Hahn v. US Bank et al

Filing 7

Order of Dismissal. ORDERED that Defendant U.S. Bank's Motion to Dismiss Plaintiff's Amended Complaint 5 is DENIED as moot. FURTHER ORDERED that the Complaint and this action are dismissed without prejudice for lack of subject matter jurisdiction. FURTHER ORDERED that leave to proceed in forma pauperis on appeal is denied, by Judge Lewis T. Babcock on 12/20/11.(lygsl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 11-cv-02752-BNB
LINAYA HAHN,
Plaintiff,
v.
US BANK,
MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC.,
THE PUBLIC TRUSTEE OF BOULDER COUNTY, and
SHERIFF OF BOULDER COUNTY,
Defendants.

ORDER OF DISMISSAL

Plaintiff, Linaya Hahn, initiated this action by filing pro se a “Complaint to Stop
Eviction and to Nullify Foreclosure Sale” on October 21, 2011. She filed an amended
complaint on November 29, 2011, asserting state law claims arising out of the
foreclosure sale of certain real property located in Boulder, Colorado (“the Property”).
Ms. Haun has been granted leave to proceed in forma pauperis pursuant to 28 U.S.C.
§ 1915.
The Court must construe the Complaint liberally because Ms. Hahn is not
represented by an attorney. See Haines v. Kerner, 404 U.S. 519, 520-21 (1972); Hall
v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). If the Complaint reasonably can be
read “to state a valid claim on which the plaintiff could prevail, [the Court] should do so
despite the plaintiff’s failure to cite proper legal authority, her confusion of various legal
theories, her poor syntax and sentence construction, or her unfamiliarity with pleading

requirements.” Hall, 935 F.2d at 1110. However, the Court should not be an advocate
for a pro se litigant. See id. For the reasons set forth below, the Complaint will be
dismissed.
Ms. Haun challenges a foreclosure proceeding initiated by Defendant U.S. Bank
against the Property in the Boulder County District Court. Plaintiff alleges that U.S.
Bank does not have the rights of a holder in due course to the deed of trust to the
Property and, therefore, had no legal right to initiate a foreclosure proceeding because
the Bank failed to comply with certain state statutory requirements and is not in
possession or control of the original promissory note. Plaintiff alleges that “in the
absence of authority to foreclose and proven damages, U.S. Bank was not entitled to an
order authorizing sale.” Amended Compl., at 29. Ms. Haun further challenges the
foreclosure sale on the bases that the Property is patented and argues that any debt
she owed on the Property has been discharged in a bankruptcy proceeding. She
asserts various state law claims based on alleged deficiencies in the state foreclosure
proceeding and fraudulent misrepresentation. Ms. Haun seeks declaratory relief, an
order enjoining Defendants from evicting Plaintiff or any other person from the Property
during the pendency of this action, and asks the Court to cancel the alleged debt and
“reverse or annul the fraudulent foreclosure sale.” Id. at 33. Plaintiff further seeks an
award of damages.
Pursuant to Fed. R. Civ. P. 12(h)(3), the Court must dismiss an action if the Court
lacks subject matter jurisdiction. The issue of subject matter jurisdiction may be raised
sua sponte by the Court at any time during the course of the proceedings. See

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McAlester v. United Air Lines, Inc., 851 F.2d 1249, 1252 (10th Cir. 1988). “The party
seeking to invoke the jurisdiction of a federal court must demonstrate that the case is
within the court’s jurisdiction.” United States v. Bustillos, 31 F.3d 931, 933 (10th Cir.
1994).
“Federal courts are courts of limited jurisdiction; they must have a statutory basis
for their jurisdiction.” Morris v. City of Hobart, 39 F.3d 1105, 1111 (10th Cir. 1994).
There are two statutory bases for federal subject matter jurisdiction: diversity jurisdiction
under 28 U.S.C. § 1332 and federal question jurisdiction under 28 U.S.C. § 1331. In the
amended complaint, Ms. Haun does not allege that any of the defendants violated her
federal constitutional or statutory rights. Instead, she asserts only state law claims for
relief. The amended complaint thus does not implicate a federal question. See 28
U.S.C. § 1331. Ms. Haun must satisfy the diversity jurisdiction statute, 28 U.S.C.
§ 1332, to maintain her action in federal court.
A plaintiff properly invokes § 1332 jurisdiction when she presents a claim
between parties of diverse citizenship that exceeds the required jurisdictional amount,
currently $75,000. See 28 U.S.C. § 1332(a); see also Arbaugh v. Y&H Corp., 546 U.S.
500, 513 (2006). To demonstrate federal jurisdiction pursuant to § 1332, allegations of
diversity must be pleaded affirmatively. See Penteco Corp. Ltd. Partnership-1985A v.
Union Gas Sys., Inc., 929 F.2d 1519, 1521 (10th Cir.1991) (citations omitted); see
also Fed. R. Civ. P. 8(a)(1) (pleading must contain “a short and plain statement of the
grounds for the court’s jurisdiction”).
Ms. Haun has not alleged an adequate basis for exercising diversity

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jurisdiction over her state law claims. Plaintiff alleges that she resides in Lyons,
Colorado. Ms. Haun further alleges that Defendants, The Public Trustee of Boulder
County and the Boulder County Sheriff, county officials, work principally in Boulder,
Colorado. Plaintiff does not allege that these individuals reside outside of Colorado.
The allegations of the amended complaint do not show complete diversity between the
parties and are therefore insufficient to invoke this Court’s diversity jurisdiction.
The Court notes that Ms. Haun’s original complaint included a claim that
Defendants have deprived her of her property without due process of law in violation of
the federal Constitution. However, the federal claim is omitted from Plaintiff’s amended
complaint. Generally, the filing of an amended complaint supersedes the original
complaint “and renders it of no legal effect.” See Davis v. TXO Prod. Corp., 929 F.2d
1515, 1517 (10th Cir.1991) (internal quotation marks omitted); see also Miller v. Glanz,
948 F.2d 1562,1565 (10th Cir. 1991); 6 C. Wright, A. Miller & M. Kane, Fed. Practice
and Procedure § 1476 (1990). Even if the Court were to construe Ms. Haun’s
pleadings together to find that she continues to assert a federal due process claim in
her amended complaint, the Court lacks subject matter jurisdiction over Plaintiff’s claims
because she is asking the Court to review the foreclosure proceeding in the Boulder
County District Court.
The Rooker-Feldman doctrine provides that federal courts, other than the United
States Supreme Court, lack jurisdiction to adjudicate claims seeking review of state
court judgments. See District of Columbia Court of Appeals v. Feldman, 460 U.S.
462, 486 (1983); Rooker v. Fidelity Trust Co., 263 U.S. 413, 415-16 (1923). The

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Rooker-Feldman doctrine precludes “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); see also Johnson v. De Grandy, 512 U.S. 997, 1005-06 (1994) (stating that
the losing party in a state court proceeding is generally “barred from seeking what in
substance would be appellate review of the state court judgment in a United States
district court, based on the losing party’s claim that the state judgment itself violates the
loser’s federal rights.”).
The Rooker-Feldman doctrine bars not only cases seeking direct review of state
court judgments; it also bars cases that are “inextricably intertwined” with a prior state
court judgment. See Feldman, 460 U.S. at 482 n.16. “To determine whether a federal
plaintiff’s claim is inextricably intertwined with a state court judgment, [the Court] must
pay close attention to the relief the plaintiff seeks.” Crutchfield v. Countrywide Home
Loans, 389 F.3d 1144, 1147-48 (10th Cir. 2004). “Where a plaintiff seeks a remedy
that would disrupt or undo a state court judgment, the federal claim is inextricably
intertwined with the state court judgment.” Id. at 1148; see also Mann v. Boatright,
477 F.3d 1140 (10th Cir. 2007) (claim is “inextricably intertwined” with the state court
judgment where success in federal district court would require court “to review and
reject” that judgment); Pittsburgh County Rural Water Dist. No. 7 v. City of Maltster,
358 F.3d 694, 707 (10th Cir. 2004) (federal claim is inextricably intertwined with state

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court judgment if the state court judgment “caused, actually and proximately, the injury
for which [the party] seeks redress”).
Ms. Haun’s claims are inextricably intertwined with the state court judgment.
Plaintiff's federal due process claim is premised on the argument that Defendants have
violated her constitutional rights by depriving her of the Property in a foreclosure
proceeding without providing her adequate notice and an opportunity to be heard.
Compl., at 2. Ms. Haun’s state law claims assert numerous deficiencies and fraud
during the state foreclosure proceeding, all of which stem from her contention that
Defendant U.S. Bank has no legal right to the Property. Furthermore, Plaintiff asks this
Court to “annul” the foreclosure sale and to award her compensatory damages. In
short, all of Ms. Haun’s claims appear to be inextricably intertwined with a state court
order finding her in default on her mortgage payments and authorizing the foreclosure.
See, e.g., Broke v. Chase Home Finance, LLC, No. 10-CV-00692-WYD-MJW, 2010
WL 2691693 at *6 (D. Colo. July 6, 2010) (claim that bank lacked a valid security
interest was resolved against plaintiff in the state court foreclosure proceeding in
determining that a default occurred and was barred by Rooker-Feldman doctrine);
Mayhew v. Cherry Creek Mortg. Co., Inc., No. 09-cv-00219-PAB-CBS, 2010 WL
935674 at **16-17 (D. Colo. March 10, 2010) (claim seeking to challenge or reverse
completed state foreclosure proceeding was barred by Rooker-Feldman doctrine);
Burlinson v. Wells Fargo Bank, N.A., No. 08-cv-01274-REB-MEH, 2009 WL 646330
at **5-6 (D. Colo. March 9, 2009) (same).

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If Ms. Haun’s claims are not barred by the Rooker-Feldman doctrine, she must
nonetheless pursue relief in the state courts. Colo. R. Civ. P. 120(d) provides for review
of an order authorizing sale in “any court of competent jurisdiction.” However, the
Colorado Rules of Civil Procedure cannot confer jurisdiction in federal court. The Court
has federal question jurisdiction over the federal due process claim and could potentially
exercise supplemental jurisdiction over a Rule 120 proceeding claim, pursuant to 28
U.S.C. § 1367. However, this Court’s exercise of supplemental jurisdiction over the
plaintiff’s Rule 120 proceeding is inappropriate for two reasons. First, § 1367 allows
federal courts to decline to exercise supplemental jurisdiction if “the claim substantially
predominates over the claim or claims over which the district court has original
jurisdiction.” 28 U.S.C. § 1367(c)(2). Here, whether U.S. Bank had the legal right under
state law to foreclose on the Property is the crux of Plaintiff’s case, as well as the basis
of her federal due process claim. See Burlinson, 2009 WL 646330 at *6. Thus, the
Rule 120 proceeding initiated by Defendant U.S. Bank substantially predominates over
the federal claim. Id.
Second, the exercise of supplemental jurisdiction over the Rule 120 proceeding
is not warranted where there is an ongoing state proceeding and the state court
provides an adequate forum to present any federal challenges. Id. at *7 (citing
Younger v. Harris, 401 U.S. 37 (1971)). Younger abstention is appropriate where the
state courts provide an adequate forum to hear the claims raised in the federal
complaint and the state proceedings involve important state interests. See Weitzel v.
Div. of Occupational & Prof’l Licensing, 240 F.3d 871, 875 (10th Cir. 2001). In this

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case, it is unclear whether there is an ongoing state proceeding at this time. If there has
been a final judgment, Rooker-Feldman applies. If the Rule 120 proceeding is
ongoing, Ms. Haun can continue to challenge the foreclosure sale and U.S. Bank’s legal
right to the Property in the state courts. Furthermore, matters concerning foreclosure
have traditionally been resolved in the state courts. See Colo. R. Civ. P. 120(f)
(providing that “[a]ny proceeding under this Rule involving a consumer obligation shall
be brought in and heard in the county in which such consumer signed the obligation or
in which the property or a substantial part thereof is located.”). Accordingly, the Court
finds that, to the extent the Plaintiff’s claims are not barred by Rooker-Feldman, this
Court should abstain from exercising jurisdiction over the claims to allow her to pursue
her legal remedies in the state district and appellate courts.
Finally, the Court certifies pursuant to 28 U.S.C. § 1915(a)(3) that any appeal
from this order would not be taken in good faith and therefore in forma pauperis status
will be denied for the purpose of appeal. See Coppedge v. United States, 369 U.S.
438 (1962). If Plaintiff files a notice of appeal, she must also pay the full $455 appellate
filing fee or file a motion to proceed in forma pauperis in the United States Court of
Appeals for the Tenth Circuit within thirty days in accordance with Fed. R. App. P. 24.
Accordingly, it is
ORDERED that Defendant U.S. Bank’s Motion to Dismiss Plaintiff’s Amended
Complaint, filed December 5, 2011 (Doc. #5) is DENIED as moot. It is
FURTHER ORDERED that the Complaint and this action are dismissed without
prejudice for lack of subject matter jurisdiction. It is

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FURTHER ORDERED that leave to proceed in forma pauperis on appeal is
denied.
DATED at Denver, Colorado, this 20th

day of

December

, 2011.

BY THE COURT:

s/Lewis T. Babcock
LEWIS T. BABCOCK, Senior Judge
United States District Court

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