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Sandaler v. Wells Fargo Bank, N.A.

United States District Court, M.D. Florida, Orlando Division

November 14, 2017

WELLS FARGO BANK, N.A., Defendant.



         THIS CAUSE is before the Court on Defendant's Motion to Dismiss (“Motion, ” Doc. 50), to which Plaintiff filed a Response (Doc. 55). For the reasons stated below, Defendant's Motion will be granted in part and denied in part.

         I. Background

         On January 23, 2006, Plaintiff obtained a loan, which was secured by a mortgage on Plaintiffs home. (Second Am. Compl., Doc. 41, ¶ 11). Plaintiffs loan was eventually bundled with other loans and deposited into a trust, and U.S. Bank, National Association (“U.S. Bank”) held legal title to the bundled loans. (Id. ¶ 13). Wells Fargo was the subservicer for Plaintiffs loan. (Id. ¶ 12). In 2011, Plaintiff defaulted on his loan payments, (see Id. ¶¶ 17, 19), and on January 13, 2012, U.S. Bank filed a foreclosure action against Plaintiff in the Circuit Court of the Eighteenth Judicial Circuit in and for Brevard County. (Id. ¶ 21). While the foreclosure action was pending, on April 17, 2013, Plaintiff filed for Chapter 7 Bankruptcy and obtained a discharge on August 1, 2013. (Id. ¶ 29 & n.13).

         On February 24, 2015, Plaintiff, proceeding pro se, initiated the instant action against Defendant and Ocwen Loan Servicing, LLC (“Ocwen”) by filing a Complaint in the Circuit Court of the Eighteenth Judicial Circuit in and for Brevard County, alleging wrongful foreclosure, unjust enrichment, and breach of contract claims, arising out of Defendant's alleged failure to convert a complete trial loan modification agreement to a permanent loan modification agreement. (Id. ¶ 54; Compl., Doc. 1-3, at 3-5). Prior to filing his Complaint-between September 7, 2011, and February 14, 2014-Plaintiff submitted five different loan modification applications to Defendant. (Doc. 41 ¶¶ 18, 20, 24-25, 45). Plaintiff submitted his sixth and final loan modification application on September 14, 2015. (Id. ¶ 57). However, none of Plaintiff's applications resulted in a modification to Plaintiff's loan. (See Id. ¶¶ 18, 20, 30-41, 45, 58).

         On June 1, 2015, U.S. Bank filed an Amended Complaint in the foreclosure action, (Am. Verified Compl., Doc. 41-2, at 67-71; Brevard County Clerk of Courts Docket, Doc. 50-1, at 6), to which Plaintiff filed an Answer (Doc. 50-1 at 6). On or about April 18, 2016, a final judgment of foreclosure was entered in favor of U.S. Bank in the state foreclosure action. (Doc. 41 ¶ 59; Final J. of Foreclosure, Doc. 41-3, at 71-74). U.S. Bank was also the prevailing bidder at the August 17, 2016 foreclosure sale and obtained a certificate of title to Plaintiff's property on September 6, 2016. (Id. ¶ 60; Doc. 50-1, at 9). Plaintiff did not object to the foreclosure sale or appeal the state foreclosure judgment.

         On September 27, 2016, Plaintiff-now represented by counsel-filed an Amended Complaint in the instant action, bringing federal and state-law claims related to the servicing of his mortgage. (See generally Am. Compl., Doc. 3). Defendant subsequently filed a Notice of Removal (Doc. 1) pursuant to 28 U.S.C. § 1331 and then moved to dismiss the Amended Complaint, (see Mot. to Dismiss, Doc. 24). While the motion to dismiss was pending, the parties filed a Joint Stipulation of Dismissal with Prejudice as to Ocwen (Doc. 24), and Ocwen was terminated as a party, (Jan. 23, 2017 Order, Doc. 37, at 1). In response to Defendant's motion to dismiss, Plaintiff sought and was granted leave to file the Second Amended Complaint. (Pl.'s Unopposed Mot. for Leave to File Second Amended Complaint, Doc. 39, at 1; Feb. 10, 2017 Order, Doc. 40). After Plaintiff filed the Second Amended Complaint (“SAC”), Defendant filed the Motion to Dismiss currently before the Court, asking the Court to dismiss all five counts asserted in the SAC.

         While the Motion was pending, the parties filed a Joint Stipulation for Dismissal of Counts 2, 3, and 4 (“Joint Stipulation, ” Doc. 69). The parties do not cite any authority authorizing the dismissal of these claims. The Court presumes the parties were attempting to dismiss the claims under Federal Rule of Civil Procedure 41(a)(1)(A)(ii). That Rule, however, only permits parties to voluntarily dismiss “an action, ” rather than individual claims. See Fed. R. Civ. P. 41(a)(1)(A)(ii). Nevertheless, the Court will construe the Joint Stipulation as a notice that Plaintiff does not oppose Defendant's Motion to the extent it requests dismissal of Counts II, III, and IV. Counts II, III, and IV will therefore be dismissed.

         Counts I and V remain. Count I alleges violations of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601 et seq., and its implementing regulations, also known as “Regulation X, ” 12 C.F.R. § 1024.1 et seq., in relation to Plaintiff's fifth and sixth loan modification applications.[1] Count V asserts a claim for negligent mortgage servicing based on Defendant's alleged violations of the National Mortgage Settlement as well as a consent judgment entered in another matter (the “Ocwen Consent Judgment” or “OCJ”).

         II. Motion to Dismiss Legal Standard

         “A pleading that states a claim for relief must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Pursuant to Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a complaint for “failure to state a claim upon which relief can be granted.” In determining whether to dismiss under Rule 12(b)(6), a court accepts the factual allegations in the complaint as true and construes them in a light most favorable to the non-moving party. See United Techs. Corp. v. Mazer, 556 F.3d 1260, 1269 (11th Cir. 2009). Nonetheless, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions, ” and “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Furthermore, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         III. Analysis

         Defendant argues that the SAC should be dismissed because the Rooker-Feldman doctrine bars this Court from having jurisdiction over Plaintiff's claims. Alternatively, Defendant argues that Plaintiff's claims are barred by Florida's compulsory counterclaim rule, that Plaintiff should be judicially estopped from brining his claims, and that Plaintiff has failed to state a claim. Defendant's arguments will be addressed in turn.

         A. Rooker-Feldman Doctrine

         “Attacks on subject matter jurisdiction under [Rule] 12(b)(1) come in two forms: ‘facial attacks' and ‘factual attacks.'” Garcia v. Copenhaver, Bell & Assocs., M.D.'s, P.A., 104 F.3d 1256, 1260-61 (11th Cir. 1997) (quoting Lawrence v. Dunbar, 919 F.2d 1525, 1528-29 (11th Cir. 1990)). The present case involves a factual attack. In other words, Defendant “challenge[s] the existence of subject matter jurisdiction in fact, irrespective of the pleadings.” Lawrence, 919 F.2d at 1529 (quotation omitted). On a factual attack, courts may consider “matters outside the pleadings, such as testimony and affidavits, ” id. at 1529 (quotation omitted), weigh the evidence, and make findings of fact, as long as “the facts necessary to sustain jurisdiction do not implicate the merits of [the] plaintiff's cause of action, ” Garcia, 104 F.3d at 1261. In such a case, “no presumptive truthfulness attaches to [the] plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.” Lawrence, 919 F.2d at 1529 (quotation omitted).

         Pursuant to the Rooker-Feldman doctrine, “a United States District Court has no authority to review final judgments of a state court in judicial proceedings.” D.C. Court of Appeals v. Feldman, 460 U.S. 462, 482 (1983); see also Rooker v. Fid. Tr. Co., 263 U.S. 413, 415-16 (1923). In other words, district courts lack jurisdiction to hear “cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). “The doctrine applies both to federal claims raised in the state court and to those ‘inextricably intertwined' with the state court's judgment.” Casale v. Tillman, 558 F.3d 1258, 1260 (11th Cir. 2009) (quoting Feldman, 460 U.S. at 482 n.16). “A claim is inextricably intertwined if it would effectively nullify the state court judgment, or it succeeds only to the extent that the state court wrongly decided the issues.” Id. (quotations omitted).

         The Rooker-Feldman doctrine applies only to federal actions “filed after the state proceedings have ended.” Nicholson v. Shafe, 558 F.3d 1266, 1275 (11th Cir. 2009). For the purposes of applying the Rooker-Feldman doctrine, state court proceedings have ended:

(1) when the highest state court in which review is available has affirmed the judgment below and nothing is left to be resolved, (2) if the state action has reached a point where neither party seeks further action, and (3) if the state court proceedings have finally resolved all the federal questions in the litigation, but state law or purely factual questions (whether great or small) remain to be litigated.

Lozman v. City of Riviera Beach, 713 F.3d 1066, 1072 (11th Cir. 2013) (quoting Nicholson, 558 F.3d at 1275).

         It is undisputed that Plaintiff filed the instant action on February 24, 2015. (See Doc. 50 at 7 (noting that Plaintiff filed his initial Complaint on February 24, 2015); Doc. 55 at 8 (noting that commencement of this federal action related back to February 24, 2015)). Defendant argues that the third test applies in this case, and thus, for purposes of the Rooker-Feldman doctrine, the state foreclosure proceeding had ended when Plaintiff filed the instant action. More specifically, Defendant asserts that when Plaintiff initiated this action, the only issues remaining to be litigated in the foreclosure action pertained to the mortgage foreclosure under state law.

         The Court disagrees that the third test applies here. The foreclosure action solely involved state law. Thus, the state court could not have “finally resolved all the federal questions in the litigation”; there were never any federal questions for the state court to litigate. However, even if the third test did apply here, there is a procedural issue that prevents the application of Rooker-Feldman.

         The Supreme Court has cautioned courts on the narrow application of Rooker-Feldman. “In Exxon Mobil, the Court reminded lower courts that Rooker-Feldman only applies to cases brought by those ‘complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced . . . .” Velazquez v. S. Fla. Fed. Credit Union, 546 F. App'x 854, 858 (11th Cir. 2013) (emphasis added) (quoting Exxon Mobil, 544 U.S. at 284). While the instant action was initiated on February 24, 2015, the state court did not enter a final judgment in the foreclosure action until April 22, 2016. Moreover, the fact that SAC was not filed until February 10, 2017, after the state court judgment was rendered, is of no import. Under the Federal Rules of Civil Procedure, Plaintiff's SAC relates back to the date of his original pleading. See Fed. R. Civ. P. 15(c)(1)(B). Accordingly, the state court judgment had not been rendered when this action commenced. It therefore follows that when Plaintiff filed this action, he was not a state-court loser complaining of injuries caused by a state-court judgment. Thus, Rooker-Feldman cannot apply here. See Exxon Mobil, 544 U.S. at 293-94 (holding that Rooker-Feldman did not apply where the party initiating the subsequent federal action had “not repaired to federal court to undo the [state court] judgment in its favor”); Novick v. Wells Fargo Bank, N.A., No. 16-cv-22982-GAYLES, 2017 WL 2464707, at *2 (S.D. Fla. June 7, 2017) (“The doctrine does not apply in this instance as Plaintiff filed his federal action before there was a final judgment in the Foreclosure Action.” (citing Green v. Jefferson Cty. Comm'n, 563 F.3d 1243, 1249-50 (11th Cir. 2009))); cf. Figueroa v. Merscorp, Inc., 766 F.Supp.2d 1305, 1321 (S.D. Fla. 2011) (“Procedurally, Rooker- Feldman may apply here as this federal case was not filed until after the state-court proceedings concluded.”), aff'd, 477 F. App'x 558 (11th Cir. 2012). To the extent Defendant's Motion requests that this case be dismissed for lack of subject matter jurisdiction under Rooker-Feldman, Defendant's Motion will be denied.

         B. Compulsory Counterclaims

         Defendant argues that Plaintiff's claims are due to be dismissed because they are compulsory counterclaims that Plaintiff was required to assert in the state foreclosure action. Plaintiff responds that his claims were not compulsory because they had not ...

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