John Berene, et al v. Nationstar Mortgage LLC, et al
Filing
Opinion issued by court as to Appellants John Berene and Camron Longson. Decision: Reversed and Remanded. Opinion type: Non-Published. Opinion method: Per Curiam. The opinion is also available through the Court's Opinions page at this link http://www.ca11.uscourts.gov/opinions.
Case: 16-13939
Date Filed: 04/20/2017
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-13939
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D.C. Docket No. 0:14-cv-61153-RNS
JOHN BERENE,
CAMRON LONGSON,
Plaintiffs - Appellants,
versus
NATIONSTAR MORTGAGE LLC,
NEWPORT MANAGEMENT CORPORATION,
SOUTHWEST BUSINESS CORPORATION,
Defendants - Appellees,
BALBOA INSURANCE COMPANY, et al.,
Defendants.
________________________
Appeal from the United States District Court
for the Southern District of Florida
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(April 20, 2017)
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Before WILSON and BLACK, Circuit Judges, and RESTANI, ∗ Judge.
PER CURIAM:
Appellants John Berene and Camron Longson (collectively, “Appellants”)
appeal the district court’s dismissal of two of their claims in their operative
complaint for lack of subject-matter jurisdiction pursuant to the Rooker-Feldman
doctrine.1 After careful review, we reverse and remand.
I.
On April 26, 2007, Appellants obtained a home mortgage loan, which was
serviced by Aurora Loan Services, LLC (“Aurora”). On November 3, 2008,
Aurora initiated a foreclosure action in state court against Appellants, alleging they
were in default. Nationstar Mortgage LLC (“Nationstar”), Aurora’s successor in
interest, began servicing the loan after Aurora became insolvent. On December 10,
2013, the state court entered a judgment of foreclosure in favor of Nationstar.
Shortly thereafter, Appellants sent Nationstar a letter, in which they invoked the
Real Estate Settlement Procedures Act (“RESPA”)’s error resolution procedures as
provided in Regulation X, and contended that Nationstar both failed to apply
credits for certain payments and improperly charged Appellants for force-placed
insurance.
∗
Honorable Jane A. Restani, Judge for the United States Court of International Trade, sitting by
designation.
1
The name of this doctrine derives from two cases: Rooker v. Fidelity Trust Co., 263 U.S. 413
(1923) and D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983).
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On May 15, 2014, Appellants filed a complaint against Nationstar and others
in federal court. While federal litigation was pending, Nationstar and Appellants
jointly sought vacatur of the state court foreclosure judgment as part of a loan
modification agreement. On December 9, 2014, the state court entered an order to
vacate that judgment. After the state court vacated its judgment and on August 6,
2015, Appellants filed the operative third amended complaint in the federal case.
Relevant here, they allege, in Counts I and III, that Nationstar failed to comply
with Regulation X’s error resolution procedures and, in doing so, acted negligently
per se.
The district court dismissed those claims, reasoning that the RookerFeldman doctrine deprived it of subject-matter jurisdiction because Appellants
were “state-court losers” and that it did not have the power to disturb the validity
of the prior state court foreclosure judgment. Appellants now appeal that
dismissal. They argue that the district court improperly expanded the scope of the
Rooker-Feldman doctrine by applying it to a vacated state court judgment and that
the doctrine does not bar their challenges because their dismissed claims are not
“inextricably intertwined” with the state court judgment.
II.
We review the application of the Rooker-Feldman doctrine de novo.
Lozman v. City of Riviera Beach, 713 F.3d 1066, 1069 (11th Cir. 2013). The
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Rooker-Feldman doctrine bars federal district courts from “review[ing] final
judgments of a state court . . . .” Id. at 1072 (quoting Nicholson v. Shafe, 558 F.3d
1266, 1271 (11th Cir. 2009)). The doctrine is “narrow” and “confined 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).
As the Supreme Court has explained, the Rooker-Feldman doctrine was not
intended to create “a wide-reaching bar on the jurisdiction of lower federal
courts, . . . .” Lance v. Dennis, 546 U.S. 459, 464 (2006) (reemphasizing the
“narrowness” of the doctrine). Accordingly, we have recognized that “the RookerFeldman doctrine cannot spring into action and vanquish properly invoked subject
matter jurisdiction in federal court when state proceedings subsequently end.”
Nicholson, 558 F.3d at 1279 n.13; see also Exxon, 544 U.S. at 292–94.
The district court erred in holding that Rooker-Feldman bars Appellants’
claims because Appellants were not state-court losers when they filed their
operative complaint. Although there was a state-court foreclosure judgment
entered against Appellants when they filed their initial federal complaint on May
15, 2014, the state court vacated that judgment on December 9, 2014. It was not
until almost eight months later, on August 6, 2015, that the district court granted
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Appellants’ motion for leave to amend their complaint and the Appellants filed the
operative complaint. The operative complaint specified that the prior state court
“judgment was later vacated, by consent, after the parties entered into a loan
modification agreement.” Third Am. Compl. for Damages and Declaratory Relief
¶ 27, ECF No. 119. Therefore, at that point in time, the district court could not
collaterally review any state court judgment, as it was clear from the pleadings that
the previously final state-court judgment was no longer in effect.
Although Nationstar would prefer us to rigidly apply the Rooker-Feldman
doctrine by considering only the facts that existed when the Appellants filed their
initial federal complaint, the Supreme Court’s Rooker-Feldman precedents favor a
more practical approach given these unique facts. Clearly, concerns of a district
court reviewing a final state-court judgment are not implicated here due to the
subsequent vacatur. Indeed, the lack of a final judgment makes the present
situation more akin to concurrent state and federal jurisdiction rather than federal
appellate jurisdiction over a state-court judgment. Exxon, 544 U.S. at 283 (“[T]he
doctrine has sometimes been construed [by district courts] to extend far beyond the
contours of the Rooker and Feldman cases, overriding Congress’ conferral of
federal-court jurisdiction concurrent with jurisdiction exercised by state
courts . . . .”). Tellingly, if, rather than filing their operative complaint, the
Appellants had simply refiled their action after the state court judgment had been
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vacated, the Rooker-Feldman doctrine would not prevent the district court from
exercising jurisdiction over the refiled action. Rather than require Appellants to
“jump through these judicial hoops merely for the sake of hypertechnical
jurisdictional purity[,]” Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826,
837 (1989), we conclude that Appellants are not “state-court losers” for the
purposes of Rooker-Feldman where they were granted leave to file and did file the
operative complaint after the state court vacated its foreclosure judgment.
Accordingly, we need not reach the inextricably intertwined issue. See, e.g.,
Lozman, 713 F.3d at 1074.
For the foregoing reasons, the district court’s dismissal of Counts I and III of
Appellants’ operative complaint is
REVERSED and REMANDED.
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BLACK, Circuit Judge, dissenting:
I respectfully dissent because I believe the time-of-filing rule applies in this
case. See Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284, 125
S. Ct. 1517, 1521–22 (2005) (Rooker-Feldman applies in cases where “state-court
judgments [were] rendered before the district court proceedings commenced”
(emphasis added)); Nicholson v. Shafe, 558 F.3d 1266, 1275 (11th Cir. 2009)
(“Rooker-Feldman will not bar subject matter jurisdiction where a plaintiff
initiates the federal lawsuit before the state court proceedings have ended.”
(emphasis added)); Coggeshall v. Mass. Bd. of Registration of Psychologists, 604
F.3d 658, 664 n.6 (1st Cir. 2010) (“For Rooker-Feldman purposes, courts must
look to the situation as it existed when the federal suit was commenced.” (citations
omitted)).
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