Loancare v. Channer

Filing 72

ORDER denying 28 Motion to Dismiss. Signed by Judge Stefan R. Underhill on 6/14/13. (Munoz, A.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
LOANCARE, A DIVISION OF FNF
SERVICING, INC.,

:
:

Plaintiff,
:
v.
No. 3:12cv590(SRU)
:
LORNA CHANNER,
:
Defendant.
---------------------------------------------------------------X
RULING ON DEFENDANT=S MOTION TO DISMISS
This is a foreclosure action brought by LoanCare, a division of FNF Servicing, Inc.
(ALoanCare@), against Lorna Channer (AChanner@). Channer filed a motion to dismiss the
complaint in its entirety for failure to state a claim upon which relief may be granted. For the
reasons set forth below, the motion to dismiss is denied.
Standard of Review
When ruling on a motion to dismiss, the court must accept all factual allegations of the
complaint as true and draw all reasonable inferences in plaintiff=s favor. See New Jersey
Carpenters Health Fund v. Royal Bank of Scotland Grp., PLC, 709 F.3d 109, 119 (2d Cir. 2013).
The court must then assess whether the complaint Acontain[s] sufficient factual matter, accepted as
true, to >state a claim to relief that is plausible on its face.=@Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim has Afacial
plausibility@ when the complaint contains factual allegations that allow the court to draw a
reasonable inference that the defendant is liable. Id. Although the court must accept as true the
factual allegations of the complaint, this principle is inapplicable to Alegal conclusions@ and
1

Aformulaic recitation[s] of the elements of a cause of action.@ Id.
Additionally, in ruling on a motion to dismiss, the court=s consideration is limited to the
factual allegations of the complaint, documents attached to the complaint as exhibits or
incorporated therein by reference, matters of which the court may take judicial notice, and
documents either in the plaintiff=s possession or of which the plaintiff had knowledge and relied
upon in bringing suit.

Halebian v. Berv, 644 F.3d 122, 131 n.7 (2d Cir. 2011); Chambers v. Time

Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002); Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d
42, 47-48 (2d Cir. 1991), cert. denied, 503 U.S. 960 (1992); Channer v. Loan Care Serv. Ctr., Inc.,
No. 3:11cv135, 2011 WL 5238878, at *1 (D. Conn. Nov. 1, 2011). If matters outside the
pleadings are presented to the court, the court must either exclude the additional material and
decide the motion based upon the complaint alone or convert it to a motion for summary judgment
under Rule 56 and afford all parties the opportunity to present supporting material.1 Rule 12(d),
Fed. R. Civ. P.; see Friedl v. City of New York, 210 F.3d 79, 83 (2d Cir. 2000).
Background
The following facts taken from the complaint and the exhibits attached thereto, are
assumed to be true for the purposes of the present motion.

1

In this case, LoanCare, the non-movant, has filed two affidavits in opposition to the
motion to dismiss, along with numerous exhibits. I have excluded these affidavits from
consideration and will rely solely on the complaint, the exhibits thereto, and matters of which the
Court may take judicial notice. See Smith v. Hogan, No. 3:10cv1025, 2011 WL 4433879, at *4
n.3 (D. Conn. Sept. 22, 2011) (holding that conversion of a motion to dismiss into a motion for
summary judgment is inappropriate where the non-movant offers the supplemental submissions).
2

LoanCare is a division of FNF Servicing, Inc. Compl. & 1.

At all times relevant hereto,

Channer was and continues to be the record owner of the property located at 52 Craigs Road,
Windsor, Connecticut (the AProperty@). Compl. & 2.
On or about August 31, 2009, Channer executed and delivered to Ideal Mortgage Bankers,
Ltd., d/b/a Lending Key, a promissory note (the ANote@) for a loan in the original principal amount
of $159,137.00. Compl. & 5. That same day, in order to secure the Note, Channer executed and
delivered to Mortgage Electronic Registration Systems, Inc. (AMERS@), as nominee for Lending
Key, a mortgage (the AMortgage@) on the Property, which was duly recorded on September 14,
2009. Compl. & 6.
At the time of Channer=s execution of the Note and Mortgage, Lending Key was an
approved issuer of securities guaranteed by the Government National Mortgage Association
(AGinnie Mae@), a wholly-owned government corporation within the United States Department of
Housing and Urban Development, and was subject to the terms of the Ginnie Mae Single Family
Guaranty Agreement (AGuaranty Agreement@). Compl. & 7.
On or about December 16, 2009, Lending Key was found to be in violation of the Guaranty
Agreement. Ginnie Mae defaulted Lending Key and extinguished its rights to the portfolio of
mortgage loans, including the Note and Mortgage executed by Channer. Compl. & 8. Upon
termination of Lending Key=s interest in the Note and Mortgage, all right, title, and interest was
transferred to Ginnie Mae pursuant to 12 U.S.C. ' 1721. Pursuant to the provisions of the
Guaranty Agreement, Ginnie Mae is the absolute owner and holder of Channer=s Note and
Mortgage. Compl. && 8, 9.
LoanCare is a subservicer of Ginnie Mae, contractually authorized to service certain loans

3

on behalf of Ginnie Mae, including the Note and Mortgage executed by Channer. Compl. & 10.
On September 30, 2010, the Mortgage was assigned to LoanCare by MERS, on behalf of
Ginnie Mae and as nominee for Lending Key, and duly recorded. Compl. Ex. C.
LoanCare provided written notice to Channer of her default under the Note and Mortgage,
but Channer failed to cure the default. Compl. & 12.

LoanCare then elected to accelerate the

balance due under the Note, to declare the Note to be due in full, and to foreclose the Mortgage
securing the Note. Compl. & 13.
The Mortgage provides as grounds for acceleration of the debt that the Lender may require
immediate payment in full of all sums secured by the Mortgage if the Borrower defaults by failing
to pay in full any monthly payment required by the Mortgage prior to or on the due date of the next
monthly payment or the Borrower defaults by failing, for a period of thirty days, to perform any
other obligation contained in the Mortgage. Compl. Ex. B & 9(a).

The Mortgage further

provides that if the Lender required immediate payment in full under paragraph 9, Lender may
invoke any remedies permitted by applicable law. Compl. Ex. B & 18.
There are no known liens or encumbrances that claim an interest in the Property that are
either prior in right or subsequent in right to the Mortgage. Compl. && 14, 15.
Channer is owner of the equity of redemption of the Property and in current possession.
Compl. & 16.
LoanCare provided Channer with notice of her rights pertaining to unemployment and
underemployment, as required by Connecticut law. Compl. & 17.
On April 16, 2010, Channer filed a Chapter 7 Bankruptcy Petition in the U.S. Bankruptcy
Court for the District of Connecticut, Case No. 10-21232. On May 6, 2010, she filed an adversary
proceeding in the Bankruptcy Court against LoanCare, Lending Key, and MERS, seeking to
4

determine the validity of the lien on the Property and to determine the dischargeability of the debt.
United States Bankruptcy Judge Albert Dabrowski dismissed the adversary complaint on August
12, 2010. On August 17, 2010, LoanCare moved for relief from the automatic stay, which was
granted. The Bankruptcy Court discharged Channer=s debt on November 3, 2010. Pl.=s Mem.
Exs. A - F.
On April 20, 2012, LoanCare filed this action seeking foreclosure of the Mortgage.
Discussion
Channer moves to dismiss the complaint on several grounds each of will be addressed in
turn.
I. Rule 12(b)(6) - Failure to State a Claim
Initially, Channer argues that LoanCare=s complaint Aomits key facts to support a
foreclosure action or enforcement of the alleged mortgage note.@ Def.=s Mem. 3. Channer
contends that LoanCare relies on Aconclusory allegations, bald assertions, and legal conclusions,@
and makes allegations that contradict facts of which the court may take judicial notice. Def.=s
Mem. 3. For these reasons, Channer maintains that LoanCare=s complaint should be dismissed
for failure to state a claim.
In support of her argument, Channer relies on allegations she made in an adversary
proceeding in Bankruptcy Court, of which she maintains this court may take judicial notice.
That is incorrect. A>A court may take judicial notice of a document filed in another court not for
the truth of the matters asserted in the other litigation, but rather to establish the fact of such
litigation and related filings.=@ Global Network Commc=ns, Inc. v. City of New York, 458 F.3d
150, 157 (2d Cir. 2006) (quoting Int=l Star Class Yacht Racing Ass=n v. Tommy Hilfiger U.S.A.,
Inc., 146 F.3d 66, 70 (2d Cir. 1998)). Even though the document may be a matter of public
5

record, on a motion to dismiss, the court may take judicial notice only of the existence of the
record, not of the truth of the matters asserted therein. Id. Thus, although I may take judicial
notice of the facts that Channer filed a Chapter 7 Bankruptcy Petition and that she filed an
adversary proceeding against LoanCare, MERS, and Lending Key, I cannot take judicial notice of
the allegations in her adversary complaint, nor of statements made by LoanCare in filings in the
Bankruptcy Court, for the truth of the matters asserted therein. See Milo v. Galante, No.
3:09cv1389, 2011 WL 1214769, at *3 (D. Conn. Mar. 28, 2011); Estate of Axelrod v. Flannery,
476 F. Supp. 2d 188, 200 (D. Conn. 2007).
In Connecticut, an action for foreclosure of a mortgage is an equitable proceeding. Bargas
v. Griffin, No. 3:11cv1854, 2013 WL 2295443, at *2 (D. Conn. May 24, 2013) (citing Deutsche
Bank Nat=l Trust Co. v. Angle, 284 Conn. 322, 326 (2007)). To set forth a prima facie case,
LoanCare, as the foreclosing party, must allege that it is the owner of the Note and Mortgage, and
that Channer, as the Mortgagor, defaulted on the Note. Id. (citing Webster Bank v. Flanagan, 51
Conn. App. 733, 750-51 (1999)); Ryder v. Washington Mut. Bank, F.A., 501 F. Supp. 2d 311, 317
(D. Conn. 2007) (citing Franklin Credit Mgmt. Corp. v. Nicholas, 73 Conn. App. 830, 838 (2002),
cert. denied, 262 Conn. 937 (2003)). Although it appears that LoanCare=s complaint readily
meets these requirements, Channer raises five grounds that she contends require dismissal of the
complaint for failure to state a claim.
First, Channer maintains that the complaint does not meet these requirements because
LoanCare has attached an unexecuted Note, which contradicts the allegation in its complaint that
Channer executed the Note. Although the Note attached to the complaint as an exhibit appears to
be missing page 3, the signature page, I may take judicial notice of the full Note, which is attached
to Channer=s motion, as a public record and as a document on which LoanCare relied in bringing
6

this suit. See Roth v. Jennings, 489 F.3d 499, 509 (2d Cir. 2007).

Citing New England Savings Bank v. Bedford Realty Corp., 246 Conn. 594, 610 (1998),
Channer claims that the complaint is deficient because it does not plead the nature of the default
giving rise to the right of foreclosure and does not plead the amount currently due and owing.
Def.=s Reply Mem. 8. Although New England Savings Bank does contain the language Channer
replies upon, that portion of the decision has been called into question as dicta and as exceeding the
pleading requirements of Connecticut Practice Book '' 10-12 and 10-69.3 See Bank United v.

2

Section 10-1 of the Connecticut Practice Book (2012), entitled AFact Pleading,@

provides:
Each pleading shall contain a plain and concise statement of the
material facts on which the pleader relies, but not of the evidence by
which they are to be proved, such statement to be divided into
paragraphs numbered consecutively, each containing as nearly as
may be a separate allegation. If any such pleading does not fully
disclose the ground of claim or defense, the judicial authority may
order a fuller and more particular statement; and, if in the opinion of
the judicial authority the pleadings do not sufficiently define the
issues in dispute, it may direct the parties to prepare other issues,
and such issues shall, if the parties differ, be settled by the judicial
authority.
3

Section 10-69 of the Connecticut Practice Book (2012), entitled APleading Special
Matters - Foreclosure Complaint, Pleading Encumbrances,@ provides:
The complaint in all actions seeking the foreclosure of a mortgage
or other lien upon real estate shall set forth, in addition to the other
essentials of such complaint: All encumbrances of record upon the
property both prior and subsequent to the encumbrance sought to be
foreclosed, the dates of such encumbrances, the amount of each and
the date when such encumbrance was recorded; if such
encumbrance be a mechanic's lien, the date of commencing to
perform services or furnish materials as therein recited; and if such
encumbrance be a judgment lien, whether said judgment lien
contains a reference to the previous attachment of the same premises
7

LeMoult, No. CV00179862S, 2001 WL 100302, at *2 (Conn. Super. Ct. Jan. 9, 2001).
Additionally, numerous cases discussing the requirements for a foreclosure cause of action do not
include those specific requirements. See, e.g., Franklin Credit Mgmt. Corp., 73 Conn. App. 830,
838 (Conn. App. 2002); Webster Bank, 51 Conn. App. 733, 750-51 (Conn. App. 1999); see also
TD Bank, N.A. v. Georgetown Land Dev. Co., 2011 WL 3199366, at *2 (Conn. Super. Ct. June 23,
2011) (holding that the facts alleged must include: the existence of an underlying obligation which
is owed by the defendant to the plaintiff; that the note is secured by a mortgage and the defendant
borrower is in default of the obligations under the note or mortgage; that, because of the default,
the plaintiff has exercised its option to accelerate the debt and declare all sums owing under the
mortgage to be due and payable; and the defendant is in possession of the mortgaged property).
Moreover, Channer=s argument overlooks the difference between the pleading standard in
Connecticut state court and the Anotice pleading@ requirements of federal court. See Rule 8(a)(2),
Fed. R. Civ. P. Under the Federal Rules, a complaint need only contain Aa short and plain
statement of the claim showing that the pleader is entitled to relief.@ Id. ASpecific facts are not
necessary; the statement need only give the defendant fair notice of what the . . . claim is and the
grounds upon which it rests.@ Erickson v. Pardus, 551 U.S. 89, 93 (2007) (internal citations and
quotation marks omitted). Even under the more stringent pleading requirements of Connecticut
law, I have found no case in which the complaint was dismissed for failure to state the means of
default or the specific amount due and owing. Accordingly, I decline to dismiss the complaint on
that basis.
Channer next argues that the complaint identifies the original mortgagee as Ideal Mortgage

in the same action, as provided by General Statutes ' 52-380a.
8

Bankers, Ltd. d/b/a Lending Key, a New York corporation, when in fact the Note and Mortgage
refer only to ALending Key, a New York corporation.@ Channer claims that LoanCare cannot
establish that these are one and the same entity. I see no problem in this respect. The use of a
Ad/b/a@ or Adoing business as@ to associate a trade name with a corporation does not create a legal
entity separate from the corporation. See Bauer v. Pounds, 61 Conn. App. 29, 36 (2000). Here,
there is no confusion concerning the entity that was the original mortgagee, and Channer does not
contend otherwise.
Relying on a memorandum filed in the bankruptcy proceedings, Channer asks me to take
judicial notice of the fact that LoanCare alleged on September 29, 2010, that it was the owner and
holder of Channer=s Mortgage and Note, whereas the assignment attached as Exhibit C to the
complaint is dated September 30, 2010. As discussed above, I cannot take judicial notice of the
truth of the matters asserted in filings in other courts. See Estate of Axelrod, 476 F. Supp. 2d at
221 (holding that such an examination of extrinsic evidence is not appropriate in the context of a
motion to dismiss). Moreover, LoanCare did not allege that it was the Aowner,@ only that it was
the Aholder.@ Pl.=s Mem. in Support of Mot. for Relief from Stay 2.
Next, Channer asserts that LoanCare has not alleged sufficient facts to demonstrate that
Ginnie Mae had any interest in the Mortgage and Note. I disagree. LoanCare alleged in
unequivocal terms that Ginnie Mae was the absolute owner and holder of Channer=s Note and
Mortgage, pursuant to the terms of the Guaranty Agreement, and further alleged the circumstances
giving rise to the default and transfer of ownership from Lending Key to Ginnie Mae. Compl. &&
8,9. Moreover, ownership is established by federal law, 12 U.S.C. ' 1721,4 the statute cited by
4

Section 1721(g)(1) of Title 12 of the United States Code provides in relevant part:
9

LoanCare in its complaint. Additionally, the Federal Rules of Civil Procedure require only a
Ashort and plain statement of the claim showing that the pleader is entitled to relief.@ Rule 8(a)(2),
Fed. R. Civ. P. LoanCare need not allege evidence upon which it will prove its allegations.

The Association is hereby empowered, in connection with any
guaranty under this subsection, whether before or after any default,
to provide by contract with the issuer for the extinguishment, upon
default by the issuer, of any redemption, equitable, legal, or other
right, title, or interest of the issuer in any mortgage or mortgages
constituting the trust or pool against which the guaranteed securities
are issued; and with respect to any issue of guaranteed securities, in
the event of default and pursuant otherwise to the terms of the
contract, the mortgages that constitute such trust or pool shall
become the absolute property of the Association subject only to the
unsatisfied rights of the holders of the securities based on and
backed by such trust or pool. No State or local law, and no Federal
law (except Federal law enacted expressly in limitation of this
subsection after October 8, 1980), shall preclude or limit the
exercise by the Association of (A) its power to contract with the
issuer on the terms stated in the preceding sentence, (B) its rights to
enforce any such contract with the issuer, or (C) its ownership
rights, as provided in the preceding sentence, in the mortgages
constituting the trust or pool against which the guaranteed securities
are issued.

10

Finally, Channer argues that LoanCare does not allege possession of the Note. Although
the complaint does not contain that specific allegation, the complaint does provide that Ginnie Mae
was the Aabsolute owner and holder of the Channer=s Note and Mortgage,@ Compl. & 9, and that
LoanCare is a Asubservicer of Ginnie Mae, contractually authorized to service certain loans on
behalf of Ginnie Mae, including the Note and Mortgage executed by the Defendant.@ Compl. &
10. Additionally, LoanCare attached the Note as an Exhibit to the complaint. As discussed
below, a loan servicer is authorized to conduct foreclosure proceedings as an agent for its
principal. For these reasons, I will not dismiss the complaint for failure to specially allege
LoanCare=s possession of the Note.
II. Standing
Channer also seeks to dismiss the complaint based on LoanCare=s lack of standing to
pursue this foreclosure action.
Rule 17(a)(1) of the Federal Rules of Civil Procedure states that an Aaction must be
prosecuted in the name of the real party in interest.@ It then identifies seven classifications of
parties who may sue in their own names without joining the person for whose benefits the action is
brought, including inter alia, a party with whom or in whose name a contract has been made for
another=s benefit. Fed. R. Civ. P. Rule 17(a)(1)(F). That list, however, is not exclusive. See
Finance California v. Lawyers Title Ins. Corp., No. 3:07cv804, 2010 WL 4876014, at *7 (D.
Conn. Nov. 22, 2010). Although federal law governs the procedural question of in whose name a
suit may be brought, that question must be answered with reference to state law. Id. Under
Connecticut law, servicing agents have the capacity to institute lawsuits on behalf of their
principals. Id. (citing Master Fin., Inc. v. Christensen Assocs., Inc., No. CV 065004255S, 2008
WL 1052387, at ** 2, 3 (Conn. Super. Ct. Mar. 20, 2008)). Thus, as Ginnie Mae=s servicing
11

agent, LoanCare would be a real party in interest under Rule 17, Fed. R. Civ. P., and would have
standing to bring this action. Id. The motion to dismiss is denied to the extend it is based on lack
of standing.
III. Statute of Limitations
Channer next argues that this action is barred by the limitation periods set forth in Conn.
Gen. Stat. ' 52-588. Section 52-588 provides in relevant part:
No action shall be brought on a negotiable note, if the holder thereof
has been notified in writing by the maker thereof, or his attorney or
agent, that such note was obtained of the maker in pursuance of a
conspiracy, or of a general intent to defraud, unless the same is
brought within one year after such notice was given, or six months
after such note became due; nor shall any claim on such note be
maintained against the estate of any deceased person or insolvent
debtor, unless such claim is presented within the time above
specified after notice as aforesaid.
Channer acknowledges that statute of limitations defenses are most often pled as affirmative
defenses because they raise factual issues beyond the face of the complaint. Def.=s Mem. 31.
Nonetheless, Channer argues that the defense is properly raised here because LoanCare=s action is
founded on the Note; the alleged Note is negotiable; Channer provided the necessary notice to
LoanCare, Lending Key, and MERS that the Note was acquired pursuant to a conspiracy or
general intent to defraud; and neither Ginnie Mae nor LoanCare brought an action within one year
of the date the notice was given.
This same argument was presented in Bank of New York Mellon v. Bell, No.
3-11-cv-01255, 2012 WL 4378590, at *2 (D. Conn. Sept. 25, 2012), and rejected by the Court in a
well-reasoned opinion.
To hold that plaintiff's complaint is barred would require the Court
find that (1) Section 52B588 applies to foreclosure actions; (2)
defendant[] notified the holder of the note in writing that such note
12

was obtained of the maker in pursuance of a conspiracy, or of a
general intent to defraud; and (3) defendant=s account of the
time-line is correct. Plaintiff disputes all three of these contentions.
While the applicability of Section 52B588 is a matter of law,
defendant=[s] factual contentions regarding notice and timing are not
evident from the complaint or incorporated by reference. Since
these affirmative defenses do not appear from the face of the
complaint, they may not be raised by a preanswer motion to dismiss.
See Pani v. Empire Blue Cross Blue Shield, 152 F.3d 67, 74 (2d Cir.
1998). As the Court must accept all well-pleaded allegations as true
and draw all reasonable inferences in favor of the pleader,
defendant=[s] motion to dismiss will be denied.
I reject Channer=s argument in this case.
Moreover, Channer=s argument is based upon the substance of filings in an adversary
proceeding in Bankruptcy Court, matters not subject to judicial notice. See Discussion, supra.
More importantly, Channer obtained a Chapter 7 Bankruptcy discharge, so that no claim on the
Note can be made against her personally. 11 U.S.C. ' 524(a). Thus, although LoanCare could
pursue the mortgage foreclosure action, it could not pursue an action on the Note against Channer
personally. Under Connecticut foreclosure laws, an action upon a note and the foreclosure of a
mortgage are separate and distinct causes of action. Federal Deposit Ins. Corp. v. Voll, 38 Conn.
App. 198, 206, cert. denied, 235 Conn. 903 (1995).

The Connecticut courts have long

recognized that Athe barring of a debt secured by a mortgage by the running of the statute of
limitations does not prevent foreclosure of the mortgage.@ Markham v. Smith, 119 Conn. 355,
358 (1935).

Thus, section 52-588 does not bar this mortgage foreclosure action.

IV. Res Judicata and Collateral Estoppel
Channer=s last ground for dismissal is that this action is barred by the doctrines of res
judicata and collateral estoppel because issues raised here were decided by the Bankruptcy Court
when it granted LoanCare=s motion for relief from stay.
13

Res judicata and collateral estoppel are affirmative defenses. Fed. R. Civ. P. R.
8(c)(1); Ross v. New Canaan Envtl. Comm=n, No. 3:09cv01966, 2010 WL 2351475, at *3 (D.
Conn. June 8, 2010). A complaint may be dismissed under Rule 12(b)(6) for failure to state a
claim upon which relief may be granted when the affirmative defense clearly appears on the face
of the complaint. McKenna v. Wright, 386 F.3d 432, 436 (2d Cir. 2004); Pond v. Town of North
Branford, No. 3:11-cv-00984, 2013 WL 836016, at *1 (D. Conn. Mar. 6, 2013); Galvin v. Lloyd,
663 F. Supp. 1572, 1578 (D. Conn. 1987).

Here, the defenses of res judicata and collateral

estoppel are not clearly apparent on the face of the complaint.
Moreover, the same claims and issues presented in this case were not decided in the
Bankruptcy Court and, thus, neither res judicata nor collateral estoppel applies. See EDP Med.
Computer Sys., Inc. v. United States, 480 F.3d 621, 624 (2d Cir. 2007) (holding that Ares judicata
bars later litigation if [an] earlier decision was (1) a final judgment on the merits, (2) by a court of
competent jurisdiction, (3) in a case involving the same parties or their privies, and (4) involving
the same cause of action@) (internal quotation marks omitted); Bear, Stearns & Co. v. 1109580
Ontario, Inc., 409 F.3d 87, 91 (2d Cir. 2005) (holding that A[c]ollateral estoppel is permissible as
to a given issue if (1) the identical issue was raised in a previous proceeding; (2) the issue was
actually litigated and decided in the previous proceeding; (3) the party had a full and fair
opportunity to litigate the issue; and (4) the resolution of the issue was necessary to support a valid
and final judgment on the merits) (internal quotation marks omitted). A motion for relief from
stay filed in the Bankruptcy Court addresses only the issue whether the movant may pursue a claim
in state or federal court to enforce its rights; it does not address or decide the merits of a claim.
See In re Boodrow, 126 F.3d 43, 55 (2d Cir. 1997), cert. denied, 522 U.S. 1117 (1998).
Therefore, this action is not barred by either res judicata or collateral estoppel.
14

Conclusion
Accordingly, for the reasons set forth above, Channer=s Motion to Dismiss [Doc. # 28] is
denied in its entirety.
SO ORDERED, this 24th day of June 2013, at Bridgeport, Connecticut.

/s/ Stefan R. Underhill
STEFAN R. UNDERHILL
United States District Judge

15