Civil Appeal Statement, 11CirR33-1b Appendix-Record

File Stamp
Rev. 2/11 UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT
CIVIL APPEAL STATEMENT
13-11585-b
Please TYPE. Attach additional pages if necessary. 11th Circuit Docket Number:
Caption:
REVERSE MORTGAGE SOLUTIONS, INC.,
v.
District and Division: Middle District, Florida, Ocala Division
Name of Judge: Hon. Wm. Terrell Hodges
Nature of Suit: remove HECM reverse mort forclosue
Date Complaint Filed: removed Feb-04-2013
District Court Docket Number: 5.13-cv-58-0c-WTH-PRL
NEIL J. GILLESPIE AS CO-TRUSTEES, ET AL.
Date Notice of Appeal Filed: April-10-2013
DCross Appeal DClass Action
Has this matter previously been before this court?
UNITED STATES OF AMERICA, ON BEHALF
DYes iii No
OF THE SECRETARY OF HOUSING AND
If Yes, provide
URBAN DEVELOPMENT
(a) Caption:
(b) Citation:
(c) Docket Number:
Attorney Name Mailing Address
For Appellant: PRO SE - NON-LAWYER 8092 SW 115th Loop
D Plaintiff Neil J. Gillespie, See Ocala, Florida 34481
iii Defendant
The Florida Bar, Unlicensed
D Other (Specify)
Practice of Law Investigation
of Neil J. Gillespie, Case No.
20133090(5), May 14,2013.
For Appellee: Curtis Wilson 225 E Robinson St., Suite 660
iii Plaintiff
Danielle N. Parsons Orlando, FL 32801
D Defendant
McCalla Raymer, LLC
D Other (Specify)
Please CIRCLE/CHECK/COMPLETE the items below and on page 2 that apply.
D
D
Jurisdiction Nature of Judgment Type of Order Relief
Telephone, Fax, and Email
neilgillespie@mfi.net
Phone: 352-854-7807
caw@mccallaraymer.com
dnp@mccallaraymer.com
Phone: 407-674-1850
Diversity
US Plaintiff
iii Federal Question
iii US Defendant
iii Final Judgment,
28 USC 1291
D Interlocutory Order,
28 USC 1292(a)(l)
o Final Agency Action (Review)
o Interlocutory Order Certified,
28 USC 1292(b)
o Interlocutory Order,
Qualified Immunity
o 54(b)
iii Dismissal/Jurisdiction
D Default Judgment
D Summary Judgment
D Injunction
D Judgment/Bench Trial
D Judgment/Jury Verdict
D Judgment/Directed Verdict/NOV
iii Other Remand to state court
Amount Sought by Plaintiff:
$ HECM foreclosure
Amount Sought by Defendant:
$ Void HECM mortgage
Awarded:
$--------
to --
Injunctions:
D TRO
D Preliminary
o Permanent
D Granted
o Denied
Page 2 11th Circuit Docket Number:
13-11585-b
Based on your present knowledge:
(1) Does this appeal involve a question of First Impression? I!I Yes 0 No
What is the issue you claim is one of First Impression? Age 57 HECM co-trustee surviving borrower; void HECM
(2) Will the determination of this appeal turn on the interpretation or application of a particular case or statute? I!I Yes 0 No
If Yes, provide
(a) Case Name/Statute
Robert Bennett, et aI., v. Secretary/HUD, 12 U.S.C. 1715z20, et seq.
(b) Citation
Bennett v. Donovan, 11-5288,2013 WL 45879 (D.C. Cir. Jan. 4,2013)
(c) Docket Number if unreported No. 11-5288, U.S. Court of Appeals, District of ColurTlbia
(3) Is there any case now pending or about to be brought before this court or any other court or administrative agency that
(a) Arises from substantially the same case or controversy as this appeal? 0 Yes 0 No
(b) Involves an issue that is substantially the same, similar, or related to an issue in this appeal? 0 Yes 0 No
If Yes, provide
unknown
(a) Case Name
(b) Citation
unknown
(c) Docket Number if unreported
unknown
(d) Court or Agency unknown
(4) Will this appeal involve a conflict of law
(a) Within the Eleventh Circuit? 0 Yes 0 No
(b) Among circuits? I!I Yes 0 No
If Yes, explain briefly:
U.S. Court of Appeals, DC Circuit, held the U.S., Secretary of Housing and Urban Development, "HUD
itself has the capability to provide complete relief to the lenders and mortgagors alike, which eliminates
the uncertainty of third-party action that would otherwise block standing...HUD could accept assignment
of the mortgage, payoff the balance of the loans to the lenders, and then decline to foreclose."
(5) Issues proposed to be raised on appeal, including jurisdictional challenges:
Matter of Doar (Brunson) 2009 NY Slip Op 29549 [28 Misc 3d 759] December 18, 2009 Thomas, J.
Supreme Court. Appellate Division continued to require that a mortgagee have knowledge of the
mortgagor's incapacity before the contract which is otherwise voidable could be voided. In order to void
a contract which is voidable because of incapacity, the mortgagor must establish that the mortgagee had
knowledge of the "incapacity and were ... not bona fide mortgagees for value." (See Weisberg v
DeMeo, 254 AD2d 351, 351 [1998].)
Failure to allege facts sufficient to establish subject matter jurisdiction in a notice of removal is a defect
in the removal procedure, district court cannot sua sponte remand a case to state court. Corporate
Mgmt. Advisors, Inc. v. Artjen Complexus, Inc., 561 F.3d 1294, 1296 (11th Cir. 2009). See attached
page for additional issues on appeal.
I CERTIFY THAT I SERVED THIS CIVIL APPEAL STATEMENT ON THE CLERK OF THE u.S. COURT OF APPEALS FOR THE ELEVENTH CIRCUIT AND
SERVED A COPY ON EACH PARTY OR THEIR COUNSEL OF RECORD, THIS
Neil J. Gillespie, PRO SE - NON-LAWYER
NAME OF COUNSEL (Print)
2013 1-=s...;;.,t__
Please ATTACH portion of district court, tax court, or agency record described in 11th Cir. R. 33-1(b): (a) judgments and orders appealed
from or sought to be reviewed; (b) any supporting opinion, findings offact, and conclusions of lawfiled by the court or the agency, board,
commission, or officer; (c) any report and recommendation adopted by an order; (d) findings and conclusions of an administrative lawjudge
when appealing a court order reviewing an agency determination; (e) any agency docket sheet or record index.
Civil Appeal Statement - additional pages
Eleventh Circuit Docket Number: 13-11585-B
Appeal Number 13-11585-B
Reverse Mortgage Solutions, Inc. v. Neil J . Gillespie, et al.
District Court Docket No: 5:13-cv-00058-oc-WTH-PRL
This appeal considers whether the federal court has jurisdiction on a disputed foreclosure of a
Home Equity Conversion Mortgage, called a HECM reverse mortgage, which dispute turns on
the interpretation of the federal HECM statute 12 U.S.C. 1715z20, federal HECM reg. 24
C.F.R. Part 206, and Bennett v. Donovan, 11-5288, 2013 WL 45879 (D.C. Cir. J an. 4, 2013).
I am a surviving HECM borrower, and homeowner, facing foreclosure and loss of my home.
A HECM does not require the homeowner to make mortgage payments like a conventional
mortgage. Instead, a HECM does not become due and payable until the last surviving borrower
dies or no longer lives in the home. Here, the Plaintiff contends the death of my mother is the
event triggering foreclosure. But I am one of two surviving borrowers, and the only surviving
borrower living in the home in substantial compliance with the HECM note.
Bennett provided protections for surviving spouses of reverse mortgage borrowers who face
foreclosure after the death of their spouses. Bennett found younger spouses are often given bad
advice to remove their name from ownership of the house so that the older spouse can obtain a
reverse mortgage on more favorable terms. Bennett held "HUD itself has the capability to
provide complete relief to the lenders and mortgagors alike, which eliminates the uncertainty of
third-party action that would otherwise block standing...HUD could accept assignment of the
mortgage, pay off the balance of the loans to the lenders, and then decline to foreclose." A report
on Bennett by the National Consumer Law Center is attached for a more detailed explanation.
Unfortunately borrower Penelope Gillespie, my mother, lacked capacity to enter a contract and
died of Alzheimers dementia. The loan originator knew my mother lacked capacity to enter a
contract. A recording and transcript of the HECM telephone counseling session showed
borrower Penelope Gillespie lacked capacity to enter a contract. Still, lender and affiliated
parties made the HECM anyway, adding me and my brother to the quit claim deed with my
mother. All three of us became HECM borrowers as co-trustees of a family trust.
In Santos, the Court rejected a definition of borrower to include only natural persons acting in
their individual capacities. Isabel Santos, individually and as trustee and beneficiary of the
Yolanda Maria Santos Trust, et al. v. Reverse Mortgage Solutions, et al, No. 12-3296-SC, U.S
District Court, Northern District of California
There is a lot more wrong with this HECM, which was a compete disaster, as shown in my
complaint to HUD, who in turn sent part of the complaint the Consumer Financial Protection
Bureau. Bank of America, which somehow bought the loan before the J une 5, 2008 closing,
claimed it could not discuss the loan with me during the CFPB investigation due to privacy.
Thereupon the CFPB closed the complaint unresolved.
Bank of Americas servicer, the Plaintiff, Reverse Mortgage Solutions, Inc., filed J anuary 9,
2013 in Florida state court an in rem action to foreclosure HECM. I filed a motion to dismiss in
state court February 4, 2013, and immediately removed to the district court under 28 U.S.C.
1441(a), 28 U.S.C. 1331, 5 U.S.C. 702, the Admin. Procedures Act and Bennett v. Donovan.
But ultimately I believe Ms. Gillespies incapacity voids the contract, according to a holding in
the Matter of Doar (Brunson) 2009 NY Slip Op 29549 [28 Misc 3d 759] December 18, 2009,
Thomas, J . Supreme Court. I found this case recently, where the Appellate Division continued to
require that a mortgagee have knowledge of the mortgagor's incapacity before the contract which
is otherwise voidable could be voided. In order to void a contract which is voidable because of
incapacity, the mortgagor must establish that the mortgagee had knowledge of the "incapacity
and were . . . not bona fide mortgagees for value." (See Weisberg v DeMeo, 254 AD2d 351, 351
[1998].) A story reporting on the case Matter of Doar by Reverse Mortgage Daily is attached.
The district court remanded the case back to state court sua sponte for lack of subject matter
jurisdiction, after the court denied my objections to the magistrate judges report and
recommendation pursuant to 28 U.S.C. 1915(e)(2) that recommended the motion to proceed in
forma pauperis be denied, and this case be remanded to state court for lack of subject matter
jurisdiction. The district court denied me leave to amend the notice of removal. Troville v. Venz,
303 F.3d 1256, 1260, n. 5 (11th Circ. 2002), allows amended pro se pleading IFP.
Notably the Plaintiff did not move to remand. The district court did not permit the Plaintiff to
respond to my objections to the report and recommendation. Failure to allege facts sufficient to
establish subject matter jurisdiction in a notice of removal is a defect in the removal procedure,
district court cannot sua sponte remand a case to state court. Corporate Mgmt. Advisors, Inc. v.
Artjen Complexus, Inc., 561 F.3d 1294, 1296 (11th Cir. 2009). A writ of mandamus is the proper
means by which a party may challenge a remand order. Thermtron Products, Inc. v.
Hermansdorfer, 423 U.S. 336, 352-53, 96 S.Ct. 584, 593-94, 46 L.Ed.2d 542 (1976).
McCalla Raymer, LLC represents the Plaintiff. There was significant attorney misconduct, see:
Rule 11 sanction motion against Ms. Parsons, McCalla Raymer LLC. (Doc. 15)
Rule 55 motion for default judgment by Defendant Gillespie. (Doc. 16)
Rule 72/Rule 60(b)(3) Verified Objection to Magistrate Order by Gillespie. (Doc. 17)
U.S. Rep. Elijah E. Cummings wrote February 25, 2011 to Inspector General Linick of Federal
Housing Finance Agency (FHFA) asking that he initiate an investigation into widespread
allegations of abuse by private attorneys and law firms hired to process foreclosures as part of
the "Retained Attorney Network" established by Fannie Mae. Rep. Cummings complained
about McCalla Raymer, LLC by name. (the letter of Rep. Cummings is attached).
U.S. J udge Wm. Terrell Hodges, the district court trial judge, failed to recuse under 28 U.S.C.
455(b)(4), for a financial interest of the J udge in Bank of America, the real party Plaintiff.
J udge Hodges later ruled upon, and denied, his own disqualification on my affidavit made under
28 U.S.C. 144, bias or prejudice of judge, which accompanied my Rule 59(e) motion to alter or
amend the judgment. J udge Hodges denied the Rule 59(e) motion too.
The Florida Bar notified me May 14, 2013 of the Unlicensed Practice of Law Investigation of
Neil J . Gillespie, Case No. 20133090(5), for representing my interests pro se in this foreclosure.
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Surviving Spouses of Reverse Mortgage Borrowers Have Standing to Assert Protection from
Displacement
by Jean Constantine-Davis, Senior Attorney, AARP Foundation Litigation and Craig Briskin, Partner, Mehri &
Skalet, P.L.L.C.
NCLC eReports January 2013 #12
Foreclosures and Servicing; Mortgage Loans

A January 4, 2013 D.C. Circuit ruling has important implications in overturning a HUD Rule and providing
protections for surviving spouses of reverse mortgage borrowers who face foreclosure after the death of their
spouses. Younger spouses are often given bad advice to remove their name fromownership of the house so that
the older spouse can obtain a reverse mortgage on more favorable terms. Current HUD rules though often result
in the younger spouse no longer being able to live in the home after the older spouse dies.

In an important challenge to those HUD rules, Bennett v. Donovan[1] holds that surviving spouses have standing
to enforce the Safeguard to prevent displacement of homeowner in the federal reverse mortgage statute,
because the statute also gives HUD the power to take ownership of mortgages to serve the programs goals.[2]
While the holding concerned standing, the court expressly sided with plaintiffs on the merits regarding the
anti-displacement provision, stating, we admit to being somewhat puzzled as to how HUD can justify a regulation
that seems contrary to the governing statute.

Plaintiffs Robert Bennett and Leila Joseph had owned their homes with their spouses for decades when they were
solicited for reverse mortgages. Although both were over 62, the minimumage under the federal Home Equity
Conversion Program(HECM),[3] they were each younger than their spouses. In a practice that appears
widespread, the mortgage brokers induced both plaintiffs to quitclaim their interest in their homes. Mrs.
Josephs broker misled her about the implications of removing her name fromthe deed to her home; Mr. Bennetts
broker never told himhis name would be removed fromthe deed. Mr. Bennetts wife died a month after they
signed on their loan; Mrs. Josephs husband died four months after they signed on theirs.

In accordance with HUDs regulations, the servicers of the two reverse mortgages called themdue and payable
soon after the last surviving mortgagor had died. The HECM statute, however, states that HUD may not insure
a HECM unless it includes a provision that protects the homeowner fromdisplacement until the homeowners
death, sale of the property, or other events. It further states, for purposes of this subsection, homeowner includes
the spouse of the homeowner.[4] But HUD drafted not only its regulations but the reverse mortgage documents
to demand repayment upon the death of the mortgagor. As a result, plaintiffs HECM lenders moved to foreclose
on the homes after their spouses died.

In March 2011, Mr. Bennett and Mrs. Joseph filed suit in the U.S. District Court for the District of Columbia
challenging HUDs regulation under the Administrative Procedure Act,[5] and seeking to be protected from
foreclosure until after their deaths or sale of their homes.[6] The district court granted HUDs motion to dismiss
the case on the ground that plaintiffs lacked standing to raise this claimbecause even if they prevailed, the private
lenders were authorized by the mortgage contracts to foreclose after the death of the named borrowers.

On appeal, plaintiffs argued that the lenders actions were not independent of HUD, which controls HECM
mortgages fromcradle to grave, and that the lenders foreclosures were driven by the strict timetable laid out in
HUDs regulations, which penalize lenders who do not prosecute timely foreclosure actions. Plaintiffs noted that
the HECM statute, 12 U.S.C. 1715z-20(i), gives HUD ample authority to carry out the purposes of the program,
including accepting assignment of plaintiffs mortgages and paying off the lenders after the deaths of their
borrowing spouses, making HUD not third party lenders capable of redressing their injury.

HUD argued that, while its regulations penalize lenders who do not follow its foreclosure protocols, it cannot
ultimately control foreclosure actions, which are contractually in the hands of private lenders. It also claimed that
its regulation requiging HECMs to become due and payable once all borrowers have died is consistent with the
statute and that plaintiffs interpretation would create open-ended liability on the FHA programfor younger and
after-acquired spouses that was not built into the actuarial assumptions of the program.

The D.C. Circuit disagreed. It noted the difficulty of establishing redressability where it is the private lenders,
not HUD itself, that currently threaten foreclosure.[7] Nonetheless, the Court concluded that HUDs statutory
authority under 12 U.S.C. 1715z-20(i) to accept assignment of HECM mortgages and pay lenders the amounts
owed themmeans that plaintiffs claims are likely redressable.[8] If HUD accepts assignment of the mortgages,
it would be within its discretion as the holder of the contract to simply decline to foreclose.[9]

Although the merits of plaintiffs challenge to HUDs regulation were not before the court, its view of the merits
was clear.
eR-20130112 http://shop.consumerlaw.org/er-20130112.aspx
1 of 2 6/27/2013 7:39 PM

[W]e admit to being somewhat puzzled as to how HUD can justify a regulation
that seems contrary to the governing statute. HUD explains that it is specially
concerned about the scenario in which a homeowner, after taking out a reverse
mortgage, marries a spouse particularly a young spouse and thereby
significantly increases a lenders risk. It would seem, however, that HUD could
legitimately deal with that problemby issuing a regulation defining a spouse as
only a spouse in existence at the time of the mortgage.[10]

If the district court on remand finds for plaintiffs on the merits, HUD need not follow the steps to redress laid out
by the Court i.e., assignment and payment of the mortgages and may find another path to redressing plaintiffs
injury. However, the Court noted, if plaintiffs prevail on the merits but are dissatisfied with HUDs remedy, they
would always have the option to seek review on the ground that HUDs actions were arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law.[11]

What Now?

Plaintiffs currently await the next steps in this litigation. HUD may choose to request a rehearing or appeal the
ruling. Barring that, the case will be remanded to the district court, where plaintiffs are likely to prevail on the
merits, given the expressed views of the D.C. Circuit. In the meantime, the D.C. Circuit opinion provides key
support to advocates defending surviving HECM spouses fromforeclosure. Even prior to the issuance of the
decision, a California widower survived summary judgment on a claimfor reformation of the HECM contract
based, in part, on his assertion that the federal statutory protection of homeowners fromdisplacement should
protect himfromforeclosure.[12] The Bennett courts support for this reading, and the fact that ultimate success
by plaintiffs would result in protection fromforeclosure, should strengthen the hand of surviving spouses making
such claims.

Copyright 2013 National Consumer Law Center, Inc.
[1] 2013 WL 45879 (DC Cir. Jan. 4, 2013).
[2] 12 U.S.C. 1715z-20(j)
[3] 24 C.F.R. 206.33
[4] 12 U.S.C. 1715z-20(j)
[5] 5 U.S.C. 706(2)(A).
[6] Plaintiffs Complaint also asserted that HUDs issuance of Mortgagee Letter 2008-38 (requiring the first time
that surviving spouses and heirs repay the full HECM balance if they want to keep the home, while allowing a sale
of the property to anyone else for 95% of its current appraised value) violated the APA. Shortly after the
Complaint was filed, HUD revoked ML 2008-38 by issuing ML 2011-16.
[7] Bennett v. Donovan, 2013 WL 45879 (DC Cir. Jan. 4, 2013).
[8] Id. See also Lujan v. Defenders of Wildlife, 504 U.S. at 561, holding that a plaintiffs claims are redressable if
it is likely as opposed to merely speculative that the relief granted by the court will redress the injury.
[9] Bennett v. Donovan, 2013 WL 45879 (DC Cir. Jan. 4, 2013).
[10] Id.
[11] Id.
[12] Kerrigan v. Bank of America, 2011 WL 3565121 (C.D. Cal. Aug. 12, 2011) (denying bank summary
judgment on claimfor reformation of contract).
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2013 National Consumer Law Center Online Store
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2 of 2 6/27/2013 7:39 PM
- Reverse Mortgage Daily - http://reversemortgagedaily.com -
Judge Voids Reverse Mortgage, Says Counseling Fails to Prove
Competency
Posted By Reva On January 14, 2010 @ 9:50 am In Counseling,Legislation,News,Reverse Mortgage | 105
Comments
In a ruling last month, Charles J. Thomas, a New York Supreme Court Judge voided a reverse
mortgage and its subsequent refinancing on the grounds that the borrowers mental illness made her
unable to understand the reverse mortgage.
In the case, Matter of Doar, 31393/07
[1]
, the borrower, Ms. Hermina Brunson, took out a reverse
mortgage with Financial Freedom on her home in Queens for $300,000 in December of 2001,
refinancing for $375,000 in June of 2003.
However, at the time, Ms. Brunson was being treated for chronic paranoid schizophrenia. By the end
of 2001, her psychiatrist testified that Ms. Brunson was hearing voices, believed her neighbor was
trying to take her home away from her, and claimed that she no longer had the deed to the home.
Despite the counseling session lasting 45 minutes over the phone, the judge wrote that it was not
meant to be perfunctory or a mere rubber stamp of the banking or mortgage industry. It was
intended to secure that the rights of elderly homeowners were protected. The mortgagee is
entrusted with the responsibility of conducting an inquiry of the applicants understanding of the
mortgage agreement.
Judge Thomas continued, There is no evidence that Ms. Brunson understood the terms of the
mortgage or the Counseling Certificate that she signed on June 20, 2003. He faulted the counselor
for not unearthing the borrowers mental illness and her delusions regarding her home. Most
significantly for the industry, Judge Thomas ruled:
While the Certificate of Counseling is an indication that information was given to the
homeowners it is not dispositive of the issue of the mortgagors knowledge and
understanding of the implications of a reverse mortgage or that the National Housing
Act has been satisfied. That determination rests ultimately with the court.
As a result, the responsibility is on the lender to prove that the borrower understood the reverse
mortgage, regardless of whether or not they received a counseling certificate.
The judge further faulted the counseling process, noting that there was no evidence as to the
qualifications of the counselor, whether the counselor spoke to Ms. Brunson or only to her brother, if
Ms. Bunsons questions were answered, and what information the counselor provided.
While recent counseling reforms such as the qualification of the counselor addresses some of these
issues, this is still a situation that could be repeated today.
In the ruling, Financial Freedom was ordered to void the mortgage, but the Guardian of the borrower
is directed to reimburse Financial Freedom for monies paid out at the closing which includes taxes,
water charges, and the New York City Department of Social Services liens. It is unclear whether
Financial Freedom will appeal.
Matter of Doar, 31393/07
[1]
Write to Reva Minkoff
[2]
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DARRn.L r: ISSA, CALIFORNIA
ONE HUNDRED TWELFTH CONGRESS U.IJAH E CUMMINGS, MARYLAND
CHAIHMAN RANKING MINORITY MEMBER
DAN BURTON, INDIANA EDOLPHUS TOWNS, NFW YORK
JOHN L MICA, FLORIDA CAROLYN B. MALONEY, NEW YORK
(!Congress of tbe Wntteb
TODD RUSSELL PLATTS, PFNNSYI VANI!\ H CANOR HOLMES NORTON,
M ICHACL R TURNER, OHIO DISTRICT OF COLUMBIA
PA TRICK McHENRY, NORTH CAFWLlNA DENNIS J KUCINICH, OHIO
JIM JORDAN, OHIO JOHN F. TIERNEY, MASSACHUSETTS 1l,oltgr of l\rpregentatiueg
JASON CHAFFETZ, UTAH WM LACY CLAY, MISSOURI
CONNIE MACK, FLORIDA STEPHEN F. LYNCH. MASSACHUSETTS
TIM WALBERG, MICHIGAN
COMMITIEE ON OVERSIGHT AND GOVERNMENT REFORM
JIM COOPER. ll:NNESSEE
JAMES LANKFORD, OKLAHOMA GERALD E. CONNOLLY, VIRGINIA
JUSTIN AMASH, MICHIGAN MIKE QUIGLEY, ILLINOIS
ANN MARIE BUERKLE, NEW YORK 2157 RAYBURN HOUSE OFFICE BUILDING
DANNY K. DAVIS, ILLINOIS
PAUL A GOSAR, D D.S., ARIZONA BRUCE L. BRALEY, IOWA
RAUL R. LABFlADOR. IDAHO PEHR WELCH, VERMONT
WASHINGTON, DC 20515-6143
PATRICK MEEHAN, PENNSYl VANIA JOHN A. YARMUTH, KENTUCKY
sc:on Drs,JARLAIS, M.D , fFNNESSH CHRISTOPHER S. MURPHY, CONNECTICUT
(;'O?):'2b ',0/4
,fOE WALSH, ILLINOIS JACKIE SPEIEH, CALIFORNIA
f ,\( 'dMII I l,'O?) ??'i 397.1
TRFY GOWDY, SOUTH CAROliNA
MIN' )HI; ( 1?02, 1
DENNIS A. ROSS, FLORIDA
FRANK C. GUINTA, NEW HAMPSHIHE
BLAKE FI\RFNTHOI 0, TEXAS
MIKE KELLY, PENNSYLVANIA
LAwnENCl J UHADY
STAFF DIRf:.CTOH
February 25,2011
The I-Ionorable Steve A. Linick
Inspector General
Federal Housing Finance Agency
1625 Eye Street, NW
Washington, DC 20006
Dear Mr. Inspector General:
I am writing to request that you initiate an investigation into widespread allegations of
abuse by private attorneys and law tirins hired to process foreclosllres as part of the "Retained
Attorney Network" established by Fannie Mae. I also request that you examine allegations of
abusive behavior on the part of default managenlent firms engaged by both mortgage servicers
managing Fannie Mae-backed loans and attorneys and firms that are part of the Retained
Attorney Network. Finally, I request that you examine efforts by Fannie Mae and the Federal
I-Iousing Finance Agency (FHF'A) to investigate these allegations and implement corrective
action.
Allegations of Abuse in the Retained Attorney Network
In August 2008, Fannie Mae created "a new nlandatory network of retained attorneys to
handle all foreclosure and bankruptcy matters" relating to Fannie Mae mortgage loans, whether
held in portfolio or mortgage-backed securities. Fannie Mae required that only these retained
attorneys represent Fannie Mae 1110rtgage servicers, and it established the maximum allowable
reinlbursable fees for foreclosure-related work. I In December 2010, Fannie Mae Executive Vice
President Terence Edwards announced that the Retained Attorney Network would be expanded
from 31 to 50 states.
2
I Fannie Mae, Netv Foreclosure and BankruptL)l Attorney Netvvork and Attorney's Fees
and ('osts (Announcement 08-19) (Aug. 6, 2008) (online at https://www.efanniemae.com
/st/guides/ssg/annltrs/pdf/2008/0819.pdt) (requiring also that '''requests for approval of excess
fees by Fannie Mae must be submitted via email''!).
2 Testilnony of l'erence Edwards, Executive Vice President, Credit Portfolio
Managelnent, Fannie Mae, before the u.S. Senate Committee on Banking, Housing and Urban
Affairs (Dec. 1,2010) (online at www.fannielnae.coln/medialpdf/Edwards_
SenateBankingComnlittee_12-1-10. pdt).
'The Honorable Steve A. Linick
Page 2
Recent reports indicate that nlany of the private attorneys, law firms, and other entities
participating in the Retained Attorney Network have been accused of practices that are fraught
with flaws, errors, conflicts of interest, and fraud, and these allegations have prompted numerous
state and federal investigations.
For example, on August 10, 20 la, the Florida State Attorney General announced an
investigation into unfair and deceptive practices by the Law Offices of David J. Stern, P.A., the
l.Jaw Offices of Marshall C. Watson, P.A., and Shapiro & Fishnlan, L.L.P. The allegations
against the tirlns include creating and filing with Florida courts improper documentation to speed
foreclosures and establishing affiliated companies outside the United States to prepare false
documents.
3
In announcing this investigation, the Attorney General stated:
On nunlerous occasions, allegedly fabricated documents have been presented to
the courts in foreclosure actions to obtain final judglnents against homeowners.
Thousands of final judglnents of foreclosure against Florida homeowners may
have been the result of allegedly inlproper actions of the law firlns under
4
InvestIgatIon.
Fornler enlployees of the Stern law firn1 also reportedly alleged that the firm engaged in
"robo-signing," a practice in which employees signed hundreds of foreclosure affidavits each
day, falsely swearing to have personal knowledge of the underlying documents. One employee
testified that the firln' s chief operating officer "signed as Inany as 1,000 foreclosure affidavits a
day without reading a single word."s The elnployees also reported that the firln backdated and
altered documents, and that it took steps to cover its 111isconduct by changing the dates on
hundreds of docUlnents.
6
Last November, Fannie Mae issued a public notice stating that it had "terminated its
relationship with the Law Offices of David J. Stern" and inforlning servicers that they "may not
refer any future Fannie Mae nlatters to the Stern finn.,,7
the U.S. Trustee Progranl (UST'P) of the Department of Justice is
investigating another firnl in the J{etained Attorney Network, the firln of Steven J. Baum, P.C. of
A111herst, Ne\v York, for tiling foreclosure dOClunents that appear to be false or
3 Attorney General of Florida, Press Release: Floril1a Lalv Firms Subpoenaed Over
F'oreclosure [Jractices (Aug. 10, 2010) (online at \vww.nlytloridalegal.com/newsrel.nsfi
newsreleases/2BAC 1AF2A61 BBA398525777B0051 BB30).
4/
e
/.
5 1'he l?ise anel J?all qf'o Associated Press (Feb. 6, 2011).
6 Questions Risin<.g ()ver F'annie anlll;rel/llie 's ()vers(ght New York
rrilnes (Oct. 19,2010); The Foreclosure New York 'Tilnes (Mar. 20,2008).
7Fannie Mae, L)ervicing Notice: ]'erlnination lvilh the Stern Lavv Firm
(Nov. 1 20 10) (online at w\vw.efanniemae.com/sf/guides/ssg/annltrs/
pdf/20 1O/ntce 11101 a.pdf).
J-Ionorable Steve A. Linick
Page 3
attel1lpting to foreclose on borrowers after rejecting their attelnpts to 111ake on-tinle
and failing to prove ownership of mortgages as it seized homes. The firm has also been accused
of illegally charging for foreclosure-settlement conferences, overcharging on foreclosure fees,
and racketeering.
8
Another firnl in the Retained Attorney Network, McCalla Raymer, L.L.C., is a defendant
in a federal lawsuit in which the plaintit1s allege that it engaged in fraud, racketeering, and the
manufacture of fraudulent foreclosure documents. Reportedly, this firnl established operations
in Florida under the nalne Stone, McGehee & Silver and hired ten forlner Stern law firm
elnployees.
9
The firm Stone, McGehee and Silver, LLC, dba McCalla Raymer currently appears
as a "Designated Counsel/Trustee" in Florida for Freddie Mac.
ID
Lender Processing Services, Inc. (LPS), a $2.8 billion company headquartered in
Jacksonville, Florida-and the largest provider of default loan services in the nation-is also
under investigation by the Florida Attorney General for producing apparently forged or
fabricated dOCUl1lents in foreclosure actions. 11 LPS is also a defendant in a federal suit alleging
an illegal fee-sharing schelne. Filed in federal bankruptcy court in Mississippi, the suit alleges
that LPS and another company, Pronlmis Solutions I-Iolding COlnpany, illegally required
attorneys in their networks to turn over a portion of their fees for foreclosure services, and that
another large law firnl, Johnson & Freedman, I-J.L.C., joined in this schenle. The Chapter 13
'rrustee [or the Northern District of Mississippi, a unit of the DepartInent of Justice, has joined as
a plaintiff. 12
A special investigation by Reulers last Decelnber reported that LPS and its affiliated
cOlllpanies also allegedly deployed low-skilled, non-lawyers to prepare foreclosure documents,
created invalid Inortgage assignl1lents to facilitate foreclosures, and rewarded attorneys for speed
rather than accuracy in filing court pleadings. Reuters reported:
8 See Federal Honle [.Joan Mortgage Corp. v. Raia, SP 002253/10, District Court of
Nassau County, New York (Henlpstead); Campbell v. Baunl, 10-cv-3800, U.S. District Court,
Eastern District of New York Menashe v. Steven J. Baum P.C., 10-cv-5155, U.S.
District Court, Eastern District ofNe\v York (Central Islip); and Saum v. Lask, 2010- 012048,
New York Suprenle Court, County (Buffalo).
9 Novice J:;7orida Lcnv)Jers l.)llSIJicion in Foreclosure A1ess, Palm Beach Post (Jan.
13, 2011 ) (online at www.palnlbeachpost.com/nl0ney/real-estate/novice-florida-lawyers-draw
suspicion-in-foreclosure-nless-1146402.htnl1).
10 Freddie Mac, (]uicle Exhibit 79: Designate(/ ("olinselIT'rustee (Florida) (revised 2/8/11)
(online at wvvw. freddienlac.coln/service/nlsp/exh79_ n.html).
II ()ftice of the Attorney General of Case Nunlber L10-3-1 094 (online at
http://nlyfloridalegal.conl/_85256309005085AB. nsf/0/98099A9003203OBE8525771300426A
68?C)pen&I-lighlight==0,lps).
12 'Thorne v. Pronlnlis Solutions I-Iolding Corp. et aI., Second Amended Class Action
COlnplaint, 10-01172 (BR Oct. 10,2010).
l"'he I-Ionorable Steve A. Linick
Page 4
The law firiTIS are on a stopwatch. [An LPS spokesman] COnfirlTIed that the LPS Desktop
systelTI automatically tinles how long each firm takes to complete a task. It assigns firnls
that turn out work the fastest a "green" rating; slower ones "yellow" and "red" for those
that take the longest. Court records show that green ratings go to firiTIS that jump on
offered assignlnents from their LPS computer screens and almost instantly turn out ready
to-file court pleadings, often using teanlS of low-skilled clerical workers with little
oversight fro111 the lawyers. 13
Although Fannie Mae terll1inated its relationship with the Stern law firm last November,
it does not appear to have terminated its relationships with any of the other firms described
above.
14
for Investigation
T'hese are serious allegations that nlay have affected thousands of homeowners. For these
reasons, I request that your office initiate a cOlnprehensive investigation into allegations of abuse
by attorneys and law firms participating in the Retained Attorney Network, as well as servicers
and default loan service providers alleged to have participated in these abuses.
It is Illy understanding that the ll1ission of your oflice is to "promote the economy,
etliciency, and effectiveness of the FHFA's progranls; to assist FHFA in the perforn1ance of its
111ission; to prevent and detect fraud, waste, and abuse in FHFA' s and to seek
sanctions and prosecutions against those who are responsible for such fraud, waste, and abuse.,,15
In 2008, FHFA replaced the Office of Federal Housing Enterprise Oversight and became the
regulator and conservator for Fannie Mae. As such, the agency's duties include overseeing the
"prudential operations" of Fannie Mae and its contractors and ensuring that their activities and
operations "are consistent with the public
With this background, I request that you address the following issues with respect to
attorneys and law firnls participating in the Retained Attorney Network program and with
respect to other entities engaged by both mortgage servicers Inanaging Fannie Mae-backed loans
and attorneys and finns that are part of the Retained Attorney Network:
1. '"1"'0 what extent have hon1eo\vners lost their hon1es to inlproper, illegal, or otherwise
invalid foreclosures as a result of the types of abuses described above?
13 Jd.
14 Fannie Mae, I?etainecl /ll1orney List (effective February 10,2011) (online at
https: IIw\vw. efanni enlae. colnlsf/techno logyIservi nvreportlanl n/pdfl retai nedattorneylist. pdf).
15 Website of the Federal I-lousing Finance Adn1inistration Office of Inspector General
(accessed on Feb. 3,2011) (online at Www.fllfaoig.gov/).
16 Section 1313(a)( 1 I-Iousing and Economic Recovery Act of 2008 (P.L. 110
289).
'rhe I-Ionorable Steve A. Linick
Page 5
2. To what extent have homeowners been charged inlproper, illegal, or otherwise invalid
fees during the foreclosure process?
3. 1"0 what extent are attorneys, law iirlTIS, and other entities engaged in fee-splitting,
kickbacks, or other silnilar schenles?
4. What is the total anlount in 'excess fees" that has been requested from Fannie Mae by
attorneys and law firlns? Of this amount, how much has been reilnbursed, and how nluch
has been deterlnined to be inappropriate or unwarranted?
5. I-lave FJ-IFA or Fannie Mae conducted investigations into allegations of abuse by
attorneys, law firlTIS, or other entities, and if so, \vhat are the results? Were these
allegations considered before the recent expansion of the Retained Attorney Network to
all 50 states?
6. What specific inforlnation has been collected regarding allegations against the following
firnls and their affiliates?
a. Law Offices of David J. Stern, P.A.
b. l.law ()ftices of Marshall C. Watson, P.A.
c. Shapiro & Fishn1an'l l.l.L.P.
d. Steven J. Baunl, P.C.
e. McCalla Raymer, L.L.C.
f. Johnson & Freednlan, L.L.C.
g. Prolnmis Solutions IIolding COlnpany
h. Lender Processing Services, Inc. and LPS Default Solutions, L.L.C.
7. t-Iave there been claims alleging that other attorneys or law firms participating in the
Retained Attorney Network progranl or any default nlanagement firms Inanaging the
foreclosure of Fannie Mae-backed loans have engaged in similar conduct that violates the
rights of borrowers or investors, federal or state foreclosure Initigation prograln
guidelines, federal or state la\v, federal or state judicial requirements, state bar ethics
requirelnents, or other regulations, rules, guidelines, or laws?
8. 'fo what extent have the alleged abuses described above underlnined loss and foreclosure
nlitigation efforts and outcoll1es? What responsibilities do loan servicers have in
1110nitoring and overseeing the activities of attorneys and other third party companies?
What are the levels of cure rate and loss Initigation activities among retained attorneys?
'rhe Honorable Steve A. Ljnick
Page 6
If you have any questions about this request, please have a member of your staff contact
Lucinda LJessley of the conlmittee staff at 202-225-4290.
'r'hank you for your consideration, and please feel free to contact me or my staff with any
questions.
Sincerely,
cc: The Honorable Darrell E. Issa, Chairnlan
UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
REVERSE MORTGAGE SOLUTIONS,
INC.,
Plaintiff/Appellant,
APPEAL NO.: 13-11585-B
v. District Court: 5:13-cv-58-Oc-WTH-PRL
NEIL J . GILLESPIE AS CO-TRUSTEES,
ET AL.
Defendants/Appellees.
_____________________________________/
Appendix of 11th Cir. R. 33-1(b) Portions of Record
CIVIL APPEAL STATEMENT
1. Order (11th Cir.) J une 12, 2013, appeal dismissed, sua sponte, for lack of jurisdiction
2. District court record on CD-ROM, documents in PDF (Doc. 1 through Doc. 30); and copy
3. District court civil case docket no: 5:13-cv-00058-WTH-PRL
4. Order (Doc. 28), May 9, 2013, denied leave to proceed on appeal IFP
5. Order (Doc. 24), April 12, 2013, denied Rule 59(e) motion to alter or amend the
judgment (Doc. 21); and denied Affidavit of Neil J . Gillespie, 28 U.S.C. 144, bias or
prejudice of judge (Doc. 22)
6. J udgment in a Civil Case (Doc. 20), March 11, 2013
7. Order Remanding Case (Doc. 19), March 7, 2013. Adopted in its entirety the Report and
Recommendation (Doc. 10); denied Objections to Report and Recommendation (Doc. 18)
8. Order (Doc. 12), February 22, 2013
(Magistrate Order extending Plaintiff time to respond to Motion to Dismiss)
9. Report and Recommendation (Doc. 10), February 13, 2013
Case 5:13-cv-00058-WTH-PRL Document 30 Filed 06/12/13 Page 1 of 3 PageID 856
1
2. District court record on CD-ROM, documents in PDF (Doc. 1 through Doc. 30); and copy.
2
CLOSED
U.S. District Court
Middle District of Florida (Ocala)
CIVIL DOCKET FOR CASE #: 5:13-cv-00058-WTH-PRL
Reverse Mortgage Solutions, Inc. v. Neil J. Gillespie as
Co-Trustees et al
Assigned to: Senior Judge Wm. Terrell Hodges
Referred to: Magistrate Judge Philip R. Lammens
Case in other court: 11th Circuit, 13-11585-B
State Court - 1/9/13, 2013-115-CAT
Cause: 05:0702 Administrative Procedure Act
Date Filed: 02/04/2013
Date Terminated: 03/11/2013
Jury Demand: None
Nature of Suit: 290 Real Property: Other
Jurisdiction: Federal Question
Plaintiff
Reverse Mortgage Solutions, Inc. represented by Danielle N. Parsons
McCalla Raymer, LLC
Suite 660
225 E Robinson St
Orlando, FL 32801
954-319-7121
Fax: 954-556-7061
Email: dnp@mccallaraymer.com
LEAD ATTORNEY
ATTORNEY TO BE NOTICED
V.
Defendant
Neil J. Gillespie as Co-Trustees
of the Gillespie Family Living Trust
Agreement Dated February 10, 1997
represented by Neil J. Gillespie as Co-Trustees
8092 SW 115th Loop
Ocala, FL 34481
352/854-7807
PRO SE
Defendant
Mark Gillespie as Co-Trustees
Defendant
Oak Run Homeowners Association, Inc.
Defendant
United States of America
on behalf of the Secretary of Housing and
Urban Development
Electronic Case Filing | U.S. District Court - Middle District of Florida https://ecf.flmd.uscourts.gov/cgi-bin/DktRpt.pl?798989392314971-L_1_0-1
1 of 5 6/17/2013 10:47 AM
3
Defendant
Elizabeth Bauerle
Defendant
Mark Gillespie represented by Tiffany Caparas
Kaufman, Englett & Lynd, PLLC
111 N. Magnolia Avenue
Suite 1600
Orlando, FL 32801
LEAD ATTORNEY
Defendant
Neil J. Gillespie represented by Neil J. Gillespie
8092 SW 115th Loop
Ocala, FL 34481
352/854-7807
PRO SE
Defendant
Development & Construction
Corporation of America
Defendant
Unknown Spouse
of Elizabeth Bauerle
Defendant
Unknown Spouse
of Mark Gillespie
represented by Tiffany Caparas
(See above for address)
LEAD ATTORNEY
Defendant
Unknown Spouse
of Neil J. Gillespie
Defendant
Unknown Settlors/Beneficiaries
Defendant
Unknown Trustees
Defendant
Settlers and Beneficiaries
of Unknown Settlers/Beneficiaries of the
Gillespie Family Living Trust Agreement
dated February 10, 1997
2 of 5 6/17/2013 10:47 AM
Defendant
Unknown Tenant in Possession 1
Defendant
Unknown Tenant in Possession 2
Date Filed # Docket Text
02/04/2013 1 NOTICE OF REMOVAL from 5th Judicial Circuit in and for Marion County, case
number 2013-115-CAT filed in State Court on 1-9-13. filed by Neil J. Gillespie as
Co-Trustees, Neil J. Gillespie. (Attachments: #1 State Record)(LAB) Modified on
2/6/2013 (Entered: 02/06/2013)
02/04/2013 2 COMPLAINT (verified) to foreclose home equity conversion mortgage against All
Defendants filed by Reverse Mortgage Solutions, Inc.(LAB) (originally filed in state
court) Modified on 2/6/2013 (LAB) (Entered: 02/06/2013)
02/04/2013 3 MOTION to quash service of process filed by Mark Gillespie and Unknown Spouse(of
Mark Gillespie). (LAB) Originally filed in state court) Modified on 2/6/2013 (LAB).
(Entered: 02/06/2013)
02/04/2013 4 NOTICE of Filing Agreement with Plaintiff's Counsel to Extend Time to Respond to
this Lawsuit until 2/4/13 by Neil J. Gillespie and Neil J. Gillespie as Co-Trustees. (LAB)
(originally filed in state court) Modified on 2/6/2013 (LMF). (Entered: 02/06/2013)
02/04/2013 5 MOTION to Dismiss complaint (verified) to foreclose home equity conversion mortgage
by Neil J. Gillespie and Neil J. Gillespie as Co-Trustees. (Attachments: #1 Exhibits
1-19, #2 Composite A, #3 Composit B, #4 Appendix 1-21, #5 Appendix
22-42)(LAB) (Originally filed in state court) Modified on 2/6/2013 (LMF). (Entered:
02/06/2013)
02/05/2013 6 MOTION for leave to proceed in forma pauperis/affidavit of indigency by Neil J.
Gillespie. (LAB) Motions referred to Magistrate Judge Philip R. Lammens. Modified on
2/6/2013 (LMF). (Entered: 02/06/2013)
02/06/2013 7 MOTION for miscellaneous relief, specifically for Authorization to File Electronically
by Neil J. Gillespie. (LAB) (Entered: 02/07/2013)
02/07/2013 8 SUPPLEMENT re 6 MOTION for leave to proceed in forma pauperis/affidavit of
indigency by Neil J. Gillespie. (LAB) (Entered: 02/07/2013)
02/11/2013 9 NOTICE of filing titled "Notice of Homestead" by Neil J. Gillespie. (LAB) (Entered:
02/12/2013)
02/13/2013 10 REPORT AND RECOMMENDATION re 6 Defendant Neil Gillespie's Motion for
Leave to Proceed In Forma Pauperis. Signed by Magistrate Judge Philip R. Lammens
on 2/13/2013. (JLS) (Entered: 02/13/2013)
02/21/2013 11 MOTION for Extension of Time to File Response/Reply as to 5 MOTION to Dismiss
complaint by All Plaintiffs. (Parsons, Danielle) Motions referred to Magistrate Judge
Philip R. Lammens. (Entered: 02/21/2013)
3 of 5 6/17/2013 10:47 AM
02/22/2013 12 ORDER granting 11 Plaintiff's Agreed Motion for Extension of Time to the extent that
Plaintiff shall respond to Mr. Gillespie's Motion to Dismiss on or before the tenth day
after the District Judge enters an order on the Report and Recommendation, and only if
the Court does not remand this case. See Order for details. Signed by Magistrate Judge
Philip R. Lammens on 2/22/2013. (JLS) (Entered: 02/22/2013)
02/26/2013 13 NOTICE of designation under Local Rule 3.05 - track 2. Signed by Deputy Clerk on
2/26/2013. (Attachments: #1 consent forms) Copies mailed/emailed. (MAM) (Entered:
02/26/2013)
02/26/2013 14 MOTION to Compel plaintiff's compliance with Rule 7.1 Disclosure Statement by Neil
J. Gillespie. (LAB) Motions referred to Magistrate Judge Philip R. Lammens. (Entered:
02/27/2013)
02/26/2013 15 MOTION for Rule 11 sanctions against Danielle N. Parsons and McCalla Raymer, LLC
by Neil J. Gillespie. (LAB) (Entered: 02/27/2013)
02/26/2013 16 MOTION for entry of Rule 55 Default Judgment as to Reverse Mortgage Solutions, Inc.
by Neil J. Gillespie as Co-Trustees and Neil J. Gillespie. (LAB) Modified on 2/28/2013
(MJT). (Entered: 02/27/2013)
03/05/2013 17 Verified OBJECTION to, and MOTION for relief from 12 ORDER by Neil J. Gillespie
and Neil J. Gillespie as Co-Trustees. (LAB) Modified on 3/7/2013 (MJT). (Entered:
03/06/2013)
03/06/2013 18 OBJECTION to 10 Report and Recommendations by Neil J. Gillespie, Neil J. Gillespie
as Co-Trustees. (Attachments: #1 Appendix Ex. 1-11)(LAB) (Entered: 03/06/2013)
03/07/2013 19 ORDER denying 6 Defendant Neil J. Gillespie's Motion for leave to proceed in forma
pauperis/affidavit of indigency; adopting 10 Report and Recommendations; overruling
18 Defendant Neil J. Gillespie's Objections and denying his request for leave to amend
the notice of removal and to recuse the district judge and magistrate judge. The Clerk is
directed to remand this case to state court, terminate all pending motions, and close the
file. Signed by Senior Judge Wm. Terrell Hodges on 3/7/2013. (LRH) (Entered:
03/07/2013)
03/11/2013 20 JUDGMENT entered. Civil appeals checklist attached. (Signed by Deputy Clerk) (LAB)
(Entered: 03/11/2013)
04/08/2013 21 MOTION to Alter or Amend Judgment by Neil J. Gillespie and Neil J. Gillespie as
Co-Trustees. (LAB) Modified on 4/10/2013 (LAB). (Entered: 04/10/2013)
04/08/2013 22 AFFIDAVIT of Neil J. Gillespie re: 21 MOTION to Alter or Amend Judgment by Neil J.
Gillespie. (LAB) Modified on 4/10/2013 (LAB). (Entered: 04/10/2013)
04/10/2013 23 NOTICE OF APPEAL as to 19 Order on motion for leave to proceed in forma
pauperis/affidavit of indigency and Order on Report and Recommendations by Neil J.
Gillespie and Neil J. Gillespie as Co-Trustees. Filing fee not paid. (LAB) (Entered:
04/10/2013)
04/10/2013 TRANSMITTAL of initial appeal package to USCA consisting of copies of notice of
appeal, docket sheet, order/judgment being appealed, and motion, if applicable to USCA
re 23 Notice of appeal. (LAB) (Entered: 04/10/2013)
04/12/2013 24 ORDER denying 21 Motion to Alter or Amend Judgment. Signed by Senior Judge Wm.
Terrell Hodges on 4/12/2013. (LRH) (Entered: 04/12/2013)
4 of 5 6/17/2013 10:47 AM
04/22/2013 ACKNOWLEDGMENT by USCA of receiving Notice of Appeal on 04/22/13 re 23
Notice of appeal. USCA number: 13-11585-B. (MJT) (Entered: 04/22/2013)
05/06/2013 25 MOTION for Leave to Appeal in forma pauperis by Neil J. Gillespie, Neil J. Gillespie as
Co-Trustees. (LAB) (Entered: 05/07/2013)
05/06/2013 26 APPENDIX re 25 MOTION for Leave to Appeal in forma pauperis. (LAB) (Entered:
05/07/2013)
05/06/2013 27 AFFIDAVIT of indigency by Neil J. Gillespie and Neil J. Gillespie as Co-Trustees.
(LAB) (Entered: 05/07/2013)
05/09/2013 28 ORDER denying 25 Motion for Leave to Appeal in forma pauperis. Signed by Senior
Judge Wm. Terrell Hodges on 5/9/2013. (LRH) (Entered: 05/09/2013)
05/10/2013 TRANSMITTAL to USCA forwarding 28 Order denying motion for leave to appeal in
forma pauperis re 23 Notice of appeal USCA number: 13-11585-B. (LAB) (Entered:
05/10/2013)
05/21/2013 ACKNOWLEDGMENT by USCA of receiving IFP on Appeal Denied Order and
Certified Copy of Docket Sheet on 05/15/13 re 23 Notice of appeal. USCA number:
13-11585-b. (LAB) (Entered: 05/23/2013)
06/07/2013 29 NOTICE of filing The Florida Bar Case No. 20133090(5) by Neil J. Gillespie (MJT)
(Entered: 06/07/2013)
06/12/2013 30 USCA Dismissal ORDER as to 23 Notice of appeal filed by Neil J. Gillespie, Neil J.
Gillespie as Co-Trustees. Appeal dismissed sua sponte for lack of jurisdiction. EOD:
06/12/13; USCA number: 13-11585-B. (MJT) (Entered: 06/12/2013)
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
OCALA DIVISION
INC.,
Plaintiff,
-vs- Case No. 5:13-cv-58-Oc-10PRL
MARK GILLESPIE AS CO-TRUSTEES,
OAK R UN HOME OWNE R S
ASSOCIATION, INC., UNITED STATES
OF AMERICA, ELIZABETH BAUERLE,
MARK GILLESPIE, NEIL J . GILLESPIE,
DEVELOPMENT & CONSTRUCTION
CORPORATION OF AMERICA,
UNKNOWN SPOUSE, UNKNOWN
SPOUSE, UNKNOWN SPOUSE,
UNKNOWN SETTLORS AND/OR
/BENEF I CI ARI ES, UNKNOWN
TRUSTEES, SETTLERS AND
BENEFCIARIES, UNKNOWN TENANT
IN POSSESSION 1 AND UNKNOWN
TENANT IN POSSESSION 2,
Defendants.
_____________________________________/
O R D E R
This mortgage foreclosure action was filed in state court on J anuary 9, 2013, and
was removed to this Court by Defendant Neil J . Gillespie, acting pro se, on February
4, 2013 (Doc. 1). On March 19, 2013, the Court remanded the case to state court
because this Court lacked subject matter jurisdiction (Doc. 19). The Court denied Mr.
Gillespies motion to alter or amend judgment on April 12, 2013 (Doc. 24).
4
Mr. Gillespie has filed a Notice of Appeal (Doc. 23), and he has now moved for
leave to proceed in forma pauperis on appeal (Doc. 25). Pursuant to 28 U.S.C.
1915(a)(3), [a]n appeal may not be taken in forma pauperis if the trial court certifies
in writing that it is not taken in good faith. For the reasons stated in the Courts Orders
dated March 7, 2013 and April 12, 2013 (Docs. 19, 24), it is clear that the Court lacks
subject matter jurisdiction over this matter, and therefore Mr. Gillespies appeal of the
dismissal of his case on that ground is utterly frivolous.
In addition, Mr. Gillespie seeks to raise several issues on appeal regarding the
Courts purported failure to sanction the Plaintiff under Fed. R. Civ. P. 11, failure to
sustain Mr. Gillespies objections to the Magistrate J udges reports and
recommendations, and failure of the Court to recuse itself (Doc. 23). The Court has
also addressed these issues in its prior orders and found them to be without any legal
merit. Therefore, Mr. Gillespies appeal of these issues is also frivolous. As such, the
Court certifies that Mr. Gillespies appeal has not been taken in good faith, and his
motion for leave to appeal in forma pauperis (Doc. 25) is DENIED.
IT IS SO ORDERED.
DONE and ORDERED at Ocala, Florida this 9th day of May, 2013.
Copies to: Counsel of Record
Neil J . Gillespie, pro se
Maurya McSheehy
-2-
OCALA DIVISION
INC.,
Plaintiff,
Defendants.
_____________________________________/
O R D E R
This mortgage foreclosure action was filed in state court on J anuary 9, 2013, and
was removed to this Court by Defendant Neil J . Gillespie, acting pro se, on February
4, 2013 (Doc. 1). Gillespie then filed a motion (Doc. 6) for leave to proceed in forma
pauperis. The United States Magistrate J udge, by reference, initially considered that
motion and recommend that it be denied and that the case be remanded to state court
5
for lack of federal jurisdiction (Doc. 10). See 28 U.S.C. 1915(e)(2) and Fed. R. Civ.
P. 12(h)(3).
Gillespie filed lengthy Objections to the Magistrate J udges Report and
Recommendation (Doc. 18). In that document, (Id., p. 7, 11), Gillespie noted that the
undersigned has listed a financial interest in Bank of America. He then referred to
certain correspondence he had addressed to Bank of America, and to pending
investigations and/or administrative proceedings allegedly involving Bank of America,
none of which appeared to have any relationship to this case (Id., pp. 7-8, 12-17).
Nevertheless, Gillespie declared on the strength of that evidence that Bank of America
was a real party in interest (Id., p. 9, 18), and that the undersigned had a duty to
recuse (Id., p. 26, 42).
The Court overruled Gillespies objections to the Magistrate J udges Report and
Recommendation; and, as he had recommended, the Court ordered that the case be
remanded to the state court (Doc. 19). In that Order, the Court noted Gillespies
suggestion of recusal but observed that Bank of America is not listed as a party and
that despite his ipse dixit declaration that Bank of America is a party in interest, his
proffered justification for that assertion did not support it.
1
1
Of course, if it did appear that Bank of America had any interest in this litigation, the
undersigned would be disqualified under 28 U.S.C. 455(b)(4) and no motion would be required.
The statute is self executing.
-2-
Gillespie has now filed a motion to alter or amend judgment pursuant to Fed. R.
Civ. P. 59(e) (Doc. 21). In fact the motion does not seek to alter or amend the
judgment at all. It is, instead, a motion to disqualify and, as such, is arguably moot.
As noted, however, 28 U.S.C. 455(b)(4) is self executing, and if the undersigned was
disqualified before the judgment was entered, the judgment would no doubt be void.
The Court will, therefore, address the motion on its merits.
Although Gillespies motion makes several arguments that adverse rulings are
indicative of bias and that senior federal judges are unconstitutional none merit
further discussion except for his repeated assertion that Bank of America is a real party
in interest.
The record is still devoid of any evidence to support Gillespies claim. In fact, the
only pertinent document that is of record tends to affirmatively refute it. Attached to the
Plaintiffs Complaint is an Assignment dated March 27, 2012, months before this
litigation was commenced, whereby Bank of America assigned to the Plaintiff, Reverse
Mortgage Solutions, Inc., . . . all beneficial interest under that certain Mortgage
described below together with the note(s) and obligations therein described and the
money due and to become due thereon with interest and all rights secured or to accrue
under said Mortgage. (Doc. 2, p. 38).
Of course, as a matter of pure conjecture, it is conceivable that Bank of America
through some separate document or agreement may have retained some contingent
interest in the subject note(s) and mortgage, but 455 disqualifications cannot be
-3-
justified by speculation and conjecture. There is, to be sure, an absolute and automatic
duty to disqualify whenever it becomes established that the judge has a financial
interest . . . in a party to the proceeding. . . . 28 U.S.C. 455(b)(4). There is also a
concomitant duty, however, not to disqualify under 455 on the basis of a fanciful or
wholly speculative assertion. Otherwise, judges could be tempted to invoke the statute
as a basis for avoiding hard or distasteful cases, with resulting injury to the collegiality
of the court, and lawyers could be tempted to invoke the statute on transparently thin
grounds as a tool for forum shopping.
In the language of the statute, the undersigned does not know that he has a
financial interest in a party to the proceeding, and does not have any personal bias
against Gillespie that would impel a sua sponte recusal.
The Motion to Alter or Amend J udgment (Doc. 21) is DENIED.
2
IT IS SO ORDERED.
DONE and ORDERED at Ocala, Florida this 12th day of April, 2013.
Neil J . Gillespie, pro se
Maurya McSheehy
2
The Court acknowledges that on April 10, 2013, Mr. Gillespie filed a Notice of Appeal with
the Eleventh Circuit Court of Appeals (Doc. 23). Nevertheless, the Court has retained jurisdiction
to consider the present motion. See Fed. R. App. P. 4(a)(4).
-4-
OCALA DIVISION
REVERSE MORTGAGE
SOLUTIONS, INC.,
Plaintiff,
Case No. 5:13-cv-58-Oc-10PRL
-vs-
NEIL J. GILLESPIE, AS CO-TRUSTEES, et al.,
Defendants.
JUDGMENT IN A CIVIL CASE
Decision by Court. This action came to trial or hearing before the Court. The issues have been
tried or heard and a decision has been rendered.
IT IS ORDERED AND ADJUDGED
Pursuant to the Courts Order entered on March 7, 2013, this case is dismissed and
remanded to the Circuit Court of the Fifth Judicial Circuit, in and for Marion
County, Florida.
Date: March 11, 2013
SHERYL L. LOESCH, CLERK
L. Burget
By: L. Burget, Deputy Clerk
Copies furnished to:
Counsel of Record
Unrepresented Parties
6
CIVIL APPEALS JURISDICTION CHECKLIST
1. Appealable Orders: Courts of Appeals have jurisdiction conferred and strictly limited by statute:
(a) Appeals from final orders pursuant to 28 U.S.C. Section 1291: Only final orders and judgments of district courts,
or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under 28
U.S.C. Section 158, generally are appealable. A final decision is one that ends the litigation on the merits and leaves
nothing for the court to do but execute the judgment. Pitney Bowes, Inc. V. Mestre, 701 F.2d 1365, 1368 (11th Cir.
1983). A magistrate judges report and recommendation is not final and appealable until judgment thereon is entered
by a district court judge. 28 U.S.C. Section 636(c).
(b) In cases involving multiple parties or multiple claims, a judgment as to fewer than all parties or all claims is not
a final, appealable decision unless the district court has certified the judgment for immediate review under
Fed.R.Civ.P. 54(b), Williams v. Bishop, 732 F.2d 885, 885-86 (11th Cir. 1984). A judgment which resolves all
issues except matters, such as attorneys fees and costs, that are collateral to the merits, is immediately appealable.
Budinich v. Becton Dickinson & Co., 486 U.S. 196, 201, 108 S. Ct. 1717, 1721-22, 100 L.Ed.2d 178 (1988);
LaChance v. Duffys Draft House, Inc., 146 F.3d 832, 837 (11th Cir. 1998).
(c) Appeals pursuant to 28 U.S.C. Section 1292(a): Appeals are permitted from orders granting, continuing,
modifying, refusing or dissolving injunctions or refusing to dissolve or modify injunctions... and from
[i]nterlocutory decrees...determining the rights and liabilities of parties to admiralty cases in which appeals from final
decrees are allowed. Interlocutory appeals from orders denying temporary restraining orders are not permitted.
(d) Appeals pursuant to 28 U.S.C. Section 1292(b) and Fed.R.App.P.5: The certification specified in 28 U.S.C.
Section 1292(b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The
district courts denial of a motion for certification is not itself appealable.
(e) Appeals pursuant to judicially created exceptions to the finality rule: Limited exceptions are discussed in cases
including, but not limited to: Cohen V. Beneficial Indus. Loan Corp., 337 U.S. 541,546,69 S.Ct. 1221, 1225-26, 93
L.Ed. 1528 (1949); Atlantic Fed. Sav. & Loan Assn v. Blythe Eastman Paine Webber, Inc., 890 F. 2d 371, 376 (11th
Cir. 1989); Gillespie v. United States Steel Corp., 379 U.S. 148, 157, 85 S. Ct. 308, 312, 13 L.Ed.2d 199 (1964).
2. Time for Filing: The timely filing of a notice of appeal is mandatory and jurisdictional. Rinaldo v. Corbett, 256 F.3d 1276,
1278 (11th Cir. 2001). In civil cases, Fed.R.App.P.4(a) and (c) set the following time limits:
(a) Fed.R.App.P. 4(a)(1): A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. 3 must be
filed in the district court within 30 days after the entry of the order or judgment appealed from. However, if the
United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within
60 days after such entry. THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT
NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD - no additional days are provided for
mailing. Special filing provisions for inmates are discussed below.
(b) Fed.R.App.P. 4(a)(3): If one party timely files a notice of appeal, any other party may file a notice of appeal within
14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a),
whichever period ends later.
(c) Fed.R.App.P.4(a)(4): If any party makes a timely motion in the district court under the Federal Rules of Civil
Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order
disposing of the last such timely filed motion.
(d) Fed.R.App.P.4(a)(5) and 4(a)(6): Under certain limited circumstances, the district court may extend the time to file
a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days
after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good
cause. Under Rule 4(a)(6), the time may be extended if the district court finds upon motion that a party did not timely
receive notice of the entry of the judgment or order, and that no party would be prejudiced by an extension.
(e) Fed.R.App.P.4(c): If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal
case, the notice of appeal is timely if it is deposited in the institutions internal mail system on or before the last day
for filing. Timely filing may be shown by a declaration in compliance with 28 U.S.C. Section 1746 or a notarized
statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid.
3. Format of the notice of appeal: Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format.
See also Fed.R.App.P. 3(c). A pro se notice of appeal must be signed by the appellant
4. Effect of a notice of appeal: A district court loses jurisdiction (authority) to act after the filing of a timely notice of appeal,
except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. 4(a)(4).
-2-
OCALA DIVISION
INC.,
Plaintiff,
Defendants.
_____________________________________/
ORDER REMANDING CASE
On J anuary 2, 2013, the Plaintiff, Reverse Mortgage Solutions, Inc., filed a
foreclosure action in the Circuit Court of the Fifth J udicial Circuit, in and for Marion
County, Florida against numerous defendants, both known and unknown (Doc. 2). The
Complaint alleges state court causes of action only, pursuant to Fla. Stat. 26.012.
On February 4, 2013, one of the Defendants, Neil. J . Gillespie, proceeding pro
7
se, filed a Notice of Removal pursuant to 28 U.S.C. 1441(a), 28 U.S.C. 1331, and
5 U.S.C. 702 (Doc. 1). The Notice of Removal states that Mr. Gillespie intends to
raise various counterclaims and affirmative defenses under the Administrative
Procedures Act, 5 U.S.C. 701, et seq., and intends to file cross-claims against
Defendant United States of America, Department of Housing and Urban Development
(HUD) (Id., pp. 2-3). Mr. Gillespie has also filed a motion for leave to proceed in
forma pauperis (Doc. 6).
On February 13, 2013, the United States Magistrate J udge issued a Report and
Recommendation (Doc. 10), which recommended, pursuant to 28 U.S.C. 1915(e)(2),
that the motion to proceed in forma pauperis be denied, and this case be remanded to
state court for lack of subject matter jurisdiction. See Fed. R. Civ. P. 12(h)(3).
Specifically, the Magistrate J udge held that remand is proper both because this Court
lacks subject matter jurisdiction under the well-pleaded complaint rule, see Caterpillar,
Inc. v. Williams, 482 U.S. 386, 392, 107 S. Ct. 2425, 2429 (1987), and because there
is a procedural defect in the notice of removal.
Mr. Gillespie has filed 58 pages of objections and exhibits challenging the
Magistrate J udges Report and Recommendation, as well as seeking recusal of both
the undersigned and the Magistrate J udge (Doc. 18). Although typically the Court
would afford the Plaintiff leave to respond to the Objections, the law and the facts of
this case conclusively establish that this Court is without subject matter jurisdiction,
such that it would be a waste of attorney and judicial resources to wait for a response.
-2-
The Magistrate J udge noted that the decision whether a claim arises under
federal law for purposes of 1331 is generally determined by the well-pleaded
complaint rule, which provides that federal jurisdiction exists only when a federal
question is presented on the face of the plaintiffs properly pleaded complaint. Smith
v. GTE Corp., 236 F.3d 1292, 1310 (11th Cir. 2001) (citing Caterpillar, 482 U.S. at
392). Under the well-pleaded complaint rule, merely having a federal defense to a
state law claim is insufficient to support removal. Lontz v. Tharp, 413 F.3d 435, 439
(4th Cir. 2005). Moreover, the Supreme Court has held that a counterclaim cannot
serve as the basis for arising under federal question jurisdiction. Holmes Group, Inc.
v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 832, 122 S. Ct. 1889, 1894 (2002).
See also Mortgage Electronic Registration Systems, Inc. v. Malugen, No. 6:11-cv-2033-
Orl-22, 2012 WL 1382265 at * 8 (M.D. Fla. Apr. 3, 2012) (Thus, the law is well settled
that federal claims raised in a counterclaim may not serve as a basis for removal
jurisdiction.).
The Magistrate J udge found that the only issues of federal law in this case were
raised in Mr. Gillespies anticipated defenses or other such claim, and thus, under the
well-pleaded complaint rule, this Court was without subject matter jurisdiction (Doc. 10,
p. 5). Mr. Gillespies primary objections focus on the fact that he intends to raise
questions of federal law not only in his counterclaims and defenses, but also in cross-
claims he intends to assert against HUD. This is a distinction without a difference.
The basic principle is that defendants may remove only on the basis of claims brought
-3-
against them and not on the basis of counterclaims, cross-claims, or defenses asserted
by them. Image 1 Studios, LLC v. Youngblood, No. 6:12-cv-1570-Orl-22DAB, 2012
WL 5415629 at * 1 (M.D. Fla. Oct. 22, 2012) (quoting 14C Charles Alan Wright, Arthur
R. Miller Edward H. Cooper & J oan E. Steinman, FEDERAL PRACTICE AND PROCEDURE
3730 (4th ed. 2009)). See also Chevy Chase Bank, F.S.B. v. Carrington, No. 6:09-
cv-2132-Orl-31GJ K, 2010 WL 1854123 at * 3 (M.D. Fla. May 10, 2010) (remanding
case to state court where the only claims that arose under federal law were contained
in the defendants cross-claims). Thus, whether Mr. Gillespie asserts a federal cause
of action in his counterclaim, affirmative defense, or cross-claim, is irrelevant for
purposes of determining subject matter jurisdiction. The Court is limited solely to a
review of the Plaintiffs Complaint, which in this case clearly and explicitly only raises
issues of state foreclosure law.
1
Mr. Gillespies objection on this point shall be
Overruled.
Mr. Gillespie also objects to the Magistrate J udges finding that the notice of
removal was procedurally defective because it does not contain the consent and/or
joinder of all other Defendants in the removal. Specifically, Mr. Gillespie contends that
he is the only defendant with a real interest in this case, and that the other defendants
were neither properly joined or served. This objection is based on both hearsay and
1
This Order should not be interpreted as a ruling concerning whether, or to what extent, Mr.
Gillespie can sue HUD in a separate action. Rather, this Order is limited to whether the Court has
subject matter jurisdiction over the specific action that has been removed to this Court.
-4-
supposition on the part of Mr. Gillespie the fact remains that several other defendants
have been served and have not consented or joined in the notice of removal. This is
sufficient to warrant remand. Moreover, this objection does not change the fact that
this Court lacks subject matter jurisdiction and must remand regardless of the validity
of the procedures used for removal. This objection shall be Overruled.
Mr. Gillespie next objects to the Magistrate J udges report and recommendation,
on the ground that the mere inclusion of the United States as a defendant automatically
gives this Court subject matter jurisdiction over the entire case. Mr. Gillespie is
mistaken. Simply listing the United States as a defendant does not automatically clothe
this Court with jurisdiction rather it gives the United States the right to seek removal
of the case to federal court. Unless and until the United States seeks removal, this
Court is without jurisdiction. Moreover, the Court has reviewed the very narrow
circumstances when it would have jurisdiction over cases where the United States is
listed as a defendant, and this case does not fall within any of those circumstances.
See 28 U.S.C. 1346, 2409, 2409a. This objection will also be Overruled.
Mr. Gillespies other objections are either irrelevant (objection to the date the
Plaintiffs actually filed their complaint in state court), or redundant (arguing that his
anticipated federal cross-claims against HUD establish jurisdiction). They warrant no
further discussion, and will be Overruled. Mr. Gillespies request to amend his Notice
of Removal will also be Denied as futile because there is no set of facts or legal claims
that can be raised which would give the Court jurisdiction over this case.
-5-
Lastly, Mr. Gillespie seeks to recuse the undersigned and the Magistrate J udge.
Because the Court does not have subject matter jurisdiction, it would appear that this
request is now moot. In any event, the Court finds that the request is also without legal
merit. Mr. Gillespie seeks the undersigneds recusal on the basis that I have a financial
interest in Bank of America, which Mr. Gillespie contends is the real party in interest in
this case. However, Bank of America is not listed as a party, and the evidence
submitted by Mr. Gillespie, which consists of correspondence between Mr. Gillespie
and Bank of America in which Mr. Gillespie is requesting information about various
accounts, does not appear to have anything to do with this case.
Mr. Gillespie seeks recusal of the Magistrate J udge on the grounds that the
Magistrate J udges report and recommendation contains misstatements of law and fact,
and therefore calls into question the Magistrate J udges fairness and impartiality. The
Magistrate J udge has not misstated any law or facts, rather he has correctly
determined that there is no subject matter jurisdiction. Besides, any such claim would
relate to judicial acts rather than extra-judicial bias, and it is insufficient to work a
disqualification as a matter of law. And the fact that Mr. Gillespie does not agree with
the Magistrate J udges well-founded report and recommendation does not establish
any legally cognizable bias either. See 28 U.S.C. 144, 455(a), and 455(b)(1).
Accordingly, upon due consideration it is hereby ORDERED as follows:
(1) The United States Magistrate J udges Report and Recommendation (Doc.
10) is ADOPTED, CONFIRMED, AND MADE A PART HEREOF;
-6-
(2) Defendant Neil J . Gillespies Objections (Doc. 18) are OVERRULED, and
his requests for leave to amend his Notice of Removal and for recusal of the
undersigned and the Magistrate J udge are all DENIED;
(3) Defendant Neil J . Gillespies Motion for Leave to Proceed In Forma
Pauperis (Doc. 6) is DENIED;
(4) The Clerk is directed to remand this case to the Circuit Court of the Fifth
J udicial Circuit, in and for Marion County, Florida; and
(5) The Clerk is further directed to enter judgment accordingly, terminate all
other pending motions, and close the file.
IT IS SO ORDERED.
DONE and ORDERED at Ocala, Florida this 7th day of March, 2013.
Hon. Philip R. Lammens
Maurya McSheehy
-7-
OCALA DIVISION

INC.,

Plaintiff,

v. Case No: 5:13-CV-58-Oc-10PRL

NEIL J. GILLESPIE AS CO-
TRUSTEES, MARK GILLESPIE AS
CO-TRUSTEES, OAK RUN
HOMEOWNERS ASSOCIATION, INC.,
UNITED STATES OF AMERICA,
ELIZABETH BAUERLE, MARK
GILLESPIE, NEIL J. GILLESPIE,
UNKNOWN
SETTLORS/BENEFICIARIES,
UNKNOWN TRUSTEES, SETTLERS
AND BENEFICIARIES, UNKNOWN
TENANT IN POSSESSION 1 and
UNKNOWN TENANT IN POSSESSION
2

Defendants.

ORDER
This cause is before the Court on Plaintiffs Agreed Motion for Extension of Time (Doc.
11). Plaintiff seeks an extension of time to respond to Defendant, Neil Gillespies, Motion to
Dismiss from February 21, 2013, up to and including March 13, 2013, because it requires
additional information to file its response. Plaintiff represents that Mr. Gillespie agrees to the
relief requested.
8
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- 2 -
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OCALA DIVISION

INC.,

Plaintiff,

v. Case No: 5:13-CV-58-Oc-10PRL

NEIL J. GILLESPIE AS CO-TRUSTEES,
OAK RUN HOMEOWNERS
MARK GILLESPIE, NEIL J. GILLESPIE,
UNKNOWN
SETTLORS/BENEFICIARIES,
UNKNOWN TRUSTEES, SETTLERS AND
BENEFICIARIES, UNKNOWN TENANT
IN POSSESSION 1 and UNKNOWN
TENANT IN POSSESSION 2

Defendants.

REPORT AND RECOMMENDATION
1

This cause is before the Court on Defendant Neil Gillespies Affidavit of Indigency (Doc.
6), which the Court construes as a Motion for Leave to Proceed In Forma Pauperis. The Court
has also reviewed Mr. Gillespies Notice of Removal (Doc. 1), his Supplement to Affidavit of
Indigency (Doc. 8), and Plaintiffs Complaint (Doc. 2). For the reasons that follow, the

1
Specific written objections may be filed in accordance with 28 U.S.C. ' 636, and Rule 6.02, Local Rules, M.D.
Fla., within fourteen (14) days after service of this report and recommendation. Failure to file timely objections
shall bar the party from a de novo determination by a district judge and from attacking factual findings on appeal.

9
- 2 -
undersigned respectfully recommends that Defendants Motion (Doc. 6) be denied and this case
be remanded to state court.
I. BACKGROUND
On J anuary 2, 2013, Plaintiff initiated this action in the Circuit Court of the Fifth J udicial
Circuit, in and for Marion County, Florida, against Mr. Neil Gillespie (and other Defendants) to
foreclose a reverse mortgage on real property in Marion County, Florida, pursuant to Fla. Stat.
26.012. (Doc. 2, 1). Subsequently, on February 4, 2013, Mr. Gillespie filed a Notice of
Removal (Doc. 1), removing this action to federal court pursuant to 28 U.S.C. 1441, and
alleging that this Court has jurisdiction per 28 U.S.C. 1331 (federal question jurisdiction) and 5
U.S.C. 702 (Administrative Procedures Act) (APA). (See Doc. 1, p.1 & 7).
II. DISCUSSION
Prior to deciding whether Mr. Gillespie qualifies to proceed in forma pauperis, the Court
has the authority, pursuant to 28 U.S.C. 1915(e)(2), to determine whether Mr. Gillespie should
be permitted to proceed in forma pauperis by determining whether there is a factual and legal
basis . . . for the asserted wrong, however inartfully pleaded. Id. (quoting Watson v. Ault, 525
F.2d 886, 892 (5th Cir. 1976)). Critical to this analysis is a showing that the claim is within the
limited jurisdiction of this federal court. See Cogdell v. Wyeth, 366 F.3d 1245, 1247-48 (11th
Cir. 2004). This analysis is equally compelling where a Defendant seeks to proceed as a pauper
in a case he had improvidently removed. See HSBC Bank U.S.A., N.A. v. Anderson, 2012 WL
4896686, at *3 (M.D. Fla. Sept. 24, 2012) (adopted by 2012 WL 4896686 (M.D. Fla. Sept. 24,
2012)) (emphasis added); see also U.S. Bank National Assn v. Cavalcante, 2012 WL 4466514,
at *3 (M.D. Fla. Sept. 11, 2012) (adopted by 2012 WL 4466452 (M.D. Fla. Sept. 27, 2012)).
Upon a review of the Complaint and the file as a whole, the Court finds that it has no jurisdiction
- 3 -
over this state court matter, and recommends that Mr. Gillespies Motion to Proceed In Forma
Pauperis be denied and this case be remanded.
Removal statues are to be strictly construed against removal. Shamrock Oil & Gas Corp.
v. Sheets, 313 U.S. 100, 108, 61 S.Ct. 868, 85 L.Ed. 1214 (1941); Burns v. Windosor Ins. Co., 31
F.3d 1092, 1095 (11th Cir. 1994) ([R]emoval statutes are construed narrowly; when the parties
dispute jurisdiction, uncertainties are resolved in favor of remand.). Any doubt as to proper
subject matter jurisdiction should be resolved against removal. Butler v. Polk, 592 F.2d 1293,
1296 (5th Cir. 1979). The removing party has the burden of proving that federal jurisdiction
exists by a preponderance of the evidence and the removing party must present facts establishing
its right to remove. Williams v. Best Buy Co., 269 F.3d 1316, 1319 (11th Cir. 2001). When the
defendant fails to do so, the case must be remanded. Id. at 1321.
There are two grounds for remanding a removed case: (1) lack of subject matter
jurisdiction; or (2) [a] procedural defect in the removal of the case. Russell Corp. v. American
Home Assurance Co., 264 F.3d 1040, 1043-44 (11th Cir. 2001) (citations omitted). Upon review
of Mr. Gillespies Notice of Removal (Doc. 1) and Plaintiffs Complaint (Doc. 2), this case
should be remanded to state court because this Court lacks subject matter jurisdiction and there is
a procedural defect in the removal.
A. Subject Matter Jurisdiction
Federal courts are courts of limited jurisdiction and therefore, have an obligation to
inquire into their subject matter jurisdiction. See Kirkland v. Midland Mortgage Co., 243 F.3d
1277, 1279-80 (11th Cir. 2001). In a given case, a federal district court must have at least one
of three types of subject matter jurisdiction: (1) jurisdiction under a specific statutory grant; (2)
federal question jurisdiction pursuant to 28 U.S.C. 1331; or (3) diversity jurisdiction pursuant
- 4 -
to 28 U.S.C. 1332(a). Baltin v. Alaron Trading, Corp., 128 F.3d 1466, 1469 (11th Cir. 1997.)
Notably, the Courts subject matter jurisdiction over a case is determined by reference to the
well-pleaded complaint rule. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425,
2429 (1987). This rule provides that federal jurisdiction exists only when a federal question is
presented on the face of the plaintiffs properly-pleaded complaint. Id.
Counterclaims and affirmative defenses raised by a defendant cannot establish subject
matter jurisdiction. See Holmes Grp., Inc. v. Vornado Air Circulation Systems, Inc., 535 U.S.
826, 122 S.Ct. 1889 (2002) ([A] counterclaim which appears as part of the defendants
answer, not as part of the plaintiffs complaint cannot serve as the basis for arising under
jurisdiction); Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 6, 123 S.Ct. 2058, 156 L.Ed.2d 1
(2003) (To determine whether the claim arises under federal law, we examine the well
pleaded allegations of the complaint and ignore potential defenses.); Pan Am. Petroleum Corp.
v. Superior Court of Del., 366 U.S. 656, 663, 81 S.Ct. 1303, 6 L.Ed.2d 584 (1961) (noting that if
the plaintiff does not raise a federal question in the complaint, it is no substitute that the
defendant is almost certain to raise a federal defense); Bd. of Educ. of Atlanta v. Am. Fed'n of
State, Cnty. & Mun. Employees, 401 F. Supp. 687, 690 (N.D.Ga.1975) (Stated simply, a federal
district court's original federal question jurisdiction must be posited upon the plaintiff's pleading
of his own case, and not by defendant's response or even plaintiff's anticipation of a federal
element in that response.).
Here, Mr. Gillespie claims that this Court has federal question jurisdiction or jurisdiction
pursuant to the APA. (See Doc. 1, 7). However, applying the well-pleaded complaint rule
and looking to the face of the Complaint, it is clear that the Complaint only alleges state law
claims; specifically, this is a mortgage foreclosure action pursuant to Florida law. (See Doc. 2,
- 5 -
1). The Complaint simply does not assert any federal claims or a basis for diversity jurisdiction;
thus, the case should not have been removed. The fact that Mr. Gillespie has asserted a defense
in his Notice of Removal (Doc. 1) does not change this result. Specifically, Mr. Gillespie seeks
to procure this Courts jurisdiction through a defense, that is, he seeks redress under the
Administrative Procedures Act . . . against a Defendant . . . . (Doc. 1, 8). As noted above, Mr.
Gillespie cannot obtain federal court jurisdiction through a defense or other such claim.
Accordingly, this Court lacks subject matter jurisdiction over this case. Moreover, in accordance
with Fed. R. Civ. P. 12(h)(3), which requires the Court to dismiss any action at any time if the
Court determines it lacks subject matter jurisdiction, this case cannot remain in federal court.
B. Procedural Defect in the Removal
Mr. Gillespies Notice of Removal is also procedurally defective. A defendant or
defendants desiring to remove any civil action . . . shall file in the district court . . . a notice of
removal . . . . 28 U.S.C. 1446(a). When a civil action is removed solely under section
1441(a), all defendants who have been properly joined and served must join in or consent to the
removal of the action. 28 U.S.C. 1446(2)(A). Failure to comply with this requirement is
grounds for remand as a defect in the removal process. Russell Corp., 264 F.3d at 1044 (citing
In re Bethesda Meml Hosp. Inc., 123 F.3d 1407, 1410 & n.2 (11th Cir. 1997); In re Ocean
Marine Mut. Protection and Indem. Assn, Ltd., 3 F.3d 353, 355-56 (11th Cir. 1993)).
Here, Mr. Gillespie removed this action to federal court solely based on Section 1441(a);
however, of all defendants in this case only Neil J . Gillespie and Neil J . Gillespie Co-Trustee of
the Gillespie Family Living Trust Agreement have joined in the removal. (See Doc. 1, at 1).
Thus, since not all of the defendants (who were served) joined in the removal, Mr. Gillespies
Notice of Removal is procedurally defective and this case should be remanded.
In
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Rev. 2/11 UNITED STATES COURT OF APPEALS

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