JOHN SMITH CO LPA v. DANIEL LIPSKY (2026)

ORDER

This matter is before the Court on Defendant Daniel S. Lipsky's motion to dismiss, (Doc. 98), and motion for reconsideration of the Court's order lifting the stay, (Doc. 99). The motion to dismiss is opposed by Cross-Defendants First Bank dba First Bank Mortgage (“First Bank”), (Doc. 100), 1st National Bank LLC (“1NB”), (Doc. 103), the Consumer Financial Protection Bureau (“CFPB”), (Doc. 105), and D.K. Pier & Co. (“D.K. Pier”), (Doc. 106); the motion for reconsideration is opposed by First Bank, (Doc. 101), 1NB, (Doc. 102), and the CFPB, (Doc. 104).

I. BACKGROUND

In 2019, Plaintiff John D. Smith Co., LPA (“Smith Law”), obtained a state court judgment against Lipsky in the amount of $66,427.74. (Doc. 1, PageID 11). Smith Law filed that judgment in the Warren County Court of Common Pleas and sought to satisfy it by foreclosing on Lipsky's personal residence, located at 8234 Voltaire Court, Waynesville, Ohio 45068. (Id.). However, the CFPB—which had imposed a $7,930,000 lien on the property following a judgment against Lipsky and his business in Consumer Fin. Prot. Bureau v. Nationwide Biweekly Admin., Inc., No. 3:15-CV-2106, 2017 U.S. Dist. LEXIS 145923 (N.D. Cal. Sep. 8, 2017)—removed the action to federal court. Cf. 28 U.S.C. §§ 1444, 2410.

Following several months of motion practice, including counterclaims and crossclaims by additional lienholders, Lipsky moved to stay these proceedings pending the Ninth Circuit's resolution of his appeal from Nationwide Biweekly. (Doc. 40). The Court agreed to impose a stay on the condition that Lipsky post a bond of $66,427.74, payable to Smith Law. (Doc. 53, PageID 690). Smith Law moved to dismiss its claim against Lipsky after he remitted $76,605.29 (accounting for the judgment amount and post-judgment interest), and proceedings involving the remaining creditors and lienholders were stayed on February 8, 2021.

In January 2023, the Ninth Circuit vacated the district court's order and remanded Nationwide Biweekly so that the court could “reassess the case under the changed legal landscape since its initial order and opinion.” (Doc. 59, PageID 716). The district court entered judgment against Lipsky for the same amount in August 2024, and Lipsky again appealed to the Ninth Circuit. (Doc. 62, PageID 724). Finally, in November 2025, the Ninth Circuit affirmed the district court's order in full. Consumer Fin. Prot. Bureau v. Nationwide Biweekly Admin., Inc., No. 24-5940, 2025 U.S. App. LEXIS 29944 (9th Cir. Nov. 17, 2025).

During the pendency of the stay, Lipsky became unacceptably delinquent on his mortgage payments to both First Bank and 1NB. As such, those parties sought to lift the stay so that they could initiate foreclosure proceedings. Lipsky moved to extend the stay, noting that he had petitioned for a writ of certiorari to obtain Supreme Court review of the Ninth Circuit's November 2025 opinion and arguing that it would be improper for the Court to move forward with this matter in the interim. But as the Court noted, “Lipsky does not contest that he is in arrears on the mortgages held by First Bank and 1NB, nor has he made the necessary showing to extend the stay.” (Doc. 96, PageID 1214). Accordingly, the stay was lifted on February 25, 2026. (Id.).

Lipsky now seeks reconsideration of the Court's order lifting the stay, and also moves—out of time—to dismiss this matter entirely. He argues that the Court misunderstood the arguments made in his petition for certiorari, and claims that his successive motion to dismiss presents “threshold constitutional arguments that could end the foreclosure entirely.” (Doc. 99, PageID 1254). Specifically, he argues in his motion to dismiss that “[t]his case presents the natural next step in the evolution of the law” around the Excessive Fines and Takings Clauses of the Constitution. (Doc. 98, PageID 1218).

II. STANDARDS OF LAW

The Federal Rules of Civil Procedure do not specifically address motions for reconsideration of interlocutory orders. However, “[d]istrict courts have authority both under common law and Rule 54(b) to reconsider interlocutory orders and to reopen any part of a case before entry of final judgment.” Rodriguez v. Tenn. Laborers Health & Welfare Fund, 89 F. App'x 949, 952 (6th Cir. 2004); see Adkisson v. Jacobs Eng'g Grp., Inc., 36 F.4th 686, 694 (6th Cir. 2022); cf. Luna v. Bell, 887 F.3d 290, 297 (6th Cir. 2018) (noting that reconsideration is a matter for the Court's sound discretion).

“Motions for reconsideration ․ are largely disfavored,” but reconsideration of an interlocutory order “is justified when there is ‘(1) an intervening change of controlling law; (2) new evidence available; or (3) a need to correct a clear error or prevent manifest injustice.’ ” Slush Puppie Ltd. v. Icee Co., 729 F.Supp.3d 773, 785 (S.D. Ohio 2024) (quoting Louisville/Jefferson Cnty. Metro Gov't v. Hotels.com, L.P., 590 F.3d 381, 389 (6th Cir. 2009)). “To establish manifest injustice a moving party must ‘show that there exist[s] a fundamental flaw in the court's decision that without correction would lead to a result that is both inequitable and not in line with applicable policy.’ ” Gibson v. Yaw, No. 1:22-CV-773, 2023 U.S. Dist. LEXIS 62130, at *7 (S.D. Ohio Apr. 7, 2023) (quoting United States v. Carney, No. 3:21-CR-98, 2022 U.S. Dist. LEXIS 39503, at *4 (M.D. Tenn. Mar. 4, 2022)). “Furthermore, a court will not find manifest injustice when the moving party simply reargues the issues that were not previously successful.” Nayyar v. Mt. Carmel Health Sys., Nos. 2:10-CV-135, 2:12-CV-189, 2014 U.S. Dist. LEXIS 19916, at *7 (S.D. Ohio Feb. 18, 2014).

As for successive motions to dismiss, they are generally barred by the Federal Rules of Civil Procedure. See Fed. R. Civ. P. 12(g)(2). “[S]ubject to limited exceptions in Rule 12(h) not relevant here, ‘a party that makes a motion under [Rule 12] must not make another motion under this rule raising a defense or objection that was available to the party but omitted from its earlier motion.’ ”¹ Novo Nordisk, Inc. v. DCA Pharm., 745 F.Supp.3d 626, 631 (M.D. Tenn. 2024) (quoting Means v. United States Conf. of Cath. Bishops, 836 F.3d 643, 648 (6th Cir. 2016)); see also Rauch v. Day & Night Mfg. Corp., 576 F.2d 697, 702 (6th Cir. 1978); 5 Wright & Miller, Federal Practice & Procedure: Civil § 1391 (2026).

III. ANALYSIS

a. Motion for Reconsideration

Lipsky first contends that the Court “should not decide serious constitutional questions of first impression in this Circuit when a defined, imminent Supreme Court ruling may make that decision unnecessary.” (Doc. 99, PageID 1254). But as the Court already explained, “insofar as Lipsky's motion [to maintain the stay] seeks to prevent two private banks from foreclosing upon his personal residence, as they are entitled to do by contract, any further appeal in the Ninth Circuit case is immaterial.” (Doc. 96, PageID 1211). In any event, the Court need not address this asserted ground for reconsideration, because the Supreme Court has already denied Lipsky's petition. Nationwide Biweekly Admin., Inc. v. Consumer Fin. Prot. Bureau, No. 25-990, ___ S.Ct. ___, 2026 U.S. LEXIS 1475 (2026) (denying certiorari).

Despite this, Lipsky claims that his second motion to dismiss “is a material change in circumstances,” and the Court “should not permit a case to proceed toward irreversible enforcement while a pending threshold motion challenges the constitutional validity of that enforcement.” (Doc. 99, PageID 1254). But as the Court notes below, the untimely motion to dismiss is procedurally improper and does not bear on the legal questions underlying this case. Moreover, it defies logic to suggest that the Supreme Court's denial of certiorari somehow breathes new life into Lipsky's rejected arguments and places them “squarely within the scope of this foreclosure claim.” (Doc. 108, PageID 1361).

Lipsky argues that First Bank and 1NB “speculate and make false assumptions without proof about Mr. Lipsky's inability to continue to make monthly mortgage payments.” (Id., PageID 1257). But no speculation or false assumption is necessary to come to the conclusion that Lipsky is seriously delinquent on his mortgage payments to the two lenders. It matters not whether Lipsky failed to pay because he couldn't or failed to pay because he opted not to. Either way, he failed to pay—that conclusion requires no “imaginary assumptions.” (Id., PageID 1258).

b. Successive Motion to Dismiss

Lipsky's motion to dismiss suffers from several deficiencies, not least of which is its untimeliness. As to that threshold question, it is strongly disfavored for a district court to entertain a successive Rule 12(b)(6) motion to dismiss if doing so “would create an unjust delay or facilitate an abuse in motion practice.” Novo Nordisk, 745 F.Supp.3d at 631. But that is exactly what Lipsky seeks, essentially shrugging off the outstanding crossclaims in favor of additional hearings and lengthy periods of briefing.² The Court declines to do so.

Alternatively, intervening legal developments have not “fundamentally altered the applicable law” on this question, as Lipsky continues to assert, (Doc. 98, PageID 1219), and there is no substance to Lipsky's argument that the CFPB's lien or the creditors’ crossclaims run afoul of the Takings Clause or the Excessive Fines Clause. To that end, his reading of Tyler v. Hennepin County, 598 U.S. 631 (2023) strains the Supreme Court's holding beyond its bounds. In Tyler, the Court reiterated that the state could not “absolutely preclud[e] an owner from obtaining the surplus proceedings of a judicial sale.” 598 U.S. at 644 (quoting Nelson v. City of New York, 352 U.S. 103, 110 (1956)). But Tyler did not circumscribe the ability of a private bank to seize and sell property to satisfy delinquent debts, nor did it prohibit the government from imposing a lien on personal property.

To the extent Lipsky asserts that a private bank foreclosure is tantamount to “the government's appropriation of [his] equity without compensation,” (Doc. 98, PageID 1221), his argument entirely misses the mark for reasons that the Court has already explained in great detail, (see, e.g., Doc. 96, PageID 1210-14). Lipsky repeatedly represents that “[t]he government proposes to collect a $7.93 million civil penalty ․ by forcing the sale of Mr. Lipsky's $13.5 million family home through a distressed foreclosure process that will predictably destroy his family's $4.695 million equity interest and yield a total economic extraction of $12.625 million.” (Doc. 109, PageID 1374). But those calculations are not supported by reality, and neither the initial listing price nor the current listing price reflect the home's fair market value. See Freed v. Thomas, 81 F.4th 655, 659 (6th Cir. 2023) (holding that “the best evidence of a foreclosed property's value is the property's sales price, not what it was worth before the foreclosure.”).

Ultimately, Lipsky seeks a proverbial “second bite at the apple” by using these foreclosure proceedings to resurrect his rejected challenge to the CFPB's lien and cause further delay. (See Doc. 108, PageID 1361). But this is neither the time nor the place, and Lipsky otherwise fails to establish that any of the pending crossclaims do not state a claim upon which relief can be granted. A foreclosure sale does not implicate the Takings Clause when the government does not appropriate excess proceeds from the sale or when there are no excess proceeds at all; nor can Lipsky use these proceedings to continue challenging the CFPB's civil judgment under the Excessive Fines Clause.

c. Certification of Interlocutory Appeal

Finally, Lipsky requests that the Court certify this ruling for interlocutory appeal to the Sixth Circuit. Pursuant to 28 U.S.C. § 1292, “a district court may certify for immediate appeal an interlocutory order that ‘involves a controlling question of law as to which there is substantial ground for difference of opinion’ when ‘an immediate appeal from the order may materially advance the ultimate termination of the litigation.’ ” In re Salas, 160 F.4th 810, 814 (6th Cir. 2025) (quoting 28 U.S.C. § 1292(b)). “Review under § 1292(b) is granted sparingly and only in exceptional cases.” W. Tenn. Chapter of Assoc. Builders & Contractors, Inc. v. City of Memphis, 295 F.3d 345, 350 (6th Cir. 2002).

The Court declines to certify this order for appeal. Despite Lipsky's repeated attempts to argue so, the issues at hand do not turn on a controlling question of law as to which there is genuine, substantial ground for a difference of opinion. As correctly noted by the CFPB, “Lipsky's arguments turn on hypotheticals and events that have not yet occurred and Lipsky does not even contest that the Bureau has stated a prima facie claim for relief.” (Doc. 105, PageID 1347). Moreover, Lipsky's arguments are squarely foreclosed by clear statutory language and well established Sixth Circuit case law.

IV. CONCLUSION

For the foregoing reasons, the motion to dismiss, (Doc. 98), and the motion for reconsideration, (Doc. 99), are DENIED. Further, the Court DECLINES to certify this ruling for interlocutory appeal.

IT IS SO ORDERED.

FOOTNOTES

1.   Rule 12(h) does preserve the ability of a party to assert a defense of failure to state a claim, but only in a post-answer pleading allowed by Rule 7(a), a motion for judgment on the pleadings under Rule 12(c), or at trial. Fed. R. Civ. P. 12(h)(2).

2.   Aside from the issue of procedural appropriateness, Lipsky barely mentions—and certainly does not meaningfully dispute—the crossclaims of First Bank, 1NB, or D.K. Pier.

Michael R. Barrett United States District Judge