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Carrington v. Mnuchin

United States District Court, D. South Carolina, Orangeburg Division

September 14, 2016

John C. Carrington and Deborah T. Carrington, Plaintiffs,
v.
Steven T. Mnuchin, IMB HoldCo, LLC, and OneWest Bank, FSB, Defendants.

          ORDER AND OPINION

         Plaintiffs John C. Carrington and Deborah T. Carrington (together “Plaintiffs”) filed this action seeking damages from Defendants IMB HoldCo, LLC (“IMB”), OneWest Bank, FSB (“OneWest”), and Steven T. Mnuchin[1] (“Mnuchin”) (collectively “Defendants”) for their alleged failure to properly pay Plaintiffs' property taxes out of amounts held in escrow and to adequately evaluate Plaintiffs for a loan modification under the Home Affordable Modification Program (“HAMP”), 12 U.S.C. §§ 5219, 5219a, 1715z-23. (ECF Nos. 1, 16.) In their pleadings, Plaintiffs asserted a federal law claim against Defendants for violation of the Real Estate Settlement Procedures Act of 1974 (“RESPA”), 12 U.S.C. §§ 2601-2617, and state law claims for breach of contract and a cause of action that Defendants construed as either a claim for fraud or for breach of contract accompanied by a fraudulent act.[2] (Id.)

         This matter is before the court pursuant to Plaintiffs' Rule 59(e)[3] Motion (ECF No. 50) seeking to alter the court's Order (ECF No. 49) entered on January 27, 2016 (the “January Order”). In the January Order, the court denied with prejudice Plaintiffs' Rule 60(b) Motion for Relief (ECF No. 44) seeking relief from the court's Order (ECF No. 42) filed on August 27, 2014, and denied as moot Plaintiffs' Motion for Evidentiary Hearing (ECF No. 47).

         For the reasons set forth below, the court DENIES Plaintiffs' Rule 59(e) Motion.

         I. RELEVANT BACKGROUND TO PENDING MOTION [4]

         On December 6, 2013, Plaintiffs commenced this action alleging causes of action against Defendants for violation of RESPA, breach of contract, and a claim for either fraud or breach of contract accompanied by a fraudulent act. (ECF No. 1.) On February 4, 2014, OneWest filed a Partial Motion to Dismiss Plaintiffs' Complaint pursuant to Rule 12(b)(6) and IMB filed a Motion to Dismiss Plaintiffs' Complaint pursuant to Rules 12(b)(2) and (6). (ECF Nos. 9, 10.) In response to the Motions to Dismiss relating to the Complaint, Plaintiffs filed an Amended Complaint on February 28, 2014. (ECF No. 16.)

         On March 27, 2014, IMB filed a Rule 12(b)(2) Motion and a Rule 12(b)(6) Motion and OneWest filed a Rule 12(b)(6) Motion as to the Amended Complaint. (ECF Nos. 22, 23.) Plaintiffs did not file a response in opposition to the Motions to Dismiss the Amended Complaint.[5] Thereafter, on August 27, 2014, the court entered an Order (ECF No. 42) dismissing Plaintiffs' claims against IMB for lack of personal jurisdiction, against OneWest for failure to state a claim, and against Mnuchin for failure to serve within 120 days as required by Rule 4(m). (ECF No. 42 at 20.) The Clerk of Court entered the Judgment of Dismissal (ECF No. 43) for Defendants on August 27, 2014.

         On August 26, 2015, Plaintiffs filed a Motion for Rule 60 Relief, asserting that subsections 3 and 6 of Rule 60(b) afforded them relief from the Order entered on August 27, 2014. (ECF No. 44.) In their Rule 60 Motion, Plaintiffs asserted that IMB's attorney committed fraud and/or misconduct by (1) representing to the court that Plaintiffs' breach of contract claim was governed by the 3-year statute of limitation in S.C. Code Ann. § 15-3-530(1) (2014)[6] when he knew, at the time of filing IMB's Motion to Dismiss, that S.C. Code Ann. § 15-3-520(a) (2014)[7] and its 20-year window controlled Plaintiffs' breach of contract claims (ECF No. 44 at 5-6); (2) knowingly engaging in the submission of false representations[8] to the court (id. at 10); and (3) misleading the court as to IMB's “business operations in South Carolina including its interest in real property in the State[]” to avoid the court's personal jurisdiction (id. at 22). Defendants filed a Memorandum of Law in Opposition to Plaintiffs' Rule 60(b) Motion for Relief (ECF No. 46) on September 14, 2015, to which Plaintiffs filed a Reply to Defendants' Opposition and a Request for Evidentiary Hearing (ECF No. 47) on September 24, 2015. On January 27, 2016, the court entered the January Order denying Plaintiffs' Rule 60 Motion and Motion for Evidentiary Hearing. (ECF No. 49 at 6.)

         On February 24, 2016, Plaintiffs filed the instant Rule 59(e) Motion. On March 14, 2016, Defendants filed a Memorandum of Law in Opposition to Plaintiffs' Rule 59(e) Motion, to which Plaintiffs filed a Reply to Defendants' Response on March 24, 2016. (ECF Nos. 51, 52.)

         II. LEGAL STANDARD

         The decision whether to amend or alter a judgment pursuant to Rule 59(e) is within the sound discretion of the district court. Hughes v. Bedsole, 48 F.3d 1376, 1382 (4th Cir. 1995). Under Rule 59(e), a court may “alter or amend the judgment if the movant shows either (1) an intervening change in the controlling law, (2) new evidence that was not available at trial, or (3) that there has been a clear error of law or a manifest injustice.” Robinson v. Wix Filtration Corp., 599 F.3d 403, 407 (4th Cir. 2010); see also Collison v. Int'l Chem. Workers Union, 34 F.3d 233, 235 (4th Cir. 1994). It is the moving party's burden to establish one of these three grounds in order to obtain relief under Rule 59(e). Loren Data Corp. v. GXS, Inc., 501 F.App'x 275, 285 (4th Cir. 2012).

         “[R]ule [59(e)] permits a district court to correct its own errors, ‘sparing the parties and the appellate courts the burden of unnecessary appellate proceedings.'” Pac. Ins. Co. v. Am. Nat'l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998). However, Rule 59 motions “may not be used to make arguments that could have been made before the judgment was entered.” Hill v. Braxton, 277 F.3d 701, 708 (4th Cir. 2002). Nor should they be used as opportunities to rehash issues already ruled upon because a litigant is displeased with the result. See Hutchinson v. Staton, 994 F.2d 1076, 1082 (4th Cir. 1993) (stating that “mere disagreement does not support a Rule 59(e) motion”); see also Consulting Eng'rs, Inc. v. Geometric Software Solutions & Structure Works LLC, No. 1:06cv956 (JCC), 2007 WL 2021901, at *2 (E.D. Va. July 6, 2007) (“A party's mere disagreement with the court's ruling does not warrant a Rule 59(e) motion, and such motion should not be used to rehash arguments previously presented or to submit evidence which should have been previously submitted.”). “In general, reconsideration of a judgment after its entry is an extraordinary remedy which should be used sparingly.” Pac. Ins. Co., 148 F.3d at 403.

         In their Motion, Plaintiffs do not rely on an intervening change in controlling law or refer to new evidence previously unavailable. Instead, they assert that the court committed a manifest injustice and/or clear error of law. Clear error occurs when the reviewing court “is left with the definite and firm conviction that a mistake has been committed.” United States v. Harvey, 532 F.3d 326, 336 (4th Cir. 2008) (internal quotation marks omitted); see also United States v. Martinez-Melgar, 591 F.3d 733, 738 (4th Cir. 2010) (“[C]lear error occurs when a district court's factual findings are against the clear weight of the evidence considered as a whole.”) (internal quotation marks omitted); Miller v. Mercy Hosp., Inc., 720 F.2d 356, 361 n.5 (4th Cir. 1983) (explaining that a district court's factual finding is clearly erroneous if “the finding is against the great preponderance of the evidence”) (internal quotation marks omitted). Manifest injustice occurs where the court “has patently misunderstood a party, or has made a decision outside the adversarial issues presented to the Court by the parties, or has made an error not of reasoning but of apprehension . . . .” Campero USA Corp. v. ADS Foodservice, LLC, 916 F.Supp.2d 1284, 1292-93 (S.D. Fla. 2012) (citations omitted).

         III. ANALYSIS

         A. The ...


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