Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Plotch v. Wells Fargo Bank, N.A.

United States District Court, E.D. New York

January 8, 2018

ADAM PLOTCH, Plaintiff,
v.
WELLS FARGO BANK, N.A., Defendant.

          OPINION & ORDER

          NINA GERSHON, UNITED STATES DISTRICT JUDGE

         This case arises from two separate state foreclosure actions as to the same property located at 387 Adelphi Street in Brooklyn (the “property”).[1] One of the foreclosure actions was instituted by Wells Fargo Bank, N.A. (“Wells Fargo”) against Philip McKenzie. The other, earlier foreclosure action was commenced by a condominium board against Philip McKenzie for his having failed to pay common charges on the property. Plaintiff, Adam Plotch, purchased the property in the foreclosure action commenced by the condominium board, but was never a party to the foreclosure action initiated by Wells Fargo. Plaintiff brings this federal action seeking various forms of declaratory relief. Defendant has now moved to dismiss the complaint on three grounds: (1) pursuant to the doctrine set forth in Younger v. Harris, 401 U.S. 37 (1971), the court should abstain from exercising its jurisdiction over plaintiff's claims; (2) plaintiff's claims are barred by collateral estoppel; and (3) plaintiff's complaint fails to state a claim. For the reasons set forth below, defendant's motion is granted, but plaintiff may move for leave to amend his complaint to address the deficiencies.

         I. Facts

         The complaint alleges the following facts which, for purposes of this motion, are taken as true. On July 23, 2001, the property was conveyed from Lazarine Quarless to Philip McKenzie. On August 20, 2001, McKenzie executed a mortgage in the amount of $247, 500 (“2001 Mortgage”) in favor of Wells Fargo. This mortgage was recorded in the New York City register. On July 28, 2003, McKenzie executed another mortgage to Wells Fargo in the amount of $6, 187.06 (“2003 Gap Mortgage”). Simultaneously with the execution of the 2003 Gap Mortgage, Wells Fargo recorded a “Consolidated, Extension and Modification Agreement” to consolidate the 2001 Mortgage with the 2003 Gap Mortgage (“2003 CEMA”). The 2003 CEMA was in the amount of $248, 071.00. A copy of the 2003 CEMA was recorded in the New York City register on July 28, 2003. On July 26, 2005, McKenzie executed another mortgage on the property in the amount of $101, 088.51 in favor of Wells Fargo (“2005 Gap Mortgage”). The 2005 Gap Mortgage was recorded in the New York City register on the same date. Simultaneously with the recording of the 2005 Gap Mortgage, Wells Fargo recorded a second “Consolidated, Extension and Modification Agreement” (the “2005 CEMA”). The 2005 CEMA states that “[t]he Consolidated Note will supersede all terms, covenants, and provisions of the Notes, ” and it was recorded in the New York City register. Within the 2005 CEMA is a “Consolidated Mortgage” in the amount of $342, 000, which consolidates all of the above noted mortgages (“2005 Consolidated Mortgage”).

         On October 31, 2012, plaintiff purchased the property for $100, 000 at a foreclosure action commenced by the condominium board as the result of McKenzie's failure to pay common charges. Compl. at ¶¶ 41-42.[2] On October 2, 2015, a referee's deed transferring title to the premises to plaintiff was recorded in the New York City register. Plaintiff alleges that the above mortgages are defective in various ways. For example, some acknowledgment pages are devoid of any identification as to the notary witnessing McKenzie's purported signature. Others lack McKenzie's initials on pages of documents that require initials.

         Plaintiff argues that, because the above mortgages were deficiently executed, Wells Fargo's interests “should be subordinate to the rights of Plaintiff.” Compl. at ¶ 59. Plaintiff seeks: the cancellation of the 2005 Gap Mortgage (or a declaration that his rights are superior to those of Wells Fargo); the cancellation of the 2003 CEMA and 2003 Gap Mortgage (or a declaration that his rights are superior to those of Wells Fargo); and a declaratory judgment that the 2001 note is satisfied and discharged. Plaintiff seeks no specific relief as to the 2005 CEMA or the 2005 Consolidated Mortgage.

         II. The 2013 State Court Proceeding

         On January 22, 2013, Wells Fargo initiated a foreclosure action in Kings County against McKenzie to foreclose on the 2005 Consolidated Mortgage. Plotch was not named as a party. McKenzie ultimately defaulted in that action. On October 11, 2016, Plotch filed a motion, purportedly as McKenzie's successor in interest, pursuant to New York Civil Practice Law and Rule (“CPLR”) § 1018, seeking to dismiss the state court action. Wells Fargo opposed this motion. The state court denied Plotch's motion on February 9, 2017. The order stated, “following oral argument . . . non-party's motion to substitute into the action is denied pursuant to [New York Civil Practice Law and Rule] 1018. Furthermore, to the extent that the motion is made pursuant to CPLR 1012, the motion is denied as untimely.”[3] In that same order, the state court granted Wells Fargo's motion for an order of reference, and the foreclosure case was sent to a referee. On May 9, 2017, Plotch moved for reconsideration. This motion is still pending. See Wells Fargo v. Philip McKenzie, No. 0001243/2013 (N.Y. Sup. Ct., Kings County).

         III. Discussion

         A. Younger Abstention

         Defendant argues that I should abstain from exercising jurisdiction pursuant to Younger v. Harris, 401 U.S. 37 (1971). In Sprint Communications, Inc. v. Jacobs, 134 S.Ct. 584, 591 (2013), the Supreme Court clarified that Younger applies only in three “exceptional” circumstances: (1) state criminal prosecutions; (2) civil enforcement proceedings; and (3) civil proceedings that implicate a state's interest in enforcing the orders and judgments of its courts. Id. at 588.

         Courts have routinely concluded that a pending state court foreclosure proceeding falls within the third category articulated in Sprint-a civil proceeding that implicates a state's interest in enforcing the orders of its courts. See Calizaire v. Mortg. Elec. Reg. Systs., Inc., 2017 WL 895741, at *3 (E.D.N.Y. Mar. 6, 2017) (collecting cases). However, Younger generally does not apply against those not party to the pending state proceedings. See Doran v. Salem Inn, Inc., 422 U.S. 922, 929 (1975); Hindu Temple Society of North Am. v. Supreme Court of State of New York, 335 F.Supp.2d 369, 375 (E.D.N.Y. 2004). Only “where the plaintiffs' interests are so inextricably intertwined that direct interference with the state court proceeding is inevitable, Younger may extend to bar the claims of plaintiffs who are not party to the pending state proceeding.” Spargo v. New York State Commission on Judicial Conduct, 351 F.3d 65, 82 (2d Cir. 2003) (internal quotation omitted).

         Defendant fails to offer any argument as to why the interests of plaintiff and McKenzie are so intertwined that an exception to the general rule-that Younger is inapplicable to non-parties- is proper in this case. See Roberts v. New York, 911 F.Supp.2d 149, 169 (N.D.N.Y. 2012) (declining to apply Younger because “defendants have failed to demonstrate that plaintiffs' interests are so closely related that abstention is warranted.”). Obviously, they are not. McKenzie has defaulted, whereas Plotch's interest is to stop Wells Fargo's attempt to foreclose on the property. As the Ninth Circuit has articulated:

The district court properly declined to abstain under Younger. [Defendant] initially named Plaintiffs as parties in the [state court] action but unilaterally dismissed them. [Defendant] did so precisely because of Plaintiffs' effort to fight-that is, to present a defense in state court. Younger abstention cannot apply to one who is a stranger to the state proceeding. [Defendant] made Plaintiffs strangers to the state case by denying them an opportunity to be heard in state court on the question . . . Moreover, as parties dismissed from the state case, Plaintiffs' interests are not intertwined with those against whom the Order was issued . . . The question Plaintiffs raise in this case . . . arose precisely because Plaintiffs were dismissed from the state court litigation and so could not defend against the imposition of an injunction on them in that litigation. Those covered by name by the [state court] Order did not attempt to ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.