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Meekins v. Lakeview Loan Servicing, LLC

United States District Court, E.D. Virginia, Richmond Division

December 30, 2019

ALAN D. MEEKINS, Pro se Petitioner,
v.
LAKEVIEW LOAN SERVICING, LLC, et al., Respondents.

          MEMORANDUM OPINION

          David J. Novak United States District Judge.

         This matter comes before the Court on the Motion to Confirm Arbitration Award (ECF No. 1) filed by Petitioner Alan D. Meekins ("Petitioner"). Respondents RoundPoint Mortgage Servicing Corporation ("RoundPoint"), Lakeview Loan Servicing, LLC ("Lakeview"), and Loancare, LLC ("Loancare") (collectively, "Respondents") have filed oppositions. (ECF Nos. 10-11.) Additionally, Lakeview and Loancare (collectively, "Counterclaimants") have filed an Amended Counterclaim. (Amended Counterclaim for Declaratory Judgment and Injunctive Relief ("Am. Counterclaim") (ECF No. 17).). Counterclaimants have also filed an Amended Motion for Preliminary Injunction against Petitioner and Innovative Holdings Inc. d/b/a Sitcomm Arbitration Association ("SAA"). (ECF No 18.) For the reasons stated herein, Petitioner's Motion is hereby DENIED WITH PREJUDICE. The Amended Motion for Preliminary Injunction is hereby DENIED, and the Amended Counterclaim is hereby DISMISSED without prejudice.

         I. BACKGROUND

         This dispute arises out of a mortgage obtained by Petitioner.[1] In June 2017, Petitioner obtained a loan in the amount of $359, 900.00 from Embrace Home Loans, Inc. (Am. Counterclaim at ¶ 10.) In October 2017, the servicing of the loan was transferred to Lakeview as servicer and Loancare as subservicer. (Id. at ¶ 12.) At some point, Petitioner apparently defaulted on the loan, and Loancare sent him notices regarding the default. (Id. at ¶ 16.) In March 2018, Petitioner sent Lakeview a document titled "Tender of Payment Offering," which appeared to assert that the United States Government had an obligation to pay $431, 700 to Lakeview on Petitioner's behalf. (ECF No. 17-3.) On February 12, 2019, Petitioner sent a document to Respondents, titled a "Show of Cause Proof of Claim Demand" that contained a litany of difficult to comprehend legal and factual assertions. (ECF No. 10-3). It stated that Respondents "will have agreed to and consented through 'tacit acquiescence' to ALL the facts in relation to the above referenced alleged Commercial/Civil/Cause." (Id.) It further provided that Respondents will have consented to arbitration through "tacit acquiescence" should they not respond within ten days. (Id.) Then, on February 25, 2019, Petitioner sent a "Notice of Default" that stated, "you are now a party to the contract that you have received and you have not complied to the terms of the contract" and that failure to respond within three days would result in "default and we will proceed to get a judgment against you through arbitration." (ECF No. 17-4.)

         On May 18, 2019, the arbitrator purported to enter a "Notice of Arbitration Hearing," setting a hearing for June 4, 2019. (ECF No. 17-8.) On May 23, 2019, Lakeview sent a cease and desist letter to Petitioner. (ECF No. 17-6.) On June 20, 2019, arbitrator Sandra Goulette in Laurel, Mississppi, awarded Petitioner $1, 079, 700.00 from Respondents. (("Award") (ECF No. 1-1) at 17.) Thereafter, on July 10, 2019, Petitioner filed his Motion to Confirm, along with a copy of the Award. (ECF No. 1.)

         II. DISCUSSION

         Petitioner filed the Motion to Confirm, asking the Court to confirm an arbitration award by SAA. Respondents claim that they never entered into an agreement to arbitrate any disputes with Petitioner; therefore, the Court cannot confirm any award. (RoundPoint's Opp. to Mot. to Confirm Arbitration Award ("RoundPoint's Opp.") (ECF No. 10); Counterclaimants' Obj. to Mot. to Confirm Arbitration Award ("Counterclaimants' Opp.") (ECF No. 11-1).) Further, Counterclaimants request that the Court vacate the Award. (Counterclaimants' Opp. at 5-7.)

         A. The Court Will Not Confirm the Award.

         Under the Federal Arbitration Act ("FAA"), a court may confirm an arbitration award "[i]f the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration...." 9 U.S.C. § 9. To obtain confirmation of an award, the statute requires the moving party to file (1) the agreement, (2) the award, and (3) each notice, affidavit, or other paper used to confirm, modify or correct the award. 9 U.S.C. § 13. This allows the Court to determine whether a valid arbitration agreement and award exist upon which it can base its judgment. See United Cmty. Bank v. Arruarana, 2011 WL 2748722, at *2 (W.D. N.C. July 12, 2012) ("Without the filings required by § 13, the Court is unable to conclude from the record that a valid arbitration agreement and award exist and therefore is unable to determine whether the Petitioner is entitled to judgment as a matter of law."). Indeed, the FAA requires an agreement to arbitrate before the Court will compel arbitration. See 9 U.S.C. § 2 (arbitration agreements enforceable "save upon such grounds exist at law or equity for the revocation of any contract"). Whether a party agreed to arbitrate "is an issue for judicial determination to be decided as a matter of contract." Johnson v. Circuit City Stores, Inc., 148 F.3d 373, 377 (4th Cir. 1998).

         Here, Petitioner did not file any agreement with his Motion to Confirm, in contravention of Section 13's requirement. Petitioner later attempted to file a purported contract as part of his Motion to Supplement the Record.[2] (ECF No. 15-1.) However, what he labeled as "Contract Between the Parties" and titled "Show of Cause Proof of Claim Demand" does not amount to an enforceable agreement between the parties. The submission from Petitioner fails to form a contract under basic hornbook contract law.

         To form an enforceable contract in Virginia, "there must be mutual assent of the contracting parties to terms reasonably certain under the circumstances." Allen v. Aetna Cas. & Sur. Co., 222 Va. 361, 364 (1981). "Mutual assent by the parties to the terms of a contract is crucial to the contract's validity." Wells v. Weston, 229 Va. 72, 78 (1985). "Mutual assent is determined from the reasonable meaning of a party's expressions - his words and acts - actually communicated lo the other party to the purported contract." Moorman v. Blackstock /mr., 276Va.64, 75(2008).

         Here, nothing in the record demonstrates a scintilla of mutual assent. The signatures of Respondents appear nowhere on the document. Nor does Petitioner suggest that they signed the document. Instead, Petitioner bases Respondents' assent on their failure to respond to Petitioner's demand rather than any affirmative act of acceptance.[3] Petitioner offers no actions, words or expressions communicated from Respondents that could constitute acceptance of Petitioner's demand. Without mutual assent, a contract does not exist. Id. Because Petitioner has not presented a valid agreement whereby the parties agreed to arbitrate a dispute, the Court will not confirm the Award under the FA A.

         B. The Court Will Vacate the Award.

         Respondents also ask the Court to vacate the Award. (Counterclaimants' Opp. at 5-7.) The FA A provides that a district court may vacate an arbitration award:

1. where the award was procured by corruption, fraud, or undue means;
2. where there was evident partiality or corruption in the arbitrators, or either of them;
3. where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or any other misbehavior by which the rights of any party have been prejudiced; or
4. where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

9 U.S.C. § 10(a). Further, courts recognize common law grounds for vacating awards, including "those circumstances where an award fails to draw its essence from the contract, or the award evidences a manifest disregard of the law." Patten v. Signator Ins. Agency, Inc., 441 F.3d 230, 234 (4th Cir. 2006). However, the "process and extent of federal judicial review of an arbitration award are substantially circumscribed." Id. Additionally, the Court undertakes its review of the award with an understanding of the strong "national policy favoring" arbitration. Hall Street Assocs. v. Mattel, Inc., 552 U.S. 576, 581 (2008).

         i. The Court Will Vacate the Award Pursuant to the FAA.

         Respondents argue that the Court should vacate the Award under the "fraud, corruption, or undue means" provision of Section 10(a) of the FAA. (Counterclaimants' Opp. at 6.) The Court agrees. Petitioner obtained an arbitration "hearing" by sending Respondents an incomprehensible agreement to arbitrate and using their non-response to initiate an arbitration. Moreover, the Award itself does not appear to have any grounding in fact or law. The Court expresses great skepticism about the validity of SAA as an arbitration entity.[4] Indeed, courts around the country have expressed doubts regarding SAA's validity. See Kalmowitz v. Fed. Home Mortg. Corp., 2019 WL 6249298, at *2 (E.D. Tex. Oct. 22, 2019) ("The purported arbitration agreement and award do not appear to have any meritorious basis in fact or law, and Sitcomm does not appear to be a valid entity of arbitration."); U-S. Bank National Ass'n v. Nichols, 2019 WL 4276995, ...


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