Love v. SouthLaw PC et al

Filing 59

MEMORANDUM AND ORDER granting 36 Motion to Dismiss for Failure to State a Claim; granting 38 Motion to Dismiss; denying 49 Motion to Amend Complaint.; finding as moot 9 Motion to Dismiss for Failure to State a Claim; granting 27 Motion to Dismiss. Signed by Chief Judge J. Thomas Marten on 3/3/2017. (sz)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

MIEKEL LOVE,
Plaintiff,
vs.

Case No. 16-1310-JTM

SOUTHLAW, P.C., et al.,
Defendants.

MEMORANDUM AND ORDER

According to her Complaint, plaintiff Miekel Love fell behind on her residential
mortgage payments. The loan holder, MidFirst Bank, obtained a judgment on the property,
which was sold at a sheriff’s sale on January 26, 2016. Love now sues MidFirst and its
servicing agent, Midland Mortgage Company, as well as its property manager, Safeguard
Properties Management, for conversion, contending that they converted her interest in the
residence by assuming control of the property. She contends she had not vacated the
residence, as defendants assumed, but “was suffering from severe depression and
spending extended periods of time at the home of a friend,” and that she “checked on the
condition of her home periodically.” (Dkt. 1, ¶ 20).1 Love has also sued SouthLaw, the law
firm which brought the foreclosure, under the Fair Debt Collections Practices Act (FDCPA),
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The plaintiff subsequently dismissed her action against Midland. (Dkt. 35)

as well as its process server, Aristocrat Investigations.
Both Aristocrat Investigations (Dkt. 9) and Southlaw (Dkt. 27) moved to dismiss the
action, arguing that they were not “debt collectors” within the meaning of the FDCPA. In
addition, Southlaw argued that Love’s claim was precluded under the Rooker-Feldman
doctrine. See Rooker v. Fidelity Trust, 263 U.S. 413 (1923). That doctrine bars federal courts
from exercising jurisdiction over claims “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.” Exxon
Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005).
Subsequently, Love filed an Amended Complaint (Dkt. 32), as well as a response to
Aristocrat’s motion to dismiss. (Dkt. 33). In the foreclosure action, Aristocrat reported that
it had been unable to serve Love at the residence, and that the person living at the residence
reported he did not know Love. The Amended Complaint contends that Aristocrat’s report
was wrong, and it should have conducted a diligent inquiry in trying to find her. She also
alleges that she had kept some personal property at the residence. She alleges that
Southlaw then used Aristocrat’s false report to justify service of the foreclosure by
publication.
Aristocrat then filed a renewed motion to dismiss (Dkt. 36), while Southlaw moved
to dismiss the Amended Complaint under Fed.R.Civ.Pr. 15(a)(1)(B). Both parties repeated
their earlier contention that they were not acting to collect a debt within the meaning of the
FDCPA, and both argued that the court has no jurisdiction to entertain the action under the
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Rooker-Feldman doctrine. Ultimately Love filed a separate motion (Dkt. 49) seeking leave
to filed a proposed Amended Complaint.
The court finds that plaintiff’s claims are inextricably intertwined with the validity
of the underlying state court judgment, and that the Rooker-Feldman doctrine bars the
present action against Aristocrat and Southlaw. For purposes of the doctrine, “[a] claim is
inextricably intertwined if the state-court judgment caused, actually and proximately, the
injury for which the federal court plaintiff seeks redress.” Tal v. Hogan, 453 F.3d 1244, 1256
(10th Cir.2006) cert. denied, 549 U.S. 1209 (2007).
Both defendants cite the Tenth Circuit’s decision in Crutchfield v. Countrywide Home
Loans & Mortg. Elec. Registration Sys., 389 F.3d 1144 (10th Cir. 2004), and the court finds that
the case strongly supports dismissal of the present FDCPA action.
In Crutchfield, the plaintiff brought an action under the Truth in Lending Act (TILA)
seeking to rescind his assumption of a mortgage following the mortgagor's death. The
district court granted summary judgment to the defendants, finding in part no evidence
of a consumer credit transaction which would provide a basis for recission. The Tenth
Circuit did not reach the merits of the matter in the subsequent appeal, agreeing with the
defendants that in any event such an action was precluded by Rooker-Feldman doctrine. The
court observed:
To determine whether a federal plaintiff's claim is inextricably intertwined
with a state court judgment we must pay close attention to the relief the
plaintiff seeks. See Kenmen Eng'g v. City of Union, 314 F.3d 468, 476 (10th
Cir.2002). While a litigant may be able to make a federal claim appear
unrelated to a state court judgment through artful pleading, the requested
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relief can quickly reveal whether Rooker–Feldman applies. Where a plaintiff
seeks a remedy that would “disrupt or undo” a state court judgment, the
federal claim is inextricably intertwined with the state court judgment.
389 F.3d at 1147-48. Rooker-Feldman barred the plaintiff’s claim, the court explained, to the
extent that it rested on the argument that plaintiff had not received the required notice
under state law:
Mr. Crutchfield appeals the district court's ruling that notice in the state court
foreclosure action was proper. Rooker–Feldman bars our subject matter
jurisdiction to entertain this argument. The District Court for Oklahoma
County held that Mr. Crutchfield was personally served with a summons in
the manner required by law and that the court “approves the service as
meeting the statutory requirements.” In response to the Defendants' first
motion for summary judgment in federal court, Mr. Crutchfield contended
that the state court's holding was contrary to Oklahoma's notice statute. This
was, in substance, a request that the federal district court overturn the
judgment of the state court, which the federal court may not do. When a state
court actually decides an issue, Rooker–Feldman prevents federal courts from
hearing an appeal of that claim. Rooker, 263 U.S. at 415–16, 44 S.Ct. 149.
Allowing parallel litigation on the same point of law would invite chicanery
from litigants.
Id. at 478 (record citation omitted). The conclusion was no different as to the plaintiff’s
contention that he had a right to recision of the mortgage under federal law, even though
the matter was not explicitly addressed in the judgment.
Unlike the adequacy of notice, the state court did not actually decide whether
Mr. Crutchfield had a right to rescission under TILA. Consequently, we must
determine whether that claim is inextricably intertwined with the state court
judgment. The effect of the state court judgment was to foreclose the
mortgage on the home that Mr. Crutchfield inherited from his mother. If he
were to receive his requested relief, the district court would issue a
declaratory judgment that he had validly rescinded the mortgage and thus
removed the lien on the property. Mr. Crutchfield is thus asking a federal
court to do precisely what Rooker–Feldman prohibits: to undo the effect of the
state court judgment. He tells us as much when he characterizes the state
court judgment as “a judicial nullity.” Consequently, Mr. Crutchfield's
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request for a declaratory judgment is inextricably intertwined with the state
court judgment.
Id. at 1148-49 (record citation omitted).
This court has reached similar conclusions in FDCPA cases. In Curnal v. LVNV
Funding, No. 10-2610-EFM, 2011 WL 2970816, *2 (D. Kan. July 20, 2011), the plaintiff
claimed in part that the defendant violated the FDCPA by obtaining a state court judgment
against her although it was not properly licensed under state law to collect on loans. The
court concluded:
These claims are inextricably intertwined with the prior state action in which
Defendant collected on a loan from Plaintiff. The relief requested by Plaintiff
would require this court to undermine the state court judgment in the loan
collection action. Therefore, the Rooker–Feldman doctrine applies and this
court must remand.
2011 WL 2970816 at *2.
In McCammon v. Bibler, Newman & Reynolds, 515 F.Supp.2d 1220, 1231 (D. Kan. 2007),
the court found that the plaintiffs’ FDCPA claim was not barred by Rooker-Feldman to
extent they claimed their credit suffered from the defendants’s failure to report a
satisfaction of the debt. At the same time, however, the court concluded:
To the extent plaintiffs' claim for actual damages is premised on the theory
that Ms. McCammon's credit report was damaged as a result of the default
judgment, the court agrees with defendants that Rooker–Feldman bars the
court from asserting jurisdiction over the claim. That particular theory of
damages asks the jury to conclude (as plaintiffs have alleged) that the
judgment was obtained through fraud or improper means such that it never
should have been entered and never should have appeared on Ms.
McCammon's credit report and thus to return plaintiffs to the position they
occupied prior to the judgment when they were offered financing at the
lower interest rate. Under this theory, plaintiffs would have suffered no
injury (in terms of actual damages) but for the state court judgment. The
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requested relief, then, would effectively “undo” the state court judgment and
the court grants defendants' motion to dismiss to the extent plaintiffs' claim
for actual damages stems from the judgment's affect on Ms. McCammon's
credit report. See Dickerson v. Bates, 287 F.Supp.2d 1251, 1255 (D.Kan.2003)
(plaintiff's claims seeking monetary damages attributable to losses he
sustained as a result of the state-court judgment fell within ambit of
Rooker–Feldman ), aff'd, 2004 WL 1510017 (10th Cir.2004); see also Ellis v. CAC
Fin. Corp., 6 Fed.Appx. 765, 769–70 (10th Cir. Mar.26, 2001) (where plaintiffs
requested damages for, among other things, loss of credit, claims were
barred by Rooker–Feldman in that they called into question the state court
judgment).
Id. at 1229-1239.
As the plaintiff notes, there is some authority outside the Tenth Circuit reaching a
contrary result. See Sykes v. Mel S. Harris & Assoc., 780 F.3d 70, 94-95 (2d Cir. 2015);
Hageman v. Barton, 817 F.3d 611, 615-16 (8th Cir. 2016). However, the Rooker-Feldman
doctrine as defined by the Tenth Circuit in Crutchfield, which the court is bound to follow,
as well as Curnal and McCammon, supports the defendants’ argument.
As in McCammon, the plaintiff “would have suffered no injury (in terms of actual
damages) but for the state court judgment.” Love’s original Complaint alleged she was
injured because the defendants acted “without proper notice to her,” and that as a direct
result of the lack of notice, she lost personal property in the residence “because she did not
have an opportunity to remove [it].” (Dkt. 1, ¶ 39). According to the Complaint, the
property was not seized by the law firm or the process server, but by Safeguard Property
Management. (Id. ¶¶ 30-32). The Complaint directly alleges that “[t]he judgment of
foreclosure and the judgment extinguishing redemption rights were void.” (Id. ¶ 26).
The validity of service is also integral to the plaintiff’s requested Amended

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Complaint, in which she alleges that Aristocrat’s affidavit erroneously reported an
unsuccessful attempt to serve her at the residence, and that the affidavit was “subsequently
used to justify publication service.” (Dkt. 49-1, ¶ 64). She argues that the law firm should
not have used service by publication rather than personal service (id., ¶ 53), and that the
foreclosure occurred “without proper notice to her” which directly caused her to lose her
property. (Id., ¶ 54). Plaintiff’s proposed Amended Complaint discusses in detail her
interpretation of Kansas rules of personal service and redemption rights. (Id., ¶¶ 26-30). She
repeats her contention that “[t]he judgment of foreclosure and the judgment extinguishing
redemption rights were void in that MidFirst Bank did not obtain personal service and
publication service was not justified by the returns that were filed.” (Id., ¶ 37).
A successful resolution of these issues would require directly repudiating the
findings of the state court. The Sedgwick County District Court explicitly found that “each
of the Defendant(s) has been served, or has otherwise voluntarily entered their appearance,
and the method of services is approved by the court.” Journal Entry of Judgment of
Foreclosure, Midfirst Bank v. Love, No. 15CV2127, at 1 (Nov. 12, 2015) (emphasis added).
The court further reported that “[p]roper Notice of Suit was published in The Sedgwick
County Post and the publication is approved by the Court.” (Id., at 2). Thus, the court
concluded, “[p]roper service has been had upon all of the parties named in the Petition.”
(Id.) (emphasis added).
At the core of the plaintiff’s argument is her claim that service of process in the state
foreclosure was improper, and that as a result, the state court’s judgments are “void.”

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Thus, “[w]ithout the injury caused by the judgments, plaintiff could claim no injury at all,”
and the Rooker-Feldman doctrine precludes this court from exercising jurisdiction over the
matter. See Market v. City of Garden City, No. 16-1053-JTM, *3 (D. Kan. Aug. 23, 2016) (citing
Winslow v. Stevens, 632 Fed.Appx. 721, 723 (3rd Cir. 2015)).
Because the court finds it is without jurisdiction to entertain the FDCPA action, it
need not resolve the additional argument by the defendants that they were not acting as
debt collectors for purposes of the FDCPA.
IT IS ACCORDINGLY ORDERED this 3rd day of March , 2017, that the defendants’
Motions to Dismiss (Dkt. 27, 36, 38) are hereby granted; plaintiff’s Motion to Amend (Dkt.
49) is denied, as the court would lack jurisdiction even with the proposed amendment; and
Aristocrat’s earlier Motion to Dismiss (Dkt. 9) is denied as moot.

s/ J. Thomas Marten
United States District Court Judge

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