Brown et al v. Florida Coastal Partners, LLC et al

Filing 73

OPINION AND ORDER granting 66 Motion for Summary Judgment; denying as moot 71 Motion to Strike. Signed by Magistrate Judge Terence P. Kemp on 2/9/2016. (agm)(This document has been sent by regular mail to the party(ies) listed in the NEF that did not receive electronic notification.)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION

Ronald Brown, et al.,

:

Plaintiffs,

:

v.

:

Florida Coastal Partners, LLC,

Case No. 2:13-cv-1225

:
:

Magistrate Judge Kemp

Defendants.
OPINION AND ORDER
This case (in which the parties have consented to full
disposition by the Magistrate Judge) is before the Court to
determine the effect of a “Notice of Trustee’s abandonment of
Tonya Brown’s claims agaisnt [sic] defendant Carlisle and
Defendant Carlisle’s motion for summary judgment” (Doc 66) which
was filed by defendant Carlisle, McNellie, Rini, Kramer & Ulrich,
Co., LPA (“Carlisle”).

Tonya Brown filed an opposition to the

motion for summary judgment (Doc. 70).

Carlisle did not file a

reply brief, and the time for doing so has passed.

Carlisle

filed a “motion to strike exhibits and objection to inadmissible
evidence pursuant to Fed. R. 56(C)(2) and Federal Rule of
Evidence 901,” which is directed to the documents attached as
Exhibit A and Exhibit B to Ms. Brown’s opposition (Doc. 71).

Ms.

Brown filed an opposition to Carlisle’s motion to strike and
objection (Doc. 72).

For the reasons set forth below, Carlisle’s

motion for summary judgment will be granted, and its motion to
strike will be denied as moot.
I. Background
Although the Court has done so previously, for ease of
reference, the Court will provide a brief summary of the relevant
facts.

The Browns are property owners who are parties to a

foreclosure action filed in the Delaware County Court of Common
Pleas as Case No. 08-CVE-12-1598.

On December 13, 2013, while

the foreclosure action was still pending in the Court of Common
Pleas, the Browns brought this action pursuant to this Court’s
federal question jurisdiction.

On May 23, 2014, with leave of

Court, the Browns filed a “3rd amended complaint” against Florida
Coastal, Mr. Griffith, Carlisle, and John Doe, Individuals 1-50.
Count one of the 3rd amended complaint alleges that the
defendants violated the FDCPA.

More specifically, the Browns

allege that Carlisle falsely represented in the Common Pleas
Court action that its clients were proper party plaintiffs
(specifically, holders of the loan) when, in fact, they were debt
collectors.

The Browns allege that Carlisle’s false and

misleading representations resulted in judgments and sanctions
against them in the foreclosure action.

Similarly, the Browns

allege that Mr. Griffith falsely represented that Florida Coastal
was a proper party plaintiff in that case when, in fact, it was
also a debt collector.

The Browns further allege that Florida

Coastal and Mr. Griffith misrepresented the character, amount,
and legal status of the mortgage and note in violation of the
FDCPA.

The Browns also set forth state law claims for

foreclosure fraud (count two), slander of title (count three),
slander of credit (count four), emotional distress (count five),
and quiet title (count six).

On October 10, 2014, the Court

granted in part a motion to dismiss by Carlisle, dismissing the
Browns’ claims against Carlisle for the intentional infliction of
emotional distress and to quiet title.

(Doc. 46).

On February 20, 2015, Tonya Brown filed a Chapter 11
bankruptcy petition in the United States Bankruptcy Court for the
Southern District of Ohio, Case No. 2:15-bk-50925.

On February

27, 2015, Mr. Griffith and Florida Coastal filed a notice of
bankruptcy and suggestion of stay.
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(Doc. 57).

In examining the

bankruptcy, the Court noted that the case was converted to a
Chapter 7 bankruptcy.
In an Opinion and Order issued on July 10, 2015, the Court
examined the impact of Ms. Brown’s bankruptcy on this litigation.
The Court determined that Ms. Brown lacked standing to pursue her
pre-petition claims because those claims were now considered to
be “property of the estate.”

(Doc. 65 at 7).

In other words,

because the United States Trustee (“UST”) was the real party in
interest to Ms. Brown’s claims, the Court analyzed motions before
it only to the extent that they pertained to Mr. Brown.

Among

other rulings, the Court granted Carlisle’s motion for summary
judgment as it applied to Mr. Brown’s claims, but it withheld
judgment as to Ms. Brown’s claims because those claims belonged
to the UST.
On August 7, 2015, Carlisle filed a notice informing this
Court that the UST abandoned all claims of Tonya Brown against
Carlisle.

(Doc. 66).

In light of the UST’s abandonment of Ms.

Brown’s claims against Carlisle, Carlisle asked the Court to
grant it summary judgment on Ms. Brown’s claims.

On August 31,

2015, Ms. Brown filed a document which she styled as an
opposition to Carlisle’s motion for summary judgment.

(Doc. 68).

In her opposition, Ms. Brown argued that Carlisle’s motion was
premature and should be denied.

In an Opinion and Order issued

on October 31, 2015, this Court found that Carlisle’s motion for
summary judgment was not premature.

Because Ms. Brown had yet to

respond to the substance of the motion, the Court granted her 21
days from the issuance of the Opinion and Order to file an
opposition to Carlisle’s motion for summary judgment.
Ms. Brown filed her opposition to Carlisle’s motion for
summary judgment on November 20, 2015.

(Doc. 70).

Carlisle did

not file a reply brief in support of its motion, and the time for
doing so has passed.

Carlisle did, however, object to and move
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to strike Exhibits A and B attached to Ms. Brown’s opposition.
(Doc. 71).

Ms. Brown filed an opposition to Carlisle’s objection

and motion to strike.

(Doc. 72).

II. Motion for Summary Judgment
Summary judgment is not a substitute for a trial when facts
material to the Court’s ultimate resolution of the case are in
dispute.

It may be rendered only when appropriate evidentiary

materials, as described in Fed. R. Civ. P. 56(c), demonstrate the
absence of a material factual dispute and the moving party is
entitled to judgment as a matter of law.
Broad. Sys., Inc., 368 U.S. 464 (1962).

Poller v. Columbia
The moving party bears

the burden of demonstrating that no material facts are in
dispute, and the evidence submitted must be viewed in the light
most favorable to the nonmoving party.
Co., 398 U.S. 144 (1970).

Adickes v. S.H. Kress &

“[I]f the evidence is insufficient to

reasonably support a jury verdict in favor of the nonmoving
party, the motion for summary judgment will be granted.”

Cox v.

Kentucky Dep’t of Transp., 53 F.3d 146, 150 (6th Cir.
1995)(citation omitted).

Additionally, the Court must draw all

reasonable inferences from that evidence in favor of the
nonmoving party.
(1962).

United States v. Diebold, Inc., 369 U.S. 654

The nonmoving party does have the burden, however, after

completion of sufficient discovery, to submit evidence in support
of any material element of a claim or defense on which that party
would bear the burden of proof at trial, even if the moving party
has not submitted evidence to negate the existence of that
material fact.

See Celotex Corp. v. Catrett, 477 U.S. 317

(1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986).
course, since “a party seeking summary judgment ... bears the
initial responsibility of informing the district court of the
basis for its motion, and identifying those portions of [the
record] which it believes demonstrate the absence of a genuine
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Of

issue of material fact,” Celotex, 477 U.S. at 323, the responding
party is only required to respond to those issues clearly
identified by the moving party as being subject to the motion.
It is with these standards in mind that the instant motion for
summary judgment must be decided.
In its motion for summary judgment, Carlisle’s primary
argument is that this action is merely an improper attempt by the
Browns to re-litigate the foreclosure action filed and decided
against them in state court.

As this Court explained in its July

10, 2015 Opinion and Order, there is both a federal law standard
and a state law standard for issue preclusion, also known as
collateral estoppel.

The federal law standard and the state law

standard share several common elements.

Under the federal

standard, the party claiming preclusion must demonstrate:
(1) the precise issue raised in the present case must
have been raised and actually litigated in the prior
proceeding; (2) determination of the issue must have been
necessary to the outcome of the prior proceeding; (3) the
prior proceeding must have resulted in a final judgment
on the merits; and (4) the party against whom estoppel is
sought must have had a full and fair opportunity to
litigate the issue in the prior proceeding.
Kosinski v. Commissioner of Internal Revenue, 541 F.3d 671, 675
(6th Cir. 2009), quoting United States v. Cinemark USA, Inc., 348
F.3d 569, 583 (6th Cir. 2003).

Similarly, issue preclusion under

the Ohio standard applies if:
1) the fact or issue was actually litigated in the prior
action; 2) the court actually determined the fact or
issue in question; 3) the party against whom issue
preclusion is asserted was a party, or in privity with a
party, to the prior action.
Osborn v. Knights of Columbus, 401 F. Supp.2d 830, 832-33 (N.D.
Ohio 2005).

The third element of issue preclusion under Ohio law

is required only if “a party seeks to use issue preclusion
offensively” in the litigation.

Id., citing Chambers v. Ohio
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Dep’t of Human Services, 145 F.3d 793, 801 n.14 (6th Cir. 1998).
In the July 10, 2015 Opinion and Order, this Court found
that, under both standards, Carlisle was able to establish that
issue preclusion barred Mr. Brown’s claims against it in this
case.

The Court’s reasoning also applies to Ms. Brown’s claims.

More specifically, Ms. Brown’s FDCPA claim (count one) raises
issues as to whether Carlisle’s clients were proper party
plaintiffs, as opposed to debt collectors, and whether Carlisle
made misleading representations with respect to the mortgage and
note.

In her fraud claim (count two), Ms. Brown alleges that

Carlisle fraudulently back-dated an assignment of the mortgage
and note, and that it fraudulently brought the foreclosure action
on behalf of debt collectors.

Ms. Brown’s slander of title claim

(count three) challenges the validity of the mortgage
assignments.

Finally, in her slander of credit claim (count

four), Ms. Brown raises an issue concerning allegedly misleading
and deceptive debt collection practices.

As set forth by

Carlisle, all of these issues were raised and resolved in the
judgment decree and order of foreclosure issued by the Delaware
County Court of Common Pleas on November 12, 2014.
As this Court determined previously, the Court of Common
Pleas made the following findings with respect to CitiGroup and
Kondaur (collectively, “Carlisle’s clients”) in its judgment
decree and order of foreclosure:
•

that Carlisle’s clients provided clear and accurate
disclosures and performed all of the conditions
precedent required to be performed prior to the
acceleration of the mortgage and initiation of
foreclosure proceedings;

•

that the accounting of the amount owed was accurate
and the interest rate was proper;

•

that the mortgage was assigned to CitiGroup on
December 1, 2008 and officially recorded;

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•

that the mortgage was further assigned to Kondaur
on November 9, 2009 and officially recorded;

•

that a judgment of foreclosure against the Browns
was warranted;

•

that Carlisle’s clients did not: breach the
mortgage contract or any contract, commit fraud,
violate federal laws or regulations with regard to
the mortgage, engage in willful or wanton
misconduct in their handling of the loan,
misrepresent any material facts regarding the loan
relationship, violate the Ohio Consumer Sales
Practices Act, use inaccurate or misleading terms
with regard to the loan, violate a fiduciary duty
owed to the Browns, breach any contractual
obligations of good faith, charge excessive
forfeiture/penalty payments above market rates with
respect to the loan, engage in unfair methods of
commerce, or make any false representation orally
or in writing to the Browns.

See Joint Decree and Order of Foreclosure, Case No. 08 CV E 12
1598 (Nov. 12, 2014).

The determination of those issues was

necessary to resolve the judgment decree and order of
foreclosure.

If, for example, there been improper debt

collection practices, fraud, or improper assignments, those
issues necessarily would have impacted the state court’s
decision.

Further, under Ohio law, the decree of foreclosure is

a final judgment for res judicata purposes.
B.R. 190, 194 (S.D. Ohio 1995).

See In re Hoff, 187

Finally, Ms. Brown had a full

and fair opportunity to litigate these issues in the Court of
Common Pleas.

Here, Carlisle does not need to demonstrate

mutuality of parties in the prior litigation because it seeks to
use issue preclusion defensively, rather than offensively.

Based

on the foregoing, the Court agrees that Ms. Brown’s claims
against Carlisle in the instant case are barred by res judicata.
In her opposition to the motion for summary judgment, Ms.
Brown argues that she and her husband only recently learned of a

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settlement agreement reached in a multi-state action involving
CitiGroup.

Ms. Brown explains that, upon learning of the

settlement, she and Mr. Brown filed a complaint with the Consumer
Financial Protection Bureau (“CFPB”) because “Citi never gave any
notice to [her or Mr. Brown] regarding the National Mortgage
Settlement agreement.”

(Doc. 70 at 2).

Terry Ann Rowe of Citi’s

Executive Response Unit sent Mr. Brown a response to the inquiry,
which Ms. Brown attaches to her opposition as Exhibit A.
According to Ms. Brown, this correspondence makes clear “that
Citi only had a Servicer relationship to Plaintiff and spouse’s
[sic] real property in foreclosure.”

(Doc. 70 at 3).

Thus, Ms.

Brown argues that Carlisle improperly “filed a foreclosure
complaint, affidavit and assignment on behalf of client Citi
which misrepresented its client’s true relationship to the
Plaintiffs and spouse’s [sic] real property in foreclosure.”
at 6.

Id.

Ms. Brown also argues that res judicata is inapplicable in

this case because the consent judgment in the multi-state action
expressly reserves certain claims, including those involved in
the instant case.
If a litigant disagrees with a court’s determination, the
proper method of challenging that determination is a direct
appeal of the case, which is also referred to as a direct attack
on a civil judgment.

In contrast, if a litigant disagrees with a

court’s determination and challenges that determination in a
separate court, that challenge is referred to as a collateral
attack.

Collateral attacks may proceed in only rare

circumstances because the collateral attack doctrine generally
prevents a court from revisiting a judgment of another court.
See Frazier v. Matrix Acquisitions, LLC, 873 F. Supp.2d 897, 904
(N.D. Ohio 2012).

The collateral attack doctrine is consistent

with the notion that “final judgments are meant to be just that –
final.”

Id., quoting Ohio Pyro, Inc. v. Ohio Dep’t of Commerce,
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115 Ohio St.3d 375 (2007).
Here, Ms. Brown is generally asserting that there is new
evidence demonstrating that Carlisle’s client, CitiGroup, was not
a proper party plaintiff in the foreclosure action, and that it
made misleading representations with respect to the mortgage and
note.

As noted above, the Court of Common Pleas expressly ruled

on that issue.

By asking this Court to consider this evidence,

Ms. Brown is attempting to collaterally attack the state court’s
judgment.

Because the collateral attack doctrine prevents this

Court from revisiting the judgment of the Court of Common Pleas,
the Court finds Ms. Brown’s argument to be without merit.
In light of this Court’s determination that Ms. Brown’s
claims against Carlisle in the instant case are barred by res
judicata, the Court need not consider the additional arguments
raised in Carlisle’s motion for summary judgment.

Carlisle’s

motion for summary judgment will be granted as to Ms. Brown’s
claims.

Finally, Carlisle’s motion to strike exhibits and

objection will be denied as moot.
III. Conclusion
For the reasons set forth above, Carlisle’s motion for
summary judgment is granted (Doc. 66), and its motion to strike
and objection is denied as moot (Doc. 71).
/s/ Terence P. Kemp
United States Magistrate Judge

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