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Holmes v. Caliber Home Loans, Inc.

United States District Court, S.D. New York

July 28, 2017

WILLIAM HOLMES, Plaintiff,
v.
CALIBER HOME LOANS, INC., EDWARD C. KLIEN, ESQ., COHN & ROTH, LESLIE A. BAUM, THEODORE SCHROEDER, JAMES V. BRANDS, LARRY SPANGLER, JOHN/JANE DOES, and NEW YORK STATE UNIFIED COURT SYSTEM, Defendants.

          William Holmes Wappingers Falls, NY Pro Se Plaintiff.

          Joseph N. Froehlich, Esq. Locke Lorde LLP New York, NY Counsel for Defendant Caliber Home Loans, Inc.

          Michael J. Sweeney, Esq. Law Offices of Michael J. Sweeney, PC Yonkers, NY Counsel for Defendants Edward C. Klein and Cohn & Roth.

          Michael J. Siudzinski, Esq. New York State Office of the Attorney General New York, NY Counsel for Defendants James V. Brands and New York State Unified Court System.

          OPINION & ORDER

          KENNETH M. KARAS, District Judge.

         Plaintiff William Holmes (“Plaintiff”), proceeding pro se, brings this Action against Caliber Home Loans, Inc. (“Caliber Home”), Edward C. Klein, Esq. (“Klein”), Cohn & Roth, Leslie A. Baum (“Baum”), Theodore Schroeder (“Schroeder”), James V. Brands (“Justice Brands”), Larry Spangler (“Spangler”), John/Jane Does, and the New York State Unified Court System (collectively, “Defendants”), alleging that Defendants violated New York General Business Law § 349, the Racketeering Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961, and 42 U.S.C. §§ 1982, 1985, and 1986 during the course of a foreclosure proceeding initiated in New York State Supreme Court.[1] Caliber Home, Klein, Cohn & Roth, Justice Brands, and the New York State Unified Court System (collectively, “Moving Defendants”) have filed Motions To Dismiss Plaintiff's Amended Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(5), and 12(b)(6) (the “Motions”).[2] For the reasons to follow, the Moving Defendants' Motions are granted.

         I. Background

         A. Factual Background

         The following facts are drawn from Plaintiff's Amended Complaint and documents of which the Court can take judicial notice, and are taken as true for the purpose of resolving the Motions.

         On February 25, 2015, Defendant Caliber Home commenced a mortgage foreclosure action in New York State Supreme Court against Plaintiff, Rayna Holmes, and the New York State Department of Taxation and Finance. (See Decl. of Michael J. Sweeney, Esq., in Supp. of Mot. To Dismiss (“Sweeney Decl.”) Ex. B (“Foreclosure Compl.”) (Dkt. No. 46).)[3] Caliber Home sought to foreclose on real property located at 7 Brian Road in Wappingers Falls, New York (the “Subject Property”). (Foreclosure Compl. ¶ 5.) The complaint alleged that Plaintiff and Rayna Holmes owed over $250, 000 on a note and mortgage secured by the Subject Property. (Id. ¶ 15.) The case was assigned to Justice Brands. (See Sweeney Decl. Ex. C, at 1.) Defendant Klein of the law firm Cohn & Roth represented Caliber Home in the state-court proceedings. (See Id. at 3.)

         Plaintiff moved to dismiss the case, but Justice Brands denied Plaintiff's motion on May 21, 2015. (See Id. at 2.) Plaintiff next filed an application entitled “Notice/Affidavit Nunc Pro Tunc, ” alleging that the case had been settled because Plaintiff and Rayna Holmes satisfied the outstanding debt. (Id. (internal quotation marks omitted).) On June 25, 2015, Justice Brands denied Plaintiff's application. (See id.)

         After the court denied Plaintiff's applications, Caliber Home moved for an order of reference. (See Sweeney Decl. Ex. E.) On September 1, 2015, Justice Brands granted Caliber Home's motion and referred the matter to Defendant Baum. (Id.) Plaintiff then filed a second “Affidavit Nunc Pro Tunc, ” in which he argued that the case should be dismissed because the outstanding debt had been paid. (See Decl. of Joseph N. Froehlich, Esq., in Supp. of Mot. To Dismiss (“Froehlich Decl.”) Ex. C (Dkt. No. 43) (internal quotation marks omitted).) On December 3, 2015, Justice Brands denied Plaintiff's application. (Id.)

         On December 31, 2015, Baum issued a report, finding that there was an outstanding balance on the note of $304, 253 and recommending that the Subject Property be sold to satisfy the debt. (See Sweeney Decl. Ex. F.) On March 1, 2016, Justice Brands ratified Baum's report and entered a Judgment of Foreclosure and Sale, directing that the Subject Property be sold at a public auction. (See Sweeney Decl. Ex. G.) The Subject Property was auctioned off on May 5, 2016. (See Sweeney Decl. Ex. H.)

         Plaintiff alleges that Defendants joined with each other to “assiduously and unlawfully AUCTION [P]laintiff's private property with the intention to unlawfully enrich themselves and each other.” (Am. Compl. ¶ 11 (Dkt. No. 16) (emphasis omitted).) As a part of this scheme, Defendants allegedly retained a tender payment Plaintiff made to settle the state-court proceedings. Plaintiff alleges that after Defendants accepted the tender, Defendants continued the “malicious foreclosure process, ” (id. ¶ 10), and committed mail and wire fraud by mailing and emailing fraudulent documents in connection with the foreclosure action, (id. ¶ 20). Plaintiff clarifies, however, that he “does not intend and neither is he implying in any manner or fashion that he is asking this Court to review the conclusions of any other STATE court found in NEW YORK STATE regarding the causes of action herein.” (Id. ¶ 13.) Plaintiff seeks a declaration that he is the rightful owner of the property and $100 million in damages.

         B. Procedural Background

         Plaintiff initiated this Action by filing a Complaint on May 5, 2016. (Dkt. No. 1.) On May 12, 2016, the Court issued an Order To Show Cause, directing Plaintiff to explain why the Action should not be dismissed for lack of subject matter jurisdiction or to file an amended pleading containing allegations that established subject matter jurisdiction. (Dkt. No. 4.) On June 8, 2016, Plaintiff filed the Amended Complaint. (Dkt. No. 16.) Pursuant to a memo endorsement, Caliber Home, Justice Brands, and the New York State Unified Court System filed their Motions on September 1, 2016. (Dkt. Nos. 36-44.) Pursuant to a Motion Scheduling Order, Klein and Cohn & Roth filed their Motion on September 14, 2016. (Dkt. Nos. 45-47.) Plaintiff filed a response to Caliber Home's Motion on September 15, 2016. (Dkt. No. 51.) Caliber Home filed a reply on October 14, 2016. (Dkt. No. 52.) The other Moving Defendants elected to forgo a reply, as Plaintiff never responded to their respective Motions. (Dkt. Nos. 53, 57.)

         II. Discussion

         Moving Defendants raise a series of arguments in support of their Motions. All of the Moving Defendants argue that Plaintiff has failed to state a claim, and that even if Plaintiff has stated a claim, the claims are barred by the Rooker-Feldman doctrine. Relatedly, Caliber Home asserts that Plaintiff's claims are barred by collateral estoppel, and Klein and Cohn & Roth argue that Plaintiff's claims are barred by res judicata. Justice Brands and the New York State Unified Court System (the “State Defendants”) argue that Plaintiff's claims also are barred by the Eleventh Amendment, and Justice Brands additionally asserts that he is entitled to absolute immunity because he was serving as a judge in the underlying foreclosure proceeding. Finally, Caliber Home, Klein, and Cohn & Roth argue that Plaintiff's claims must be dismissed because Plaintiff did not properly effectuate service of process. The Court will address each of these arguments in turn.

         A. Standard of Review

         1. Rules 12(b)(1) & 12(b)(6)

         “The standards of review for a motion to dismiss under Rule 12(b)(1) for lack of subject matter jurisdiction and under 12(b)(6) for failure to state a claim are ‘substantively identical.'” Gonzalez v. Option One Mortg. Corp., No. 12-CV-1470, 2014 WL 2475893, at *2 (D. Conn. June 3, 2014) (quoting Lerner v. Fleet Bank, N.A., 318 F.3d 113, 128 (2d Cir. 2003)); see also Neroni v. Coccoma, No. 13-CV-1340, 2014 WL 2532482, at *4 (N.D.N.Y. June 5, 2014) (same), aff'd, 591 F. App'x 28 (2d Cir. 2015). “In deciding both types of motions, the Court must accept all factual allegations in the complaint as true, and draw inferences from those allegations in the light most favorable to the plaintiff.” Gonzalez, 2014 WL 2475893, at *2 (internal quotation marks omitted); see also Seemann v. U.S. Postal Serv., No. 11-CV-206, 2012 WL 1999847, at *1 (D. Vt. June 4, 2012) (same). However, “[o]n a Rule 12(b)(1) motion, . . . the party who invokes the Court's jurisdiction bears the burden of proof to demonstrate that subject matter jurisdiction exists, whereas the movant bears the burden of proof on a motion to dismiss under Rule 12(b)(6).” Gonzalez, 2014 WL 2475893, at *2; see also Sobel v. Prudenti, 25 F.Supp.3d 340, 352 (E.D.N.Y. 2014) (“In contrast to the standard for a motion to dismiss for failure to state a claim under Rule 12(b)(6), a plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists.” (internal quotation marks omitted)). This allocation of the burden of proof is “[t]he only substantive difference” between the standards of review under these two rules. Smith v. St. Luke's Roosevelt Hosp., No. 08-CV-4710, 2009 WL 2447754, at *9 n.10 (S.D.N.Y. Aug. 11, 2009), adopted by 2009 WL 2878093 (S.D.N.Y. Sept. 2, 2009).

         a. Rule 12(b)(1)

         “A federal court has subject matter jurisdiction over a cause of action only when it has authority to adjudicate the cause pressed in the complaint.” Bryant v. Steele, 25 F.Supp.3d 233, 241 (E.D.N.Y. 2014) (internal quotation marks omitted). “Determining the existence of subject matter jurisdiction is a threshold inquiry[, ] and a claim 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.” Morrison v. Nat'l Austl. Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008) (internal quotation marks omitted), aff'd, 561 U.S. 247 (2010). While a district court resolving a motion to dismiss under Rule 12(b)(1) “must take all uncontroverted facts in the complaint . . . as true, and draw all reasonable inferences in favor of the party asserting jurisdiction, ” “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, ” in which case “the party asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists.” Tandon v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014) (alteration and internal quotation marks omitted); see also Ray Legal Consulting Grp. v. Gray, 37 F.Supp.3d 689, 696 (S.D.N.Y. 2014) (“[W]here subject matter jurisdiction is contested a district court is permitted to consider evidence outside the pleadings, such as affidavits and exhibits.”).

         b. Rule 12(b)(6)

         “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his [or her] entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation, alteration, and internal quotation marks omitted). Indeed, Rule 8 of the Federal Rules of Civil Procedure “demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted). “Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement.” Id. (alteration and internal quotation marks omitted). Instead, a complaint's “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. Although “once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint, ” id. at 563, and a plaintiff must allege “only enough facts to state a claim to relief that is plausible on its face, ” id. at 570, if a plaintiff has not “nudged [his or her] claims across the line from conceivable to plausible, the[] complaint must be dismissed, ” id.; see also Iqbal, 556 U.S. at 679 (‚ÄúDetermining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility ...


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