United States District Court, S.D. New York
OPINION & ORDER
HONORABLE PAUL A. CROTTY, UNITED STATES DISTRICT JUDGE
Nery Chery brings this action alleging violations of the
Racketeer Influenced and Corrupt Organizations Act
("RICO"), 18 U.S.C. § 1961 et seq., against
Defendants Nationstar Mortgage LLC, Nationstar Holdings,
Inc., Fortress Investment Group LLC, and Wesley R. Edens,
Defendants now move to dismiss the complaint for lack of
subject-matter jurisdiction under Federal Rule of Civil
Procedure 12(b)(1), failure to state a claim under Rule
12(b)(6), and because Plaintiffs claims are precluded by res
judicata and collateral estoppel. The motion to dismiss is
April 26, 2006, Mela Kissoon Persuad executed a promissory
note reflecting that she had received a loan of $810, 000
from BNC Mortgage, Inc. ("BNC"). See
Chirch Decl. Ex. A, Promissory Note. To secure the $810, 000,
Persuad executed a mortgage ("Mortgage") on
property located at 108-51 48th Avenue, Cornona, New York,
11368 ("Property"), and delivered it to the nominee
for BNC, Mortgage Electronic Registration Systems, Inc.
("MERS"). See Chirch Decl. Ex. B,
Mortgage. Persuad defaulted on her mortgage payments, and
MERS instituted a foreclosure action against Persuad and
other defendants in the Supreme Court of the State of New
York, Queens County, on or about February 21, 2007
("Foreclosure Action"). See Chirch Decl.
Ex. C, Summons and Complaint in Mortg. Elec. Registration
Sys., Inc. v. Mela Kisson Persuad, et al, Index No.
4996/2007. On January 3, 2008, the state court entered a
judgment in favor of MERS. See Chirch Decl. Ex. D,
Judgment of Foreclosure and Sale.
subsequently moved for leave to intervene in the Foreclosure
Action, and the state court granted the motion. See
Chirch Decl. Ex. E, Foreclosure Action 2010 Order at 2. On
June 3, 2009, Plaintiff filed an answer in the Foreclosure
Action, asserting various defenses and counterclaims
seeking to set aside and void the Mortgage.
See Id. Specifically, Plaintiff alleged
that she was the original owner of the Property, and that she
was the victim of a "mortgage rescue scam," in
which certain nonparties fraudulently induced her to transfer
ownership of the Property by promising that title would be
transferred back to her, and then sold it to Persuad, a straw
purchaser, instead of returning the title to Plaintiff.
See Id. at 4.
moved to dismiss Plaintiffs defenses and counterclaims, and
the state court granted the motion on April 12, 2010.
See Id. at 2, 8. The court also denied
Plaintiffs cross-motion to amend her answer to assert claims
against MERS and third-party claims against BNC for fraud and
misrepresentation. See Id. With respect to
the fraud and misrepresentation allegations, the court found
that Plaintiff had failed to allege:
any misrepresentation made by BNC Mortgage or [MERS, ] . . .
[any] allegation which would support a finding of vicarious
liability on the part of BNC Mortgage or [MERS] for the
alleged misrepresentations and fraud perpetrated by [certain
nonparties] . . . [or] any basis upon which to find BNC
Mortgage or MERS guilty of conspiracy to defraud or aiding
and abetting fraud.
Id. at 5. Subsequently, the court issued an Amended
Judgment of Foreclosure and Sale on July 26, 2013.
See Circh Decl. Ex. F, Amended Judgment of
Foreclosure and Sale.
September 26, 2013, the Mortgage was assigned to Nationstar
Mortgage LLC. See Chirch Decl. Ex. G, Mortgage
Assignment. On August 30, 2014, in accordance with the
Amended Judgment of Foreclosure and Sale, the court-appointed
referee deeded the Property to Nationstar Mortgage LLC.
See Chirch Decl. Ex. H, Referee's Deed. Eviction
proceedings commenced in New York City Civil Court, and
warrants of eviction were issued in September 2015.
See Chirch Decl. Ex. J, State Court Action 2016
Order, at 2. On January 29, 2016, Plaintiff filed an
Emergency Order to Show Cause seeking to stop the
eviction on the ground that she was not served with proper
notice, but the civil court found mat she had been served
properly. See id.
26, 2016, Plaintiff brought an action in Queens County
Supreme Court ("State Court Action") against the
same Defendants as in this action, alleging two causes of
action under RICO and four causes of action under state law.
See Chirch Decl. Ex. I, State Court Complaint. On
December 27, 2016, the state court dismissed the State Court
Action against Defendants. See Chirch Decl. Ex. J,
State Court Action 2016 Order. The court held that Plaintiffs
claims were barred by res judicata and collateral estoppel
because they arose from the same transaction or occurrence
that formed the basis of the Foreclosure Action, and because
Plaintiff failed to demonstrate the absence of a full and
fair opportunity to contest the prior determinations in the
Foreclosure Action. See Id. at 3-4.
March 15, 2017, Plaintiff filed with this Court a complaint
and an order to show cause to stop her eviction ("2017
Action"). See No. 1:17-cv-1875 Dkt. 1, 3. That
same day, the Court (Cote, J., sitting in Part I) denied
Plaintiffs application for an order to show cause, noting
that "[t]his is the third litigation over the
foreclosure. The plaintiff has failed to prevail in the two
prior state court litigations, the second of which included a
RICO claim. There is a failure to show a likelihood of
success." See id., Dkt. 3. On interlocutory
appeal, the Second Circuit affirmed this order on August 8,
2017. See id., Dkt. 6. On December 20, 2017, the
Court dismissed the 2017 Action without prejudice for lack of
activity. See id., Dkt. 7.
February 12, 2018, Plaintiff initiated a new action by filing
yet another complaint and order to show cause with the Court,
raising the same issues as in the 2017 Action. See
Dkt. 1, 11. Once again, the Court denied Plaintiffs
application, and the Second Circuit affirmed. See
Dkt. 11, 16. Defendants now move to dismiss Plaintiffs claims