Santana v. Federal National Mortgage Association et al

Filing 14

DECISION & ORDER that Defendants' joint 8 Motion to Dismiss is hereby DENIED with leave to renew. Defendants shall either file a renewed motion to dismiss or file an answer to the complaint within 21 days of the date of this Order. Signed by Senior Judge Thomas J. McAvoy on 2/18/2016. (see)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
---------- --------------------VICTOR SANTANA,
Plaintiff,
v.

1:15-cv-1424
(TJM/DJS)

FEDERAL NATIONAL MORTGAGE ASSOCIATION,
as Trustee for the Fannie Mae Guaranteed Remic
Pass-Through Certificates Fannie Mae Remic Trust
2006-81, SETERUS, INC., MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,
Defendants.
------------------------------THOMAS J. McAVOY
Senior United States Judge
DECISION and ORDER
Before the Court is Defendants’ joint motion to dismiss the complaint. See dkt. #
8. Plaintiff has not responded to the motion, and the time for such response has
passed.
I.

BACKGROUND
Plaintiff, proceeding pro se, filed the instant Complaint on December 1, 2015.

See Complaint (“Complt.”), dkt. # 1. The Complaint alleges that Defendants engaged in
fraud in a mortgage transaction with the Plaintiff and breached contractual provisions.
Plaintiff contends that the note and the m ortgage in question were never properly
assigned, and that a foreclosure action against the property was therefore improper.
The mortgage, he contends, is unenforceable. Plaintiff seeks damages of $108,000,
the amount of the underlying loan on the property transaction, as well as additional
damages for the alleged fraud. He also seeks an order from the Court declaring the

foreclosure on the property to be void.
After being served with the Complaint, Defendants filed a joint motion to dismiss.
See dkt. # 8. Defendants served that motion on the Plaintiff. See dkt. # 12. The Court
ordered Plaintiff to respond by January 22, 2016. See dkt. # 13. Plaintiff has not yet
responded.
II.

ANALYSIS.
Defendants have filed a motion to dismiss Plaintiff’s claims pursuant to Federal

Rule of Civil Procedure 12(b)(6). Defendants argue that Plaintiff has not stated a claim
upon which relief could be granted, even if all factual allegations in the complaint were
proved true. In addressing such motions, the Court must accept “all factual allegations
in the complaint as true, and draw[] all reasonable inferences in the plaintiff’s favor.”
Holmes v. Grubman, 568 F.3d 329, 335 (2d Cir. 2009). This tenet does not apply to
legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Threadbare recitals of
the elements of a cause of action, supported by mere conclusory statements, do not
suffice.” Id. at 678. “To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its face.”
Id. (quoting Bell Atl. v. Twombly, 550 U.S. 544, 570 (2007)).
Plaintiff has not responded to the motion. Plaintiff’s failure does not constitute a
default because “[s]uch motions assume the truth of a pleading’s factual allegations
and test only its legal sufficiency.” McCall v. Pataki, 232 F.3d 321, 322 (2d Cir. 2000).
As such, “although a party is of course to be given a reasonable opportunity to respond
to an opponent’s motion, the sufficiency of a complaint is a matter of law that the court
is capable of determining based on its own reading of the pleading and knowledge of
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the law.” Id. When a complaint meets the pleading standing, “the plaintiff’s failure to
respond to a Rule 12(b)(6) motion does not warrant dismissal.” Id. at 323.
III.

ANALYSIS
Defendants seek dismissal on several grounds. For reasons that will become

clear, the Court will address only one of those grounds.
Defendants first argue that the Court should abstain from exercising jurisdiction
over this matter because to do so would interfere with a state foreclosure action. “Since
the beginning of this country’s history Congress has, subject to few exceptions,
manifested a desire to permit state courts to try state cases free from interference by
federal courts.” Younger v. Harris, 401 U.S. 37, 43 (1971). The doctrine enforcing that
desire has been termed “abstention.” “In the main, federal courts are obliged to decide
cases within the scope of federal jurisdiction.” Sprint Communs., Inc. v. Jacobs, 123
S.Ct. 584, 588 (2013). “Abstention is not in order sim ply because a pending state-court
proceeding involves the same subject matter.” Id. The Supreme Court has identified
three situations where abstention for a state proceeding is appropriate: (1) “[w]hen
there is a parallel, pending state criminal proceeding”; (2) when a state-court
proceeding exists that is “akin to [a] criminal [proceeding]”; or (3) a case “implicate[s] a
State’s interest in enforcing the orders and judgments of its courts[.]” Id. If the matter
falls into one of these three categories, abstention is appropriate “when: (1) there is an
ongoing state proceeding; (2) that implicates an important state interest; and (3) the
state proceeding affords the federal plaintiff an adequate opportunity for judicial review
of the federal constitutional claims.” Spargo v. New York State Comm’n on Judicial
Condcut, 351 F.3d 65, 75 (2d Cir. 2003).
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A number of courts in this circuit have concluded that abstention is appropriate
when a federal action seeks to enjoin an ongoing state foreclosure proceeding. Such
courts have found that a state foreclosure action is a “‘civil proceeding that implicates a
State’s interest in enforcing the orders and judgments of its courts’” and abstained from
hearing the federal case. Abbatiello v. Wells Fargo Bank, N.A., 116 A.F.T.R.2d (RIA)
6521 at *9 (E.D.N.Y. Oct. 8, 2015) (quoting Sprint, 134 S.Ct. at 588); see also, Fequiere
v. Tribeca Lending, No. 14cv812, 2014 U.S. Dist. LEXIS 183152 at *8-9 (E.D.N.Y. July
15, 2014) (“‘[T]o the extent [p]laintiff seeks federal court intervention in an on-going
state foreclosure proceeding, such claims are generally barred by Younger v. Harris’”)
(quoting Marcelo v. EMC Mortg. Corp., No. 10-cv-5964, 2011 U.S. Dist. LEXIS 50063,
at *4 (E.D.N.Y. May 6, 2011)); Muong v. Fannie Mae, No. 13cv6564, 2013 U.S. Dist.
LEXIS 176424 at *7 n.1 (E.D.N.Y. Dec. 16, 2013).
To the extent that Plaintiff seeks a declaratory judgment form the Court that
enjoins any pending state-court proceeding, the Court would invoke Younger abstention
and decline to hear the case. It is unclear, however, whether a case is actually pending
in state court. Plaintiff’s complaint admits an underlying state mortgage foreclosure
proceeding, but appears to indicate that the case has bee n resolved. Defendant’s
motion includes as exhibits documents from the Supreme Court of Schenectady
County, New York. The Court will consider those documents. See Kramer v. Time
Warner, 937 F.2d 767, 774 (2d Cir. 1991) (in deciding a Rule 12(b)(6) motion a court is
permitted to take “judicial notice of documents filed in other courts . . . to establish the
fact of such litigation and related filings.”). These court filings indicate that a foreclosure
action was initiated against the Plaintiff in that court, and that the court eventually
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entered summary judgment for the Plaintiff in that matter and against the Plaintiff in this
case. See Exhibits 3, 5 to Declaration of Jonathan E. Samon, dkt. # 8-2. Since
Younger abstention only applies to pending state-court action and Defendants have not
demonstrated that the action is actually pending, the Court will deny the motion with
leave to renew should Defendants have evidence that an action is actually pending in
state court.
The Court notes, however, that Defendants appear to argue that Younger
abstention would permit dismissal of the entire action. Defendants are mistaken.
Plaintiff Complaint seeks damages in addition to (arguably) injunctive relief, and
“abstention and dismissal are inappropriate when damages are sought, even when a
pending state proceeding raises identical issues and [a court] would dismiss otherwise
identical claims for declaratory and injunctive relief[.]” Kirschner v. Klemons, 225 F.3d
227, 238 (2d Cir. 2000). Under those conditions, “a stay of the action pending
resolution of the state proceeding may be appropriate.” Id. Thus, should the
Defendants file a new motion to dismiss and demonstrate that Younger abstention
applies to this case, the Court would not be compelled to dismiss the entire case unless
the Defendants could show that Plaintiff has failed to state a claim for upon which relief
could be granted for those claims that seek monetary relief. Because comity requires
this Court to consider abstention in favor the state-court proceeding, the Court will not
address arguments regarding whether Plaintiff has stated a claim upon which relief
could be granted at this point.
The Court has another alternative in addressing whether the instant case should
be heard in this Court: the Rooker-Feldman doctrine. Under that standard, a federal
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district court may not hear “‘cases brought by state-court losers complaining of injuries
rendered before the district court proceedings commenced and inviting district court
review and rejection of those judgments.’” Green v. Mattingly, 585 F.3d 97, 101 (2d Cir.
2009) (quoting Exxon Mobil Corp. v. Saudi Basic Industries Corp., 544 U.S. 280, 284
(2005)). The doctrine applies when four conditions are met:
First, the federal-court plaintiff must have lost in state court. Second, the
plaintiff must “complain [] of injuries caused by [a] state-court judgment.”
Third, the plaintiff must “invite district court review and rejection of [that]
judgment [].” Fourth, the state-court judgment must have been “rendered
before the district court proceedings commenced”– i.e., Rooker-Feldman
has no application to federal-court suits proceeding in parallel with
ongoing state-court litigation.
Id. (quoting Hoblock v. Albany County Bd. of Elections, 422 F.3d 77, 85 (2d Cir. 2005)).
“Rooker-Feldman is jurisdictional,” Hachamovitch v. Debuonon, 159 F.3d 687, 696 n.2
(2d Cir. 1998). Under those circumstances, the Court would not be required to
differentiate between equitable and damages claims.
Defendants did not raise the Rooker-Feldman issue. They did not provide any
information on whether the state case is currently under appeal, and the Court declines
under those circumstances to sua sponte dismiss the case. Defendants may choose to
address this doctrine if they file a renewed motion to dismiss.
IV.

CONCLUSION
For the reasons stated above, the Defendants’ joint motion to dismiss, dkt. # 8, is

hereby DENIED with leave to renew. Defendants shall either file a renewed motion to
dismiss or file an answer to the Complaint within twenty-one days of the date of this
Order.

.

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IT IS SO ORDERED
Dated:February 18, 2016

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