MCANANY v. NATIONSTAR MORTGAGE, LLC et al

Filing 11

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE MARK A. KEARNEY ON 3/1/2017. 3/1/2017 ENTERED AND COPIES MAILED TO PRO SE, E-MAILED.(kp, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

JAMES McANANY
v.
NATIONSTAR MORTAGE, LLC;
DOES 1 through 10, INCLUSIVE

: CIVIL ACTION
:
:
: NO. 16-5173
:

MEMORANDUM
KEARNEY, J.

March 1, 2017

Borrowers facing foreclosure proceedings in state court need to fully protect themselves
and advocate all available defenses in the state court process.

Long after the foreclosure

judgment, the borrower cannot file in federal court raising the same arguments which he raised,
or which he could have been raised, before the state court.

We are not an appellate court for

state court foreclosure proceedings. In the accompanying Order, we must dismiss a borrower’s
complaint raising notice and fraud claims (based on the lender allegedly not telling the state
court of certain facts) available to the borrower when litigating the state court foreclosure. The
borrower’s claims are barred by res judicata. His claims for damages arising from the state court
foreclosure are barred by the Rooker Feldman doctrine.
I.

Mr. McAnany’s allegations.

Bank of America, N.A. serviced a mortgage loan extended to James McAnany secured by
his home.1 Sometime during October 2012, Bank of America modified Mr. McAnany’s payment
terms on a trial basis.2 The Bank lowered Mr. McAnany’s scheduled payments for November
2012, December 2012, and January 2013. 3 If he timely paid these lower amounts, the Bank
agreed to permanently modify the mortgage loan terms.4 Mr. McAnany alleges he made his first

payment before November 1, 2012, but the Bank told him it could not locate the payment. 5 As a
result, Mr. McAnany defaulted on the trial modification and needed to apply for a new
modification.6
Bank of America transferred the servicing of Mr. McAnany’s mortgage loan to
Nationstar Mortgage, LLC on July 1, 2013.7 Nationstar asked for documents and Mr. McAnany
alleges he provided documents from September 19, 2014 to October 28, 2014, but Nationstar
denied timely receiving these documents. 8

Mr. McAnany alleges Nationstar’s denial of

receiving his documents is a misrepresentation.9
According to Mr. McAnany, Nationstar engaged in “dual tracking by scheduling and
conducting a foreclosure sale” of his former residence while he “was seeking a loan
modification.” 10 The foreclosure sale occurred on March 19, 2015.

Mr. McAnany now

complains Nationstar did not post notice of the foreclosure sale or serve him with a summons
before the sale.11
Mr. McAnany sued Nationstar on September 28, 2016. Mr. McAnany brings three
claims of wrongful foreclosure. 12

The first claim of wrongful foreclosure comes under

Pennsylvania’s Loan Interest and Protection Law13 and alleges a lack of notice.14 His second
claim, also alleging notice defects, is brought under Pennsylvania’s Finance Housing Agency
Law.15 His final claim, under Pennsylvania’s Unfair Trade Practices and Consumer Protection
Law,

16

alleges Nationstar made a misrepresentation to Mr. McAnany concerning the

foreclosure. 17 Mr. McAnany alleges injuries stemming directly from the Pennsylvania state
court’s judgment in the foreclosure action, i.e., damage to his reputation and credit rating as well
as the loss of his home.18

2

II.

Analysis

Nationstar moves to dismiss for lack of subject matter jurisdiction under the RookerFeldman doctrine. In the alternative, Nationstar moves to dismiss because Mr. McAnany’s
claims are barred by res judicata.
A. Res judicata bars Mr. McAnany’s claims.
Mr. McAnany’s claims are barred by res judicata. Res judicata provides “a federal court
must give a state court judgment the same preclusive effect that the state court would give it.”19
“Any final, valid judgment on the merits by a court of competent jurisdiction precludes any
future suit between the parties or their privies on the same cause of action.” 20 Res judicata
“applies not only to claims actually litigated, but also to claims which could have been litigated
during the first proceeding if they were part of the same cause of action.”21 A plaintiff’s claims
may be precluded based on the doctrine of res judicata if the following elements are present:
“(1) a final judgment on the merits in a prior suit involving (2) the same parties or their privies
and (3) a subsequent suit based on the same cause of action.”22

A claim challenging a party’s conduct that occurred before the state court entering
judgment in a foreclosure proceeding may not be barred by the Rooker-Feldman doctrine but
instead is subject to the principles of preclusion under res judicata.23 For example, in Sherk v.
Countrywide Home Loans, the court found to the extent the plaintiffs argued they were injured
by the defendants’ conduct before the entry of judgment, res judicata barred the claims because
the plaintiffs could have litigated the claims in the state court foreclosure proceeding.24
Mr. McAnany seeks relief for claims he could have brought against Nationstar in the
now-concluded foreclosure proceedings, including failure to provide certain notices and
misrepresenting its non-receipt of documents related to the foreclosure action. Mr. McAnany
could and should have brought these claims in the foreclosure action, which he could have
3

appealed to the proper Pennsylvania appellate court. We dismiss Mr. McAnany’s claims as
barred under the doctrine of res judicata.
B. Rooker-Feldman bars claims for damages caused by the state court foreclosure.
Mr. McAnany’s claims also are barred by Rooker-Feldman to the extent he seeks
compensation for damage caused by the foreclosure. “Under the Rooker-Feldman Doctrine, a
district court is precluded from entertaining an action, that is, the federal court lacks subject
matter jurisdiction, if the relief requested effectively would reverse a state court decision or void
its ruling.”25 The Supreme Court defined the contours of Rooker-Feldman, explaining that the
doctrine deprives the lower federal courts of jurisdiction only in “cases brought by state-court
losers complaining of injuries caused by state-court judgments rendered before the district court
proceedings commenced and inviting district court review and rejection of those judgments.”26
Rooker-Feldman is not implicated “simply because a party attempts to litigate in federal court a
matter previously litigated in state court.”27 If the matter was previously litigated, as long as the
“federal plaintiff ‘present[s] some independent claim, albeit one that denies a legal conclusion
that a state court has reached in a case to which he was a party . . . , then there is jurisdiction and
state law determines whether the defendant prevails under principles of preclusion.’”28
Clarifying the Rooker-Feldman doctrine, our Court of Appeals instructs we lack
jurisdiction only if (1) the federal plaintiff lost in state court; (2) the plaintiff complains of
injuries caused by the state court judgment; (3) the judgment was rendered before the federal suit
was filed; and (4) the plaintiff has invited the district court to review and reject the state
judgment.29 When a “federal plaintiff brings a claim, whether or not raised in state court, that
asserts injury caused by a state-court judgment and seeks review and reversal of that judgment,
the federal claim is ‘inextricably intertwined’ with the state judgment.”30 In deciding whether a

4

claim is inextricably intertwined, the federal court must determine exactly what the state court
held.31 The court must then articulate the federal relief sought by the plaintiff.32 If this relief
“requires determining that the state court decision is wrong or would void the state court’s
ruling,” then the issues are inextricably intertwined and the federal court lacks subject matter
jurisdiction.33
On multiple occasions, our Court of Appeals has held the Rooker-Feldman doctrine bars
federal courts from providing relief invalidating a state court foreclosure decision. 34 For
example, in Easley v. New Century Mortgage Corporation, the plaintiff sought compensation for
“damage to her credit rating caused by the foreclosure.” 35 Our Court of Appeals held the
Rooker-Feldman doctrine barred the plaintiff’s claims because the plaintiff sought damages
“stemming directly from the state court’s judgment in the foreclosure action.”36
Mr. McAnany’s claims are barred by Rooker-Feldman to the extent he seeks
compensation for damage caused by the foreclosure. Mr. McAnany lost in state court. He
complains of injuries caused by the state court judgment. Specifically, Mr. McAnany asserts his
reputation and credit rating were damaged because of the negative light of the foreclosure action.
He also asserts he lost his home as a result of the foreclosure. Because the foreclosure sale took
place on March 19, 2015, the state court foreclosure judgment necessarily occurred before Mr.
McAnany filed suit in federal court on September 28, 2016. The damages Mr. McAnany
seeks—including damages to his reputation, his credit rating, and losing his house—all stem
directly from the state court’s judgment. Mr. McAnany’s claims for these damages are barred by
the Rooker-Feldman doctrine.

5

III.

Conclusion.

Mr. McAnany’s claims are barred by res judicata. Mr. McAnany’s claims are also
barred by the Rooker-Feldman doctrine to the extent he seeks relief for conduct preceding the
foreclosure action. We dismiss his complaint in the accompanying Order.

1

ECF Doc. No. 5, ¶ 7.

2

Id.

3

Id.

4

Id., ¶ 8.

5

Id., ¶ 9.

6

Id.

7

Id., ¶ 10.

8

Id., ¶ 11.

9

Id.

10

Id., ¶ 12.

11

Id., ¶¶ 14-16.

12

Id., ¶¶ 17-27.

13

41 Pa. Stat. § 401.

14

ECF Doc. No. 5, ¶¶ 17-19.
6

15

35 Pa. Stat. § 1680.101; ECF Doc. No. 5, ¶¶ 20-23.

16

73 Pa. Stat. §§ 201-2(4)(iv), 201-3.

17

ECF Doc. No. 5, ¶¶ 24-27.

18

ECF Doc. No. 5, ¶¶ 19, 23, 27.

19

Sherk v. Countrywide Home Loans, Inc., No. 08-5969, 2009 WL 2412750, at *6 (E.D. Pa.
Aug. 5, 2009) (citing Lance v. Dennis, 546 U.S. 459, 466 (2006) and Turner v. Crawford Square
Apartments III, L.P., 449 F.3d 542, 548 (3d Cir. 2006)).
20

Balent v. City of Wilkes-Barre, 669 A.2d 309, 313 (Pa. 1995) (citation omitted).

21

Id.

22

Duhaney v. Attorney Gen. of U.S., 621 F.3d 340, 347 (3d Cir. 2010).

23

See Hua v. U.S. Bank Nat. Ass’n, No. 14-6767, 2015 WL 1071606, at *3 (E.D. Pa. Mar. 11,
2015) (stating if the source of the injury is defendant’s actions “[t]he federal suit is an
independent claim that is not barred by the Rooker-Feldman doctrine, and is, instead, subject to
state law principles of preclusion.”) (citing Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544
U.S. 280, 293 (2005)).
24

Sherk, 2009 WL 2412750, at *6.

25

Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 192 (3d Cir. 2006).

26

Exxon Mobil Corp., 544 U.S. at 284.

27

Id. at 293.

28

Id.

29

Great W. Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 166 (3d Cir. 2010).

30

Id. at 170.

31

FOCUS v. Allegheny Cnty. Court of Common Pleas, 75 F.3d 834, 840 (3d Cir. 1996) (citations
omitted).
32

Perkins v. Beltway Capital, LLC, 773 F. Supp. 2d 553, 557–58 (E.D. Pa. 2011).

7

33

Id. (quoting Laychock v. Wells Fargo Home Mortg., No. 07–4478, 2008 WL 2890962, at *2
(E.D. Pa. July 23, 2008)).
34

See, e.g., Gage v. Wells Fargo Bank, NA AS, 521 F. App’x 49, 51 (3d Cir. 2013); Manu v.
Nat'l City Bank of Indiana, 471 F. App’x 101, 105 (3d Cir. 2012); Laychock v. Wells Fargo
Home Mortg., 399 F. App’x 716 (3d Cir. 2010); Easley v. New Century Mortg. Corp., 394 F.
App’x 946 (3d Cir. 2010); Moncrief v. Chase Manhattan Mortg. Corp., 275 F. App’x 149, 152
(3d Cir. 2008).
35

Easley, 394 F. App’x at 948.

36

Id.

8