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Robinson v. HSBC Mortgage Services, Inc.

United States District Court, S.D. New York

February 10, 2017

DONNA MARIE ROBINSON, Plaintiff,
v.
HSBC MORTGAGE SERVICES, INC., Defendant.

          MEMORANDUM OPINION & ORDER

          VALERIE CAPRONI, United States District Judge.

         This action arises out of the foreclosure sale of property owned by pro se Plaintiff Donna Marie Robinson in the Western District of Tennessee. Plaintiff brings a myriad of claims against Defendant HSBC Mortgage Services, Inc., which foreclosed on Plaintiffs property, including securities fraud relating to the securitization of her mortgage, wrongful foreclosure, fraud, intentional infliction of emotional distress, violation of consumer protection laws, slander of title, and a declaratory judgment to quiet title. While this action was pending, Plaintiff attempted to remove to this Court an ongoing eviction proceeding in Tennessee state court regarding the same property. Defendant now moves to dismiss Plaintiffs Second Amended Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1), (3), and (6) and to remand the eviction proceeding to the Tennessee state court pursuant to 28 U.S.C. § 1447(c). Because this Court lacks jurisdiction under the Rooker-Feldman doctrine and because Plaintiff has not satisfied the requirements for removal, Defendant's motions to dismiss and remand are GRANTED.

         BACKGROUND

         On May 21, 2001, Plaintiff obtained a $189, 900 mortgage loan from SouthStar Funding LLC, which was secured by her residence at 2441 Steam Mill Ferry Road in Jackson, Tennessee. SAC ¶¶ 1, 9 (Dkt. 43); Declaration of Anna Mercado Clark in Support of Defendant's Motion to Dismiss and Remand ("Clark Decl.") Ex. 2 (Dkt. 56-2).[1] At some point, Plaintiffs mortgage loan was securitized along with other mortgage loans, SAC ¶¶ 26-28, and the Note and Deed were assigned to HSBC in August 2013, Clark Decl. Ex. 3 (Dkt. 56-3). On July 25, 2013, Defendant notified Plaintiff that she had defaulted on her loan in the amount of $260, 188.69. Clark Decl. Ex. 9 (Dkt. 56-9). Defendant foreclosed on Plaintiffs property and purchased the property at a foreclosure sale on October 10, 2013. Def Mem. 4 (Dkt. 57) (citing Clark Decl. Ex. 4 (Dkt. 56-4)). Plaintiff has refused to vacate the property and continues to live there. SAC Ex. 10, at 9-11.

         Since the foreclosure sale, Plaintiff has initiated a number of court proceedings in an attempt to reverse the foreclosure and prevent eviction. In 2014 and 2015, Plaintiff filed for bankruptcy four times, although all cases were dismissed. Clark Decl. Ex. 8 (Dkt. 56-8). In addition, on March 15, 2015, Plaintiff filed a complaint against Defendant and others in the United States District Court for the Western District of Tennessee ("the Tennessee Action"), alleging that the Defendants violated the Fair Debt Collection Practices Act ("FDCPA") and various Tennessee regulations. Plaintiffs primary complaint was that the Defendants misrepresented during the foreclosure proceeding that the Note and Deed had been properly assigned to HSBC and that HSBC thus had standing to foreclosure. See Clark Decl. Ex.1 ¶¶ 16, 23, 27-28, 30, 33-34, 39. On June 8, 2015, Plaintiff moved voluntarily to dismiss her complaint without prejudice. Clark Decl. Ex. 5 (Dkt. 56-5). On October 19, 2015, the judge in the Tennessee Action granted Plaintiffs motion to dismiss without prejudice but ordered that if Plaintiff attempted to refile her case, she must do so in the same court and pay Defendant's legal fees incurred up to that date. Clark Decl. Ex. 6 (Dkt. 56-6).

         After Plaintiff filed a motion to dismiss her Complaint in Tennessee but before the Court acted on it, Plaintiff filed this action. Plaintiff essentially raised the same claims here as she raised in the Tennessee action - namely, that Defendant did not have a right to foreclose on the property because it did not perfect its security interest in the property and therefore the foreclosure was wrongful. While this case was pending, Plaintiff received a summons to appear in General Session Court in Jackson, Tennessee as part of an eviction proceeding. Plaintiff sought a temporary restraining order from this Court enjoining Defendant from evicting her and her family from the property. Dkt. 43-2. On July 14, 2016, the Court denied Plaintiffs motion for a temporary restraining order: "Plaintiff failed to demonstrate a likelihood of success on the merits . . . because Plaintiffs claims are, in all likelihood, barred by the Rooker-Feldman doctrine." Dkt. 45. On July 13, 2016, Plaintiff filed a notice of removal seeking to remove to this Court the state eviction proceeding taking place in General Session Court in Jackson, Tennessee. Dkt. 46.

         DISCUSSION

         I. Defendant's Motion to Dismiss Is Granted Pursuant to Rule 12(b)(1)

         "Courts should go to lengths to ensure that inexperienced pro se litigants do not inadvertently forfeit rights or winning arguments; this 'special solicitude' includes a liberal construction of papers and a flexibility on some otherwise-rigid procedural rules." Tartt v. City of New York, No. 12-CV-5405(VEC), 2014 WL 3702594, at *2 (quoting Tracy v. Freshwater, 623 F.3d 90, 101 (2d Cir. 2010)); see also Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 474 (2d Cir. 2006) (per curiam). This lower standard for pro se plaintiffs "does not relieve [a] plaintiff of his duty to meet the requirements necessary to defeat a motion" to dismiss, however. Jorgensen v. Epic/Sony Records, 351 F.3d 46, 50 (2d Cir. 2003).

         A Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction should be granted where "the district court lacks the statutory or constitutional power to adjudicate" the case. Navan v. Astrue, No. 11 Civ. 6732 (DLC), 2012 WL 398635, at *2 (S.D.N.Y. Feb. 8, 2012) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)). Indeed, "[f]ederal courts are courts of limited jurisdiction, and may not preside over cases absent subject matter jurisdiction." Cherry v. Law Office of Felix Kozak, No. 11 Civ. 3471 (SJF) (WDW), 2011 WL 4056069, at *1 (E.D.N.Y. Aug. 28, 2011); see also County of Nassau v. Hotels.com LP, 577 F.3d 89, 91 (2d Cir. 2009). Further, "[l]ack of subject matter jurisdiction cannot be waived." Cherry, 2011 WL 4056069, at * 1. In evaluating a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), courts "must take all uncontroverted facts in the complaint (or petition) as true, and draw all reasonable inferences in favor of the party asserting jurisdiction." Tandon v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014). "But 'where jurisdictional facts are placed in dispute, the court has the power and obligation to decide issues of fact by reference to evidence outside the pleadings, such as affidavits.'" Id. (quoting APWU v. Potter, 343 F.3d 619, 627 (2d Cir.2003) (alteration omitted). "A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Makarova, 201 F.3d at 113.

         The Rooker-Feldman doctrine recognizes that, in defining district courts' original subject matter jurisdiction in 28 U.S.C. § 1331, Congress did "not authorize district courts to exercise appellate jurisdiction over state-court judgments." McKithen v. Brown, 481 F.3d 89, 96 (2d Cir. 2007) (quoting Verizon Md, Inc. v. Pub. Serv. Comm 'n o/Md., 535 U.S. 635, 644 n. 3 (2002)). "Underlying the Rooker Feldman doctrine is the principle, expressed by Congress in 28 U.S.C. § 1257, that within the federal judicial system, only the Supreme Court may review state-court decisions." Green v. Mattingly, 585 F.3d 97, 101 (2d Cir. 2009) (quoting Hoblock v. Albany Cnty. Bd. of Elections, 422 F.3d 77, 85 (2d Cir. 2005)). Thus, when faced with a claim that is in effect an appeal of a final state court judgment, a district court must dismiss for lack of subject matter jurisdiction. See id.

         Under the Rooker-Feldman doctrine, a federal court lacks subject matter jurisdiction over a plaintiffs claims if the following four conditions are met: (1) "the federal-court plaintiff must have lost in state court;" (2) "the plaintiff must complain[ ] of injuries caused by [a] state court judgment;" (3) "the plaintiff must invit[e] district court review and rejection of [that] judgment;" and (4) "the state-court judgment must have been rendered before the district court proceedings commenced." Hoblock, 422 F.3d at 85. The first and fourth requirements are procedural, the second and third are substantive. Id. The Rooker-Feldman doctrine does not apply if the plaintiff raises an "independent claim, " i.e., a claim that is not "inextricably intertwined" with the state court judgment and does not merely present a legal theory not raised in state court. See Id. at 86. In other words, "the applicability of the Rooker Feldman doctrine turns ... on the causal relationship between the state-court judgment and the injury of which the party complains in federal court." McKithen, 481 F.3d at 97-98. The causal requirement is satisfied "where ... the state court itself is the decision-maker whose action produces the injury." Sindone v. Kelly, 439 F.Supp.2d 268, 272 (S.D.N.Y.2006).

         Here, Plaintiffs claims satisfy the two procedural requirements of Rooker-Feldman. As to the first prong, Plaintiff lost in state court-the Tennessee court found that Plaintiff was in default of her loan and issued an order to foreclose on her property. As to the fourth prong, the Tennessee court rendered its judgment in the foreclosure action before the proceedings in this Court began-the foreclosure occurred on October 10, 2013, and Plaintiff initiated this action on July 10, 2015.

         Plaintiff also meets the substantive requirements of the Rooker-Feldman doctrine-she complains of an injury caused by a state court judgment and seeks review and rejection of that judgment without raising an independent claim. The alleged injury is the loss of her home due to foreclosure; that injury is due to the foreclosure judgment issued by the Tennessee court. Accordingly, the causal requirement-the second prong-is satisfied because it is the state court foreclosure judgment that has caused Plaintiffs injury, and "[c]ourts in this Circuit have consistently held that any attack on a judgment of foreclosure is clearly barred by the Rooker-Feldman doctrine." Sylvester v. Bayview Loan Servicing LLC', No. 15-CV-1736 (JPO), 2016 WL 3566234, at *5 (S.D.N.Y. June 24, 2016) (citation omitted) (quotation marks omitted).[2] Plaintiff also raises no independent claim. The crux of all of Plaintiff s claims is wrongful foreclosure; the alleged injury at the heart of her claims for fraud, intentional infliction of emotional distress, consumer protection law violations, slander of title, and to quiet title is the loss of her home due to the foreclosure. These claims improperly invite review of the foreclosure judgment. See, e.g., In re Wilson, 410 F.App'x at 410 (2d Cir. 2011) (applying Rooker-Feldman because "the crux" of plaintiff s complaint was wrongful foreclosure); Worthy-Pugh v. Deustche Bank Nat'l Trust Co., No. 3:14-CV-1620 (AWT), 2016 WL 2944535, at *5 (D. Conn. Jan. 29, 2016) (applying Rooker-Feldman to bar claims for fraud, theft, intentional infliction of emotional distress, quiet title, and slander of title brought in response to a foreclosure); Campbell, 2012 WL 2952852, at *7 ...


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