Duraczynski et al v. Bank of America Corporation et al
Filing
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ORDER AND REASONS denying 8 Motion to Dismiss for Failure to State a Claim. Signed by Judge Jane Triche Milazzo. (ecm, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
DEBORAH DURACYZNSKI, ET AL.
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CIVIL ACTION NO. 12‐2252
Plaintiffs
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SECTION: H
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JUDGE JANE TRICHE MILAZZO
VERSUS
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MAGISTRATE: 5
BANK OF AMERICA CORPORATION, ET AL.
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MAG. ALMA CHASEZ
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Defendants *
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ORDER AND REASONS
The matter before the Court is a Motion to Dismiss for Failure to State a Claim (Doc. 8) filed
by Defendants Bank of America ("BOA") and Countrywide Financial Corporation ("Countrywide")
(collectively "Defendants"). For the following reasons the Motion is DENIED.
BACKGROUND
Deborah Bulliard (Duraczynski) ("Deborah"), along with 288 other non‐New York class
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members, filed suit in New York state court against various defendants ("New York defendants"),
including BOA and Countrywide. (Doc. 8‐2 at 1.) The New York plaintiffs alleged that damages
arose from various business practices employed by New York defendants including, but not limited
to, deceptively inducing plaintiffs to enter into mortgages, unlawful sale of mortgage‐backed
securities, unlawful foreclosure practices, improperly processing loan modification requests in good
faith, and depriving plaintiffs of the right to contract. (Id. at 5.)
The New York defendants filed a motion to dismiss which was granted. (Id.) The proposed
order gave the New York Judge two grounds to dismiss the action against defendants. The first was
pursuant to CPLR 3211(a)(1) and (7) for failure to state a claim. The second was dismissal on
grounds of forum non conveniens. (Doc. 8‐6 at 1.) Ultimately, the New York Judge signed the
proposed order thereby dismissing the case “with prejudice” against all plaintiffs, including
Deborah. (Id.) Subsequently, Deborah and her husband, Guy Bulliard ("Guy"), filed this action in
the Eastern District of Louisiana with similar allegations.
Before the Court is Defendants' Motion to Dismiss for Failure to State a Claim. (Doc. 8.)
Plaintiff opposed the Motion (Doc. 11) and Defendants filed a Reply (Doc. 15).
LEGAL STANDARD
To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead enough facts “to state
a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting
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Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 547 (2007)). A claim is “plausible on its face” when the
pleaded facts allow the court to “[d]raw the reasonable inference that the defendant is liable for
the misconduct alleged.” Iqbal, 129 S.Ct. at 1949. A court must accept the complaint's factual
allegations as true and must “draw all reasonable inferences in the plaintiff's favor.” Lormand v.
U.S. Unwired, Inc., 565 F.3d 228, 232 (5th Cir.2009). The Court need not, however, accept as true
legal conclusions couched as factual allegations. Iqbal, 129 S.Ct. at 1949–50.
To be legally sufficient, a complaint must establish more than a “sheer possibility” that the
plaintiff's claims are true. Id. “A pleading that offers labels and conclusions or a formulaic recitation
of the elements of a cause of action“ will not suffice. Iqbal, 129 S.Ct. at 1949 (quotations and
citation omitted). Rather, the complaint must contain enough factual allegations to raise a
reasonable expectation that discovery will reveal evidence of each element of the plaintiffs' claim.
Lormand, 565 F.3d at 255–57. The Court's review “is limited to the complaint, any documents
attached to the complaint, and any documents attached to the motion to dismiss that are central
to the claim and referenced by the complaint.” Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC,
594 F.3d 383, 387 (5th Cir.2010) (citing Collins v. Morgan Stanley Dean Witter, 224 F.3d 496,
498–99 (5th Cir.2000)). Ultimately, If it is apparent from the face of the complaint that an
insurmountable bar to relief exists, and the plaintiff is not entitled to relief, the court must dismiss
the claim. Jones v. Bock, 549 U.S. 199, 215 (2007).
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LAW AND ANALYSIS
For the reasons that follow the Court finds that there is insufficient evidence in the record
to show that the New York state court disposed of the Plaintiffs' claims on the merits. Accordingly
this decision is not res judicata and Defendants Motion to Dismiss is denied.
I.
Arguments of the Parties
Defendants seek to dismiss all of Plaintiffs' claims with prejudice under Rule 12(b)(6) for
failure to state a claim. (Doc. 8 at 1.) Defendants argue their claims were properly adjudicated in
a prior action in a New York state court. (Id.) Defendants aver that because the New York state
court dismissed that action "with prejudice," then the instant matter is barred by res judicata. (Id.)
In opposition, Plaintiffs argue that the New York state court dismissed the action on two conjoint
grounds and therefore the action is not barred by res judicata. (Doc. 11 at 3.) Specifically, Plaintiff
contends that because forum non conveniens is one of those grounds then the instant matter is not
barred. (Id.) Defendants reply and maintain that because the New York state court dismissed the
action "with prejudice" then this conveys that the New York court dismissed Plaintiffs claims on the
merits. (Doc. 15.)
II.
Res Judicata
A.
Motion to Dismiss
As an initial matter this Court notes that dismissal under Rule 12(b)(6) on res judicata
grounds may be appropriate if “the elements of res judicata are apparent on the face of the
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pleadings.” Dean v. Miss. Bd. of Bar Admissions, 394 F. App'x 172, 175 (5th Cir. 2010) (citing Kansa
Reinsurance Co., Ltd. v. Cong. Mortg. Corp. of Tex., 20 F.3d 1362, 1366 (5th Cir. 1994)). “In addition
to facts alleged in the pleadings, however, the district court ‘may also consider matters of which
[it] may take judicial notice.’” Hall v. Hodgkins, 305 F. App'x 224, 227 (5th Cir. 2008) (citing
Lovelace v. Software Spectrum Inc., 78 F.3d 1015, 1017–18 (5th Cir. 1996)). A court may take
judicial notice of public records such as prior judgments. Norris, 500 F.3d 454, 461 (5th Cir. 2007).
If a court decides to takes judicial notice of “matters in the public record, and items appearing in
the record of the case, all may be considered along with the pleadings in Rule 12(b)(6)
determinations.” Hall v. United States, No. CIV. A. 6:06‐CV‐528, 2008 WL 276397, at *3 n.5 (E.D.
Tex. Jan. 30, 2008).
Based on the foregoing, the Court will take judicial notice of the New York State court
pleadings and consider them in its determination of the instant motion.
B.
Generally
Res judicata ensures the finality of a judgment. Brown v. Felsen, 442 U.S. 127, 131 (1979).
In essence, under res judicata, “a final judgment on the merits of an action precludes the parties
or their privies from relitigating issues that were or could have been raised in that [prior] action.“
Allen v. McCurry, 449 U.S. 90, 94 (1980) (citation omitted). Moreover, res judicata protects
"[a]gainst 'the expense and vexation attending multiple lawsuits, conserv[es] judicial resources, and
foste[rs] reliance on judicial action by minimizing the possibility of inconsistent decisions.'” Taylor
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v. Sturgell, 553 U.S. 880, 892 (2008) (quoting Montana v. United States, 440 U.S. 147, 153–54
(1979)).
Claim preclusion and issue preclusion collectively define the doctrine of res judicata. Id.
"Under the doctrine of claim preclusion, a final judgment forecloses 'successive litigation of the
very same claim, whether or not relitigation of the claim raises the same issues as the earlier suit.'"
Taylor, 553 U.S. at 892 (2008) (quoting New Hampshire v. Maine, 121 S.Ct. 1808 (2001)). "Issue
preclusion, in contrast, bars successive litigation of an issue of fact or law actually litigated and
resolved in a valid court determination essential to the prior judgment, even if the issue recurs in
the context of a different claim.” Id. (quotations omitted).
C.
New York Res Judicata Law Applies
Under 28 U.S.C. § 1738, the federal courts must “give the same preclusive effect to state
court judgments that those judgments would be given in the courts of the State from which the
judgments emerged.” Lance v. Dennis, 546 U.S. 459, 466 (2006) (quotations and citations omitted).
The judgment to which Defendants wish the Court to refer is from New York. Therefore, this court
must look to New York’s rule on res judicata.
New York courts have adopted the transactional analysis approach in deciding res judicata
issues. O'Brien v. City of Syracuse, 54 N.Y.2d 353, 357 (1981). Thus, in New York, "under the
doctrine of res judicata, a final disposition on the merits bars litigation between the same parties
of all other claims arising out of the same transaction or out of the same or related facts, even if
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based upon a different theory involving materially different elements of proof." Goldman v. Rio,
104 A.D. 729, 730 (2013) (quotations and citations omitted).
D.
Final Disposition on the Merits
The Court finds that Defendants have not shown that the New York state court disposed
of the case on the merits. Accordingly, res judicata does not apply and Defendants' Motion is
denied.
Defendants attach plaintiffs' complaint in the New York state court proceedings, the New
York defendants' Motion to Dismiss the New York state court proceedings, and the Judge's Order
dismissing the New York state court proceedings. The Order states the following:
Upon Notice of Motion dated March 9, 2012 of defendants Bank of America
Corporation, Countrywide Home Loans, Inc., ReconTrust Company, N.A. (incorrectly
sued as Recon Trust Company) and CTC Real Estate Services (incorrectly sued as CT
Real Estate Services, Inc.) (collectively, "Defendants") for an order (I) pursuant to
CPLR 3211(a)(1) and (7) dismissing this action as against Defendants; and (ii) in the
alternative, pursuant to CPLR §§ 327(a) dismissing the claims of each of the 288
non‐New York Plaintiffs on grounds of forum non conveniens and in the Affirmation
of Scott H. Kaiser, Esq. in support of Defendants' motion, dated March 9, 2012 with
exhibits annexed thereto; and
This Court having rendered the attached decision and order dated April 13,
2012 and entered on April 16, 2012 in the Office of the Clerk of the County of New
York, granting Defendants' motion on default;
NOW, on motion of Bryan Cave LLP, attorneys for the Defendants, it is
hereby ORDERED that Plaintiffs' claims against Defendants are dismissed with
prejudice.
(Doc. 8‐6.) Because the Court does not provide the reasons for the decision referenced in the
Judge's Order this Court must determine whether dismissing the case "with prejudice" is a final
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disposition on the merits.
Customarily, "[a] dismissal with prejudice clearly constitutes an adjudication on the merits,"
and that "[a] dismissal without prejudice only ‘indicates,’ as a general matter, that there has been
no adjudication on the merits of the claim.” Goldstein v. N.Y. State Urban Dev. Corp., 13 N.Y.3d 511,
544 (2009). Thus, "a dismissal 'with prejudice' generally signifies that the court intended to dismiss
the action 'on the merits,' that is, to bring the action to a final conclusion against the plaintiff."
Yonkers Contracting Co., Inc. v. Port Auth. Trans‐Hudson Corp., 93 N.Y.2d 375, 380 (1999) (citations
omitted). In the end, some courts "[h]ave used the phrase 'with prejudice' interchangeably with
'on the merits' to suggest the same preclusive effect." Id.
On the other hand, an action dismissed "with prejudice" may not necessarily be a decision
based on the merits. Specifically, “[w]hen a complaint is dismissed on forum non conveniens
grounds, it is ‘dismissed with prejudice,' precluding plaintiffs from further presenting their claims
in courts of this State.” Purgatorio, 198 A.D.2d 37, 38 (1993) (citing Brown v. Bullock, 17 A.D.2d
424, 428 (1962)). Thus, even though a case is dismissed "with prejudice" on grounds of forum non
conveniens, "[i]t is not an adjudication of the merits of his claim, and obviously is no bar to
prosecution of the suit in the proper jurisdiction." Brown, 17 A.D.2d at 428.
Here, the Court has not been provided with a complete record of the New York state court
action. Missing from the record are the New York court's reasons for dismissing the action.
Because the New York state court included forum non conveniens in its order dismissing the New
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York action, the Court cannot determine whether the "with prejudice" was based on the merits or
on forum non conveniens grounds without its reasons. As such, this Court is unable to determine
whether the instant matter is barred by res judicata.
Because Defendants cannot show that the New York matter was a final disposition on the
merits this Court pretermits discussion of whether the instant litigation bears the same parties
and/or arises out of the same transaction or out of the same or related facts as the New York state
suit.
CONCLUSION
For the foregoing reasons, Defendants' Motion to Dismiss is DENIED. (Doc. 8.)
New Orleans, Louisiana on this 18th day of July, 2013.
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JANE TRICHE MILAZZO
UNITED STATES DISTRICT COURT JUDGE
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