HARTE v. SEA VILLAGE MARINA, LLC et al

Filing 34

OPINION. Signed by Judge Joseph H. Rodriguez on 2/4/2016. (drw)

UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEW JERSEY
DANIEL T. HARTE,

:
:

Plaintiff,
v.
SEA VILLAGE MARINA, LLC

Hon. Joseph H. Rodriguez
Civil Action No. 14-3231

:
:

Defendant.

Opinion

:

This matter comes before the Court on Motion to Dismiss [Dkt. No. 25], pursuant
to Federal Rules of Civil Procedure 12(b)(1), 12(b)(6), and 8(a), of Defendant Wells
Fargo & Company. The Court has considered the written submissions of the parties
without oral argument. For the reasons that follow, Wells Fargo & Company’s Motion to
Dismiss is granted.
I.

Background

This case is related to a matter in the Superior Court of New Jersey. The
underlying state court lawsuit revolved around a contract that Plaintiff Daniel T. Harte
entered into, on or about August 25, 2005, to purchase a mariner houseboat, located at
Defendant Sea Village Marina (“SVM”), for the amount of $132,500.00. Plaintiff
purchased the houseboat from John Best. During the course of litigation, Defendant
Barbara Lieberman, Esquire represented the Estate of John Best. Allegedly, based
upon her representations to the state court that the Estate was insolvent, Harte agreed
to dismiss the claims against the Estate. Harte was unaware at that time that Lieberman
was under criminal investigation by the New Jersey Attorney General. Lieberman was
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recently convicted of various fraud counts.
On February 24, 2014 Harte and SVM entered into a settlement agreement in the
Superior Court of New Jersey in Daniel T. Harte v. Sea Village Marina, LLC, Docket No.
ATL-L-2616-12. Under the terms of the Settlement Agreement, Harte had sixty days to
produce to SVM proof of unencumbered title. Harte claims that Wells Fargo(also
referred to as Wachovia Bank in the Amended Complaint) had the title, but could not
locate the title and eventually ceased responding to Harte’s requests. It appears Harte
never received verification that the title was unencumbered and then he suffered a
stroke. The Settlement Agreement also required Harte to meet certain payment
obligations. It appears he did not satisfy the terms of the Settlement Agreement.
On May 20, 2014, Harte filed this action seeking a declaratory ruling that the
Settlement Agreement is unenforceable due to newly discovered evidence of fraud: Ms.
Lieberman’s criminal indictment. In addition, the Complaint alleges a claim of
common law fraud against all of the named Defendants. On July 3, 2014, Defendant
SVM filed a motion to Dismiss. Then on July 14, 2014, the Superior Court of New
Jersey entered a Judgment in the amount of $50,000 in favor of Sea Village Marina,
Inc. and against Daniel T. Harte. The Judgment was entered as a result of Daniel T.
Harte’s failure to honor the terms of the Settlement Agreement with SVM. The
judgment notes the pendency of the present action:
The defendant has demonstrated that this matter was settled between the
parties on February 24, 2014.In the opinion of this court, the fact that
plaintiff filed suit in the United States District Court is not a reason to
deny the defendant's motion to enforce the settlement and enter the
judgment. The plaintiff could have prevented the defendant from entering
the judgment by making the payments the plaintiff agreed. to make on
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February 24, 2014. The settlement agreement shall be enforced. Judgment
shall be entered in favor of the defendant and against the plaintiff in the
amount of $50,000.00
See Cert. of Aaron M. Bender, Esq., Ex. E, Judgment, Daniel T. Harte v. Sea
Village Marina, LLC, Docket No. ATL-L-2616-12.
The Court granted SVM’s motion to dismiss.
The remaining Defendants are Barbara Lieberman, the Estate of John Best and
Wells Fargo. The claims are as follows: Count I, Declaratory Judgment That the
Settlement Agreement Is Void and Unenforceable and Related Preliminary and
Permanent Injunctive Relief; Count II, Fraudulent Inducement; Count III, Common
Law Fraud. Counts I and II are plead against all of the Defendants, while Count II is
plead against Barbara Lieberman only. There is no proof of service of the Summons
and Complaint on the docket as to Defendants Lieberman and the Estate of John Best.
As a result, the claims against these defendants are dismissed.1
The only remaining defendant, Wells Fargo, moves for dismissal on several

1 Absent strict compliance with Rule 4's summons and service requirements, “a
court ordinarily may not exercise power over a party the complaint names as a
defendant.” Murphy Bros. v. Michetti Pipe Stringing, 526 U.S. 344, 350, 119 S.Ct. 1322,
143 L.Ed.2d 448 (1999) (quoting Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., 484 U.S.
97, 104, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987) (“Before a ... court may exercise personal
jurisdiction over a defendant, the procedural requirement of service of summons must
be satisfied.”); Miss. Pub. Corp. v. Murphree, 327 U.S. 438, 444–45 (1946) (“Service of
summons is the procedure by which a court ... asserts jurisdiction over the person of the
party served.”)). At the time the Complaint and the Amended Complaint were filed in
this matter, Fed. R. Civ. P. m (4) provides for dismissal where a defendant is not served
within 120 days after the complaint is filed. See Fed. R. Civ. P. 4(m). Plaintiff has not
demonstrated good cause for the failure to serve Lieberman and/or the Estate of John
Best.
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grounds, including Fed. R. Civ. P. 12(b)(1), Fed. R. Civ. P. 12(b)(6) and Fed. R. Civ. P.
8(a). Wells Fargo argues that Plaintiff’s claims are barred by the Rooker-Feldman
Doctrine, the Entire Controversy Doctrine, res judicata, and Collateral Estoppel.
Finally, Wells Fargo argues that Plaintiff’s claims are time-barred.
II.

Standard of Review

Under Fed.R.Civ.P. 12(b)(1), a defendant may challenge a plaintiff's right to be
heard in federal court by asserting the court lacks subject matter jurisdiction over the
controversy. See Robinson v. Daulton, 107 F.3d 1018, 1021 (3d Cir. 1999). Unless it is
affirmatively demonstrated, a federal court is presumed to lack subject matter
jurisdiction. Cohen v. Kurtzman, 45 F.Supp.2d 423, 429 (D.N.J. 1999) (citations
omitted). Dismissal is proper under Rule 12(b)(1) when the claim “clearly appears to be
immaterial and made solely for the purpose of obtaining jurisdiction or ... is wholly
insubstantial or frivolous.” Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1408–
09 (3d Cir. 1991) (citing Bell v. Hood, 327 U.S. 678, 682 (1946)). A claim is insubstantial
if “‘its unsoundness so clearly results from the previous decisions of this court as to
foreclose the subject and leave no room for interference that the questions sought to be
raised can be the subject of controversy.’” Hagans v. Lavine, 415 U.S. 528, 538 (1973)
(quoting Ex parte Poresky, 290 U.S. 30, 32 (1933)).
Under a Rule 12(b)(1) motion, the party asserting jurisdiction, the plaintiff, bears
the burden of demonstrating in the record that jurisdiction is proper. Packard v.
Providential Nat'l Bank, 994 F.2d 1039, 1045 (3d Cir. 1993); Development Finance
Corp. v. Alpha Housing & Health Care, Inc., 54 F.3d 156, 158 (3d Cir. 1995). However,

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“no presumptive truthfulness attaches to plaintiff's allegations, and the existence of
disputed material facts will not preclude the trial court from evaluating for itself the
merits of a jurisdictional claim.” Mortensen v. First Fed'l Sav. & Loan Ass'n, 549 F.2d
884, 891 (3d Cir. 1977). The trial court is free to weigh the evidence to determine
whether it has subject matter jurisdiction. Id.
A motion to dismiss under Rule 12(b)(1) may be treated as either a facial or
factual challenge to the court's subject matter jurisdiction. Taliaferro v. Darby Twp.
Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006) (citations omitted); Gould Electronics Inc.
v. United States, 220 F.3d 169, 176 (3d Cir. 2000) (citing Mortensen, 549 F.2d at 891).
Rule 12(b)(1) facial attacks contest the sufficiency of the pleadings, and the trial court
must take all allegations in the complaint as true and in the light most favorable to the
plaintiff. Gould, 2201 F.3d at 176 (citing PBGC v. White, 998 F.2d 1192, 1196 (3d Cir.
1993); see also In re Kaiser Group Int'l Inc., 399 F.3d 558, 561 (3d Cir. 2005) (In
evaluating “facial” subject matter jurisdiction attacks, the court ordinarily accepts all
well-pleaded factual allegations as true, and views all reasonable inferences in the
plaintiff's favor.). Essentially, a “facial” challenge by the defendant contests the
adequacy of the language used in the pleading. Turicentro, S.A. v. American Airlines,
Inc., 303 F.3d 293, 300 n. 4 (3d Cir. 2002).
Rule 12(b) (1) factual attacks, however, contest the factual basis for subject
matter jurisdiction; that is, in a factual challenge to jurisdiction, the defendant argues
that the allegations on which jurisdiction depends are not true as a matter of fact. Id. at
300. As such, no presumptive truthfulness attaches to plaintiff's allegations and “the

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court must weigh the evidence relating to jurisdiction, with discretion to allow affidavits,
documents, and even limited evidentiary hearings.” Id. at 300 n. 4. If the defendant
contests the jurisdictional allegations, then “it is incumbent upon the plaintiff to
respond to the defendant's sworn factual assertions” with something more than
conclusory responses. International Ass'n of Machinists & Aerospace Workers v.
Northwest Airlines, Inc., 673 F.2d 700, 711 (3d Cir. 1981). If the plaintiff fails to “meet
and controvert the defendant's factual proofs, then the district court must determine
whether it has subject matter jurisdiction based upon the factual context presented by
the defendant.” Id. at 711–12. However, if the opposing affidavits present a disputed
issue of material fact, the court must permit the case to proceed to a plenary trial to
resolve the contested jurisdictional issues. Id.
III.

Analysis

For the reasons that follow, Wells Fargo’s Motion to Dismiss pursuant to Fed. R.
Civ. P. 12(b)(1) is granted. The Court does not have jurisdiction over Plaintiffs’ claims
pursuant to the Rooker-Feldman doctrine.
“Under the Rooker–Feldman doctrine, a district court is precluded from
entertaining an action, that is, the federal court lacks subject matter jurisdiction, if the
relief requested effectively would reverse a state court decision or void its ruling.”
Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 192 (3d Cir. 2006) (citations
omitted). There are four requirements that must be met for the Rooker–Feldman
doctrine to apply: “(1) the federal plaintiff lost in state court; (2) the plaintiff
complain[s] of injuries caused by [the] state-court judgments; (3) those judgments were

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rendered before the federal suit was filed; and (4) the plaintiff is inviting the district
court to review and reject the state judgments.” B.S. v. Somerset Cnty., 704 F.3d 250,
259–60 (3d Cir. 2013) (quoting Great W. Mining & Mineral Co. v. Fox Rothschild LLP,
615 F.3d 159 (3d Cir. 2010)). As such, application of the Rooker–Feldman doctrine is
necessarily limited to “cases brought by state-court losers complaining of injuries
caused by state-court judgments rendered before the district court proceedings
commenced and inviting district court review and rejection of those judgments.” Exxon
Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284, 125 S.Ct. 1517, 161 L.Ed.2d
454 (2005).
The Third Circuit explains the Rooker–Feldman doctrine as barring federal
district courts from hearing cases under two circumstances: “‘first, if the federal claim
was actually litigated in state-court prior to the filing of the federal action or, second, if
the federal claim is inextricably intertwined with the state adjudication, meaning that
federal relief can only be predicated upon a conviction that the state-court was wrong.’”
In re Knapper, 407 F.3d at 580 (emphasis added) (quoting Walker v. Horn, 385 F.3d
321, 329 (3d Cir. 2004); Parkview Assoc. P'ship v. City of Lebanon, 225 F.3d 321, 325
(3d Cir. 2000). In this case, both proscriptions apply.
“[A] federal action is inextricably intertwined with a state adjudication, and thus
barred in federal court under Feldman, ‘[w]here federal relief can only be predicated
upon a conviction that the state court was wrong.’ ” Id. (quoting Centifanti v. Nix, 865
F.2d 1422, 1430 (3d Cir. 1989) (quoting Pennzoil Co. v. Texaco Inc., 481 U.S. 1, 25, 107
S.Ct. 1519, 95 L.Ed.2d 1 (1987) (Marshall, J., concurring)). See also Exxon Mobil, 544

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U.S. at 293, 125 S.Ct. 1517 (“In parallel litigation, a federal court may be bound to
recognize the claim- and issue-preclusive effects of a state-court judgment,” but the
federal court is divested of jurisdiction under Rooker–Feldman only where it is asked to
redress injuries caused by an unfavorable state-court judgment.). Importantly, if a
plaintiff's claim in federal court is inextricably intertwined with a previous state court
adjudication, the district court lacks jurisdiction over the claim even if it was not raised
in the state court. Id. at 327, 125 S.Ct. 1517.
Here, the Court is invited to review and reject the Settlement Agreement that is
the subject of the New Jersey Superior Court’s July 14, 2014 Judgment. Plaintiff had
the opportunity to challenge the Settlement Agreement in State Court prior to and
during the pendency of the present action. Plaintiff’s Amended Complaint acknowledges
that his claims were actually litigated as he seeks action on the Settlement Agreement
before the New Jersey Superior Court:
Plaintiff seeks a declaratory judgment pending the resolution of this case,
which is based on events that transpired shortly after settlement
agreement in the matter of Harte v. Sea Village Marina, LLC, et al.,
Superior Court of New Jersey, Law Division, Atlantic
County, Docket No. L-2616-12 (the “Lawsuit”) and potentially newly
discovered evidence. Plaintiff prays for judgment and hereby demands a
jury trial against Defendants[.]
See Amend. Compl.
Moreover, Counts I and III as they relate to Wells Fargo seek relief
identical to that requested in the State Court. The Court finds that plaintiff’s
claims were actually litigated in state court prior and/or are inextricably
intertwined with the Judgment of the New Jersey Superior Court. As such,

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Plaintiff is a state court loser, complaining of an injury caused by New Jersey
Superior Court’s enforcement of the Settlement Agreement that is at the heart of
his federal case. In other words, the Court finds that the ultimate relief sought
by Plaintiff in this matter is the same relief he sought and lost in the Superior
Court of New Jersey. Such review is proscribed by Rooker-Feldman. Walker,
385 F.3d at 330.
Moreover, the Court finds that the present Amended Complaint is “inextricably
intertwined” with issues resolved by the New Jersey Superior Court and this Court is
without jurisdiction to resolve Plaintiff’s claims under the Rooker–Feldman doctrine.
As a result, this Court lacks subject matter jurisdiction over the Plaintiff's claims and
dismisses them as to Defendant Wells Fargo pursuant to Fed. R. Civ. P. 12(b)(1).
In addition, Plaintiff’s request to amend the Amended Complaint is both deficient
and denied as futile. In his Opposition Brief, Plaintiff requests permission to amend
the complaint without setting forth the relevant criteria for the motion or appending the
proposed Second Amended Complaint.
“[A]bsent undue or substantial prejudice, an amendment should be allowed
under Rule 15(a) unless denial [can] be grounded in bad faith or dilatory motive, truly
undue or unexplained delay, repeated failure to cure deficiency by amendments
previously allowed or futility of amendment.’” Long v. Wilson, 393 F.3d 390, 400 (3d
Cir. 2004) (quoting Lundy v. Adamar of New Jersey, Inc., 34 F.3d 1173, 1196 (3d Cir.
1994)). Here, Plaintiff fails to address any of the considerations.
In addition, the Court finds that the amendment would be futile as the claims

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relate to or are inextricably intertwined with the New Jersey Superior Court’s July 14,
2014 Judgment in Daniel T. Harte v. Sea Village Marina, LLC, Docket No. ATL-L-261612. See Grayson v. Mayview State Hospital, 293 F.3d 103, 108 (3d Cir. 2002) (an
amendment sought pursuant to Rule 15(a) shall be permitted unless it would be
inequitable or futile.).
Because the Court is divested of subject matter jurisdiction under the RookerFeldman Doctrine, it will not address Wells Fargo’s remaining arguments related to Fed.
R. Civ. P. 12(b)(6) and Fed. R. Civ. P. 8(a) and the Entire Controversy Doctrine, res
judicata, Collateral Estoppel and the Statute of Limitations.
IV.

Conclusion

For the reasons stated above, Wells Fargo’s motion to dismiss is granted. The
claims against Barbara Lieberman and the Estate of John Best are dismissed pursuant
to Fed. R. Civ. P. 4 (m). Plaintiff’s request to amend the complaint is deficient and futile
and, therefore, denied.
An appropriate Order shall issue.

Dated: February 4, 2016

s/ Joseph H. Rodriguez
Hon. Joseph H. Rodriguez,
UNITED STATES DISTRICT JUDGE

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