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11th Cir. Upholds Dismissal, Suggests Sanctions for ‘Shotgun Pleading’

The U.S. Court of Appeals for the Eleventh Circuit recently rejected an attempt by homeowners to collaterally attack a state court mortgage foreclosure judgment, affirming the trial court’s dismissal of an amended complaint with prejudice for failure to state a claim, but on alternative grounds.

More specifically, the Court upheld the dismissal on the grounds that, “by attempting to prosecute an incomprehensible pleading to judgment, the plaintiffs obstructed the due administration of justice” in the trial court, and by trying to defend the fatally defective complaint on appeal. The Court also ordered plaintiffs’ counsel to show cause why he should not have to pay the defendants’ double costs and expenses, including appellate attorney’s fees, for filing a frivolous appeal.

A copy of the opinion in Karun N. Jackson, et al. v. Specialized Loan Servicing LLC, et al. is available at:  Link to Opinion.

One day after the foreclosure sale of their home, the plaintiff homeowners sued their lender, loan servicer, and MERS in state court in Alabama, attempting to assert 14 claims under Alabama and federal law.

The complaint was poorly written, making it difficult for each of the defendants to frame their answer. The gist of the complaint was that the servicer improperly declared the plaintiffs in default on their mortgage and stopped accepting their payments without providing an explanation. The plaintiffs sought a declaratory judgment that the plaintiffs were not in default on their loan, prohibiting the foreclosure plus compensatory and punitive damages for the mental anguish caused by the allegedly wrongful foreclosure.

The defendants removed the case to the federal trial court and moved for a more definite statement under Federal Rule of Civil Procedure 12(e), arguing the complaint was a “shotgun” pleading that lumped all of the factual allegations into each count by incorporation, did not differentiate between the defendants and omitted key chronological facts.

The trial court granted the motion and gave the plaintiffs 21 days to serve an amended complaint. On the due date, the plaintiff’s counsel moved for a seven-day extension of time due to illness, which the magistrate judge granted.

Five days after the expiration of the extended deadline, plaintiff’s counsel moved for another seven-day extension based on an illness in the family, which the magistrate judge granted given the defendants’ lack of opposition.

The plaintiffs timely filed their amended complaint, but it contained only minor changes and suffered from the same basic lack of clarity as before, but was even longer, two additional counts having been added.

One of the defendants answered the amended complaint, denying the material allegations and raising failure to state a claim as an affirmative defense. The others moved to dismiss on the same failure to state a claim basis as before.

On the due date of the plaintiffs’ response, their attorney moved for a seven-day extension because he had been out of town for hearings. Because the motion was unopposed, the judge granted it.

The plaintiffs filed their response to the motion to dismiss and the magistrate judge issued a report recommending dismissal of the amended complaint against the three moving defendants for failure to state a claim.

The plaintiffs objected to the magistrate judge’s report and recommendation, but just before the judge was set to rule, they moved for leave to file a second amended complaint. Shortly thereafter, the defendant that had answered moved for judgment on the pleadings.

The trial court denied the plaintiffs’ motion for leave to amend, adopted the magistrate judge’s report and recommendation, and dismissed the amended complaint with prejudice as to the three moving defendants. The plaintiffs then stipulated to dismissal of the amended complaint against the remaining defendant that had answered. The following day, the trial court entered final judgment, from which the plaintiffs appealed.

On appeal, the plaintiffs’ counsel continued his tricks, moving six times to extend the deadline to file the initial brief for various reasons. The appellate court granted all six motions, setting a final deadline, which plaintiffs’ counsel was unable to meet due to alleged difficulty uploading the brief. The brief was finally filed more than three months after it was originally due.

The defendants filed their response brief, but the plaintiffs’ counsel requested four extensions to file the reply brief, all of which were granted, and the reply brief was finally filed.

The Eleventh Circuit quickly affirmed the trial court’s dismissal, but on different grounds, explaining that “[t]he amended complaint is an incomprehensible shotgun pleading … making it nearly impossible for Defendants and the Court to determine with any certainty which factual allegations give rise to which claims for relief. As such, the Amended Complaint patently violated Federal Rule of Civil Procedure 8, which requires a plaintiff to plead ‘a short and plain statement of the claim showing that the pleader is entitled to relief.’’

The Court went on to reiterate its prior decisions rejecting the “vices” of shotgun pleadings such as additional expense and delay in the administration of justice. “Tolerating such behavior constitutes toleration of obstruction of justice … [which] is why … a District Court retains authority to dismiss a shotgun pleading on that basis alone.”

The Eleventh Circuit then pointed out that a trial court must give a plaintiff one chance to remedy any noncompliance with Rule 8(a) and the plaintiffs were provided that opportunity. “What matters is function, not form: the key is whether the plaintiff had fair notice of the defects and a meaningful chance to fix them. If that chance is afforded and the plaintiff fails to remedy the defects, the trial court does not abuse its discretion in dismissing the case with prejudice on shotgun pleading grounds.”

In concluding, the Appellate Court cited Federal Rule of Appellate Procedure 38, which allows the court of appeals to “award just damages and single or double costs to the appellee” if it determines that an appeal is frivolous.

Because plaintiffs’ counsel was on notice of the Court’s precedent regarding shotgun pleadings due to the case law cited in the defendants’ motion to dismiss, yet persisted and then added insult to injury by appealing his incomprehensible complaint, the Court concluded that “[t]his constitutes an abuse of judicial process, a ‘deliberate use of a legal procedure, whether criminal or civil, for a purpose for which it was not designed.’”

The Eleventh Circuit affirmed the trial court’s judgment, and ordered the plaintiffs’ counsel to show cause why he should not have to pay the appellees “double costs and their expenses, including the attorney’s fees they incurred in defending these appeals.”

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Hector Lora has substantial experience in all phases of complex commercial litigation, including motion practice, written discovery, depositions, mediations, bench and jury trials, and appellate practice. For more than a decade, his practice has focused extensively on the defense of civil enforcement actions filed by the FTC, as well as real estate litigation, and contested mortgage and condominium lien foreclosures and foreclosure of security interests under UCC Article 9. Hector also has substantial experience in advising a variety of types of businesses regarding their compliance with applicable federal and state laws, including the Federal Trade Commission Act, the Telephone Consumer Protection Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Telemarketing Sales Rule, the Controlling the Assault of Nonsolicited Pornography and Marketing Act of 2003, and Florida laws governing telephone solicitation and communication. Hector received his Juris Doctor from the Georgetown University Law Center, and his undergraduate degree with honors from the University of Florida.

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