Evans v. Colorado Housing and Finance Authority et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 24-cv-01033-CNS-TPO
RACHEL EVANS,
Plaintiff,
v.
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT,
Defendant.
______________________________________________________________________________
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
______________________________________________________________________________
Timothy P. O’Hara, United States Magistrate Judge.
Before the Court is Defendant 	United States 	Department of Housing and Urban
Development’s (“HUD’s”) Motion to Dismiss Amended Complaint. ECF 36. Defendant’s Motion
was referred to this Court for recommendation by District Judge Sweeney. ECF 37 & 64.1 On
November 4, 2024, the Court set a final deadline for Plaintiff Rachel Evans, proceeding pro se, to
respond to Defendant’s Motion to Dismiss. ECF 66 (setting November 15, 2024). On November
21, 2024, Plaintiff filed “Plaintiff’s Comprehensive Opposition to Motion to Dismiss and Notice
of Systemic Procedural Violations” [ECF 68], which the Court accepts as timely filed. The Court
held a Status Conference on this matter on December 9, 2024 and heard arguments from both
Parties on the Defendant’s Motion to Dismiss. See ECF 702 and 72.
1 The Motion originally was referred to Magistrate Judge Susan Prose. ECF 37. The Motion was
reassigned to this Court upon my appointment to the bench. ECF 64.
2 As part of the Minute Order setting the case for a Status Conference, the Court alerted the parties
that it would hear “the Plaintiff’s oral argument to the legal arguments raised in the Defendant’s
Motion to Dismiss.” ECF 70.
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The Court has carefully considered the Motion to Dismiss [ECF 36], Plaintiff’s Opposition
[ECF 68], the arguments presented at the hearing, the entire case file, and the applicable case law
in issuing this Report and Recommendation. Based upon the record herein, and Plaintiff’s lack of
standing to bring the present lawsuit under Federal Rule of Civil Procedure 12(b)(1), the Court
respectfully RECOMMENDS the motion be GRANTED and Plaintiff’s case be dismissed without
prejudice.3
FACTUAL BACKGROUND
The Court takes the following facts from the First Amended Complaint [ECF 7] (“FAC”)
and presumes they are true for the purposes of this Recommendation.4
Plaintiff owned a home in Grand Junction, Colorado. ECF 7 at p. 1.5 In 2018, Plaintiff
obtained a mortgage loan from Amerisave Mortgage, which was serviced by Dovenmuehle
Mortgage, Inc. (“Mortgage Servicer”) and subsequently sold to the Colorado Housing Finance
Authority (CHFA or “Lender”). Id. at p. 2. As conceded by Plaintiff on December 9, 2024 during
the Status Conference, HUD never owned or serviced the mortgage loan on her home and played
no role in the foreclosure, eviction, or sale of her home. However, Plaintiff’s mortgage loan was
federally insured under HUD’s Federal Housing Administration (“FHA”) single-family-mortgage-
insurance program, which is a federal program insuring mortgage loans made by qualified lenders
3 Because the Court recommends dismissal under Rule 12(b)(1), the Court need not reach
Defendant’s Administrative Procedures Act argument or the merits of the lawsuit under Rule
12(b)(6). See Rivera v. Maldonado, No. 21-cv-01119-CMA-NYW, 2022 WL 870596, at *4 (D.
Colo. Mar. 11, 2022) (“Article III standing cannot be assumed; the court must resolve issues of
standing before it may reach the merits of an issue.”) (citing Colo. Outfitters Ass’n v. Hickenlooper,
823 F.3d 537, 543 (10th Cir. 2016)).
4 See Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009) (citing Moore v. Guthrie, 438
F.3d 1036, 1039 (10th Cir. 2006); see also Boulter v. Noble Energy, 521 F. Supp. 3d 1077, 1082
(D. Colo. 2021) (citing Holt v. United States, 46 F.3d 1000, 1002 (10th Cir. 1995)).
5 For numbering purposes, the Court uses the page numbers designated by ECF and not the page
numbers of the filings themselves.
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to borrowers who are purchasing a primary residence. See 12 U.S.C §§ 1708-1709. FHA
regulations require participating lenders to “engage in loss mitigation actions” prior to initiating
foreclosure proceedings to provide an alternative to foreclosure. See 12 U.S.C. § 1715u(a).
During the COVID-19 pandemic, Plaintiff fell behind on her mortgage payments. See
generally ECF 7 at pp. 8-11. Plaintiff represented at the Hearing that Lender initiated two
foreclosure proceedings in Mesa County that were vacated before she sought HUD’s assistance
and loan counseling.
In March 2022, Plaintiff began working with a HUD counselor, who helped her submit two
loss mitigation applications to Lender, one in July 2022 and another in August 2022. Id. at p. 8.
Plaintiff asserts that Lender was in communication with her HUD counselor until November 2022,
after which Lender became unresponsive to her HUD counselor’s inquiries. Id. at pp. 8-9.
According to Plaintiff, on January 11, 2023, Lender, not HUD, foreclosed on and sold the
property without giving Plaintiff prior notice. Id. at p. 9. In April of 2023, that foreclosure was
vacated. See id. Lender, not HUD, locked her out of the property from February 2023 until April
2023, before evicting her from the home. Id. During this lockout period, Plaintiff claims the
property maintenance company, Cyprexx, not HUD, stole over $5,000 worth of her unspecified,
personal property from a shed located on the property. Id.
In March 2023, an individual from the HUD Office of Inspector General (OIG), Ms. Kalie
Groves, contacted Plaintiff and relayed the actions Lender was taking to foreclose on the property.
Id. Ms. Groves also informed Plaintiff that Lender was removing her from COVID relief options
but that HUD could not intervene because her loan was not in forbearance. Id. at p. 10. Between
March 12, 2023, and April 23, 2024, Plaintiff made “numerous requests for assistance” to HUD,
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HUD OIG, and “other HUD offices and officials,” but her contact attempts went ignored. Id. at p.
10.
On March 12, 2024, after reinstituting the foreclosure action in Mesa County, a Mesa
County Court once again authorized the foreclosure of Plaintiff’s home. See ECF 36 at p. 5. On
May 6, 2024, the State of Colorado issued a “Writ of Restitution,” ordering the Sheriff of Mesa
County to evict Ms. Evans. See id. at p. 5. Plaintiff was evicted from the property on June 7, 2024.
See ECF 24 (Plaintiff Letter).
Prior to her eviction, on March 11, 2024, Plaintiff filed this lawsuit in Mesa County (Colo.)
Combined Court. See ECF 3 at p. 1 (referencing Mesa County Case No. 2024CV21). Plaintiff’s
original complaint named four Defendants: CHFA, Dovenmuehle Mortgage, Inc., Janeway Law
Firm, and HUD. See id. In the Complaint, Plaintiff alleged various violations of housing statutes,
regulations, and protocols and that her mortgage servicers’ implementation of COVID-19
mortgage relief programs was fraudulent. Id. The clear intent of the original Complaint [ECF 3]
was to “set an example for Lenders who use Government Programs to Defraud Borrowers by
revoking their ability to service Mortgages again.” Id. at p. 60. By filing the FAC, Plaintiff sought
to stop the eviction process prior to being removed from her home. See ECF 7 at p. 23.
Plaintiff’s FAC alleges that CHFA and Dovenmuehle Mortgage engaged in unfair and
deceptive lending practices, which defrauded her of her home. See id. at pp. 2 and 5. While Lender,
Dovenmuehle Mortgage, Inc., and Janeway Law Firm were previously named in Plaintiff’s initial
Complaint [See ECF 3], only HUD was listed as a Defendant in the FAC. Plaintiff alleges that
HUD, as the federal insurer of her mortgage, had legal obligations to investigate Lender and
Mortgage Servicer, to intervene in her foreclosure proceedings, and to prevent her eviction. ECF
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7 at pp. 11-13 and 16-18. Plaintiff alleges that HUD’s failure to act cost her the property.6 Id. at
pp. 12-14.
Plaintiff brings the following claims against HUD: (1) failure to investigate in violation of
the Administrative Procedures Act under 5 U.S.C. § 706(2)(A), (2) violations of the Dodd-Frank
Wall Street Reform and Consumer Protection Act, (3) breach of HUD regulations and protocol,7
and (4) general violations of Colorado law.8 Id. at pp. 19-21.
Plaintiff requests the following relief: (1) to stop eviction proceedings and vacate the
foreclosure, (2) submit the mortgage to the Mortgagee Review Board and “Mesa County
foreclosures” 9 for an investigation, (3) provide legal counsel “pursuant to the Dodd-Frank Wall
Street Reform and Consumer Protection Act,” (4) provide an expert witness to proffer testimony
and to investigate HUD corruption, (5) return her personal property, and (6) other unspecified
“remedies and accountability.” Id. at pp. 23-24.
LEGAL STANDARD
I. 	Treatment of a Pro Se Plaintiff’s Complaint
A pro se plaintiff’s “pleadings are to be construed liberally and held to a less stringent
standard than formal pleadings drafted by lawyers.” Garrett v. Selby Connor Maddux & Janer,
6 Plaintiff clarified at the Status Conference that she believes HUD failed to protect her and failed
to stop the abusive acts of CHFA and Dovenmuehle Mortgage.
7 To support her claims, Plaintiff cites Chapters 1-11 in HUD Handbook 4060.1 Rev2, 5 U.S.C.
706(2)(A) (scope of review under the APA for agency actions that are arbitrary, capricious, or an
abuse of discretion), and 24 CFR § 1.7 (applying to conduct of investigations for violations of
nondiscrimination in HUD’s federally assisted programs).
8 Plaintiff’s Colorado State law cause of action alleges that her Lender and Servicer violated
Colorado laws, such as the Colorado Consumer Protection Act, C.R.S. § 6-1-101 et seq. and the
Colorado Foreclosure Protection Act. Claim IV makes no reference to Defendant HUD nor
allegations that HUD violated Colorado state laws. See ECF 7 at p. 21.
9 The Court interprets this as a demand to submit all foreclosures that occurred in Mesa County,
not just Plaintiff’s, for investigation.
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425 F.3d 836, 840 (10th Cir. 2005) (quoting Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir.
1991)). “‘Th[e] court, however, will not supply additional factual allegations to round out a
plaintiff’s complaint or construct a legal theory on the plaintiff’s behalf.’” Smith v. United States,
561 F.3d 1090, 1096 (10th Cir. 2009) (quoting Whitney v. New Mexico, 113 F.3d 1170, 1173-74
(10th Cir. 1997)). The Tenth Circuit has interpreted this rule to mean that if a court “can reasonably
read the pleadings to state a valid claim on which the plaintiff could prevail, [it] should do so
despite the plaintiff’s failure to cite proper legal authority, [their] confusion of various legal
theories, [their] poor syntax and sentence construction, or [their] unfamiliarity with pleading
requirements.” Diversey v. Schmidly, 738 F.3d 1196, 1199 (10th Cir. 2013) (quoting Hall, 935
F.2d at 1110). However, it is not “the proper function of the district court to assume the role of
advocate for the pro se litigant.” Garrett, 425 F.3d at 840 (quoting Hall, 935 F.2d at 1110). The
Court applies this standard in assessing Plaintiff’s FAC, Plaintiff’s Opposition, and her oral
argument presented before the Court.
II. 	Subject Matter Jurisdiction
As a threshold matter, the Court must first consider whether Plaintiff has sufficiently
alleged subject-matter jurisdiction. “Federal courts are courts of limited jurisdiction. They possess
only that power authorized by Constitution and statute . . . which is not to be expanded by judicial
decree.” Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994) (citations
omitted). “‘Federal courts operate only in the presence rather than the absence of statutory
authority.’” Castaneda v. I.N.S., 23 F.3d 1576, 1580 (10th Cir. 1994) (quoting Wyeth Lab v. United
States District Court, 851 F.2d 321, 324 (10th Cir. 1988) (citations omitted)). The Court must
“presume no jurisdiction exists absent an adequate showing by the party invoking federal
jurisdiction.” United States ex rel. Hafter D.O. v. Spectrum Emergency Care, Inc., 190 F.3d 1156,
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1160 (10th Cir. 1999) (citing United States v. ex rel. Precision Co. v. Koch Indus., Inc., 971 F.2d
548, 551 (10th Cir. 1992)). “‘Mere conclusory allegations of jurisdiction are not enough.’” Id.
(citing Penteco Corp. Ltd. Partnership v. Union Gas Sys. Inc., 929 F.2d 1519, 1521 (10th Cir.
1991)). If a plaintiff fails to meet their burden to allege subject-matter jurisdiction, the Court cannot
reach the merits of the claims.
III. 	Fed. R. Civ. P. 12(b)(1)
Federal Rule of Civil Procedure 12(b)(1) empowers a court to dismiss a Complaint for lack
of “subject-matter jurisdiction.” Fed. R. Civ. P. 12(b)(1). “Dismissal under Rule 12(b)(1) is not a
judgment on the merits of a plaintiff’s case, but only a determination that the court lacks authority
to adjudicate the matter.” Walker v. Knapic, No. 20-cv-02179-RBJ-MEH, 2021 WL 4311821, at
*1 (D. Colo. Aug. 30, 2021) (citing Castaneda, 23 F.3d at 1580). Courts “are duty bound to
examine facts and law in every lawsuit before them to ensure that they possess subject matter
jurisdiction.” Wilderness Soc. v. Kane Cnty., 632 F.3d 1162, 1179 n.3 (10th Cir. 2011) (Gorsuch,
J., concurring). A court lacking jurisdiction must dismiss a case when it “becomes apparent that
jurisdiction is lacking.” Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974)
(citation omitted). Even if the parties do not raise the question of lack of jurisdiction, “it is the duty
of the federal court to determine the matter sua sponte.” Id. (citing Atlas Life Insurance Co., v. W.I.
Southern, Inc., 306 U.S. 563 (1939); Continental Mining and Milling Co. v. Migliaccio, 16 F.R.D.
217 (D.C. Utah Aug. 31, 1954)).
Rule 12(b)(1) challenges are generally presented in one of two forms: “[t]he moving party
may (1) facially attack the complaint’s allegations as to the existence of subject-matter jurisdiction,
or (2) go beyond allegations contained in the complaint by presenting evidence to challenge the
factual basis upon which subject-matter jurisdiction rests.” Merrill Lynch Bus. Fin. Servs., Inc. v.
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Nudell, 363 F.3d 1072, 1074 (10th Cir. 2004) (quoting Maestas v. Lujan, 351 F.3d 1001, 1013
(10th Cir. 2003)). When reviewing a facial attack on subject-matter jurisdiction, the Court
“presume[s] all of the allegations contained in the [] complaint to be true.” Ruiz v. McDonnell, 299
F.3d 1173, 1180 (10th Cir. 2002) (citing Holt v. United States, 46 F.3d 1000, 1002 (10th Cir.
1995)).
ANALYSIS
I. 	Defendant’s Argument
Defendant first argues that Plaintiff lacks standing to bring all her claims, specifically that
Plaintiff fails to allege traceability and redressability, linking her injury—the loss of her property—
to discrete actions or inactions by HUD. ECF 36 at pp. 10-11. Since Defendant brings a facial
attack [ECF 36 at 7], the Court accepts Plaintiff’s allegations as true and considers whether there
is authority to adjudicate the matter. See Ruiz, 299 F.3d at 1180. Defendant’s Motion to Dismiss
also attacks Plaintiff’s FAC on the merits. Specifically, Defendant argues that Plaintiff’s first claim
under the Administrative Procedures Act, 5 U.S.C. § 501 et seq. (“APA”), should be dismissed
because Plaintiff complains of discretionary decisions over which this Court lacks authority to
adjudicate.10 ECF 36 at p. 11-15. Plaintiff does not respond to this argument. See generally ECF
68. Defendant also argues that Plaintiff’s second, third, and fourth claims are subject to Fed. R.
Civ. P. 12(b)(6) dismissal for failure to state a claim upon which relief could be granted. See ECF
36 at pp. 13-15. Plaintiff also does not respond to these arguments. See generally ECF 68.
10 “[A]n agency’s decision not to take enforcement action should be presumed immune from
judicial review under §701(a)(2).”
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II. 	Plaintiff’s Response
Plaintiff disagrees with Defendant’s arguments that the Court lacks subject matter jurisdiction
but fails to present any factual or legal support. Without further elaboration, Plaintiff cites 28
U.S.C. § 1331 (Federal Question Jurisdiction) and 42 U.S.C. § 1983 (Civil action for deprivation
of rights) as “clear bas[e]s for federal court intervention.” See ECF 68 at p. 3. Plaintiff lists
“standing and constitutional claims,” but offers only brief conclusory statements in support: “direct
and immediate harm demonstrated,” “substantive constitutional rights violations,” and “ongoing
property rights deprivation.” Id.
At the Hearing, the Court addressed Plaintiff’s failure to respond to Defendant’s Motion to
Dismiss and offered an additional opportunity for Plaintiff to rebut the Defendant’s arguments for
dismissal for lack of standing. The Court asked Plaintiff whether HUD played a role in her eviction
proceedings, and Plaintiff candidly admitted that it did not. Plaintiff’s only argument regarding
traceability was that HUD failed to protect her and failed to stop the abusive acts of her mortgage
provider and servicer.
III. 	Jurisdiction and Standing
Because jurisdiction is a threshold inquiry, the Court first considers Defendant’s argument
that all Plaintiff’s claims should be dismissed for lack of jurisdiction. See United States v. Springer,
875 F.3d 968, 973 (10th Cir. 2017) (“Jurisdiction is a threshold question that a federal court must
address before reaching the merits . . .” (quoting Payton v. U.S. Dep’t of Agric., 337 F.3d 1163,
1167 (10th Cir. 2003) (internal quotation marks omitted)); Citizen Ctr. v. Gessler, 770 F.3d 900,
906 (10th Cir. 2014) (citing WildEarth Guardians v. Pub. Serv. Co. of Colo., 690 F.3d 1174, 1182
(10th Cir. 2012) (standing is jurisdictional). As a question of subject-matter jurisdiction, standing
provides a basis for a Rule 12(b)(1) dismissal.
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Article 	III 	of 	the 	Constitution 	limits 	federal 	courts 	to 	consider 	“Cases” 	and
“Controversies.” “If a dispute is not a proper case or controversy, the courts have no business
deciding it, or expounding the law in the course of doing so.” DaimlerChrysler Corp. v. Cuno, 547
U.S. 332, 341 (2006). A plaintiff “must show that she has suffered, or will suffer, an injury that is
‘concrete, particularized, and actual or imminent; fairly traceable to the challenged action; and
redressable by a favorable ruling.” Murthy v. Missouri, 603 U.S. 43, 57 (2024) (quoting Clapper
v. Amnesty Int’l USA, 568 U.S. 398, 409 (2013) (internal quotations omitted)); see also Lujan v.
Defenders of Wildlife, 504 U.S. 555, 559-61 (1992). “The party invoking federal jurisdiction bears
the burden of establishing” the elements of standing. Lujan, 504 U.S. at 561 (1992) (citing
FW/PBS, Inc. v. Dallas, 493 U.S. 215, 231 (1990); Warth v. Seldin, 422 U.S. 490, 508 (1975)). A
plaintiff must allege constitutional standing to bring each of their claims. See DaimlerChrysler
Corp, 547 U.S. at 352 (2006) (citing Allen v. Wright, 468 U.S. 737, 750 (1984) (“[A] plaintiff must
demonstrate standing for each claim he seeks to press.”)).
At this motion-to-dismiss stage, Plaintiff must plead sufficient facts, taken as true, to make
standing plausible. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). Each claim must be supported by an injury that may be
remedied by a favorable judgment granting the requested relief. See DaimlerChrysler Corp, 547
U.S. at 352-53.
Plaintiff’s written response does not address Defendant’s arguments on traceability or
redressability and only lists conclusory statements of injury. See ECF 68 at p. 3. While the Court
cannot construct legal arguments on Plaintiff’s behalf, the Court construes the alleged injury to be
the eviction from her home. The Defendant does not dispute that Plaintiff suffered an injury. See
ECF 36 	at 	p. 	7 	(Defendant’s 	Motion 	to 	Dismiss 	focuses 	argument 	on 	traceability 	and
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redressability). Therefore, the Court considers whether Plaintiff has sufficiently alleged that losing
her home is traceable to HUD’s alleged wrongdoing and redressable by a favorable ruling from
this Court granting her requested relief.
A) Traceability
Defendant argues that Plaintiff’s injuries cannot be traced to HUD. See Id. at p. 10. A
plaintiff invoking jurisdiction must show their injury is “‘fairly . . . trace[able] to the challenged
action of the defendant, and not . . . the result [of] the independent action of some third party not
before the court.’” Lujan, 504 U.S. at 560 (citing Simon v. Eastern Ky. Welfare Rights
Organization, 426 U.S. 26, 41-42 (1976)). The traceability standard requires a plaintiff to draw a
sufficient causal connection, and not a “highly attenuated chain of possibilities,” between the
defendant’s supposed misbehavior and the harm. See Clapper, 568 U.S. at 410 (citations omitted).
In assessing traceability for standing, the Tenth Circuit has held the requirement to be less
demanding than “the concept of ‘proximate cause.’” Nova Health Systems v. Gandy, 416 F.3d
1149, 1156 (10th Cir. 2005) (citing Focus on the Family v. Pinellas Suncoast Transit Auth., 344
F.3d 1263, 1273 (11th Cir. 2003)). Yet Article III requires a plaintiff to allege a “substantial
likelihood that the defendant’s conduct caused plaintiff’s injury in fact.” Id. (citations omitted).
“[A]t the motion to dismiss stage, a plaintiff can satisfy the ‘fairly traceable’ requirement by
advancing allegations which, if proven, allow for the conclusion that the challenged conduct is a
‘but for’ cause of the injury.” Santa Fe All. For Pub. Health & Safety v. City of Santa Fe, New
Mexico, 993 F.3d 802 (10th Cir. 2021) (citations omitted).
When a plaintiff brings a claim asserting an “injury aris[ing] from the government’s
allegedly unlawful regulation (or lack of regulation) of someone else,” as Plaintiff does here,
traceability and redressability are typically “‘substantially more difficult’ to establish.” Lujan, 504
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U.S. at 562 (citations omitted). When an injury is caused by discretionary actions of independent
third parties not before the Court, it is not feasible for the Court to enter a judgment that will
remedy the injury, thus failing to meet Article III’s “case” or “controversy” requirement. See id.
at 561-563. In this instance, the dispositive question is whether HUD’s inactions were the ultimate
cause of Plaintiff’s injury.
The Court agrees with the Defendant’s position that Plaintiff fails to allege her injury is
fairly traceable to HUD. While she alleges that HUD provided counseling services to her, the
Plaintiff has not alleged a “substantial likelihood” that it was HUD’s failure to act that caused her
injury. Instead, her FAC confirms that HUD played an advisory role in assisting her as she sought
mitigation options. HUD served as a liaison between Ms. Evans and her lender and assisted her in
several ways: notifying Plaintiff of the lapses in COVID-relief measures, submitting applications,
and communicating with CHFA and Dovenmuehle Mortgage Inc. While Plaintiff lists a myriad of
actions she believes HUD should have taken, she does not explain how these actions would have
changed her unfortunate outcome. See id. at pp. 17-18. Plaintiff alleges various misconduct from
third parties not before the Court, and Plaintiff rests her legal theory on the grounds that HUD, as
a federal agency bound by the APA, should have acted to prevent these third parties’ discretionary
actions. Such claims, at this stage, must be supported by sufficient factual allegations, which taken
as true, support the conclusion that “but for” HUD’s role, Plaintiff would not have lost her home.
No such factual support exists here.
The bulk of Plaintiff’s FAC details allegedly fraudulent behavior by her lender and
mortgage servicer in mishandling her COVID-19 mortgage relief options. See generally ECF 7.
Plaintiff points to “Lender [b]ehavior that warranted HUD intervention,” including withholding
COVID-19 modification for her mortgage loan terms, removing her from relief options, refusing
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to work with her, and eventually foreclosing on her home. Id. at pp. 2-5. These are all allegations
of independent, discretionary decisions made by third parties—her lender and servicer—over
which HUD had no control.
Plaintiff does not adequately allege, beyond conclusory accusations, that HUD’s failures
to investigate, intervene, provide legal counsel, or otherwise act against her lender and servicer
caused her to lose her home. Such conclusory accusations are not well-pleaded allegations upon
which her claim for relief can be supported. See Brooks v. Mentor Worldwide, LLC, 985 F.3d 1272,
1281 (10th Cir. 2021) (quoting Khalik v. United Air Lines, 671 F.3d 1188, 1193 (10th Cir. 2012)
(“Conclusory allegations are ‘not entitled to the assumption of truth.”); see also Iqbal, 550 U.S. at
570. In a similar situation, District Judge Timothy J. Kelly in the District of Columbia found that
there was insufficient information pleaded to allow the Court to conclude that a third party would
have acted differently had HUD provided additional scrutiny. See Texas Low Income Housing
Information Service v. Carson, 427 F. Supp.3d 43, 59 (D. D.C. Dec. 3, 2019). By contrast,
plaintiffs who have survived Rule 12(b)(1) motions “have supported their allegations with
‘substantial evidence’ that left ‘little doubt as to causation and the likelihood of redress.’” Id.
(citations omitted).
Plaintiff has not met her burden to establish traceability. Since Plaintiff’s FAC does not
fairly trace HUD’s inactions to her injuries, the Court respectfully agrees with Defendant’s
arguments that Plaintiff lacks standing to bring her claims against HUD. Although failure to
establish any one element of standing requires dismissal under Article III’s “case” or “controversy”
requirement, the Court continues to discuss redressability.
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B) Redressability
Defendant further argues that Plaintiff does not adequately allege redressability. See ECF
36 at p. 11. In assessing the redressability requirement for constitutional standing, the Court must
consider the “relationship between ‘the judicial relief requested’ and the ‘injury’ suffered.”
California v. Texas, 593 U.S. 659, 671 (2021) (citing Allen, 468 U.S. at 753). A plaintiff must also
“demonstrate a substantial likelihood that the relief requested will redress [their] injury in fact.”
Nova Health Systems, 416 F.3d at 1158 (citing Ash Creek Mining Co. v. Lujan, 969 F.2d 868, 875
(10th Cir. 1992)). Although Plaintiff need not establish that all injuries would be redressed, a
plaintiff must show that a favorable judgment will “relieve [at least one] discrete injury.” Id. (citing
Larson v. Valente, 456 U.S. 228, 243 n. 15 (1982)). Further, a plaintiff requesting “forward-
looking relief … must face a real and immediate threat of repeated injury.” Murthy, 603 U.S. at 58
(2024) (citations omitted).
Defendant argues that redressability is deficient because Plaintiff is seeking forward-
looking relief, but (1) she no longer has a mortgage, and (2) even if this civil matter resulted in
changes to HUD’s oversight of lenders and servicers, Plaintiff does not allege she faces a real and
immediate threat of repeated injury. ECF 36 at p. 11. In this instance, for forward-looking relief,
Plaintiff must allege a substantial possibility that she will get a mortgage in the immediate future
insured by HUD through FHA. Otherwise, her claims are not redressable by the sought after relief,
and thus, must be dismissed for lack of standing. Plaintiff does not respond to this argument in
writing. See generally ECF 68. At the Status Conference, Plaintiff only voiced vague ideas relating
to redress: she hoped the lawsuit would address HUD’s complicity with the improper conduct of
mortgage lenders and servicers.
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The Court finds that Plaintiff’s FAC fails to meet her burden to show redressability.
Plaintiff requests the following relief from HUD: to stop eviction proceedings and vacate the
foreclosure, submit the mortgage to the Mortgagee Review Board for investigations, to assign legal
counsel under the Dodd Frank Reform Act, to appoint an expert witness, to return her personal
property, and other unspecified remedies and accountability. See ECF 7 at pp. 23-24. For her injury
to be redressable, though, Plaintiff here must allege that, if this Court were to grant the above-
requested relief, such relief would remedy the harm of losing her home in a foreclosure proceeding
or that such relief would likely prevent a repeat, future injury. See Murthy, 602 U.S. at 58.
Unfortunately for Plaintiff, the foreclosure and eviction proceedings have already occurred and
were finalized. As a result, Plaintiff’s first request for relief is impossible for this Court to grant.
See ECF 24. The Court could not order HUD to enforce a judgment to stop eviction proceedings
or vacate her foreclosure because HUD does not have the ability to stop the eviction nor to undo
the foreclosure.
Outstanding questions regarding Plaintiff’s other requested relief abound. For example,
even if an investigation were to be ordered by the Court and launched by HUD, Plaintiff fails to
allege that the property would or could be returned to her. Plaintiff conceded that she does not
have a mortgage currently and she is not in the process of obtaining a new mortgage. And even if
the Dodd Frank Reform Act provided a statutory right to legal counsel, the record does not support
that retaining counsel would return the property to her or guarantee that she would be better
situated in a related future proceeding. For the same reasons, even if an expert witness could be
appointed, there is no indication that such a measure would address her injury at this point. And
finally, even if a judgment in this civil matter were to result in changes to HUD’s policies and
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handling of lenders and servicers, Plaintiff has not alleged a substantial likelihood of a repeat injury
to support standing for forward-looking relief.
Therefore, the Court agrees with Defendant’s arguments that Plaintiff also lacks standing
because she fails to allege traceability and redressability. The lack of constitutional standing
precludes this Court from hearing the merits of her claims.
IV. 	Dismissal Without Prejudice
Because the Court recommends dismissing all of Plaintiff’s claims against HUD under Fed. R.
Civ. P. 12(b)(1) for lack of jurisdiction, in the Tenth Circuit, the dismissal must be without
prejudice. See Brereton v. Bountiful City Corp., 434 F.3d 1213, 1216 (10th Cir. 2006) (citations
omitted); see also Fed. R. Civ. P. 41(b) (specifically excluding dismissals for “lack of
jurisdiction”). A case dismissed for lack of jurisdiction “is not an adjudication of the merits and
therefore … must be without prejudice.” Martinez v. Richardson, 472 F.2d 1121, 1126 (10th Cir.
1973) (citations omitted). Because standing is a jurisdictional issue, “dismissal with prejudice for
lack of standing is inappropriate.” Brereton, 434 F.3d at 1216 (citation omitted).
CONCLUSION
For the reasons set forth above, under Fed. R. Civ. P. 12(b)(1), the court respectfully
RECOMMENDS that Defendant’s Motion to Dismiss [ECF 36] be GRANTED, and that
Plaintiff’s FAC [ECF 7] be DISMISSED WITHOUT PREJUDICE.11 Lacking jurisdiction, the
11 Within fourteen days after service of a copy of this Recommendation, any party may serve and
file written objections to the Magistrate Judge’s proposed findings and recommendations with the
Clerk of the United States District Court for the District of Colorado. 28 U.S.C. § 636(b)(1); Fed.
R. Civ. P. 72(b); Griego v. Padilla (In re Griego), 64 F.3d 580, 583 (10th Cir. 1995). A general
objection that does not put the district court on notice of the basis for the objection will not preserve
the objection for de novo review. “[A] party’s objections to the magistrate judge’s report and
recommendation must be both timely and specific to preserve an issue for de novo review by the
district court or for appellate review.” United States v. 2121 East 30th Street, 73 F.3d 1057, 1060
(10th Cir. 1996). Failure to make timely objections may bar de novo review by the District Judge
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Court does not reach the merits of Plaintiff’s claims or Defendant’s arguments for dismissal under
the APA or for failure to state a claim under Fed. R. Civ. P. 12(b)(6).
DATED at Denver, Colorado, this 9th day of January, 2025.
BY THE COURT:
Timothy P. O’Hara
United States Magistrate Judge
of the Magistrate Judge’s proposed findings and recommendations and will result in a waiver of
the right to appeal from a judgment of the district court based on the proposed findings and
recommendations of the Magistrate Judge. See Vega v. Suthers, 195 F.3d 573, 579-80 (10th Cir.
1999) (holding that the district court’s decision to review Magistrate Judge’s recommendation de
novo despite lack of an objection does not preclude application of “firm waiver rule”); Int’l Surplus
Lines Ins. Co. v. Wyo. Coal Refining Sys., Inc., 52 F.3d 901, 904 (10th Cir. 1995) (finding that
cross-claimant waived right to appeal certain portions of Magistrate Judge’s order by failing to
object to those portions) Ayala v. United States, 980 F.2d 1342, 1352 (10th Cir. 1992) (finding that
plaintiffs waived their right to appeal certain portions of Magistrate Judge’s orders by failing to
object to those portions); Ayala v. United States, 980 F.2d 1342, 1352 (10th Cir. 1992) (finding
that plaintiffs waived their right to appeal the Magistrate Judge’s ruling by failing to file
objections). But see, Morales-Fernandez v. INS, 418 F.3d 1116, 1122 (10th Cir. 2005) (holding
that firm waiver rule does not apply when the interests of justice require review).
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