Opinion
18 Civ. 6324 (PAE)(HBP)
07-08-2019
ORINTHIA GIFFORD, Plaintiff, v. UNITED NORTHERN MORTGAGE BANKERS, LTD., et al., Defendants.
REPORT AND RECOMMENDATION
: TO THE HONORABLE PAUL E. ENGELMAYER, United States District Judge,
I. Introduction
By notice of motion, defendants M&T Mortgage Corporation ("M&T"), United Northern Mortgage Bankers, Ltd. ("United Northern"), Aurora Loan Services LLC ("Aurora"), Mortgage Electronic Registration Systems, Inc. ("MERS"), Nationstar Mortgage LLC ("Nationstar") and Knuckles, Komosinski & Elliot ("KKE") (collectively, the "defendants") move to dismiss plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction and Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted (Notice of Motion, dated Aug. 24, 2018 (Docket Item ("D.I.") 23); Memorandum of Law, dated Sept. 5, 2018 (D.I. 27) ("United Memo."); Notice of Motion to Dismiss, dated Sept. 17, 2018 (D.I. 43); Notice of Motion, dated Nov. 7, 2018 (D.I. 59)).
For the reasons set forth below, I respectfully recommend that defendants' motions be granted. II. Background
Plaintiff's pro se complaint does not contain sufficient factual allegations to explain the extensive background that led to this litigation. Therefore, the facts and procedural history below are taken from plaintiff's complaint, proposed amended complaint, defendants' opposition papers and pertinent documents from the foreclosure and holdover proceedings commenced against plaintiff.
A. Facts
On October 20, 1998, plaintiff executed a promissory note in favor of United Northern for $251,700.00 (Complaint, dated July 12, 2018 (D.I. 1) ("Compl.") ¶ 10; Proposed Amended Complaint, dated Dec. 6, 2018, annexed to Gifford Declaration as Ex. A (D.I. 55-1) ("PAC") ¶ 10). This promissory note was secured by a mortgage given to United Northern encumbering plaintiff's real property located at 4160 Digney Avenue, Bronx, New York 10466 (the "Property") (Compl. ¶ 3; PAC ¶ 10). Under the terms of the promissory note, plaintiff was required to make 360 installment payments of $2,025.24 to United Northern from December 1, 1998 through November 1, 2028 (PAC ¶ 10).
United Northern then assigned plaintiff's mortgage and note to M&T, and it was recorded by the Bronx County Clerk on June 30, 1999 (PAC ¶¶ 10, 14). In or about October 1999, plaintiff experienced financial hardship and defaulted on her loan payments to M&T (PAC ¶¶ 15-16).
On November 17, 1999, plaintiff's mortgage and note were assigned to MERS which elected to accelerate plaintiff's debt based on her default (PAC ¶ 18). MERS filed a foreclosure action against plaintiff on or about April 25, 2000 in Bronx County Supreme Court (PAC ¶ 18). Plaintiff defaulted in that foreclosure action and on April 13, 2006, the Honorable Paul A. Victor, Justice of the Supreme Court, entered judgment against plaintiff for $430,085.89 and ordered that the Property be sold as a single parcel at a foreclosure sale (Judgment of Foreclosure and Sale, dated Apr. 5, 2006, annexed to the Declaration of Scott W. Parker, Esq. ("Parker Decl.") as Ex. 2 (D.I. 23-3)). Plaintiff moved to vacate this judgment on May 8, 2007; Justice Victor denied that motion on February 29, 2008 (Order, dated Feb. 29, 2008, annexed to Parker Decl. as Ex. 4 (D.I. 23-5)).
On December 12, 2007, MERS acquired title to the Property and a referee's deed was subsequently issued to it on February 23, 2009 (Referee's Deed, dated Feb. 23, 2009, annexed to Parker Decl. as Ex. 5 (D.I. 23-6)). However, four days earlier, on February 19, 2009, MERS assigned its bid in the foreclosure to Aurora which instituted a holdover proceeding against plaintiff (Assignment of Bid, dated Feb. 19, 2009, annexed to Parker Decl. as Ex. 6 (D.I. 23-7)). This holdover proceeding was resolved on May 26, 2010 when plaintiff consented to a judgment and warrant for possession of the Property in favor of Aurora (Stipulation of Settlement, dated May 26, 2010, annexed to Parker Decl. as Ex. 8 (D.I. 23-9)).
B. State Court Procedural History
Plaintiff has mounted numerous challenges in state court to the foreclosure action and the related proceedings. Plaintiff filed an Order to Show Cause on February 13, 2012 seeking to stay all eviction proceedings against her and to vacate the judgment of the foreclosure action claiming that MERS "had no standing to bring [the] action against [her] because [her] mortgage may not have been properly assigned to them" (Affirmation in Support, dated Feb. 13, 2012, annexed to Parker Decl. as Ex. 9 (D.I. 23-10)). This motion was denied by the Honorable Stanley Green, Justice of the Supreme Court, on May 15, 2012 who found that plaintiff "never raised the issue of [MERS'] standing previously and thus [had] waived any objection thereto" (Order, dated May 15, 2012, annexed to Parker Decl. as Ex. 10 (D.I. 23-11)).
Plaintiff filed a nearly identical motion in October 2012 which was again denied by Justice Green for substantially the same reasons:
The motion by defendant to vacate the judgment of the foreclosure and sale, etc is denied. This case is thirteen years old. Defendant has resided in and conducted a business in the premises without paying mortgage payments or rent all these years. This case has been litigated for many years, with many motions, and multiple eviction proceedings have been brought in the Civil Court. Defendant has successfully remained in the premises for free. The issue of standing of MERS was resolved long ago. The judgment in this case was issued prior to any determination in other cases that MERS lacked standing to bring foreclosure actions. Defendant did not timely raise this issue and this Court has already ruled, by order dated May 15, 2012, that defendant had waived the issue.(Order, dated Apr. 17, 2013, annexed to Parker Decl. as Ex. 11 (D.I. 23-12)). Plaintiff appealed this decision to the First Department, which affirmed Justice Green's ruling and found that "Gifford . . . did not demonstrate entitlement to vacatur . . . since she did not demonstrate a reasonable excuse for her default or move within one year[,] [n]or did she demonstrate grounds for vacatur based on fraud or misrepresentation." Mortgage Elec. Registration Sys., Inc. v. Gifford, 133 A.D.3d 429, 431, 20 N.Y.S.3d 9, 11 (1st Dep't 2015).
C. The Present Action
Plaintiff commenced this action pro se against defendants United Northern, Aurora, MERS, Nationstar, M&T and KKE on July 13, 2018 alleging violations of 42 U.S.C §§ 1983 and 1985 because defendants unlawfully deprived her of her constitutional right to her property, a "refusal or neglect to prevent the deprivation" of her property rights, "abuse of process" with respect to the foreclosure action, obstruction of justice and denial of due process, conspiracy, fraud and fraud on the court (Compl. ¶¶ 52-79).
Specifically, plaintiff alleges that United Northern unconscionably separated her mortgage from the promissory note by assigning the mortgage and that "trading her [n]ote as an investment security in a [t]rust on Wall Street" unlawfully "materially altered" the agreement (Compl. ¶¶ 11-12). Plaintiff appears to argue that because of this alleged separation, the mortgage was unenforceable and, thus, defendants had no right to foreclose on or evict her from the Property (Compl. ¶¶ 11-21). Plaintiff also once again argues that United Northern and MERS "did not have [s]tanding to invoke the Bronx County Supreme Court's jurisdiction" (Compl. ¶¶ 27-29). Finally, plaintiff alleges that because she was not aware that her mortgage was being assigned or securitized and because defendants did not have standing to bring the foreclosure action, defendants' actions amounted to fraud (Compl. ¶¶ 28, 30-41).
Although plaintiff's eight counts are asserted against all defendants, her complaint does not explain who defendants M&T, Aurora, Nationstar or KKE are, and what role, if any, they specifically played in the transactions and proceedings at issue (see generally Compl.). My understanding of their roles is derived from the documents identified in footnote 1.
Defendants now move to dismiss plaintiff's complaint for lack of subject matter jurisdiction based on the Rooker-Feldman doctrine, res judicata and collateral estoppel, and for failure to state a claim (Memorandum of Law in Support of Defendant's Motion to Dismiss, dated Aug. 24, 2018 (D.I. 23-1) ("M&T Memo."); United Memo.; Memorandum of Law in Support of Defendants' Motion to Dismiss the Complaint with Prejudice, dated Sept. 17, 2018 (D.I. 44) ("MERS Memo."); Declaration of John E. Brigandi, Esq., dated Nov. 7, 2018 (D.I. 59) ("Brigandi Decl.")). Plaintiff did not submit any opposition papers to defendants' motions to dismiss; rather, she moved for leave to file an amended complaint (Notice of Motion, dated Dec. 6, 2018 (D.I. 54)). Plaintiff's motion to amend is addressed in a separate Opinion and Order that is being filed contemporaneously with this Report and Recommendation.
Defendants MERS, Aurora and Nationstar are represented by the same counsel and, thus, submitted a joint motion to dismiss.
KKE submitted only an attorney declaration as its motion to dismiss. This practice violates Local Civil Rule 7.1(a)(2).
III. Analysis
A. Legal Standards Applicable to Rule 12(b) Motions
Where, as here, a defendant seeks dismissal of the complaint on multiple Rule 12(b) grounds, a court should ordinarily address the movant's jurisdictional arguments before considering whether the complaint states a claim. Arrowsmith v. United Press Int'l, 320 F.2d 219, 221 (2d Cir. 1963) (Friendly, Cir. J.); see also Prout v. Vladeck, 18 Civ. 260 (JSR), 2018 WL 6332898 at *2 (S.D.N.Y. Nov. 1, 2018) (Rakoff, D.J.); Backus v. U3 Advisors, Inc., 16 Civ. 8990 (GHW), 2017 WL 4600430 at *10 (S.D.N.Y. Aug. 18, 2017) (Woods, D.J.); Artists Rights Enf't Corp. v. Jones, 268 F. Supp. 3d 491, 495 (S.D.N.Y. 2017) (Marrero, D.J.). If the court concludes that subject matter jurisdiction is lacking, it should not consider any remaining grounds asserted for dismissal. See Arrowsmith v. United Press Int'l, supra, 320 F.2d at 221.
1. Rule 12(b)(1)
"A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). The party asserting that the court has subject matter jurisdiction bears the burden of proving the court's jurisdiction. FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231 (1990); Chayoon v. Chao, 355 F.3d 141, 143 (2d Cir. 2004) (per curiam); Bd. of Educ. v. N.Y. State Teachers Ret. Sys., 60 F.3d 106, 109 (2d Cir. 1995). In resolving a motion to dismiss for lack of subject matter jurisdiction,
"[T]he court must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of plaintiff, Natural Res. Def. Council v. Johnson, 461 F.3d 164, 171 (2d Cir. 2006) (citation and internal quotation marks omitted), but "jurisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to the party asserting it." APWU v. Potter, 343 F.3d 619, 623 (2d Cir. 2003). In resolving a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) a district court may consider evidence outside the pleadings. Makarova, 201 F.3d at 113.Morrison v. Nat'l Australia Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008), aff'd, 561 U.S. 247 (2010).
The general standards applicable to a motion to dismiss pursuant to Rule 12(b)(6) are well settled and require only brief review:
"To 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.'" Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). As the Supreme Court has explained, this standard creates a "two-pronged approach," id. at 679, 129 S.Ct. 1937, based on "[t]wo working principles," id. at 678, 129 S.Ct. 1937.
First, although a complaint need not include detailed factual allegations, it must provide "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. "A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Id. (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955). "Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we 'are not bound to accept as true a legal conclusion couched as a factual allegation.'" Id. (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955). . . .Pension Benefit Guar. Corp. ex rel. St. Vincent Catholic Med. Ctrs. Ret. Plan v. Morgan Stanley Inv. Mgmt. Inc., 712 F.3d 705, 717-18 (2d Cir. 2013); accord Barrett v. Local 804 Union, 18-CV-2046 (MKB), 2019 WL 2579018 at *3 (E.D.N.Y. June 24, 2019); Washington v. City of New York, 18 Civ. 12306 (CM), 2019 WL 2120524 at *12-*13 (S.D.N.Y. Apr. 30, 2019) (McMahon, D.J.).
Second, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. This "facial plausibility" prong requires the plaintiff to plead facts "allow[ing] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678, 129 S.Ct. 1937. Importantly, the complaint must demonstrate "more than a sheer possibility that a defendant has acted unlawfully." Id. "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged -- but it has not 'show[n]' -- 'that the pleader is entitled to relief.'" Id. at 679, 129 S.Ct. 1937 (quoting Fed.R.Civ.P. 8(a)(2)). "Determining whether a complaint states a plausible claim for relief [is] . . . a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.
B. Application of the Foregoing Principles
1. Rooker-Feldman Doctrine
"An argument that the court does not have subject matter jurisdiction pursuant to the Rooker-Feldman doctrine is properly considered under Rule 12(b)(1)." Hylton v. J.P. Morgan Chase Bank, N.A., 338 F. Supp. 3d 263, 273 (S.D.N.Y. 2018) (Gardephe, D.J.).
Under the Rooker-Feldman doctrine, federal district courts generally lack jurisdiction over cases which are, in essence, appeals from or collateral attacks on state court judgments. Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 283-84 (2005); Worthy-Pugh v. Deutsche Bank Nat'l Tr. Co., 664 F. App'x 20, 21 (2d Cir. 2016) (summary order); Vossbrinck v. Accredited Home Lenders, Inc., 773 F.3d 423, 426 (2d Cir. 2014); Morrison v. City of New York, 591 F.3d 109, 112 (2d Cir. 2010). The doctrine is rooted in the principle that "appellate jurisdiction to reverse or modify a state-court judgment is lodged . . . exclusively in [the Supreme] Court." Exxon Mobil Corp. v. Saudi Basic Indus. Corp., supra, 544 U.S. at 283. "There are four requirements for the application of the Rooker-Feldman doctrine: (1) the federal-court plaintiff lost in state court; (2) the plaintiff complain[s] of injuries caused by a state court judgment; (3) the plaintiff invite[s] . . . review and rejection of that judgment; and (4) the state judgment was rendered before the district court proceedings commenced." Vossbrinck v. Accredited Home Lenders, Inc., supra, 773 F.3d at 426 (quotation marks and citation omitted); accord McKithen v. Brown, 626 F.3d 143, 154 (2d Cir. 2010); Hoblock v. Albany Cnty. Bd. of Elecs., 422 F.3d 77, 85 (2d Cir. 2005). "Where all four requirements are met, a district court must dismiss for lack of subject matter jurisdiction." Hylton v. J.P. Morgan Chase Bank, N.A., supra, 338 F. Supp. 3d at 274.
Although MERS is the only defendant here who was a party to the state court foreclosure action, plaintiff's complaint taken as a whole alleges "a pattern of allegedly fraudulent activity" from the initial loan agreement with United Northern which is "inextricably intertwined" with the state court foreclosure action. Swiatkowski v. Citibank, 745 F. Supp. 2d 150, 165 (E.D.N.Y. 2010), aff'd, 446 F. App'x 360 (2d Cir. 2011) (summary order). Thus, the Rooker-Feldman doctrine may be applied to plaintiff's claims against United Northern in addition to MERS. Swiatkowski v. Citibank, supra, 745 F. Supp. 2d at 165; accord Pharr v. Evergreen Garden, Inc., 123 F. App'x 420, 422-23 (2d Cir. 2005) (Rooker-Feldman doctrine bars "claims that are 'inextricably intertwined' with a state court decision"); In re Lunn, 16-20163 (PRW), 2016 WL 5349726 at *7 (W.D.N.Y. Sept. 23, 2016) (Rooker-Feldman doctrine barred plaintiff's claims that were predicated on "irregularities in recording the various assignments of [her] mortgage" which showed that "her mortgage loan lack[ed] a valid chain of mortgage and note ownership from the original lender to date" because such claims were caused by or arose out of a state court foreclosure judgment); Anctil v. Ally Fin., Inc., 998 F. Supp. 2d 127, 132-34 (S.D.N.Y. 2014) (Seibel, D.J.), aff'd in part, rev'd in part on other grounds sub nom., 588 F. App'x 66 (2d Cir. 2015) (holding that Rooker-Feldman barred plaintiff's claims that transfers of mortgages were illegal, chains of title to mortgages were broken, the foreclosing entities initiated the foreclosure proceedings using false and misleading documents and did not hold valid title to the mortgages, and that judgment of foreclosure was invalid, even where "[d]efendants' allegedly fraudulent conduct may have preceded the entry of the foreclosure judgments, but the injury complained of -- loss of Plaintiffs' homes -- was effected by the judgments, not by any previous direct actions taken by Defendants" (emphasis in original)); Done v. Option One Mortg., 09-CV-4770 (JFB), 2011 WL 1260820 at *6 (E.D.N.Y. Mar. 30, 2011) (Rooker-Feldman barred plaintiff's claims that were "entirely dependent on the loan in question being invalid, which ha[d] already been resolved against plaintiff in the state court [foreclosure] proceeding"); see also Omotosho v. Freeman Inv. & Loan, 136 F. Supp. 3d 235, 246-47 (D. Conn. 2016) ("Rooker-Feldman requires the federal court plaintiff to have been a party to the state court proceeding, but it does not require the federal court defendants to have been party to the state court proceedings.").
However, as noted above, plaintiff's complaint contains only conclusory allegations with respect to M&T, Aurora, Nationstar and KKE, and does not explain what role, if any, they played in the transactions and proceedings at issue. Accordingly, plaintiff's claims against these defendants is addressed below pursuant to Rule 12(b)(6), rather than Rule 12(b)(1). I address the applicability of the Rooker-Feldman doctrine only as to defendants United Northern and MERS.
Here, the first and fourth "procedural" requirements of the Rooker-Feldman doctrine are clearly met as to all of plaintiff's claims. Plaintiff lost in the foreclosure action in Bronx County Supreme Court and her loss took place over 12 years before she filed her complaint in federal court on July 13, 2018. With respect to the second and third "substantive" requirements of Rooker-Feldman, an individual analysis of each of plaintiff's claims is required to determine whether plaintiff alleges injuries caused by the state court judgment and whether adjudication of plaintiff's claims would invite a review and rejection of that judgment.
a. Counts 1, 2 and 3 - Section 1983 and 1985 Claims
Plaintiff alleges under Counts 1, 2 and 3 of her complaint that she was deprived under "color of law" of her constitutional right to her property by defendants' collective actions because the "separation of [her] [m]ortgage [was] done without the corresponding [n]ote accompanying it [which made] the solemnity of the [m]ortgage . . . null and void" and unenforceable (Compl. ¶¶ 52-61). Consideration of this allegation would clearly "require [this court] to review the state proceeding and determine that the foreclosure judgment was issued in error." Vossbrinck v. Accredited Home Lenders, Inc., supra, 773 F.3d at 427. Furthermore, the injury plaintiff of which complains is that her property was "unjustly foreclosed upon" -- an injury that was the direct result of the state court foreclosure proceeding and the subsequent eviction proceedings (Compl. ¶ 53).
Thus, all of the conditions for the application of the Rooker-Feldman doctrine are met as to plaintiff's 1983 and 1985 claims and her claim for "refusal or neglect to prevent the deprivation of [her] constitutionally protected [property] rights," and, therefore, I respectfully recommend that these claims be dismissed. See Omotosho v. Freeman Inv. & Loan, supra, 136 F. Supp. 3d at 247 (second and third elements of Rooker-Feldman met with respect to plaintiff's 1983 claim that "defen- dants deprived him of his property rights under color of state law by unjustly foreclos[ing] upon his property" and with respect to plaintiff's claim that "defendants violated his constitutionally protected rights by refusing or neglecting to prevent the deprivation of his [r]ights under [c]olor of [l]aw" (internal quotation marks and citations omitted)); Gurdon v. Bank, 15 Civ. 5674 (GBD)(JLC), 2016 WL 721019 at *5-*6 (S.D.N.Y. Feb. 23, 2016) (Cott, M.J.) (Report & Recommendation), adopted at, 2016 WL 3523737 (S.D.N.Y. June 22, 2016) (Daniels, D.J.) (plaintiff's 1983, 1985 and refusal or neglect to prevent deprivation of plaintiff's constitutionally protected rights claims barred by Rooker-Feldman because "[e]ach of these alleged deprivations was caused by the state-court [foreclosure] judgment and would require this Court to reject that judgment to provide a remedy"); Worthy-Pugh v. Deutsche Bank Nat'l Tr. Co., 14 Civ. 1620 (AWT), 2016 WL 2944535 at *4 (D. Conn. Jan. 29, 2016), aff'd, 664 F. App'x 20 (2d Cir. 2016) (summary order) (second and third elements of Rooker-Feldman met where plaintiff alleged that her promissory note and mortgage were improperly separated and thereby rendered unenforceable because the injury complained of was caused by the state court judgment and adjudication of plaintiff's claim would require a review of the state court judgment); Swiatkowski v. Citibank, supra, 745 F. Supp. 2d at 165 (plaintiff's Section 1983 claim barred by Rooker-Feldman because if the district court "were to accept plaintiff's arguments regarding defendants' allegedly fraudulent actions [in plaintiff's state court foreclosure action], the Court's ruling would effectively declare the state court judgment fraudulently procured and thus void" (internal quotation marks and citation omitted)).
b. Count 4 - Abuse of Process
In Count 4 of her complaint, plaintiff alleges that defendants "knew or should have known that the foreclosure action initiated by them against [her] was a misuse or misapplication of process because the integrity of the [c]hain of [t]itle of [her] [m]ortgage and [n]ote was compromised at its inception and they did not have [s]tanding to pursue their alleged claims" (Compl. ¶ 63). Plaintiff's abuse of process claim is entirely predicated on MERS' and United Northern's lack of standing and is also barred by Rooker-Feldman.
"As to the second and third elements, Rooker-Feldman bars claims that ask a court to find a defendant lacked standing to pursue foreclosure in a prior state court action, because such claims require a court to sit in review of the state court judgment." Pennicott v. JPMorgan Chase Bank. N.A., 16 Civ. 3044 (VB), 2018 WL 1891312 at *3 (S.D.N.Y. Apr. 18, 2018) (Briccetti, D.J.); accord Hylton v. J.P. Morgan Chase Bank, N.A., supra, 338 F. Supp. 3d at 275; Rockwood v. Cenlar FSB, 17 Civ. 10153 (VB), 2018 WL 2122820 at *3 (S.D.N.Y. May 8, 2018) (Briccetti, D.J.); Francis v. Nichols, 16 Civ. 1848 (CS), 2017 WL 1064719 at *4 (S.D.N.Y. Mar. 21, 2017) (Seibel, D.J.); Gurdon v. Bank, supra, 2016 WL 721019 at *7. Plaintiff has specifically challenged MERS' standing in her state court action four separate times and both the Bronx County Supreme Court and the First Department have expressly ruled against her.
Thus, plaintiff's abuse of process claim set out in Count 4 is also barred by the Rooker-Feldman doctrine.
c. Count 5 - Obstruction of Justice and Denial of Due Process
Plaintiff next alleges that defendants "fail fed] to disclose the true nature of the [m]ortgage [l]oan [a]greement -- the separation of the [n]ote from the [m]ortgage at its inception" and "avoid[ed] or ommitt[ed] evidence from the Court in the foreclosure action" which was "an obstruction of justice and denial of due process" (Compl. ¶ 65).
Plaintiff's allegations once again satisfy the second and third requirements of the Rooker-Feldman doctrine because her alleged injury was caused by the state court's judgment in the foreclosure action and adjudication of her claim would require a review of that judgment. See Omotosho v. Freeman Inv. & Loan, supra, 136 F. Supp. 3d at 247 ("Count V alleging that the defen- dants obstructed justice and denied the plaintiff due process by concealing evidence from the court in the foreclosure action and that the alleged conduct [was] integral to the injury and damages he sustained . . . [is] barred by the Rooker-Feldman doctrine . . . because the injury complained of was caused by the judgment in the foreclosure action and determining whether the plaintiff is entitled to the relief he seeks would require review of the state court judgment." (internal quotation marks and citations omitted)); Gurdon v. Bank, supra, 2016 WL 721019 at *7 (plaintiff's obstruction of justice and denial of due process claim "based upon [d]efendants avoiding or omitting evidence from the Court in the foreclosure action" barred by Rooker-Feldman).
Thus, plaintiff's obstruction of justice and denial of due process claim set out in count five is also barred by the Rooker-Feldman doctrine.
d. Counts 6, 7 and 8 - Conspiracy and Fraud Claims
In Count 6, plaintiff alleges that defendants "conspired to deprive [her] of constitutionally protected [r]ights under [c]olor of [l]aw through the initiation and implementation of a fraudulent foreclosure proceeding that culminated in an adverse judgment against [her]" (Compl. ¶ 70). In Count 7, plaintiff alleges defendants committed "fraud" because the assignment of plaintiff's mortgage to MERS was "unconscionable" and made the mortgage "null and void", defendants "did not disclose or get consent from [p]laintiff in the [s]ecuritization of her [n]ote and [m]ortgage" and "they did not have standing" to initiate the foreclosure action against her (Compl. ¶¶ 73-76). Finally, in Count 8, plaintiff alleges that defendants perpetrated a "fraud on the court" because "MERS was not a true [p]arty of [i]nterest to the [m]ortgage [a]greement" and, thus, the "judgment rendered in [the foreclosure] action is void as a matter of law" (Compl. ¶¶ 78-79).
Counts 6 and 8 are barred by the Rooker-Feldman doctrine for substantially the same reasons set forth above. Plaintiff's conspiracy claim directly challenges the foreclosure proceeding and is clearly complaining of an injury that was caused by the state court judgment -- namely, "the adverse judgment against" her. Plaintiff's fraud on the court claim once again impermissibly asserts a lack of standing and asks this court to render the foreclosure judgment void. See Francis v. Nichols, supra, 2017 WL 1064719 at *5 ("Although the [complaint] speaks in terms of fraud and deception, [p]laintiff has alleged only injuries either directly caused by the adverse judgment in the [f]oreclosure [a]ction, or injuries the remedy for which would require this Court to revisit and reject the state court's determination that [defendant] had standing to pursue the foreclosure.").
Whether Count 7 is barred by Rooker-Feldman presents a closer question. Plaintiff's fraud allegations that the assignment of plaintiff's mortgage to MERS rendered her mortgage unenforceable and that MERS did not have standing to initiate the foreclosure action against her would require a review of the state court foreclosure judgment. However, there is authority holding that a mortgagee or a mortgagee's assignee's failure to disclose that a note and mortgage would be securitized does "not require a ruling that the foreclosure was improper." Pennicott v. JPMorgan Chase Bank. N.A., supra, 2018 WL 1891312 at *4; accord Hylton v. J.P. Morgan Chase Bank, N.A., supra, 338 F. Supp. 3d at 276; Gurdon v. Bank, supra, 2016 WL 721019 at *8. However, this alone does not end the inquiry.
The Second Circuit has instructed that in attempting to "distinguish between claims that require a federal court to review a state court judgment and those that seek damages from [d]efendants for injuries [] suffered from an alleged fraud [involving a state court judgment]," courts "must scrutinize the injury of which a plaintiff complains as a necessary step toward determining whether the suit impermissibly seeks review and rejection of a state court judgment . . . or permissibly seeks some other remedy." Charles v. Levitt, 716 F. App'x 18, 21 (2d Cir. 2017) (emphasis in the original) (quotation marks and citation omitted). Although plaintiff requests money damages in her complaint, "[r]eading the [complaint] as a whole . . . it is clear that [plaintiff] disputes the validity of the underlying state foreclosure judgment . . . and that this dispute forms the sole basis for the [complaint]." Francis v. Nichols, supra, 2017 WL 1064719 at *6 (quotation marks and citation omitted). Plaintiff specifically requests $550,000.00 in damages "for the value of her property interests in the fraudulent foreclosure proceeding instigated by [d]efendants" and "free and clear [t]itle to the . . . subject property of the fraudulent foreclosure proceeding" (Compl. ¶ 87). "Thus, even to the extent [plaintiff] seeks damages rather than declaratory or injunctive relief, [p]laintiff is inviting this Court to sit in review of the state court judgment . . . [because] [t]he damages claims are intertwined with questions of whether [d]efendant[s] own[] the [n]ote or the [m]ortgage and are barred by Rooker-Feldman." Francis v. Nichols, supra, 2017 WL 1064719 at *6 (quotation marks and citation omitted); see also Charles v. Levitt, supra, 716 F. App'x at 22 ("Although [plaintiff] spruces up his amended complaint with general allegations of fraud . . . the damages [plaintiff] seeks are aimed at compensating him for the potential loss of [his] [p]roperty" and "[h]is claims are thus barred by the Rooker-Feldman doctrine.").
Plaintiff's other requests for monetary damages relate to her other claims discussed in the preceding sections and which I recommended be dismissed (Compl. ¶ 87).
Even if plaintiff's fraud claim was not barred by Rooker-Feldman, it would be barred under the principles of res judicata. Under New York law, "res judicata . . . bars successive litigation based upon the same transaction or series of connected transactions . . . if: (i) there is a judgment on the merits rendered by a court of competent jurisdiction, and (ii) the party against whom the doctrine is invoked was a party to the previous action . . . ." Sheffield v. Sheriff of Rockland Cty. Sheriff Dep't., 393 F. App'x 808, 811 (2d Cir. 2010) (summary order). Several courts in this Circuit have found that state court foreclosure judgments are final judgments on the merits and have barred subsequent attacks of such judgments in federal court based on allegations of fraud. See Worthy-Pugh v. Deutsche Bank Nat'l Tr. Co., supra, 664 F. App'x at 22; Pennicott v. JPMorgan Chase Bank. N.A., supra, 2018 WL 1891312 at *4; Francis v. Nichols, supra, 2017 WL 1064719 at *7; Gurdon v. Bank, supra, 2016 WL 721019 at *8.
Thus, I also conclude that plaintiff's Counts 6, 7 and 8 are also barred by the Rooker-Feldman doctrine.
2. Claims Against M&T, Aurora, Nationstar and KKE
Plaintiff asserts all eight of her claims against all defendants. However, with respect to M&T, Aurora, Nationstar and KKE, plaintiff makes only "mere conclusory statements" that these defendants, "each of them by their acts individually and collectively," deprived her of her rights (Compl. ¶¶ 54, 58). Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Plaintiff fails to identify any "acts" by M&T, Aurora, Nationstar and KKE that caused her injury. In fact, the only factual statements plaintiff makes in her complaint with respect to these defendants is that they are "proper parties" to the action and that KKE is a "foreclosure mill law firm who specializes in perpetrating fraudulent foreclosure actions on behalf of unscrupulous Lenders and financial institutions" (Compl. ¶¶ 4, 7-9).
It is well settled that "a complaint [does not] suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Ashcroft v. Iqbal, supra, 556 U.S. at 678, quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 557 (2007); accord Hirsch v. New York, 751 F. App'x 111, 114 (2d Cir. 2018) (explaining that while courts are obligated to accept all factual allegations as true in a motion to dismiss analysis, they "are not required to credit conclusory allegations or legal conclusions couched as factual allegations" (quotation marks and citation omitted)) (summary order); DiPizio v. Empire State Dev. Corp., 745 F. App'x 385, 390-92 (2d Cir. 2018) (plaintiff failed to state a claim where her "complaint lack[ed] any non-conclusory allegation[s]") (summary order); D'Alessandro v. City of New York, 713 F. App'x 1, 10 (2d Cir. 2017) (affirming dismissal of plaintiff's complaint where "the complaint merely insist[ed] -- over and over again, in a conclusory fashion -- that a pattern . . . of misconduct existed") (summary order).
Thus, because plaintiff's claims against defendants M&T, Aurora, Nationstar and KKE "consist of nothing more than labels [and] conclusions," I respectfully recommend that they be dismissed for failure to state a claim pursuant to Rule 12(b)(6). Guido v. Wells Fargo Bank, N.A., 16 Civ. 1568 (VSB), 2017 WL 551859 at *4 (S.D.N.Y. Mar. 21, 2017) (Broderick, D.J.).
IV. Conclusion
Accordingly, for all the foregoing reasons, I respectfully recommend that (1) all of plaintiff's claims against United Northern and MERS be dismissed pursuant to Rule 12(b)(1) because they are barred by the Rooker-Feldman doctrine and (2) all of plaintiff's claims against M&T, Aurora, Nationstar and KKE be dismissed pursuant to Rule 12(b)(6) because they fail to state a claim. If accepted, this Report and Recommendation resolves Docket Items 34, 38, 43 and 58.
V. Objections
Pursuant to 28 U.S.C. § 636(b)(1)(C) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from receipt of this Report to file written objections. See also Fed.R.Civ.P. 6(a). Such objections (and responses thereto) shall be filed with the Clerk of the Court, with courtesy copies delivered to the Chambers of the Honorable Paul A. Engelmayer, United States District Judge, 500 Pearl Street, Room 2201, New York, New York 10007, and to the Chambers of the undersigned, 500 Pearl Street, Room 1670, New York, New York 10007. Any requests for an extension of time for filing objections must be directed to Judge Engelmayer. FAILURE TO OBJECT WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. Thomas v. Arn, 474 U.S. 140, 155 (1985); United States v. Male Juvenile, 121 F.3d 34, 38 (2d Cir. 1997); IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1054 (2d Cir. 1993); Frank v. Johnson, 968 F.2d 298, 300 (2d Cir. 1992); Wesolek v. Canadair Ltd., 838 F.2d 55, 57-59 (2d Cir. 1988); McCarthy v. Manson, 714 F.2d 234, 237-38 (2d Cir. 1983) (per curiam). Dated: New York, New York
July 8, 2019
Respectfully submitted,
/s/_________
HENRY PITMAN
United States Magistrate Judge Copy mailed to: Ms. Orinthia Gifford
C/O 4160 Digney Avenue
Bronx, New York 10466 Copies transmitted to: All Counsel