Opinion
22-CV-3177 (PGG) (KHP)
11-07-2022
HARRIET NICHOLSON, Plaintiff, v. THE BANK OF NEW YORK MELLON, Defendant.
TO: HON. PAUL G. GARDEPHE, United States District Judge
REPORT AND RECOMMENDATION ON DEFENDANT'S MOTION TO DISMISS SECOND AMENDED COMPLAINT AND PLAINTIFF'S MOTION TO AMEND
KATHARINE H. PARKER, United States Magistrate Judge.
This action concerns a Texas foreclosure action. Plaintiff won certain aspects of her case but lost other aspects of it. She now seeks to relitigate her claims in this Court and asks this Court to set aside the judgment of the Texas state court.
For the reasons set forth below, I respectfully recommend that the motion to dismiss (ECF No. 53) be granted with prejudice and the motion to amend (ECF No. 59) be denied.
The facts set forth below are derived from the Second Amended Complaint, documents submitted by Plaintiff in this action, and documents filed in and decisions issued by the state court in Texas.
In 2001, Plaintiff Harriet Nicholson purchased a home in Grand Prairie, Texas, where she lives. She borrowed $125,048 from Mid America Mortgage, Inc. (“Mid America”) to make the purchase, which was secured by a Deed of Trust (“DOT”), which in Texas is the functional equivalent of a mortgage against real property. The DOT was assigned several times, first to Countrywide Home Loans, then to The Bank of New York Mellon (“BNYM”). Nationstar Mortgage LLC (“Nationstar”) is the current loan servicer, having taken over for prior loan servicers.
In July 2012, after Plaintiff defaulted on her loan payments, a non-judicial foreclosure sale of the property took place, and the property was sold to BNYM, which took title through a Substitute Trustee's Deed (“BNYM Deed”). BNYM then brought an action to evict Plaintiff. Plaintiff then sued in Texas state court for wrongful foreclosure and to stop her eviction. She brought the claims against BNYM and other entities, including Nationstar and the Harvey Law Group (outside counsel to BNYM), in a case encaptioned Harriet Nicholson v. The Bank of New York Mellon, etc., et al., Cause No.: 342-262692-12 (the “Texas Action”). Plaintiff amended her complaint multiple times and asserted sprawling claims including violations of the Texas Civil Practice & Remedies and Property Codes, negligence, and fraud by BNYM, the Harvey Law Group and others. She sought, among other things, to vitiate the BNYM Deed, re-obtain quiet title to her home, preclude any eviction actions against her and to recover money damages, including for emotional distress, against various parties.
Defendant was formerly known as The Bank of New York as Trustee for the Certificate holders of CWMBS, Inc., CWMBS Reforming Loan REMIC Trust Certifies, Series 2005-R2.
The Texas Action was filed in Tarrant County, Texas in 2012. Plaintiff brought a number of other actions in Texas State Court as well, but she does not seek to set aside or vacate judgements in those other actions in this case. This case is a challenge only to the outcome of 2012 Texas Action.
After extensive litigation in Texas, which included removal to federal court and then remand to state court, Plaintiff succeeded in having the BNYM Deed vacated and she was awarded possession and costs; however, she did not succeed in obtaining quiet title or any damages. Thus, she is still on the hook for the loan. She also did not succeed in her claims against Nationstar or the Harvey Law Group, which were stricken as parties. See ECF No. 25, Exhs. 9-10.
Plaintiff contended that the final judgment issued by the court did not conform to the relief verbally granted by the trial judge-an argument she lost in the Texas Action. She also contended the Texas court erred in dismissing Nationstar and the Harvey Law Group from the Texas Action-also an argument she lost in the Texas Action. Plaintiff appealed the final judgement of the Texas trial court, but the appellate court denied her appeal. In a 39-page opinion, the Texas appellate court detailed the ten-year history of litigation between Plaintiff, BNYM and others, all of the various claims and arguments asserted by Plaintiff over that time and on appeal, and ultimately overruled the myriad issues raised in her appeal. See ECF No. 54, Exh. 11. Its decision was issued on March 31, 2022. On January 5, 2022, on a motion brought by Nationstar in another case she had brought against it in Texas, the Texas state court deemed Plaintiff a “vexatious litigant” and barred her from filing further lawsuits in Texas state courts without permission. See ECF No. 54, Exh. 12. The decision lists multiple litigations she brought in Texas (including the one filed in Tarrant County, Texas against BNYM at issue in this case) - all related to her mortgage and the attempts to foreclose on her property and evict her from her home. Id. The court found that Plaintiff “has repeatedly, after litigation has been finally determined against her, continued to re-litigate or attempted to re-litigate . . . the cause of action, claims, controversy and/or factual and/or legal determinations against one or more of the same defendants against whom the litigation was previously finally determined.” Id.
PROCEDURAL HISTORY
Plaintiff has now sued BNYM in this Court to collaterally attack the Texas state court judgment in the Texas Action. Plaintiff's initial complaint was filed on April 18, 2022. Defendant moved to dismiss under Federal Rules of Civil Procedure 12(b)(1) for lack of jurisdiction and 12(b)(6) for failure to state a claim. On May 25, 2022, in response to the motion to dismiss, Plaintiff filed a First Amended Complaint. She then sought Defendant's consent to file a Second Amended Complaint, which Defendant granted to avoid further motion practice. Plaintiff filed the Second Amended Complaint (“SAC”) on May 27, 2022.
In the SAC, she asserts that BNYM committed fraud on the federal and state courts, which deprived her of obtaining full relief in the Texas Action. She requests declaratory relief that: (1) BNYM, two Texas state judges and a lawyer from the Harvey Law group perpetuated a fraud on the Texas state court; (2) Nationstar and the Harvey Law Group were indispensable parties in the Texas Action; (3) the judgments in the Texas Action “are void for want of jurisdiction for lack of indispensable parties;” (4) a judge in the Texas Action committed “fraud” on the court by striking Nationstar and the Harvey Law Group as defendants; and (5) another judge in the Texas Action committed “fraud” on the Court by failing to rejoin Nationstar and the Harvey Law Group as parties but permitting them to appear to oppose Plaintiff's motion seeking to have them reinstated as parties. She also requests vacatur of the judgment in the Texas Action; an award of compensatory damages of $1 million for “ten years of pain and suffering for protracted litigation” in Texas; an award of the costs of the Texas litigation estimated to be $15,000; and punitive damages.
On June 22, 2022, Defendant moved to dismiss the SAC, again pursuant to Rules 12(b)(1) and 12(b)(6). It asserts that this Court lacks diversity jurisdiction, that the action is barred by the Rooker-Feldman abstention doctrine, that the claims are barred by the doctrines of res judicata and collateral estoppel, and that, in general, the claims are not sufficiently pleaded.
Plaintiff opposes the motion to dismiss but also cross-moves for permission to file a Third Amended Complaint (“TAC”). The proposed TAC is based on the same factual allegations in the SAC - alleged fraud by BNYM, the Harvey Law Group and judges in the Texas Court that resulted in her not obtaining the full relief she sought in the Texas Action and alleged improper legal conclusions reached by the Texas courts based on Plaintiff's interpretation of Texas property laws and state court procedural rules. The TAC largely seeks the same relief, which Plaintiff now purports to seek under Federal Rule of Civil Procedure 60, to set aside the Texas State Court's judgment on the grounds that it was entered on the basis of fraud or misconduct and/or because it is void due to the absence of indispensable parties. In the TAC, she also seeks damages in excess of $1 million for actual and compensatory damages and punitive damages in excess of 5% of Defendant's net worth, as well as attorneys' fees and costs (although she is proceeding pro se). Defendant opposes the motion to amend for the same reasons it seeks dismissal of the SAC and the additional reason that Rule 60 does not provide a basis for federal question jurisdiction. It also argues that any further amendments would be futile and that the case be dismissed with prejudice.
LEGAL STANDARD
The court must dismiss an action for lack of subject matter jurisdiction if it “lacks statutory or constitutional power to adjudicate it.” Nike, Inc. v. Already, LLC, 663 F.3d 89, 94 (2d Cir. 2011). Thus, consideration of the motion to dismiss based on Rule 12(b)(1) necessarily precedes consideration of the motion under Rule 12(b)(6). The burden to establish jurisdiction lies with the plaintiff. See Makarova v. U.S., 201 F.3d 110, 113 (2d Cir. 2000). When determining the existence of subject matter jurisdiction, a district court may consider evidence outside the pleadings. Id. at 113.
Assuming there is jurisdiction, the Court may then evaluate whether the pleading states a claim upon which relief can be granted. When evaluating a motion to dismiss under Rule 12(b)(6) for failure to state a claim, the Court must accept all factual allegations in the complaint as true and draw all inferences in the Plaintiff's favor. Littlejohn v. City of New York, 795 F.3d 297, 306-07 (2d Cir. 2015). To survive a motion to dismiss, the complaint must contain “sufficient factual matter . . . to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). While detailed factual allegations are not required, the complaint must contain more than mere “labels and conclusions.” Iqbal, 556 U.S. at 678. “The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.” Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 378 (2d Cir. 1995). In general, the Court evaluates a complaint without reference to outside evidence; however, it may take judicial notice of publicly filed documents and it may consider documents incorporated by reference in the complaint or attached thereto. Dismissal is appropriate only when it “appears beyond a doubt that the plaintiff can prove no set of facts which would entitle him or her to relief.” Sweet v. Sheahan, 235 F.3d 80, 83 (2d Cir. 2000).
The Court may take judicial notice of the various filings made by the parties in the Texas Action and decisions issued by the court in that action. See Brass v. Am. Film Technologies, Inc., 987 F.2d 142, 150 (2d Cir. 1993) (the Court is permitted to consider “matters of which judicial notice may be taken on Rule 12(b)(6) motion); Int'l Star Class Yacht Racing Ass'n v. Tommy Hilfiger U.S.A., Inc., 146 F.3d 66, 70 (2d Cir. 1998) (“a court may take judicial notice of a document filed in another court . . . to establish the fact of such litigation and related filings”); Kramer v. Time Warner Inc., 937 F.2d 767, 774 (2d Cir. 1991) (judicial notice may be taken of public documents); Fed.R.Evid. § 201 (judicial notice may be taken of facts that “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned”). Plaintiff has requested that the Court take judicial notice of various documents, which the Court has done in considering the motions.
Here, Plaintiff not only opposes dismissal under Rule 12 but also seeks to amend her complaint a third time. Under Rule 15(a) of the Federal Rules of Civil Procedure, “a party may amend its pleading once as a matter of course within . . . 21 days after serving it, or . . . if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier.” Fed.R.Civ.P. 15(a)(1). “In all other cases, a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). However, a court may deny a motion to amend a complaint when the proposed amendments are futile. Proposed amendments are futile when they would fail to state a claim under Rule 12(b)(6). IBEW Local Union No. 58 Pension Tr. Fund & Annuity Fund v. Royal Bank of Scotland Grp., PLC, 783 F.3d 383, 389 (2d Cir. 2015) (quoting Panther Partners Inc. v. Ikanos Commc'ms, Inc., 681 F.3d 114, 119 (2d Cir. 2012)). “The party opposing the amendment has the burden of demonstrating that leave to amend would be futile.” Margel v. E.G.L. Gem Lab Ltd., 2010 WL 445192, at *3 (S.D.N.Y. Feb. 8, 2010) (citation omitted). Because determination of futility is subject to the same standards as a motion to dismiss under Rule 12(b)(6), “futility is generally adjudicated without resort to any outside evidence,” and the court must accept all facts pleaded as true, except that it may take judicial notice of certain documents or documents referenced in the pleading. Wingate v. Gives, 2009 WL 424359, at *5 (S.D.N.Y. Feb. 13, 2009) (citing Nettis v. Levitt, 241 F.3d 186, 194, n.4 (2d Cir. 2001)).
See supra note 4.
Finally, the court must construe the pleadings of a pro se litigant liberally and interpret them “to raise the strongest arguments that they suggest."' Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 474 (2d Cir. 2006) (citation omitted).
DISCUSSION
I. Federal Question and Diversity Jurisdiction
There are only two possible bases for jurisdiction in this case: federal question jurisdiction under 28 U.S.C. §1331 or diversity jurisdiction under 28 U.S.C. § 1332. Federal question jurisdiction exists when the claims arise under the Constitution, laws or treaties of the United States. 28 U.S.C. §1331. Plaintiff contends in her motion to amend that Federal Rule of Civil Procedure 60 qualifies as a law for purposes of federal question jurisdiction. Plaintiff is mistaken. Rule 82, which states that the Federal Rules of Civil Procedure “do not extend or limit the jurisdiction of the district courts,” expressly precludes Plaintiff's argument. Fed.R.Civ.P. 82. The Second Circuit also has made clear that the Federal Rules of Civil Procedure “do not provide an independent ground for subject matter jurisdiction.” Cresswell v. Sullivan & Cromwell, 922 F.2d 60, 70 (2d Cir. 1990), abrogated on other grounds as recognized in Kalt v. Hunter (In re Hunter), 66 F.3d 1002, 1005-06 (9th Cir. 1995).
Diversity jurisdiction exists where the matter in controversy exceeds the sum or value of $75,000 and is between citizens of different states. 28 U.S.C. § 1332. There is no real dispute here that Nicholson and BNYM are citizens of different states. BNYM contends that this action does not involve $75,000 or more. As a general matter, plaintiffs are subject to a liberal pleading standard, GW Holdings Grp., LLC v. U.S. Highland, Inc., 794 F. App'x. 49, 51 (2d Cir. 2019) (citation omitted), and even cursory allegations that the jurisdictional amount is met may be sufficient, provided the allegations are plausible, Hart v. Rick's NY Cabaret Int'l, Inc., 967 F.Supp.2d 955, 960 (S.D.N.Y. 2014); see also 14AA Wright & Miller, Fed. Prac. & Proc. Juris. § 3702 (4th ed.) (listing cases finding that plaintiffs met their initial burden where the complaints contained cursory allegations that the amount was met and concluding this is the correct result). In other words, the burden on the plaintiff for showing the monetary threshold has been met is light.
Once a good faith representation has been made, the burden shifts to the defendant to show to a “legal certainty” that the amount recoverable does not meet the jurisdictional threshold. St. Paul Mercury Indem., Co. v. Red Cab Co., 303 U.S. 283, 289 (1938). Unlike the plaintiff's burden, the defendant's burden is heavy. “[T]he legal impossibility of recovery must be so certain as virtually to negat[e] the plaintiff's good faith in asserting the claim.” Chase Manhattan Bank, N.A. v. Am. Nat. Bank & Trust Co. of Chi., 93 F.3d 1064, 1070 (2d Cir. 1996) (citation omitted). “[E]ven where [the] allegations leave grave doubt about the likelihood of a recovery of the requisite amount, dismissal is not warranted.” Zacharia v. Harbor Island Spa, Inc., 684 F.2d 199, 202 (2d Cir. 1982).
Here, Plaintiff seeks in excess of $1 million dollars in compensatory damages. While cursory and likely far in excess of the value of her claims, the Court gives Plaintiff the benefit of the doubt that the value at least exceeds $75,000, especially in light of the liberal pleading standards for pro se litigants. In this regard, the Court notes that the value of the property at issue exceeds $75,000. By seeking to set aside the judgment of the Texas court and to ultimately obtain quiet title to the property, the value of the claims, though cast as compensatory damages, plausibly exceed $75,000. In contrast, BNYM has not demonstrated to a “legal certainty” that the amount in controversy does not meet the jurisdictional threshold. Thus, Plaintiff has adequately pleaded diversity jurisdiction. As discussed below, however, this does not end the analysis of subject matter jurisdiction.
II. The Rooker-Feldman Doctrine
The Rooker-Feldman abstention doctrine bars federal courts from hearing cases brought by plaintiffs who lost in state court and subsequently ask a federal court to reject or overrule the state court judgment. See Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005) (defining the existence and scope of the Rooker-Feldman doctrine). The doctrine exists to ensure that federal courts do not sit in review of state court decisions outside of the specific statutory and Constitutional grants of authority to do so. See e.g., 28 U.S.C. § 1257 (empowering the Supreme Court to review certain “judgments or decrees rendered by the highest court of a State in which a decision could be had”). Thus, if an action brought in federal court would necessarily, even if not directly, require the district court to determine that a state court judgment is void or was decided incorrectly, it cannot be heard by that federal court. Kropelnicki v. Siegal, 290 F.3d 118, 128 (2d Cir. 2002). An action invites federal review of a state court decision when a plaintiff's claim(s) in federal court are “inextricably intertwined” with the decisions of the state court. Id. There are four requirements that must be met in order for the Rooker-Feldman doctrine to preclude a federal court from hearing a case: “(i) the plaintiff must have lost in state court; (ii) the plaintiff must complain of injuries caused by a state court judgment; (iii) the plaintiff must invite federal court review and rejection of that judgment; and (iv) the state court judgement must have been rendered before the federal proceedings commenced.” Martinez v. Supreme Ct. of New York, Rockland Cnty., 2020 WL 6647427 at *2 (S.D.N.Y. Nov. 12, 2020); see also Hoblock v. Albany Cty. Bd. Of Elections, 422 F.3d 77, 85 (2d Cir. 2005). This doctrine occupies “narrow ground.” Exxon Mobil Corp., 544 U.S at 284.
The Second Circuit recently clarified how the Rooker-Feldman doctrine should be applied in a case involving a creditor to a property on which another creditor foreclosed. In Hansen v. Miller, et al., 2022 WL 15527742 (2d Cir. Oct. 28, 2022), the Court held that the doctrine did not require the dismissal of the Plaintiff's claims against certain third-party attorneys involved in the underlying foreclosure action. In that case, Hansen had loaned money to a coworker so that he could purchase, develop and resell a property. The loan was secured by an interest in the property pursuant to a security agreement. The security agreement, however, was never recorded. The co-worker later obtained another mortgage loan on the property from his wife, which was recorded. The co-worker defaulted on the loans and because his spouse's notes were recorded, the state court found they were superior to Hansen's note, allowed the spouse to foreclose and eliminated Hansen's interest in the property. While her appeal of the state court judgment was pending, Hanson brought suit in federal court against the co-worker, his spouse, the co-worker's company, and their attorneys. Her claims included fraud in the enforcement of a mortgage, fraud upon the court, violation of New York State Judiciary Law § 487, and negligence. The district court dismissed the complaint against the parties to the foreclosure action on the basis of forum non conveiens and against the attorney defendants based on the Rooker-Feldman doctrine and the doctrines of res judicata and collateral estoppel. Hansen appealed dismissal of her claims against the attorney defendants.
The Second Circuit held that the Rooker-Feldman doctrine did not deprive the district court of jurisdiction over Hansen's damages claims against the attorney defendants while restating the rule that the doctrine prohibits claims that “essentially amount to appeals of state court judgments.” Id. at *2 (quoting Vossbrink v. Accredited Home Lenders, Inc., 773 F.3d 423, 426 (2d Cir. 2014)). It stated that the doctrine does not preclude suits against non-parties to the state court action for their alleged misconduct during the course of a state court proceeding. Id. at *3. For this reason, Hansen's claims against the attorney defendants could be considered independently from the merits of the foreclosure judgment, as her complaint against them was not aimed at injuries caused by the state court judgment itself, but rather, sought money damages for injuries caused by the attorney defendants' alleged misconduct. Id.
Nicholson argues that the Rooker-Feldman doctrine does not apply here principally because she is not a state court loser, pointing to the fact that she succeeded in invalidating the BNYM Deed. However, she lost other aspects of her case, and it is those aspects of her case that are driving the instant litigation. She asks this Court to set aside the judgment of the Texas state court because she disagrees with its decision to strike Nationstar and the Harvey Law Group from the action and its failure to award her quiet title, among other complaints about the outcome of that action. Thus, she is a state court loser for the purposes of applying the Rooker-Feldman doctrine to this action.
Plaintiff also complains of injury from the state court judgment. Specifically, she complains she was not awarded full relief insofar as she did not win quiet title or succeed in obtaining an order precluding enforcement of the debt she owes.
Next, it is crystal clear that Plaintiff is asking this court to review and set aside the judgment of the Texas court. She has attached various filings and transcripts from the Texas Action and included detailed arguments in the SAC and proposed TAC as to why she believes the Texas court erred, making essentially the same arguments she made to the Texas courts. In other words, the claims in this action are inextricably intertwined with that action and are functionally an appeal of the Texas court judgment. See Niles v. Wilshire Inv. Group, LLC, 859 F.Supp.2d 308, 334-335 (E.D.N.Y. 2012); Estate of Keys v. Union Planters Bank, N.A., 578 F.Supp.2d 629 (S.D.N.Y. 2008); Drew v. Chase Manhattan Bank, N.A., 1998 U.S. Dist. LEXIS 11616, at *12-17 (S.D.N.Y. July 28, 1998).
Lastly, the judgment in the Texas action was rendered before this case was initiated. Thus, the Rooker-Feldman doctrine bars the court from adjudicating the claim.
Plaintiff attempts to escape application of Rooker-Feldman doctrine by using the word “fraud” throughout the SAC and proposed TAC - contending that BNYM, its attorneys, Nationstar and even the Texas judges engaged in fraud. But Plaintiff also asserted fraud in the Texas Action against the parties in that action. The only difference here is that she now accuses the judges of fraud based on her disagreement with the outcome of the case. While it is true that fraud on the court could potentially be a basis to bring an independent claim against nonparties to the underlying state action, see Nelsen, supra, this case does not involve claims of fraud against non-parties to the Texas Action. And, alleged fraud on the court is generally not a basis for an independent action when the alleged fraud was raised and argued in the earlier action or to escape application of the Rooker-Feldman doctrine here. See Vossbrinck v. Accredited Home Lenders, Inc., 773 F.3d 423 (2d Cir. 2014); Graham v. Select Portfolio Servicing, Inc., 156 F.Supp.3d 491 (S.D.N.Y. 2016); Buckskin Realty, Inc. v. Windmont Homeowners Ass'n (In re Buckskin Realty, Inc.), Nos. 1-13-40083-nhl, 15-01004, 2016 Bankr. LEXIS 3458, at *15 (Bankr. E.D.N.Y. Sep. 23, 2016); Gunn v. AMBAC Assur. Corp., 2012 U.S. Dist. LEXIS 110652 (S.D.N.Y. Aug. 6, 2012); Miller v. Shelton, 2006 WL 753187 (W.D.N.Y. Mar. 20, 2006).
Harris Trust and Sav. Bank v. Ellis, 810 F.2d 700 (7th Cir. 1987), cited by Plaintiff, does not hold otherwise. 810 F.2d 700 (only the rendering court may set aside a judgment based on fraud, at least so long as the fraud, at least so long as the fraud did not either vitiate the jurisdiction of the rendering court; discussing Rule 60(b)(3) and noting that party must return to rendering court when alleging a judgment must be set aside for fraud).
Plaintiff appears to be under the impression that Rule 60(b) provides a new way to relitigate issues resolved in the Texas Action. That is not so. Gleason v. Jandrucko, 860 F.2d 556 (2d Cir. 1988), which is cited by Plaintiff, does not assist her. In that case, the court clarified that fraud on the court is “limited to fraud which seriously affects the integrity of the normal process of adjudication.” Id. at 559. Citing to the Supreme Court's decision in Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944), the Second Circuit explained that in the case of a judgment obtained with the aid of a witness who may have committed perjury the judgment is still subject to the rule of finality. Id. Where a litigant had an opportunity to litigate the issue of fraud and challenge allegedly fraudulent submissions, a Rule 60(b) action premised on fraud is not appropriate. Id. In other words, “the credibility and veracity of a witness at issue in an original proceeding cannot be later challenged by way of an independent action” for fraud on the court. Id. The other cases she cites to support her bid to set aside the judgment in the Texas action because of fraud are also distinguishable or unhelpful. See Eastern Financing Corp. v. JSC Alchevsk Iron and Steel Works, 258 F.R.D. 76 (S.D.N.Y. 2008) (setting aside default judgment in contract action where plaintiff's counsel represented plaintiff was party to a contract with defendant when it was not in fact a party; losing party did not participate in earlier action because of misconduct by plaintiff, allowing plaintiff to secure improper default); Campaniello Imports, Ltd. v. Saporiti Italia S.p.A., 117 F.3d 655 (2d Cir. 1997) (affirming denial of request to rescind dismissal of prior action on ground of fraud; settlement of prior action allegedly induced by fraudulent representations; plaintiff failed to plead fraud with particularity; appellants failed to raise a recognized ground for the extraordinary equitable relief of an independent action after the stipulated time for legal relief under Rule 60); Miller, 2006 WL 753187 (plaintiff denied relief under Rule 60(b) after alleging defendant submitted fraudulent and forged evidence during a trial; recognizing that where alleged forged document was introduced at trial and subject to cross examination, fraud claim was without merit because it could have been exposed at trial).
In sum, the Rooker-Feldman doctrine bars consideration of this action as set forth in the SAC and the proposed TAC.
III. Res Judicata
Even if the Rooker-Feldman doctrine did not bar some or all of the claims in this action, the doctrine of res judicata bars Plaintiff's claims. Res judicata, or claim preclusion, bars a court from hearing a suit when a previous action involving claims that could have been or actually were raised by a plaintiff resulted in a prior adjudication on the merits.
“A federal court must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered.” Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984). Texas's claim preclusion law requires “(1) a prior final judgment on the merits by a court of competent jurisdiction; (2) identity of parties or those in privity with them; and (3) a second action based on the same claims as were raised or could have been raised in the first action.” Norris v. Hearst Trust, 500 F.3d 454, 460-61 (5th Cir. 2007) (citing Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996)). If all three elements are satisfied, claims that have been finally adjudicated, or claims that arise out of the same occurrence and that could have been litigated, are precluded by res judicata. Amstadt, 919 S.W.2d at 652. See also Sims v. City of Madisonville, 894 F.3d 632, 644 (5th Cir. 2018) (recognizing that actions arising out the same transaction or occurrence that could have been but were not brought in state court were barred by res judicata); Eubanks v. FDIC, 977 F.2d 166, 177 (5th Cir. 1992) (recognizing that under Texas law, the particular legal theories advanced in the first and second lawsuits do not need to be identical for res judicata to apply).
In this case, the Texas Action against BNYM was adjudicated on the merits and involved substantially the same facts and allegations as alleged in this case. Further, the Texas court was a court of competent jurisdiction to resolve the claims surrounding the foreclosure on Plaintiff's home. Finally, Plaintiff and BNYM were both parties to the Texas Action. Thus, res judicata bars Plaintiff's claims as stated in the SAC and the proposed TAC. See Searcy v. CitiMortgage,Inc., 2019 WL 935587, at *5-8 (N.D. Tex. Feb. 26, 2019) (granting defendant's motion for judgment on the pleadings on the basis of res judicata); Mason v. Wells Fargo Bank, N.A., 2016 WL 7664305, at *3 (E.D. Tex. Dec. 13, 2016), report and recommendation adopted, 2017 WL 67943 (E.D. Tex. Jan. 6, 2017) (granting 12(b)(6) motion to dismiss on the basis of res judicata); Wade v. Household Fin. Corp. III, 2016 WL 540814, at *3 (W.D. Tex. Feb. 9, 2016) (granting motion to dismiss on res judicata grounds); Millard v. Bank of N.Y. Mellon Tr. Co., 2013 WL 12120415, at *2-4 (W.D. Tex. Jan. 30, 2013) (granting motion for judgment on the pleadings on the basis of res judicata). Indeed, a comparison of the allegations in this action to the arguments raised in the Texas Action leaves no doubt that Plaintiff seeks to relitigate matters that were or could have been raised in the Texas Action and that she has turned to this Court only because she has been barred from continuing to relitigate claims she lost in Texas due to being deemed a vexatious litigant. Insofar as the doctrine of res judicate seeks to “bring an end to litigation [and] prevent vexatious litigation,” among other goals, its application here is manifest. Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430, 449 (Tex. 2007) (citing Barr v.Resol. Tr. Corp. ex rel. Sunbelt Fed. Sav., 837 S.W.2d 627, 629 (Tex. 1992)).
Given the bases for dismissal of the SAC and rejection of the motion to amend set forth above, I do not reach the other arguments in the parties' briefs.
CONCLUSION
Because the Rooker-Feldman doctrine and res judicata bar the claims as stated in the SAC and the proposed TAC, the motion to dismiss should be granted and the motion to amend should be denied as futile. At this juncture, I also recommend that this action be dismissed with prejudice, as Plaintiff has had multiple opportunities to amend her complaint and a generous reading of the complaint does not indicate a possible basis to save jurisdiction or state a claim. See Palompelli v. Smith, 2022 WL 624421, at *6 (S.D.N.Y. 2022); Dash v. Mayers, 2020 WL 1946303, at *9 (Apr. 23, 2020), report and recommendation adopted, 2020 WL 3056133 (S.D.N.Y. June 9, 2020); Ausenbaugh v. Bank of New York Mellon, 2013 WL 4729505 at *3 (S.D.N.Y. Sept. 3, 2013).
NOTICE
The parties shall have fourteen days, from service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. See also Fed.R.Civ.P. 6(a), (d) (adding three additional days only when service is made under Fed.R.Civ.P. 5(b)(2)(C) (mail), (D) (leaving with the clerk), or (F) (other means consented to by the parties)). A party may respond to another party's objections after being served with a copy. Fed.R.Civ.P. 72(b)(2).
The parties shall have fourteen days to serve and file any response. Any objections and any responses to such objections shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Paul G. Gardephe at the United States Courthouse, 40 Foley Square, New York, New York 10007, and served on the other parties. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Gardephe. The failure to file timely objections shall result in a waiver of those objections for purposes of appeal. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).