Armstrong v. JPMorgan Chase

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT December 14, 2015
_________________________________
Elisabeth A. Shumaker
Clerk of Court
WALTER TRUSTRUM ARMSTRONG,
III,
Plaintiff - Appellant,
v. No. 14-1144
(D.C. No. 1:13-CV-02930-RBJ)
JPMORGAN CHASE BANK NATIONAL (D. Colo.)
ASSOCIATION,
Defendant - Appellee.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before LUCERO, GORSUCH, and McHUGH, Circuit Judges.
_________________________________
Walter Trustrum Armstrong, III, appeals from the district court’s dismissal of
his declaratory-judgment and quiet-title claims against JPMorgan Chase Bank
National Association (“JPMorgan Chase”). 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
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 This order and judgment is not binding precedent,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.
I
Armstrong obtained a mortgage loan from Stewart Mortgage Services (“SMS”)
in 2007 that was evidenced by a promissory note and secured by a deed of trust on
the financed house. According to JPMorgan Chase, SMS assigned the note to
AmTrust Bank by means of an allonge,1 after which AmTrust Bank endorsed the
allonge in blank and negotiated the note to JPMorgan Chase. The beneficiary of the
deed of trust was Mortgage Electronic Registration Systems, Inc. (“MERS”), as
SMS’s nominee. In 2012, MERS assigned the deed of trust to JPMorgan Chase.
Armstrong defaulted on the note in January 2010. Chase Home Finance, LLC,
initiated a foreclosure proceeding. Armstrong filed suit in Colorado state court
against Chase Home Finance and MERS, seeking a declaratory judgment that neither
defendant held a legal interest in the note or deed of trust and an injunction
prohibiting them from foreclosing on his house. Six days later, while his state action
was pending, Armstrong filed a voluntary Chapter 7 bankruptcy case, in which he
made a number of assertions under penalty of perjury germane to this case: (1) the
only proceeding he was party to was the foreclosure proceeding; (2) he had no
contingent or liquidated claims of any kind; (3) the amount due on his mortgage was
a secured claim held by Chase Manhattan Mortgage; and (4) he intended to retain the
property and reaffirm the debt to Chase Manhattan Mortgage.
1
Although Armstrong contends that SMS assigned only the servicing rights to
AmTrust, this factual dispute is immaterial to our disposition of this appeal.
2
The bankruptcy trustee moved to dismiss the case because Armstrong’s
disposable income was higher than Armstrong had estimated. The bankruptcy court
granted the motion, which Armstrong did not oppose, and closed the case in August
2011. In December 2011, the state court dismissed Armstrong’s action because he
failed to serve necessary parties and because Chase Home Finance had withdrawn the
foreclosure proceeding several months earlier.
JPMorgan Chase then initiated a foreclosure proceeding and filed a Colo. R.
Civ. P. 120 motion in Colorado state court, seeking authorization for the public
trustee to sell the encumbered property. Concluding that JPMorgan Chase did not
meet its burden to prove it held an enforceable note, the state court denied the
Rule 120 motion. More specifically, the court found that JPMorgan Chase did not
provide any competent evidence to show the authenticity and authority of a signature
on the allonge to the note purportedly assigning SMS’s interest, and held that the
allonge was not sufficiently affixed to the note to qualify as an endorsement under
Colorado law.
Armstrong then filed the present action in state court, seeking a declaration
that JPMorgan Chase had no interest in the note and could not maintain any claim
against the secured property. He also sought to quiet title to the property. JPMorgan
Chase removed the case to federal court and moved to dismiss. The district court
granted JPMorgan Chase’s motion on alternative grounds. First, it held that
Armstrong lost the right to enforce his claims by failing to disclose them in his
bankruptcy proceeding. Second, the court concluded that the judicial-admission
3
doctrine barred Armstrong from seeking a declaration against JPMorgan Chase based
on Armstrong’s sworn statements in the bankruptcy case that Chase Manhattan
Mortgage was the undisputed secured creditor on the note.2 The court also ruled that
the quiet title claim failed because Armstrong did not allege any facts establishing he
held superior title to the property. This appeal followed.
II
“We review the district court’s grant of a Rule 12(b)(6) motion de novo,
accepting all well-pleaded allegations as true and viewing them in the light most
favorable to the plaintiff.” Lane v. Simon, 495 F.3d 1182, 1186 (10th Cir. 2007).
We reject Armstrong’s argument that the district court improperly considered
documents from his bankruptcy case without giving Armstrong an opportunity to
present materials relevant to a summary judgment motion. A court may consider
facts subject to judicial notice—including facts that are a matter of public record,
such as documents filed in other litigation—without converting a motion to dismiss
into a motion for summary judgment. Pace v. Swerdlow, 519 F.3d 1067, 1072-73
(10th Cir. 2008).
We also reject Armstrong’s contention that the district court’s order
contravened the Rooker-Feldman doctrine. The Rooker-Feldman doctrine bars lower
federal courts from entertaining “cases brought by state-court losers complaining of
injuries caused by state-court judgments rendered before the district court
2
Armstrong has not taken issue with the district court’s finding that Chase
Manhattan Mortgage is a subsidiary of JPMorgan Chase.
4
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). But the state court’s denial of the Rule 120 motion was not a judgment that
falls within the Rooker-Feldman doctrine. See Colo. R. Civ. P. 120(d) (“Neither the
granting nor the denial of a motion under this Rule shall constitute an appealable
order or judgment.”); Miller v. Deutsche Bank Nat’l Trust Co. (In re Miller),
666 F.3d 1255, 1262 (10th Cir. 2012) (holding that “no final judgment is entered in
Rule 120 proceedings” and rejecting notion that Rooker-Feldman applied).
Armstrong’s argument conflates Rooker-Feldman with preclusion law. See Lance v.
Dennis, 546 U.S. 459, 466 (2006) (explaining that Rooker-Feldman is not simply
issue preclusion). And a Rule 120 decision has no preclusive effect. See Colo. R.
Civ. P. 120(d) (“The granting of any [Rule 120] motion shall be without prejudice to
the right of any person aggrieved to seek injunctive or other relief in any court of
competent jurisdiction, and the denial of any such motion shall be without prejudice
to any right or remedy of the moving party.”); Miller, 666 F.3d at 1262 (holding that
“the rulings of the court in [Rule 120] proceedings do not have preclusive effect”).3
3
Because the Rule 120 decision lacked preclusive value under Colorado law,
the district court’s decision in this case did not, as Armstrong maintains, contravene
Colorado law or the state court’s finding that JPMorgan Chase failed to meet its
burden to show it held an enforceable note under Colorado law. Nor was the district
court required to afford full faith and credit to the Rule 120 ruling under 28 U.S.C.
§ 1738. See Nichols v. Bd. of Cty. Comm’rs, 506 F.3d 962, 967 (10th Cir. 2007)
(explaining that § 1738 requires federal courts to give a state court ruling only the
preclusive effect it has under the law of the state where it was rendered).
5
Turning to the merits, we need not parse Armstrong’s arguments on each of
the district court’s alternative rulings because we affirm its conclusions as to the
judicial-admission doctrine. “A judicial admission is a formal, deliberate declaration
which a party or his attorney makes in a judicial proceeding for the purpose of
dispensing with proof of formal matters or of facts about which there is no real
dispute.” Kempter v. Hurd, 713 P.2d 1274, 1279 (Colo. 1986). If unequivocal,
“[j]udicial admissions are binding on the party who makes them, are evidence against
such party, and may furnish the basis for a verdict.” Salazar v. Am. Sterilizer Co.,
5 P.3d 357, 365 (Colo. Ct. App. 2000). Armstrong’s only argument that the court
erred in this respect is that relying on his admissions in the bankruptcy case
overlooks the state court’s decision in the Rule 120 proceeding. But as we have just
explained, that decision was made without prejudice to the parties and lacks
preclusive effect.4
4
Under Colorado law, the judicial-admission doctrine applies only to factual
matters. People v. McKimmy, 338 P.3d 333, 338 (Colo. 2014). Armstrong has not
presented any argument that his bankruptcy admissions concerned anything other
than factual matters. Nor has he argued the district court erred in using his
bankruptcy admissions in this case. Accordingly, he has forfeited appellate review of
those issues. See Bronson v. Swensen, 500 F.3d 1099, 1104 (10th Cir. 2007) (“[T]he
omission of an issue in an opening brief generally forfeits appellate consideration of
that issue.”).
6
III
The judgment of the district court is AFFIRMED.
Entered for the Court
Carlos F. Lucero
Circuit Judge
7