CASARES v. WELLS FARGO BANK, N.A. et al

Filing 81

MEMORANDUM OPINION. Signed by Judge Amy Berman Jackson on 8/7/2017.(lcabj3)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
MANUEL J. CASARES,
)
)
Plaintiff,
)
)
v.
)
Civil Action No. 13-1633 (ABJ)
)
WELLS FARGO BANK, N.A., et al.,
)
)
Defendants.
)
____________________________________)
MEMORANDUM OPINION
Plaintiff Manuel J. Casares has filed a complaint against defendants Wells Fargo Advisors,
LLC (“WFA”), Wells Fargo Bank, N.A., and Robin Cobas, an employee of Wells Fargo Advisors.
Plaintiff, who formerly worked as a financial advisor for Wells Fargo Advisors, alleges that he lost
his home as a result of a mortgage fraud scheme, and that after he published a website critical of
Wells Fargo’s handling of the mortgage situation, he also lost his job. He filed this lawsuit alleging
that Wells Fargo Bank, Wells Fargo Advisors, and Cobas engaged in wrongdoing, including
treason, conspiracy, obstruction of justice, discrimination, and retaliation. See Am. Compl. [Dkt.
# 5]. Defendants have moved to dismiss the complaint in its entirety pursuant to Federal Rule of
Civil Procedure 12(b)(6). They argue that the claims arising out of the foreclosure are barred by
the doctrine of res judicata, and that plaintiff’s employment claims are subject to dismissal under
the arbitration clause in plaintiff’s employment agreement. See Defs.’ Mot. to Dismiss [Dkt. # 74]
(“Defs.’ Mot.”) at 1.
While the Court can certainly understand Mr. Casares’s frustration under the
circumstances, he has already had a full opportunity to litigate the foreclosure in the state courts
of Florida, and he exercised his right to appeal those matters all the way to the Florida Supreme

Court. Unfortunately for him, the law does not give civil litigants a second bite at the apple.
Because he has already litigated to judgment complaints related to his foreclosure, those
allegations cannot be litigated again. And due to the binding arbitration clause in plaintiff’s
employment contract with defendant Wells Fargo Advisors, he cannot bring his employment
discrimination claims in federal court either. The complaint will therefore be dismissed. 1
BACKGROUND
Plaintiff filed this lawsuit on October 23, 2013, Compl. [Dkt. # 1], and he filed an amended
complaint as of right on December 2, 2013. Am. Compl. The amended complaint alleges the
following facts, which the Court must accept as true for the purpose of resolving the pending
motion to dismiss. The Court also takes judicial notice of the filings in the Nineteenth Judicial
Circuit Court in Indian River County, Florida, where plaintiff and defendants engaged in litigation
surrounding the bank’s efforts to foreclose on plaintiff’s home. See Marshall Cty. Health Care
Auth. v. Shalala, 988 F.2d 1221, 1228 (D.C. Cir. 1993) (Mikva, C.J., dissenting) (observing that
courts may take judicial notice “of facts on the public record” in resolving a motion to dismiss).
The complaint states that plaintiff began working as a financial advisor with Wells Fargo
Advisors in its Prudential Securities office in May 2000 in Vero Beach, Florida. Am. Compl. ¶ 23.
After Wachovia bought Prudential in 2004, it offered plaintiff an “employment benefit” of a
mortgage “at a preferential rate of interest.” Id. ¶¶ 28–29. Plaintiff then purchased a house in
Vero Beach for $470,000, and Wachovia issued him a 30-year Fannie Mae mortgage of $355,000
at a 5.25% interest rate. Id. ¶ 30.

1
Because the Court will dismiss the complaint on other grounds, it need not reach the
question of whether Rule 8(a) would provide an alternative basis for dismissal. See Defs.’ Mot. at
1. The Court notes, however, that the forty-eight page amended complaint, supplemented by an
additional sixty-two pages of exhibits, can hardly be described as a “short and plain statement” of
a claim entitling plaintiff to relief. Fed. R. Civ. P. 8(a).
2

When plaintiff purchased the house, he told the underwriters “that he had no interest in
[the]

property

if

an

requirements/standards.”

honest

professional

Am. Compl. ¶ 31.

appraisal

failed

to

meet

Fannie

Mae

But, according to plaintiff, Wachovia had an

“unwritten policy with [an] appraiser to produce an appraisal reflecting the amount which they
provided to [the] appraiser.” Id.
Plaintiff alleges that the broker failed to disclose “hidden but known defects” including
damage caused by flooding and hurricanes, as well as mold. Am. Compl. ¶ 32. The complaint
states that plaintiff became disabled due to the mold infestation, and he then sued Wachovia in the
Circuit Court of the Nineteenth Judicial Circuit in Indian River County, Florida for nondisclosure
and personal injury. Id. Plaintiff alleges that his Florida lawsuit “has been plagued by numerous
[illegal] acts” by Wells Fargo, Wachovia, and by numerous attorneys and judges. Id.
The complaint states that as plaintiff’s “disability worsened,” a Vice President at Wells
Fargo discriminated against him by, among other things, calling him a “whack job.” Am.
Compl. ¶ 34. Plaintiff confronted another manager about that incident, but the incident was
“brushed . . . aside.” Id.
In January 2011, plaintiff became aware of the “appraisal fraud / mortgage fraud” that was
allegedly perpetrated by Wells Fargo Bank, and he reported the alleged fraud to Wells Fargo Home
Mortgage. Am. Compl. ¶ 35. An employee of Wells Fargo Home Mortgage allegedly told
plaintiff that Wells Fargo “could not do a thing as long as [p]laintiff continued making mortgage
payments.” Id. So plaintiff stopped making payments and defaulted on the loan. Id.
Wells Fargo Home Mortgage then offered to forbear on the impending foreclosure if
plaintiff paid Wells Fargo $700 through Western Union. Am. Compl. ¶ 38. Plaintiff sent the
money, but, according to the complaint, Wells Fargo initiated foreclosure proceedings anyway.

3

Id. Records from the Circuit Court for Indian River County, Florida reveal that Wells Fargo filed
a complaint for foreclosure on December 20, 2011. See Ex. B. to Mot. for Remand & Attys’ Fees
& Costs [Dkt. # 2-2] (“Foreclosure Complaint”).
Also in early 2011, plaintiff created a website “in the manner of an Ecuadorian ‘denuncia’”
on which he criticized various Wells Fargo employees. Am. Compl. ¶ 40. After Wells Fargo
personnel became aware of the statements on plaintiff’s website, a Wells Fargo Advisors
compliance officer requested that plaintiff make certain changes to comply with corporate policy.
Id. ¶ 41. Plaintiff alleges that despite complying with the repeated demands to make edits to his
website, he was nevertheless terminated in retaliation for the statements on the website, and
because of his national origin and disability. See id. ¶¶ 45, 47, 48. 2
As plaintiff puts it, he filed this lawsuit to “seek[] monetary damages and injunctive relief
from the Defendants for the blatant and egregious disabled adult, religious, racial and Ecuadorian
culture discrimination he was subjected to during employment as a financial advisor at Defendant
WFA’s Vero Beach, Florida office.” Am. Compl. ¶ 17. He also alleges that defendants retaliated
against him by conspiring with an “organized criminal enterprise” in Indian River County, Florida,
including judges and court staff, which subjected plaintiff to an “illegal foreclosure action” in a
“Star Chamber Court.” Id. ¶¶ 17–20. 3
The amended complaint contains ten counts.

The first six counts arise out of the

foreclosure action: In Count I, plaintiff alleges that Wells Fargo Bank and others committed
2
Under the heading “Obstruction and Treason Allegations,” plaintiff alleges that he filed a
motion for injunctive relief in Florida in an effort to avoid his “improper firing,” but that the
ensuing court proceeding was tainted by the use of “mob hit squads” and “computer hacking.”
Am. Compl. ¶¶ 62–79.
3
Plaintiff alleges that the “‘Star Chamber Court’ operates to aid and comfort a subversive
anti-American (enemy),” among others. Am. Compl. ¶ 20.
4

“treason and conspiracy” in handling the mortgage and foreclosure. Am. Compl. ¶¶ 84–89. Count
II alleges that Wells Fargo Bank and others conspired to deprive plaintiff of his civil rights when
they foreclosed on his property despite “knowledge of mortgage fraud / appraisal fraud.” Id.
¶¶ 90–97. In Counts III and IV, plaintiff alleges that Wells Fargo and others conspired to obstruct
justice during the foreclosure action. Id. ¶¶ 98–106. In Count V, he claims that Wells Fargo
committed mail and wire fraud in the handling of the foreclosure. Id. ¶¶ 107–11. In Count VI, he
alleges that judges in Indian River County obstructed justice in the foreclosure action. Id. ¶¶ 112–
14. 4
The remaining counts relate to plaintiff’s tenure with Wells Fargo Advisors. Count VII
alleges that WFA engaged in national origin discrimination in violation of Title VII of the Civil
Rights Act of 1964, 42 U.S.C. § 2000e, et seq. (“Title VII”), and Count IX alleges retaliation in
violation of Title VII. Am. Compl. ¶¶ 115–18, 124–28. In Count VIII, plaintiff alleges that WFA
and Wells Fargo engaged in disability discrimination in violation of the Americans with
Disabilities Act (“ADA”), and in Count X he alleges that they engaged in unlawful retaliation in
violation of the ADA. Id. ¶¶ 119–123, 129–33.
On December 18, 2013, defendants filed a motion to stay and compel arbitration on the
grounds that plaintiff’s employment claims in Counts VII through X were subject to an arbitration
clause contained in plaintiff’s employment contract with Wells Fargo Advisors. Mem. in Supp.
of Mot. to Stay & Compel Arb. [Dkt. # 7]. After plaintiff conceded that Counts VII through X
were subject to arbitration, the Court granted the motion and stayed the remainder of the action.
Order (Jan. 23, 2014) [Dkt. # 13]. The parties then engaged in a lengthy arbitration before the

4
Pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i), plaintiff voluntarily dismissed
count VI on March 28, 2014. Notice of Rule 41 Voluntary Dismissal [Dkt. # 18].
5

Financial Industry Regulatory Authority, commonly referred to as “FINRA.” Defs.’ Status Report
on Termination of Arb. Proceedings [Dkt. # 68] (“Arb. Status Report”).
On April 5, 2017, FINRA terminated the arbitration. Ex. A to Arb. Status Report [Dkt.
# 68-1] at 1. On May 18, 2017, defendants filed their motion to dismiss. Defs.’ Mot. Plaintiff
opposed the motion on June 23, 2017, Pl.’s Resp. to Defs.’ Mot. [Dkt. # 76] (“Pl.’s Opp.”), and
defendants waived their right to file a reply. Defs.’ Notice of Waiver of Right to File Reply [Dkt.
# 79].
STANDARD OF REVIEW
“To survive a [Rule 12(b)(6)] motion to dismiss, a complaint must contain 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). In Iqbal,
the Supreme Court reiterated the two principles underlying its decision in Twombly: “First, the
tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable
to legal conclusions,” and “[s]econd, only a complaint that states a plausible claim for relief
survives a motion to dismiss.” Id. at 678–79.
A claim is facially plausible when the pleaded factual content “allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678, citing
Twombly, 550 U.S. at 556. “The plausibility standard is not akin to a ‘probability requirement,’
but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id., quoting
Twombly, 550 U.S. at 556. A pleading must offer more than “labels and conclusions” or a
“formulaic recitation of the elements of a cause of action,” id., quoting Twombly, 550 U.S. at 555,
and “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Id., citing Twombly, 550 U.S. at 555.

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When considering a motion to dismiss under Rule 12(b)(6), the Court is bound to construe
a complaint liberally in the plaintiff’s favor, and it should grant the plaintiff “the benefit of all
inferences that can be derived from the facts alleged.” Kowal v. MCI Commc’ns Corp., 16 F.3d
1271, 1276 (D.C. Cir. 1994). Where the action is brought by a pro se plaintiff, a district court has
an obligation “to consider his filings as a whole before dismissing a complaint,” Schnitzler v.
United States, 761 F.3d 33, 38 (D.C. Cir. 2014), citing Richardson v. United States, 193 F.3d 545,
548 (D.C. Cir. 1999), because such complaints are held “to less stringent standards than formal
pleadings drafted by lawyers.” Haines v. Kerner, 404 U.S. 519, 520–21 (1972). Nevertheless, the
Court need not accept inferences drawn by the plaintiff if those inferences are unsupported by facts
alleged in the complaint, nor must the Court accept plaintiff’s legal conclusions. See Kowal, 16
F.3d at 1276; see also Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). In ruling upon a
motion to dismiss for failure to state a claim, a court may ordinarily consider only “the facts alleged
in the complaint, documents attached as exhibits or incorporated by reference in the complaint,
and matters about which the Court may take judicial notice.” Gustave-Schmidt v. Chao, 226 F.
Supp. 2d 191, 196 (D.D.C. 2002), citing EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d
621, 624–25 (D.C. Cir. 1997).
ANALYSIS
I.

Counts I through V are barred by the doctrine of res judicata.
Defendants have moved to dismiss the first five counts in the amended complaint under

the doctrine of res judicata. “The doctrine of res judicata prevents repetitious litigation involving
the same causes of action or the same issues.” I.A.M. Nat’l Pension Fund v. Indus. Gear Mfg. Co.,
723 F.2d 944, 946 (D.C. Cir. 1983). Under this doctrine, also known as claim preclusion, “a final
judgment on the merits of an action precludes the parties or their privies from relitigating issues

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that were or could have been raised in that [prior] action.” Drake v. FAA, 291 F.3d 59, 66 (D.C.
Cir. 2002), quoting Allen v. McCurry, 449 U.S. 90, 94 (1980); see also I.A.M. Nat’l Pension Fund,
723 F.2d at 949 (noting that res judicata “forecloses all that which might have been litigated
previously”), citing Brown v. Felsen, 442 U.S. 127, 139 n.10 (1979).
When applying res judicata principles, “a subsequent lawsuit will be barred if there has
been prior litigation (1) involving the same claims or cause of action, (2) between the same parties
or their privies, and (3) there has been a final, valid judgment on the merits, (4) by a court of
competent jurisdiction.” Porter v. Shah, 606 F.3d 809, 813–14 (D.C. Cir. 2010), quoting Capitol
Hill Grp. v. Pillsbury, Winthrop, Shaw, Pittman, LLC, 569 F.3d 485, 490 (D.C. Cir. 2009). If
those factors have been satisfied, a court may dismiss claims precluded by res judicata under Rule
12(b)(6). See, e.g., Nader v. Democratic Nat’l Comm., 590 F. Supp. 2d 164, 169 (D.D.C. 2008),
citing Stanton v. D.C. Court of Appeals, 127 F.3d 72, 76–77 (D.C. Cir. 1997).
A party cannot escape application of the doctrine by raising a different legal theory or
seeking a different remedy in the new action that was available to him in the prior action. See
Apotex, Inc. v. FDA, 393 F.3d 210, 218 (D.C. Cir. 2004) (observing that “simply raising a new
legal theory . . . is precisely what is barred by res judicata”). For that reason, for res judicata
purposes, a “cause of action is determined by the factual nucleus, not the theory on which a plaintiff
relies.” Sheptock v. Fenty, 707 F.3d 326, 330 (D.C. Cir. 2013), quoting Faulkner v. GEICO, 618
A.2d 181, 183 (D.C. 1992).
To determine whether claims derive from the same nucleus of facts, this Circuit has
adopted a transactional, pragmatic approach. Smalls v. United States, 471 F.3d 186, 192 (D.C.
Cir. 2006), citing Stanton, 127 F.3d at 78. A court looks at “whether the facts are related in time,
space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment

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as a unit conforms to the parties’ expectations.” Stanton, 127 F.3d at 78, quoting Restatement
(Second) of Judgments § 24(2) (1982).
Here, the Court finds that Counts I through V of the amended complaint share the same
factual nucleus as the allegations that were litigated in plaintiff’s counterclaim in the Florida
foreclosure action. In the amended complaint, plaintiff states that he is challenging the alleged
“illegal foreclosure action . . . in Indian River County.” Am. Compl. ¶ 17. But plaintiff has
already had the opportunity to litigate any defenses to that action. In his counterclaim in the
foreclosure action, Casares brought many of the same claims that he brings here; treason and
conspiracy, conspiracy to deprive him of his rights, and obstruction of justice all appear in both
the amended complaint and the state court counterclaim. See Am. Compl. ¶¶ 84–106 (Counts I
through IV); Ex. B to Defs.’ Opp. to Pl.’s Mot. for Leave to Am. [Dkt. 37-1] (“Foreclosure
Countercl.”) ¶¶ 32–41, 48 (Counts I, II, and V). And while plaintiff did not previously raise the
mail and wire fraud allegations set forth in Count V of the amended complaint, the state court
counterclaim arose out of the same nucleus of facts – the alleged irregularities and wrongdoing in
connection with plaintiff’s mortgage and foreclosure. See Foreclosure Countercl. Therefore,
because the claims in Counts I–V relate to the same factual allegations that were or could have
been aired in the prior case, the claims are sufficiently similar to satisfy the first element of res
judicata.
The second element, that both cases involve the same parties, has also been met because
plaintiff has sued the same defendants as in the foreclosure action.
The third and fourth elements – whether a judgment on the merits has been entered by a
court of competent jurisdiction – have also been satisfied. “A judgment on the merits is one that
‘reaches and determines the real or substantial grounds of action or defense as distinguished from

9

matters of practice, procedure, jurisdiction[,] or form.’” Sheppard, 791 F. Supp. 2d at 7, quoting
Saylor v. Lindsley, 391 F.2d 965, 968 (2d Cir. 1968). Here, the state court in Florida conducted a
two-day bench trial and found for Wells Fargo on its complaint for foreclosure, and against
plaintiff on his counterclaims, citing “the testimony and evidence presented at trial and the record
in this case,” and it noted that it would “enter a Final Judgment.” Order Entered Upon Non-Jury
Bench Trial, Ex. A to Defs.’ Opp. to Pl.’s Mot. for Leave to Amend [Dkt. # 37-1] (“Foreclosure
Order”) at 1. 5 So the Court finds that a judgment on the merits was entered. And since Florida
law grants jurisdiction to the circuit courts to “rescind, vacate, and set aside a decree of foreclosure
of a mortgage of property,” Fla. Stat. § 702.07, the circuit court in Indian River County was a court
of competent jurisdiction to resolve plaintiff’s counterclaim.
For all of these reasons, the claims in Counts I through V of plaintiff’s amended complaint
are precluded, and the Court will grant defendants’ motion to dismiss.
II.

Plaintiff’s employment claims are foreclosed by the binding arbitration clause in his
employment agreement.
Defendants move to dismiss the remaining counts, arguing that they are barred by the

arbitration clause in plaintiff’s employment agreement with Wells Fargo Advisors. This motion
will also be granted.
By enacting the Federal Arbitration Act (“FAA”), Congress adopted “a liberal federal policy
favoring arbitration agreements, notwithstanding any state substantive or procedural policies to
the contrary.” Moses H. Cone Mem'l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24 (1983). The

5
The circuit court’s judgment was affirmed on appeal in a per curiam order, Casares v. Wells
Fargo Bank, N.A., 193 So. 3d 897 (Fla. Dist. Ct. App. 2016), and the Florida Supreme Court
dismissed the petition for discretionary review for lack of jurisdiction. Casares v. Wells Fargo
Bank, N.A., No. SC16-1503, 2016 WL 4415365 (Fla. Aug. 19, 2016); see Jackson v. State, 926
So. 2d 1262, 1264 (Fla. 2006) (holding that the Supreme Court of Florida “lacks jurisdiction over
unelaborated per curiam decisions in the context of discretionary review jurisdiction”).
10

FAA provides that an arbitration agreement “shall be valid, irrevocable, and enforceable, save
upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2.
Upon determining the existence of a valid arbitration contract, courts in this district have
consistently dismissed cases when all of the plaintiff’s claims are subject to arbitration. See, e.g.,
Nelson v. Insignia/Esg, Inc., 215 F. Supp. 2d 143, 158 (D.D.C. 2002) (noting that “dismissal
is . . . in accordance with what other courts have done when all of the plaintiff's claims must be
submitted to arbitration”); Haire v. Smith, Currie & Hancock LLP, 925 F. Supp. 2d 126, 134
(D.D.C. 2013) (compelling arbitration on all claims and dismissing the case).
The Court granted defendants’ motion to compel arbitration in 2014 because plaintiff’s
employment claims were subject to arbitration pursuant to the parties’ employment agreement,
and that circumstance has not changed. 6 In his employment agreement, plaintiff agreed that “[a]ny
claim or controversy arising out of . . . [plaintiff’s] employment or termination of [plaintiff’s]
employment shall be settled by arbitration.” Ex. A to Mem. in Supp. of Mot. to Stay & Compel
Arb. [Dkt. # 7-1] ¶ 7. Plaintiff conceded in the past that his employment claims were subject to
arbitration by not opposing the submission of Counts VII through X to an arbitration panel, see
Pl.’s Mem. in Supp. of Answer to Mot. to Stay & Compel Arb. [Dkt. # 12] at 9; and in his
opposition to the motion to dismiss, he does not appear to put forth any arguments related to the
employment counts. See generally Pl.’s Opp.
Because only an arbitration panel can resolve plaintiff’s employment discrimination
claims, the Court will grant defendants’ motion to dismiss Counts VII through X.

6
At the time, the Court only stayed the action and did not dismiss it entirely, but that was
because the complaint also included numerous counts that were not subject to arbitration. See
Order (Jan. 23, 2014). Now, no other claims remain.
11

CONCLUSION
Because Counts I through V are subject to dismissal on res judicata grounds, and because
Counts VII through X can only be resolved through arbitration, the Court will grant defendants’
motion to dismiss.
A separate order will issue.

AMY BERMAN JACKSON
United States District Judge
DATE: August 7, 2017

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