Klimowicz v Deutsche Bank National Trust Company, et al.
District Judge Timothy S. Hillman: MEMORANDUM OF DECISION AND ORDER entered granting 15 Motion to Dismiss. (Castles, Martin)
United States District Court
District of Massachusetts
JEANNE M. KLIMOWICZ,
DEUTSCHE BANK NATIONAL TRUST COMPANY AS
INDENTURE TRUSTEE FOR NEW CENTURY HOME EQUITY)
LOAN TRUST 2005-1, and
CARRINGTON MORTGAGE SERVICES, LLC,
Memorandum of Decision and Order
August 31, 2017
Plaintiff, Jeanne M. Klimowicz (“Plaintiff”) has filed suit against Deutsche Bank
National Trust Company as Indenture Trustee For New Century Home Equity Loan Trust 2005-1
(“Deutsche Bank”), and Carrington Mortgage Services, LLC (“Carrington”) alleging claims for
wrongful foreclosure, violation of the Massachusetts Consumer Protection Act, Mass.Gen.L. ch.
93A, breach of the covenant of good faith and fair dealing and negligent infliction of emotional
distress. More specifically, Plaintiff asserts that “Deutsche Bank wrongfully acquired title to the
mortgage of the subject property through a pattern of intentional fraudulent conduct[, i.e.] the
[a]ssignment of a mortgage from a company no longer in existence, to a mortgage [t]rust that had
closed to new mortgages years before the [a]ssignment.” Complaint, at ¶42. Among the relief
sought by the Plaintiff is that this Court vacate and set aside the Final Judgment of Foreclosure
which was entered by the Massachusetts Land Court on the grounds that the judgment was
obtained by fraud and because, under the circumstances, vacating the judgment is appropriate to
accomplish the ends of justice. Plaintiff seeks this relief in accordance with Massachusetts state
law, Mass. R.Civ. P. 60(b). Plaintiff also seeks the entry of an injunction prohibiting any further
post-foreclosure proceedings by any party, the entry of an injunction prohibiting any further
post-foreclosure proceedings including any eviction or other proceedings related to the property
by the Massachusetts Housing Court or any other court which would command any action on the
part of the Plaintiff. Lastly, Plaintiff seeks to be fully reimbursed for the cost of her home and
other compensatory and punitive damages.
On June 23, 2016, this Court entered an Order denying Plaintiff’s request for a TRO after
finding that she had failed to establish a likelihood of success on the merits. See Order on Motion
for TRO (Docket No. 13). This Order addresses Defendants’ motion to dismiss Klimowicz’s
Complaint for failure to state a claim. See Defendants Deutsche Bank National Trust Company
As Indenture Trustee for New Century Home Equity Loan Trust,2005-1, And Carrington
Mortgage Services, LLCs’ Motion To Dismiss Plaintiff’s Complaint (Docket No. 15)(“Motion to
Dismiss”). More specifically, Defendants assert that the claims are barred by the doctrines of res
judicata, judicial estoppel and/or that she voluntarily surrendered the property as part of the
Bankruptcy (as hereafter defined). For the reasons set forth below, the Motion to Dismiss is
Standard Of Review
On a Rule 12(b)(6) motion to dismiss, the Court “must assume the truth of all wellplead[ed] facts and give plaintiff the benefit of all reasonable inferences therefrom.” Ruiz v.
Bally Total Fitness Holding Corp., 496 F.3d 1, 5 (1st Cir. 2007) (citing Rogan v. Menino, 175
F.3d 75, 77 (1st Cir. 1999)). To survive a motion to dismiss, the plaintiff must state a claim that
is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955 (2007).
That is, “[f]actual allegations must be enough to raise a right to relief above the speculative level,
... on the assumption that all the allegations in the complaint are true (even if doubtful in fact).”
Id. at 555 (internal citations omitted). “The plausibility standard is not akin to a ‘probability
requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.”
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937 (2009) (quoting Twombly, 550 U.S. at 556).
Dismissal is appropriate if plaintiff’s well-pleaded facts do not “possess enough heft to show that
plaintiff is entitled to relief.” Ruiz Rivera v. Pfizer Pharm., LLC, 521 F.3d 76, 84 (1st Cir. 2008)
(internal quotations and original alterations omitted). “The relevant inquiry focuses on the
reasonableness of the inference of liability that the plaintiff is asking the court to draw from the
facts alleged in the complaint.” Ocasio-Hernàndez v. Fortuño-Burset, 640 F.3d 1, 13 (1st Cir.
The Mortgage and its Assignment To Deutsche
Deutsche Bank acquired title to 32 Mary Heights, Fitchburg, Massachusetts (the
“Property”), as the high bidder at the foreclosure sale of the Property. Klimowicz is the former
owner of the Property. On December 23, 2004, she had granted a mortgage to the Property to
New Century Mortgage Company (“New Century”) to secure her obligations under a promissory
note in the amount of $297,500. The mortgage was recorded in the Worcester County Registry of
Deeds (Northern District), on or about January 3, 2005 (the “Mortgage”)1.
New Century filed for bankruptcy in the Delaware Bankruptcy Court on April 2, 2007.
Later, on August 1, 2008, the corporation was liquidated and its assets were transferred to New
Century Liquidating Trust. On August 7, 2008, New Century-- despite its earlier dissolution-executed a purported assignment of mortgage to Deutsche Bank National Trust, as trustee of an
investment loan trust—New Century Home Equity Loan Trust 2005-1. The assignment of
mortgage was recorded on August 18, 2008, at the Worcester County Registry of Deeds
(Northern District) (“Assignment”). The Assignment states it was prepared by Carrington
Mortgage Services, LLC (“Carrington”), which is listed as the attorney-in-fact for New Century.
The Assignment was signed by Dave S. Gordon, who is identified as, “President of
Carrington Mortgage Services, LLC.” With permission of the Delaware Bankruptcy Court
granted on May 23, 2007, Carrington purchased servicing rights from New Century. The
appointment of Carrington as Attorney-in-fact for New Century is dated June 18, 2007, and
recorded in the North Worcester Registry of Deeds. Additionally, the appointment of Carrington
as Attorney-in-fact for Deutsche Bank is dated April 26, 2011. Consequently, Carrington is—
with regard to relevant times in the case at hand—both the Attorney-in-fact for the Assignor
(New Century), and Attorney-in-fact for the Assignee (Deutsche Bank).
The investment trust (“Trust”) to which the Mortgage was purportedly assigned on
August 7, 2008, had a closing date-- the date by which all loans and mortgages must have been
transferred into the investment pool-- of February 25, 2005. The Trust is governed by a Pooling
In their memorandum in support of their motion, Defendants state that the Mortgage was filed in the
Worcester County Registry of Deeds on December 23, 2003. However, it is clear from the documentation submitted
by the Defendants that Klimowicz signed the Mortgage on December 3, 2004 and it was filed in the Registry of
Deeds January 5, 2005. See Motion to Dismiss, at Ex. A.
and Servicing Agreement. “(PSA”). By the terms of the PSA, the parties agree to be governed by
the laws of New York: “This Agreement shall be governed by and construed in accordance with
the laws of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.”
In or about May 24, 2006, Klimowicz filed for protection under the United States
Bankruptcy Code, docket number 06-40851 (the “Bankruptcy”). The case was converted to a
case under Chapter 7, of the Bankruptcy Code on May 25, 2007. As part of the Bankruptcy,
Klimowicz commenced Adversary Proceeding number07-04093, challenging the validity of the
underlying mortgage, (the “Adversary Proceeding”). The Adversary Proceeding was dismissed
due to her failure to properly serve New Century Mortgage Company. During the Bankruptcy,
and prior to the conversion to a case under Chapter 7, New Century Mortgage Company filed a
motion for relief from the automatic stay, in order to begin foreclosure proceeding. Klimowicz
entered into a stipulation with New Century Mortgage Company to cure the arrears and continue
paying the mortgage. Relief was ultimately granted in favor of the secured creditor because
Klimowicz failed to make the payments as agreed.
On August 6, 2010, Plaintiff filed a complaint in the Worcester Superior Court against
Deutsche Bank and the loan originator (Lendia, Inc.), but the complaint was never served on the
defendants and was ultimately dismissed by the court. The complaint did not challenge the
validity of the mortgage. Complaint, at ¶ 27.
On or about February 28, 2011, Deutsche Bank filed a complaint in the Massachusetts
land court seeking to foreclose on Klimowicz’s property; on April 12, 2011, the court granted
Deutsche Bank the right to conduct a foreclosure proceeding. Deutsche Bank proceeded with
conducting a foreclosure sale, was the high bidder and became the title owner of the Property.
Deutsche Bank subsequently commenced a summary process action in the Worcester
Housing Court, Deutsche Bank National Trust Company as Indenture Trustee for New Century
Home Equity Loan Trust 2005-1 v. Jeanne Klimowicz (Docket No. 13H85SP00581)(the
“Summary Process Case”). There was significant litigation in the Summary Process Case for
years. Judgment entered for Deutsche Bank on January 14, 2016. Plaintiff filed a counter claim
in that case. Years after the case had commenced, she filed a motion to amend her counterclaim
to assert that the Assignment was invalid on the grounds that: (1) New Century had been
dissolved prior to the execution of the Assignment and was not in business on the date of the
alleged assignment; and (2) the Trust into which the Mortgage was allegedly assigned had closed
years before the Assignment was made. The court held a hearing but did not hear argument on
the former ground for relief (as New Century was no longer in business); the court denied the
motion to amend. The Plaintiff appealed the judgment of possession, but her appeal was
dismissed for her failure to post an appeal bond. The Plaintiff is no longer in possession of the
The Mortgage was incorporated by reference in the Complaint, a copy of the Assignment was attached to
the Complaint and the Bankruptcy docket and related orders, the foreclosure deed, the Massachusetts State Court
dockets relating to the summary process action filed in the Worcester Housing Court are public record and therefore,
all of these documents may be considered in deciding the motion to dismiss without converting it into a motion for
summary judgment. See Doe v. Town of Wayland, 179 F. Supp. 3d 155, 163 (D. Mass. 2016)(“While the Court
typically ‘may not consider any documents that are outside of the complaint … unless the motion is converted into
one for summary judgment,’ there is an exception ‘for documents the authenticity of which are not disputed by the
parties; for official public records; for documents central to plaintiffs' claim; or for documents sufficiently referred
to in the complaint.’” (internal citation and citation to quoted case omitted)).
Whether This Action Barred By The Rooker-Feldman Doctrine
The Rooker–Feldman doctrine3, which gives the United States Supreme Court exclusive
“jurisdiction over appeals from final state-court judgments,” implicates this Court’s subjectmatter jurisdiction. 4 See Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 291–92,
125 S.Ct. 1517 (2005); see also 28 U.S.C. § 1257. “The Rooker–Feldman doctrine prevents the
lower federal courts from exercising jurisdiction over cases brought by ‘state-court losers’
challenging state-court judgments rendered before the district court proceedings commenced.”
Lance v. Dennis, 546 U.S. 459, 460, 126 S.Ct. 1198 (2006) (per curiam) 460, 126 S.Ct. 1198
(quoting Exxon Mobil, 544 U.S. at 284, 125 S.Ct. 1517). This is so because the Supreme Court
has held that lower federal courts do not have subject matter jurisdiction to act as appellate courts
reviewing state court judgments; such review may only be had in the Supreme Court.
DuLaurence, 94 F.Supp.3d at 79. More specifically, “the doctrine applies only to (1) a party who
lost in a state-court judgment that (2) was rendered before the federal action commenced, where
(3) the party complains of injuries caused by the state-court judgment and (4) invites district
court review and rejection of those judgments.” Id. However, a “[f]ederal courts’ application of
the Rooker–Feldman doctrine ‘does not depend on what issues were actually litigated in the state
court.’” Miller v. Nichols, 586 F.3d 53, 59 (1st Cir. 2009)(internal citations and citation to quoted
cases omitted). On the contrary, “[t]he Rooker-Feldman doctrine is properly applied where
regardless of how the claim is phrased, the only real injury to [the plaintiff] is ultimately still
The Rooker–Feldman doctrine takes its name from two Supreme Court cases: Rooker v. Fidelity Trust
Co., 263 U.S. 413, 44 S.Ct. 149 (1923) and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103
S.Ct. 1303 (1983).
Because the Rooker-Feldman doctrine implicates this Court’s subject matter jurisdiction, the Court may
consider the issue sua sponte. DuLaurence v. Telegen, 94 F.Supp.3d 73, 78 (D. Mass. 2015), aff'd sub nom.
Dulaurence v. Telegen, et al (May 5, 2015).
caused by a state-court judgment”. DuLaurence, 94 F.Supp. at 80 (internal quotations and
citation to quoted case omitted). However, “if the plaintiff alleges a constitutional violation by
an adverse party independent of the injury caused by the state court judgment, the [RookerFeldman] doctrine does not bar jurisdiction.” Davison v. Gov’t of P.R.-P.R. Firefighters Corps.,
471 F.3d 220, 222 (1st Cir. 2006).
Plaintiff asserts claims for wrongful foreclosure, violation of the Massachusetts
Consumer Protection Act, Mass.Gen.L. ch. 93A, breach of the covenant of good faith and fair
dealing and negligent infliction of emotional distress based on the premise that “Deutsche Bank
wrongfully acquired title to the mortgage of the subject property through a pattern of intentional
fraudulent conduct ...” Complaint, at ¶42. Plaintiff can prevail on these claims only if the state
court’s Final Judgment of Foreclosure is invalidated. Indeed, invoking the Massachusetts State
Court Rules of Procedure (specifically, M.R.Civ.P 60(b)), Plaintiff expressly requests that this
Court vacate and set aside the Final Judgment of Foreclosure entered by the Massachusetts
Land Court. Moreover, she has not alleged a constitutional violation independent of any injury
suffered caused by the Massachusetts state court judgment. Accordingly, under the RookerFeldman doctrine, this Court lack subject matter jurisdiction over Plaintiff’s claims and the
Complaint must be dismissed. Even if I were to find that this Court has jurisdiction over
Plaintiff’s claims, for the reasons set forth below, I would find that they should be dismissed
under the doctrine of res judicata, which bars the re-litigation of issues that were or could have
been raised in a prior proceeding involving the same parties which arose from the same operative
The Action Is Barred Under Principles Of Res Judicata
Defendants assert that Klimowicz’s claims in this action were previously litigated in the
state court. More specifically, Defendants assert that Plaintiff’s claims, which are based on the
alleged invalid foreclosure of her property, arise from the same transaction and nucleus of
operative facts as did the Summary Process Case, i.e., the validity of the foreclosure. Plaintiff
argues that the res judicata doctrine does not apply because no final judgement was reached in
the Massachusetts Housing Court given that her appeal was dismissed for failure to post a bond.
Plaintiff cites no case law nor provides any cogent legal analysis in support of this extraordinary
proposition. This is not surprising given that, as more fully discussed below, the law does not
support her contention.
Klimowicz further argues that the Massachusetts Housing Court never addressed some of
the issues she seeks to raise in this action. She suggests that some of the arguments that would
have been made in Worcester Superior Court and in the U.S. Bankruptcy court were different
than the arguments she seeks to make in this case in that they concerned improprieties related to
the making of the loan rather than the mortgage assignment (both of those cases were dismissed
for failure to effect proper service). The Court is unclear as to what point Plaintiff is seeking to
make regarding her prior attempts to pursue actions in the Worcester Superior Court and the U.S.
Bankruptcy Court. The Court will assume that the claims raised in complaints filed in those cases
were dismissed for failure to effect proper service and therefore, do not constitute “final
judgments.” However, Plaintiff acknowledges in her Complaint that she did attempt to raise the
alleged invalidity of her mortgage in the Summary Process Case in a motion to amend her
counterclaim; that motion was denied. She filed an appeal of the denial of her motion to amend,
but the appeal was dismissed for failure to post a bond. See Complaint, at ¶ 39. For the reasons
set forth below, I find for purposes of the Massachusetts law governing the doctrine of res
judicata5, a final judgment entered in the Summary Process Case and therefore, she us barred
from re-litigating her claims in this Court.
Massachusetts recognizes two kinds of res judicata, claim preclusion and issue
preclusion. As the names suggest, claim preclusion operates on the level of the claim, and issue
preclusion operates on the level of the issue. Claim preclusion is based on the idea that the
precluded litigant had the opportunity and incentive to fully litigate the claim in an earlier action,
so that all matters that were or could have been adjudicated in the earlier action on the claim are
considered to have been finally settled by the first judgment. In contrast, issue preclusion does
not reach issues unless they were actually litigated and decided in the first litigation; however, it
bars relitigation of those issues even in the context of a suit based on an entirely different claim.
Massachusetts applies the doctrine of issue preclusion in a traditional
manner. The Massachusetts courts use several formulations interchangeably to
describe the prerequisites for issue preclusion, but the Supreme Judicial Court …
stated that issue preclusion applies when
(1) there was a final judgment on the merits in the prior
adjudication; (2) the party against whom preclusion is asserted was
a party (or in privity with a party) to the prior adjudication; and (3)
the issue in the prior adjudication was identical to the issue in the
current adjudication. Additionally the issue decided in the prior
adjudication must have been essential to the earlier judgment.
Massachusetts courts also require that appellate review must have been available
in the earlier case before issue preclusion will arise.
In re Sonus Networks, Inc, S’holder Derivative Litig., 499 F.3d at 56–57 (internal citations and
citation to quoted case omitted)(emphasis added).
“Under the full faith and credit statute, 28 U.S.C. § 1738, a judgment rendered in a state court is entitled
to the same preclusive effect in federal court as it would be given within the state in which it was rendered. Thus, the
preclusive effect of the state court judgment at issue here is determined under Massachusetts law.” In re Sonus
Networks, Inc, S’holder Derivative Litig., 499 F.3d 47, 56 (1st Cir. 2007)(internal citation omitted).
Thus, in determining whether the doctrine of issue preclusion applies, this Court must
first determine whether the issue in question was: “ ‘actually litigated;’ determined by a ‘final
judgment’; and was ‘essential to the judgment.’” Cousineau v. Laramee, 388 Mass. 859, 863 n.
4, 448 N.E.2d 756 (1983); Restatement (Second) of Judgments § 27 (1982). Plaintiff contends
that not all of the issues she raises in this action were actually litigated in the Summary Process
Case. More specifically, she asserts that the issue of the validity of the mortgage was not actually
litigated. However, she herself acknowledges that the state court denied her motion to amend
her counterclaim to include a claim that the mortgage was invalid, and therefore, there can be no
question that this issue was squarely before the court and was actually litigated. Plaintiff’s
primary argument appears to be that the determination of the issue did not have the level of
finality sufficient to apply the doctrine of issue preclusion because her appeal was dismissed for
failure to post a bond. This argument fails: “[f]or purposes of issue preclusion, ‘final judgment’
includes any prior adjudication of an issue in another action that is determined to be ‘sufficiently
firm to be accorded conclusive effect.’ The determination of ‘finality’ depends upon a
consideration of whether ‘the parties were fully heard, the judge’s decision is supported by a
reasoned opinion, and the earlier opinion was subject to review or was in fact reviewed.’ It is
settled that the doctrine of issue preclusion may not be invoked unless there is available an
‘avenue for review of the prior ruling on the issue.’ ” Jarosz v. Palmer, 49 Mass. App. Ct. 834,
836–38, 733 N.E.2d 164, 167–68 (2000), aff’d, 436 Mass. 526, 766 N.E.2d 482 (2002).
Plaintiff raised the issue of the invalidity of the mortgage in her motion to amend her
counterclaim. The court held a hearing on the motion and while there was no argument on the
issue of New Century’s authority to effect the Assignment (given its dissolution), the court had
the benefit of Plaintiff’s briefing of the issue. The court denied the motion to amend the
counterclaim. Plaintiff appealed and the appeal was dismissed for failure to post a bond. That
Plaintiff had an opportunity to appeal the judgment is sufficient to satisfy the final judgment
requirement under Massachusetts law6. Plaintiff does not contend that the other factor, i.e.,
identify of parties has not been met. Therefore, Plaintiff’s claims relating to the foreclosure
judgment, including her assertion that the Assignment was invalid, are barred by the doctrine of
As to those claims Plaintiff asserts in this case that arguably were not litigated in the
Summary Process Case, Defendants contend that they are barred by the doctrine of claim
preclusion because such claims arose out of the same factual transaction and involve the same
parties as the state court proceeding and therefore, could have, but were not, raised in that
proceeding. Plaintiff does not argue to the contrary. For that reason, I find that such claims are
For the reasons set for the above, I find that in addition to being barred by the RookerFeldman doctrine, Plaintiff’s claims are barred by the doctrine of res judicata. Accordingly, it is
not necessary for me to address Defendants’ arguments that the claims should be dismissed
because Plaintiff effectively surrendered her properly in the Bankruptcy and/or her claims are
barred by principles of judicial estoppel.
Massachusetts law does not recognize that there has been a final judgement where a complaint is
dismissed for failure to post a bond (such as when a plaintiff has had to seek approval from a medical tribunal to
proceed). That scenario, where there has clearly been no decision on the merits, is distinguishable from the instant
case where the court after considering the merits, entered a judgment which was subject to appeal.
Defendants Deutsche Bank National Trust Company As Indenture Trustee for New
Century Home Equity Loan Trust,2005-1, And Carrington Mortgage Services, LLCs’ Motion To
Dismiss Plaintiff’s Complaint (Docket No. 15) is granted.
/s/ Timothy S. Hillman
TIMOTHY S. HILLMAN
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