Duma v. Jpmorgan Chase

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
KHADIJA DUMA, )
)
Plaintiff, )
)
v. ) Civ. Action No. 10-1307 (ABJ)
)
JPMORGAN CHASE, )
)
Defendant. )
_______________________________ )
MEMORANDUM OPINION
In this civil action filed pro se, plaintiff sues JPMorgan Chase Bank, N.A. (hereinafter
referred to as “Chase”) 1 to quiet title on her property located in the southeast quadrant of the
District of Columbia. Am. Compl. [Doc. # 17] at 1. She alleges that Chase initiated an “illegal
foreclosure action against said property resulting in the plaintiff being forced into bankruptcy . . .
.” Id.
Defendant moves to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to
state a claim upon which relief may be granted. Defendant also asserts that this action is barred
by the doctrine of res judicata since plaintiff has already unsuccessfully challenged the basis of
the foreclosure in bankruptcy court. Upon consideration of the parties’ submissions, the Court
agrees that the complaint is barred by the doctrine that prohibits the successive litigation of the
same claims, and therefore, it will grant defendant’s motion to dismiss under Rule 12(b)(6). 2
1
JPMorgan Chase Bank is a wholly owned subsidiary of JPMorgan Chase, “a financial holding
company, with several subsidiaries.” Dow Chemical Co. v. Reinhard, No. 07-12012-BC, 2008
WL 495501, at *2 (E.D. Mich. Feb. 20, 2008).
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See Smalls v. U.S., 471 F.3d 186, 189 (D.C. Cir. 2006) (“[T]he defense of res judicata, or
claim preclusion, while having a ‘somewhat jurisdictional character’ . . . does not affect the
1
I. BACKGROUND
On July 8, 2010, plaintiff filed an action against Chase in the Superior Court of the
District of Columbia, which defendant removed to this court based on diversity jurisdiction. See
Mem. Op. and Order (Mar. 21, 2011) [Doc. # 16] (granting plaintiff’s motion for leave to amend
the pleadings, denying her motion to remand the complaint to Superior Court, and denying
defendant’s motion to dismiss); Notice of Removal [Doc. # 1]. In the amended complaint,
plaintiff alleges that Chase’s foreclosure action was illegal because “pursuant to D.C. Code,
Chase did not have standing to bring a foreclosure action against my property in the District of
Columbia, and the [United States Office of the Comptroller of the Currency] notified me that
Chase did not have the requisite documentation to support its claims . . . .” Am. Compl. at 1-2.
Therefore, plaintiff seeks to quiet title on the property and $40,000 in damages.
According to the court records supplied by Chase in support of the instant motion to
dismiss, plaintiff filed for Chapter 13 bankruptcy on June 3, 2008, and voluntarily converted the
case to a Chapter 7 filing on July 7, 2008. See Def.’s Mot. [Doc. # 19], Ex. 1 (Docket, U.S.
Bankruptcy Court for the District of Columbia, Bankruptcy Petition # 08-00379). 3 On July 23,
2008, U.S. Bank National Association, as trustee, c/o Chase Home Finance, LLC, as servicing
agent, filed a Proof of Claim for $497,900.05, secured by plaintiff’s property, which it amended
on August 15, 2008, to $503,337.47. Id., Exs. 2, 3. On the date of the amended claim, Chase
moved in the bankruptcy court for relief from the automatic stay, see 11 U.S.C. § 362, as to the
subject matter jurisdiction of the district court.”) (quoting SBC Commc'ns Inc. v. FCC, 407 F.3d
1223, 1229-30 (D.C. Cir. 2005)) (citing cases).
3
In ruling on a Rule 12(b)(6) motion to dismiss, the Court may consider "any documents either
attached to or incorporated in the complaint and matters of which the court may take judicial
notice[,] [e.g.,] matters of a general public nature, such as court records, without converting the
motion to dismiss into one for summary judgment.” Baker v. Henderson, 150 F. Supp.2d 13, 15
(D.D.C. 2001) (citations omitted).
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subject property. Id. Ex. 4. On August 26, 2008, plaintiff filed her opposition to Chase’s
motion, asserting, inter alia, that “[t]he last entry regarding a secured creditor/lienholder with a
documented and timely registered interest at the DC Recorder of Deeds . . . is a Certificate of
Satisfaction from Fremont Bank,” that “JP Morgan Chase . . . misrepresented instruments from
the DC Recorder of Deeds as proof that it holds a secured interest in my property,” and that “[i]f
JP Morgan Chase was assigned a secured lien . . . from Fremont Bank it should have been timely
registered in the DC Recorder of Deeds office; no such registration took place.” Id., Ex. 5
(Opposition to Motion of Secured Creditor for Order Granting Relief from the Automatic Stay as
to Property Commonly Known as 1840 Massachusetts Ave., SE, Washington, DC 20003 ¶ 2).
Plaintiff acknowledged that “[a]t some point JP Morgan Chase may have become the servicer
(for collection of mortgage payments only) for Fremont Bank.” Id. (parenthesis in original). She
claimed that she had “sufficient equity in my home to sell it after the November [presidential]
election . . . without ending up completely penniless and homeless,” id. ¶ 3, and listed “several
[negative] things” she claimed would happen “if this court determines that JP Morgan Chase has
established a proof of claim and . . . releases the automatic stay on my property, id. ¶ 4.
On September 4, 2008, the bankruptcy court conducted a hearing on Chase’s motion for
relief from the stay, at which plaintiff appeared pro se and testified about the equity she claimed
to have had in the property. 4 See Def.’s Mot., Ex. 7 (transcript of the proceeding). On
September 5, 2008, United States Bankruptcy Judge S. Martin Teel, Jr., issued an “Order
Denying Motion for Relief from Automatic Stay Contingent on Debtor Scheduling Unsecured
Claims in Case,” based on plaintiff’s representation at the hearing that she would “waive her
4
See In re Global One, LLC, 411 B.R. 524, 526 (Bankr. S.D.Ga., 2009) (to succeed on a motion
for relief from an automatic stay, the creditor has the “burden of showing there is no equity in
[the] property.”) (citing 11 U.S.C. § 362(g)).
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right to exempt her real property to the extent necessary for the trustee to pay unsecured claims
and administrative claims in the case.” Id., Ex. 8. Judge Teel found that plaintiff had “established
that there is equity in the real property, and assuming that she amends her schedules to include
[her] unsecured debts, there would be reason for the trustee to sell the subject property in order to
pay the unsecured claims.” Id. at 1. He stated that the order “may be vacated, and the motion for
relief from the automatic stay granted,” if plaintiff did not comply with the conditions of the
order by September 19, 2008. Id. at 2.
On September 19, 2008, plaintiff filed a motion to reconsider the order with regard to her
waiver of the right to exempt her real property. Bankruptcy Dkt. # 52. By Order entered on
October 10, 2008, plaintiff’s motion was granted and the order was vacated. Bankruptcy Dkt. #
58. Consequently, Judge Teel issued an order, also entered on October 10, 2008, granting
Chase’s motion for relief from the stay, thereby allowing Chase “to proceed to a foreclosure sale
of the subject property commonly known as 1840 Massachusetts Ave., S.E., Washington, DC
20003 more fully described in the Deed of Trust dated October 7, 2005[,] and recorded among
the land records of said District.” Def.’s Mot., Ex. 9 at 2. Judge Teel found “that the Secured
Creditor [Chase] is entitled to relief from operation of the Automatic Stay,” and he “immediately
modified [the Stay] as to [Chase]” and authorized “immediate[]” implementation and
enforcement of the order. Id.
II. DISCUSSION
Although plaintiff seeks $40,000 in the amended complaint, the amount in controversy,
i.e., the outstanding balance on the loan secured by the subject property, is “more than
$500,000.” Mem. of P. & A. in Supp. of Mot. By Chase to Dismiss Am. Compl. Pursuant to
Rule 12(b)(6) ¶ 5. The court is satisfied that it maintains subject matter jurisdiction over the
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amended complaint to quiet title. See 28 U.S.C. § 1332 (conferring original jurisdiction in the
federal district court over actions between parties of diverse citizenship involving $75,000 or
more); Mem. Op. and Order (Mar. 21, 2011) at 4-6 (denying plaintiff’s motion to remand based
on damages claim “reduced . . . for the sole purpose of defeating federal jurisdiction.”).
Under the doctrine of res judicata, a claim previously adjudicated on the merits by a
court of competent jurisdiction is foreclosed from being relitigated in a new action. Specifically,
“a subsequent lawsuit will be barred if there has been prior litigation (1) involving the same
claims or cause of action, (2) between the same parties or their privies, and (3) there has been a
final, valid judgment on the merits, (4) by a court of competent jurisdiction.” Smalls v. U.S., 471
F.3d 186, 192 (D.C. Cir. 2006) (citations omitted).
Because res judicata “bars any further claim based on the same ‘nucleus of facts’ . . . .,”
Page v. United States, 729 F.2d 818, 820 (D.C. Cir. 1984), it applies not only to claims that were
raised but also to claims that “could have been raised in [the prior] action.” Drake v. FAA, 291
F.3d 59, 66 (D.C. Cir. 2002) (emphasis in original) (quoting Allen v. McCurry, 449 U.S. 90, 94
(1980)); see I.A.M. Nat’l Pension Fund v. Indus. Gear Mfg. Co., 723 F.2d 944, 949 (D.C. Cir.
1983) (noting that res judicata “forecloses all that which might have been litigated previously”).
Therefore, a party cannot escape application of the doctrine by raising a different legal theory or
seeking a different remedy in the new action that was available to her in the prior action. See
Apotex, Inc. v. Food & Drug Admin., 393 F.3d 210, 217 (D.C. Cir. 2004) (observing that “simply
raising a new legal theory . . . is precisely what is barred by res judicata.”) (citations omitted);
U.S. Indus., Inc. v. Blake Constr. Co., Inc., 765 F.2d 195, 205 (D.C. Cir. 1985) (adopting “the
Restatement (Second) of Judgments’ pragmatic, transactional approach,” which “reflects a trend
‘in the direction of requiring that a plaintiff present in one suit all the claims for relief that he
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may have arising out of the same transaction or occurrence.’” (quoting 1B J. Moore, Moore's
Federal Practice ¶ 0.410[1], at 359 (1983)) (other citation omitted).
The overarching issue of whether Chase had a valid claim in plaintiff’s property to
initiate foreclosure proceedings was necessarily decided by Judge Teel’s order that relieved
Chase of the automatic stay. Any challenge to the validity of Chase’s Proof of Claim could have
– and should have -- been raised in the bankruptcy court. The elements of same claim and same
parties are present for res judicata purposes. Therefore, this action is barred.
III. CONCLUSION
For the foregoing reasons, the court grants defendant’s motion to dismiss under Rule
12(b)(6) on the ground of res judicata. A separate order accompanies this Memorandum
Opinion.
__________s/___________
AMY BERMAN JACKSON
United States District Judge
DATE: December 7, 2011
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