Pace v. Federal National Mortgage Association
Filing
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OPINION MEMORANDUM AND ORDER IT IS HEREBY ORDERED that the motion of defendant Life Insurance Company of North America to dismiss Count III, [Doc. No 11], granted. IT IS FURTHER ORDERED that Count III is dismissed as to Defendant Life Insurance Company of North America. 9 Signed by District Judge Henry Edward Autrey on 3/26/18. (CLA)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
ANTHONY PACE,
)
)
Plaintiff,
)
)
v.
) CASE NO. 4:17CV1776 HEA
)
FEDERAL NATIONAL MORTGAGE ASSOC., )
)
Defendant,
)
OPINION, MEMORANDUM AND ORDER
This matter is before the Court on Defendant’s motion to dismiss, [Doc. No.
9]. Plaintiff has responded to the motion, to which Defendant has responded. The
matter is fully briefed. For the following reasons, the Court will grant Defendant
motion.
Facts and Background
Plaintiff’s Petition alleges the following:
On or about September 27, 2010, a foreclosure sale was conducted on
Plaintiff's property.
Defendant purchased the property.
At the time, Plaintiff was unaware that for the years preceding the
foreclosure, Defendant had for all intents and purposes actually owned the
loan, and was using Wells Fargo as a glorified servicer under its guidelines.
Defendant put into place multiple safeguards to ensure that although it
was not listed on the note and deed of trust that it would have all say as to how
the mortgage would be handled, and would be the beneficiary if the property
went into foreclosure.
To that extent, even though it w a s never mentioned in the note and deed
of trust, Defendant purchased the property at the foreclosure sale, and did so
with a credit bid, a luxury no third-party bidder would have been given.
Defendant, because of the arrangement made with Wells Fargo before
entering into the loan agreement with Plaintiff, was the true owner of the loan
at all times it was being serviced by Wells Fargo.
During this time, Defendant forced Wells Fargo to enter into a sham
modification and other agreements with Plaintiff, during which it told Plaintiff
not to make his payments, that he would be modified, and to disregard the
written communication he received indicating his default.
Employees of Wells Fargo, acting as agents for Defendant, told Plaintiff
repeatedly that he was eligible for loan modification, and that he must be
behind in his payments to receive such modification.
Plaintiff relied on the representations of the agents of Defendant, and was
thereby harmed when Defendant purchased the property at foreclosure sale.
Plaintiff was removed from his home in January of 2014.
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Plaintiff has been harmed by credit reporting done erroneously on him by
Defendant and its agent Wells Fargo, which has cost him job opportunities and
made his cost of credit, to the extent he could get any, much more expensive.
Defendant argues the Petition should be dismissed under the doctrine of res
judicata.
Standard
To survive a motion to dismiss under Rule 12(b)(6) for failure to state a
claim upon which relief can be granted, “a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’ ” Braden v. Wal–Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009)
(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). A claim is plausible on its
face “when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal,
556 U.S. at 678. In making this determination, the Court must grant the plaintiff all
reasonable inferences that can be drawn from the complaint's factual allegations.
See Lustgraaf v. Behrens, 619 F.3d 867, 872–73 (8th Cir. 2010).
The Court can take judicial notice of public records and consider them on a
motion to dismiss. Stahl v. U.S. Dep't of Agric., 327 F.3d 697, 700 (8th Cir. 2003).
Here, the Court has considered certain matters of public record—the original Pace
state court case file, 11JE-CC00078, and the removal thereof, 4:11-cv-004893
CAS—as well as documents that are necessarily embraced by the complaint. See
Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999) (holding
that, when considering a motion to dismiss, the court “may consider some
materials that are part of the public record or do not contradict the complaint, as
well as materials that are necessarily embraced by the pleadings”) (citations and
internal quotation marks omitted); see also Knutson v. City of Fargo, 600 F.3d 992,
1000 (8th Cir. 2010) (“[W]e see no reason why the District Court, like this Court,
could not take judicial notice of the publicly available state-court argument,
particularly where the issue at hand is possible preclusion of a federal claim as a
result of those same state-court proceedings.”); see also Germain Real Estate Co.,
LLC v. HCH Toyota, LLC, 778 F.3d 692, 695 (8th Cir. 2015).
Discussion
To establish that a claim is barred by res judicata, Defendant must show “(1)
the first suit resulted in a final judgment on the merits; (2) the first suit was based
on proper jurisdiction; (3) both suits involve the same parties (or those in privity
with them); and (4) both suits are based upon the same claims or causes of action.”
Yankton Sioux Tribe v. United States Dep't of Health & Human Servs., 533 F.3d
634, 639 (8th Cir. 2008) (internal quotations omitted). “Dismissal on the basis of
res judicata at the pleading stage is appropriate if the defense is apparent on the
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face of the complaint.” Magee v. Hamline Univ., 775 F.3d 1057, 1058–59 (8th Cir.
2015) (per curiam).
The original Pace case alleged wrongful foreclosure, fraud and negligence
based on the 2010 foreclosure of the Property. In Judge Shaw’s case, summary
judgment was entered in favor of Defendant. A final judgment on the merits was
entered.
The parties do not dispute that the first Pace case was based on proper
jurisdiction.
Wells Fargo and Defendant in this matter are in privity. The Petition alleges
that Wells Fargo was the agent of, and was acting on behalf of, Defendant in the
original case. The Court finds that Defendant and Wells Fargo’s relationship
satisfies the third requirement of the same parties in both cases.
Judge Shaw has already decided the exact issues that Plaintiff seeks to have
adjudicated in this case. “To determine whether two causes of action are the same,
the court examines whether the second lawsuit is ‘part of the transaction, or series
of connected transactions, out of which the [first] action arose..., giving weight to
such considerations as whether the facts are related in time, space, origin, or
motivation, [and] whether they form a convenient trial unit.’” First Nat'l Bank in
Sioux Falls v. First Nat'l Bank South Dakota, 679 F.3d 763, 767 (8th Cir. 2012)
(quoting Lane v. Peterson, 899 F.2d 737, 742 (8th Cir. 1990)). “Whether two
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claims are the same for res judicata purposes depends on whether the claims arise
out of the same nucleus of operative fact or are based on the same factual
predicate.” Murphy v. Jones, 877 F.2d 682, 684 (8th Cir. 1989).
“As stated in Lane, ‘reliance...on different substantive law and new legal
theories does not preclude the operation of res judicata....[W]here a plaintiff
fashions a new theory of recovery or cites a new body of law that was arguably
violated by a defendant's conduct, res judicata will still bar the second claim if it is
based on the same nucleus of operative facts as the prior claim.’ Lane, 899 F.2d at
744. In effect, ‘res judicata bars relitigation not only of those matters that were
actually litigated, but also those which could have been litigated in the earlier
proceeding.’ King v. Hoover Group, Inc., 958 F.2d 219, 223 (8th Cir. 1992).”
Banks v. Int'l Union Electronic, Elec., Tech., Salaried & Machine Workers, 390
F.3d 1049, 1052–53 (8th Cir. 2004); see also Ashanti v. City of Golden Valley, 666
F.3d 1148, 1153–54 (8th Cir. 2012) (res judicata bars claims “ ‘arising from the
original circumstances' but ‘under new legal theories' ” (quoted case omitted)).
Conclusion
This action clearly arises out of the same nucleus of operative facts as the
previous action against Wells Fargo. It is, therefore, barred by res judicata. The
motion to dismiss is well taken.
Accordingly,
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IT IS HEREBY ORDERED that the motion of defendant Life Insurance
Company of North America to dismiss Count III, [Doc. No 11], granted.
IT IS FURTHER ORDERED that Count III is dismissed as to Defendant
Life Insurance Company of North America.
Dated this 26th day of March, 2018.
_______________________________
HENRY EDWARD AUTREY
UNITED STATES DISTRICT JUDGE
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