Greer et al v. Household Finance Corporation et al

Filing 13

MEMORANDUM AND ORDER ACCEPTING AND ADOPTING REPORT AND RECOMMENDATION 7 ; signed by Judge R. Allan Edgar (EDTN Judge R. Allan Edgar, cam)

Greer et al v. Household Finance Corporation et al

Doc. 13

UNITED STATES DISTRICT COURT FO R THE WESTERN DISTRICT OF MICHIGAN NORTHERN DIVISION G R E G O R Y R. GREER and CATHY D . GREER, P la in tiffs , v. H O U S EH O LD FINANCE CORPORATION, et al., D e fe n d a n ts . ____________________________________/ C ase No. 2:10-cv-72 H O N . R. ALLAN EDGAR

M EM ORANDUM P lain tiffs Gregory and Cathy Greer have filed this diversity action against Defendants H o u seh o ld Finance Corp., Shelena Strauss, Mortgage Electronic Registration Systems ("MERS"), an d John and Jane Doe as unknown owners of a securitized note. The Plaintiffs assert in their C o m p lain t that the Defendants have attempted to foreclose on property in which they have no in terest. [Court Doc. No. 1]. Plaintiffs assert that they have owned the subject property, 1016 M ap lew o o d Drive, in Hancock, Michigan for 18 years. Id. They further contend that the filing of a fo reclo su re action in state court was fraudulent because the Defendants are not the owners of the m o rtgage note. Id. They have filed a motion to stay that appears to request that this court stay the fo reclo su re action currently proceeding in the Circuit Court of Houghton County, Michigan. [Court D o c. No. 3]. On June 3, 2010 United States Magistrate Judge Timothy Greeley issued a Report and R eco m m en d atio n recommending dismissal of this action in its entirety. [Court Doc. No. 7]. The P lain tiffs timely objected to the Magistrate's Report and Recommendation. [Court Doc. No. 10]. This Court must conduct a de novo review of the portions of the Report and Recommendation to w h ich objection is made. 28 U.S.C. § 636(b)(1)(c). This Court may then either accept, reject or

Dockets.Justia.com

modify the Magistrate's Report and Recommendation either in whole or in part. Id. I. A n a ly s is

T h e Magistrate Judge recommended dismissal for failure to state a claim upon which relief m ay be granted pursuant to 28 U.S.C. § 1915(e)(2)(B)(ii). Plaintiffs bear the burden of proof of d em o n stratin g jurisdiction as they are the party seeking to invoke this court's jurisdiction. See Ohio ex rel. Skaggs v. Brunner, 549 F.3d 468, 474 (6th Cir. 2008). Federal courts must address whether th ey have jurisdiction sua sponte. See Federal Trade Comm'n v. Owens-Corning Fiberglass Corp., 8 5 3 F.2d 458, 464 (6th Cir. 1988); Franzel v. Kerr Mfg. Co., 959 F.2d 628 (6th Cir. 1992); see a lso , Fed. R. Civ. P. 12(h)(3) (stating that "[w]henever it appears by suggestion of the parties or o th erw ise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action"). The Magistrate Judge recommended dismissal because this court lacks subject matter ju risd ictio n over the Plaintiffs' claims. This court agrees with the Magistrate Judge's assessment. Plaintiffs' claims must be dismissed based on the Rooker-Feldman doctrine which provides that fed eral courts may not interfere with final judgments of state court proceedings. See District of C o lu m b ia Court of Appeals v. Feldman, 460 U.S. 462, 476, 482, 103 S.Ct. 1303 (1983); Rooker v. F id elity Trust Co., 263 U.S. 413, 415-16, 44 S.Ct. 149 (1923); Patmon v. Michigan Supreme Court, 2 2 4 F.3d 504 (6 th Cir. 2000). In Patmon the Sixth Circuit made clear that "[t]he federal district courts will [even] lack su b ject matter jurisdiction over constitutional challenges to state rules and procedures under the R o o ker-F eld m a n doctrine, . . . where the general constitutional challenge is `inextricably in tertw in ed ' with state judicial proceedings." 224 F.3d at 509-510. As noted by the Seventh C ircu it in Ritter v. Ross, "[t]here is, unfortunately, no bright line that separates a federal claim that is `in ex tricab ly intertwined' with a state court judgment from a claim that is not so intertwined. The cru cial point is whether `the district court is in essence being called upon to review the state-court

-2-

decision.'" 992 F.2d 750, 754 (7th Cir. 1993) (quoting Feldman, 460 U.S. at 483-84 n.16, 103 S.Ct. at 1316 n.16). Plaintiffs here are attempting to challenge the state court foreclosure proceedings in th is court as evidenced by their Motion to Stay. [Court Doc. No. 3]. This move is prohibited by th e Rooker-Feldman doctrine. They are essentially asking this court to set aside the foreclosure ju d gm en t in state court. See [Court Doc. No. 3]. This court simply does not have jurisdiction to rev iew such state court proceedings. In Tropf v. Fidelity Nat. Title Ins. Co. the court addressed claims similar to the claims made b y the Plaintiffs here and determined that they were precluded under the Rooker-Feldman doctrine. 289 F.3d 929 (6th Cir. 2002). The court noted: T h e [plaintiffs] allege a variety of vague fraud and RICO claims, as well as co n stitu tio n al due process and equal protection violations under 42 U.S.C. § 1983. All their claims, however, rely on the argument that the warranty deed and land co n tract executed by the Tropfs and Wolenski were fraudulent. Because the w arran ty deed and land contract were upheld in all of the state actions involving the [p lain tiffs], the [plaintiffs'] federal claims are therefore predicated on their co n v ictio n that the state courts were wrong ­ the very definition of "inextricably in tertw in ed ." Moreover, the [plaintiffs] do not argue that any state law applied to th em is itself unconstitutional; instead, they argue only that their equal protection an d due process rights were violated in the particular application of the state laws to th eir case. Thus, the district court was correct in finding that it did not have subject m atter jurisdiction based on the Rooker-Feldman abstention doctrine. Id . at 937-38. In Ritter the Seventh Circuit also found that the plaintiffs' attempt to challenge state fo reclo su re proceedings was precluded by the Rooker-Feldman doctrine. 992 F.2d at 755. The co u rt noted that the plaintiffs "like the plaintiff in Rooker, are essentially seeking a federal district co u rt appellate review of a state judicial proceeding; their claims against Defendants are in ex tricab ly intertwined with the merits of that proceeding. As in Rooker, the lower federal courts h av e no jurisdiction over this complaint." Id. Although the Plaintiffs have objected to the Magistrate Judge's Report and R eco m m en d atio n , which explicates the Rooker-Feldman doctrine, the cases cited by the Plaintiffs

-3-

are not pertinent to the legal jurisdictional issues raised in this matter. Although they cite Penn G en era l Casualty Co. v. Commonwealth of Pennsylvania as support for their objections to the R ep o rt and Recommendation, that case does not support the Plaintiffs' argument. 294 U.S. 189, 55 S .C t. 386 (1935). In Penn General the Supreme Court held that: Wh ere the judgment sought is strictly in personam, for the recovery of money or for an injunction compelling or restraining action by the defendant, both a state court an d a federal court having concurrent jurisdiction may proceed with the litigation, at least until judgment is obtained in one court which may be set up as res adjudicata in th e other. 2 9 4 U.S. at 195, 55 S.Ct. at 389. In this case, the Plaintiffs are asking this court to intervene in state co u rt foreclosure proceedings that are already underway and have resulted in a judgment. They are, in effect, asking this court to serve as an appellate court for the state court. This is not the same co n cep t as a state court and a federal court having concurrent jurisdiction as described in Penn G en era l Casualty Co. 294 U.S. 189, 55 S.Ct. 386. II. Conclusion

B ecau se Petitioner's objections to the Report and Recommendation are without merit, this co u rt hereby ACCEPTS and ADOPTS the Report and Recommendation. A separate judgment w ill enter.

/s/ R. Allan Edgar R. ALLAN EDGAR UNITED STATES DISTRICT JUDGE

-4-