Whitmore v. Bank of New York Mellon et al
ORDER AND REASONS granting in part 11 MOTION to Dismiss for Failure to State a Claim, 13 MOTION for Judgment on the Pleadings; all of plaintiff's claims are DISMISSED WITHOUT PREJUDICE. FURTHER ORDERED that Whitmore may file an amende d complaint no later than 6/2/2017. If Whitmore does not timely file an amended complaint, this Court will dismiss the lawsuit with prejudice. If an amended complaint is timely filed and if the defendants take the position that the claims in Whitmore's amended complaint are barred by res judicata or otherwise, they shall file motions to dismiss this lawsuit with prejudice no later than 6/19/2017. Signed by Judge Lance M Africk on 5/16/2017.(blg)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
WILMORE WILEY WHITMORE
BANK OF NEW YORK MELLON ET AL.
ORDER AND REASONS
Before the Court are a motion1 to dismiss filed by Bank of America National
Association and a motion 2 for judgment on the pleadings filed by Bank of New York
Mellon and Ditech Financial LLC. For the following reasons, the Court grants the
motions in part.
Homeowners who are at imminent risk of defaulting or who have already
defaulted on mortgage loans can apply for modification of their mortgage through the
Home Affordable Modification Program (“HAMP”), a federal mortgage assistance
program. Through HAMP, the United States Treasury Department offers mortgage
loan servicers—such as defendants Bank of America National Association (“BANA”)
and Ditech Financial LLC (“Ditech”)—incentives to participate in loan modifications.
A “short sale” or a deed-in-lieu of foreclosure are options available to certain
homeowners through the Home Affordable Foreclosure Alternatives Program
(“HAFA”), a sub-program of HAMP. See Stephen F.J. Ornstein et. al., Eligibility and
R. Doc. No. 11.
R. Doc. No. 13.
Foreclosure Alternatives in the Hamp Home Affordable Refinancing and Foreclosure
Alternatives Programs, 64 Consumer Fin. L.Q. Rep. 415, 416 (2010).
Pro se plaintiff Wilmore Whitmore filed this lawsuit relative to the foreclosure
of his home. He claims that he entered into a valid short sale agreement with BANA
under the federal assistance programs described above and that BANA and the other
defendants breached the short sale agreement. A “short sale” agreement refers to a
transaction where the mortgagee/lender and other creditors and lienholders having
a recorded interest in the borrower’s property which is in the process of being
foreclosed agree to accept less than the full amount due on the loan. The loan servicer
agrees to hold off or postpone the foreclosure proceedings in order to give the owner
time to sell the property in the market. The loan servicer then accepts the net
proceeds of the sale as satisfaction in full of the total amount due on the loan. See
Alternatives (HAFA), Real Estate & Mortgage Banking § 7:98. Whitmore claims the
defendants breached his short sale agreement by foreclosing on his home before the
time for Whitmore to sell his home on the market had expired.
Whitmore and his wife filed a petition for injunctive relief against defendant
Bank of New York Mellon (“BNY Mellon”) in state court in 2013 in an attempt to halt
the foreclosure of their home. BNY Mellon is the trustee for the certificate holders of
the note on Whitmore’s mortgage. Defendant Ditech is the current servicer of the
mortgage loan and defendant BANA was the previous servicer of the mortgage loan.
After filing the lawsuit, Whitmore and his wife filed a motion to dismiss the state
court action with prejudice which was granted by the state court on August 16, 2013.
The defendants now argue, inter alia, that the prior dismissal with prejudice bars
Whitmore’s re-assertion of his claims in this lawsuit.
The Court agrees.
Nevertheless, it only grants the defendants’ motions in part in order to afford
Whitmore an opportunity to amend his complaint.
Although all of the defendants seek dismissal on the basis of res judicata, they
filed their motions pursuant to different Rules of Civil Procedure. As stated above,
BANA filed a Rule 12(b)(6) motion and BNY Mellon and Ditech filed a Rule 12(c)
motion. Rule 12(b)(6) permits a defendant to seek a dismissal of a complaint based
on the “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P.
12(b)(6). Rule 12(c) states that, “[a]fter the pleadings are closed—but early enough
not to delay trial—a party may move for judgment on the pleadings.” Fed. R. Civ. P.
The Fifth Circuit holds that “[t]he standard for dismissal under Rule 12(c) is
the same as that for dismissal for failure to state a claim under Rule 12(b)(6).”
Johnson v. Johnson, 385 F.3d 503, 529 (5th Cir. 2004). Under either type of motion,
the Court must look only to the pleadings and must accept all well-pled factual
allegations as true. Brittan Commc’ns Int’l Corp. v. Sw. Bell Tel. Co., 313 F.3d 899,
904 (5th Cir. 2002). “Pleadings should be construed liberally, and judgment on the
pleadings is appropriate only if there are no disputed issues of material fact and only
questions of law remain.” Id. “[T]he central issue is whether, in the light most
favorable to the plaintiff, the complaint states a valid claim for relief.” Id. (internal
quotation marks omitted).
“Generally, a court ruling on a 12(b)(6) motion may rely on the complaint, its
proper attachments, documents incorporated into the complaint by reference, and
matters of which a court may take judicial notice.” Phillips v. Home Path Fin., L.P.,
No. 15-11290, 2017 WL 629270, at *1 (5th Cir. Feb. 15, 2017) (internal quotation
marks omitted). The same is true with respect to Rule 12(c) motions. See Bosarge v.
Mississippi Bureau of Narcotics, 796 F.3d 435, 440 (5th Cir. 2015); Hebert Abstract
Co. v. Touchstone Properties, Ltd., 914 F.2d 74, 76 (5th Cir. 1990). 3
When determining the preclusive effect of a state court judgment, federal
courts apply the preclusion law of the state that rendered the earlier judgment.
Weaver v. Tex. Capital Bank N.A., 660 F.3d 900, 906 (5th Cir. 2011). Under Louisiana
law, in order to establish that res judicata bars an action the defendant must prove
that: (1) the judgment is valid; (2) the judgment is final; (3) the parties are the same;
(4) the cause or causes of action asserted in the second lawsuit existed at the time of
final judgment in the first litigation; and (5) the cause or causes of action asserted in
the second lawsuit arose out of the transaction or occurrence that was the subject
The Court may take judicial notice of “matters of public record,” including public
records in state court proceedings. Lamar Cty. Elec. Co-op. Ass’n v. Rayburn Country
Elec. Co-op., Inc., 330 F. Supp. 2d 763, 764 n.1 (E.D. La. 2002) (Vance, J.). The
defendants invite the Court to take judicial notice of the dismissal in Whitmore’s prior
state court action, see R. Doc. No. 11-4, and the Court does so. See Fed. R. Evid.
201(c)(2) (“The court must take judicial notice if a party requests it and the court is
supplied with the necessary information.”).
matter of the first litigation. Burguieres v. Pollingue, 843 So. 2d 1049, 1053 (La. 2003)
(citing La. R.S. 13:4231).
The first two elements are met. There is no dispute that the state court
judgment was valid and that a dismissal with prejudice of all claims—even a
voluntary one—counts as a final judgment under Louisiana law.
See Buck v.
Deutsche Bank Nat. Trust Co., No. 05-2986, 2006 WL 1968863, at *3 (E.D. La. July
12, 2006) (Vance, J.).
The third element is satisfied because Whitmore and BNY Mellon were both
parties to the state court action and because BANA and Ditech, as the former and
current servicers of the mortgage, are in privity with BNY Mellon for the purposes of
res judicata. In Louisiana, a final judgment binds a nonparty where “the nonparty’s
interests were adequately represented by a party to the action, who may be
considered the ‘virtual representative’ of the nonparty, because the interests of the
party and the nonparty are so closely aligned.” See Mandalay Oil & Gas, L.L.C. v.
Energy Dev. Corp., 880 So. 2d 129, 142 (La. App. 1 Cir. 2004). Based on these facts,
the preexisting relationship between the trustee for the certificate holders of the
mortgage note and the servicers of the mortgage is sufficiently close to establish
privity for res judicata purposes. Cf. Murphy v. Hsbc Bank USA, 2017 WL 393595,
at *5 (S.D. Tex. Jan. 30, 2017) (noting that “[t]he preexisting relationship between a
mortgage holder, a mortgage servicer, and a mortgage lender usually is sufficient to
establish privity for res judicata purposes” under Texas law); Everhart v. Citibank,
NA., 2015 WL 12805172, at *3 (S.D. Tex. Mar. 30, 2015) (recognizing that “courts
have found [that] a trustee and servicer are in privity” under Texas res judicata law).
The final two elements are also met. Although communications have been
exchanged between Whitmore and the defendants since the dismissal of Whitmore’s
earlier lawsuit, the basis for Whitmore’s claims is his belief that the defendants
violated the short sale agreement by initiating foreclosure proceedings in 2013.
“After a final judgment, res judicata bars relitigation of any subject matter arising
from the same transaction or occurrence as a previous suit.” Henkelmann v. Whiskey
Island Pres., LLC, 145 So. 3d 465, 470 (La. App. 1 Cir. 2014) (emphasis omitted).
Because all of Whitmore’s claims arise out of the same transaction or occurrence
which led to he and his wife filing the previous lawsuit, the claims are now barred.
Although the defendants do not specifically argue it, the Court notes that this is true
even though Whitmore asserts both contractual claims and tort claims.
Under Louisiana law, res judicata bars claims in the second litigation which
could have been raised in the first litigation, irrespective of whether the legal theory
of recovery in the two lawsuits is the same. See Schnell v. Mendoza, 142 So. 3d 238,
241 (La. App. 5 Cir. 2014) (“Plaintiff argues that her first suit sounded in tort, and
therefore does not preclude the instant (second) suit, which alleges a breach of the
bond for deed contract, [but] to overcome an exception of res judicata . . . requires a
plaintiff in the first proceeding to assert all causes of action existing at the time of
final judgment arising out of the transaction or occurrence that is the subject matter
of the litigation, regardless of the legal theory or particular cause of action . . . .”
(internal quotation marks omitted)); Sours v. Kneipp, 923 So. 2d 981, 984 (La. App. 2
Cir. 2006) (“Finally, Mr. Sours argues that the prior action did not involve the same
claim or cause of action because the prior action was for negligence, whereas the
instant cause of action is for breach of contract. . . . [W]e find that Mr. Sours’ final
argument lacks merit.”). Because res judicata bars relitigation of “any subject matter
arising from the same transaction or occurrence as a previous suit,” Whitmore’s tort
claims are also barred by the previous dismissal. See Henkelmann, 145 So. 3d at
There is one final issue worth addressing. It is true that a breach of contract
action based on the defendants’ alleged violation of the short sale agreement is barred
by res judicata. However, the Court observes that the state court order dismissing
Whitmore’s prior action states that a compromise and settlement agreement was
reached between the parties. See R. Doc. No. 11-4. It is not entirely clear from
Whitmore’s complaint whether he is asserting that the defendants violated that
settlement agreement (assuming the parties actually reached one). If Whitmore is
asserting such a claim, it would not necessarily be barred by res judicata.
Only one argument against the application of res judicata is advanced by Whitmore.
Whitmore attaches to his opposition a 2011 order by the U.S. District Court for the
Middle District of Georgia. See R. Doc. No. 14-2. The order addresses a plaintiff’s
right to obtain a voluntary dismissal under Rule 41 of the Federal Rules of Civil
Procedure and whether that right is extinguished by the filing of a motion to dismiss
under Rule 12. Plaintiff’s argument is not clear, and the case cited by plaintiff is of
no relevance. This Court will not divine an argument not specifically advanced by
The Court will allow Whitmore an opportunity to amend his complaint in order
to determine whether he is asserting any claims outside the scope of res judicata. See
Amanduron v. Am. Airlines, 416 F. App’x 421, 423 (5th Cir. 2011) (“Generally a
district court errs in dismissing a pro se complaint for failure to state a claim under
Rule 12(b)(6) without giving the plaintiff an opportunity to amend.” (internal
quotation marks omitted)).
For the foregoing reasons,
IT IS ORDERED that the motions to dismiss are GRANTED IN PART and
that all of plaintiff’s claims in the above-captioned matter are DISMISSED
IT IS FURTHER ORDERED that Whitmore may file an amended complaint
no later than Friday, June 2, 2017. If Whitmore does not timely file an amended
complaint, this Court will dismiss the lawsuit with prejudice.
If an amended
complaint is timely filed and if the defendants take the position that the claims in
Whitmore’s amended complaint are barred by res judicata or otherwise, they shall
file motions to dismiss this lawsuit with prejudice no later than June 19, 2017.
New Orleans, Louisiana, May 16, 2017.
LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE
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?