Rountree v. US Bank NA et al
OPINION AND ORDER re: 27 LETTER MOTION for Leave to File Amended Complaint addressed to Judge Katherine Polk Failla from Steven Rabitz, Esq. dated 6/7/2016 filed by David Rountree, 23 MOTION to Dismiss filed by Select Portfolio Servicing, Inc., US Bank NA. For the reasons set forth above, Defendants' motions to dismiss are GRANTED, and Plaintiff's request for leave to amend his Complaint is DENIED. The Clerk of Court is directed to terminate all pending motions, adjourn all remaining dates, and close this case. (As further set forth in this Opinion and Order.) (Signed by Judge Katherine Polk Failla on 1/3/2017) (mro)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
US BANK NA; US BANK NA as Trustee for :
Harborview Mortgage Loan Trust 2006-1;
SELECT PORTFOLIO SERVICING, INC;
BANK OF AMERICA NA as successor to
Countrywide Home Loans Servicing
LP; and Does 1 through 100 inclusive,
DOC #: _________________
DATE FILED: January 3, 2017
15 Civ. 9018 (KPF)
OPINION AND ORDER
KATHERINE POLK FAILLA, District Judge:
This case is Plaintiff David Rountree’s third attempt to nullify the
foreclosure of real property he purchased in Boise, Idaho. His two prior actions
proceeded in Idaho’s District Court for the Fourth Judicial District. Both suits
pitted Plaintiff, who represented himself, against a constellation of entities
involved in the foreclosure. Plaintiff, now represented by counsel, sues several
of those same entities here, bringing substantially the same claims he raised in
Idaho state court.
Pending before this Court are two motions to dismiss Plaintiff’s
Complaint: one filed by US Bank NA, individually and as Trustee for
Harborview Mortgage Loan Trust 2006-1 (“US Bank”), and Select Portfolio
Servicing, Inc. (“SPS”); and another filed by Bank of America, N.A. as successor
to Countrywide Home Loans Servicing LP (“BANA”) (collectively, “Defendants”).
Defendants all raise similar defenses. They argue that the Rooker-Feldman
doctrine (discussed further herein) divests this Court of subject-matter
jurisdiction to entertain Plaintiff’s suit; that res judicata precludes Plaintiff from
bringing the claims in his Complaint; and that, in any event, Plaintiff’s causes
of action are meritless. The Court agrees that this combination of arguments
defeats all of Plaintiff’s claims. Plaintiff’s Complaint is dismissed accordingly.
That conclusion should resolve this case. But one month after
Defendants filed their motions to dismiss, and two months after the deadline
for amending his Complaint had passed, Plaintiff requested leave to amend.
Pursuant to the Court’s instructions, Plaintiff attached a proposed Amended
Complaint as an exhibit to his response to Defendants’ motions to dismiss.
Defendants argue that granting Plaintiff leave to amend would cause undue
delay, work prejudice against Defendants, and be futile. Here again, the Court
agrees with Defendants.
This Opinion thus answers two questions. First, does Plaintiff’s
Complaint withstand Defendants’ motions to dismiss? And second, should
Plaintiff be granted leave to amend his Complaint? Because the Court answers
both questions “no,” Defendants’ motions to dismiss are granted in full, and
Plaintiff’s request for leave to amend his Complaint is denied.
Plaintiff’s Complaint provides little in the way of background. Notably, it
glosses over Plaintiff’s default of the promissory note (the “Promissory Note”)
underlying his mortgage loan, which precipitated years of litigation culminating
in this lawsuit. And the Complaint provides almost no dates to aid the Court
in crafting a coherent timeline of the operative events in this case. With these
prefatory caveats in mind, the Court can discern the following:
When reviewing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), this
Court is generally permitted to “review only a narrow universe of materials.” Goel v.
Bunge, Ltd., 820 F.3d 554, 559 (2d Cir. 2016). But where, as here, a Defendant raises
res judicata as a defense under Rule 12(b)(6), the Court may review “materials in the
public record that are subject to judicial notice.” Bey v. City of N.Y., No. 13 Civ. 9103
(AJN), 2015 WL 363903, at *1 (S.D.N.Y. Jan. 28, 2015) (quoting Kiryas Joel Alliance v.
Village of Kiryas Joel, 495 F. App’x 183, 187 n.2 (2d Cir. 2012) (summary order)); accord
Blue Tree Hotels Inv. (Canada), Ltd. v. Starwood Hotels & Resorts Worldwide, Inc., 369
F.3d 212, 217 (2d Cir. 2004) (court considering Rule 12(b)(6) motion “may … look to
public records, including complaints filed in state court”). And because Defendants
have also contested subject-matter jurisdiction under Rule 12(b)(1), the Court may
“consider evidence outside the pleadings, such as affidavits and exhibits.” Martinez v.
Riverbay Corp., No. 16 Civ. 547 (KPF), 2016 WL 5818594, at *3 (S.D.N.Y. Oct. 4, 2016).
Accordingly, this Opinion draws on evidence from an array of sources in addition to
Plaintiff’s Complaint (“Compl.” (Dkt. #1)). Many of these sources are documents related
to the foreclosure of Plaintiff’s Idaho property: a Notice of Assignment appended as an
exhibit to the Complaint (“Notice of Assignment” (Dkt. #1-1)); a Trustee’s Deed
(“Trustee’s Deed” (Dkt. #24-2)); a Notice of Trustee’s Sale (“Notice of Trustee’s Sale” (Dkt.
#24-3, Ex. 4)); Plaintiff’s Promissory Note (“Promissory Note” (Dkt. #26-4)); and
Plaintiff’s Deed of Trust (“Deed of Trust” (Dkt. #26-5)). This Opinion also considers
pleadings and orders from Plaintiff’s Idaho state-court litigation. Most of these
documents are already in the record of this case: a complaint Plaintiff filed in Idaho’s
Fourth Judicial District (“Idaho Compl.” (Dkt. #24-3)) and an accompanying notice of lis
pendens (“Idaho Notice of Lis Pendens” (Dkt. #26-6)); a stipulation of dismissal (“Idaho
Stipulation” (Dkt. #26-7)); and various orders and judgments of Idaho’s Fourth Judicial
District (“7/12/12 Idaho Order” (Dkt. #26-8); “3/11/13 Idaho Order” (Dkt. #24-4);
“4/1/13 Idaho Judgment” (Dkt. # 24-5); “10/29/15 Idaho Order” (Dkt. #24-6)). The
Court also considers Idaho state-court documents that are not presently in the record,
but which are appropriate for judicial notice: an answer and counterclaim Plaintiff filed
in response to an eviction complaint from US Bank (“Idaho Answer and Countercl.”); a
Fourth Judicial District magistrate judge’s order dismissing Plaintiff’s counterclaims
(“5/5/15 Idaho Order”); a magistrate judge’s findings of fact and conclusions of law
In December 2005, Plaintiff obtained a mortgage loan from Countrywide
Home Loans Servicing LP (“Countrywide”). (Compl. ¶ 15). BANA is
Countrywide’s successor in interest. (Id. at ¶ 8). In order to obtain his
mortgage, Plaintiff executed the Promissory Note and a deed of trust (the “Deed
of Trust”). (Id. at ¶ 19). Mortgage Electronic Registration Systems, Inc.
(“MERS”), which is not a party to this action, was “[t]he original beneficiary and
nominee of the Promissory Note.” (Id. at ¶ 15; Notice of Assignment).
Plaintiff’s loan was in the amount of $503,920.00, which Plaintiff used to
purchase real property at 4750 N. Rivervista Place, Boise, Idaho (the
“Property”). (Compl. ¶ 15). Pursuant to the Deed of Trust, Plaintiff conveyed
the Property to Trustee Fidelity National Title Insurance Company (also a nonparty here). (Deed of Trust 1-3). Plaintiff alleges that he was unqualified for
his loan, and that Countrywide committed fraud by selling “Plaintiff a deceptive
loan product.” (Compl. ¶ 13).
On September 1, 2009, Plaintiff failed to make a payment due under the
Promissory Note. (Notice of Trustee’s Sale). Consequently, on August 8, 2011,
concerning US Bank’s eviction complaint (“5/27/15 Idaho Findings”); and the judgment
entered on those findings of fact and conclusions of law (“5/27/15 Idaho Judgment”).
This Opinion also considers a second, discrete issue: whether Plaintiff is entitled to
amend his Complaint. Plaintiff filed a written request (“6/7/16 Leave Mot.” (Dkt. #27)),
to which US Bank and SPS responded (“6/10/16 Leave Opp.” (Dkt. #28)). In analyzing
this issue, the Court cites the transcript of the telephone conference concerning
Plaintiff’s leave motion (“6/17/16 Tr.”), which is not in the record (see infra note 3).
Finally, the Court will consider the Amended Complaint Plaintiff tendered (“Am. Compl.”
For ease of reference, the parties’ supporting memoranda are referred to as “US Bank
Br.” (a brief in which US Bank and SPS have joined) (Dkt. #25), “BANA Br.” (Dkt. #261), “Pl. Opp.” (Dkt. #32), “BANA Reply” (Dkt. #33), and “US Bank Reply” (Dkt. #34).
then-Trustee Recontrust Company, N.A. (“Recontrust”), yet another non-party,
published a Notice of Trustee’s Sale indicating that the Property would be sold
at a non-judicial foreclosure auction on December 16, 2011. (Id.).
Plaintiff appears to allege that the Promissory Note and Deed of Trust
were assigned to US Bank in December 2005. (Compl. ¶¶ 15, 22). But the
Notice of Assignment attached as an exhibit to Plaintiff’s Complaint provides
that on October 1, 2013, BANA, through SPS, assigned the Deed of Trust to US
Bank. (Notice of Assignment). And in his opposition to Defendants’ motions to
dismiss, Plaintiff indicates that US Bank has purported to own the Promissory
Note since 2007. (Pl. Opp. 9).
In any case, Plaintiff alleges that the securitization of the Deed of Trust
was invalid for a host of reasons — among them, (i) that US Bank violated the
terms of its Pooling and Servicing Agreement (Compl. ¶¶ 16, 22-23); (ii) that
neither SPS nor US Bank can establish a satisfactory chain of title (id. at ¶ 19);
and (iii) that the individual who executed the 2013 assignment lacked authority
to do so (id. at ¶¶ 28-29). (See also id. at ¶ 26). Plaintiff alleges that, as a
result of these deficiencies, no defendant in this case “hold[s] a perfected and
secured claim in the Property,” and further that “Defendants are estopped and
precluded from asserting an unsecured claim against Plaintiff’s estate.” (Id. at
On July 18, 2014, US Bank purchased the Property at a Trustee’s Sale.
(10/29/15 Idaho Order 2; see also Trustee’s Deed).
This case’s procedural history gives more shape to Plaintiff’s dispute with
Defendants. Again, Plaintiff has twice before attempted to forestall or prevent
foreclosure of the Property. First, in 2011, Plaintiff sued BANA, SPS, MERS,
and Recontrust in Idaho’s Fourth Judicial District (the “Idaho Foreclosure
Action”), bringing many of the same claims he raises in the instant Complaint.
Second, in 2015, Plaintiff unsuccessfully defended against an eviction action
that US Bank initiated in that same court (the “Idaho Eviction Action”).
Finally, Plaintiff filed his instant Complaint against Defendants. The Court
considers all three suits in turn.
But first, a primer on Idaho foreclosure law. In Idaho, foreclosure “is not
a judicial proceeding.” Trotter v. Bank of N.Y. Mellon, 275 P.3d 857, 861 (Idaho
2012). Instead, Idaho Code §§ 45-1502 through 45-1515 “provide a
comprehensive regulatory scheme for non-judicial foreclosure of deeds of
trust.” Spencer v. Jameson, 211 P.3d 106, 115 (Idaho 2009). Accordingly, in
Idaho, foreclosure occurs “outside of the judicial process,” and thus “provide[s]
[an] express-lane alternative to foreclosure in the judicial system and strip[s]
borrowers of protections embedded in a judicial foreclosure.” Fed. Home Loan
Mortg. Corp. v. Appel, 137 P.3d 429, 433 n.1 (Idaho 2006). Therefore, no
foreclosing entity in this case was required to obtain a foreclosure judgment
from an Idaho court before foreclosing on the Property.
The Idaho Foreclosure Action
On December 12, 2011, Plaintiff filed a pro se complaint and a notice of
lis pendens against BANA, SPS, MERS and Recontrust. (Idaho Compl.; Idaho
Notice of Lis Pendens). Plaintiff’s Idaho complaint is difficult to follow, but its
thrust is that the named defendants lacked authority to foreclose on the
Property. (Idaho Compl. 2, 9-14). Central to this contention were Plaintiff’s
allegations that the defendants (i) had failed to produce the “wet ink” (i.e.,
original) version of the Promissory Note (id. at 10-11, 15), and (ii) lacked
standing to foreclose on the Property (id. at 13-15). Although styled as a
complaint seeking “Declaratory Judgement [sic] of Verification of Debt,” the
complaint also sought coercive relief, such as removal of “all derogatory
reporting with the credit bureaus” and “full reconveyance o[f] the Deed of
Trust.” (Id. at 1, 16).
On July 10, 2012, Plaintiff voluntarily dismissed with prejudice BANA
and Recontrust from the Idaho Foreclosure Action. (Idaho Stipulation). On
July 12, 2012, the Fourth Judicial District entered an order (the “July 12, 2012
Order”) granting that stipulation. (7/12/12 Idaho Order). That order
provides: “[BANA] and Recontrust … shall be dismissed with prejudice, for the
reason that the parties have resolved the differences between them.” (Id.).
MERS and SPS then moved for judgment on the pleadings on
November 2, 2012. (3/11/13 Idaho Order 1). The Fourth Judicial District
granted that motion in an order dated March 11, 2013 (the “March 11, 2013
Order”), and entered a judgment dismissing with prejudice Plaintiff’s Idaho
complaint on April 1, 2013. (Id. at 5; 4/1/13 Idaho Judgment). In the March
11, 2013 Order, the Fourth Judicial District rejected Plaintiff’s argument that
MERS and SPS lacked standing to foreclose on the Property. (3/11/13 Idaho
Order 2-3). And in reaching that conclusion, the court held that Idaho law did
not require a foreclosing entity to produce a “wet ink” promissory note before
initiating a non-judicial foreclosure. (Id. at 3).
The Idaho Eviction Action
Because Plaintiff refused to leave the Property, on October 9, 2014,
US Bank filed a complaint for eviction in the Fourth Judicial District.
(10/29/15 Idaho Order 1-2). On March 10, 2015, Plaintiff filed a pro se answer
and counterclaim. (Idaho Answer and Countercl.). Plaintiff brought six
counterclaims in total; they tracked, and supplemented, the claims he raised in
his Idaho complaint. (Id. at 5-23). Plaintiff sought (i) a declaratory judgment
that, inter alia, US Bank could not foreclose on the Property, because the
assignment of the Deed of Trust to US Bank was invalid (id. at 15-17); (ii) an
injunction halting the foreclosure (id. at 17); (iii) cancellation of allegedly
fraudulent documents in the Ada County (Idaho) Recorder’s Office concerning
the foreclosure of the Property (id. at 17-18); (iv) a judgment of quiet title (id. at
18-20); (v) $1,500,000 in damages, because US Bank conspired to defraud
Plaintiff of his rights in the Property and to violate the covenant of good faith
and fair dealing (id. at 20-22); and (vi) attorney’s fees and costs (id. at 22).
US Bank moved to dismiss Plaintiff’s counterclaims, arguing that the
March 11, 2013 Order collaterally estopped Plaintiff from asserting his
counterclaims against US Bank. (10/29/15 Idaho Order 2-3). A magistrate
judge in the Fourth Judicial District agreed, and on May 5, 2015, entered an
order dismissing Plaintiff’s counterclaims (the “May 5, 2015 Order”). (5/5/15
Plaintiff appealed the dismissal. (10/29/15 Idaho Order 3). On appeal
to the district court, a district judge affirmed the dismissal of Plaintiff’s
counterclaims in an order dated October 29, 2015 (the “October 29, 2015
Order”), reasoning that Plaintiff was collaterally estopped from bringing his
counterclaims against US Bank. (Id. at 5-6).
On May 27, 2015, the same magistrate judge who granted US Bank’s
motion to dismiss entered findings of fact and conclusions of law concerning
US Bank’s underlying eviction complaint (the “May 27, 2015 Findings”).
(5/27/15 Idaho Findings). The magistrate judge held that Plaintiff’s continued
occupancy of the Property was “wrongful,” that “possession should be granted
to” US Bank, and that US Bank had a right to recover the Property. (Id. at 2).
That same day, the magistrate judge entered a judgment of eviction against
Plaintiff. (5/27/15 Idaho Judgment). Plaintiff abandoned the Property on or
before July 24, 2015. (10/29/15 Idaho Order 3).
The Instant Case
Plaintiff, represented by counsel, filed his Complaint in this Court on
November 17, 2015. (Dkt. #1). The defendants named in his Complaint were
all parties to the Idaho Foreclosure Action (SPS and BANA) or the Idaho
Eviction Action (US Bank). 2 And the claims in Plaintiff’s Complaint mirror
many of the claims he raised pro se in Idaho state court.
The seven counts in Plaintiff’s Complaint merit careful attention here,
because their contours and the specific relief they seek bear on the Court’s
resolution of Defendants’ Rooker-Feldman and res judicata defenses. Plaintiff
has complicated the Court’s reading of the Complaint by failing to identify
which counts correspond to which Defendants. In their motions to dismiss,
however, Defendants challenge all seven counts of Plaintiff’s Complaint. And in
turn, the Court will assume that all seven counts are brought against all
Defendants. The counts are:
Count I — Declaratory Judgment: Plaintiff seeks a
declaratory judgment that, inter alia, Defendants have
no right to foreclose on the Property. (Compl. ¶¶ 3034).
Count II — Fraudulent Concealment: Plaintiff alleges
that Defendants concealed material terms of the
mortgage loan Plaintiff used to purchase the Property,
including the fact that Plaintiff’s mortgage loan was
securitized. (Id. at ¶¶ 35-43). Had Plaintiff known of
The caption of Plaintiff’s Complaint names “Does 1 through 100 inclusive” as
defendants. (Compl. 1). In his Complaint, Plaintiff identifies these parties as
“individuals or corporations that aided and abetted … the civil conspiracy to ‘churn’ or
put the Plaintiff in a series of loans which are the subject of this lawsuit.” (Id. at ¶ 9).
But Plaintiff makes no substantive allegations about these “Doe” defendants in his
Complaint. “[W]here the complaint names a defendant in the caption but contains no
allegations indicating how the defendant violated the law or injured the plaintiff, a
motion to dismiss the complaint in regard to that defendant should be granted.” Askew
v. Lindsey, No. 15 Civ. 7496 (KMK), 2016 WL 4992641, at *7 (S.D.N.Y. Sept. 16, 2016)
(quoting Dove v. Fordham Univ., 56 F. Supp. 2d 330, 335 (S.D.N.Y. 1999)); see also
Crichlow v. Fischer, No. 12 Civ. 7774 (NSR), 2015 WL 678725, at *9-10 (S.D.N.Y.
Feb. 17, 2015) (dismissing sua sponte defendants named in caption of complaint but
not mentioned elsewhere). Accordingly, Does 1 through 100 are dismissed sua sponte.
these concealed facts, he claims, he would not have
entered into his mortgage loan. (Id.).
Count III — Intentional Infliction of Emotional Distress:
foreclosure proceedings” have caused him to suffer
emotional harm. (Id. at ¶¶ 44-52).
Count IV — Slander of Title:
By publishing false
documents concerning the foreclosure of the Property,
without holding title to the Property, Defendants
slandered Plaintiff’s title. (Id. at ¶¶ 53-60).
Count V — Quiet Title: Because Defendants lack lawful
title in the Property, Plaintiff asks this Court to “enter a
judgment … quieting title as to Defendants.” (Id. at
Count VI — Civil Conspiracy: Plaintiff alleges that
Defendants conspired to defraud Plaintiff “[i]n
connection with the application for and consummation
of the [mortgage] loan.” (Id. at ¶¶ 67-73).
Count VII — Breach of the Covenant of Good Faith and
Fair Dealing: As far as the Court can tell, this Count
alleges that Defendants did not act in good faith
because they did not properly service Plaintiff’s
mortgage loan; failed to modify the loan; and
“present[ed] a false and invalid ‘[a]ssignment’ of the loan
documents knowing that the assignment was false and
invalid.” (Id. at ¶¶ 74-80).
On March 4, 2016, the Court issued an Order (the “March 4, 2016
Order”) setting deadlines for Plaintiff to amend his Complaint and for
Defendants to file motions to dismiss. (Dkt. #22). That Order gave Plaintiff
until April 1, 2016, to file an Amended Complaint, and directed Defendants to
file motions to dismiss by May 6, 2016. (Id.). Plaintiff was ordered to file an
opposition to Defendants’ motions by June 13, 2016. (Id.).
April 1 passed without Plaintiff filing an Amended Complaint.
Defendants timely filed their motions to dismiss. (Dkt. #23, 26). Then, on
June 7, 2016 — two months after the deadline, one month after Defendants
had filed their motions, and one week before his opposition papers were due —
Plaintiff filed a letter motion seeking leave to amend his Complaint. (6/7/16
Leave Mot.). In his motion, Plaintiff explained that he had mistakenly recorded
the date on which the Amended Complaint was due, and offered to file his
Amended Complaint on June 13, 2016. (Id. at 1-2). Plaintiff did not attach a
proposed Amended Complaint to his letter motion.
US Bank and SPS filed a letter motion opposing Plaintiffs’ request for
leave to amend. (6/10/16 Leave Opp.). They argued that allowing Plaintiff to
amend his Complaint would cause undue delay and prejudice Defendants. (Id.
at 2-3). And even though Plaintiff had not yet tendered an Amended
Complaint, US Bank and SPS argued that any attempt at amendment would be
futile because of the preclusive effect of the Idaho state-court judgments. (Id.
The Court held a telephone conference on Plaintiffs’ request for leave to
amend on June 17, 2016. 3 During the conference, Plaintiff reiterated that he
had failed the file the Amended Complaint because of a clerical error.
(6/17/16 Tr. 5-6). Plaintiff added that although his “basic claim” remained the
same, he had discovered new facts regarding the chain of assignments of his
At the conclusion of the telephone conference, the Court ordered Plaintiff to obtain a
copy of the conference’s transcript. Plaintiff did not comply with this instruction. On
December 15, 2016, the Court issued a written Order directing Plaintiff to procure a
copy of the transcript, and to submit a letter to the Court by December 16, 2016,
indicating that he had done so. (Dkt. #35). Plaintiff responded by letter on
December 20, 2016, writing that he had ordered a copy of the transcript and that it
would be available in two weeks’ time. (Dkt. #36). As a result, the transcript of the
June 17, 2016 telephone conference is not yet in the record of this case. However, the
Court has obtained a copy of the transcript, and cites it herein.
mortgage and a 2014 trustee’s sale that would strengthen the allegations in his
Complaint. (Id. at 7-8). BANA stated that it wished to join in US Bank’s and
SPS’s letter motion, and added that Plaintiff’s request for leave to amend was
untimely and would be futile. (Id. at 3, 9-10). The Court agreed to accept
Defendants’ written and oral submissions in considering their opposition to
Plaintiff’s request for leave to amend. (Id. at 12).
On June 24, 2016, Plaintiff filed his opposition to Defendants’ motions to
dismiss, attaching a proposed Amended Complaint as an exhibit. (Pl. Opp.,
Ex. A). Defendants each filed separate replies on July 8, 2016. (Dkt. #33, 34).
To review, this Opinion addresses two issues. The first is whether
Plaintiff’s Complaint survives Defendants’ motions to dismiss. The second is
whether Plaintiff should be granted leave to amend his Complaint. For the
reasons stated herein, the Court resolves both issues against Plaintiff.
Defendants urge several grounds for dismissal. They move to dismiss
under Rule 12(b)(1), arguing that the Rooker-Feldman doctrine deprives this
Court of subject-matter jurisdiction to entertain this suit. And they move for
dismissal under Rule 12(b)(6), arguing that res judicata precludes Plaintiff from
bringing the claims in his Complaint, and that in any event these claims lack
merit. The Court concludes that every count in Plaintiff’s Complaint must be
dismissed as to all Defendants. 4
Plaintiff hinted at the inevitability of this outcome during the June 17, 2016 telephone
conference. In explaining why he was seeking leave to amend one month after
Defendants had filed their motions to dismiss, Plaintiff remarked: “[W]e couldn’t
As for Plaintiff’s request for leave to amend, the Court declines to extend
Plaintiff this opportunity. Relying on Rule 15(a), Defendants argue that
allowing Plaintiff to amend his Complaint would cause undue delay, prejudice
Defendants, and be futile. The Court agrees, and denies Plaintiff’s request for
leave to amend.
The Court Grants Defendants’ Motions to Dismiss
Motions to Dismiss Under Rule 12(b)(1)
Because Defendants have moved for dismissal under Rules 12(b)(1) and
12(b)(6), the Court must first assess whether it has subject-matter jurisdiction
to consider Plaintiff’s Complaint. Wong v. CKX, Inc., 890 F. Supp. 2d 411, 41415 (S.D.N.Y. 2012) (“When presented with a motion under Rule 12(b)(1) to
dismiss for lack of subject matter jurisdiction and Rule 12(b)(6) to dismiss for
failure to state a claim upon which relief can be granted, the Court must first
analyze the Rule 12(b)(1) motion to determine whether the Court has subject
matter jurisdiction necessary to consider the merits of the action.”).
“A case is properly dismissed for lack of subject matter jurisdiction under
Rule 12(b)(1) when the district court lacks the statutory or constitutional power
to adjudicate it.” Lyons v. Litton Loan Servicing LP, 158 F. Supp. 3d 211, 218
(S.D.N.Y. 2016) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir.
2000)). “In resolving a motion to dismiss under Rule 12(b)(1), the district court
respond to the motion[s] to dismiss based on the [C]omplaint as it presently stood.”
(6/17/16 Tr. 6).
must take all uncontroverted facts in the complaint … as true, and draw all
reasonable inferences in favor of the party asserting jurisdiction.” Fountain v.
Karim, 838 F.3d 129, 134 (2d Cir. 2016) (quoting Tandon v. Captain’s Cove
Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014)). “A plaintiff
asserting subject matter jurisdiction has the burden of proving by a
preponderance of the evidence that it exists.” Id. (quoting Makarova, 201 F.3d
Motions to Dismiss Under Rule 12(b)(6)
“To survive a motion to dismiss” under Rule 12(b)(6), “a complaint must
contain sufficient factual matter, accepted as true, to state a claim to relief that
is plausible on its face.” Nicosia v. Amazon.com, Inc., 834 F.3d 220, 230 (2d
Cir. 2016) (internal quotation marks omitted) (quoting Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009)). “A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” In re Whole Foods Mkt. Grp.,
Inc. Overcharging Litig., 167 F. Supp. 3d 524, 537 (S.D.N.Y. 2016) (quoting
Iqbal, 556 U.S. at 678). “[I]t is well settled that a court may dismiss a claim on
res judicata or collateral estoppel grounds on a Rule 12(b)(6) motion.” Bd. of
Managers of 195 Hudson St. Condo. v. Jeffrey M. Brown Assocs., Inc., 652 F.
Supp. 2d 463, 470 (S.D.N.Y. 2009) (citation omitted).
One conceptually difficult issue with this case is that Defendants’
motions to dismiss succeed for different reasons. Defendants all move for
dismissal under Rules 12(b)(1) and 12(b)(6). And they all argue that RookerFeldman, res judicata, and the deficient merits of Plaintiff’s Complaint should
compel this Court to dismiss Plaintiff’s Complaint in its entirety. But even
though Defendants press similar arguments, their jurisdictional and preclusion
defenses rely on different state-court judgments, and implicate distinct analytic
issues. In turn, the most straightforward way to consider Defendants’ motions
to dismiss is to address each Defendant seriatim. The Court will begin with
BANA, turn to SPS, and conclude with US Bank.
BANA’s Arguments for Dismissal
BANA raises several grounds for dismissal, but the Court need only
consider two. First, Rooker-Feldman: BANA argues that Plaintiff’s Complaint is
in effect a challenge to the Fourth Judicial District’s July 12, 2012 Order
dismissing BANA from the Idaho Foreclosure Action. (BANA Br. 4-5). BANA
claims that this Court thus lacks jurisdiction to adjudicate all seven counts in
Plaintiff’s Complaint. (Id.). Second, res judicata: BANA argues that the Fourth
Judicial District’s July 12, 2012 Order precludes Plaintiff from bringing all
seven counts in his Complaint. (Id. at 6-9). BANA’s Rooker-Feldman argument
fails, but its res judicata argument succeeds.
Rooker-Feldman Does Not Divest This Court of
Subject-Matter Jurisdiction to Consider Plaintiff’s
Complaint as It Relates to BANA
28 U.S.C. § 1257 vests the United States Supreme Court with exclusive
jurisdiction to hear “appeals from final state-court judgments.” Lance v.
Dennis, 546 U.S. 459, 463 (2006) (per curiam). Thus, “under what has come to
be known as the Rooker-Feldman doctrine, lower federal courts are precluded
from exercising appellate jurisdiction over final state-court judgments.” Id.
(discussing District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 482
(1983), and Rooker v. Fidelity Trust Co., 263 U.S. 413, 416 (1923)). “Under this
doctrine, federal district courts lack jurisdiction over cases that essentially
amount to appeals of state court judgments, including claims that are
inextricably intertwined with a prior determination of a state court.” Harriot v.
JP Morgan Chase Bank NA, No. 16 Civ. 211 (GBD), 2016 WL 6561407, at *3
(S.D.N.Y. Oct. 21, 2016) (internal quotation marks and citations omitted).
Courts sparingly apply Rooker-Feldman. See Exxon Mobil Corp. v. Saudi Basic
Indus. Corp., 544 U.S. 280, 287-88 (2005) (collecting cases).
BANA claims that Plaintiff’s Complaint attempts to undo the Fourth
Judicial District’s July 12, 2012 Order dismissing BANA from the Idaho
Foreclosure Action. This argument misapprehends Rooker-Feldman and Idaho
A party invoking Rooker-Feldman must meet four “requirements”:
First, the federal-court plaintiff must have lost in state
court. Second, the plaintiff must “complain[ ] of injuries
caused by [a] state-court judgment[.]”
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. 5
The Court pauses to note a deficiency in Plaintiff’s opposition to Defendants’ motions to
dismiss. In rebutting Defendants’ Rooker-Feldman arguments, Plaintiff appears to
concede that BANA and SPS have met all four Rooker-Feldman elements. (Pl. Opp. 3-5).
He claims that “Defendants cannot show that Plaintiff meets the second and third
Green v. Mattingly, 585 F.3d 97, 101 (2d Cir. 2009) (quoting Hoblock v. Albany
Cty. Bd. of Elections, 422 F.3d 77, 85 (2d Cir. 2005)). Plaintiff concedes that
BANA (like SPS and US Bank) has met the first and fourth of these
requirements. (Pl. Opp. 5). The Court concludes that BANA has failed to meet
the second or third.
To start, Plaintiff is not complaining of injuries caused by the Fourth
Judicial District’s July 12, 2012 Order. “[T]he applicability of the Rooker–
Feldman doctrine turns not on the similarity between a party’s state-court and
federal-court claims ... but rather on the causal relationship between the statecourt judgment and the injury of which the party complains in federal court.”
Alroy v. City of N.Y. Law Dep’t, 69 F. Supp. 3d 393, 400 (S.D.N.Y. 2014)
(emphases in original) (quoting McKithen v. Brown, 481 F.3d 89, 97-98 (2d Cir.
2007)). This requirement of a “causal relationship” is met “where … the state
court itself is the decision-maker whose action produce[d] the injury.” Id.
(quoting Sindone v. Kelly, 439 F. Supp. 2d 268, 272 (S.D.N.Y. 2006)). But the
Fourth Judicial District did not produce any of Plaintiff’s alleged injuries when
it issued the July 12, 2012 Order. That order simply endorsed Plaintiff’s
voluntary dismissal of BANA from the Idaho Foreclosure Action.
[Rooker-Feldman] factors,” but his arguments on this score relate solely to US Bank’s
failure to prove its Rooker-Feldman defense. (Id.). Put simply, there is good reason to
conclude that Plaintiff has not met his “burden of proving by a preponderance of the
evidence that [subject-matter jurisdiction] exists.” Fountain v. Karim, 838 F.3d 129,
134 (2d Cir. 2016) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir.
2000)). Defendants’ Rooker-Feldman arguments, however, are perfunctory. And the
Court is not willing to hold that it lacks jurisdiction on the basis of a fairly limited
round of arguments. Thus, it is incumbent upon the Court to conduct a wholesale
Rooker-Feldman analysis for each Defendant in this case.
For similar reasons, BANA has not satisfied the third Rooker-Feldman
requirement. Plaintiff is not asking this Court to review the July 12, 2012
Order. True, many of the claims Plaintiff brings in his Complaint are similar
(or identical) to claims he brought in the Idaho Foreclosure Action. And as the
Court will explain, BANA’s res judicata argument succeeds for this exact
reason. But BANA’s insistence that the slim daylight between Plaintiffs’ statecourt and federal-court claims divests this Court of jurisdiction elides the
distinction between res judicata and Rooker-Feldman. See Hoblock, 422 F.3d at
92 (“[T]he narrow Rooker-Feldman inquiry is distinct from the question whether
claim preclusion … or issue preclusion … will defeat a federal plaintiff’s suit.”).
Nothing in Plaintiff’s Complaint suggests that he is seeking to reverse the
Fourth Judicial District’s dismissal of BANA from the Idaho Foreclosure Action.
One more point bears mention here, because it helps illustrate why
BANA has not met Rooker-Feldman’s second or third requirements. There
exists a long line of cases in this Circuit considering the effect of RookerFeldman when “a mortgagor … file[s] suit in federal court after a state court
issued an adverse foreclosure judgment.” Nath v. JP Morgan Chase Bank,
No. 15 Civ. 3937 (KMK), 2016 WL 5791193, at *6 (S.D.N.Y. Sept. 30, 2016).
Those cases follow a similar pattern: “Courts in this Circuit have consistently
held that any attack on a judgment of foreclosure is clearly barred by the
Rooker–Feldman doctrine.” Webster v. Wells Fargo Bank, N.A., No. 08 Civ.
10145 (LAP), 2009 WL 5178654, at *5 (S.D.N.Y. Dec. 23, 2009) (citation
omitted), aff’d sub nom. Webster v. Penzetta, 458 F. App’x 23 (2d Cir.)
(summary order), as amended (Jan. 24, 2012); see, e.g., Nath, 2016 WL
5791193, at *6 (collecting cases).
Rooker-Feldman imposes this jurisdictional bar because a mortgagor who
comes to federal court to challenge (tacitly or directly) an adverse state-court
foreclosure judgment asks “the federal court to review the state proceedings
and determine that the foreclosure judgment was issued in error.” Vossbrinck v.
Accredited Home Lenders, Inc., 773 F.3d 423, 427 (2d Cir. 2014) (per curiam)
(emphasis added); see, e.g., id. at 425-27 (Rooker-Feldman barred federal court
from voiding state court “Judgment of Strict Foreclosure”); Riley v. Comm’r of
Fin. of City of N.Y., 618 F. App’x 16, 17 (2d Cir. 2015) (summary order) (district
court correctly declined to exercise jurisdiction over plaintiff’s complaint
seeking declaratory judgment of ownership and removal of clouds on title,
because state-court in rem tax-foreclosure proceeding decided conclusively that
plaintiff did not own subject property); Graham v. Select Portfolio Servicing, Inc.,
156 F. Supp. 3d 491, 503-04 (S.D.N.Y. 2016) (district court lacked jurisdiction
over claims that challenged state-court “judgment of foreclosure and sale”).
BANA’s hurdle is that no judgment of foreclosure was ever issued in this
case. All seven of the counts in Plaintiff’s Complaint derive from Plaintiff’s
belief that the foreclosure of the Property was wrongful. Recall, however, that
Idaho is a non-judicial foreclosure state. Trotter, 275 P.3d at 861. Any injury
Plaintiff claims as a consequence of the foreclosure was the result of Idaho’s
“comprehensive regulatory scheme for non-judicial foreclosure.” Spencer, 211
P.3d at 115.
Plaintiff’s Complaint thus takes aim at the conduct of private entities
that foreclosed on the Property, not a state court that permitted this conduct to
go forward. And because Plaintiff’s injuries were not caused by a state-court
foreclosure judgment (the second Rooker-Feldman requirement), it seems
unlikely that Plaintiff is inviting review of a state-court foreclosure judgment
(the third). See In re Residential Capital, LLC, No. 12-12020 (MG), 2013 WL
6227582, at *2, *7 (Bankr. S.D.N.Y. Nov. 27, 2013).
Accordingly, Rooker-Feldman does not divest this Court of subject-matter
jurisdiction over Plaintiff’s suit, insofar as it relates to BANA. The Court will
thus consider the merits of Plaintiff’s Complaint.
Res Judicata Precludes Plaintiff from Bringing Any
of the Counts in His Complaint Against BANA
Although BANA’s Rooker-Feldman defense fails, its res judicata claim
succeeds. Plaintiff is precluded from bringing any of the counts in his
Complaint against BANA. As a preliminary matter, BANA (like SPS and US
Bank) appears to argue that New York law controls this Court’s res judicata
analysis. (BANA Br. 6; US Bank Br. 5). Not so. “[A] federal court must give to
a state-court judgment the same preclusive effect as would be given that
judgment under the law of the State in which the judgment was rendered.”
O’Connor v. Pierson, 568 F.3d 64, 69 (2d Cir. 2009) (quoting Migra v. Warren
City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984)). That means that this
Court “must use the res judicata doctrine of” Idaho to determine whether
Plaintiff is precluded from suing BANA. Logan v. Matveevskii, 175 F. Supp. 3d
209, 233 (S.D.N.Y. 2016) (emphasis added) (citation omitted).
In Idaho, “[t]he doctrine of res judicata covers both claim preclusion (true
res judicata) and issue preclusion (collateral estoppel).” Ticor Title Co. v.
Stanion, 157 P.3d 613, 617 (Idaho 2007). However, Idaho courts use
“[s]eparate tests … to determine whether claim preclusion or issue preclusion
applies.” Id. Because BANA’s res judicata defense sounds in traditional
“claim” preclusion, the Court will consider this branch of Idaho’s res judicata
“For claim preclusion to bar a subsequent action there are three
requirements: [i] same parties; [ii] same claim; and [iii] final judgment.”
Andrus v. Nicholson, 186 P.3d 630, 633 (Idaho 2008) (quoting Ticor, 157 P.3d at
618). The contours of all three requirements are familiar.
The first requirement mandates that “res judicata … bars the
presentation of [a] claim in a subsequent lawsuit between the same parties or
their privies.” Andrus, 186 P.3d at 633 (emphasis added) (quoting Devil Creek
Ranch, Inc. v. Cedar Mesa Reservoir and Canal Co., 851 P.2d 348, 351 (Idaho
Under the second requirement, “claim preclusion … is not limited to
theories that were actually litigated in the prior lawsuit.” Andrus, 186 P.3d at
633. Rather, in Idaho, “claim preclusion bars not only subsequent relitigation
of a claim previously asserted, but also subsequent relitigation of any claims
relating to the same cause of action which were actually made or which might
have been made.” Hindmarsh v. Mock, 57 P.3d 803, 805 (Idaho 2002). To
determine whether a party asserting res judicata has proven an identity of
claims, Idaho follows the “transactional” approach: A “prior adjudication
‘extinguishes all claims arising out of the same transaction or series of
transactions out of which the cause of action arose.’” Andrus, 186 P.3d at 622
(quoting Diamond v. Farmers Group, Inc., 804 P.2d 319, 323 (Idaho 1990)).
“[W]hether a group of facts constitutes a ‘transaction’” turns on “whether the
facts are related in time, space, origin, or motivation, whether they form a
convenient trial unit, and whether their treatment as a unit conforms to the
parties’ expectations or business understanding or usage.” Id. (internal
quotation marks and citation omitted).
Finally, the third res judicata requirement provides that “a valid final
judgment rendered on the merits by a court of competent jurisdiction is an
absolute bar to a subsequent action between the same parties upon the same
claim.” Hindmarsh, 57 P.3d at 805. As relevant here, in Idaho, the preclusive
“effect of a Rule 41 stipulation of dismissal with prejudice” is equivalent to that
of a final judgment entered after trial. Kawai Farms, Inc. v. Longstreet, 826
P.2d 1322, 1326 (Idaho 1992).
BANA has satisfied all three res judicata elements. The June 12, 2012
Order precludes Plaintiff from bringing any of the claims in his Complaint
First, there is complete identity of the parties between the Idaho
Foreclosure Action and the instant case. Plaintiff named BANA as a defendant
in the complaint he filed in the Fourth Judicial District.
Second, all seven of the counts in Plaintiffs Complaint were, or could
have been, brought against BANA in the Idaho Foreclosure Action. Count I
seeks essentially the identical declaratory relief that Plaintiff sought in the
Idaho Foreclosure Action. Counts II through VII arise out of the same
transaction that was the subject of the Idaho Foreclosure Action: Plaintiff’s
receipt of the mortgage loan and Promissory Note, Plaintiff’s default, the
securitization of the Deed of Trust, and BANA’s foreclosure. And the thrust of
Counts II through VII — that BANA’s foreclosure was wrongful because it
lacked a valid interest in the Property — formed the core of Plaintiff’s Idaho
complaint. Put simply, Plaintiff’s Complaint here and his complaint in the
Idaho Foreclosure Action arise out of the same transaction. See Andrus, 186
P.3d at 622.
Finally, the Fourth Judicial District’s July 12, 2012 Order was a valid
final judgment that is entitled to preclusive effect. The Fourth Judicial District
dismissed BANA from the Idaho Foreclosure Action with prejudice. That
disposition is binding on this Court.
Plaintiff tries to resist this conclusion in five ways, although he does not
differentiate between the parties’ respective res judicata arguments in doing so.
In any event, all of Plaintiff’s arguments are meritless. First, Plaintiff argues
that the declaratory-judgment exception to res judicata limits the preclusive
effect of the Fourth Judicial District’s judgments. (Pl. Opp. 6). He claims,
without citation, that Idaho recognizes this exception. (Id.). 6 But even if Idaho
did recognize the exception, it would have no bearing on the instant case. The
declaratory-judgment exception “limits the preclusive effect of [a] declaratory
judgment to the ‘subject matter of the declaratory relief sought.’” Duane
Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 600 F.3d 190, 196 (2d Cir. 2010)
(quoting Harborside Refrigerated Servs., Inc. v. Vogel, 959 F.2d 368, 372 (2d
Cir. 1992)). However, “the declaratory judgment exception … applies when ‘the
prior action involved only a request for declaratory relief.’” Id. (emphasis in
original) (quoting Harborside, 959 F.2d at 372) (citing 18A Charles A. Wright,
Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 4446, at
313-14 (2d ed. 2002)). Plaintiff’s Idaho complaint requested declaratory as well
as coercive relief. Thus, even assuming that Idaho does recognize the
declaratory-judgment exception, the exception would not diminish the
preclusive effect of the Fourth Judicial District’s judgments in the Idaho
Second, Plaintiff argues that the judgments of the Fourth Judicial
District should not be accorded preclusive effect because Plaintiff represented
Conversely, Defendants argue that the declaratory-judgment exception does not limit
the preclusive effect of the Fourth Judicial District’s judgments in the Idaho Foreclosure
Action, because in his Idaho complaint Plaintiff sought declaratory and coercive relief.
(US Bank Br. 6-9; US Bank Reply 6-7; BANA Reply 3). However, Defendants cite no
Idaho law in support of this contention. The lone Idaho state-court case Defendants do
cite — Stilwyn, Inc. v. Rokan Corp., 353 P.3d 1067 (Idaho 2015) (see US Bank Br. 6
n.1) — considered the preclusive effect of a federal judgment, and thus applied “federal
common law.” Id. at 1073 (emphasis added) (citation omitted). As far as the Court can
tell, Idaho courts have not yet opined on the applicability of the declaratory-judgment
exception under Idaho law.
himself before that court. (Pl. Opp. 6-7). But in Idaho, “[p]ro se civil litigants
are not accorded special latitude merely because they chose to proceed through
litigation without the assistance of an attorney. Further, pro se litigants are
held to the same standards and rules as those represented by an attorney.”
PHH Mortg. v. Nickerson, 374 P.3d 551, 559 (Idaho 2016) (emphasis added)
(quoting Colafranceschi v. Briley, 355 P.3d 1261, 1264 (Idaho 2015)), reh’g
denied (July 19, 2016). Plaintiff’s argument, which appears to be rooted in
considerations of equity, is inconsistent with these principles.
Third, Plaintiff argues that he “failed to name an indispensable party” in
the Idaho Foreclosure Action — US Bank — and thus the judgments rendered
in that action are not preclusive. (Pl. Opp. 7). However, in Idaho, “res
judicata … bars the presentation of [a] claim in a subsequent lawsuit between
the same parties or their privies.” Andrus, 186 P.3d at 633 (emphases added)
(quoting Devil Creek Ranch, 851 P.2d at 351). In any case, as the Court will
discuss infra, the May 5, 2015 Order from the Idaho Eviction Action precludes
Plaintiff from bringing this action against US Bank. And to the extent that
Plaintiff argues that his failure to name an indispensable party in the Idaho
Foreclosure Action constitutes a ground for rejecting BANA’s res judicata
defense, the Court notes that such a claim is more properly raised as a ground
for dismissing a complaint under Rule 12(b)(7). Fed. R. Civ. P. 12(b)(7); see,
e.g., Fed. Ins. Co. v. SafeNet, Inc., 758 F. Supp. 2d 251, 257 (S.D.N.Y. 2010).
Fourth, Plaintiff argues that the instant litigation and the Idaho
Foreclosure Action involve different claims. (Pl. Opp. 7-8). The Idaho
Foreclosure Action, Plaintiff argues, centered on whether Defendants had
standing to foreclose on the Property, while the instant case “relate[s] to the
various assignments” of the Promissory Note and Deed of Trust. (Id. at 8). The
Complaint makes plain that this comparison is incorrect. Only Count VII
clearly takes issue with Defendants’ assignments of the loan documents.
(Compl. ¶ 79). And in any event, the claims Plaintiff brought in the Idaho
Foreclosure Action and the claims he brings in this Court all concern the same
“transaction,” and are thus considered the same claims for res judicata
purposes. Andrus, 186 P.3d at 622.
Finally, Plaintiff argues that Idaho’s “ripeness exception” bars “the
application of res judicata in the instant action.” (Pl. Opp. 9 (emphasis added)).
He claims that “[t]he ripeness exception applies when something happens after
the first suit that triggers the filing of the second suit.” (Id.). The precipitating
event in this case was Plaintiff’s discovery, upon obtaining a loan audit in
October 2014, that Defendants had “affirmative[ly] conceal[ed] … relevant
This argument fails for many reasons. To begin, although in his
Complaint Plaintiff alleges that Defendants concealed facts from him (see
Compl. ¶¶ 36, 42, 77), he does not argue that this concealment somehow
prevented him from raising certain claims in Idaho state court. Notably,
Plaintiff makes no mention of the October 2014 loan audit in his Complaint,
which he filed in December 2015. (Compl.). For this reason, the Court
declines to consider Plaintiff’s belatedly raised “ripeness exception” argument.
See Wright v. Ernst & Young LLP, 152 F.3d 169, 178 (2d Cir. 1998) (collecting
cases for the proposition that a party may not amend its pleading through its
opposition papers); Shemian v. Research In Motion Ltd., No. 11 Civ. 4068 (RJS),
2013 WL 1285779, at *14 (S.D.N.Y. Mar. 29, 2013) (emphasizing same
proposition), aff’d, 570 F. App’x 32 (2d Cir. 2014) (summary order).
Plaintiff’s presentation of his “ripeness exception” claim suggests that his
real issue with Defendants is that they fraudulently concealed material
information. And as a result of this concealment, Plaintiff seems to allege, he
only learned of material facts — for example, that US Bank was the holder of
his Promissory Note — after he filed his Idaho complaint. Again, Plaintiff’s
Complaint does not raise this claim. Moreover, the Complaint contains
virtually no dates that might plausibly substantiate this claim. Plaintiff notes
that BANA assigned the Promissory Note and Deed of Trust to US Bank on
October 1, 2013. (Compl. ¶ 28, Ex. A). But it is entirely unclear from the
Complaint if Plaintiff believes that Defendants concealed this assignment from
him. Indeed, it is unclear if this assignment forms the basis of any of the
counts in Plaintiff’s Complaint. Whether deemed a “ripeness” or “fraudulent
concealment” argument, Plaintiff’s final effort to resist res judicata fails.
In sum, BANA has demonstrated that all three elements of res judicata
lie. Plaintiff is thus precluded from bringing any of the counts in his Complaint
against BANA, and BANA’s motion to dismiss is granted.
SPS’s Arguments for Dismissal
SPS also argues that the counts in Plaintiff’s Complaint are barred by
Rooker-Feldman and res judicata. 7 Like BANA, SPS’s Rooker-Feldman
argument is unavailing. And, like BANA, SPS’s res judicata argument
succeeds. Because those conclusions resolve fully the counts in Plaintiff’s
Complaint as they relate to SPS, SPS’s motion to dismiss is granted.
Rooker-Feldman Does Not Divest This Court of
Subject-Matter Jurisdiction to Consider Plaintiff’s
Complaint as It Relates to SPS
Without identifying which judgment of Idaho’s Fourth Judicial District
Plaintiff impermissibly challenges, SPS argues that Rooker-Feldman prohibits
this Court from entertaining every count in Plaintiff’s Complaint. SPS’s
presentation of this argument highlights its fatal flaw. SPS has failed to
establish that Plaintiff complains of injuries inflicted by, or seeks review of, a
judgment of the Fourth Judicial District.
To review, in order to prove that Rooker-Feldman deprives this Court of
subject-matter jurisdiction, SPS must demonstrate (i) that Plaintiff “lost in
state court; (ii) that he “complain[s] of injuries caused by a state-court
judgment”; (iii) that Plaintiff “invite[s] district court review and rejection of
There is an ambiguity in the memorandum supporting US Bank’s and SPS’s joint
motion to dismiss. The memorandum’s argument section opens by alleging that every
count in Plaintiff’s Complaint except Count II is barred by res judicata and RookerFeldman. (US Bank Br. 4). But the memorandum’s res judicata and Rooker-Feldman
arguments appear to address all seven counts. (Id. at 4-11). And a section of the brief
that deals specifically with the merits of Count II provides: “Besides being barred by res
judicata and/or the Rooker-Feldman doctrine … Plaintiff’s second cause of action …
fails to state a claim and is barred by the applicable statute of limitations.” (Id. at 13).
The Court will assume that SPS and US Bank argue that res judicata and RookerFeldman bar all seven counts in Plaintiff’s Complaint.
[that] judgment”; and (iv) that this state-court judgment was entered before
Plaintiff filed his Complaint in this action. Green, 585 F.3d at 101 (quoting
Hoblock, 422 F.3d at 85). Plaintiff does not contest that SPS can satisfy the
first and fourth Rooker-Feldman requirements. (Pl. Opp. 5). But the Court is
convinced that SPS cannot satisfy the second or third.
In support of its Rooker-Feldman argument, SPS seems to argue that
adjudicating Plaintiff’s Complaint would require this Court to sit in review of
three Idaho judgments: (i) the June 12, 2012 Order dismissing BANA from the
Idaho Foreclosure Action; (ii) the March 11, 2013 Order granting SPS’s motion
for judgment on the pleadings; and (iii) the October 29, 2015 Order dismissing
Plaintiff’s Idaho counterclaims in the Idaho Eviction Action. SPS’s reliance on
all three of these state-court judgments is misguided.
First, the June 12, 2012 Order does not support SPS’s Rooker-Feldman
argument. As explained supra, nothing in Plaintiff’s Complaint suggests that
he is complaining of an injury caused by the June 12, 2012 Order, or that he
seeks to undo that order.
Nor does Plaintiff appear to be complaining of an injury inflicted by the
March 11, 2013 Order. In that order, the Fourth Judicial District rejected all
three claims Plaintiff brought in his Idaho complaint: (i) that SPS and MERS
lacked “standing” to enforce the Promissory Note because they had not given
Plaintiff the “wet ink” note; (ii) that MERS was not allowed to assign the
Promissory Note and Deed of Trust; and (iii) that SPS and MERS lacked Article
III standing. (3/11/13 Order 2-5). None of the counts in Plaintiff’s Complaint
alleges an injury caused by these conclusions.
Finally, to the extent that SPS argues that Plaintiff is complaining of an
injury inflicted by the October 29, 2015 Order, that argument is unavailing for
two reasons. First, SPS does not explain how Plaintiff’s Complaint, which
brings seven causes of action related to the foreclosure of the Property,
complains of an injury wrought by the October 29, 2015 Order. This order
dealt with the narrow, subsequent issue of US Bank’s authority to evict
Plaintiff from the Property.
Second, even if SPS had demonstrated that Plaintiff is challenging the
October 29, 2015 Order, this order was not binding on SPS, because SPS was
not a party to the Idaho Eviction Action. SPS argues that it enjoys a privity
relationship with US Bank sufficient to extend the res judicata effect of the
judgments in the Idaho Foreclosure Action (to which SPS was a party) to US
Bank (which was not). (US Bank Br. 9-10). But “[t]he Rooker–Feldman
doctrine does not bar actions by nonparties to [an] earlier state-court judgment
simply because, for purposes of preclusion law, they could be considered in
privity with a party to the judgment.” Lance, 546 U.S. at 466. And although
courts in this Circuit have extended Rooker-Feldman’s jurisdictional bar to
parties in privity with state-court litigants, see Gould v. Airway Office, LLC, No.
15 Civ. 7964 (PAE), 2016 WL 3948102, at *4 (S.D.N.Y. July 19, 2016), SPS has
not demonstrated that it enjoys a privity relationship with US Bank sufficient
to warrant such an extension here.
What is more, SPS (like BANA) overlooks the fact that Idaho practices
non-judicial foreclosure. Again, the thrust of Plaintiff’s Complaint is that
Defendants wrongfully foreclosed on the Property. Under Idaho’s statutory
foreclosure scheme, that foreclosure involved no court action. That gives little
reason for the Court to conclude that Plaintiff is complaining of an injury
caused by a state-court judgment, and SPS has not convinced the Court
In sum, SPS’s Rooker-Feldman argument fails. This Court has
jurisdiction to consider all seven counts of Plaintiff’s Complaint as they relate
Res Judicata Precludes Plaintiff from Bringing Any
of the Counts in His Complaint Against SPS
Like BANA, SPS has successfully litigated a foreclosure action against
Plaintiff before. The March 11, 2013 Order dismissed Plaintiff’s Idaho
Complaint against SPS, and entered judgment on the pleadings in SPS’s favor.
That judgment is entitled to preclusive effect, and it bars Plaintiff from bringing
any of the counts in his Complaint against SPS.
Under Idaho law, SPS must prove three elements to prevail on its res
judicata defense: “[i] same parties; [ii] same claim; and [iii] final judgment.”
Andrus, 186 P.3d at 633 (quoting Ticor, 157 P.3d at 618). SPS has made this
showing. First, SPS and Plaintiff were both parties to the Idaho Foreclosure
Action. Second, the claims Plaintiff brought in that litigation are identical to
the claims he brings here. To review, all of the counts in Plaintiff’s Complaint
were litigated (Count I) or could have been litigated (Counts II through VII) in
the Idaho Foreclosure Action. Finally, the March 11, 2013 Order is a final
judgment against Plaintiff. Because all three elements of a successful res
judicata defense lie, Plaintiff is precluded from bringing suit against SPS.
US Bank’s Arguments for Dismissal
The only remaining defendant in this case is US Bank. The arguments it
raises in its motion to dismiss (in which SPS joins) are familiar. US Bank
argues that Rooker-Feldman and res judicata bar Plaintiff from bringing all of
the counts in his Complaint against US Bank. Here too, the Court concludes
that US Bank’s Rooker-Feldman argument fails, but its res judicata argument
Rooker-Feldman Does Not Divest This Court of
Subject-Matter Jurisdiction to Consider Plaintiff’s
Complaint as It Relates to US Bank
As discussed above, one major flaw in US Bank’s (and SPS’s) RookerFeldman argument is that it elides the distinction between the judgments that
the Fourth Judicial District rendered in the Idaho Foreclosure Action and the
Idaho Eviction Action. For that reason, it is difficult to determine which statecourt judgment US Bank claims Plaintiff is seeking to reverse.
Having already concluded that neither the June 12, 2012 Order nor the
March 11, 2013 Order is a proper subject of a Rooker-Feldman defense, the
Court will not consider the jurisdictional effect of either decision here. That
leaves the Fourth Judicial District’s October 29, 2015 Order dismissing
Plaintiff’s counterclaim in the Idaho Eviction Action. This judgment does not
impose a jurisdictional bar to the Court’s consideration of Plaintiff’s Complaint.
The October 29, 2015 Order shares much in common with the March 11,
2013 Order. Both denied Plaintiff’s request for a declaratory judgment that
would have prevented foreclosure of the Property. And both rejected Plaintiff’s
contentions that Defendants lacked authority to foreclose on the Property.
Neither order, however, is a judgment of foreclosure. Neither order appears to
have caused the injuries of which Plaintiff complains. And Plaintiff challenges
neither order in his Complaint.
US Bank argues that granting Plaintiff relief on his Complaint would
“render meaningless” the October 29, 2015 Order. (US Bank Br. 11). But that
argument does not speak to the two Rooker-Feldman requirements that have
proven to be Defendants’ shared stumbling blocks: that Plaintiff “complain of
injuries causes by [a] state-court judgment, and that he “invite district court
review and rejection of [that] judgment.” Green, 585 F.3d at 101 (quoting
Hoblock, 422 F.3d at 85). At bottom, US Bank has not established that
Plaintiff is challenging the October 29, 2015 Order.
However, Plaintiff might be challenging a different state-court decision:
The May 27, 2015 Findings that a Fourth Judicial District magistrate judge
entered concerning US Bank’s eviction complaint. (5/27/15 Idaho Findings).
Those findings provide: “Possession of the Premises by [Plaintiff] is wrongful,
and possession should be granted to [US Bank].” (Id. at 2). The magistrate
judge who rendered those findings ordered “that [US Bank] … have and recover
from [Plaintiff] and those claiming possession through [Plaintiff], the restitution
and possession of [the Property].” (Id.).
Plaintiff’s Complaint alleges that US Bank lacks authority to foreclose on
the Property, a claim that is at odds with the May 27, 2015 Findings. Thus, it
could be argued that Plaintiff is complaining of an injury caused by the
magistrate judge’s May 27, 2015 Findings. And it could also be argued that
Plaintiff seeks reversal of the same. At minimum, it appears that the counts in
Plaintiff’s Complaint may be “inextricably intertwined” with this magistrate
judge’s decision. Harriot, 2016 WL 6561407, at *3 (citation omitted).
US Bank, however, makes none of these arguments. Indeed, US Bank
makes no mention of the May 27, 2015 Findings in its briefing. And like the
other orders of the Fourth Judicial District that this Court has already
considered, the May 27, 2015 Findings are not a judgment of foreclosure.
Rather, the May 27, 2015 Findings address the subsequent issue of whether
US Bank could evict Plaintiff from the Property. In turn, it is unclear whether
these findings caused any of the injuries in Plaintiff’s Complaint. It is equally
unclear whether Plaintiff is challenging the May 27, 2015 Findings. Here too,
the Court cannot hold that it lacks subject-matter jurisdiction in the face of
Like BANA and SPS, US Bank has failed to demonstrate that RookerFeldman bars this Court from adjudicating Plaintiff’s Complaint. The Court
will thus turn to US Bank’s res judicata defense.
Res Judicata and Idaho’s CompulsoryCounterclaim Rule Bar Plaintiff from Bringing Any
of the Counts in His Complaint Against US Bank
US Bank argues that “res judicata bars Plaintiff’s relitigation of the
claims [he] previously asserted against US Bank … as counterclaims in the
Idaho Eviction Action.” (US Bank Br. 10). Not quite. In Idaho, “claim
preclusion ‘is not applicable to the litigation of counterclaims.’” Stilwyn, Inc. v.
Rokan Corp., 353 P.3d 1067, 1073 (Idaho 2015) (quoting Joseph v. Darrar, 472
P.2d 328, 331 (Idaho 1970)). Thus, “[a]n action on a claim which was a
permissive counterclaim in an earlier action, but which was not raised and
litigated in that action” — i.e., a claim that could have been raised — “is not
barred” by res judicata. Joseph, 472 P.2d at 332. And although “actions on
claims properly classified in an earlier action as compulsory counterclaims” —
i.e., claims that should have been raised — “are barred by a failure to raise
them in the earlier action, … this is a bar arising not from the concept of res
judicata, but from” Idaho Rule of Civil Procedure 13(a), which defines
compulsory counterclaims. Id. (emphasis added). Of course, if an Idaho
litigant raises a counterclaim (permissive or compulsory), and a court rejects
that counterclaim in a merits decision, res judicata precludes the litigant from
raising the counterclaim in a subsequent action. See id.
Whether Plaintiff is barred from bringing the counts in his Complaint
against US Bank, then, turns on two questions. The first concerns res
judicata: Did Plaintiff bring any of these counts as counterclaims against US
Bank, such that the October 27, 2015 Order dismissing Plaintiff’s
counterclaims precludes him from relitigating them here? The second flows
from Idaho Rule 13(a): Assuming that there are counts in Plaintiff’s Complaint
that Plaintiff could have brought as counterclaims in the Idaho Eviction Action,
but did not, can they be classified as compulsory counterclaims? 8 The answer
to both questions is “yes.”
First, Plaintiff pled Counts I (declaratory judgment), V (quiet title), and VI
(civil conspiracy) of his Complaint as counterclaims in the Idaho Eviction
Action. (Idaho Answer and Countercl. 15-17, 18-22). That litigation involved
the same parties as the instant litigation (Plaintiff and US Bank). The two
litigations share three of the same claims. And the Fourth Judicial District
rejected all three of those claims in the October 27, 2015 Order. Accordingly,
res judicata precludes Plaintiff from asserting Counts I, V, and VI against US
Bank in this Court.
Second, Idaho Rule 13(a) makes plain that Plaintiff should have pled
Counts II (fraud in the concealment), III (intentional infliction of emotional
distress), IV (slander of title), and VII (breach of the covenant of good faith and
fair dealing) as compulsory counterclaims in the Idaho Eviction Action. Under
Idaho Rule 13(a), a compulsory counterclaim has two characteristics:
A pleading must state as a counterclaim any claim that, at the time
of its service, the pleader has against an opposing party if the
claim … [i] arises out of the transaction or occurrence that is the
This second issue raises a choice-of-law question: Does the Court’s classification of the
claims in Plaintiff’s Complaint as permissive or compulsory counterclaims depend on
state or federal law? Here, the distinction is academic. Federal Rule of Civil Procedure
13(a) and (b) — which deal with permissive and compulsory counterclaims,
respectively — are identical to Idaho Rule 13(a) and (b). Compare Fed. R. Civ. P. 13(a)(b), with Idaho R. Civ. P. 13(a)-(b). The Court will cite to Idaho Rule 13(a) herein.
subject matter of the opposing party’s claim; and [ii] does not require
adding another party over whom the court cannot acquire
Idaho R. Civ. P. 13(a). Counts II, III, IV, and VII share both characteristics.
First, these four claims “arise out of the transaction” that formed the basis of
US Bank’s eviction complaint: US Bank’s foreclosure of the Property, and its
efforts to evict Plaintiff from it. Second, Plaintiff could have raised all four
claims as counterclaims in the Idaho Eviction Action without adding any
parties to that litigation. In short, Plaintiff should have pled Counts II, III, IV,
and VII as compulsory counterclaims in the Idaho Eviction Action. He cannot
belatedly raise them as counts in his Complaint now.
Res judicata and Idaho Rule 13(a) thus prohibit Plaintiff from bringing all
seven counts of his Complaint against US Bank. In turn, the Court dismisses
the Complaint as to US Bank.
The Court Denies Plaintiff’s Request for Leave to Amend His
Because Defendants’ motions to dismiss are granted in their entirety, the
only remaining question is whether Plaintiff is entitled to amend his Complaint.
Defendants argue that granting Plaintiff leave to amend would prejudice
Defendants, cause undue delay, and ultimately be futile. The Court agrees.
Rule 15(a)(1) grants a party an opportunity to “amend its pleading once
as a matter of course within … 21 days after serving it, or … if the pleading is
one to which a responsive pleading is required, 21 days after service of a
responsive pleading or 21 days after service of a motion under Rule 12(b), (e),
or (f), whichever is earlier.” Fed. R. Civ. P. 15(a). But once a party’s time to
amend under Rule 15(a)(1) has expired, Rule 15(a)(2) provides that it “may
amend its pleading only with the opposing party’s written consent or the
court’s leave.” Fed. R. Civ. P. 15(a)(2). Rule 15(a)(2) adds: “The court should
freely give leave when justice so requires.” Id.; see also Loreley Fin. (Jersey) No.
3 Ltd. v. Wells Fargo Sec., LLC, 797 F.3d 160, 190 (2d Cir. 2015) (“[T]he
‘permissive standard’ of Rule 15 ‘is consistent with our strong preference for
resolving disputes on the merits.’” (quoting Williams v. Citigroup Inc., 659 F.3d
208, 212-13 (2d Cir. 2011) (per curiam)).
Although “[l]eave to amend should be freely granted” pursuant to Rule
15(a)(2), this Court “has the discretion to deny leave if there [is] a good reason
for it, such as futility, bad faith, undue delay, or undue prejudice to the
opposing party.” In re Arab Bank, PLC Alien Tort Statute Litig., 808 F.3d 144,
159 (2d Cir.), as amended (Dec. 17, 2015) (quoting Jin v. Metro. Life Ins. Co.,
310 F.3d 84, 101 (2d Cir. 2002)). In general, however, “[t]he rule in this Circuit
has been to allow a party to amend its pleadings in the absence of a showing
by the nonmovant of prejudice or bad faith.” AEP Energy Servs. Gas Holding
Co. v. Bank of Am., N.A., 626 F.3d 699, 725 (2d Cir. 2010) (quoting Block v.
First Blood Assocs., 988 F.2d 344, 350 (2d Cir. 1993)); see also Ruotolo v. City
of N.Y., 514 F.3d 184, 191 (2d Cir. 2008) (“Mere delay, … absent a showing of
bad faith or undue prejudice, does not provide a basis for the district court to
deny the right to amend.” (citation omitted)); see generally Foman v. Davis, 371
U.S. 178, 182 (1962).
Defendants have argued persuasively that granting Plaintiff leave to
amend would be inconsistent with Rule 15(a)(2). In so doing, Defendants do
not suggest that Plaintiff acted in bad faith when he requested leave to amend.
But they argue that every other relevant factor — prejudice, undue delay, and
futility — militates in favor of denying leave. The Court agrees.
First, granting Plaintiff leave to amend would prejudice Defendants.
Plaintiff did not simply request leave to amend after the April 1, 2016 deadline
that the Court set in its March 4, 2016 Order. He requested leave to amend
one month after Defendants filed their motions to dismiss. Granting Plaintiff
leave to amend would harm Defendants, because it would force them to expend
time and money responding to the Amended Complaint. And it would upend
Defendants’ settled expectations that Plaintiff intended to stand on his initial
Complaint. At the same time, granting Plaintiff’s request would benefit Plaintiff
by allowing him to file an Amended Complaint that he drafted after reading two
motions to dismiss that identified the deficiencies in his original Complaint.
Second, granting Plaintiff leave to amend would cause undue delay.
Plaintiff requested leave to amend months after this Court ordered him to file
an Amended Complaint. The dilatory consequences of granting Plaintiff’s
request are obvious. If Plaintiff files an Amended Complaint, Defendants will
have to submit new motions to dismiss. Plaintiff will submit a new opposition.
Defendants will submit new replies. Months of additional litigation may be in
What is more, the Court credits US Bank’s and SPS’s argument that
Plaintiff’s intent in seeking leave to amend is to delay these proceedings.
(6/10/16 Leave Opp. 2). Plaintiff insists that he failed to file timely his
Amended Complaint because he incorrectly calendared the date on which it
was due. That justification strains credulity. Plaintiff’s claimed scheduling
error might explain (if not excuse) why Plaintiff filed his Amended Complaint
after the April 1, 2016 deadline. But it does not explain why Plaintiff waited
one month after receiving Defendants’ motions to dismiss before requesting
leave to amend.
Finally, and most significantly, the Court is confident that granting
Plaintiff leave to amend would be futile. “Granting leave to amend is ‘futile’ if a
revised claim still ‘could not withstand a motion to dismiss pursuant to Rule
12(b)(6).’” Jordan v. Chase Manhattan Bank, 91 F. Supp. 3d 491, 510 (S.D.N.Y.
2015) (quoting Dougherty v. Town of N. Hempstead Bd. of Zoning Appeals, 282
F.3d 83, 88 (2d Cir. 2002)). Such is the case here.
There are three salient differences between the Amended Complaint and
Plaintiff’s original Complaint. First, in the Amended Complaint Plaintiff alleges
that Defendants “concealed” facts from him, and that Plaintiff only learned of
these facts after conducting a loan audit in October 2014. (Am. Compl. ¶¶ 13,
19, 25, 30-31, 48, 51, 58). As a consequence of Defendants’ alleged
subterfuge, “Plaintiff could not possibly have fully and fairly litigated the
matters set forth in this case” in Idaho state court. (Id. at ¶ 25). Second, the
Amended Complaint contains more facts about the chain of assignments of the
Deed of Trust. (Id. at ¶¶ 26-31). It appears that Plaintiff principally complains
about two of these assignments: (i) a July 29, 2011 assignment from MERS to
BANA (“Assignment 1”) and (ii) the December 2, 2013 assignment from BANA to
US Bank (“Assignment 2”). (Id. at ¶¶ 11-14, 31, 41, 45-47, 55-57, 62-65).
Finally, Plaintiff has changed his theories of relief. He brings five causes of
action in his Amended Complaint: (i) declaratory relief; (ii) constructive fraud;
(iii) “[v]iolations of the Truth in Lending Act — 15 U.S.C. § 1640”; (iv) slander of
title; and (v) wrongful foreclosure. (Id. at ¶¶ 39-74). None of these changes to
the Amended Complaint saves Plaintiff’s lawsuit. His Amended Complaint does
not state a claim for relief.
To begin, the Amended Complaint belies Plaintiff’s claim that Defendants
“concealed” facts from him. It appears that Plaintiff learned of the chain of
assignments of his Deed of Trust after he obtained a loan audit in October
2014. That just begs the question: Why didn’t Plaintiff obtain a loan audit
sooner? (See BANA Reply Br. 6). And why does the fact that Plaintiff learned
about the chain of assignments only after he obtained the loan audit suggest
that Defendants concealed this information from him? Plaintiff appears to
allege that Defendants’ failure to “notif[y]” him of Assignments 1 and 2 is
tantamount to Defendants concealing that information. (Am. Compl. ¶¶ 11,
14). But the Amended Complaint’s allegations of concealment are too
conclusory, and too scattershot, to suggest plausibly that Defendants took
efforts to hide this information from Plaintiff. See Faber v. Metro. Life Ins. Co.,
648 F.3d 98, 104 (2d Cir. 2011) (court reviewing Rule 12(b)(6) motion to
dismiss not “bound to accept [complaint’s] conclusory allegations or legal
conclusions masquerading as factual conclusions” (quoting Rolon v. Henneman,
517 F.3d 140, 149 (2d Cir. 2008) (Sotomayor, J.)). As such, the Court rejects
Plaintiff’s allegations that Defendants’ “concealment” prohibited him from “fully
and fairly litigat[ing]” in Idaho state court “the matters” he addresses in his
Amended Complaint. (Am. Compl. ¶ 25).
And although Plaintiff has made new factual allegations, and modified
his causes of action, his Amended Complaint fails to state a claim for relief.
Like the Complaint, the Amended Complaint does not identify clearly which
causes of action correspond to which defendants. But even assuming that all
five causes of action are brought against BANA, SPS, and US Bank, res judicata
and Idaho Rule 13 bar Plaintiff from bringing any of these claims. See Taylor v.
Riley, 336 P.3d 256, 265 (Idaho 2014) (“A cause of action can be barred by a
prior adjudication even though the theory of liability and supporting evidence
differ from the cause of action actually litigated in the prior lawsuit.... The
issue is whether both lawsuits arose out of the same transaction or series of
transactions.” (internal quotation marks and citation omitted)).
Insofar as the five amended counts are brought against BANA and SPS,
they are precluded by the judgments in the Idaho Foreclosure Action. The
Amended Complaint and Plaintiff’s Idaho complaint both name BANA and SPS
as defendants. The amended counts (like the original counts in the Complaint)
arise out of the same transaction as the Idaho Foreclosure Action: Plaintiff’s
mortgage default, the securitization of his Deed of Trust, and the foreclosure of
the Property. Although the Amended Complaint focuses more intently on
Defendants’ assignments of the Deed of Trust than did the Complaint, these
assignments “are related in time, space, origin, [and] motivation” to the facts
Plaintiff alleged in his Idaho complaint. Andrus, 186 P.3d at 622 (citation
omitted). (Compare Am. Compl. ¶ 25, 48 (alleging that “Defendants concealed
the various void assignments” and “conspired to conceal the true identity of the
owner and holder of the [Promissory] Note and Deed of Trust”), with Idaho
Compl. 10 (“It is the pattern and practice of banking institutions to sell and/or
assign loans, therefore it is uncertain who is actually the current … note
holder[.]” (emphases in original)). Finally, the Fourth Judicial District’s July
12, 2012 Order and March 11, 2013 Order are final judgments in BANA’s and
SPS’s favor. Accordingly, res judicata bars Plaintiff from bringing all five of his
amended counts against SPS and BANA.
Res judicata and Idaho Rule 13(a) also bar Plaintiff from bringing the five
counts in his Amended Complaint against US Bank. Idaho Rule 13(a) does
much of the work here. Plaintiff brought only part of one of his amended
counts as a counterclaim in the Idaho Eviction Action: his request for a
declaratory judgment, insofar as it seeks a declaration that US Bank lacks
authority to foreclose on the Property. The October 29, 2015 Order thus
precludes Plaintiff from seeking the same declaratory relief in his Amended
Complaint. And the remaining causes of action in Plaintiff’s Amended
Complaint plainly should have been pled as compulsory counterclaims in the
Idaho Eviction Action. All arise from the foreclosure of the Property and US
Bank’s eviction efforts. Plaintiff would not have had to add a defendant to the
Idaho Eviction Action in order to plead his amended counts as compulsory
counterclaims. And none of Plaintiff’s amended causes of action relies on facts
that post-date Plaintiff’s March 10, 2015 filing of his answer and counterclaim
in the Idaho Eviction Action. Put simply: Plaintiff should have pled his
amended counts as compulsory counterclaims. His attempt to raise them now
In sum, the Court concludes that granting Plaintiff leave to amend would
be inconsistent with Rule 15(a)(2). His request for leave is denied.
For the reasons set forth above, Defendants’ motions to dismiss are
GRANTED, and Plaintiff’s request for leave to amend his Complaint is DENIED.
The Clerk of Court is directed to terminate all pending motions, adjourn
all remaining dates, and close this case.
January 3, 2017
New York, New York
KATHERINE POLK FAILLA
United States District Judge
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