McDonald v. J.P. Morgan Chase Bank N.A. et al
OPINION AND ORDER GRANTING, IN PART, MOTION TO DISMISS: The Defendants' Motion to Dismiss 53 is GRANTED IN PART, insofar as the Court DISMISSES all of Mr. McDonald's claims in the Amended Complaint, with the exception of hi s tenth (RESPA), eleventh (RESPA), and thirteenth (C.R.S. § 38-40-103) claims for relief, for lack of subject-matter jurisdiction under Rooker-Feldman, and DENIED IN PART, insofar as the remaining three claims shall proceed to discovery. by Chief Judge Marcia S. Krieger on 1/29/14.(msksec, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Honorable Marcia S. Krieger
Civil Action No. 12-cv-02749-MSK
R. KIRK MCDONALD,
J.P. MORGAN CHASE BANK, N.A.,
CITIBANK, N.A., and
CHASE FUNDING MORTGAGE LOAN ASSET BACKED CERTIFICATE 2002-4,
OPINION AND ORDER GRANTING, IN PART, MOTION TO DISMISS
THIS MATTER comes before the Court pursuant to the Defendants’ Motion to Dismiss
(# 53), Mr. McDonald’s response (# 82), and the Defendants’’ reply (# 85).
The operative pleading is Mr. McDonald’s pro se Amended Complaint (# 44). Although
the vast bulk of that pleading appears to be irrelevant to the actual claims, the Court gives that
pleading the liberal construction required of all pro se pleadings. Haines v. Kerner, 404 U.S.
519, 520-21 (1972). (The Court supplements this recitation with certain facts gleaned from the
Defendants’ motion, to the extent not inconsistent with Mr. McDonald’s Amended Complaint.)
At some point in the early 2000s, Mr. McDonald took out a loan from Defendant J.P. Morgan
Chase Bank (“Chase”) to purchase (or perhaps refinance an existing loan on) real property
located in Littleton, Colorado. The repayment of the note was secured by lien reflected in a
Deed of Trust recorded against such property. At some point, Chase purportedly assigned the
note to Defendant Citibank, or to the Defendant . . . Certificate 2002-4 (Mr. McDonald is of the
belief that no such assignment(s) occurred, or that he was given insufficient notice of them.) By
September 2012, Mr. McDonald had fallen into default on that loan, and Citibank commenced
foreclosure proceedings on the property.
Mr. McDonald apparently sought to refinance the loan through governmental foreclosure
relief services, but was unsuccessful. He contends, in part, that this was due to Defendants’
refusal to disclose the actual holder of the note. Although Mr. McDonald sought to enjoin the
foreclosure proceedings in both state and federal courts, his requests were denied, and the
property was sold at a public trustee foreclosure sale to Citibank.
The Amended Complaint delves into a variety of matters, but it appears that Mr.
McDonald’s primary contention is that Citibank lacked standing to commence the foreclosure
proceeding and that the Defendants purposefully concealed the identity of the holder of his note
in order to facilitate the foreclosure and to prevent him from obtaining foreclosure relief. Mr.
McDonald asserts a variety of claims: (i) conversion, in that the Defendants obtained the
property via foreclosure sale without “disclos[ing] who the plaintiff’s not holder was and is,” and
thus, lacked standing to pursue the foreclosure; (ii) “fraud on the court,” in that the Defendants
“concealed the note holder’s address and contact information from the court and plaintiff” during
the foreclosure proceedings; (iii) “conspiracy to defraud,” based on essentially the same facts;
(iv) civil conspiracy, on essentially the same facts; (v) “attempting to influence a public servant,”
in that the Defendants “presented . . . pleadings and other documents testifying the Banks as
note holder,” when, in fact, it was not, and thus, “attempted to influenced the Arapahoe County
District Court [and Public Trustee] by providing documents that were factually untruthful”; (vi)
“willful and wanton negligence,” in that the Defendants “knowingly supplied false information”
and “knew that plaintiff would rely on the material false information”; (vii) unjust enrichment, in
that Mr. McDonald was eligible for foreclosure deferral under C.R.S. § 38-38-805, but the
Defendants nevertheless foreclosed on the property; (viii) breach of the covenant of good faith
and fair dealing/breach of contract, in that the Defendants breached the terms of the promissory
note by “refusing to convey note holder contact information”; (ix) “common law
unconscionability,” in that the “Defendant Banks’ policies and practices during the contract
period are and have been substantively and procedurally unconscionable” in various respects,
including failing to disclose the identity of the note holder, refusing to permit Mr. McDonald to
secure foreclosure deferral, and falsifying documents; (x) violation of the Real Estate Settlement
Procedures Act (“RESPA”), 12 U.S.C. § 2601 et seq., in that he submitted a new loan application
to Chase (at an unspecified time), and Chase “fail[ed] to provide a good faith estimate for the
new loan”; (xi) violation of RESPA in that no notice was provided to Mr. McDonald when
Chase “securitized the plaintiff not into a pooled trust”; (xii) breach of C.R.S. § 38-38-305, in
that the Defendants “refused to provide note holder and trustee contact information” despite Mr.
McDonald qualifying for foreclosure deferral; and (xiii) breach of C.R.S. § 38-40-103, in that the
Defendants refused to respond to written requests by Mr. McDonald for information about his
The Defendants move to dismiss (# 53) Mr. McDonald’s claims for lack of subject-matter
jurisdiction, arguing that the foreclosure sale of Mr. McDonald’s house was confirmed by the
District Court of Arapahoe County, and thus, Mr. McDonald’s claims here would implicate the
validity of that confirmation order in violation of the Rooker-Feldman doctrine. In the
alternative, the Defendants request that the Court direct Mr. McDonald to amend his Complaint
to provide a more clear and concise statement of his claims.
A. Standard of review
The Defendants’ motion initially challenges the sufficiency of federal subject-matter
jurisdiction under Fed. R. Civ. P. 12(b)(1).
Rule 12(b)(1) motions generally take one of two forms: (1) a facial attack on the
sufficiency of the complaint's allegations as to subject matter jurisdiction; or (2) a challenge to
the actual facts upon which subject matter jurisdiction is based. Ruiz v. McDonnell, 299 F.3d
1173, 1180 (10th Cir. 2002), citing Holt v. United States, 46 F.3d 1000, 1002-03 (10th Cir.1995).
Here, the Defendants= motion does not dispute the facial sufficiency of Mr. McDonald’s
invocation of federal jurisdiction (apparently federal question jurisdiction under 28 U.S.C. §
1331), but alleges that doctrines of abstention prevent the Court from hearing the claims. Where
a Rule 12(b)(1) motion challenges the facts underlying the invocation of jurisdiction, the Court
may not presume the truthfulness of the complaint's factual allegations; rather, the Court has
wide discretion to allow affidavits, other documents, and a limited evidentiary hearing to resolve
disputed jurisdictional facts. Sizova v. National Institute of Standards and Technology, 282 F.3d
1320, 1324 (10th Cir. 2002). The party asserting the existence of subject matter jurisdictionB in
this case, Mr. McDonaldB bears the burden of proving such jurisdiction exists. Montoya v.
Chao, 269 F.3d 952, 955 (10th Cir. 2002).
The Rooker-Feldman doctrine provides that federal courts lack jurisdiction over claims
that would call into question a final judgment by a state court. Adams v. EMC Mortg. Co., ___
Fed.Appx. ___, 2013 WL 5567886 (10th Cir. Oct. 10, 2013) (slip op.), citing Campbell v. City of
Spencer, 682 F.3d 1278, 1281 (10th Cir. 2012). In other words, it “precludes a losing party in
state court who complains of injury caused by the state court judgment from bringing a case
seeking review and rejection of that judgment in federal court.” Dillard v. Bank of New York,
476 Fed.Appx. 690, 691 (10th Cir. 2012), citing Miller v. Deutsche Bank Nat’l Trus Co., 666
F.3d 1255, 1261 (10th Cir. 2012).
The doctrine is applicable only in limited circumstances. It applies only to federal suits
filed after the state proceedings become final.1 D.A. Osguthorpe Family Partnership v. ASC
Utah, Inc., 705 F.3d 1223, 1232 (10th Cir. 2013). It is not implicated simply because the federal
claims seek relief that would be inconsistent with the state judgment; rather, success on the
federal claims must require, either implicitly or explicitly, a finding that the state judgment was
in error or invalid. Campbell, 682 F.3d at 1283.
Although the 10th Circuit has made clear that the Rooker-Feldman doctrine does not
operate to preclude federal consideration of requests to enjoin a pending foreclosure sale under
C.R.C.P. 120, Miller, 666 F.3d at 1261-62, it has repeatedly held that the doctrine is applicable to
prevent federal attacks on a completed foreclosure – i.e. one in which the state court has
“Finality,” in this sense, occurs when either: (i) the state’s highest available appellate
court has reviewed and affirmed the judgment; (ii) the state action has reached a point where
neither party is seeking further action; or (iii) all federal questions in the state court proceedings
have been fully resolved, leaving only matters of state law or questions of fact for resolution.
Osguthorpe, 705 F.3d at 1232 n. 12.
confirmed the Public Trustee’s sale (or, at least one in which the redemption periods of C.R.S. §
38-38-501 have expired). See Crowe v. Clark, ___ Fed.Appx. ___, 2014 WL 92358 (10th Cir.
Jan. 10, 2014); Castro v. Kondaur Capital Corp., ___ Fed.Appx. ___, 2013 WL 5340779 (10th
Cir. Sept. 25, 2013); Dillard, 476 Fed.Appx. 691-92.
Here, the record indicates that Mr. McDonald commenced this action on October 16,
2012, the day before the foreclosure sale took place. The focus of Mr. McDonald’s initial
Complaint (# 1) was seeking injunctive relief preventing the foreclosure sale from occurring.
This Court denied the request for an injunction (as did the state court), and the Public Trustee
sold the property to Citibank on October 17, 2012. The Public Trustee issued a Confirmation
Deed to Citibank, pursuant to C.R.S. § 38-38-501, on December 11, 2012, vesting title in the
property to Citibank as of that date. Mr. McDonald filed the instant Amended Complaint in this
Court on February 13, 2013. The District Court for Arapahoe County confirmed the Public
Trustee’s sale of Mr. McDonald’s property on March 25, 2013.
On these facts, the Court cannot initially agree with the Defendants that the RookerFeldman doctrine applies. As noted above, Rooker-Feldman applies only if the federal action is
filed after the state court proceeding has become final. If one measures from the inception of the
action, Mr. McDonald commenced this action before any foreclosure sale occurred. If one
measures from the date of the current Amended Complaint, Mr. McDonald filed that document
after the Public Trustee had issued a Confirmation Deed, but prior to the date of any state court
action confirming the sale. In either circumstance, it is clear that Mr. McDonald’s federal claims
were filed before the state court proceeding became “final” as defined by Osguthorpe.
But Osguthorpe teaches that this does not conclude the inquiry. In Osguthorpe, as in this
case, the state court litigation had not concluded at the time the federal action was commenced.
The 10th Circuit found that the federal court’s invocation of Rooker-Feldman to dismiss the
action was inappropriate. 705 F.3d at 1232 (“Because the state-court proceedings are not final,
the Rooker–Feldman doctrine cannot by itself bar the federal district court from hearing
Osguthorpe's suit”). However, the 10th Circuit proceeded to find that it would nevertheless have
been appropriate for the federal court to abstain from hearing the federal claims during the
pendency of the state court suit by invoking the Colorado River doctrine, which sometimes
counsels a federal court to stay or dismiss a federal suit pending the resolution of a parallel state
court proceeding. Id. at 1233. Were the state court foreclosure proceedings involving Mr.
McDonald ongoing, this Court would likely have concluded that the factors governing Colorado
River abstention would have required this Court to stay (if not dismiss) Mr. McDonald’s claims
here pending the conclusion of the foreclosure proceeding.
Had this Court stayed or dismissed Mr. McDonald’s federal suit on Colorado River
grounds until the state foreclosure proceeding was complete, the practical effect of doing so
would place the Court in an appropriate circumstance to now correctly invoke the RookerFeldman doctrine. At this point in time, it appears that Mr. McDonald’s foreclosure proceeding
in the state court has reached conclusion, with the Arapahoe District Court having entered a final
order confirming the sale.2 Thus, with the state proceeding having become final, invocation of
the Rooker-Feldman doctrine would now prevent this Court from hearing Mr. McDonald’s
Neither party addresses whether Mr. McDonald has appealed from or otherwise
challenged the outcome of the foreclosure proceeding in state appellate courts. Assuming he was
pursuing an appeal, this Court would likely fall back to declining to hear the instant matter
pursuant to Colorado River abstention.
claims seeking to “unwind” the foreclosure (or hold the Defendants liable in damages for seeking
and obtaining the foreclosure), just as the 10th Circuit held appropriate in cases like Crowe,
Castro, and Dillard. Although a case like Osguthorpe suggests that the application of RookerFeldman is dictated strictly by the status of the state court proceeding at the time of the filing of
the federal action, this Court sees little justification for allowing a party to forever circumvent the
Rooker-Feldman doctrine simply by commencing suit in federal court prior to state court
proceeding reaching its conclusion.3 Accordingly, this Court finds that, because the state
proceeding has now become final, it is appropriate at this point to invoke the Rooker-Feldman
doctrine and dismiss any claims by Mr. McDonald to invalidate the state court foreclosure.
With one exception, all of Mr. McDonald’s state-law claims fall within this category. As
this Court reads those claims, a fundamental assumption underlies all of them: that Citibank
lacked the authority to commence and pursue the foreclosure. Mr. McDonald’s “conversion”
claim implies that Citibank obtained title to the property unlawfully, even though it purchased
the property through a judicially-confirmed foreclosure sale; the “fraud on the court” and various
conspiracy claims suggest that Citibank misled the state court as to its standing to seek
foreclosure, his breach of contract claim implies that the parties breached the contract by not
disclosing the true holder of the note, despite the foreclosure proceeding implicitly finding that
Citibank was the holder, etc.4 Because relief on those claims would necessarily require this
Osguthorpe indicates that the state proceeding was continuing at the time the 10th Circuit
ruled. It gives no hint as to how the outcome might have been different if the state proceeding
had resulted in a final judgment while the federal matter was still before the federal district court.
The analysis with regard to Mr. McDonald’s unjust enrichment claim is slightly more
elaborate. That claim invokes C.R.S. § 38-38-801 et seq., which provides that certain eligible
borrowers may receive “foreclosure deferrals.” The deferral is effectuated by a “foreclosure
counselor” who, upon certifying the eligibility of a borrower, contacts the Public Trustee to
Court to find that Citibank was not the holder of the note and a proper party to commence and
pursue the foreclosure proceeding, the claims are barred by Rooker-Feldman.
The one surviving state law claim is Mr. McDonald’s contention that he made a request
to the Defendants for information about his loan pursuant to C.R.S. § 38-40-103(2). That statute
requires the servicer of his loan to respond to such a request within 20 days, and creates a private
right of action for damages for violations. C.R.S. § 38-40-104. Mr. McDonald’s Amended
Complaint is admittedly vague as to when he made such a qualifying request, to whom, what
information he requested, and what response (if any) he received. Because this claim simply
entails an award of damages5 for a loan servicer’s refusal to provide information, it is entirely
possible for Mr. McDonald to prevail on this claim without calling the validity of the foreclosure
itself. Thus, this claim is not barred by the Rooker-Feldman doctrine.
Nor are Mr. McDonald’s two claims pursuant to RESPA. Claim 10 alleges that Chase
violated RESPA when Mr. McDonald submitted a loan application to it (at an unspecified time),
and Chase “faile[d] to provide a good faith estimate for the new loan.” Mr. McDonald invokes
“RESPA 3500.6,” which the Court understands to be an outdated reference to regulations now
codified at 12 C.F.R. § 1024.6. Those regulations require that “the lender shall provide a copy of
the special information booklet to a person from whom the lender receives . . a written
ensure that the foreclosure does not proceed. C.R.S. § 38-38-803(6). A finding that Mr.
McDonald was, in fact, eligible for foreclosure deferral would entail a finding that the Public
Trustee’s sale was premature. Such a finding would necessarily invalidate the state court’s
confirmation of that sale, making even the unjust enrichment claim subject to Rooker-Feldman.
Mr. McDonald alleges that the Defendants’ failure to respond to his requests for
information resulted in the foreclosure of his home. It is difficult, albeit not impossible, to
envision a situation in which Mr. McDonald could recover actual damages he suffered due to the
foreclosure under C.R.S. § 38-0-104, without actually finding that the foreclosure itself was
application for a federally related mortgage loan.” 12 C.F.R. § 1024.6(a). Such a claim does not
implicate the state foreclosure proceedings, and thus, is not barred by Rooker-Feldman.6
Finally, Mr. McDonald’s eleventh claim asserts a violation of “RESPA 3500.21,”
presumably a reference to 12 C.F.R. § 1024.21. That provision (which is no longer in effect7)
previously provided certain disclosures that were required to be made when a mortgage loan was
transferred from one servicer to another. This claim does not turn on whether or not Citibank’s
foreclosure was proper, and thus, this claim is not barred by Rooker-Feldman.
Accordingly, all of Mr. McDonald’s claims, with the exception of the tenth, eleventh, and
thirteenth claims for relief in the Amended Complaint are dismissed for lack of federal subjectmatter jurisdiction under Rooker-Feldman.
C. Dismissal and amendment
Although the Court agrees in general with the Defendants that Mr. McDonald’s Amended
Complaint is vague, conclusory, and filled with irrelevant material, it declines the Defendants’
request that the Court require Mr. McDonald to replead them. As set forth above, only three
claims remain. Each of them is fairly simple and straightforward. Mr. McDonald’s Amended
Complaint lacks certain details that might help to flesh out these claims, such as dates and
contents of correspondence and identification of the correct Defendant, but the Court cannot say
that the claims are so inscrutable that the Defendants are unable to meaningfully respond to
The Court has some doubt that RESPA provides a private right of action for a lender
failing to provide the booklet. RESPA’s private right of action is set forth in 12 U.S.C. § 2614,
and specifically relates to violations of 12 U.S.C. § 2605, 2607, and 2608. The “booklet”
requirement is found at 12 U.S.C. § 2604, falling outside the scope of the private right of action.
Nevertheless, because this issue has not been raised, the Court will not address it.
The Court does not address when that rule was abolished or the effect that such abolition
would have on Mr. McDonald’s claim.
them. Moreover, the Court is unconvinced that a new round of pleading is an efficient way to
develop these remaining claims, particularly given Mr. McDonald’s prolixity. The Defendants
can easily ascertain the specific facts underlying these claims with a set of targeted
interrogatories or a brief deposition. To the extent the Defendants believe those claims cannot be
proven, they may seek summary judgment as appropriate.
For the foregoing reasons, the Defendants’ Motion to Dismiss (# 53) is GRANTED IN
PART, insofar as the Court DISMISSES all of Mr. McDonald’s claims in the Amended
Complaint, with the exception of his tenth (RESPA), eleventh (RESPA), and thirteenth (C.R.S. §
38-40-103) claims for relief, for lack of subject-matter jurisdiction under Rooker-Feldman, and
DENIED IN PART, insofar as the remaining three claims shall proceed to discovery.
Dated this 29th day of January, 2014.
BY THE COURT:
Marcia S. Krieger
Chief United States District Judge
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