Dall v. Constantino et al

Filing 40

MEMORANDUM DECISION and ORDER granting in part and denying in part 37 Motion to Remand to State Court; granting in part and denying in part 8 Motion for Judgment on the Pleadings; denying without prejudice 9 Motion for Partial Summary Judgment. This case is REMANDED to the Third District Court in and for Salt Lake County, State of Utah, case number 140907010. Signed by Judge Dale A. Kimball on 2/24/2016. (eat)

______________________________________________________________________________
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

SUSAN F. DALL,
Plaintiff,

MEMORANDUM DECISION AND
ORDER

vs.
Case No. 2:15CV125DAK
GREGORY M. CONSTANTINO,
DAVID R. TODD, CONSTANTINO
LAW OFFICE P.C., ERIK JACOBSON,
RICHARD KENNERLEY,
GUGLIELMO & ASSOCIATES, PLLC,
ARROW FINANCIAL SERVICES LLC,
LVNV FUNDING, LLC,

Judge Dale A. Kimball

Defendants.

This matter is before the court on Defendants Gregory M. Constantino, Constantino Law
Office, P.C., and David R. Todd’s (collectively “Constantino Defendants”) Rule 12(c) Motion
for Judgment on the Pleadings, the Constantino Defendants’ Rule 12(b) Motion for Partial
Summary Judgment on Plaintiff’s Second and Fourth Causes of Action, and Plaintiff Susan F.
Dall’s Motion for Remand for Failure to Effectively Remove Action. On February 10, 2016, the
court held a hearing on the Constantino Defendants’ motions. At the hearing, Dall was
represented by Douglas R. Short and the Constantino Defendants were represented by Patrick C.
Burt and S. Shane Stroud. The court took the motions under advisement. Dall’s motion for
remand was not filed until after the hearing on the Constantino Defendants’ motions. The court
does not believe that an additional hearing would significantly aid in the determination of that

motion. Therefore, the court will consider Dall’s motion for remand based on the memoranda
submitted by the parties. Having carefully considered the memoranda submitted by the parties
and the law and facts relating to all the pending motions, the court issues the following
Memorandum Decision and Order.
BACKGROUND
On November 28, 2007, Defendant Arrow Financial filed a lawsuit in Third Judicial
District Court in Salt Lake City, Utah, against Plaintiff Susan F. Dall, alleging that Dall had
entered into an open account agreement with Washington Mutual Bank, that Dall had made
charges on that account, and that Dall failed to pay the amount due on the account. On January
22, 2008, Arrow Financial attempted to serve Dall. Dall was not at home so the process server
served a copy of the Summons and Complaint on Ms. Dall’s son, Nick.
On February 29, 2008, Arrow Financial moved for default judgment against Dall. On
March 5, 2008, Arrow Financial filed a Certificate of Default. That same day, the state court
clerk entered Default Judgment against Dall for $3149.11 in damages and $161.34 in interest.
Dall alleges that she was never served with the Default Judgment.
Five years later, on August 28, 2013, Defendant Gregory M. Constantino filed his Notice
of Appearance in the state court action on behalf of Arrow Financial. That same day, he filed a
Notice of Entry of Judgment. On October 8, 2013, Constantino filed an Application for a
Continuing Writ of Garnishment for Arrow Financial. On October 10, 2013, the state court clerk
issued a Writ of Continuing Garnishment and Instructions. Constantino served the writ on Dall’s
employer, Jet Blue Airways.
Dall alleges that she was unaware of the state court action against her or the Default
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Judgment against her until the garnishment began. On November 4, 2013, attorney Douglas R.
Short filed a Special Appearance of Counsel on behalf of Dall in the state action to challenge the
court’s jurisdiction over Dall. Short contacted Constantino to advise him that Dall never had a
credit card account with Washington Mutual, that Dall was not served properly with the state
court Complaint, and that Dall was challenging the propriety of the Default Judgment. Short also
requested a copy of the credit agreement for the alleged account and demanded that Constantino
stop the garnishments and return the garnished funds. Constantino refused to stop the
garnishments or return the funds already garnished.
Dall filed a Motion to Quash the Writ of Garnishment and a Motion to Vacate Default
Judgment. Those motions were initially denied by the state court because Dall and her counsel
did not show up for the hearing. Dall refiled the motions and they are currently pending and
unresolved in the state court case.
On December 18, 2013, Constantino filed an Ex Parte Motion to Change Name to Real
Party in Interest from Arrow Financial to LVNV Funding, LLC. Despite the pending motions in
state court, the Constantino Defendants continued to garnish Dall’s wages until they received the
full amount of the default judgment and filed a satisfaction of judgment.
On October 8, 2014, Dall sued Defendants in a separate, new action in state court for the
collections efforts made against her, alleging that she never had a credit card account with
Washington Mutual. On February 26, 2015, the Constantino Defendants, who were the only
Defendants who had been served, removed the case to this court. The remaining defendants still
have not been served.

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DISCUSSION
Constantino Defendants’ Motion for Judgment on the Pleadings
The Constantino Defendants move for judgment on the pleadings, arguing that this court
should dismiss Dall’s Complaint because it is barred by res judicata, the Rooker-Feldman
doctrine, and the statute of limitations.
“[I]n particular cases, the federal courts should decline to adjudicate cases concurrently
with state proceedings when considerations of ‘wise judicial administration giving regard to the
conservation of judicial resources and comprehensive disposition of litigation,” would justify a
stay or dismissal of the federal proceedings.” First National Credit Corp. v. Von Hake, 511 F.
Supp. 634, 644 (D. Utah 1981).
“A federal court must abstain from exercising jurisdiction when: (1) there is an ongoing
state criminal, civil, or administrative proceeding, (2) the state court provides an adequate forum
to hear the claims raised in the federal complaint, and (3) the state proceedings ‘involve
important state interests, maters which traditionally look to state law for their resolution, or
implicate separately articulated state policies.” Amanatullah v. Colo. Bd. Med. Examiners, 187
F.3d 1160, 1163 (10th Cir. 1999). “Younger abstention is non-discretionary, it must be invoked
once the three conditions are met, absent extraordinary circumstances.” Id.
In this case, the state court action in which the garnishment was obtained has pending
motions regarding the validity of the garnishments. While a judgment has been entered, the case
remains open and the court retains jurisdiction to address supplemental proceedings in the case.
Next, the state court provides an adequate forum to hear the claims raised in Dall’s Complaint.
Dall originally brought the action in state court but the Constantino Defendants removed the case
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because of the federal FDCPA claims. Finally, the state garnishment proceeding involves
matters which traditionally look to state law for their resolution. The garnishment proceeding is
governed by state law and is an integral part of the state judicial system. The Supreme Court has
recognized that “challenges to the processes by which the State compels compliance with the
judgments of its courts” involve important state interests. Penzoil Co. v. Texaco, Inc., 481 U.S.
1, 12 (1987). Therefore, all three elements of the Younger abstention doctrine are met in this
case.
In addition, “[u]nder the Rooker-Feldman doctrine, federal district courts ‘do not have
jurisdiction . . . over challenges to state-court decisions in particular cases arising out of judicial
proceedings.” Jackson v. Peters, 81 Fed. Appx. 282, 285-86 (10th Cir. 2003). “The doctrine
‘prohibits a lower federal court from considering claims actually decided by a state court and
claims inextricably intertwined with a prior state-court judgment.’” Id. at 286.
In Jackson, the court found that the plaintiff’s claims regarding defective procedures
relating to the garnishment of his wages were “inextricably intertwined with the state courts’
judgments.” Id. The Jackson court concluded that the plaintiff must pursue his claims of
defective procedures in the garnishment process in state court. Id.
As in Jackson, Dall’s claims that the garnishment proceedings were procedurally
defective are inextricably intertwined with the state courts’ judgments. Whether Defendants
improperly sought the state court writ of garnishment or whether the court improperly issued the
writ are issues for the state court to determine and must be pursued in state court.
Dall’s FDCPA claims are also inextricably intertwined with the state garnishment issue.
As in the Williams case, “proof that Defendants violated the FDCPA hinges on two issues: (1)
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whether [Dall] is liable for the debt and (2) whether [Dall] was properly served in state court.”
Williams v. Cavalry Portfolio Servs., LLC, 2010 WL 20889656, *3 (C.D. Cal. July 20, 2010).
“For this Court to exercise jurisdiction over these claims would be to review and undermine the
state-court judgment. Plaintiff is essentially the losing party in state court who seeks relief from
the default judgment.” Id. This is the very situation Rooker-Feldman seeks to avoid.
All of Dall’s claims, whether based in Utah law or as FDCPA claims, arise from the same
source–Dall’s assertion that the state court’s default judgment and writ of garnishment were
issued in error. This court cannot effectively vacate the state court judgment or review the
judgment as an appellate court would. Accordingly, the Rooker-Feldman doctrine precludes this
case from proceeding in federal court.
Because this court has concluded that it lacks jurisdiction over the present case, the court
will not address any of the other issues or motions raised by the parties. Furthermore, because
Dall initially filed this case in state court and Defendants removed the case to federal court, the
court concludes that the proper course of action is to remand the case to state court. Dall asks
this court for fees and costs resulting from the Constantino Defendants’ improper removal of the
case. The court recognizes that the Constantino Defendants could have researched the issues
surrounding removal better. However, given the number of federal claims Dall asserted against
the Constantino Defendants, removal appeared correct on the face of the Complaint and the court
does not find the initial removal unreasonable.1 The court, therefore, declines to award fees and
costs.
1

Dall also argues that removal was ineffective because Defendants did not file a copy of
the state court Complaint. However, the state court Complaint was filed as an exhibit with
Defendants’ Notice of Removal. The Complaint, therefore, was properly filed in this court.
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CONCLUSION
Based on the above reasoning, the Constantino Defendants’ Rule 12(c) Motion for
Judgment on the Pleadings is GRANTED IN PART AND DENIED IN PART as explained
above, the Constantino Defendants’ Rule 12(b) Motion for Partial Summary Judgment on
Plaintiff’s Second and Fourth Causes of Action is DENIED WITHOUT PREJUDICE to be filed
in state court, and Plaintiff Susan F. Dall’s Motion for Remand for Failure to Effectively Remove
Action is MOOT to the extent that the court already determined that it lacked jurisdiction over
the case, DENIED IN PART to the extent that it asserts that removal was improper because the
state court Complaint was not filed in this court, and GRANTED IN PART to the extent that the
court is remanding the case based on a lack of jurisdiction over this removed action.
This case is REMANDED to the Third District Court in and for Salt Lake County, State
of Utah, case number 140907010. Pursuant to 42 U.S.C. § 1447(c), the clerk of this court shall
mail a certified copy of this Memorandum Decision and Order to the clerk of said state court.
DATED this 24th day of February, 2016.
BY THE COURT:

__________________________________
DALE A. KIMBALL,
United States District Judge

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