Gustavia Home LLC v. Brown et al
MEMORANDUM AND ORDER denying without prejudice 37 Motion to Dismiss; denying without prejudice 39 Motion for Sanctions. Therefore, Nationstar's motion to dismiss (Docket no. 37) and motion for sanctions (Docket no. 39) are denied without prejudice to a future application after Gustavia's motion to intervene and vacate the Judgment of Foreclosure and Sale in the state court action isresolved. Until that time, this action is stayed. SO ORDERED. (Signed by Magistrate Judge James C. Francis on 9/15/2017) Copies Transmitted this Date By Chambers. (anc)
Nationstar moves to dismiss this action pursuant
to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil
Procedure and moves for sanctions pursuant to Rule 11 of the
Federal Rules of Civil Procedure.
Nationstar argues that this
court lacks subject matter jurisdiction under the prior exclusive
judicata, collateral estoppel, and the prior pending doctrine
because of a pending mortgage foreclosure action filed by Aurora
interest on its mortgage, in New York State Supreme Court, Bronx
(Memorandum of Law in Support of Defendant Nationstar
Jurisdiction and Pursuant to Rule 12(b)(6) and in Support of
Nationstar’s Motion for Rule 11 Sanctions (“Def. Memo.”) at 5-10;
Corporate Assignment of Mortgage dated May 5, 2009, attached as
part of Exh. A to Declaration of Joyce A. Davis dated July 19,
2017 (“Davis Decl.”)).
Aurora filed the state court action on June 5, 2009.
(“State Court Summons”), Aurora Legal Services, LLC v. Browne,
Index No. 381143/09 (N.Y. Sup. Ct. June 5, 2009), attached as Exh.
E to Davis Decl.).
The defendants in the state court action
defaulted, and an Order of Reference was entered on the default in
(Decision/Order (“1/26/17 Order”), Nationstar
Mortgage, LLC v. Browne, Index No. 381143/09 (N.Y. Sup. Ct. Jan.
Registration Systems, Inc. (“MERS”), is one of the defendants in
Assignment of Mortgage dated July 6, 2008, attached as part of
Exh. B to Davis Decl.).
MERS assigned its mortgage to Gustavia in September 2016.
(Corporate Assignment of Mortgage dated Sept. 16, 2016, attached
as part of Exh. B to Davis Decl.).
In November 2016, Gustavia
filed a motion to vacate the defendants’ default and the Order of
Reference entered on the default.
(Def. Memo. at 4; Memorandum
of Law in Opposition to Defendant Nationstar Mortgage LLC’s Motion
to Dismiss for Lack of Subject Matter Jurisdiction and Pursuant to
Rule 12(b)(6) and in Opposition of Nationstar’s Motion for Rule 11
Sanctions (“Pl. Memo.”) at 3).
The motion was denied on January
26, 2017, because Gustavia was not a party to the state court
action and had not sought to intervene as a successor assignee.
Gustavia instituted this action on December 2,
2016, while that motion was still pending.
Foreclosure and Sale, Aurora Loan Services, LLC v. Browne, Index
No. 381143/09 (N.Y. Sup. Ct. May 2, 2017), attached as Exh. I to
On July 6, 2017, Gustavia moved for leave to
intervene in the state court action and to vacate the Judgement of
Foreclosure and Sale.
(Def. Memo. at 4; Pl. Memo. at 3).
motion is still pending.
(Def. Memo. at 4; Pl. Memo. at 3).
The outcome of Nationstar’s motion to dismiss this action may
turn on the resolution of Gustavia’s pending motion in the state
That is, if the motion is denied, the state court
may no longer be exercising jurisdiction over 1723 Taylor Avenue,
in which case the prior exclusive jurisdiction doctrine would not
See Chapman v. Deutsche Bank National Trust Co., 651 F.3d
1039, 1043-44 (9th Cir. 2011) (“The prior exclusive jurisdiction
jurisdiction over a res, a second court will not assume in rem
jurisdiction over the same res.’” (quoting Marshall v. Marshall,
547 U.S. 293, 311, (2006)); Bergsrud v. Bank of America, N.A., 13
CV 998, 2014 WL 280920, at *2 (D. Nev. Jan. 23, 2014) (holding
that “the prior-exclusive jurisdiction does not apply” where “the
action in  state court involving the property that is at the
heart of this case has been dismissed”).
Nor would the “prior
pending” or “prior pending action” doctrines.
See Zigmund v.
Foster, 106 F. Supp. 2d 352, 363 (D. Conn. 2000) (“[R]eliance on
the prior pending action doctrine is misplaced” where state court
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