and re-file the action once his bankruptcy case had concluded, provided that the Bankruptcy Trustee did not assume authority over the civil action.

Defendants cite to Jurin v. Google, Inc., 695 F. Supp 2d 1117 (E.D. Cal. 2010) as support for their motion. In Jurin, the Plaintiff filed a lawsuit in the Central District of California, voluntarily dismissed it under Federal Rule of Civil Procedure 41(a)(2), then re-filed an almost identical complaint in the Eastern District of California. Id. at 1123 The Court in Jurin agreed that Plaintiff could not "voluntarily dismiss his original suit only to further harass Defendants with renewed allegations of the same claims." Id. The Court ultimately granted Defendants motion for costs under Rule 41(d).

Jurin is distinguishable for several reasons. First, Plaintiff did not re-file an identical or even nearly identical complaint. Plaintiff reduced his case from twenty-six causes of action to six. The second complaint lists three causes of action that were also in the original complaint, including wrongful foreclosure, declaratory relief and injunctive relief. However, two of the claims are remedies rather than causes of action. As to the wrongful foreclosure claim, while Plaintiff does reiterate several arguments, a plain reading shows that the two complaints can hardly be described as identical. ...


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