POWELL v. LASALLE BANK NATIONAL ASSOCIATION et al

Filing 34

ORDER granting Defendants' 16 Motion to Dismiss (S.O.) cm. Signed by Judge William T. Lawrence on 3/15/2012. (MAC)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA

WILLIAM POWELL,
Plaintiff,
vs.
LASALLE BANK NATIONAL
ASSOCIATION, et al.,
Defendants.

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1:11-cv-0497-WTL-TAB

Entry Discussing Motion to Dismiss
or in the Alternative for Summary Judgment
Plaintiff William Powell brings this lawsuit against the holder of his
mortgage loan LaSalle National Bank Association, as Trustee (“Trustee”), the EMC
Mortgage, EMC Mortgage LLC (“EMC”), and their respective parent entities,
alleging that the conduct of Trustee and EMC in managing and enforcing the
mortgage loan violated applicable federal and state statutes. The defendants have
moved to dismiss arguing that this court does not have jurisdiction over Powell’s
claims based on the Rooker-Feldman doctrine. In the alternative, the defendants
move for summary judgment arguing that Powell’s claims are barred by by res
judicata.
In his complaint, Powell alleges that EMC fraudulently declared that his
mortgage loan was in default despite the fact that he was making payments, caused
him to enter into a fraudulent workout agreement which required Powell to make
inflated payments on his mortgage, returned payments that he made. He alleges
that EMC received summary judgment based on its claim that he had not made
payments in accordance with the workout agreement.

Powell’s lawsuit alleges violations of the following statutes: (1) the Fair Debt
Collection Practices Act, by falsely representing the character and legal status of his
debt, (2) the Fair Credit Reporting Act, by failing to keep and furnish accurate
records and failing to adequately conduct an investigation, (3) the Indiana
Collection Agencies Act, by failing to enact reasonable rules, policies, procedures, or
training to prevent these actions, and attempting to enforce a debt which they knew
or had reason to know was not legitimate, (4) the Indiana Fraud Act, by
fraudulently filing a foreclosure action, fraudulently had Powell sign a modification
agreement, and made false statements to Powell and the Marion County Superior
Court, (5) the Indiana Deceptive Consumer Sales Act, by making false statements
to the plaintiff and Marion Superior Court, (6) the Racketeer Influenced and
Corrupt Organizations Act, by committing these actions in interstate commerce.
Powell also alleges a claim for intentional infliction of emotional distress in that
their actions were intended to embarrass, harass, belittle confuse and threaten
Powell, to intimidate and coerce Powell into paying a debt which was not
legitimately owed, and conspired to systematically deny Powell his right to dispute
the legitimacy of a claimed debt.
Powell seeks the following relief: an injunction enjoining the defendants from
further violations; injunctive relief enjoining the defendants from selling,
transferring, reporting or assigning the property, compensatory damages in amount
of the value of the residence; general damages for out-of-pocket loss, RICO damages,
punitive damages, rescission of the agreements, and attorney’s fees.
The defendants argue that because Powell’s claims in this case are barred by
the Rooker-Feldman doctrine the court does not have subject-matter jurisdiction
over this case. Because the Rooker–Feldman doctrine is jurisdictional in nature, its
applicability must be determined before considering the defendants' arguments
regarding the applicability of res judicata. See Garry v. Geils, 82 F.3d 1362, 1365
(7th Cir. 1996) (“Where Rooker–Feldman applies, lower federal courts have no
power to address other affirmative defenses, including res judicata.”).
“The Rooker–Feldman doctrine makes clear that federal district courts cannot
review state court final judgments because that task is reserved for state appellate
courts or, as a last resort, the United States Supreme Court.” Casale v. Tillman, 558
F.3d 1258, 1260 (11th Cir. 2009). This is a narrow doctrine, confined to “cases
brought by state-court losers complaining of injuries caused by state-court
judgments rendered before the district court proceedings commenced and inviting
district court review and rejection of those judgments.” Lance v. Dennis, 546 U.S.
459, 126 S.Ct. 1198, 1201, 163 L.Ed.2d 1059 (2006) (quoting Exxon Mobil Corp. v.
Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005)); Casale, 558 F.3d at 1260. The
Rooker–Feldman doctrine applies when:

(1) the party in federal court is the same as the party in state court; (2)
the prior state court ruling was a final or conclusive judgment on the
merits; (3) the party seeking relief in federal court had a reasonable
opportunity to raise its federal claims in the state court proceeding;
and (4) the issue before the federal court was either adjudicated by the
state court or was inextricably intertwined with the state court's
judgment.
Parker v. Potter, 368 F. App'x 945, 948 (11th Cir. 2010) (quoting Storck v. City of
Coral Springs, 354 F.3d 1307, 1310 n.1 (11th Cir. 2003)). “A claim is inextricably
intertwined if it would effectively nullify the state court judgment, [ ] or it succeeds
only to the extent that the state court wrongly decided the issues. Casale, 558 F.3d
1258 at 1260 (internal quotation marks and citations omitted). The determination of
whether a federal claim is “inextricably intertwined” hinges on whether it alleges
that the supposed injury was caused by the state court judgment, or, alternatively,
whether the federal claim alleges an independent prior injury that the state court
failed to remedy. See Long v. Shorebank Dev. Corp., 182 F.3d 548, 555 (7th Cir.
1999). But finding that a federal claim is inextricably intertwined with a state court
judgment does not end the inquiry. Once it is determined that a claim is
inextricably intertwined, we must then inquire whether “the plaintiff [did or] did
not have a reasonable opportunity to raise the issue in state court proceedings.”
Brokaw, 305 F.3d at 667 (citing Long, 182 F.3d at 558). If the plaintiff could have
raised the issue in state court, the claim is barred under Rooker-Feldman.
The state court action between the parties, LaSalle Bank National Assoc,
Trustee v. Powell, No. 49D12-0801-MF-002355, was a foreclosure action on the same
property at issue in this case. Powell, EMC and Trustee were parties to that
lawsuit. Powell was represented by counsel and filed a counterclaim against
Trustee and a third-party complaint against EMC alleging mishandling of the same
payments described in Powell’s complaint. Trustee and EMC moved for summary
judgment in the state court action on its claim to foreclose on the property and on
Powell’s counterclaim and third-party complaint. They argued in support of their
motion for summary judgment that there was no evidence that they mismanaged
Powell’s payments. The state court granted the motion for summary judgment and
foreclosed on the property.
Powell’s lawsuit covers the same ground as did the state court action. Among
other relief, he seeks here an injunction preventing the defendants from selling the
property, rescission of the agreements, and damages in the amount of the residence.
To award any of these damages would be to reverse the state court judgment, which
this court does not have jurisdiction to do. Moreover, each of Powell’s claims are
based on his allegation that the defendants mismanaged payments he made on his
mortgage – an issue the state court explicitly decided in its summary judgment
ruling. These claims are therefore “inextricably intertwined” with the state court

judgment. Powell had the opportunity to raise these claims in the state court
proceedings, and did in fact argue that Trustee and EMC mismanaged his mortgage
payments. While he did not bring claims against Bank of America or JP Morgan
Chase in that case, he had the opportunity to do so. This court does not have
jurisdiction to give him another bite at that apple.
Because consideration the claims Powell brings here would require this court
to review the decision of an Indiana state court, this court does not have jurisdiction
to review his claims. The defendants’ motion to dismiss [16] must therefore be
granted
IT IS SO ORDERED.

03/15/2012
Date: __________________

_______________________________
Hon. William T. Lawrence, Judge
United States District Court
Southern District of Indiana

Distribution:
All electronically registered counsel
William Powell
4509 E. 16th. Street
Indianapolis, IN 46201