SHEDD et al v. BANK OF AMERICA NA
Filing
12
ORDER granting 5 Motion to Dismiss Complaint Ordered by Judge Clay D. Land on 06/22/2012.(aaf)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
DANNY SHEDD and JACINDA SHEDD,
Plaintiffs,
*
*
vs.
*
BANK OF AMERICA, N.A.,
*
CASE NO. 4:11-CV-202 (CDL)
Defendant.
*
O R D E R
An Oklahoma state court entered a final judgment against
Plaintiffs
based
upon
their
default
on
their
mortgage
on
property located there, authorizing foreclosure on and sale of
that property.
Notwithstanding that valid state court judgment,
Plaintiffs filed the present action in this Court against their
lender’s successor based on the handling of that loan and the
subsequent foreclosure on their property.
asserted
in
this
federal
action
are
Because the claims
inextricably
intertwined
with the claims that were finally decided in the Oklahoma state
court action, this Court lacks subject matter jurisdiction to
hear
those
claims
under
the
Rooker-Feldman
doctrine.
Accordingly, this action is dismissed for lack of subject matter
jurisdiction.
FACTUAL BACKGROUND
Viewed in the light most favorable to the Plaintiffs, the
facts are as follows.1
In
April
2007,
Plaintiffs
Danny
and
Jacinda
Shedd
(“Shedds”) executed a mortgage conveying a security interest in
their
home
American
in
Brokers
Bartlesville,
Conduit,
Oklahoma
which
was
(“the
Property”)
subsequently
assigned
to
to
Countrywide Home Loans Servicing, LP (“Countrywide”), which is
now Bank of America, N.A. (“BOA”) as a result of a merger.
Compl. ¶ 7, ECF No. 1.
After Mr. Shedd joined the Army in July
2008 and learned that he would be assigned to a post outside the
state
of
Oklahoma,
Mrs.
Shedd
called
Countrywide
to
inquire
about programs for active duty military who are required to move
to a state other than where their residence is located.
Id. ¶¶
9-10.
Shedds
Countrywide
submitted
Countrywide,
Mr.
informed
Shedd’s
then,
Mrs.
Shedd
active-duty
without
any
that
if
military
additional
the
orders
to
process
or
communications with Countrywide, the Shedds would qualify for a
ninety day forbearance on their mortgage payments.
12.
Id. ¶¶ 11-
Mrs. Shedd then faxed Mr. Shedd’s military orders to
Countrywide.
Id. ¶ 13.
1
Because Defendants assert a facial challenge to subject matter
jurisdiction, these “facts” are derived from the allegations in the
pleadings and their attachments.
See Samco Global Arms, Inc. v.
Arita, 395 F.3d 1212, 1214 n.4 (11th Cir. 2005).
2
The Shedds listed the Property for sale on August 1, 2008
after
Mr.
Shedd
Georgia.
was
ordered
Id. ¶¶ 14-15.
mortgage
payment,
but
to
report
to
Fort
Benning
in
The Shedds paid their August 2008
they
did
not
pay
September, October, or November 2008.
the
mortgage
Id. ¶ 16.
in
Mrs. Shedd
contacted Countrywide and informed the company that she and Mr.
Shedd had moved out of the Property and gave Countrywide their
new Georgia address and their cell phone numbers.
Id. ¶¶ 17-18.
In November 2008, the Shedds sought to purchase a home in
Georgia.
Id. ¶ 19.
Countrywide told the Shedds that they were
approved for a mortgage contingent upon renting the Property.
Id. ¶ 20.
In December 2008, Mrs. Shedd attempted to pay the
Property mortgage online, but her account was locked.
In
preparation
for
purchasing
the
home
in
Id. ¶ 22.
Georgia,
Mr.
Shedd pulled his and Mrs. Shedd’s credit reports at the end of
December 2008.
Id. ¶ 24.
These reports showed that the Shedds’
credit scores had dropped and reported a foreclosure status on
the Property.
Id. ¶ 25.
After seeing these reports, Mr. Shedd
called Countrywide and was informed that the Property was in
foreclosure,
no
military
orders
had
been
received,
and
the
Shedds had not been given the ninety day forbearance period that
they
requested
Relief
Act
(“SCRA”), 50 U.S.C. app. § 501 et seq.
Id. ¶¶ 26, 28.
Mr.
Shedd
active-duty
then
under
mailed
the
another
Servicemembers
copy
3
of
his
Civil
military
orders to Countrywide.
Id. ¶ 27.
In January 2009, Countrywide
informed Mrs. Shedd that it had not
previously
received Mr.
Shedd’s military orders and informed Mr. Shedd it was sorry for
the
mistake
and
would
correct
the
past
due
payments.
Id. ¶¶ 29-30.
Notwithstanding
these
communications
to
the
Shedds,
Countrywide filed suit on January 13, 2009 against the Shedds in
Oklahoma state court, seeking a judgment against them for the
amount due on the note and mortgage to the Property and a decree
of
foreclosure
to
sell
the
Property
(“Oklahoma
lawsuit”).
Compl. Ex. 1, Petition 2 & ¶¶ 10-11, Countrywide Home Loans
Servicing, LP v. Shedd, No. CJ-2009-22 (D. Ct. Washington Cnty.,
Okla. Jan. 13, 2009) [hereinafter Countrywide], ECF No. 1-2 at
2.
On January 26, 2009, a process server served the Shedds
with summonses in the Oklahoma lawsuit.
Compl. ¶¶ 32-33; Compl.
Ex. 1, D. Shedd Aff. of Service 1, Countrywide, ECF No. 1-2 at
21; Compl. Ex. 1 J. Shedd Aff. of Service 1, Countrywide, ECF
No. 1-2 at 24.
After being served with the Oklahoma lawsuit, on January
28, 2009 Mr. Shedd again sent Countrywide his military orders.
Compl.
¶
36.
Thereafter,
a
Countrywide
representative
apologized and told Mr. Shedd that Countrywide was granting the
Shedds a modification, so they should disregard the summons, not
call
back,
and
wait
for
a
call
4
from
a
loan
modification
negotiator.
Id. ¶¶ 37-38.
The Shedds called Countrywide again
on March 5, 2009 and were informed that the mortgage was not
undergoing a modification and Countrywide would not change any
information it had provided to the credit reporting agencies.
Id. ¶ 39.
Later in March 2009, the Shedds requested a loan
modification and Countrywide instructed them that the loan was
under
review
for
modification
and
to
not
call
back.
Id. ¶¶ 40-41.
On March 12, 2009, Countrywide filed an Affidavit as to
Military
Service
in
the
Oklahoma
lawsuit,
stating
that
“Plaintiff is unable to determine with certainty whether any of
the
Defendants
.
.
.
are
presently
engaged
in
the
military
service of the United States, as provided by the Servicemembers
Civil Relief Act of 2003.”
Compl. Ex. 1, Aff. as to Military
Serv., Countrywide, ECF No. 1-2 at 25.
On March 31, 2009, the
Oklahoma state court (“Oklahoma court”) entered a Journal Entry
of Judgment, finding the Shedds in default because the Summons
was properly served on the Shedds and they failed to answer or
appear in the matter.
Compl. Ex. 1, Journal Entry of J. 1,
Countrywide, ECF No. 1-2 at 26.
The Oklahoma court further
found that the Shedds defaulted on the note and mortgage owed to
Countrywide, and the Court entered judgment against the Shedds
in the sum of $128,849.36 plus interest, expenses, late charges,
attorney’s fees, and other costs.
5
Id. at 2.
The Court also
authorized the foreclosure on the property and ordered judicial
sale of the property.
Id. at 3; Compl. Ex. 1, Special Execution
& Order of Sale, Countrywide, ECF No. 1-2 at 30.
In April 2009, the Shedds received the Journal Entry of
Judgment in the mail at their Georgia address.
Compl. ¶ 42.
The Shedds called Countrywide and learned that Countrywide was
not processing a modification and the Property would be sold May
18, 2009.
Id. ¶ 43; Compl. Ex. 1, Notice of Sheriff’s Sale,
Countrywide, ECF No. 1-2 at 43; Compl. Ex. 1, Aff. of Publ’n,
Countrywide, ECF No. 1-2 at 48.
The Shedds called Countrywide
several more times asking for a modification, and Countrywide
instructed
them
modification.
to
submit
Compl. ¶ 44.
specified
documentation
for
a
The Shedds submitted the documents,
and Countrywide told them the modification was under review and
not to call back.
Id. ¶¶ 45-47.
In July 2009, Countrywide told the Shedds that the Property
would not be sold at foreclosure if they paid all back payments,
loan fees, and legal fees.
Id. ¶ 48.
On July 6, 2009, the
attorneys for Bank of America, N.A. (“BOA”), which had merged
with Countrywide, requested that the Sheriff’s Sale be cancelled
and the sale was cancelled.
Id.
¶
7;
Compl. Ex. 1,
Sheriff’s Return, Countrywide, ECF No. 1-2 at 51.
Alias
The sheriff
subsequently ordered a sale of the Property at the appraised
6
value.
Compl. Ex. 1, Second Alias Special Execution & Order of
Sale 1, ECF No. 1-2 at 55.
Before
the
modification
Property
papers
from
was
sold,
the
Countrywide
in
Shedds
received
December
they signed and sent back to Countrywide.
2009,
loan
which
Compl. ¶¶ 50-52.
Nevertheless, in February 2010, Countrywide disavowed knowledge
of a loan modification and told the Shedds the Property was in
foreclosure.
auction
on
Id. ¶¶ 54-55.
June
28,
2010
The Property was eventually sold at
for
less
than
judgment, while Mr. Shedd was in Iraq.
the
amount
of
Id. ¶¶ 59, 66-67.
Oklahoma court approved the sale on July 19, 2010.
the
The
Compl. Ex.
1, Order Confirming Sale, Countrywide, ECF No. 1-2 at 76.
The
Oklahoma judgment and the orders related to the foreclosure have
not been vacated.
In May 2011, a Judge Advocate General’s Corps officer wrote
to BOA in an attempt to correct the adverse entries on the
Shedds’
credit
reports
relating
foreclosure on their property.
to
the
that
it
foreclosed
on
judgment
and
Compl. Ex. 2, Letter from M.
Lane to BOA (May 2, 2011), ECF No. 1-3.
BOA
default
Mr.
Servicemembers Civil Relief Act.
Shedd
Id.
The officer notified
in
violation
of
the
BOA acknowledged receipt
of that letter, Compl. Ex. 3, Letter from BOA to J. Shedd (May
17, 2011), ECF No. 1-4, but never responded, Compl. ¶ 73.
The
Shedds’ credit reports still show the adverse entries. Id. ¶ 76.
7
The Shedds seek to hold Defendant BOA liable as follows:
under the Servicemembers Civil Relief Act (“SCRA”), 50 U.S.C.
app. § 501 et seq., for foreclosing on their Oklahoma property
while Mr. Shedd was an active duty member of the Army; for fraud
by
BOA
agents
leading
to
the
default
and
foreclosure;
for
violating the Real Estate Settlement Procedures Act of 1974, 12
U.S.C. § 2601 et seq. (“RESPA”); for wrongful foreclosure; and,
for defamation in reporting the foreclosure to credit bureaus.
DISCUSSION
BOA seeks to dismiss the Shedds’ Complaint on the ground
that
the
Court
lacks
subject
matter
jurisdiction
under
the
Rooker-Feldman doctrine and alternatively seeks to dismiss the
Shedds’
claims
pursuant
to
Federal
Rule
12(b)(6) for failure to state a claim.2
of
Civil
Procedure
BOA argues that the
Shedds’ claims are barred by Rooker-Feldman because they are
inextricably intertwined with the claims and issues decided in
the Oklahoma action, and the Shedds had a reasonable opportunity
to participate in the Oklahoma action as the defendants in that
action.
The Shedds acknowledge that Rooker-Feldman may apply,
but, rather than dismiss the action, they request that the Court
stay the action while they seek to set aside the Oklahoma state
court judgment.
2
See D.C. Court of Appeals v. Feldman, 460 U.S. 462, 476 (1983);
Rooker v. Fid. Trust Co., 263 U.S. 413, 416 (1923).
8
I.
Subject Matter Jurisdiction Under Rooker-Feldman
Under
the
Rooker–Feldman
doctrine,
“‘a
United
States
District Court has no authority to review final judgments of a
state court in judicial proceedings.
Review of such judgments
may be had only in [the United States Supreme Court].’”
Narey
v. Dean, 32 F.3d 1521, 1524 (11th Cir. 1994) (alteration in
original) (quoting Feldman, 460 U.S. at 482).
“‘is
confined
to
.
.
.
cases
brought
by
This doctrine
state-court
losers
complaining of injuries caused by state-court judgments rendered
before
the
district
district
court
court
review
and
proceedings
rejection
commenced
of
and
those
inviting
judgments.’”
Alvarez v. Att'y Gen. for Fla., No. 11–10699, 2012 WL 1579489,
at *5 (11th Cir. May 8, 2012) (quoting Exxon Mobil Corp. v.
Saudi Basic Indus. Corp., 544 U.S. 280, 292 (2005)).
The
Eleventh
Circuit
has
explained
that
the
“doctrine
operates as a bar to federal court jurisdiction where the issue
before the federal court was ‘inextricably intertwined’ with the
state court judgment so that (1) the success of the federal
claim would ‘effectively nullify’ the state court judgment, or
that (2) the federal claim would succeed ‘only to the extent
that the state court wrongly decided the issues.’”
Id. (quoting
Casale v. Tillman, 558 F.3d 1258, 1260 (11th Cir. 2009) (per
curiam)).
“The Rooker-Feldman doctrine is broad enough to bar
all federal claims which were, or should have been, central to
9
the state court decision, even if those claims seek a form of
relief that might not have been available from the state court.”
Goodman ex rel. Goodman v. Sipos, 259 F.3d 1327, 1333 (11th Cir.
2001).
When a federal court determines that it lacks subject
matter jurisdiction under Rooker-Feldman, the court must dismiss
the case.
Id. at 1331 n.6.
Applying these principles, the Court finds that the Shedds’
claims are inextricably intertwined with those in the Oklahoma
action because they are premised on the Oklahoma court having
ruled erroneously.
wrongfully
Id. at 1334.
foreclosed
on
the
The Shedds assert that BOA
Shedds’
Property,
foreclosed
in
violation of the SCRA, foreclosed in violation of RESPA, and
foreclosed based on fraud.
Compl. ¶¶ 79, 81-83.
Deciding any
of these claims or issues would effectively nullify the Oklahoma
court’s orders and judgment, which authorized foreclosure on the
Property, ordered the Property sold, and confirmed the sale of
the Property.
The Shedds also assert that BOA is liable for defamation
because
it
reported
false
information
to
credit
bureaus,
specifically that the Property was in foreclosure and foreclosed
on.
Id. ¶¶ 25, 72, 76, 80.
Shedds’
state
law
defamation
A fundamental element of the
claim
is
a
finding
Oklahoma foreclosure was unauthorized under the law.
Court
to
make
that
determination,
10
it
would
that
the
For this
necessarily
be
required
to
review,
and
potentially
invalidate,
the
Oklahoma
state court judgment and foreclosure orders, which it is not
permitted to do under
Rooker-Feldman.
See
Alvarez, 2012 WL
1579489, at *5.
For Rooker-Feldman purposes and based on the present record
before this Court, the Court also finds that the Shedds had a
reasonable opportunity to participate in the Oklahoma action as
defendants in that action.
finding,
however,
See Goodman, 259 F.3d at 1334.
should
not
preclude
them
from
This
seeking
to
vacate the Oklahoma judgment and related orders under Oklahoma
law in an Oklahoma state court.
For
does
these
not
claims.
892-93
district
reasons,
have
subject
Rooker-Feldman
matter
applies
jurisdiction
and
over
the
the
Court
Shedds’
See Velardo v. Fremont Inv. & Loan, 298 F. App’x 890,
(11th
court
Rooker-Feldman
Cir.
2008)
lacked
doctrine
(per
subject
to
curiam)
matter
hear
(affirming
that
the
jurisdiction
under
the
plaintiffs’
federal
claims
challenging the foreclosure action and judgment in a Florida
court).
Because the Court lacks subject matter jurisdiction
over all of the Shedds’ claims, the Court must dismiss this
action.
Fed. R. Civ. P. 12(h)(3); Goodman, 259 F.3d at 1331
n.6.
11
II.
The Shedds’ Request for Stay
The Shedds request that if the Court concludes it does not
have subject matter jurisdiction under Rooker-Feldman, then it
should “stay these proceedings prior to ruling on Defendant’s
motion to dismiss, because Plaintiffs are filing a Petition to
Set Aside Judgment in the Washington County District Court in
Oklahoma based on Defendant’s violations of the Servicemembers
Civil Relief Act.”
Pls.’ Resp. 1-2, ECF No. 7.
This request
misunderstands the nature of subject matter jurisdiction.
If
the Court lacks subject matter jurisdiction, it has no power to
issue a stay.
v.
Am.
It must dismiss the action.
Tobacco
Co.,
168
F.3d
405,
410
See Univ. of S. Ala.
(11th
Cir.
1999)
(“[W]ithout jurisdiction the court cannot proceed at all in any
cause.
Jurisdiction is power to declare the law, and when it
ceases to exist, the only function remaining to the court is
that
of
announcing
the
fact
and
(internal quotation marks omitted).
dismissing
the
cause.")
Because the Court has no
authority to rule upon the motion to stay, it is moot in light
of the dismissal.
CONCLUSION
For the foregoing reasons, the Court grants BOA’s Motion to
Dismiss
(ECF No. 5)
for lack of subject matter jurisdiction
based on the Rooker-Feldman doctrine.
12
Accordingly, this action
is dismissed without prejudice to Plaintiffs’ right to re-file
the action should the circumstances warrant doing so after the
completion of the proceedings in Oklahoma to vacate the relevant
judgment and related orders there.
IT IS SO ORDERED, this 22nd day of June, 2012.
S/Clay D. Land
CLAY D. LAND
UNITED STATES DISTRICT JUDGE
13
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