Preston v. Citimortgage, Inc.

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT January 7, 2016
_________________________________
Elisabeth A. Shumaker
Clerk of Court
ISAIAH PRESTON, JR.;
DONETTA PRESTON,
Plaintiffs - Appellants,
v. No. 15-6057
(D.C. No. 5:14-CV-01258-R)
CITIMORTGAGE, INC.; MIDWEST (W.D. Okla.)
MORTGAGE CAPITAL LLC;
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,
Defendants - Appellees.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before BACHARACH, O’BRIEN, and PHILLIPS, Circuit Judges.
_________________________________
Isaiah Preston, Jr. and Donetta Preston appeal from the district court’s
dismissal of their federal lawsuit and imposition of filing restrictions. Exercising
jurisdiction under 28 U.S.C. § 1291, we affirm.
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Background
The Prestons lost their home in an Oklahoma foreclosure proceeding that
resulted in the sale of the property and the issuance of a sheriff’s deed in 2012. Just
after the Oklahoma court entered a final order confirming the sale, the Prestons began
filing a series of federal district court actions seeking to regain the property.
In 2012 they tried unsuccessfully to remove the foreclosure action to federal
court. Citi Mortgage Inc. v. Preston, No. 5:12-cv-01318-R, slip op. at 1-2
(W.D. Okla. Dec. 3, 2012) (unpublished). They also filed a quiet title action, which
the district court dismissed as barred by the Rooker-Feldman doctrine.1 Preston v.
CitiMortgage, Inc., No. 5:12-cv-01220-R, slip op. at 1-2 (W.D. Okla. Jan. 11, 2013)
(unpublished). This court affirmed. Preston v. CitiMortgage, 522 F. App’x 426,
427-28 (10th Cir. 2013) (unpublished).
In 2013 the Prestons again tried unsuccessfully to remove the foreclosure
action to federal court. CitiMortgage, Inc. v. Preston, No. 5:13-cv-00437-R, slip op.
at 1 (W.D. Okla. June 3, 2013) (unpublished). They also filed a federal complaint
alleging wrongful foreclosure and fraud and seeking to quiet title to the property.
The district court again dismissed the claims under the Rooker-Feldman doctrine.
Preston v. CitiMortgage, Inc., No. 5:13-cv-00438-R, slip op. at 2-4 (W.D. Okla. July
23, 2013) (unpublished). The Prestons did not appeal from that decision.
1
See D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983); Rooker v. Fid.
Tr. Co., 263 U.S. 413 (1923).
2
Most recently, in 2014 the Prestons filed the complaint underlying this appeal.
They asserted various tort claims and sought a declaratory judgment as to rights of
the parties in the property. The district court held for the third time that their claims
were barred by the Rooker-Feldman doctrine and then denied their motion to
reconsider. The district court also granted in part the defendants’ motion for
Fed. R. Civ. P. 11 sanctions: it declined to impose a monetary penalty, but it
imposed filing restrictions requiring the Prestons to obtain the court’s authorization
before filing any further pro se actions in the Western District of Oklahoma. The
district court subsequently granted the Prestons’ motion for an extension of time to
file their notice of appeal.
Discussion
The Prestons appeal from both the dismissal and the imposition of sanctions.
We have jurisdiction to review both orders.2
I. Dismissal
We review a Rooker-Feldman dismissal de novo. See Mann v. Boatwright,
477 F.3d 1140, 1145 (10th Cir. 2007).
2
The district court did not abuse its discretion in granting an extension of
time to file a notice of appeal, see City of Chanute v. Williams Nat. Gas Co., 31 F.3d
1041, 1045-47 (10th Cir. 1994), and therefore the Prestons’ formal notice of appeal is
timely. That notice identifies only the January 20, 2015, dismissal order as the
decision under review. But the Prestons’ motion for extension of time was the
functional equivalent of a notice of appeal, see Rodriguez v. IBP, Inc., 243 F.3d
1221, 1227 (10th Cir. 2001); United States v. Smith, 182 F.3d 733, 735-36 (10th Cir.
1999), and it identified the February 20, 2015, sanctions order. Accordingly, we
have jurisdiction to review both orders.
3
The Prestons argue that they adequately stated claims for relief and that the
district court prematurely dismissed the action, which precluded them from having
the opportunity to support their claims through discovery. But the district court did
not dismiss the Prestons’ claims because they were inadequately pleaded; it
dismissed them because they cannot proceed in federal court as a matter of law.
The Prestons asserted that their complaint was “based upon the unlawful
foreclosure and sale of the subject Property of the Plaintiffs,” R., Vol. 1 at 7, and
among other remedies involving the state-court foreclosure, they requested “an order
of the Court . . . striking the void sale of the subject property” and an order
establishing their rights in the property, id. at 14-15. As the district court explained,
the Rooker-Feldman doctrine bars the Prestons from proceeding with these claims in
federal court. See Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284
(2005) (stating that the Rooker-Feldman doctrine 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”). We recognize that the Rooker-Feldman doctrine
is narrow, see id., but the district court applied it appropriately in this case. And
because the claims are barred as a matter of law, there was no need for discovery.
The dismissal of the Prestons’ claims is affirmed for substantially the reasons
set forth in the district court’s January 20, 2015, order.
4
II. Filing Restrictions
We review Rule 11 sanctions for abuse of discretion. See Cooter & Gell v.
Hartmarx Corp., 496 U.S. 384, 405 (1990). The district court declined to impose a
monetary penalty, but did impose a filing restriction requiring the Prestons to obtain
the court’s authorization before filing any new pro se actions.
The Prestons argue that “they are only seeking redress by what they perceive
to be the proper jurisdiction and venue.” Aplt. Br. at 22. This case, however, is only
the latest in their series of unsuccessful attempts to raise federal claims regarding the
foreclosure. As set forth above, before the Prestons filed this suit, the district court
had twice dismissed claims concerning the property under the Rooker-Feldman
doctrine, and this court affirmed in the earlier appeal, see Preston, 522 F. App’x at
427-28. By the time they filed the instant complaint, the Prestons should have been
aware that they cannot try to undo or undermine the foreclosure in federal court.
The Prestons also state that “Rule 11 sanctions should not be imposed in this
matter where Appellees rely primarily upon filings in other jurisdictions to allege that
the instant filing was wholly frivolous and abusive.” Aplt. Br. at 22. But “federal
courts, in appropriate circumstances, may take notice of proceedings in other courts,
both within and without the federal judicial system, if those proceedings have a direct
relation to matters at issue.” St. Louis Baptist Temple, Inc. v. Fed. Deposit Ins.
Corp., 605 F.2d 1169, 1172 (10th Cir. 1979).
Finally, citing precedent from the Seventh Circuit, the Prestons assert that the
district court was required to find subjective bad faith. We have acknowledged that
5
“the degree to which malice or bad faith contributed to the violation” is a factor to be
considered in evaluating Rule 11 sanctions. White v. Gen. Motors Corp., 908 F.2d
675, 685 (10th Cir. 1990). Bad faith, however, is just one of several factors that
contribute to the ultimate decision, which is whether it was objectively reasonable for
the Prestons to assert these claims. See id. at 680; see also Dodd Ins. Servs. v. Royal
Ins. Co. of Am., 935 F.2d 1152, 1155 (10th Cir. 1991).3 Both the district court and
this court previously told the Prestons that they cannot try to undo the foreclosure in
federal court. Even allowing for the fact that the Prestons are proceeding pro se and
are not to be held to the same standards as attorneys, it was not objectively
reasonable for them to file the instant complaint.
III. Conclusion
The judgment of the district court is affirmed.
Entered for the Court
Gregory A. Phillips
Circuit Judge
3
White and Dodd address attorney conduct, speaking of “reasonable” and
“competent” attorneys, Dodd, 935 F.2d at 1155; White, 908 F.2d at 680, but Rule 11
imposes the same standard on both attorneys and pro se parties.
6