SCARR v. JPMORGAN CHASE BANK NATIONAL ASSOCIATION, et al.

Filing 153

ORDER ADOPTING REPORT AND RECOMMENDATIONS - The Court, having reviewed de novo the parties' arguments in the Motions to Dismiss, the Report and Recommendation's findings and authorities on each point, and Scarr's Objections thereto , concludes that the Magistrate Judge's analysis is correct and her holdings are sound. Fair and meaningful consideration was given to Scarr's objections and he has demonstrated no error in the Magistrate Judge's order. Therefore, t he Court ADOPTS the Magistrate Judge's Report and Recommendation (Filing No. 142 ). Defendants' Motions to Dismiss (Filing No. 77 , Filing No. 79 , Filing No. 89 and Filing No. 91 ) are GRANTED. And, to the extent the Amended Compl aint (Filing No. 64 ) seeks to challenge the state court foreclosure judgment or seeks rescission of Scarr's mortgage loan, those claims are DISMISSED without prejudice for lack of subject matter jurisdiction, but to the extent any of the claims are not barred by Rooker-Feldman, those claims are DISMISSED with prejudice for failure to state a claim based on claim preclusion or issue preclusion. In addition, the Court finds no errors in the Magistrate Judge's Order dismissing a ll pending non-dispositive motions (Filing No. 109 , Filing No. 127 , Filing No. 132 , Filing No. 137 , and Filing No. 138 ). The Court therefore OVERRULES the objections and Filing No. 109, Filing No. 127 , Filing No. 132 , Filing No. 137 , and Filing No. 138 are DISMISSED. (See Order.) Copy to Plaintiff via US Mail. Signed by Judge Tanya Walton Pratt on 3/14/2018.(BRR)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
KIMBALL RUSTIN ROY SCARR,
Plaintiff,
v.
JPMORGAN CHASE BANK NATIONAL
ASSOCIATION,
LSF9 MORTGAGE HOLDINGS LLC,
LSF9MASTER PARTICIPATION TRUST
d/b/a CALIBER HOME LOANS, INC.,
MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC.,
FEIWELL AND HANNOY PC,
BRYN REDMOND attorney,
LEANNE TITUS attorney,
BENJAMIN S. CARSON, SR. Secretary of the
United States Department of Housing and Urban
Development,
CAROL J. GALANTE Assistant Secretary for
Housing, Federal Housing Commissioner,
JOHN W. LUCY Director of Asset Sales, HUD,
CALIBER HOME LOANS, INC.,
Defendants.

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Case No. 1:16-cv-02605-TWP-DML

ORDER ADOPTING REPORT AND RECOMMENDATION
This matter is before the Court on Plaintiff, Kimball Rustin Roy Scarr’s (“Scarr”),
Objections to the Magistrate Judge’s Report and Recommendation (Filing No. 147, Filing No.
152). Scarr filed this action against multiple defendants alleging each fraud and violation of
numerous statutes. The Defendants each filed Motions to Dismiss the Amended Complaint.
Defendant Feiwell and Hannoy PC filed a Motion to Dismiss (Filing No. 77) pursuant to Federal
Rules of Civil Procedure 8(a), 12(b)(1), and 12(b)(6); Defendants Secretary of Housing and Urban
Development filed a Motion to Dismiss (Filing No. 79); Defendants Mortgage Electronic

Registration Systems, Inc. and JP Morgan Chase Bank, N.A. filed a Motion to Dismiss Pursuant
to Federal Rules of Civil Procedure 8(a), 12(b)(1), and 12(b)(6) (Filing No. 89), and Defendants
Caliber Home Loans, Inc., LSF9 Mortgage Holdings LLC, LSF9 Master Participation Trust filed
a Motion to Dismiss Plaintiff’s New Amended Complaint (Filing No. 91). The Motions were
referred to the Magistrate Judge for a Report and Recommendation (Filing No. 136). On January
25, 2018, the Magistrate Judge submitted her Report and Recommendation that each of the
Motions to Dismiss be granted. In addition, the Magistrate Judge denied all pending nondispositive motions (Filing No. 109, Filing No. 127, Filing No. 132, Filing No. 137 and Filing No.
138). Scarr filed a timely objection. For the reasons stated below, the Court overrules Scarr’s
Objections and adopts the Magistrate Judge’s Report and Recommendation.
I. BACKGROUND
The following facts are accepted as true for purposes of the Motions to Dismiss and all
reasonable inferences are drawn in a light most favorable to Scarr as the non-moving party. See
Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008). Scarr raised no objections to the
Magistrate Judge’s detailed and thorough recitation of the facts, (Filing No. 137 at 1-6), therefore
the facts will only be summarized in this Entry.
Scarr executed a mortgage on his home in Connersville, Fayette County, Indiana, with
SurePoint Lending (“SurePoint”) in 2008. The mortgage was later assigned to JPMorgan Chase
Bank, N.A. (“Chase”). In June 2013, after making mortgage payments for almost five years, Scarr
stopped making mortgage payments and Chase commenced a mortgage foreclosure action in
Fayette County Superior Court against Scarr, which was assigned Cause No. 21D01-1312-MF00873. Scarr challenged the validity of the promissory note and mortgage and the state trial court
granted Chase a summary judgment award in the amount of $200,649.11 and ordered foreclosure

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of the mortgage. Scarr challenged the grant of summary judgment and asserted Chase lacked
standing to foreclose on the mortgage. The Indiana Court of Appeals affirmed the grant of
summary judgment and denial of the motion to correct error. See Scarr v. JPMorgan Chase Bank
Nat. Ass’n., 40 N.E.3d 531 (Ind. Ct. App. 2015) (unpublished), trans. denied, 49 N.E.3d 107 (Ind.
2016).
On March 9, 2017, Scarr filed the operative Amended Complaint in this case alleging in
Count 1 that Defendants SurePoint and Chase engaged in fraud in originating a mortgage loan
without a note and making inaccurate and incomplete disclosures, and engaged in a conspiracy to
prevent Scarr’s rescission of that loan. Count 2 alleges that in connection with the mortgage loan,
Chase and LSF9 Mortgage Holdings, LLC violated the Truth in Lending Act, 15 U.S.C. §§ 1631–
1651; Regulation X, 12 C.F.R. § 1024; and the Real Estate Settlement Procedures Act (“RESPA”),
12 U.S.C. §§ 2601–2617, by withholding information about the assignment of the mortgage loan
and withholding RESPA notifications. Count 3 alleges that SurePoint, Chase, LSF9 Mortgage
Holdings and LSF9 Master Participation Trust, 2 and Caliber Home Loans, Inc. engaged in fraud
and conspiracy to commit fraud to prevent rescission and obtain a judgment of foreclosure,
obstruction of justice, and money laundering. Count 4 claims inadequate management and
oversight by the United States Department of Housing and Urban Development (“HUD”) of its
Federal Housing Administration (“FHA”) insurance programs. The complaint contains a fifth
count alleging injuries to Scarr and his family, namely, the mortgage loan, the state court
foreclosure action, the loss of FHA insurance protections, the personal judgment against Scarr in
the foreclosure action, the order of a sheriff’s sale of his home, and emotional distress.
In a thoughtful and detailed Order, the Magistrate Judge recommended that the Court grant
each Defendant’s motion to dismiss. To the extent the Amended Complaint challenged the state

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court foreclosure judgment or sought rescission of Scarr’s mortgage loan, the Magistrate Judge
recommended dismissal of those claims without prejudice for lack of subject matter jurisdiction.
To the extent that any of Scarr’s claims are not barred by the Rooker-Feldman doctrine 1, the
Magistrate Judge recommended dismissal with prejudice for failure to state a claim based on claim
preclusion or issue preclusion.
II. LEGAL STANDARD
A.

Objection to Dispositive Matters
A district court may assign dispositive matters to a magistrate judge, in which case the

magistrate judge may submit to the district judge only a report and recommended disposition,
including any findings of fact. 28 U.S.C. § 636(b)(1)(B) (2012); Fed. R. Civ. P. 72(b)(1). See
also Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 760 (7th Cir. 2009). The magistrate
judge’s recommendation on a dispositive matter is not a final order, and the district judge makes
the ultimate decision to “accept, reject, or modify” the findings and recommendations, and the
district court need not accept any portion as binding. 28 U.S.C. § 636(b)(1) (2012); Fed. R. Civ.
P. 72(b)(3). See also Schur, 577 F.3d at 760-61.
After a magistrate judge makes a report and recommendation, either party may object
within fourteen days of being served with a copy of the same. 28 U.S.C. § 636(b)(1); Fed. R. Civ.
P. 72(b)(2). When a party raises specific objections to findings and recommendations made within
the magistrate judge’s report, the district court is required to review those objections de novo,
determining for itself whether the magistrate judge’s decisions as to those issues are supported by
substantial evidence or were the result of an error of law. 28 U.S.C. § 636(b)(1) (2012); Fed. R.

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The Rooker-Feldman doctrine divests lower federal courts of “jurisdiction over cases brought by state-court losers
challenging state-court judgments rendered before the district court proceedings commenced.” Mains v. Citibank,
N.A., 852 F.3d 669, 675 (7th Cir. 2017), cert. denied, 138 S. Ct. 227 (Oct. 2, 2017); see D.C. Court of Appeals v.
Feldman, 460 U.S. 462, 482 (1983); Rooker v. Fidelity Trust Co., 263 U.S. 413, 415–6 (1923).

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Civ. P. 72(b)(3). See also Johnson v. Zema Sys. Corp., 170 F.3d 734, 739 (7th Cir. 1999). The
court may, however, defer to those conclusions to which timely objections have not been raised
by a party. Schur, 577 F.3d at 760-61. Further, if a party fails to object to a magistrate judge’s
report and recommendation, or objects on some issues and not others, the party waives appellate
review of the issues to which the party has not objected. Johnson, 170 F.3d at 739.
B.

Objection to Non-Dispositive Matters
A district court may refer a non-dispositive pretrial motion to a magistrate judge under

Federal Rule of Civil Procedure 72(a). Rule 72(a) provides:
When a pretrial matter not dispositive of a party’s claim or defense is referred to a
magistrate judge to hear and decide, the magistrate judge must promptly conduct the
required proceedings and, when appropriate, issue a written order stating the
decision. A party may serve and file objections to the order within 14 days after
being served with a copy. A party may not assign as error a defect in the order not
timely objected to.
The district judge in the case must consider timely objections and modify or set aside any
part of the order that is clearly erroneous or is contrary to law. Fed. R. Civ. P. 72(a). The clear
error standard is highly deferential, permitting reversal only when the district court “is left with
the definite and firm conviction that a mistake has been made.” Weeks v. Samsung Heavy Indus.
Co., Ltd., 126 F.3d 926, 943 (7th Cir. 1997).
III. DISCUSSION
Because Scarr proceeds pro se, the Court liberally construes his Objections as well as his
responses to the Motions to Dismiss. See, e.g., Alvarado v. Litscher, 267 F.3d 648, 651 (7th Cir.
2001). Scarr filed an Interim Response and Objections on February 15, 2018 (Filing No. 147),
and with leave of the Court, filed a second Objection to Report and Recommendation (Filing No.
152) on March 9, 2018, which incorporates much of the same language contained in the Interim
filing. As an initial matter the Court notes that a majority of Scarr’s Objections in both filings
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contain re-argument of matters that were previously raised in his Responses to each of the motions
to dismiss.
In a preamble to his Objection filed March 9, 2018, Scarr states “Absolutely this is not a
Rooker Feldman Case, brought by a loser in Indiana State Courts disputing, attempting to
invalidate, or modify in part or all a Certified by the Indiana State Supreme Court judgment.”
(Filing No. 152 at 11.) He goes on to state the reason for his suit is “the defendants’ frauds and
collusions” which caused him to “enter by deceit into a loan by using an enticing come on loan
offer” which deceived him “into applying for a loan with SurePoint as originator and Chase as
Lender.” Id. at 34. His specific Objections to the Report and Recommendation begin on page 45
of his second filing. Scarr’s first objection is that “Rooker Feldman, Res Judicata and issue
preclusion do not apply here.” (Filing No. 152 at 45 ¶ 131.) He also specifically objects to the
Court’s “only partial investigation into the breach of contract and foreclosure in Fayette County
Indiana Superior and the Appellate Courts of Indiana as to determination of those Court’s [sic]
other than the judgment given…”. (Filing No. 152 at 46 ¶ 132.) In a summary fashion, Scarr
concludes that he objects to each and every legal determination of the Magistrate Judge because
the “opinions badly interrupt [sic] or misunderstand my case, claims and issues”. (See Filing No.
152 at 54 ¶ 158.)
A.

MERS’s and Chase’s Motion to Dismiss
With respect to MERS and Chase, the Magistrate Judge analyzed their Motion to Dismiss

under Rules 8(a), 12(b)(1), 12(b)(6), and under the Rooker-Feldman doctrine, res judicata, and
preclusion principles. The Court agrees with the Magistrate Judge’s analysis that because the
foreclosure judgment is the source of Scarr’s alleged injuries, the Rooker-Feldman doctrine bars
his claims to the extent he seeks to challenge the state court foreclosure judgment or seeks

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rescission of his mortgage loan. Under Rule 12(b)(1), this Court lacks subject matter jurisdiction
over Scarr’s claims against these Defendants. See, e.g., Harold v. Steel, 773 F.3d 884, 885 (7th
Cir. 2014) (“The Rooker-Feldman doctrine applies when the state court’s judgment is the source
of the injury of which plaintiffs complain in federal court.”); Taylor v. Federal Nat’l Mortg. Ass’n,
374 F.3d 529, 533–34 (7th Cir. 2004) (holding Rooker-Feldman barred mortgagor’s federal claim
seeking to have home returned based on creditors’ alleged fraud effectively sought to vacate state
court foreclosure judgment and claim for damages in amount of home’s fair market value). In
addition, the Magistrate Judge determined that even if some claims are not barred by RookerFeldman, they would be barred by res judicata (claim preclusion) or collateral estoppel (issue
preclusion). (Filing No. 142 at 13.) The case law and authority cited by the Magistrate Judge is
directly on point, and the Court finds no error in this portion of the recommendation.
B.

The HUD Defendants’ Motion to Dismiss
Benjamin S. Carson, Sr., the Secretary of HUD, John W. Lucey, the Director of Asset

Sales, and HUD moved to dismiss the claims against them under Rule 12(b)(1) for lack of subject
matter jurisdiction, arguing that all claims against them and all named HUD employees are barred
by the Rooker-Feldman doctrine and because Scarr lacks standing to challenge the Secretary’s
actions. The Magistrate Judge agreed and found that Scarr has no private right of action to sue the
Secretary under the National Housing Act and HUD regulations and that he lacks standing to
contest the policies of these United States government agencies. The Magistrate Judge further
determined correctly that the United States has sovereign immunity as to the claims against them
and that immunity had not been waived. In his Objections, Scarr made no specific arguments
regarding the HUD Defendants and assigned no specific errors to the Magistrate Judge’s ruling

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regarding these claims, and the Court finds no error. Accordingly, the Court finds no error in this
portion of the Recommendation.
C.

Motion to Dismiss of LSF9/Caliber Defendants
On April 10, 2017, Chase filed an Assignment of Judgment which conveyed and assigned

all of its right, title and interest in the foreclosure judgment against Scarr to Defendants Master
Participation Trust, LSF9 Mortgage Holdings, LLC, and Caliber Home Loans, Inc. (collectively
the “LSF9/Caliber Defendants”). Scarr’s claims against the LSF9/Caliber Defendants is premised
on their failure to accept his purported rescission of the mortgage loan and the foreclosure
judgment. (Filing No. 64 at. ¶¶ 59–67, 70, 74.) The claims against the LSF9/Caliber Defendants
invite the court to review and set aside the state court foreclosure judgment. Again, the Magistrate
Judge determined that under Rooker-Feldman, the federal court lacks jurisdiction to grant Scarr
his requested relief. After a careful review of the parties’ briefing and the Magistrate Judge’s
recommendation, the Court finds that Scarr’s claims are barred by Rooker-Feldman and should be
dismissed for lack of jurisdiction. In addition, Scarr cites no authority in support of his contention
that the Magistrate Judge erred in her analysis; accordingly, the Court finds no error in this portion
of the Recommendation.
D.

The Feiwell Defendants’ Motion to Dismiss
Feiwell & Hannoy, P.C., Leanne S. Titus, and Bryan K. Redmond (the “Feiwell

Defendants”), are the lawyers who represented Chase, the plaintiff in the state court foreclosure
action against Scarr. They move to dismiss the Amended Complaint under Rules 8, 12(b)(1) and
12(b)(6) of the Federal Rules of Civil Procedure. Among other grounds, they assert that the Court
lacks subject matter jurisdiction under the Rooker-Feldman doctrine. The Magistrate Judge
determined that Rooker-Feldman bars the claims against these Defendants to the extent Scarr seeks

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to challenge the state court foreclosure judgment or seeks rescission of his mortgage loan. More
importantly, any claims against the Feiwell Defendants must be denied because the Amended
Complaint makes no allegations against these lawyers in any way. The Court agrees with the
Magistrate Judge that even if the Rooker-Feldman doctrine did not apply, these claims must be
dismissed pursuant to Federal Rule 12(b)(6) for failure to state a claim. Accordingly, the Court
finds no error in this portion of the Recommendation.
E.

Scarr’s Objection to the Magistrate Judges Order on Related Motions
In his Interim Objection (Filing No. 147 at 1) Scarr also objects to the Magistrate Judge’s

order dismissing all related motions (Filing No. 109, Filing No. 127, Filing No. 132, Filing No.
137 and Filing No. 138). However, the Court could find no specific objections to any of these
rulings in Scarr’s filings.
The Magistrate Judge denied Scarr’s Motion to Amend Plaintiff’s Response to Defendants’
Motions to Dismiss and for 65 Page Response (Filing No. 127). The reason for the ruling was that
“Scarr has not shown that an amended response brief could possibly make a difference in the
outcome of the motions to dismiss or that 65 pages of briefing is necessary.” (Filing No. 142 at
24.) The Magistrate Judge denied Scarr’s two separate motions for a hearing on the motions to
dismiss (Filing No. 109 and Filing No. 132), because resolution of the motions to dismiss is
straightforward and oral argument is unnecessary. The Magistrate Judge denied Scarr’s two
motions seeking to file exhibits in support of the record and for consideration in deciding the
motions to dismiss (Filing No. 137 and Filing No. 138), because none of the exhibits would affect
the proper determination of the motions to dismiss. Fair and meaningful consideration was given
to Scarr’s motions in Filings No. 109, Filing No. 127, Filing No. 132, Filing No. 137 and Filing

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No. 138; and he has demonstrated no error in the Magistrate Judge’s order. Accordingly, the Court
overrules Scarr’s objections and appeal of the Order denying all pending non-dispositive motions.
IV. CONCLUSION
The Court, having reviewed de novo the parties’ arguments in the Motions to Dismiss, the
Report and Recommendation’s findings and authorities on each point, and Scarr’s Objections
thereto, concludes that the Magistrate Judge’s analysis is correct and her holdings are sound. Fair
and meaningful consideration was given to Scarr’s objections and he has demonstrated no error in
the Magistrate Judge’s order. Therefore, the Court ADOPTS the Magistrate Judge’s Report and
Recommendation (Filing No. 142). Defendants’ Motions to Dismiss (Filing No. 77, Filing No.
79, Filing No. 89 and Filing No. 91) are GRANTED. And, to the extent the Amended Complaint
(Filing No. 64) seeks to challenge the state court foreclosure judgment or seeks rescission of
Scarr’s mortgage loan, those claims are DISMISSED without prejudice for lack of subject matter
jurisdiction, but to the extent any of the claims are not barred by Rooker-Feldman, those claims
are DISMISSED with prejudice for failure to state a claim based on claim preclusion or issue
preclusion.
In addition, the Court finds no errors in the Magistrate Judge’s Order dismissing all pending
non-dispositive motions (Filing No. 109, Filing No. 127, Filing No. 132, Filing No. 137, and Filing
No. 138). The Court therefore OVERRULES the objections and Filing No. 109, Filing No. 127,
Filing No. 132, Filing No. 137, and Filing No. 138 are DISMISSED.

SO ORDERED.

Date: 3/14/2018

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DISTRIBUTION:
Kimball Rustin Roy Scarr
114 North 13th Street
Richmond, Indiana 47374-3215
Robert C. Folland
BARNES & THORNBURG LLP
[e-mail]
Jill Z. Julian
UNITED STATES ATTORNEY’S OFFICE
[e-mail]
Mark J. Magyar
DYKEMA GOSSETT PLLC
[e-mail]
Rubin Pusha, III
BARNES & THORNBURG LLP (Indianapolis)
[e-mail]
Bryan Keith Redmond
FEIWELL & HANNOY, P.C.
[e-mail]
Leanne S. Titus
FEIWELL & HANNOY P.C.
[e-mail]

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