United States District Court, S.D. Texas, Brownsville Division
MAGISTRATE JUDGE'S REPORT AND
Ignacio Torteya, III United States Magistrate Judge.
Court is in receipt of Defendant Ben Carson's Motion to
Dismiss pursuant to Rule 12(b)(1) and 12(b)(6) of the Federal
Rules of Civil Procedure (hereinafter, Defendant's
Carson's "Motion to Dismiss" or
"Motion") filed on August 12, 2019. Dkt. No. 54.
The Court also received Plaintiff Pamela Ziolkowksi
Margolis' Response to Motion to Dismiss (hereinafter,
Margolis' "Response") on September 3, 2019.
Dkt. No. 60. For the reasons provided below, it is
recommended that the Court GRANT
Carson's Motion to Dismiss, and all claims against Carson
Background and Procedural History
her husband, and her mother purchased a home located in
Brownsville, Texas (the "Property") in 2007. In May
of 2008, Margolis' husband and Margolis' mother
obtained a Home Equity Conversion Mortgage ("HECM")
through Griffin Financial Mortgage, LLC ("Griffin
Financial"). Griffin Financial subsequently assigned
the HECM to JBNC. Margolis' mother passed away on
December 20, 2009; and Margolis' husband
passed away on October 1, 2016. As a result, the outstanding
balance of the HECM became due and payable. This suit stems
from Margolis' efforts to prevent foreclosure on the
sues Carson based on the Department of Housing and Urban
Development ("HUD") being referenced in the Deed of
Trust and Loan Agreement. Dkt. No. 15 at 5. Specifically,
Margolis alleges various claims against Carson: (1) breach of
fiduciary duty; (2) negligence; (3) entitlement to promissory
estoppel; (4) negligent misrepresentation; (5) fraud in the
inducement; and (6) breach of contract. Id. at
11-13. Carson's Motion to Dismiss alleges that the Court
lacks subject-matter jurisdiction and, in the alternative,
that Margolis fails to state a claim for which relief can be
granted. Dkt. No. 54. Margolis' filed a response to
Carson's Motion, wherein she agrees with Carson on
several points. Dkt. No. 60.
courts have subject-matter jurisdiction over civil cases
"arising under the Constitution, laws, or treaties of
the United States," or over civil cases where the amount
in controversy exceeds $75, 000, exclusive of interest and
costs, and in which diversity of citizenship exists among the
parties. 28 U.S.C. §§ 1331, 1332. Federal courts
have limited jurisdiction and must dismiss a case when
"the court lacks the statutory or constitutional power
to adjudicate the case." Home Builders Ass'n of
Mississippi, Inc. v. City of Madison, Miss., 143 F.3d
1006, 1010 (5th Cir. 1998) (quoting Nowak v. Ironworkers
Local 6 Pension Fund, 81 F.3d 1182, 1187 (2d Cir.
1996)). Likewise, absent an express waiver, suits against the
federal government are barred under the doctrine of sovereign
immunity. Kansas v. United States, 204 U.S. 331,
341, 27 S.Ct. 388, 51 L.Ed. 510 (1907).
Rule of Civil Procedure 12(b)(1) governs challenges over a
federal court's subject-matter jurisdiction. A party may
move for a court to dismiss a plaintiffs cause of action on
the basis that the court lacks subject-matter jurisdiction.
Fed.R.Civ.P. 12(b)(1). Accordingly, "if [a federal]
court determines at any time that it lacks subject-matter
jurisdiction, [it] must dismiss the action."
Fed.R.Civ.P. 12(h)(3). Unlike motions to dismiss under Rule
12(b)(6), where the plaintiffs allegations are taken as true
and viewed under most favorable light, the plaintiff bears
the burden of proof that jurisdiction exists under Rule
12(b)(1). See Ramming v. United States, 281 F.3d
158, 161 (5th Cir. 2001) (per curiam); Strain v.
Harrelson Rubber Co., 742 F.2d 888, 889 (5th Cir. 1984)
(same). "When a Rule 12(b)(1) motion is filed in
conjunction with other Rule 12 motions, the court should
consider the Rule 12(b)(1) jurisdictional attack before
addressing any attack on the merits." Ramming
281 F.3d at 161 (citing Hitt v. City of Pasadena,
561 F.2d 606, 608 (5th Cir. 1977)). The court grants a motion
under 12(b)(1) only if it appears certain that the plaintiff
cannot prove any set of facts in support of his claim that
would entitle him to relief. See Benton v. U.S., 960
F.2d 19, 21 (5th Cir. 1992).
doctrine of administrative exhaustion is established in
administrative law. Woodford v. Ngo, 548 U.S. 81,
88, 126 S.Ct. 2378, 165 L.Ed.2d368 (2006). Under the doctrine
of exhaustion of administrative remedies, "no one is
entitled to judicial relief for a supposed or threatened
injury until the prescribed administrative remedy has been
exhausted." Id. (quoting Myers v. Bethlehem
Shipbuilding Corp., 303 U.S. 41, 50-51, 58 S.Ct. 459, 82
L.Ed. 638 (1938)). "When exhaustion is statutorily
mandated, the requirement is jurisdictional."
Townsend v. United States Dep't of Justice
Immigration & Naturalization Serv., 799 F.2d 179,
181 (5th Cir. 1986). Exhaustion of administrative remedies is
jurisdictional only when Congress has clearly and
unequivocally manifested its intent to require claimants to
exhaust their administrative remedies. See Taylor v. U.S.
Treasury Dept., 127 F.3d 470, 475 (5th Cir. 1997).
Therefore, a dismissal under Rule 12(b)(1) for lack of
subject-matter jurisdiction is improper when the exhaustion
of administrative remedies is not clear and unequivocal as a
jurisdictional prerequisite. Hager v. NationsBank
N.A., 167 F.3d 245, 248 (5th Cir. 1999). Failure to
exhaust administrative remedies is an affirmative defense.
Davis v. Fort Bend County, 893 F.3d 300, 307 (5th
Motion to Dismiss puts forth that Margolis' claims should
be dismissed under Rule 12(b)(1) and 12(b)(6). Dkt. No. 54 at
1. Carson raises several defenses: (1) the court lacks
subject-matter jurisdiction based on sovereign immunity; (2)
torts claims must be administratively exhausted under the
Federal Tort Claims Act; (3) contract claims in excess of
$10, 000 fall under the jurisdiction of the Court of Federal
Claims; and (4) Margolis fails to state a claim upon which
relief can be granted. Id. at 4-7. In her response,
Margolis agrees she has "failed to file an
administrative claim pursuant to the provisions of the
Federal Tort Claims Acts" and further states that
"until a proper claim is presented to HUD, this court
cannot acquire jurisdiction." Dkt. No. 60 at 4. Margolis
agrees that her claims of negligent misrepresentation and
deceit are barred under 28 U.S.C. § 2680(h).
Id. at 5. However, Margolis alleges that the Court
has jurisdiction because her contract claims do not exceed
$10, 000 and therefore she does not need to pursue her
contract claims under the Tucker Act and before the Court of
Federal Claims. Id. As a result, Margolis asks the
Court to conduct discovery to make determinations of fact;
she asserts her claims are plausible and should not be
dismissed. See Dkt. No. 60 at 5, 9.
by Margolis' own admission, she has not exhausted her
administrative remedies. As a result, this Court lacks
subject-matter under Rule 12(b)(1) and must dismiss the
claims against Carson. As such, the Court cannot review the
merits of Margolis' claims pursuant to Rule 12(b)(6).
recommended that the Court: (1) GRANT Carson's Motion to
dismiss for lack of subject-matter jurisdiction, and ...