Davis v. Wells Fargo NA et al

Filing 5

MEMORANDUM OPINION OF THE COURT. Signed by District Judge Aleta A. Trauger on 1/31/2013. (xc:Pro se party by regular and certified mail.)(DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(eh)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION

JANICE A. DAVIS,
Plaintiff,
v.
WELLS FARGO, NA,
CHANCERY COURT FOR DAVIDSON COUNTY,
CHANCELLOR CAROL McCOY,
WILSON & ASSOC. LAW FIRM,
AND ATTORNEY BARNEY,
Defendants.

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Case No. 3:12-cv-1181
Judge Trauger

MEMORANDUM OPINION
Plaintiff Janice A. Davis has filed suit against defendants Wells Fargo, N.A.; the Chancery Court
for Davidson County, Tennessee; Wilson & Associates law firm; and Attorney [f/n/u] Barney.

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In

documents attached to the complaint, the plaintiff suggests she also intended to name Chancellor Carol
McCoy as a defendant. Because the plaintiff brings suit in forma pauperis, her complaint is before the
court for an initial review pursuant to 28 U.S.C. § 1915(e)(2)(B), which requires the dismissal of a
complaint, prior to service on the defendant, if the action “is frivolous or malicious[,] fails to state a claim
on which relief may be granted[,] or seeks monetary relief against a defendant who is immune from such
relief.”

See also McGore v. Wrigglesworth, 114 F.3d 601, 608–09 (6th Cir. 1997) (“The complaint must be

dismissed if it falls within the requirements of § 1915(e)(2) when filed.”), reversed on other grounds by
Jones v. Bock, 549 U.S. 199 (2007).
I.

Factual Allegations
The plaintiff alleges that defendant Wells Fargo, N.A. “admitted to taking the $145,000 proceeds

from a Class action lawsuit with W MC Mtg v. Disadvantaged Minorities W omen Black & Hispanic in 2007.
Those funds were to go to that class of which [the plaintiff] was legally a part, but Wells Fargo NA took the
money.” (ECF No. 1, at 1.) More specifically, the plaintiff alleges that, in 2006, she purchased a house
located at 1005 9th Avenue South, Nashville, Tennessee 37203.
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The mortgage company was W MC

Based on documents attached to the complaint, it appears that Mr. Barney’s first name is John.

Mortgage. This company was sued in a class action lawsuit for defrauding first-time homebuyers, in
particular minority black and Hispanic women and families. The case was litigated in federal district court in
California, and the plaintiff alleges that she was ultimately awarded $145,000 in the settlement of that
action, which would have been enough to pay off her mortgage on the house.
The plaintiff claims she did not receive timely notice of the settlement or the money she was
supposed to have received, because W ells Fargo, through its attorney Mr. Barney, wrongfully intercepted
that payment and then “distracted” the plaintiff by immediately initiating foreclosure proceedings to take the
plaintiff’s house at 1005 9th Avenue South.
The plaintiff seeks relief against the Chancery Court for Davidson County, Tennessee, apparently
on the basis of a decision entered by Chancellor Carol McCoy after a final hearing on October 25, 2012,
which, the plaintiff claims, “refused to address the matter pertaining to the fact that W ells Fargo had
illegally obtained the $145,000 check that would have allowed Plaintiff to pay off the mortgage.” (ECF
No. 1, at 6.) In that regard, the plaintiff indicates that she had been involved in litigation in the state courts
over the foreclosure of her mortgage loan for a number of years. She apparently instituted proceedings
herself in the Chancery Court for Davidson County, Tennessee for the purpose of enjoining the
foreclosure.

Attached to her complaint in the present case, among other exhibits, is a copy of an order of

the Chancery Court for Davidson County, Tennessee granting summary judgment to defendant W ells
Fargo Bank, N.A. in a case before that court styled Janice Davis v. Wells Fargo Corporation, Saxon
Mortgage, WMC Mortgage Corporation, No. 11-1354-II.

In the order granting summary judgment, the

court held that (1) W ells Fargo gave proper notice to the plaintiff that she had defaulted on her mortgage
loan and notice of her right to cure the default pursuant to the terms of the Deed of Trust; (2) the
foreclosure sale was conducted properly; and (3) the plaintiff had no private right of action for a loan
modification. (ECF No. 1, at 106.) Judgment was entered in favor of Wells Fargo, granting it possession of
the real property located at 1005 9th Avenue South.
In the present case, the plaintiff states that she intends to bring a claim for “fraudulent acquisition of
fund designated to be paid to [her],” and “violation of [her] civil and human rights . . . and a minority
suffering historical and inhumane discrimination.” (ECF No. 1, at 16.) She seeks relief in the form of,
among other things, an injunction requiring that Wells Fargo return the $145,000 it stole from the plaintiff
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and directing W ells Fargo to permit the plaintiff to pay the mortgage amount owed in 2007 from the
settlement proceeds; ordering that the plaintiff be given clear title to the house that was the subject of
foreclosure proceedings, once the funds are returned to her and used to pay off the mortgage (ECF No. 1,
at 12); barring any continued “illegal actions” by W ells Fargo Bank or by W ilson & Associates Law Firm;
staying “all foreclosures initiated by Wells Fargo Bank as they were not qualified as a member of the class
in the WMC class action suit”’; permitting rescission of the plaintiff’s bankruptcy; and ensuring that
plaintiff’s credit rating is restored.

The plaintiff also seeks compensatory and punitive damages and

attorney fees.
II.

Standard of Review
Under 28 U.S.C. § 1915(e)(2)(B), the court must dismiss a civil complaint filed in forma pauperis, or

any portion thereof, that fails to state a claim upon which relief can be granted or is frivolous, or if it seeks
relief from a defendant who is immune from suit.

The Sixth Circuit has confirmed that the dismissal

standard articulated by the Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic Corp.
v. Twombly, 550 U.S. 544 (2007), “governs dismissals for failure to state a claim under [that statute]
because the relevant statutory language tracks the language in Rule 12(b)(6).” Hill v. Lappin, 630 F.3d
468, 470–71 (6th Cir. 2010).

Thus, to survive scrutiny on initial review, “a complaint must contain

sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal,
556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). “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.”

Id. (citing Twombly, 550 U.S. at 556).

“[A] district court must (1) view the

complaint in the light most favorable to the plaintiff and (2) take all well-pleaded factual allegations as
true.” Tackett v. M & G Polymers, USA, LLC, 561F.3d 478, 488 (6th Cir. 2009) (citing Gunasekera v.
Irwin, 551 F.3d 461, 466 (6th Cir. 2009) (citations omitted)).
Although pro se pleadings are to be held to a less stringent standard than formal pleadings
drafted by lawyers, Haines v. Kerner, 404 U.S. 519, 520–21 (1972); Jourdan v. Jabe, 951 F.2d 108, 110
(6th Cir. 1991), the courts’ “duty to be ‘less stringent’ with pro se complaints does not require us to
conjure up [unpleaded] allegations.”

McDonald v. Hall, 610 F.2d 16, 19 (1st Cir. 1979) (citation omitted).

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III.

Analysis and Discussion
A.

The Rooker-Feldman Doctrine

This court has an independent obligation to determine whether it has subject-matter jurisdiction
over the action before it. Kusens v. Pascal Co., 448 F.3d 349, 359 (6th Cir. 2006). To the extent Janice
Davis seeks this court’s intervention for the purpose of setting aside a state-court order to which she
objects regarding the disposition of the real property located at 1005 9th Avenue South in Nashville, this
court lacks jurisdiction under the Rooker-Feldman doctrine to provide the requested relief. This doctrine is
based on two United States Supreme Court decisions, District of Columbia Court of Appeals v. Feldman,
460 U.S. 462 (1983), and Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923).
The Rooker-Feldman doctrine provides that district courts lack subject-matter jurisdiction of
“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.” Lawrence v. Welch, 531 F.3d 364, 368 (6th Cir. 2008) (quoting Exxon Mobil Corp. v. Saudi
Basic Indus. Corp., 544 U.S. 280, 284 (2005)). As this language suggests, the doctrine is confined to
cases brought after state proceedings have ended. Exxon Mobil, 544 U.S. at 291–92. It appears that the
state-court proceedings to which the plaintiff objects in this case have ended, and the plaintiff seeks review
and reversal of a state court order to which she objects.

It is unclear whether the plaintiff appealed the

state-court decision or otherwise made an effort to vindicate her rights within the state-court system.
In Lawrence v. Welch, the Sixth Circuit applied a “source of injury” test to determine whether the
Rooker-Feldman doctrine applies:
If the source of the injury is the state court decision, then the Rooker-Feldman doctrine
would prevent the district court from asserting jurisdiction. If there is some other source
of injury, such as a third party’s actions, then the plaintiff asserts an independent claim.
531 F.3d 364, 368 (6th Cir. 2008) (quoting McCormick v. Braverman, 451 F.3d 382, 394 (6th Cir. 2006)).
The Sixth Circuit stressed in McCormick that the Rooker-Feldman doctrine is not a “panacea” to be
applied whenever state court decisions and federal court decisions may overlap:
The Supreme Court made clear in Exxon Mobil that the doctrine is confined to those
cases exemplified by Rooker and Feldman themselves: when a plaintiff asserts before a
federal district court that a state court judgment itself was unconstitutional or in violation
of federal law. In such a situation, a plaintiff seeks appellate review of the state court
judgment, and the federal district court has no subject matter jurisdiction over such an
action.
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McCormick, 451 F.3d at 395; see also Givens v. Homecomings Fin., 278 F. App’x 607, 609 (6th Cir. 2008)
(noting that the Sixth Circuit has tightened the scope of the Rooker-Feldman doctrine in the wake of
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (2005), and now construes it to deprive a
district court of jurisdiction only “when the cause of the plaintiff’s complaint is the state judgment itself”
(citing McCormick, 451 F.3d at 393)). Cf. Whittiker v. Deutsche Bank Nat. Trust Co., 605 F. Supp. 2d
914, 921 (N.D. Ohio 2009) (concluding that the Rooker-Feldman doctrine did not prevent the district court
from exercising subject-matter jurisdiction simply because a party attempted to litigate in federal court a
matter previously litigated in state court as long as the federal plaintiff presents an independent claim over
which the district court has jurisdiction, “even if that claim denies a legal conclusion reached by the state
court.” (citing Pittman v. Cuyahoga Cnty. Dep’t of Children & Family Servs., 241 F. App’x 285, 287 (6th
Cir. 2007)).
In the present case, the plaintiff seeks to sue the Chancery Court for Davidson County, apparently
because the plaintiff disagreed with that court’s decision. Because the source of any injury inflicted by the
state court is the judgment issued by that court, it is apparent that the claim against the Chancery Court is
barred by the Rooker-Feldman doctrine. The appropriate course of action, if the plaintiff disagreed with
the state court’s decision, would have been to take an appeal of that decision to the Tennessee Court of
Appeals. This court does not have appellate jurisdiction over state-court decisions. Even if that were not
the case, any suit for damages or injunctive relief against the Davidson County Chancery Court, a division
of the State of Tennessee, is barred by the Eleventh Amendment. The claims against the Chancery Court
are therefore subject to dismissal for failure to state a claim for which relief may be granted.
Likewise, to the extent the plaintiff intended to sue Chancellor Carol McCoy, that claim too is
subject to dismissal for two reasons.

First, insofar as the cause of the plaintiff’s complaint against

Chancellor McCoy is the judgment entered by the Chancellor against the plaintiff, the suit is barred by the
Rooker-Feldman doctrine. McCormick, 451 F.3d at 393. Second, judges are entitled to absolute judicial
immunity from suit for damages for all actions taken in the judge’s judicial capacity, unless these actions
are taken in the complete absence of any jurisdiction. Mireles v. Waco, 502 U.S. 9 (1991) (per curiam);
Foster v. Walsh, 864 F.2d 416, 417 (6th Cir. 1988). The plaintiff’s claims against Judge McCoy are
premised upon actions taken in her judicial capacity. The claim against Chancellor McCoy is barred on the
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basis of immunity as well.
The relief sought in the present action against W ells Fargo Bank, one of the defendants in the
state-court action, is similarly foreclosed insofar as the plaintiff seeks to circumvent the Chancery Court’s
judgment approving the foreclosure on the plaintiff’s house. This court does not have jurisdiction to enjoin
the state-court action or to set aside the judgment granting possession of the house located at 1005 9th
Avenue South, Nashville, Tennessee to W ells Fargo.

The claims against Wells Fargo seeking relief in the

form of an order setting aside the state-court judgment and awarding possession of the house to the
plaintiff must therefore be dismissed.
Alternatively, to the extent the complaint may be construed as seeking injunctive relief against ongoing state-court proceedings, this Court is precluded by the Younger abstention doctrine from providing
relief.

This doctrine, derived from the Supreme Court’s decision in Younger v. Harris, 401 U.S. 37 (1971),

provides that, when state proceedings are pending, principles of federalism dictate that constitutional
claims should be raised and decided in state court without interference by the federal courts.

See

Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 17 (1987); Tindall v. Wayne Cnty. Friend of the Court, 269 F.3d
533, 538 (6th Cir. 2001).

Younger abstention applies when “(1) there [are] on-going state judicial

proceedings; (2) those proceedings must implicate important state interests; and (3) there must be an
adequate opportunity in the state proceedings to raise constitutional challenges.” Sun Ref. & Mktg. Co. v.
Brennan, 921 F.2d 635, 639 (6th Cir. 1990) (citation omitted). State foreclosure proceedings clearly
implicate important state interests. Doscher v. Menifee Circuit Court, 75 F. App’x 996, 997 (6th Cir.
2003); see also Borkowski v. Fremont Inv. and Loan of Anaheim, Cal., 368 F. Supp. 2d 822, 828 (N.D.
Ohio 2005) (finding abstention warranted on the basis that a pending state foreclosure matter was of
paramount state interest). Further, the plaintiff has not articulated any reason why she cannot raise her
constitutional concerns in the state proceedings.

See Pennzoil Co., 481 U.S. at 14 (“[T]he burden on this

point rests on the federal plaintiff to show ‘that state procedural law barred presentation of [its] claims.’”
(quoting Moore v. Sims, 442 U.S. 415, 432 (1979))).
In short, it appears that all of the plaintiff’s claims against the Chancery Court and Chancellor
McCoy are completely barred, and that her claims against Wells Fargo Bank are barred by the RookerFeldman doctrine to the extent the cause of the plaintiff’s complaint is the state-court judgment upholding
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the foreclosure proceedings against the plaintiff. Those claims will be dismissed without prejudice for lack of
jurisdiction.
B.

Subject-Matter Jurisdiction over Remaining Claims and Defendants

As suggested above, the federal courts have limited jurisdiction and can hear only those cases
authorized by the United States Constitution and federal statute. Kokkonen v. Guardian Life Ins. Co. of
Am., 511 U.S. 375, 377 (1994). Generally speaking, to establish subject-matter jurisdiction, a plaintiff’s
complaint must show either the existence of a federal question, pursuant to 28 U.S.C. § 1331, or diversity of
the parties involved in the lawsuit, pursuant to 28 U.S.C. § 1332.

Lack of subject-matter jurisdiction

cannot be waived and thus can be raised by the court, sua sponte, at any time during the proceedings.
Ambrose v. Welch, 729 F.2d 1084, 1085 (6th Cir. 1984); Fed. R. Civ. P. 12(h)(3).
Under § 1331, district courts “have original jurisdiction of all civil actions arising under the
Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. For a civil action to arise under
the Constitution or federal law, “a well-pleaded complaint [must] establish [] either that federal law creates
the cause of action or that the plaintiff’s right to relief necessarily depends on resolution of a substantial
question of federal law.” Palkow v. CSX Transp. Inc., 431 F.3d 543, 552 (6th Cir. 2005). 28 U.S.C. §
1332 provides for federal subject-matter jurisdiction in all civil actions where the parties are diverse and
the amount in controversy exceeds $75,000. Parties are considered diverse when the lawsuit is between
citizens of different States; citizens of a State and citizens or subjects of a foreign state; citizens of different
States and citizens or subjects of a foreign state are additional parties; and a foreign state, as plaintiff, and
citizens of a State or different states, as defendants. Id. In addition, however, the district courts have
supplemental jurisdiction over “all other claims that are so related to claims in the action within such
original jurisdiction that they form part of the same case or controversy under Article III of the United States
Constitution.”

28 U.S.C. § 1367(a).

In the instant case, the plaintiff expressly states that she intends to bring a claim for “fraudulent
acquisition,” which appears to sound in state tort law, against the defendants Wells Fargo, Wilson &
Associates law firm, and Attorney Barney. The plaintiff also suggests, however, that she seeks to bring
claims against W ells Fargo for discrimination in the making or modification of a contract under 42 U.S.C. §
1981, and for discrimination in public accommodation under 42 U.S.C. § 1982. Section 1981 prohibits
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intentional race discrimination in the making and enforcing of contracts with both public and private
actors. 42 U.S.C. § 1981. The statute’s protection extends to “the making, performance, modification,
and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the
contractual relationship.” 42 U.S.C. § 1981(b). Section 1982 reads: “All citizens of the United States
shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit,
purchase, lease, sell, hold, and convey real and personal property.”

42 U.S.C. § 1982. “To effectuate the

remedial purposes of the statute, the Court has broadly construed this language to protect not merely the
enforceability of property interests acquired by black citizens but also their right to acquire and use
property on an equal basis with white citizens.” City of Memphis v. Greene, 451 U.S. 100, 120 (1981).
Both § 1981 and § 1982 “derive their operative language from the first section of the Civil Rights Act of
1866.”

Morris v. Office Max, Inc., 89 F.3d 411, 413 (7th Cir. 1996) (citing Tillman v. Wheaton-Haven

Recreation Ass’n, Inc., 410 U.S. 431, 439–40 (1973)). Thus, due to “their common origin and purpose, §
1981 and § 1982 are generally construed in tandem.”

Id.

The plaintiff indicates that she is a minority and alleges that W ells Fargo interfered with her ability to
modify a contract and her ability to keep her house at 1005 9th Avenue South. Construing the complaint
very broadly, the court finds, for purposes of the initial review, that the plaintiff states colorable claims
against Wells Fargo under 42 U.S.C. §§ 1981 and 1982. Further development of this case may well
reveal that these claims are barred by res judicata or other preclusion grounds, but at this point, the plaintiff
appears to have stated claims against W ells Fargo over which this court has independent subject- matter
jurisdiction. In addition, the court has supplemental jurisdiction over the state-law claim for theft under 28
U.S.C. § 1367. While the theft claim appears to be closely related to the foreclosure proceedings, the
plaintiff asserts that the Chancery Court did not address this claim. If this assertion is true, then this claim
was not the subject of the state court’s judgment and would not necessarily be barred by Rooker-Feldman.
While it too may be barred by res judicata, the claim, for now, will be permitted to proceed. The court
expresses no opinion as to the ultimate merit of these claims.
IV.

CONCLUSION
Based on the Rooker-Feldman doctrine as well as considerations of immunity, the court will

dismiss the claims against the Chancery Court for Davidson County and Chancellor Carol McCoy.
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Further, insofar as the complaint seeks to enjoin enforcement of one or more orders entered by the
Chancery Court for Davidson County, Tennessee or otherwise to appeal a judgment of that court, this
court lacks jurisdiction to entertain such claims. It is not clear at this juncture whether all the plaintiff’s
claims may be barred by the Rooker-Feldman doctrine or, alternatively, whether Younger abstention or res
judicata should apply.

For now, however, the court must construe the complaint in the light most

favorable to the plaintiff and give her the benefit of the doubt. Accordingly, at this juncture the plaintiff’s
claims against Wells Fargo under 42 U.S.C. §§ 1981 and 1982 will be permitted to proceed, along with
the supplemental state-law claim for conversion against Wells Fargo, John Barney, and W ilson &
Associates law firm.
An appropriate order is filed herewith.

Aleta A. Trauger
United States District Judge

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