Charlesworth Lewis v. Lauren O'Donnell ( 2017 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 16-2820
___________
CHARLESWORTH LEWIS,
Appellant
v.
LAUREN E. O’DONNELL, Esq.; KEVIN C. RAKOWSKI, Esq;
FRANK J. KEENAN, Esq; PENNYMAC CORP.; M. E. WILEMAN; C. LAFFERTY
____________________________________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil Action No. 2-16-cv-01514)
District Judge: Honorable Jose L. Linares
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
December 16, 2016
Before: AMBRO, KRAUSE and NYGAARD, Circuit Judges
(Opinion filed: January 4, 2017)
___________
OPINION*
___________
PER CURIAM
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
Charlesworth Lewis appeals from an order of the United States District Court for
the District of New Jersey dismissing his complaint. For the reasons that follow, we will
affirm.
Lewis defaulted on a mortgage that had been assigned to PennyMac Corporation.
Consequently, PennyMac filed a foreclosure action in the Superior Court of New Jersey,
Chancery Division (Essex County). Lewis failed to respond, and a final judgment by
default was entered against him in October 2014.1 In May 2015, Lewis initiated a
separate action against PennyMac in the Chancery Division, alleging that the assignment
of his mortgage was fraudulently drafted, executed, and recorded. On August 21, 2015,
the Chancery Division granted PennyMac’s motion to dismiss and dismissed the action
with prejudice.
In March 2016, Lewis filed a complaint in the District Court, challenging the
foreclosure action on the ground that the assignment of the mortgage to PennyMac was
“defective.” In particular, he alleged violations of the Fair Debt Collection Practices Act
(FDCPA), the Racketeer Influenced and Corrupt Organizations (RICO) Act, the New
Jersey Consumer Fraud Act (CFA), and civil conspiracy laws. Lewis named as
defendants PennyMac, attorneys who represented PennyMac, and individuals involved in
1
Thereafter, Lewis filed a motion to vacate the default judgment, arguing that the
assignment of the mortgage to PennyMac was invalid. The Chancery Division denied
Lewis’ motion. Lewis appealed, and the Superior Court, Appellate Division, affirmed.
See Pennymac Corp. v. Lewis, 2016 WL 3981210, at *2 (N.J. Super. Ct. App. Div. July
26, 2016) (not precedential).
2
executing and notarizing the PennyMac assignment. The defendants were not served
with the complaint but, upon learning of its existence through their own docket search,
filed a motion to dismiss. Lewis filed a response in opposition. The District Court
denied the motion to dismiss as moot, but nevertheless dismissed the complaint, holding
that Lewis’ claims were barred by the Rooker-Feldman doctrine and New Jersey’s entire
controversy doctrine.2 Lewis appealed.3
In his brief, Lewis primarily alleges that his procedural due process rights were
violated by the District Court’s dismissal of his complaint before the Defendants were
served, entered an appearance, and participated in discovery. In Oatess v. Sobolevitch,
we held that dismissal of a complaint prior to service of process is inappropriate. 914
F.2d 428, 430 (3d Cir. 1990). Here, however, although the Defendants were not served,
they filed a motion to dismiss, Lewis filed a response in opposition to that motion, the
District Court rendered its decision, and Lewis appealed. Consequently, the concerns
underlying our decision in Oatess – “interfere[nce] with the orderly process of the
case[,]” “bypass[ing] our tradition of adversarial proceedings[,]” and “greater
2
The District Court also denied as moot Lewis’ “motion to show bona fides,” wherein he
sought an order directing the Defendants’ attorneys to explain their “authority to defend
this action.” There is no merit to Lewis’ argument on appeal that the District Court was
required to hold a hearing to address that motion.
3
We have jurisdiction under 28 U.S.C. § 1291 and review de novo the District Court’s
dismissal of the complaint. We may affirm the District Court’s judgment on any basis
that the record supports. See Murray v. Bledsoe, 650 F.3d 246, 247 (3d Cir. 2011) (per
curiam).
3
inefficiency” because “if an appeal is taken the case shuttles between the district and
appellate courts[,]” id. at 431 – are absent here. See Roman v. Jeffes, 904 F.2d 192, 196
(3d Cir. 1990) (stating that “there are times when a court may sua sponte raise the issue
of the deficiency of a pleading under Rule 12(b)(6) provided that the litigant has the
opportunity to address the issue either orally or in writing.”). In addition, Lewis has
failed to identify how he was prejudiced by the filing of the Defendants’ motion to
dismiss three days before their attorney entered an appearance. Also, contrary to Lewis’
contention, the District Court was permitted to dismiss the complaint prior to discovery.
See Neitzke v. Williams, 490 U.S. 319, 326-27 (1989).
We also conclude that the Defendants’ motion to dismiss adequately demonstrated
that Lewis’ claims are barred by res judicata.4 See Fed. R. Civ. P. 8(c) (listing res
judicata as an affirmative defense); see also Ball v. Famiglio, 726 F.3d 448, 459 n.16 (3d
Cir. 2013) (noting that res judicata may be raised in a 12(b)(6) motion to dismiss). Res
judicata bars claims that were actually litigated or could have been litigated in a prior
action. See Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981). For res
judicata to apply, a defendant must show that there has been “(1) a final judgment on the
merits in a prior suit involving (2) the same parties or their privies and (3) a subsequent
suit based on the same causes of action.” United States v. Athlone Indus., Inc., 746 F.2d
977, 983 (3d Cir. 1984). “In deciding whether two suits are based on the same ‘cause of
4
This conclusion obviates the need for us to consider the District Court’s application of
the Rooker-Feldman and entire controversy doctrines. See Murray, 650 F.3d at 247.
4
action,’ we take a broad view, looking to whether there is an ‘essential similarity of the
underlying events giving rise to the various legal claims.’” CoreStates Bank, N.A. v.
Huls Am., Inc., 176 F.3d 187, 194 (3d Cir. 1999) (citation omitted).
Based on our review of Lewis’ complaint and the state court documents submitted
by the Defendants, it is clear that those requirements have been met and that Lewis is
merely attempting to re-litigate issues that were already decided in state court. See
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 293 (2005) (recognizing
that “a federal court may be bound to recognize the claim- and issue-preclusive effects of
a state-court judgment”). First, Lewis’ prior state court actions were dismissed on the
merits. See Morris v. Jones, 329 U.S. 545, 550-51 (1947) (holding that a default
judgment constitutes a decision on the merits for res judicata purposes); DeGroot, Kalliel,
Traint & Conklin, P.C. v. Camarota, 404 A.2d 1211, 1213 (N.J. Super. Ct. App. Div.
1979) (same). Second, PennyMac is a party here and in the prior actions.5 Finally, the
5
With respect to the individual defendants named here, only one, M.E. Wileman, was
named in the state court proceedings. Nevertheless, we conclude that the individual
defendants were in privity with PennyMac. “Privity ‘is merely a word used to say that
the relationship between one who is a party on the record and another is close enough to
include that other within the res judicata.’” Marran v. Marran, 376 F.3d 143, 151 (3d Cir.
2004) (quoting EEOC v. U.S. Steel Corp., 921 F.2d 489, 493 (1990)). Indeed, the
individual defendants all worked for or on behalf of PennyMac. See Henry v. Farmer
City State Bank, 808 F.2d 1228, 1235 n.6 (7th Cir. 1986) (“Even though the Bank was
the only actual party to the state court mortgage foreclosure proceedings, the other
defendants, as directors, officers, employees, and attorneys of the Bank, are in privity
with the Bank for purposes of res judicata.”); see also Collins v. E.I. DuPont de Nemours
& Co., 34 F.3d 172, 176 (3d Cir. 1994) (stating that, under New Jersey law, “[a]
relationship is usually considered ‘close enough’ [for res judicata purposes] only when
the party is a virtual representative of the non-party, or when the non-party actually
5
present action and the prior state suits involve the issue whether the mortgage was
fraudulently assigned to PennyMac. We note that Lewis could have raised in state court
claims under the FDCPA, the RICO Act, the New Jersey CFA, and civil conspiracy laws.
See e.g., Hodges v. Sasil Corp., 915 A.2d 1, 7 (N.J. 2007) (addressing FDCPA claim in
connection with landlord-tenant dispute); Mayo, Lynch & Assocs., Inc. v. Pollack, 799
A.2d 12, 20-22 (N.J. Super. Ct. App. Div. 2002) (considering federal RICO claim).
For these reasons, we will affirm the District Court’s judgment.6
controls the litigation.”).
6
Lewis’ “motion for attorney to show bona fides and authority” and “motion to strike
appellees’ answer brief and sanction the Appellees’ attorneys” are denied. We also deny
as moot Appellees’ “motion for leave to file opposition to Appellant’s motion for
attorney to show bona fides and authority.”
6