Crooks v. Household Finance Corporation III et al
Filing
34
ORDER granting 30 Motion to Dismiss complaint. Amended complaint to be filed by 12/5/2011. Signed by Judge Robert L Miller, Jr on 11/7/2011. (kds)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
DAVID CROOKS,
Plaintiff
vs.
JULIA BLACKWELL GELINAS;
MICHELE LORBIESKI ANDERSON;
MELANIE D. MARGOLIN;
LUCY R. DOLLENS; and
DOES 1 through 10,
Defendants
)
)
)
)
)
)
)
)
)
)
)
)
)
CAUSE NO. 3:11-CV-221 RM
OPINION and ORDER
After the court’s dismissal, on August 30, 2011, of David Crooks’ pro se
complaint pursuant to Federal Rules of Civil Procedure 8, 9, 10, 12(b)(1), and
12(b)(6), Mr. Crooks, again proceeding pro se, filed a timely amended complaint,
alleging violations of the Fair Debt Collection Practices Act, “constitutionally
protected
Fundamental
Rights,”
“common-law
rights
involving
Federal
Corporations and Interstate Commerce in the form of lending and banking,” and
his rights under the Uniform Commercial Code. Mr. Crooks names as defendants
Doe Defendants 1 through 10 and four “foreclosing attorneys” – Julia Blackwell
Gelinas, Michele Lorbieski Anderson, Melanie D. Margolin, Lucy R. Dollens – who
were named as defendants in his original complaint. Mr. Crooks seeks the
following relief: quiet title to property, disgorgement of all amounts wrongfully
acquired by defendants, three times the amount defendants intended to defraud
plaintiff (a sum equal to $1,098,683.76), pain and suffering due to extreme mental
anguish, pre- and post-judgment interest, attorney’s fees and costs, and such
other relief as the court deems just and fair.1
The defendants have moved to dismiss the amended complaint on a number
of grounds. First, they say, the Rooker-Feldman doctrine2 deprives the court of
subject matter jurisdiction over Mr. Crooks’ claims, so his claims against them
should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(1). They
also argue that Mr. Crooks’ claims of extreme emotional distress and those under
the Federal Debt Collection Procedures Act, 15 U.S.C. § 1692 et seq., should be
dismissed under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim
upon which relief can be granted, and his claims for fraud should be dismissed
as deficient under Federal Rule of Civil Procedure 9. Because dismissal under
Rule 12(b)(1) is appropriate, the court need not address the other bases.
The threshold question in every case is whether the court has the power to
entertain the suit. Warth v. Seldin, 422 U.S. 490, 498 (1975). The RookerFeldman doctrine “is a rule of federal jurisdiction,” Frederiksen v. City of Lockport,
384 F.3d 437, 438 (7th Cir. 2004), which “deprives federal courts of subject
1
Mr. Crooks’ response brief contains the following sentence: “As a matter of housekeeping,
plaintiff acknowledges his amended complaint’s prayer errantly appears to seek reversal of the
State Court’s decision, when in actuality the plaintiff seeks actual, statutory, and punitive damages
from the named defendants.” Reply, at 10. Mr. Crooks can’t amend his complaint through
statements or arguments in his response brief. See Burks v. Wisconsin Dep’t of Transp., 464 F.3d
744, 758 n.15 (7th Cir. 2006) (claim first raised in response brief “could be disregarded because
Ms. Burks did not plead such a claim” in her complaint).
2
See generally Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923), and District of Columbia
Court of Appeals v. Feldman, 460 U.S. 462 (1983).
2
matter jurisdiction where a party . . . sues in federal court seeking to set aside the
state court judgment and requesting a remedy for an injury caused by that
judgment.” Johnson v. Orr, 551 F.3d 564, 568 (7th Cir. 2008). “When the RookerFeldman doctrine applies, there is only one proper disposition: dismissal for lack
of federal jurisdiction. A jurisdictional disposition is conclusive on the
jurisdictional question: the plaintiff cannot re-file in federal court.” Frederiksen
v. City of Lockport, 384 F.3d 437, 438 (7th Cir. 2004).
The defendants argue that the Rooker-Feldman doctrine bars Mr. Crooks’
claims because his claims are a challenge to their standing to represent their
client, his creditor, in enforcing the security interest at issue in the foreclosure
action, so his current attack on his creditor’s attorneys “is nothing more than a
further attack on the injuries caused by the state-court judgment.” Defts. Br., at
3. The defendants explain, “Of course, the remaining defendants do not claim to
have ‘standing’ to foreclose on the real estate. They are merely the attorneys for
Household Finance Corp. III, the party who, as determined by the Elkhart
Superior Court had a valid right to foreclose on plaintiff’s real estate. As the issue
of standing was determined on the merits by the Elkhart Superior Court, this
action constitutes nothing more than an attack on that judgment.” Defts. Br., at
4.
Mr. Crooks responds that his “suit is not remotely connected to his
foreclosure,” Resp., at 1, but, contrary to his assertion, the claims of his amended
complaint directly relate to the mortgage loan documents he signed in November
3
20043 and the foreclosure proceedings in the Elkhart Superior Court.4 As this
court previously concluded in ruling on the motions to dismiss his initial
complaint, Mr. Crooks had ample opportunity to challenge the mortgage loan and
related documents in his bankruptcy proceedings, filed in 2005 and reopened in
2008, see Op. and Ord. (Aug. 30, 2011), at 2-5, and to advance his numerous
objections and defenses to the foreclosure action in the Elkhart Superior Court
3
See, e.g., Amd. Compl, ¶ 10(b) (“Defendant(s) claimed the existence of a document
establishing a lien against the property owned by plaintiff.”); ¶ 18 (“Plaintiff herein demands strict
verified proof, according to the rules of evidence for each of the following: (a) that plaintiff entered
into a legal and binding contract with defendant(s) or defendant(s)’ alleged client that would
establish the alleged debt; (b) that defendant(s) or defendant(s)’ alleged client is the true holder of
said debt instrument.”); ¶ 19 (“Plaintiff herein demands strict verified proof, according to the rules
of evidence and the Uniform Commercial Code that defendant or defendant(s)’ alleged client is the
true holder of said debt instrument by production of the original contract upon which defendant(s)
claims authority to demand payment.); ¶ 22 (“Plaintiff herein demands strict verified proof,
according to the rules of evidence, that: (a) plaintiff entered into a contract with defendant(s) or
defendant(s)’ principal for whom defendant(s) claims to act as agent, granting defendant(s) a legal
claim against the property as protection against loss in the event plaintiff failed to meet the
obligations of the above alleged debt, (b) defendant(s)’ alleged client or principal is the true and
exclusive holder, or is the proper agent for said holder, of said legal claim against the property, (c)
that the alleged document purporting to create a lien against the property was granted by plaintiff
to defendant(s) or to defendant(s)’ principal for whom defendant(s) claims to be acting as agent.”);
¶ 23 (“. . . Plaintiff herein demands strict verified proof, according to the rules of evidence that
defendant(s)’ principal is the exclusive holder of said instrument.”); ¶ 24 (“In the event defendant(s)
is able to produce a bona fide lien document, plaintiff herein demands strict verified proof that
plaintiff granted such claim to defendant(s) by name, defendant is, and at all times has been, the
holder of the alleged note purporting to evidence a debt.”).
4
See, e.g., Amd. Compl., ¶ 10(e) (“Defendant(s) claimed authority to exercise foreclosure
on an alleged lien against the property.”); ¶ 10(f) (“Plaintiff never created a document creating a lien
against plaintiff’s real property to the benefit of defendant(s).”); ¶ 21 (“. . . Plaintiff demands strict
verified proof that defendant(s)’ claim against the debt is the singular and exclusive claim based
on the purported contract.”); ¶ 26 (“. . . Plaintiff herein demands strict verified proof, according to
the rules of evidence, of a complete chain of legal possession of said lien document.”); ¶ 27 (“In the
event defendant(s) is able to produce a complete chain of legal possession of the above referenced
document purporting to create a lien against the property, plaintiff herein demands strict verified
proof, according to the rules of evidence that, at all times, the ownership of the alleged lien
document and the alleged note were transferred together such that, at no time, one entity held the
alleged lien and another entity held the alleged note.”); ¶ 28 (“In the event that defendant(s) were
to prove that a debt claim exists against the property, plaintiff demands strict verified proof that
defendant(s)’ claim against the debt is the singular and exclusive claim based on the purported
debt claim which defendant(s) is attempting to collect.”).
4
and in his appeal of that judgment. See Op. and Ord. (Aug. 30, 2011), at 5-8 &
n.2.
Mr. Crooks further affirms in his response brief that his current claims
against these defendants relate to the mortgage loan documents and foreclosure
proceedings – claims that Mr. Crooks could have and did, in fact, raise in the
bankruptcy and state court actions. In his response, Mr. Crooks explains that he
wants the defendants to prove that they were agents in the foreclosure
proceedings “for either an alleged principal, a viable or valid holder of a note, or
an investor” and “until [they] prove agency spanning the entire chain of interested
parties and evolution of the security instrument, their actions are rogue at best
and they are without defense for collection of a false or mischaracterized debt or
misrepresented the legal status of such.” Resp., at 2. Those statements confirm
that he’s contesting the state court action and its outcome.
Mr. Crooks has re-labeled some of his claims as ones under the Federal
Debt Collection Practices Act: he alleges that the defendants, as “foreclosing
attorneys,” violated the FDCPA by “attempting to collect a debt when no debt
exists which defendant(s) has standing to collect,” Amd. Compl., ¶ 11, sending
“fraudulent demands for payment for which defendant(s) had no authority to
make,” Amd. Compl., ¶¶ 12, 13, and failing to “exercise due diligence concerning
defendant(s)’ standing to collect the alleged debt claimed by defendant(s) to be
owed to defendant(s) or defendant(s)’ principal by plaintiff,” Amd. Compl., ¶ 16.
Mr. Crooks alleges that the defendants sent him a “dunning letter dated August
5
15, 2011 . . . that asked for a lump sum of money,” but he doesn’t allege that the
letter was unrelated to the foreclosure of his property or the August 31, 2011
Sheriff’s sale of his home. Amd. Compl., ¶ 29. He states generally that the
“defendant(s) is a debt collector within the meaning of the FDCPA,” but supplies
no further details about their practices in that regard. Amd. Compl., ¶ 33. He
claims the defendants engaged in “overshadowing” based on his allegation that
unidentified “earlier bills [] meet the definition of overshadowing.” Amd. Compl.,
¶ 35. He summarily concludes that the defendants violated 15 U.S.C. §§ 1692(e),
1692(f) 1692(g). Amd. Compl., ¶¶ 29, 34, 36. Mr. Crooks lastly alleges that the
defendants engaged in common law and criminal fraud by making false
representations that they “knew or should have known . . . was made without
standing or capacity on the part of defendant(s),” Amd. Compl., ¶¶ 37-39, and
caused him extreme emotional distress by threatening foreclosure. Amd. Compl.,
¶¶ 40-41.
Even recognizing that the court must construe the amended complaint
liberally, see Erickson v. Pardus, 551 U.S. 89, 94 (2007) (a pro se complaint “must
be held to less stringent standards than formal pleadings drafted by lawyers”), a
review of Mr. Crooks’ claims of fraud, emotional distress, and violations of the
FDCPA shows that Mr. Crooks hasn’t alleged or set forth facts outside the scope
of the foreclosure action that might bring the defendants’ actions within the
purview of the FDCPA or that would suggest that his claims arose under
circumstances separate and apart from the foreclosure action. While the Rooker6
Feldman doctrine doesn’t “prevent state-court losers from presenting independent
claims to a federal district court,” Crawford v. Countrywide Home Loans, Inc., 647
F.3d 642, 645 (7th Cir. 2011), the claims advanced by Mr. Crooks in his amended
complaint aren’t independent of his state court proceedings and, so, must be
dismissed pursuant to Federal Rule of Civil Procedure 12(b)(1).
The court reaffirms its previous conclusion that Mr. Crooks’ complaints
about the actions of these defendants – that the “foreclosing attorneys” lacked
standing to initiate foreclosure proceedings on behalf of their client; they failed to
“prove” an agency relationship and the “evolution of the security instrument;” they
didn’t produce the original contract evidencing their authority to demand
payment; they made fraudulent demands for payment from plaintiff when they
lacked standing and capacity to make such demands – are, in reality, defenses to
the foreclosure action and challenges to the state court judgment. See Op. and
Ord., 5-8. The injury Mr. Crooks claims – the foreclosure of his mortgage and the
resulting loss of his property – was effectuated by the state court judgment.
Because the relief he seeks can’t be granted “without necessarily impugning the
state court’s judgment,” Crawford v. Countrywide Home Loans, Inc., 647 F.3d
642, 647 (7th Cir. 2011), the Rooker-Feldman doctrine bars his claims. See
Crawford v. Countrywide Home Loans, 647 F.3d at 646 (“To determine whether
Rooker-Feldman bars a claim, we look beyond the four corners of the complaint
to discern the actual injury claimed by the plaintiff.”). Mr. Crooks’ claims about
his mortgage and associated loan documents, the foreclosure proceedings, and the
7
resulting state court judgment must again be dismissed pursuant to Federal Rule
of Civil Procedure 12(b)(1).
Based on the foregoing, the court GRANTS the motion of defendants Julia
Blackwell Gelinas, Michele Lorbieski Anderson, Melanie D. Margolin, and Lucy R.
Dollens to dismiss the amended complaint [docket # 30] pursuant to Federal Rule
of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction.5 The court will
afford Mr. Crooks one last opportunity to amend his complaint. Sanctions may be
imposed if he again attempts to pursue claims that have already been decided, by
this or any other court, on issues relating to the validity of his mortgage loan
transaction
or
the
related
loan
documents,
the
foreclosing
attorneys’
representation of their client in the foreclosure action, the foreclosure proceedings,
or the state court judgment. If no amended complaint is filed by December 5,
2011, judgment will be entered against him.
SO ORDERED.
ENTERED:
November 7, 2011
/s/ Robert L. Miller, Jr.
Judge, United States District Court
cc:
D. Crooks
D. Kasper
5
The defendants ask that the amended complaint be dismissed with prejudice, but “[a] suit
dismissed for lack of jurisdiction cannot also be dismissed ‘with prejudice’; that’s a disposition on
the merits, which only a court with jurisdiction may render. . . . ‘No jurisdiction’ and ‘with
prejudice’ are mutually exclusive.” Frederiksen v. City of Lockport, 384 F.3d 437, 438 (7th Cir.
2004).
8
9
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?