Chestnut et al v. Wells Fargo Bank, NA

Filing 49

MEMORANDUM AND ORDER denying 34 Motion to Vacate. For the reasons stated above, Plaintiffs' motion to vacate is DENIED. The Clerk of the Court is directed to mail copies of this Memorandum and Order to the pro se Plaintiffs. So Ordered by Judge Joanna Seybert on 8/20/12. C/M; C/ECF (Valle, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------X
DAWN CHESTNUT and RODNEY CHESTNUT,
Plaintiffs,
MEMORANDUM & ORDER
10-CV-4244(JS)(ARL)

-againstWELLS FARGO BANK, N.A.,
Defendant.
---------------------------------------X
APPEARANCES
For Plaintiffs:
Dawn Chestnut, pro se
112 W. Barlett Road
Middle Island, NY 11953
Rodney Chestnut, pro se
112 W. Barlett Road
Middle Island, NY 11953
For Defendant:

Sara L. Markert, Esq.
Houser & Allison, APC
One Grand Central Place
60 E. 42nd Street, Suite 1148
New York, NY 10165
Victoria McKenney, Esq.
Hogan Lovells US LLP
875 Third Avenue
New York, NY 10022

SEYBERT, District Judge:
Plaintiffs
commenced

this

Dawn

action

pro

and
se

Rodney
on

Chestnut

September

(“Plaintiffs”)

17,

2010

against

Defendant Wells Fargo Bank, N.A. (“Defendant” or “Wells Fargo”),
asserting

claims

arising

out

of

Defendant’s

foreclosing

on

Plaintiffs’ property located at 112 W. Bartlett Road in Middle
Island, New York.

On November 1, 2010, Defendant filed a motion

to dismiss Plaintiffs’ Complaint, which this Court granted on
March 2, 2011.

The Complaint was dismissed with prejudice and

judgment was entered in favor of Defendant on March 4, 2011.
Presently before the Court is Plaintiffs’ motion to vacate.

For

the following reasons, Plaintiffs’ motion is DENIED.
BACKGROUND
The

Court

assumes

familiarity

with

the

facts

underlying this foreclosure dispute which the Court detailed in
its March 2, 2011 Memorandum and Order dismissing this action
with prejudice.

See Chestnut v. Wells Fargo Bank, N.A., No. 10-

CV-4244, 2011 WL 838914 (E.D.N.Y. Mar. 2, 2011).

Thus, the

Court

procedural

will

only

briefly

summarize

the

relevant

history.
Plaintiffs commenced this action in September 2010,
purporting

to

assert

twenty-three

separate

causes

of

action,

including, inter alia, fraudulent inducement, unfair business
practices, unjust enrichment, violations of the Truth-In-Lending
Act, as well as some imaginative claims with no basis in any
statute or common law doctrine, such as “Lender Profit by Credit
Default Swap Derivatives” and “Extra Profit on Sale of Predatory
Loan

Product.”

foreclosure

action

All

of

Plaintiffs’

commenced

by

claims

Defendant

in

related
New

York

to

a

State

Supreme Court, Suffolk County in July 2006 that resulted in a
Judgment of Foreclosure being entered in favor of Wells Fargo in
2

July 2007.1

Mr. Chestnut twice attempted, unsuccessfully, to

have the Judgment of Foreclosure vacated by the state court on
three separate occasions: first, by moving the state court to
vacate the judgment in January 2009 and, second, by moving the
state court to reconsider its denial of his motion to vacate in
March 2010.

When those efforts failed, Plaintiffs commenced the

present action.
On November 1, 2010, Wells Fargo moved to dismiss the
Complaint, arguing that: (1) Plaintiffs’ claims were barred by
the Rooker-Feldman doctrine, (2) Plaintiffs’ claims were barred
by collateral estoppel, and (3) Plaintiffs’ otherwise failed to
plead a cognizable cause of action.

(Docket Entry 21.)

November

their

29,

2010,

Plaintiffs

(Docket Entry 26.)

filed

opposition

On

brief.

Plaintiffs argued that their claims were

sufficiently pled but did not contest Defendant’s argument that
their

claims

estoppel.

were

barred

Defendant

by

filed

Rooker-Feldman
its

reply

on

and/or

December

collateral
20,

2010.

(Docket Entry 28.)
On March 2, 2011, the Court granted Defendant’s motion
to dismiss finding that all of Plaintiffs’ claims were barred by
Rooker-Feldman, collateral estoppel, and/or res judicata because
1

On February 7, 2007, the state court granted Wells Fargo’s
unopposed summary judgment motion, and on July 18, 2007, the
state court granted Wells Fargo’s unopposed motion for a
Judgment of Foreclosure.
3

Plaintiffs’ Complaint was merely another attempt to re-litigate
the

state

court

foreclosure

adjudicated therein.
(citations

with

and

the

issues

See Chestnut, 2011 WL 838914, at *2-3

omitted).

dismissed

proceeding

Plaintiffs’

prejudice

(Docket

claims

Entry

were

32)

and

entered in favor of Defendant (Docket Entry 33).

accordingly
judgment

was

Plaintiffs did

not appeal.2
On

September

9,

2011,

motion to vacate the judgment.

Plaintiffs

filed

the

pending

(Docket Entry 34.)

DISCUSSION
Notwithstanding

Plaintiffs’

assertion

that

they

are

seeking relief from judgment pursuant to N.Y. C.P.L.R. 5015(3),
the Court construes Plaintiffs’ motion as a motion to vacate
pursuant to Rule 60(b) of the Federal Rules of Civil Procedure.
See Milgram v. Orthopedic Assocs. Defined Contribution Pension
Plan,

666

C.P.L.R.’s
Brown

v.

F.3d

68,

78

procedural
Enzyme

Dev.,

(2d

Cir.

2011)

(stating

apply

in

federal

98

(2d

rules

do

not

380

F.

App’x

2

97,

that

the

court);

Cir.

2010)

The Court notes that in March 2011, Plaintiffs filed an Order
to Show Cause in the Supreme Court, Suffolk County, again
seeking vacatur of the Judgment of Foreclosure. This motion was
denied in June 2011.
4

(construing a pro se plaintiff’s motion for relief from judgment
as a motion under Rule 60(b)).3
The Court will first address the standard of review on
a Rule 60(b) motion to vacate before turning to the merits of
Plaintiffs’ motion.
I.

Standard of Review
Rule 60(b) provides that a district court may relieve

a party from a final judgment for the following reasons:
(1) mistake, inadvertence,
excusable neglect;

surprise,

or

(2) newly discovered evidence that, with
reasonable diligence, could not have been
discovered in time to move for a new trial
under Rule 59(b);
(3)
fraud
(whether
previously
called
intrinsic or extrinsic), misrepresentation,
or misconduct by an opposing party;
(4) the judgment is void;
(5)
the
judgment
has
been
satisfied,
released or discharged; it is based on an
earlier judgment that has been reversed or
vacated; or applying it prospectively is no
longer equitable; or
(6) any other reason that justifies relief.
FED. R. CIV. P. 60(b).
3

The Court will not construe Plaintiffs’ motion as one for
reconsideration under FED. R. CIV. P. 59(e) or Local Civil Rule
6.3, because a motion under either rule would be time-barred.
See FED. R. CIV. P. 59(e) (must be filed no later than twentyeight days after judgment is entered); E.D.N.Y. Local Civil Rule
6.3 (must be filed no later than fourteen days after judgment is
entered).
5

Although district courts have discretion in evaluating
Rule 60(b) motions, relief under this provision is extraordinary
and should be granted only in exceptional circumstances.

See

United States v. Int’l Bhd. of Teamsters, 247 F.3d 370, 391 (2d
Cir. 2001) (“A motion for relief from judgment is generally not
favored

and

is

properly

granted

only

upon

a

showing

of

exceptional circumstances.”); Nemaizer v. Baker, 793 F.2d 58, 61
(2d Cir. 1986) (“Since 60(b) allows extraordinary relief, it is
invoked

only

(citations

upon

a

omitted)).

showing
Such

of
a

exceptional

motion

may

circumstances.”
not

be

used

to

repackage or relitigate arguments and issues already considered
by the district court, see Shrader v. CSX Transp, Inc., 70 F.3d
255, 257 (2d Cir. 1995); cf. Stevens v. Miller, 676 F.3d 62, 67
(2d Cir. 2012) (“In no circumstances . . . may a party use a
Rule 60(b) motion as a substitute for an appeal it failed to
take in a timely fashion.”), and the burden of proof is on the
party seeking relief from judgment, see Int’l Bhd. of Teamsters,
247 F.3d at 391.
II.

Plaintiffs’ Motion
Plaintiffs’ arguments in favor of vacatur fall into

three categories:
and (3) fraud.

(1) mistake, (2) newly-discovered evidence,

The Court will address each separately.

6

A.

Mistake
Rule

relief

from

60(b)(1)
a

“permits

judgment

based

surprise, or excusable neglect.’”

a

district

on

court

‘mistake,

to

grant

inadvertence,

Johnson v. Univ. of Rochester

Med. Ctr., 642 F.3d 121, 125 (2d Cir. 2011) (quoting FED. R. CIV.
P. 60(b)(1)).
include

both

The Second Circuit has interpreted “mistake” to
errors

of

a

party

or

his

representatives,

see

Montco, Inc. v. Barr (In re Emergency Beacon Corp.), 666 F.2d
754, 759 (2d Cir. 1981), and mistakes of law or fact made by the
district court, see Gey Assocs. Gen. P’ship v. 310 Assocs. (In
re 310 Assocs.), 346 F.3d 31, 35 (2d Cir. 2003).

Plaintiffs

argue that the Court erred in relying on the Rooker-Feldman
doctrine

to

dismiss

their

Complaint.

Plaintiffs’

argument,

however, is flawed and without merit for the following reasons.
First, Plaintiffs already had an opportunity to argue
that Rooker-Feldman is inapplicable here.

Defendant raised the

issue in its motion to dismiss, but Plaintiffs failed to address
the issue or respond to Defendant’s argument in any way.

This

lack of due diligence in responding to Defendant’s motion to
dismiss, however, is not grounds for vacatur, and the Court will
not permit Plaintiffs to relitigate the applicability of RookerFeldman at this juncture.

See Shrader, 70 F.3d at 257 (“[A]

motion to reconsider should not be granted where the moving

7

party seeks solely to relitigate an issue already decided.”);
Competex, S.A. v. Labow, 783 F.2d 333, 335 (2d Cir. 1986).
Second,
reargue

this

incorrect.

even

issue,

if

the

Court

Plaintiffs’

permitted

application

of

Plaintiffs
the

law

to
is

“Courts in this Circuit have consistently held that

any attack on a judgment of foreclosure is clearly barred by the
Rooker-Feldman doctrine,” Wu v. Levine, No. 05-CV-1234, 2005 WL
2340722,

at

*2

(E.D.N.Y.

June

3,

2005)

(collecting

cases),

aff’d, 314 F. App’x 376 (2d Cir. 2009); see also Dockery v.
Cullen

&

Dykman,

90

F.

Supp.

2d

233,

236

(E.D.N.Y.

2000)

(Rooker-Feldman doctrine bars claim that state court judgment of
foreclosure was procured by fraud), and this is the exact relief
that Plaintiffs are seeking here.
Finally, even if the Court did err in applying RookerFeldman, the Court also dismissed the Complaint on the grounds
of

collateral

estoppel

and

res

judicata--theories

Plaintiffs fail to address in their motion to vacate.

that
Thus,

even if Plaintiff is correct and Rooker-Feldman does not apply,
Plaintiffs’ claims would still be barred by issue and claim
preclusion.

See Chestnut, 2011 WL 838914, at *2-3.

Accordingly, the Court finds that Plaintiffs are not
entitled to vacatur under Rule 60(b)(1).

8

B.

Newly-Discovered Evidence
A court may also vacate a judgment on the grounds of

“newly

discovered

establish

evidence.”

entitlement

to

FED. R. CIV. P.

relief

from

60(b)(2).

judgment

under

To
Rule

60(b)(2), Plaintiffs must show that:
(1) the newly discovered evidence was of
facts that existed at the time of trial or
other dispositive proceeding, (2) the movant
must have been justifiably ignorant of them
despite due diligence, (3) the evidence must
be admissible and of such importance that it
probably would have changed the outcome, and
(4)
the
evidence
must
not
be
merely
cumulative or impeaching.
Int’l Bhd. of Teamsters, 247 F.3d at 392 (internal quotation
marks and citation omitted).
Plaintiffs here purport to introduce “new” evidence in
support of their argument that the assignment of their mortgage
to Wells Fargo was not valid.
“new” evidence.

There are two issues with this

First, it is not new.

Plaintiffs provide the

Court with a copy of the assignment (Pl. Reply, Docket Entry 48,
Ex. A) and a Pooling and Service Agreement dated February 1,
2006

(Pl.

Reply,

Docket

Entry

48,

Ex.

B).

However,

the

assignment was previously submitted to the Court by Defendant in
support of its motion to dismiss (Garcia Decl., Docket Entry 22,
Ex.

D),

and

“justifiably

Plaintiffs

ignorant”

of

fail
the

to

explain

existence

of

why
the

they

were

Pooling

and

Service Agreement--an agreement that was signed more than four
9

years before Plaintiffs commenced this action.

Int’l Bhd. of

Teamsters, 247 F.3d at 392; cf. Stewart Park & Reserve Coal.
Inc. v. Slater, 374 F. Supp. 2d 243, 253 (N.D.N.Y. 2005) (“[T]he
moving

party

bears

the

burden

in

establishing

that

the

new

evidence is ‘truly newly discovered or . . . could not have been
found

by

due

diligence.’”

(alteration

in

original)

(quoting

United States v. Potamkin Cadillac Corp., 697 F.2d 491, 493 (2d
Cir. 1983)).
the

Second, the Court did not rely on the validity of

assignment

Complaint.

in

its

Memorandum

and

Order

dismissing

the

Thus, even if this evidence was new and established

that the assignment was invalid, it would not affect the Court’s
dismissal pursuant to the Rooker-Feldman doctrine, collateral
estoppel, and/or res judicata.
Accordingly, the Court finds that Plaintiffs are not
entitled to vacatur under Rule 60(b)(2).
C.

Fraud
Under Rule 60(b)(3), a district court may relieve a

party from a final judgment for “fraud” committed in connection
with the proceedings.

To prevail, Plaintiffs “must show that

the conduct complained of prevented [them] from fully and fairly
presenting

[their]

case.”

State

St.

Bank

&

Trust

Co.

v.

Inversiones Errazuriz Limitada, 374 F.3d 158, 176 (2d Cir. 2004)
(internal

quotation

marks

and

citation

omitted).

Here,

Plaintiffs argue that Defendant engaged in fraud in procuring
10

the

assignment

of

Plaintiffs’

mortgage.

However,

this

information was all presented to the Court in opposition to
Defendant’s motion to dismiss.

Thus, Plaintiffs cannot argue

that the alleged fraud “prevented [them] from fully and fairly
presenting [their] case.”

Id.
CONCLUSION

For the reasons stated above, Plaintiffs’ motion to
vacate is DENIED.

The Clerk of the Court is directed to mail

copies of this Memorandum and Order to the pro se Plaintiffs.

SO ORDERED

/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:

August
20 , 2012
Central Islip, New York

11