GIROUARD et al v. WELLS FARGO BANK NA

Filing 56

ORDER OF REMAND TO THE STATE COURT. By JUDGE LANCE E. WALKER. (CJD)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE

ANTOINE A GIROUARD and JESSICA )
A. GIROUARD,
)
)
)
Plaintiffs,
)
)
V.
)
)
WELLS FARGO BANK NA,
)
Defendant.

2:17-CV-00022-LEW

ORDER OF REMAND
As explained below, I conclude that the United States District Court lacks subject
matter jurisdiction on jurisprudential grounds.
Plaintiffs, Antoine A. Girouard and Jessica A. Girouard, were the victors of a Maine
District Court foreclosure action brought by Defendant, Wells Fargo on an accelerated
promissory note. See Wells Fargo Bank, N.A. v. Girouard, 123 A.3d 216 (Me. 2015)
(vacating district court order that dismissed foreclosure action without prejudice and
remanding with instruction to grant judgment in favor of the Girouards). The foreclosure
proceeding concluded when the Maine District Court entered judgment for the Girouards
on the basis of Wells Fargo’s failure to properly provide notice of the mortgagors’ right to
cure. Eighth District Court Order on Defendants’ Mot. for Summary J., ECF No. 1-6.
Plaintiffs commenced this action by filing in the Maine Superior Court a complaint
for declaratory and injunctive relief. Specifically, Plaintiffs requested that the state court
declare that the mortgage is no longer enforceable and enjoin Defendant, Wells Fargo to

discharge the mortgage, because Plaintiffs obtained judgment in their favor in the
foreclosure action.

Defendant removed the action to this Court, citing diversity

jurisdiction, and asserted with its answer counterclaims for declaratory relief and unjust
enrichment. 1
Generally, “any civil action brought in a State court of which the district courts of
the United States have original jurisdiction, may be removed by the defendant or the
defendants, to the district court of the United States for the district and division embracing
the place where such action is pending.” 28 U.S.C.A. § 1441(a). While the parties to this
action are diverse, and while the controversy over the enforceability of a promissory note
and mortgage can be valued at over $75,000, jurisprudential principles that limit the
exercise of subject matter jurisdiction call for remand of the action to state court.
Plaintiffs contend that, as a matter of state law, they are entitled to a declaratory
judgment dispelling the cloud on their title created by the undischarged mortgage and an
order that enjoins any further attempt at collection or foreclosure and requires the current
holder of the mortgage to discharge it. Assuming Plaintiffs are correct, their action should
proceed in state court under Maine Rule of Civil Procedure 70. Conceivably, upon remand,
the Maine Superior Court can transfer the matter to the Maine District Court to permit that
proceeding to take place in the proper venue. Regardless, even if the Superior Court retains

1

On October 31, 2017, Plaintiff filed an amended complaint to join Wilmington Savings Fund Society, to
whom Defendant Wells Fargo evidently assigned the mortgage following the unsuccessful foreclosure.

2

the matter for adjudication on the current pleadings, the matter raised by Plaintiff’s
complaint does not belong in federal court. 2
Federal district courts regularly dismiss, on jurisdictional grounds, actions brought
by “state-court losers” challenging state-court judgments rendered before the
commencement of the new action. Lance v. Dennis, 546 U.S. 459, 460 (2006) (per curiam).
Although this case was not commenced in federal court, and although Plaintiffs were the
winners rather than the losers in state court, Plaintiffs seek to achieve in this action
supplemental relief that they say they are entitled to by dint of the state court judgment.
Simply stated, it is not the duty of the federal district courts to supplement the relief
awarded in final state court judgments, any more that it is the duty of federal district courts
to issue orders that invalidate final state court judgments. Cf. Armistead v. C & M Transp.,
Inc., 49 F.3d 43, 47–48 (1st Cir. 1995) (citing Barrow v. Hunton, 99 U.S. 80, 82-83 (1879)
(explaining that federal courts may not exercise control over state proceedings by
entertaining supplementary actions which are but incidents of state suits); and MacKay v.
Pfeil, 827 F.2d 540, 545 & n.12 (9th Cir. 1987) (holding that a request for declaratory relief
that does not state a new case arising upon new facts, but in reality seeks review and
correction of a state court judgment is not within federal court’s original jurisdiction)).
In my view, an abstention doctrine must apply under these circumstances, and the
most likely candidate is the Colorado River abstention doctrine. While federal courts have
a “‘virtually unflagging obligation’ to exercise their lawful jurisdiction and resolve the

2

Defendant Wells Fargo’s counterclaim states a claim for relief that is within this Court’s diversity
jurisdiction. However, removal jurisdiction does not arise on the basis of a counterclaim.

3

matters properly before them,” Nazario-Lugo v. Caribevision Holdings, Inc., 670 F.3d 109,
114 (1st Cir. 2012) (quoting Colo. River Water Conserv. Dist. v. United States, 424 U.S.
800, 817 (1976)), the duty “is not absolute, and departure from it is permitted ‘in otherwise
exceptional circumstances, where denying a federal forum would clearly serve an
important countervailing interest.’” Id. (quoting Quackenbush v. Allstate Ins. Co., 517 U.S.
706, 716 (1996)).
Here, given that the relief requested in this action should have been part and parcel
of the state court judgment – assuming Plaintiffs are correct on the merits – there is a
“clear” justification for according deference to state court proceedings. Colorado River
abstention is warranted where the state court exercised jurisdiction over a res, the
institution of the new suit by Plaintiff to obtain declaratory and injunctive remedies
involves piecemeal litigation where the state court has already completed it proceedings,
state law controls the merits and a declaration by this Court is not binding in future state
court proceedings, 3 the state forum is an ideal forum for litigation of interests arising from
the foreclosure of real property and was the forum Defendant selected for its failed
foreclosure action, and Defendant’s removal of the action from state court is at odds with
its earlier decision to pursue foreclosure against Plaintiffs in state court. Nazario-Lugo,
670 F.3d at 114 (collecting Colorado River factors). In short, consigning this matter to the

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More pointedly, the Colorado River Court opined that “abstention is also appropriate where there have
been presented difficult questions of state law bearing on policy problems of substantial public import
whose importance transcends the result of the case then at bar.” 424 U.S. at 814. Certainly, there is a matter
presented of substantial public importance here. Furthermore, although the actual circumstances evidently
do not raise the concern here, if Defendant or another party were to attempt foreclosure against Plaintiff in
state court, while this action is pending, this Court could not enjoin those proceedings. 28 U.S.C. § 2283.

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state court ensures the “comprehensive disposition of litigation” in the forum that already
ruled on the foreclosure matter. Colo. River, 424 U.S. at 817-19.
The prior, non-final interlocutory order 4 issued in this matter is hereby vacated
pursuant to Rule 54(b) and the case is remanded to the state court.

SO ORDERED.
Dated this 30th day of January, 2019.

/S/ Lance E. Walker
LANCE E. WALKER
UNITED STATES DISTRICT JUDGE

4

On June 12, 2018, the Court issued an order on Plaintiff’s motion to dismiss Defendant’s counterclaims
for competing declaratory relief. Order on Plaintiffs’ Mot. to Dismiss Counterclaims (ECF No. 43). In its
order the court converted the matter to summary judgment proceedings and awarded judgment in favor of
Plaintiffs.

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