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The Bank of New York Mellon v. Perry

United States District Court, D. Hawaii

November 27, 2017

LEN C. PERRY JR., an individual; NATHAN JON LEWIS, an individual; and 3925 KAMEHAMEHA RD PRINCEVILLE, HI 96722, LLC, a Hawaii limited liability corporation, Defendants.




         The Bank of New York Mellon (“BONY Mellon”), fka The Bank of New York, seeks dismissal of the Amended Counter-Complaint filed by Defendants Len C. Perry, Nathan J. Lewis, and 3925 Kamehameha Rd Princeville, HI 96722, LLC (the “LLC”). Although not entirely clear, Defendants appear to allege counterclaims sounding in fraud, in response to Plaintiff's attempt to set aside certain false liens and other fraudulent documents recorded by Defendants relating to real property on Kauai. Because it is difficult to discern any cognizable claims for relief in the Amended Counter-Complaint, and any mention of statutory or common law causes of action lack plausible, supporting factual allegations, Plaintiff's Motion to Dismiss is GRANTED. Defendants are permitted limited leave to file a further amended counter-complaint in accordance with the terms of this order, no later than December 29, 2017, with instructions below.


         I. Procedural Background

         Plaintiff filed this action on June 21, 2017, seeking cancellation of certain instruments based on Defendants' alleged improper and fraudulent recordings in the land records relating to Plaintiff's title to real property, including deeds purporting to convey title to Defendants. See Compl., Dkt. No. 1. It asserts claims against Defendants for cancellation of instruments, quiet title, slander of title, unjust enrichment, and declaratory judgment. Compl. ¶¶ 39-93. On August 2, 2017, Defendant Nathan Jon Lewis, proceeding pro se, filed an Answer, in which Lewis attempted to respond to the Complaint on behalf of all Defendants. 8/2/17 Answer, Dkt. No. 17. Lewis purported to “act[] as Trustee for the Len C. Perry, Jr. account, ” as “the authorized Trustee [with] a Special Power of attorney over this matter to represent Len C. Perry, Jr. [] as his agent.” 8/2/17 Answer, ¶¶ A, K. Lewis also avers that he is “the sole member of 3925 Kamehameha Rd Princeville HI 96722, LLC.” Id. ¶ L.[1] With their Answer, Defendants filed a “Counter Complaint” against BONY Mellon, alleging violations of numerous federal and state statutes, and seeking dismissal of the Complaint, summary judgment, and costs. 8/2/17 Counter-Complaint, Dkt. No. 17-1.

         Defendants then filed their “Amended Counter-Complaint for Collusion, Conspiracy and Fraudulent Misrepresentation” on August 21, 2017, again seeking dismissal of Plaintiff's Complaint, summary judgment in favor of Defendants, and “full restitution of lien claim, ” which in turn references UCC-1 financing statements recorded by Defendants in the Hawaii Bureau of Conveyances.[2] Dkt. No. 19. According to Plaintiff, these UCC-1 statements falsely identified Plaintiff as a debtor. See generally Compl. As best the Court can discern, Defendants assert counterclaims based upon their claimed right to ownership of the subject property, stemming from Plaintiff's failure to respond to Defendant's “Good Faith Tendered Offer” to purchase the property. Am. Counter-Compl. ¶ 31. Defendants deemed Plaintiff in default and indebted to Defendants by “Silent Acquiescence.” Am. Counter-Compl. ¶ 32. To enforce their supposed debt, Defendants then “foreclosed” on the property and claim that title was somehow transferred to them during a purported non-judicial foreclosure proceeding because Perry “perfected a lien on the mortgage, ” and Plaintiff “forfeited the entirety based on tac [sic] procurement and silent acquiescence.” Am. Counter-Compl. Ex. B at 7, Dkt. No 19-4. Defendants' Bill of Particulars lists “recommended penalties” for nineteen separate violations of the United States Code, including, for example: treason ($250, 000); attempted slavery ($250, 000); attempted genocide ($1, 050, 000); misprision of felony ($500); attempted extortion ($5, 000); perjury and suborning perjury ($2, 000 each); civil racketeering ($25, 000); and criminal racketeering ($250, 000). Am. Counter-Compl. Ex. A, Dkt. No. 19-2.

         II. Plaintiff's Motion To Dismiss

         BONY Mellon moves to dismiss the Amended Counter-Complaint because it fails to state a claim for relief or, alternatively, it seeks a more definite statement under Federal Rule of Civil Procedure 12(e). It argues that the Amended Counter-Complaint fails to provide Plaintiff with notice of any legal claims, and instead, Defendants purport to bring causes of action for “Dismissal with Prejudice, ” “Summary Judgment, ” and “Full Restitution of Lien Claim in Full, ” none of which are viable claims.


         Federal Rule of Civil Procedure 12(b)(6) authorizes the Court to dismiss a complaint that fails “to state a claim upon which relief can be granted.” Rule 12(b)(6) is read in conjunction with Rule 8(a), which requires “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The Court may dismiss a complaint either because it lacks a cognizable legal theory or because it lacks sufficient factual allegations to support a cognizable legal theory. Balistreri v. Pacifica Police Dep't., 901 F.2d 696, 699 (9th Cir. 1988). Pursuant to Ashcroft v. Iqbal, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” 555 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 570 (2007)). “[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Id. Accordingly, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555). Rather, “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). Factual allegations that only permit the court to infer “the mere possibility of misconduct” do not constitute a short and plain statement of the claim showing that the pleader is entitled to relief as required by Rule 8(a)(2). Id. at 679.

         Because Defendants are proceeding pro se, the Court liberally construes their filings. See Erickson v. Pardus, 551 U.S. 89, 94 (2007); Eldridge v. Block, 832 F.2d 1132, 1137 (9th Cir. 1987) (“The Supreme Court has instructed the federal courts to liberally construe the ‘inartful pleading' of pro se litigants.”) (citing Boag v. MacDougall, 454 U.S. 364, 365 (1982) (per curiam)). The Court recognizes that “[u]nless it is absolutely clear that no amendment can cure the defect . . . a pro se litigant is entitled to notice of the complaint's deficiencies and an opportunity to amend prior to dismissal of the action.” Lucas v. Dep't of Corr., 66 F.3d 245, 248 (9th Cir. 1995); see also Crowley v. Bannister, 734 F.3d 967, 977-78 (9th Cir. 2013).


         Upon review of the Amended Counter-Complaint, the Court finds that, even liberally construed, Defendants fail to state any basis for judicial relief against BONY Mellon. Defendants' pleading is largely incoherent, and to the extent the Court can ascertain any claim, Defendants fail to provide sufficient factual content to enable the Court to draw the reasonable inference that BONY Mellon is liable for the misconduct alleged. In short, even accepting the truth of the limited, factual allegations, the Amended Counter-Complaint fails to state a claim to relief that is plausible on its face. Plaintiff's Motion is therefore granted with Defendants given limited leave to amend, consistent with the instructions below.

         I. The Amended Counter-Complaint Fails To State A Claim

         As detailed more fully below, the allegations in the Amended Counter-Complaint are insufficient, consisting largely of conclusory statements, without necessary factual support.[3] Defendants specifically allege the following scheme to defraud by BONY Mellon-

31. The Counter Defendants did not send our Good Faith Tendered Offer back and therefore used the benefit of the ...

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