Rosee Torres v. Wells Fargo Bank, N.A. ( 2020 )

NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted January 21, 2020
Decided January 27, 2020
Before
FRANK H. EASTERBROOK, Circuit Judge
MICHAEL B. BRENNAN, Circuit Judge
MICHAEL Y. SCUDDER, Circuit Judge
Nos. 18-3686 & 19-2114
In the Matter of: ROSEE TORRES and Appeals from the United States District
NOEL TORRES, Court for the Northern District of Illinois,
Debtors-Appellants. Eastern Division.
No. 18-cv-05279
Edmond E. Chang,
Judge.
No. 19-1657
ROSEE TORRES and NOEL TORRES, Appeal from the United States District
Plaintiffs-Appellants, Court for the Northern District of Illinois,
Eastern Division.
v. No. 19-cv-00112

We have agreed to decide these appeals without oral argument because the
briefs and records adequately present the facts and legal arguments, and oral argument
would not significantly aid the court. FED. R. APP. P. 34(a)(2)(C).
Nos. 18-3686, 19-2114, & 19-1657 Page 2
JUDICIAL SALES CORPORATION, et Andrea R. Wood,
al. Judge.
Defendants-Appellees.
ORDER
Rosee and Noel Torres sought to void the foreclosure of the mortgage backed by
their Chicago home by filing a bankruptcy action. They also filed an original civil suit in
the district court, seeking money damages and the reversal of the state court’s
foreclosure judgment. In each case, the couple advanced over a dozen theories of relief
under state and federal law stemming from their allegation that Wells Fargo and others
used fraudulent and discriminatory practices to foreclose on their residence. The
Torreses did not prevail in either case. We previously consolidated their two appeals
arising from the bankruptcy proceeding, and we now consolidate those with a third,
arising out of the civil suit, for the benefit of judicial economy. Because the foreclosure
and sale have already occurred, the appeals in the bankruptcy case are moot and must
be dismissed. And because the lower federal courts lack jurisdiction to upset the
judgment of the Illinois court, we affirm the dismissal of the civil suit.
Wells Fargo, N.A. sued the Torreses for foreclosure after they allegedly defaulted
on the loan that was secured by a mortgage on their house. After the Circuit Court of
Cook County entered a foreclosure judgment, the couple filed a Chapter 7 bankruptcy
proceeding, triggering an automatic stay of the foreclosure action. See 11 U.S.C. § 362(a).
Wells Fargo moved to lift the stay, see 11 U.S.C. § 362(d), and the bankruptcy court
granted the motion, finding no equity in the property for the bankruptcy estate. In
response to the Torreses’ arguments that the foreclosure was a sham—because, they
alleged, they never borrowed money from Wells Fargo and the mortgage on their home
was “paid in full”—the bankruptcy court explained that the Torreses should raise those
defenses in state court.
The Torreses filed an interlocutory appeal in the district court of the bankruptcy
court’s decision to lift the automatic stay, see 28 U.S.C. § 158(a); Colin v. Option One
Mortg. Corp., 319 F.3d 912, 916 n.1 (7th Cir. 2003) (bankruptcy court’s order lifting
automatic stay is appealable). They also requested a preliminary injunction to postpone
the auction of their home pending the appeal. The district court denied the motion for a
preliminary injunction—an order the Torreses appealed to this court—and later, on
Wells Fargo’s motion, dismissed the appeal outright after the state court approved the
sale and entered a final judgment. The court explained that, although it had jurisdiction
Nos. 18-3686, 19-2114, & 19-1657 Page 3
to review the bankruptcy court’s order, see 28 U.S.C. § 158(a), the appeal was
“frivolous” because the Rooker-Feldman doctrine barred it “from considering any of the
Torreses’ objections to the state court foreclosure judgment.” See Rooker v. Fidelity Trust
Co., 263 U.S. 413 (1923); D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983).
In addition to the bankruptcy matter, the Torreses filed a separate federal lawsuit
alleging, among other things, that the foreclosure was premised on fraud and
discrimination. In short, they alleged that Wells Fargo targeted the Torreses because of
their race and age, and then conspired with the other defendants to trick the state court
into validating a fabricated mortgage and approving a staged foreclosure sale (to a third
party that was essentially a straw man for Wells Fargo). The Torreses sought money
damages, relief from the state court’s judgment, and reversal of the foreclosure sale.
Because the state court had already approved the judicial sale of the property and title
had passed to a third party, the district court dismissed the case without prejudice at
screening for lack of jurisdiction under the Rooker-Feldman doctrine. This is the subject
of the Torreses’ third appeal.
To begin, we address the two appeals arising from the bankruptcy proceeding.
The Torreses first challenge the order denying a preliminary injunction against the sale
of their property, see 28 U.S.C. § 1292(a)(1), but the district court mooted the
interlocutory appeal in number 18-3686 when it dismissed the case in its entirety.
See Auto Driveway Franchise Sys. v. Auto Driveway Richmond, 928 F.3d 670, 674–75
(7th Cir. 2019).
The Torreses also appeal the district court’s dismissal of the entire bankruptcy
appeal, but that appeal is also moot because after it was filed, the foreclosure action
ended in a final judgment. “[A] suit becomes moot when the issues presented are no
longer ‘live’ or the parties lack a legally cognizable interest in the outcome. [This occurs]
only when it is impossible for a court to grant any effectual relief whatever to the
prevailing party.” Chafin v. Chafin, 568 U.S. 165, 172 (2013) (internal citations and
quotation marks omitted). The only relief the Torreses sought in the interlocutory
bankruptcy appeal, other than reinstatement of the automatic stay, was to enjoin the
sale of their home. But, while the appeal was pending in the district court, the state
court approved the sale of the property, and title transferred to the third party. Under
Illinois law, a foreclosure action is finally decided once the court “enters an order
approving the sale and directing the distribution.” Matter of Anderson, 917 F.3d 566, 572
(7th Cir. 2019) (citing EMC Mortg. Corp. v. Kemp, 982 N.E.2d 152 (Ill. 2012)). That
rendered appeal number 19-2114 moot, although the district court gave other reasons
Nos. 18-3686, 19-2114, & 19-1657 Page 4
for dismissing it. Without a live controversy, we must vacate the judgment of the
district court and remand with instructions to dismiss the case as moot. See United States
v. Munsingwear, Inc. 340 U.S. 36, 39 (1950).
On to the appeal from the original civil action, which the second district court
dismissed based on the Rooker-Feldman doctrine. That doctrine provides that “the
Supreme Court of the Unites States is the sole federal tribunal authorized to review the
judgments of state courts in civil litigation.” Iqbal v. Patel, 780 F.3d 728, 729 (7th Cir.
2015). It applies to “cases brought by state-court losers complaining of injuries caused
by state-court judgments rendered before the district court proceedings commenced
and inviting district court review and rejection of those judgments.” Exxon Mobil Corp.
v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005); see Mains v. Citibank, N.A., 852 F.3d
669, 675 (7th Cir. 2017). We ask whether the federal plaintiff is alleging an injury caused
by the state-court judgment or an injury independent of the judgment that the state
court failed to remedy; in the latter case, Rooker-Feldman does not apply. Mains, 852 F.3d
at 675 (There must be “no way for the injury complained of by a plaintiff to be
separated from a state court judgment.” (internal citations omitted)).
The Torreses primarily argue on appeal, as they did in the district court, that
Wells Fargo obtained the foreclosure through a scheme to defraud them and
discriminate against them. Those claims—which encapsulate their theories of common-
law fraud and alleged violations of consumer protection and anti-discrimination
statutes—are barred by the Rooker-Feldman doctrine. Like the plaintiff in Mains, the
Torreses assert that the state-court judgment was in error because it rested on fraud and
discrimination by the defendants. 852 F.3d at 676. Had the Torreses argued that an
underlying fraud or discriminatory act caused an injury independent from the
foreclosure judgment and the loss of their home, those claims could have survived.
See Iqbal, 780 F.3d at 729–730. As it is, however, the Torreses’s complaint made clear that
the foreclosure judgment caused their injuries, and they expressly asked the district
court for “relief from judgment and sale.” Rooker-Feldman prohibits that outcome. See id.
On appeal, the Torreses mostly restate the allegations in their complaint and
mention the Rooker-Feldman doctrine only to argue that an exception applies because
they had no “reasonable opportunity to raise the issues in state court proceedings.”
Jakupovic v. Curran, 850 F.3d 898, 904 (7th Cir. 2017). They argue that the defendants’
conspiracy robbed them of a fair shot in state court. But the Torreses misapprehend that
exception, which accounts for procedural bars to bringing their claims in state court.
See Taylor v. Fed. Nat. Mortg. Ass’n, 374 F.3d 529, 535 (7th Cir. 2004) (reasonable
Nos. 18-3686, 19-2114, & 19-1657 Page 5
opportunity exists when no “state laws, state court procedures or other impediments …
stand in the way of her bringing her claims in state court”). Here, the Torreses had the
opportunity to raise, and did raise, their claims in the foreclosure action and multiple
appeals.
For these reasons, we VACATE and REMAND appeals number 18-3686 and
number 19-2114 with instructions to dismiss the bankruptcy appeal as moot. In appeal
number 19-1657, we AFFIRM the district court’s judgment dismissing for lack of subject
matter jurisdiction.