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Clark v. United States

United States District Court, E.D. Missouri, Eastern Division

February 13, 2019

VANCE CLARK, Plaintiff,



         This case is before the Court on Defendant United States of America, on behalf of the United States Department of Agriculture, Rural Housing Service (“USDA”)'s Motion to Dismiss, [Doc. No. 45], Defendant John Robinson's Motion to Dismiss or in the Alternative, Motion to Stay the Proceedings, [Doc. No. 68], and Defendant Ann L. Mell's Motion to Dismiss, [Doc. No. 81].[1] For the reasons set forth below, the Motions will be granted.

         Facts and Background

          On March 1, 2018, plaintiff Vance Clark (“Plaintiff”), acting pro se, filed this lawsuit in the St. Francois County, Missouri, Circuit Court against the United States of America (the “United States”) concerning a property Plaintiff purchased in 2009 using a loan from the United States Department of Agriculture, (“USDA”). The United States, on behalf of the USDA (“Defendant”) subsequently removed this case to federal court pursuant to 28 U.S.C. §1442(a)(1).

         In November 2009, Plaintiff purchased property located at 3416 Hildebrecht Road, Doe Run, Missouri 63637 (the “Hildebrecht Property”). To finance the purchase, Plaintiff sought and obtained a $122, 000 loan from the USDA. Plaintiff executed a Deed of Trust in favor of the USDA, which the USDA recorded with the St. Francois County Recorder of Deeds at Document No. 2009R-10926, and rerecorded at Document 2010R-00327.

         As a condition of the loan, Plaintiff was required to obtain property insurance. Plaintiff applied for and received a homeowner's insurance policy from Farm Bureau Town and Country Company of Missouri (hereinafter, “Farm Bureau”). In September 2010, the Hildebrecht Property suffered damage from fire. Plaintiff submitted a claim to Farm Bureau, which denied coverage.

         On December 28, 2010, Farm Bureau filed a lawsuit in Missouri state court naming Plaintiff and the USDA. See Mo. No. 10SF-CC00289 (St. Francois County) (the “Farm Bureau Lawsuit”). Farm Bureau alleged that on the application for insurance, Plaintiff concealed the fact that he had prior felony convictions. Farm Bureau alleged that the USDA, as the mortgagee on the Hildebrecht Property, was “subject to the same terms, exclusions, and conditions that apply to the named insured.” The United States counter-claimed, alleging Farm Bureau owed the United States for the property loss under the homeowner's policy because the United States was the mortgagee on the property.

         Farm Bureau and the USDA settled the claims between them, whereby Farm Bureau agreed to pay the USDA an undisclosed amount of money. On February 21, 2014, the USDA and Farm Bureau agreed to a voluntary dismiss the USDA from the Farm Bureau Lawsuit.

         The USDA applied the settlement proceeds to the outstanding balance of Plaintiff's loan, although the settlement was insufficient to satisfy the outstanding principal balance. Farm Bureau is still prosecuting the Farm Bureau Lawsuit against Plaintiff in the state court.

         Plaintiff stopped making payments to the USDA on the remaining balance of the $122, 000 loan. On February 21, 2012, the USDA sent via certified mail an acceleration letter pursuant to the promissory note signed by Plaintiff, demanding full payment of the outstanding loan balance and accrued interest. When Plaintiff failed to comply, the USDA contacted the caretaker of Plaintiff's property, notifying him that the USDA intended to foreclose on Plaintiff's property.

         On April 30, 2018, the Substitute Trustee under the Deed of Trust conducted a foreclosure sale of the Hildebrecht Property. The foreclosure sale netted a total of eleven thousand dollars ($11, 000.00) in proceeds. Because the foreclosure sale did not satisfy the outstanding principal balance on the loan, there were no excess proceeds to remit to Plaintiff.

         On August 22, 2018, Plaintiff filed a motion for leave to file a fourth amended petition. Plaintiff filed his fourth amended petition on August 27, 2018. In the fourth amended petition, Plaintiff names Defendants United States, John Robinson, and Ann L. Mell.

         Plaintiff raises five counts in his fourth amended petition. In Counts I and II, Plaintiff requests a declaratory judgment interpreting provisions of the homeowner's contract between Plaintiff and the Farm Bureau, and alleges the USDA breached the terms of that contract. Count III alleges the USDA wrongfully seized $1, 240.00 of Plaintiff's tax refund, and alleges that Plaintiff sustained injury when the United States removed his state court litigation to this Court. Plaintiff demands the United States pay him damages because the United States removed this case to federal court.

         In Count IV, Plaintiff once again alleges that the United States breached the terms of his homeowner's insurance policy. He further alleges that the defendants “had a meeting of minds in circumventing Plaintiff's rights, ” when it removed this case to federal court prior to him having a hearing before the state-court judge. Plaintiff further alleges that the foreclosure of his property was wrongful and fraudulent. In Count V, Plaintiff alleges that the United States and the individual defendants engaged in a “conspiracy” causing Plaintiff damages.

         Defendant USDA moves to dismiss for lack of subject matter jurisdiction. Defendant Mell moves to dismiss for lack of subject matter jurisdiction and for failure to state a claim. Defendant Robinson moves to dismiss or alternatively stay this proceeding pursuant to the Colorado River Doctrine.

         Legal Standards

         Subject Matter Jurisdiction

          “In order to properly dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the complaint must be successfully challenged on its face or on the factual truthfulness of its averments.” Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993) (Osborn v. United States, 918 F.2d 724, 729 n.6 (8th Cir. 1990)). “In a facial challenge to jurisdiction, the court presumes all of the factual allegations concerning jurisdiction to be true and will grant the motion only if the plaintiff fails to allege an element necessary for subject matter jurisdiction.” Young Am. Corp. v. Affiliated Comput. Servs., 424 F.3d 840, 843-44 (8th Cir. 2005) (citing Titus, 4 F.3d at 593). In a factual challenge to jurisdiction, “there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case.” Osborn, 918 F.2d at 730. “In short, no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.” Iowa League of Cities v. EPA, 711 F.3d 844, 861 (8th Cir. 2013) (citing Osborn, 918 F.2d 724, 730). The plaintiff has the burden of proving jurisdiction exists. Kennedy Bldg. Assocs. v. Viacom, Inc., 375 F.3d 731, 745 (8th Cir. 2004) (citing Cty. of Los Angeles v. Davis, 440 U.S. 625, 631, 99 S.Ct. 1379, 59 L.Ed.2d 642 (1979)). “Once the evidence is submitted, the district court must decide the jurisdictional issue, not simply rule that there is or is not enough evidence to have a trial on the issue.” Osborn, 918 F.2d at 730.

         “Jurisdictional issues, whether they involve questions of law or of fact, are for the court to decide.” Id. at 729. “Moreover, because jurisdiction is a threshold question, judicial economy demands that the issue be decided at the outset rather than deferring it ...

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