Pedro J. Burgos v. Option One Mortgage Corporation

• Court: Court of Appeals for the Eleventh Circuit
• Decided: September 19, 2019
• Docket: 19-10932
• Status: Unpublished

Opinion

Case: 19-10932 Date Filed: 09/19/2019 Page: 1 of 5

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 19-10932 Non-Argument Calendar ________________________

D.C. Docket No. 4:18-cv-00223-CDL

PEDRO J BURGOS,

Plaintiff - Appellant,

versus

OPTION ONE MORTGAGE CORPORATION, now known as SAND CANYON CORP,

Defendant - Appellee,

WELLS FARGO BANK NA, as trustee for Option One Mortgage Loan Trust 2003-1, asset-backed certificates, series 2003-1,

Movant.

________________________

Appeal from the United States District Court for the Middle District of Georgia ________________________

(September 19, 2019) Case: 19-10932 Date Filed: 09/19/2019 Page: 2 of 5

Before WILLIAM PRYOR, MARTIN and DUBINA, Circuit Judges.

PER CURIAM:

Appellant Pedro Burgos (“Burgos”) appeals the district court’s order

denying his motion for sanctions pursuant to Rule 11, Federal Rules of Civil

Procedure. Because Burgos cannot demonstrate how the district court abused its

discretion in denying the motion, we affirm.

I. BACKGROUND

In 2013, Burgos sued Option One Mortgage Corporation (“OOMC”) 1 in

Georgia state court, asserting federal and state law claims relating to allegations

that OOMC, Burgos’s mortgage loan originator, fraudulently assigned his security

deed to Wells Fargo Bank (“Wells Fargo”) and that Wells Fargo later wrongfully

foreclosed on his home. In August 2013, the state court judge issued an order of

default judgment, declaring the original security deed, the assignment to Wells

Fargo, and the deed under power to be forgeries and null and void. In October

2013, the court issued a $188,000 judgment against OOMC. The state court closed

the case.

1 Option One Mortgage Corporation is now known as Sand Canyon Corporation, but we will continue to refer to the defendant/appellee as OOMC. 2 Case: 19-10932 Date Filed: 09/19/2019 Page: 3 of 5

Three years later, Burgos filed a post-judgment motion to set aside the

judgment, asserting that the state court erred in failing to award him at least

$400,157.40. Wells Fargo, having litigated with Burgos over the same property in

a separate lawsuit, learned of the case and filed a motion to intervene. In August

2018, Burgos moved to withdraw his motion to set aside the default judgment and

later moved to strike Wells Fargo’s motion to intervene and to sanction Wells

Fargo for its motion. Wells Fargo filed an objection, and the state court scheduled

a hearing, sending notice to Wells Fargo and OOMC. OOMC asserts that it first

learned of the action from the court’s notice. Before the hearing, Burgos sought to

withdraw his still pending motion to set aside the default judgment. OOMC

removed the case to federal court based on diversity and federal question

jurisdiction and motioned the district court to set aside the default judgments.

Burgos filed a motion to remand the case to state court and sought Rule 11

sanctions against OOMC, asserting that its removal of the case to federal court was

frivolous and in bad faith because it knew there was no pending case in state court

at the time of its removal request. OOMC opposed the Rule 11 motion and cited in

its brief that Burgos had not properly served OOMC with the motion prior to filing

it with the court. The district court remanded the case to state court, ruling that

because a final judgment had been entered in the state court in 2014 and the

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judgment had not been appealed timely, there was no pending action and thus no

case or controversy. The district court denied Burgos’s motion for sanctions under

Rule 11 because it was not convinced that OOMC’s removal motion was frivolous

or in bad faith. Burgos filed a notice of appeal, and after jurisdictional inquiries

and responses, this court noted that it had jurisdiction to entertain Burgos’s appeal

only as to the denial of his motion for Rule 11 sanctions.

II. DISCUSSION

We review for abuse of discretion the district court’s order denying Rule 11

sanctions. Baker v. Alderman, 158 F.3d 516, 521 (11th Cir.1998). Rule 11

sanctions are properly assessed “(1) when a party files a pleading that has no

reasonable factual basis; (2) when the party files a pleading that is based on a legal

theory that has no reasonable chance of success and that cannot be advanced as a

reasonable argument to change existing law; or (3) when the party files a pleading

in bad faith for an improper purpose.” Worldwide Primates, Inc. v. McGreal, 87

F.3d 1252, 1254 (11th Cir.1996) (quoting Jones v. Int’l Riding Helmets, Ltd., 49

F.3d 692, 694 (11th Cir. 1995).

Burgos cannot demonstrate how the district court abused its discretion,

especially in light of its specific finding that it was not convinced that OOMC’s

motion to remove the case to federal court was frivolous or done in bad faith. At

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the time it requested the removal, OOMC reasonably believed that a live case was

before the state court because Burgos had filed a motion to set aside the judgment,

Wells Fargo moved to intervene, and Burgos moved to sanction Wells Fargo.

Moreover, the state court had set a hearing on these motions, and it was the notice

of the hearing that alerted OOMC about the default judgment. Thus, considering

these facts and the district court’s specific finding, we conclude that the district

court did not abuse its discretion in denying Burgos’s motion for sanctions

pursuant to Rule 11.

Accordingly, we affirm the district court’s order denying Burgos’s motion

for Rule 11 sanctions.

AFFIRMED.