Minor v. Nationstar Mortgage, LLC et al

Filing 15

OPINION. Signed by District Judge John A. Gibney, Jr. on 6/30/2017. Copy to Pro Se Plaintiff. (jsmi, )

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division

DULCE MINOR,

Plaintiff,
Civil Action No. 3:17-cv-258-JAG

V.

NATIONSTAR MORTGAGE, LLC, and
U.S. BANK NATIONAL ASSOCIATION,
Defendants.
OPINION

The pro se plaintiff, Dulce Minor, brings this wrongful foreclosure case against the
defendants, Nationstar Mortgage, LLC ("Nationstar") and U.S. Bank National Association

("U.S. Bank"). Minor says the defendants used "an invalid document" to foreclose on the home
once owned by her now-deceased husband and illegally evict her. The defendants moved to
dismiss Minor's claims pursuant to Fed. R. Civ. P. 12(b)(6). The plaintiff filed a motion for
leave to amend her complaint, and the defendants filed a motion for leave to file a reply in

support of their motion to dismiss. Res judicata bars Minor's claims because she previously
filed a nearly identical C2ise in state court, and that court dismissed the case on the merits. The
Court grants the motion to dismiss based on res judicata and denies the motion for leave to
amend because any amendment would be futile.
I. BACKGROUND

In January 2006, the plaintiffs now-deceased spouse, Mark Minor, executed a deed of

trust for a loan of $63,169.60 from American General Financial Services (DE), Inc. to property

located at 2218 Concord Avenue, Richmond, Virginia 23234. (Dk. No. 7-1.)' At some time

'

In her complaint. Minor refers to a number of documents which the defendants attach to

their motion to dismiss. The plaintiff incorrectly cites certain information fi-om these documents,

between 2006 and 2015, American General Financial Services (DE), Inc., became Springleaf
Financial Services, Inc.

On September 5, 2015, Springleaf Financial Services, Inc. ihddi

American General Financial Services Inc., d^/a American General Financial Services (DE), Inc.,

assigned its interest to U.S. Bank National Association, as Indentnre Trustee for Springleaf
Mortgage Loan Trust 2013-3.

(Dk. No. 7-2.)

On January 6, 2016, U.S. Bank National

Association, as Indenture Trustee for Springleaf Mortgage Loan Trust 2013-3, assigned its
interest to U.S. Bank National Association, as Indenture Trustee for Springleaf Mortgage Loan
Trust 2013-3, Mortgage Backed Notes, Series 2013-3. (Dk. No. 7-3.) Nationstar acted as the
servicer of the loan.

At some point, Mark Minor passed away and the loan went into default. The plaintiff
knew the estate was in default.

She received eight notices from the defendants and even

expected the notices, but she "did not read the notices thoroughly." (Compl. | 2, Dk. No. 1-1.)
At the foreclosure auction, U.S. Bank National Association, as Indenture Trustee for Springleaf

Mortgage Loan Trust 2012-3, Mortgage Backed Notes, Series 2013-3, purchased the property
and later evicted the plaintiff.
In October 2016, the plaintiff filed suit against Nationstar, U.S. Bank, and other
defendants in the Circuit Court for the City of Richmond, claiming that the foreclosure sale and

and the Court refers to the documents themselves to resolve any discrepancies. See WilsonMcClain v. Specialized Loan Servicing, LLC, No. 3:15cv541, 2016 U.S. Dist. LEXIS 135134, at
*5-6 (E.D. Va. Sept. 27, 2016) ("[The] court may consider official public records, documents
central to plaintiffs claim, and documents sufficiently referred to in the complaint [without
converting a Rule 12(b)(6) motion into one for summary judgment] so long as the authenticity of
these documents is not disputed.") (quoting Witthohn v. Fed. Ins. Co., 164 F. App'x 395, 396-97
(4th Cir. 2006)) (alteration in original).

subsequent eviction were the result of an "outdated agreement."^ The court sustained the
defendants' demurrer and dismissed the complaint on February 16, 2017.
On March 9, 2017, Minor filed the current complaint in the Circuit Court for the City of
Richmond. The defendants removed the case on April 3, 2017, and filed a motion to dismiss on
April 21, 2017. Minor filed a motion for leave to amend her complaint on May 5, 2017, and

attached a proposed amended complaint making the same substantive arguments as the original
complaint but referring to the previously alleged "invalid documents" instead as "fraudulent
documents."
II. DISCUSSION

Res judicata, or claim preclusion, bars Minor's claims, so the Court does not reach the

merits of the defendants' motion to dismiss. Further, amending the complaint would be futile in
this case, and the Court denies Minor's motion to amend.
A, Res Judicata Bars the PlaintifTs Suit

Virginia's res judicata laws govern this dispute. See Q Int'l Courier Inc. v. Smoak, 441
F.3d 214, 218 (4th Cir. 2006) ("[T]he preclusive effect, if any, of the first action on the second

action should have been decided under the res judicata law of the state of Virginia—^the law of
the state where the ... court sat in the first action.") (citation omitted).
Under Virginia law, res judicata bars an action that (1) arises from the same conduct,
transaction, or occurrence, whether or not the legal theory or rights asserted in the second or

subsequent action were raised in the prior suit; (2) has been previously decided on the merits by
a final judgment; and (3) contains the same parties or parties in privity to those from the prior

^"When entertaining a motion to dismiss on the ground ofres judicata, a court may take notice
of facts from a prior judicial proceeding when the res judicata defense raises no disputed issue of
fact." Nabaya v. Stark, No. 3:13CV218-HEH, 2013 WL 2484661, at *3 (E.D. Va. June 10,
2013).

suit. See Houmadi v. U.S. Bank Nat. Ass% No. l:14-CV-997-CMH, 2014 WL 5092624, at *1

(E.D. Va. Sept. 26, 2014). "The party asserting res judicata as a defense must prove by a
preponderance of the evidence that a claim is precluded by a prior judgment." Id. (citing Smoak,
441 F.3d at 219). Finally, although "some leniency can be afforded" to pro se plaintiffs, "pro se
status is not sufficient to overcome the precluding effect of the Court's judgment" on the prior
claims. Chisholm v. Epps, No. 3:16-CV-00078-GCM, 2016 WL 3452751, at *4 (W.D.N.C. June
21, 2016). Here, the defendants have shown each element of res judicata by a preponderance of
the evidence.

In 2006, the Virginia legislature intentionally broadened the scope of claims barred by res
judicata, amending the law to bar those claims arising out of "the same conduct, transaction, or
occurrence as the previously litigated claim, rather than merely those with 'the same cause of

action asserted in the former proceeding.'" Martin-Bangura v. Virginia Dep 't ofMental Health,
640 P. Supp. 2d 729, 738 (E.D. Va. 2009). Minor's current claims, raised in either her initial or

proposed amended complaint, arise from the same conduct, transaction, or occurrence as her
previous litigation—^the foreclosure sale of her deceased husband's property and her subsequent
eviction. Her new legal theories related to invalid or fraudulent documents necessarily stem
from the same exact conduct as in her initial case.

The state court issued a final judgment on the merits when it sustained the defendants'
demurrer and dismissed the complaint on February 16, 2017.

Astrop v. Eckerd Corp., No.

3:09CV681, 2010 WL 1779992, at *9 (E.D. Va. Apr. 29, 2010). ("[A] dismissal on demurrer is
a judgment on the merits and [has] preclusive effect.") (citing Rivers v. Norfolk, Bait., and
Carolina Line, Inc., 210 F. Supp. 283 (E.D. Va. 1962)).
Finally, the parties in the current case are identical to those in the previous litigation.

Res judicata therefore bars Minor's claims.
B, Amending the Comvlaint would be Futile

Under Rule 15 of the Federal Rules of Civil Procedure, a "court should freely give leave
[to amend a pleading] when justice so requires." Fed. R. Civ. P. 15(a)(2). Leave to amend
should be denied "when the amendment would be prejudicial to the opposing party, there has
been bad faith on the part of the moving party, or the amendment would be futile." Field v.
GMAC LLC, 660 F.Supp.2d 679, 690 (E.D. Va. 2008) (quoting Johnson v. Oroweat Foods Co.,
785 F.2d 503, 509 (4th Cir. 1999)).

"In the Eastern District of Virginia, an amendment may be considered futile where
Plaintiffs have previously had two full opportunities to plead their claim." Field, 785 F.2d at 690

(quoting Iron Workers Local 16 Pension Fund v. Hilb Rogal & Hobbs Co., 432 F.Supp.2d 571,
595 (E.D. Va. 2006). Amending is futile "if the proposed amended complaint fails to satisfy the

requirements of the federal rules." United States ex rel. Wilson v. Kellogg Brown & Root, Inc.,
525 F.3d 370 (4th Cir. 2008) (quoting United States ex rel. Fowler v. Caremark RX, LLC, 496
F.3d 730, 740 (7th Cir. 2007)).

Under clearly established precedent. Minor's proposed amended complaint would be
futile. First, Minor had two full opportunities to plead her claim: one in state court and one in
this Court.

The state court even heard oral arguments before sustaining the defendants'

demurrer. Second, the Court has considered the proposed amended complaint Minor submitted

with her motion to amend and the documents Minor attached to her response to the defendants'
motion to dismiss. After considering these documents, Minor still fails to state a claim that is not
precluded by resjudicata.
III. CONCLUSION

Res judicata b£irs Minor's claims, and amending her complaint would be futile. The
Court grants the defendants' motion to dismiss and denies the plaintiffs motion for leave to
amend.

An appropriate Final Order shall issue.
Let the Clerk send a copy of this Opinion to all counsel of record and mail a copy via
U.S. Mail to the pro se plaintiff.

Date;
Richmond, VA

j 2017

_____

M.

John A. Gibney, Jr.
United States Distrifct 3u(tee