DocketNumber: Case No. 16–CV–524–JHP
Judges: Eastern, Oklahoma, Payne
Filed Date: 3/21/2018
Status: Precedential
Modified Date: 10/18/2024
Before this Court are (1) Defendants' Motion to Dismiss Second Amended Complaint (Dkt. 41), (2) Defendants' Motion for Leave to File Judgment Rolls (Dkt. 42), (3) Plaintiff's "Motion for Leave to Amend Its Second Amended Complaint" (Dkt. 46), (4) Plaintiff's "Emergency Motion for a Evidentiary Hearing for a Temporary Restraining Order or Preliminary Injunction" (Dkt. 48), and (5) Plaintiff's "Emergency Motion for a Order to Show Cause and Request an Evidentiary Hearing" (Dkt. 49). Plaintiff is proceeding pro se and in forma pauperis . In the interest of efficiency, the Court will address each of the pending motions in this Opinion and Order.
BACKGROUND
Plaintiff Timmy Dewayne Jester ("Plaintiff") filed his original pro se Complaint in this matter on December 2, 2016, seeking relief against Defendants Wells Fargo Bank, N.A. and Wells Fargo Home Mortgage (together, "Defendants") for foreclosure fraud and unjust enrichment. (Dkt. 2). On July 26, 2017, after obtaining permission from the Court, Plaintiff filed a Second Amended Complaint, adding various causes of action against Defendants.
The Second Amended Complaint is rambling, repetitive, and difficult to decipher. However, it is plain from the pleading and Defendants' Motion to Dismiss that Plaintiff's claims stem from his attempts to prevent Defendants from enforcing their *1238Oklahoma State Court Foreclosure Judgment against him, in Wagoner County Case No. CJ-2012-308 (the "2012 Foreclosure"). The relevant proceedings are below described.
I. The 2012 Foreclosure Proceeding
In the 2012 Foreclosure, Defendants moved for summary judgment, and Plaintiff opposed Defendants' motion by questioning the validity of the indorsement from Washington Mutual Bank, FA, on his note and by alleging Mortgage Electronic Registration Services, Inc. ("MERS") mortgages are invalid in Oklahoma. (See Dkt. 41-3 (Jester's Response to Motion for Summary Judgment, June 16, 2014) ).
Plaintiff sought to vacate the judgment in the 2012 Foreclosure. (Dkt. 41-6 (Jester's Amended Response for Motion to Vacate Summary Judgment, Feb. 20, 2015) ). In that motion, Plaintiff raised numerous allegations against Defendants, including: (1) the indorsement on the note was forged and invalid, (2) Plaintiff's mortgage payments had not been credited properly, in violation of various statutes including the Oklahoma Consumer Protection Act ("OCPA"), 15 Okl. St. §§ 752 et seq. , (3) MERS mortgages cannot be valid in Oklahoma, (4) misconduct occurred during Plaintiff's Chapter 7 bankruptcy proceeding in 2011, (5) Plaintiff's prior counsel during the 2012 Foreclosure acted negligently and incompetently, and (6) the loan was improperly serviced, in violation of the Real Estate Procedures Act ("RESPA"),
II. Plaintiff's Chapter 7 Bankruptcy Proceeding
Also pertinent to this matter is Plaintiff's 2011 bankruptcy proceeding, Case No. 11-80627-TRC, in the United States Bankruptcy Court for the Eastern District of Oklahoma (the "Bankruptcy Case"). A Chapter 7 Bankruptcy discharge was entered in that case on July 27, 2011. (See Dkt. 41-1 (Discharge of Debtor) ). On October 28, 2014, Plaintiff sought to reopen his Chapter 7 Bankruptcy to pursue an adversary proceeding against Defendants. (See Dkt. 41-10 (Motion to Reopen Case for Purpose of Complaints) ). Plaintiff requested the Bankruptcy Court review the state court judgment against him in the 2012 Foreclosure. (Id. ). He alleged a litany *1239of violations of state and federal law committed by Defendants, including violation of the bankruptcy discharge injunction and automatic stay laws by foreclosing on his mortgage; fraud; robo-signing; misapplication of his payments; violation of RESPA; and intentional infliction of emotional distress. (Id. ). On December 30, 2014, following a hearing, Judge Cornish issued an order denying Plaintiff's request to reopen, finding the Bankruptcy Court had no authority to set aside the state court judgment in the 2012 Foreclosure. (Dkt. 41-11 (Order Denying Motion to Reopen) ). Judge Cornish concluded the Rooker - Feldman doctrine prevented the Bankruptcy Court "from acting as an appellate court to review a final, state court judgment or claims inextricably intertwined with them." (Id. at 4). Judge Cornish also found no violation of the automatic stay and no violation of the discharge injunction. (Id. ).
Plaintiff appealed Judge Cornish's ruling to the Bankruptcy Appellate Panel ("BAP"), which affirmed the Bankruptcy Court's order on October 22, 2015. (Dkt. 41-12 (Opinion, BAP Appeal No. EO-15-2) ). Plaintiff then appealed to the Tenth Circuit Court of Appeals, which affirmed the BAP's Opinion on July 25, 2016. (Dkt. 41-13 (Order in Tenth Circuit Case No. 15-7079) ).
III. The Present Proceeding
Following the Tenth Circuit's Order and Judgment in the Bankruptcy Case, Plaintiff filed a Complaint in this matter. In the Second Amended Complaint, Plaintiff again seeks review of the 2012 Foreclosure judgment, along with review of the judgment in the Bankruptcy Case. The Second Amended Complaint lists twenty causes of action against Defendants: (1) foreclosure fraud; (2) unjust enrichment; (3) fraud upon the court; (4) misrepresentation; (5) breach of contract; (6) misapplication of payments; (7) deceit; (8) violation of RESPA,
Defendants have filed a motion to dismiss the allegations against them pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Dkt. 41). Defendants simultaneously filed a Motion for Leave to File Judgment Rolls (Dkt. 42). Plaintiff has responded to the Defendants' motion. (Dkt. 43). Defendants have filed a Reply.
*1240(Dkt. 44). Plaintiff thereafter filed an unauthorized Surreply brief. (Dkt. 45).
On September 7, 2017, Plaintiff filed a Motion for Leave to Amend the Second Amended Complaint. (Dkt. 46). Defendants filed an Objection and Response to Plaintiff's Motion to Amend. (Dkt. 47). On November 3, 2017, Plaintiff filed two motions: an "Emergency Motion for a Evidentiary Hearing for a Temporary Restraining Order or Preliminary Injunction" (Dkt. 48) and an "Emergency Motion for a Order to Show Cause and Request an Evidentiary Hearing" (Dkt. 49). Defendants filed an Objection and Response to each motion. (Dkts. 50, 51). The pending motions are now ripe for review by this Court.
DISCUSSION
IV. Defendants' Motion to Dismiss Second Amended Complaint
A. Standard of Review
1. Rule 12(b)(1) - Lack of Subject Matter Jurisdiction
The party asserting jurisdiction has the burden to allege jurisdictional facts demonstrating the presence of federal subject matter jurisdiction. Montoya v. Chao ,
The second type of attack goes beyond the allegations in the complaint and challenges "the facts upon which subject matter jurisdiction depends." Holt v. United States ,
2. Review of Pro Se Pleadings
The Court further notes that, while pro se pleadings must be liberally construed and must be held to less stringent standards than formal pleadings drafted by lawyers, Haines v. Kerner ,
B. Subject Matter Jurisdiction Over Claims Challenging the State Court Judgment
1. State-Based Claims
In the Second Amended Complaint, Plaintiff asserts fifteen state law claims that were addressed in or intertwined with the 2012 Foreclosure judgment: (1) foreclosure fraud; (2) unjust enrichment; (3) fraud on the court; (4) misrepresentation; (5) breach of contract; (6) misapplication of payments; (7) deceit; (8) violations of the OCPA for misapplication of payments; (9) lack of standing; (10) dual tracking; (11) promissory fraud; (12) actual fraud; (13) constructive fraud; (14) forgery; and (15) infliction of emotional distress. (See Dkt. 38, at 1). Defendants seek dismissal of these claims, because they are based on two allegations already rejected by the Wagoner County District Court in the 2012 Foreclosure-(1) that Defendants lack standing to enforce the promissory note because the Washington Mutual Bank indorsement is fraudulent, and (2) Defendants misapplied his payments. Defendants argue Plaintiff's claims amount to an improper request for this Court to invalidate the state court's rulings in the 2012 Foreclosure. The Court agrees.
As Defendants correctly point out, Plaintiff's claims, as enumerated above, are subject to dismissal for lack of subject matter jurisdiction, pursuant to the Rooker - Feldman doctrine. This doctrine is a jurisdictional prohibition, based on
The doctrine also prohibits federal courts from hearing any claim that is "inextricably intertwined" with a state court judgment. Tal v. Hogan ,
*1242Bolden v. City of Topeka, Kan. ,
Here, Plaintiff alleges in the Second Amended Complaint that the "Nature of the Case" is, in part:
Judge Dennis Shook of the Wagoner County District Court State of Oklahoma Case No. CJ-2012-0308 incorrectly granted Judgment on October 8, 2014 in favor of the Defendant, Wells Fargo Bank, N.A. in the Foreclosure Action filed against the Plaintiff Timmy Jester on July 6, 2012 where genuine issues of material facts exist which timely raised and objected to by the Plaintiff. Where the Defendant Lacked Standing to Foreclose on the Plaintiffs Property and the Court Lacked Jurisdiction. The Foreclosure Judgment was based on Fraud, Deceit, and Misrepresentation therefore the Foreclosure Judgment is Void.
(Dkt. 38, at 8). Plaintiff further alleges throughout the Second Amended Complaint various grounds why the Wagoner County District Judge in the 2012 Foreclosure was wrong in granting judgment against him, and why Defendants, Defendants' attorneys, and Plaintiff's previous attorneys are to blame. These allegations center around claims that Defendants failed to credit his mortgage payments properly, Defendants lacked standing to foreclose on his property, and the Washington Mutual indorsement on the promissory note is fraudulent.
Although Plaintiff's rambling allegations make it difficult to parse out the facts underlying each of his numerous causes of action, it is clear that Plaintiff's state-based claims are all attacks on the judgment in the 2012 Foreclosure. Plaintiff already raised these challenges in the 2012 Foreclosure, and the Wagoner County District Court and Oklahoma COCA already rejected these arguments in that foreclosure proceeding. This Court could not find in Plaintiff's favor on his state-based claims, and grant his requested relief, without undermining the 2012 Foreclosure judgment. Moreover, the Tenth Circuit has clearly stated that allegations of fraud in the state court proceeding do not prevent application of the Rooker - Feldman doctrine to bar those fraud claims. See Tal ,
After Plaintiff appealed the Wagoner County District Court's judgment against him in the 2012 Foreclosure to the Oklahoma COCA, and his petition for certiorari to the Oklahoma Supreme Court was denied, Plaintiff's remaining recourse was to petition the United States Supreme Court pursuant to
2. FDCPA and RESPA Claims
Plaintiff additionally alleges Defendants violated the FDCPA and RESPA. Specifically, Plaintiff alleges an FDCPA violation occurred when Defendants misapplied his mortgage payments (see Dkt. 38, at 25). Plaintiff fails to state any facts to support a RESPA claim, but such a claim would necessarily be based on the servicing *1243of Plaintiff's mortgage loan. See, e.g. ,
These claims are also barred under Rooker - Feldman , because they present issues that are inextricably intertwined with the 2012 Foreclosure proceedings. A determination on the FDCPA and RESPA issues would necessarily require this Court to revisit the question of whether Defendants' foreclosure was proper. This question was already answered as part of the 2012 Foreclosure judgment, and the Rooker - Feldman doctrine prohibits this Court from reviewing and rejecting that judgment. See Dillard v. Bank of New York ,
3. Constitutional Claims
Plaintiff alleges the state courts in the 2012 Foreclosure violated his constitutional rights under the Fourteenth and Fifteenth Amendments. However, as Defendants point out, Plaintiff filed these claims in the wrong court. Pursuant to
C. Subject Matter Jurisdiction over Claims Decided in Bankruptcy Court
In the Second Amended Complaint, Plaintiff asserts two claims that pertain to his federal Bankruptcy Case: (1) violation of the automatic stay laws, codified at
Res judicata , or claim preclusion, "generally applies when there is a final judgment on the merits which precludes the parties or their privies from relitigating the issues that were decided or issues that could have been raised in the earlier action." Driver Music Co., Inc. v. Commercial Union Ins. Cos. ,
Here, the elements of res judicata are met. First, Plaintiff's federal Bankruptcy Case was fully adjudicated and ended with a judgment on the merits, which was affirmed by the Tenth Circuit BAP and the Tenth Circuit Court of Appeals. (See Dkt. 41-11 (Order Denying Motion to Reopen); Dkt. 41-12 (Opinion, BAP Appeal No. EO-15-2); Dkt. 41-13 (Order, Tenth Circuit Case No. 15-7079) ). Second, Plaintiff and Defendants were parties to the prior Bankruptcy Case. Third, Plaintiff's claims for violation of the automatic stay and discharge injunction were addressed in the Bankruptcy Case, and Plaintiff's claims for those violations arise from the same set of facts in this case as in the Bankruptcy Case. See Nwosun ,
D. Permanent Injunction
Finally, Plaintiff requests a permanent injunction preventing the foreclosure sale of his home. (See Dkt. 38, at 38). To obtain a permanent injunction, a party must prove: "(1) actual success on the merits; (2) irreparable harm unless the injunction is issued; (3) the threatened injury outweighs the harm that the injunction may cause the opposing party; and (4) the injunction, if issued, will not adversely affect the public interest." Prairie Band Potawatomi Nation v. Wagnon ,
For the reasons explained above, this Court concludes that Plaintiff cannot succeed on the merits of his various claims because they are barred under either the Rooker - Feldman doctrine or res judicata . This Court has no authority to enjoin the judgment in the 2012 Foreclosure proceeding. Accordingly, Plaintiff cannot obtain a permanent injunction.
E. Plaintiff's Response and Surreply
Plaintiff's Response (Dkt. 43) and Surreply (Dkt. 45) in opposition to the Motion to Dismiss do not offer any basis to save his claims. In his Response brief, Plaintiff reiterates the allegations in the Second Amended Complaint and denies that he is seeking review of the 2012 Foreclosure judgment. However, Plaintiff also states in his Response that "the Oklahoma State Court Foreclosure Judgment is not valid, it is void" (Dkt. 43, at 2), and it is clear from the substance of his Response that he indeed seeks to reopen the 2012 Foreclosures proceedings. Plaintiff's adamant *1245denials in this regard do not change the circumstances of this case.
In the Response, Plaintiff asserts he has a right to plead his case based on the United States Constitution,
In his Response, Plaintiff relies on the Supreme Court's decision in Hazel-Atlas Glass Co., v. Hartford-Empire Co. ,
Plaintiff further argues the state court decided only two of his present twenty claims, and the counterclaims he did raise in the 2012 Foreclosure proceeding were ignored by the state court. However, as explained above, all of Plaintiff's claims (apart from the violation of the automatic stay and discharge injunction) would require this Court to void the state court judgment and reconsider issues already decided in the state court. If Plaintiff's counterclaims were not heard by the state court, the appropriate remedy was to petition the United States Supreme Court pursuant to
In addition, Plaintiff states in his Response brief that he was unaware he could appeal to the United States Supreme Court, and the Supreme Court would have ruled against him anyway. (Dkt. 43, at 3-4). Whatever the reason, Plaintiff's failure to follow proper appellate procedure does not confer this Court jurisdiction over Plaintiff's claims. Plaintiff's claims must be dismissed.
V. Plaintiff's Motion for Leave to Amend
Plaintiff seeks leave to amend his Second Amended Complaint, to add several new defendants: (1) attorneys at Shapiro and Cejda L.L.C., (2) attorneys at Baer Timberlake Coulson & Cates PC, and (3)
*1246attorney Mark Hardin with Pierce Couch Hendrickson Baysinger & Green L.L.P. (together, the "Attorneys") (Dkt. 46). Plaintiff seeks to add these defendants to assert claims against them for allegedly providing false documentation to the state court in the 2012 Foreclosure proceeding. Plaintiff also asks for leave to amend to clarify the cause of action and the nature of the case. Plaintiff does not attach a proposed Third Amended Complaint, and he does not explain how he proposes to amend his existing claims. Defendants oppose Plaintiff's request to amend. (Dkt. 47).
A. Standard of Review
Plaintiff seeks amendment pursuant to Federal Rule of Civil Procedure 15(a)(2). Under Rule 15(a)(2), " 'a party may amend its pleading only with the opposing party's written consent or the court's leave.' " Bylin v. Billings ,
B. Proposed Amendment to Add New Defendants
As Defendants point out, it would be futile to allow an amendment to add their attorneys as defendants, because Oklahoma does not recognize a civil claim for the type of fraud alleged-intrinsic fraud. The Oklahoma Supreme Court defines "intrinsic fraud" as:
any fraudulent conduct of the successful party which was practiced during the course of an actual adversary trial of the issues joined and which had no effect directly and affirmatively to mislead the defeated party to his injury after he announced that he was ready to proceed with the trial. If during the trial the successful party urges forged instruments, or perjured testimony or fails to introduce witnesses of whom he has knowledge and whose testimony would help his adversary and impair his own case, he is guilty of fraud; but it is intrinsic fraud, for relief from which application must be made to the court having jurisdiction of the issues joined and tried.
Patel v. OMH Medical Center, Inc. ,
In addition, the Oklahoma Supreme Court has held that a second action attacking alleged intrinsic fraud committed in a prior action is improper.
*1247FDIC v. Jernigan ,
Because Plaintiff alleges the Attorneys' fraud occurred within the course of the 2012 Foreclosure, Oklahoma law clearly requires Plaintiff to seek relief from such fraud in the Oklahoma state court where that proceeding occurred. Accordingly, Plaintiff cannot state a valid claim against the Attorneys for fraud on the court, and this Court must deny Plaintiff's request to add these defendants as futile.
C. Proposed Amendment to Clarify Existing Claims
The Court also denies Plaintiff's request to amend his existing claims to clarify the cause of action and the nature of the case. Plaintiff already has had ample opportunity to state his claims and cure any deficiencies by previous amendment, and Plaintiff points to no proposed amendments to the Second Amended Complaint that would affect the outcome of this case. "Where the party seeking amendment knows or should have known of the facts upon which the proposed amendment is based but fails to include them in the original complaint, the motion to amend is subject to denial." Las Vegas Ice & Cold Storage Co. v. Far W. Bank ,
VI. Plaintiff's Emergency Motion for a Temporary Restraining Order or Preliminary Injunction
On November 3, 2017, Plaintiff filed an "Emergency Motion for a Evidentiary Hearing for a Temporary Restraining Order or Preliminary Injunction." (Dkt. 48). In this motion, Plaintiff states his property was sold at foreclosure auction on October 17, 2017, by Sheriff's sale, and he is currently subject to eviction from the foreclosed property. Plaintiff reiterates many of the allegations in the Second Amended Complaint, and he again asserts the 2012 Foreclosure judgment is void and should be vacated by this Court. Plaintiff requests a temporary restraining order, a preliminary injunction, and a permanent injunction enjoining Defendants from selling or attempting to sell the property. In addition, he requests a declaration that sale of the property to enforce the deed of trust/mortgage is improper and that Defendants do not legally hold the note or deed of trust or have the right to foreclose on the property. (See Dkt. 48, at 10-11).
This Court previously denied Plaintiff's request for a temporary restraining order and preliminary injunction. (See Dkt. 6 (Opinion and Order, Dec. 7, 2016) ). In that Opinion and Order, the Court concluded Plaintiff's attempt to enjoin the sale of the property was barred by the Rooker - Feldman doctrine, because it sought to undo the state court's order in the 2012 Foreclosure proceeding. (See
Moreover, the Court concludes above in Part I.D that Plaintiff is not entitled to a permanent injunction. Plaintiff's motion presents no arguments or facts to change *1248that conclusion. Accordingly, Plaintiff's request for a permanent injunction is denied.
VII. Plaintiff's Emergency Motion for an Order to Show Cause
Finally, on November 3, 2017, Plaintiff filed an "Emergency Motion for a Order to Show Cause and Request an Evidentiary Hearing." (Dkt. 49). In this motion, Plaintiff asks the Court to set a hearing regarding cancellation of the sale of Plaintiff's property. Plaintiff further requests that the Court vacate/dismiss the 2012 Foreclosure judgment, that the assignment of mortgage to Wells Fargo Bank NA be removed from Plaintiff's land record, and that Defendants be forever barred from filing a claim on the property. (See Dkt. 49, at 12-13).
In response, Defendants state the confirmation of the Sheriff's sale of the subject property has already occurred, which renders the hearing request moot. (Dkt. 51). Defendants further argue the Court lacks jurisdiction to vacate or dismiss the 2012 Foreclosure judgment pursuant to the Rooker - Feldman doctrine and this Court lacks jurisdiction to remove a recorded assignment of mortgage from the land records.
The Court agrees it lacks authority to grant Plaintiff's requested relief. A hearing on Plaintiff's motion is unnecessary. For the reasons explained above in Part I.B.1, Rooker - Feldman bars this Court from vacating or dismissing the judgment in the 2012 Foreclosure proceeding. Further, Plaintiff cites no authority that would permit this Court to remove an assignment of mortgage from the land records, particularly when this Court is prohibited from vacating the 2012 Foreclosure judgment, and the Court is unaware of any such authority. Finally, a permanent injunction prohibiting Defendants from filing a claim on Plaintiff's property is unavailable, for the reasons explained above in Part I.D. Accordingly, Plaintiff's motion (Dkt. 49) is denied in its entirety.
CONCLUSION
For the reasons outlined above, the Court concludes that dismissal of this action as to Defendants is warranted. Accordingly, Defendant's Motion to Dismiss (Dkt. 41) is GRANTED . Plaintiff's "Motion for Leave to Amend Its Second Amended Complaint" (Dkt. 46) is DENIED . Plaintiff's action is DISMISSED WITHOUT PREJUDICE as to both Defendants.
In addition, it is ordered that: Plaintiff's "Emergency Motion for a Evidentiary Hearing for a Temporary Restraining Order or Preliminary Injunction" (Dkt. 48) is DENIED . Plaintiff's "Emergency Motion for a Order to Show Cause and Request an Evidentiary Hearing" (Dkt. 49) is DENIED . Defendants' Motion for Leave to File Judgment Rolls (Dkt. 42) is DENIED .
IT IS SO ORDERED this 21st day of March, 2018.
The Court may take judicial notice of the public filings in the 2012 Foreclosure and in Plaintiff's Chapter 7 Bankruptcy proceeding, because they are matters of public record. Tal v. Hogan ,
It is unclear what subsection of the OCPA Plaintiff is referencing, as 15 Okl. St. § 761 was repealed in 1980. Plaintiff later refers to 15 Okl. St. §§ 761.1(A), (B), and (E), which merely describe liability and penalties for violations of the OCPA.
Plaintiff alleges the relevant statutes under the FDCPA are
Pursuant to Local Civil Rule 7.1(e), supplemental briefs are not encouraged and may be filed "only upon motion and leave of Court." Plaintiff failed to comply with this requirement. However, Defendants have not objected to Plaintiff's filing of a surreply. In the interest of giving Plaintiff the opportunity to fully litigate his claim, the Court accepts the surreply and will consider its substance.
Because the Court disposes of Plaintiff's claims based on lack of subject matter jurisdiction pursuant to Rooker - Feldman and res judicata , the Court will not consider Defendants' various "alternative" arguments for dismissal, including Defendants' arguments for dismissal based on Rule 12(b)(6).