Klimowicz v. Deutsche Bank Nat'l Trust Co. , 907 F.3d 61 ( 2018 )

United States Court of Appeals
For the First Circuit
No. 17-1916
JEANNE M. KLIMOWICZ,
Plaintiff, Appellant,
v.
DEUTSCHE BANK NATIONAL TRUST COMPANY, as indenture trustee for
New Century Home Equity Loan Trust 2005-1 ET AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Timothy S. Hillman, U.S. District Judge]
Before
Lynch, Selya, and Thompson,
Circuit Judges.
Mark Ellis O'Brien on brief for appellant.
Shawn M. Masterson and Shapiro Dorry Masterson, LLC on brief
for appellees.
October 19, 2018
SELYA, Circuit Judge. In this appeal, we are asked to
revisit a case in which the plaintiff fought tooth and nail in the
Massachusetts state courts and lost. Displeased by the result of
the state-court proceedings, she repaired to the federal district
court and sought to have that court address essentially the same
grievances. The district court rejected her importunings, and the
plaintiff now appeals. Concluding, as we do, that Supreme Court
case law divests federal courts of subject-matter jurisdiction in
such circumstances, see D.C. Court of Appeals v. Feldman, 460 U.S.
462, 482 (1983); Rooker v. Fidelity Trust Co., 263 U.S. 413, 415-
16 (1923), we affirm the district court's order of dismissal.
In as much as this appeal follows the granting of a
motion to dismiss before the filing of any responsive pleading, we
draw the relevant facts from the plaintiff's complaint,
supplemented by matters of public record and matters susceptible
to judicial notice. See Banco Santander de P.R. v. Lopez-Stubbe
(In re Colonial Mortg. Bankers Corp.), 324 F.3d 12, 14-15 (1st
Cir. 2003). Even though the facts are convoluted and the case has
been litigated in one form or another for many years, the
controlling legal issue is straightforward. Consequently, a
sketch of the relevant events and travel of the case will serve to
put the appeal into focus.
In December of 2004, plaintiff-appellant Jeanne M.
Klimowicz executed a mortgage in favor of New Century Mortgage
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Company (New Century) for real estate that she owned in Fitchburg,
Massachusetts. On or about May 24, 2006, the plaintiff filed for
protection under the United States Bankruptcy Code. Her filing
was converted to a Chapter 7 bankruptcy proceeding. See 11 U.S.C.
§§ 701-784. As part of that proceeding, she challenged the
validity of the New Century mortgage. This challenge proved
futile: the bankruptcy court dismissed it because the plaintiff
failed to serve New Century properly.
One year later, New Century itself filed for bankruptcy.
It was liquidated in due course, and the plaintiff's mortgage was
assigned to defendant-appellee Deutsche Bank National Trust
Company (Deutsche Bank). Thereafter, the plaintiff defaulted on
her payment obligations under the mortgage.
In response to the plaintiff's default, Deutsche Bank
petitioned in the Massachusetts Land Court, seeking to foreclose
on the mortgaged property. The Land Court entered a final judgment
of foreclosure, after which Deutsche Bank proceeded to arrange a
foreclosure sale. Deutsche Bank proved to be the highest bidder
at the foreclosure sale and became the record owner of the
property.
Deutsche Bank then commenced a summary process action in
the Worcester Housing Court, seeking to evict the plaintiff. In
turn, the plaintiff filed a counterclaim. Well into the summary
process action, the plaintiff introduced a new argument: she moved
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to amend her counterclaim so as to challenge the validity of the
mortgage assignment. This strategy came to naught, as the Housing
Court denied her motion.
Following lengthy motion practice and other skirmishing
in the summary process action, the Housing Court — on January 14,
2016 — entered a final judgment awarding possession of the property
to Deutsche Bank. The plaintiff appealed, but her appeal was
dismissed for failure to post the required bond.
Roughly five months after the conclusion of the summary
process action, the plaintiff sought another bite of the cherry.
Invoking diversity jurisdiction, see 28 U.S.C. § 1332(a), she filed
a civil action against Deutsche Bank in the United States District
Court for the District of Massachusetts.1 In her complaint, the
plaintiff alleged claims for wrongful foreclosure, violation of
the Massachusetts consumer protection statute, Mass. Gen. Laws ch.
93A, § 9(1), breach of the covenant of good faith and fair dealing,
and negligent infliction of emotional distress. Deutsche Bank
moved to dismiss. The district court granted Deutsche Bank's
motion, concluding, inter alia, that the Rooker-Feldman doctrine
deprived the federal courts of subject-matter jurisdiction. This
timely appeal followed.
1The plaintiff's suit also named a mortgage servicing company
as a defendant. That company is not a party to this appeal, and
we make no further mention of it.
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"Federal courts are courts of limited jurisdiction."
Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994).
Consequently, a plaintiff who seeks to bring her suit in a federal
forum bears the burden of establishing that the federal court has
subject-matter jurisdiction. See Gordo-González v. United States,
873 F.3d 32, 35 (1st Cir. 2017). The court below found that the
plaintiff's federal suit stumbled over this first step — and upon
de novo review, see id., we agree.
We need not tarry. In assessing the plaintiff's claims,
the district court offered a thoughtful explanation of the Rooker-
Feldman doctrine. See Klimowicz v. Deutsche Bank Nat'l Tr. Co.,
264 F. Supp. 3d 309, 314-16 (D. Mass. 2017). Deeming that doctrine
dispositive, the court concluded that dismissal was appropriate.
See id. at 315. We explain briefly why this conclusion was
manifestly correct (and, therefore, do not discuss the district
court's alternative ground for dismissal).
The Rooker-Feldman doctrine preserves the Supreme
Court's exclusive jurisdiction over "appeals from final state-
court judgments," Lance v. Dennis, 546 U.S. 459, 463 (2006) (per
curiam), by divesting lower federal courts of jurisdiction to hear
certain cases brought by parties who have lost in state court, see
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 291-
93 (2005); Coggeshall v. Mass. Bd. of Regist. of Psychologists,
604 F.3d 658, 663 (1st Cir. 2010). Specifically, the doctrine
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applies to "cases brought by state-court losers complaining of
injuries caused by state-court judgments [that were] rendered
before the district court proceedings commenced and invit[e]
district court review and rejection of those judgments." Exxon
Mobil, 544 U.S. at 284.
In the case at hand, the record makes manifest that the
plaintiff was the losing party in both the Land Court and the
Housing Court. It is equally clear that the plaintiff's federal
action pertains to injuries allegedly caused by those state-court
judgments. In her federal suit, the plaintiff seeks to challenge
the validity of both the foreclosure and the mortgage assignment
— matters falling squarely within the compass of the state-court
judgments. Specifically, the foreclosure was ordered by the Land
Court and the plaintiff's challenge to the mortgage assignment was
rejected by the Housing Court.
Nor can the plaintiff evade the reach of the Rooker-
Feldman doctrine by artful pleading. For instance, the plaintiff
alleges that Deutsche Bank violated the Massachusetts consumer
protection statute by engaging in "unfair and deceptive
practices." But the challenged practices implicate the Housing
Court's judgment because they relate directly to the mortgage
assignment. So, too, the plaintiff alleges a breach of the
covenant of good faith and fair dealing, but this allegation, like
the plaintiff's claim of negligent infliction of emotional
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distress, is premised on Deutsche Bank's "wrongfully acquir[ing]
title to the mortgage of the subject property through a pattern of
intentional fraudulent conduct." Although the quoted language
from the complaint does not expressly mention the Housing Court's
judgment, the plaintiff attempted to raise this very issue through
a proposed amendment to her counterclaim in the Housing Court
action. The Housing Court denied her motion and, given that
ruling, it is luminously clear that the plaintiff's current
grievances implicate the Housing Court's judgment. See Davison v.
Gov't of P.R. - P.R. Firefighters Corps., 471 F.3d 220, 223 (1st
Cir. 2007) (applying Rooker-Feldman doctrine when "the only real
injury to Plaintiffs is ultimately still caused by a state court
judgment").
The plaintiff's claim of wrongful foreclosure fares no
better. That claim is for an injury which necessarily stems from
the final judgment of foreclosure entered by the Land Court.
Indeed, foreclosure of the property was the central issue litigated
in the Land Court action. No more is exigible to bring the Rooker-
Feldman doctrine into play. Cf. Puerto Ricans for P.R. Party v.
Dalmau, 544 F.3d 58, 68 (1st Cir. 2008) (finding Rooker-Feldman
doctrine inapplicable when "core issues" raised in federal action
concerned matters distinct from state-court judgment).
Similarly, the timing and the finality of the state-
court judgments fit the contours of the Rooker-Feldman doctrine.
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As long as a state-court suit has reached a point where neither
party seeks further action in that suit, then "the state
proceedings [are considered] ended" and the judgment is deemed
sufficiently final to trigger the Rooker-Feldman doctrine.
Federación de Maestros de P.R. v. Junta de Relaciones del Trabajo
de P.R., 410 F.3d 17, 24 (1st Cir. 2005) (quoting Exxon Mobil, 544
U.S. at 291). So it is here. The Land Court ended the foreclosure
action on April 12, 2011, when it entered a final judgment. By
the same token, the Housing Court brought the protracted summary
process action to a close on January 14, 2016, when it entered a
final judgment granting Deutsche Bank possession of the property.
To be sure, the plaintiff could have pursued an appeal
of the Housing Court's judgment. She forfeited that opportunity,
though, by neglecting to post the required appeal bond.2 See
Federación de Maestros de P.R., 410 F.3d at 24 (stating "if a lower
state court issues a judgment and the losing party allows the time
for appeal to expire, then the state proceedings have ended"). It
was roughly five months after the entry of the Housing Court's
judgment and a full five years after the entry of the Land Court's
judgment that the plaintiff initiated her federal suit. Since all
2
The plaintiff did appeal the order requiring her to post an
appeal bond, but her attorney failed to appear at the scheduled
hearing before the Massachusetts Appeals Court. The Appeals Court
nonetheless reviewed the Housing Court's refusal to waive the
appeal bond and upheld the setting of bond.
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the state-court proceedings ended well before the plaintiff
commenced her federal suit, the federal suit was too late to elude
the reach of the Rooker-Feldman doctrine.
The last piece of the puzzle requires us to consider
whether the plaintiff, in bringing her federal suit, impermissibly
invited the district court to review and reject one or more final
state-court judgments. See Davison, 471 F.3d at 223. As we
already have explained, the plaintiff's federal suit sought to
vacate and set aside the Land Court's final judgment of
foreclosure. In the same vein, the plaintiff's federal suit sought
an injunction prohibiting any further post-foreclosure
proceedings, which would include enjoining enforcement of the
Housing Court's order granting Deutsche Bank possession of the
property. The district court could grant such relief only by
declaring — either explicitly or implicitly — that the state courts
had wrongly decided the foreclosure action and/or the summary
process action. Such remediation would necessarily invite the
district court to review, reject, and reverse the state courts'
rulings — an invitation that the Rooker-Feldman doctrine forbad
the district court from accepting. See id.
The short of it is that the plaintiff exhorts the federal
district court to find a wrongful foreclosure based on an invalid
mortgage assignment. Such an exhortation cannot be honored: the
Land Court already has ruled definitively on the foreclosure issue
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and the Housing Court already has ruled definitively on the
mortgage-assignment issue.
The plaintiff has a fallback position. She submits that
her federal claims are based on legal theories not presented in
the state courts and, thus, should be allowed to proceed. This is
magical thinking: a plaintiff cannot escape the Rooker-Feldman
bar through the simple expedient of introducing a new legal theory
in the federal forum that was not broached in the state courts.
See Miller v. Nichols, 586 F.3d 53, 59 n.2 (1st Cir. 2009) (citing
Hoblock v. Albany Cty. Bd. of Elections, 422 F.3d 77, 87 (2d Cir.
2005)). Put simply, a federal court's application of the Rooker-
Feldman doctrine is not contingent upon an identity between the
issues actually litigated in the prior state-court proceedings and
the issues proffered in the subsequent federal suit. See Maymó-
Meléndez v. Álvarez-Ramírez, 364 F.3d 27, 33 (1st Cir. 2004).
Instead, the critical datum is whether the plaintiff's federal
suit is, in effect, an end-run around a final state-court judgment.
See Federación de Maestros de P.R., 410 F.3d at 24 (stating that
"a federal suit seeking an opposite result [from a final state
court judgment] is an impermissible attempt to appeal the state
judgment to the lower federal courts"). Because the plaintiff's
federal suit seeks to invalidate the antecedent state courts'
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judgments, the district court lacked jurisdiction to consider her
newly minted legal theories.3
We need go no further. The aphorist tells us that hope
springs eternal, but litigation based on hope alone should not be
allowed to proceed eternally. This case illustrates the point.
Refined to bare essence, the plaintiff is seeking, through her
federal suit, to revisit a pair of state-court judgments that did
not go her way. The Rooker-Feldman doctrine blocks her path.
Affirmed.
3 In all events, the plaintiff's theories are scarcely new. For
example, her federal suit seeks to question the validity of the mortgage
assignment. That very theory, though, was raised in her motion to amend
her counterclaim in the Housing Court — a motion that was denied after
briefing and argument.
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