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Gonzalez v. Bank of America, N.A.

United States District Court, Seventh Circuit

January 2, 2014



JOAN H. LEFKOW, District Judge.

Plaintiff Arnulfo R. Gonzalez filed a four-count pro se complaint against Bank of America, N.A. ("Bank of America")[1] and Mortgage Electronic Registration Systems, Inc. ("MERS") (collectively, "defendants")[2] seeking damages arising from alleged violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq. (Count I); void assignment of mortgage in violation of the Fourteenth Amendment (Count II); lack of authority to assign mortgage (Count III); and, against Bank of America only, violation of the Illinois Mortgage Foreclosure Law, 735 Ill. Comp. Stat. 5/15-1101 et seq., and related state court rules (Count IV). Defendants have moved to dismiss the complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Dkt. #14.) For the following reasons, the motion will be granted.[3]


On January 13, 2006, Gonzalez obtained a home loan from Countrywide Home Loans, Inc. ("Countrywide"), secured by a mortgage on real estate located at 14328 Karlov Avenue, Midlothian, Illinois ("the property"). (Def. Ex. 6.) On November 18, 2009, MERS, acting as nominee for Countrywide, assigned the mortgage to BAC Home Loans Servicing, LP f/k/a Countrywide Home Loans Servicing, LP ("BAC"). (Compl. Ex. A.) BAC serviced the loan and is Bank of America's predecessor by merger.

On November 25, 2009, BAC filed a foreclosure action in the Circuit Court of Cook County, Chancery Division. (Def. Ex. 5.) On June 21, 2010, BAC obtained a judgment of foreclosure and sale. (Def. Ex. 1.) On October 18, 2011, BAC obtained an order approving the foreclosure report of sale and an order for possession of the deed. (Def. Ex. 2.) On August 17, 2012, Gonzalez filed a motion to quash service, which the Circuit Court denied on October 2, 2012. (Def. Exs. 3, 4.) Gonzalez did not appeal. ( See Def. Ex. 5.) Instead, on May 9, 2013, he filed the instant complaint. Defendants now move to dismiss the complaint under Rules 12(b)(1) and 12(b)(6), arguing that the court lacks subject matter jurisdiction under the Rooker-Feldman doctrine and the complaint fails to state a claim upon which relief may be granted.


Federal Rule of Civil Procedure 12(b)(1) provides that a case will be dismissed if the court lacks the authority to hear and decide the dispute. Fed.R.Civ.P. 12(b)(1). If subject matter jurisdiction is not evident from the face of the complaint, the court analyzes the motion to dismiss under Rule 12(b)(1) as any other motion to dismiss. United Phosphorous, Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir. 2003) (en banc) overruled on other grounds by Minn-Chem, Inc. v. Agrium Inc., 683 F.3d 845 (7th Cir. 2012). Where, as here, "the complaint is formally sufficient but the contention is that there is in fact no subject matter jurisdiction, the movant may use affidavits and other materials to support the motion." Id. (emphasis in original); see also Long v. Shorebank Dev. Corp., 182 F.3d 548, 554 (7th Cir. 1999). The court may weigh the evidence to determine whether jurisdiction has been established. United Phosphorous, Ltd., 322 F.3d at 946. Although pro se complaints are liberally construed, Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007), Estelle v. Gamble, 429 U.S. 97, 106, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976), the plaintiff bears the burden of establishing the basis for the court's jurisdiction. United Phosphorous, Ltd., 322 F.3d at 946.

Under Rule 8(a), the complaint must provide a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). To survive a Rule 12(b)(6) motion, the complaint must not only provide the defendant with fair notice of a claim's basis but must also establish that the requested relief is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); see also Bell Atl. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The allegations in the complaint must be "enough to raise a right of relief above the speculative level." Twombly, 550 U.S. at 555. At the same time, the plaintiff need not plead legal theories. Hatmaker v. Mem'l Med. Ctr., 619 F.3d 741, 743 (7th Cir. 2010). Rather, it is the facts that count.


Defendants first argue that the court lacks subject matter jurisdiction over Gonzalez's claims under the Rooker-Feldman doctrine, a doctrine derived from the United States Supreme Court's decisions in Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed.2d 362 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983). This doctrine stands for the principle that only the United States Supreme Court has appellate jurisdiction to reverse or modify a state court judgment. Holt v. Lake Cnty. Bd. of Comm'rs, 408 F.3d 335, 336 (7th Cir. 2005). The doctrine precludes federal jurisdiction where "the complained of injury resulted from a state court judgment, " Sanchez v. Onewest Bank, FSB, No. 11 CV 6820, 2013 WL 139870, at *2 (N.D. Ill. Jan. 10, 2013), and where the federal law suit is "inextricably intertwined" with a state court decision "such that success in the federal court would require overturning the state court decision[.]" Epps v. Creditnet, Inc., 320 F.3d 756, 759 (7th Cir. 2003).[5] "The Rooker-Feldman doctrine asks: is the federal plaintiff seeking to set aside a state judgment, or does he present 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? If the former, then the district court lacks jurisdiction; if the latter, then there is jurisdiction and state law determines whether the defendant prevails under principles of preclusion." GASH Assocs. v. Vill. of Rosemont, Ill., 995 F.2d 726, 728 (7th Cir. 1993).

I. The Rooker-Feldman doctrine does not deprive the court of jurisdiction over the FDCPA claim

Count I alleges various violations of the FDCPA, which prohibits "debt collectors" from harassing creditors or using false representations or unfair conduct to collect a debt. See 15 U.S.C. § 1692d (prohibiting harassing, oppressive, or abusive conduct); § 1692e (prohibiting false, deceptive, or misleading representations); § 1692f (prohibiting unfair or unconscionable debt collection practices). Gonzalez alleges that defendants violated the FDCPA by "[d]esigning and implementing a purposeful scheme to obtain additional amounts from distressed borrowers on the false promise and/or misleading representation that completion of trial period payments would result in [a] permanent [loan] modification... when Defendants had no intention of actually... honor[ing] any such final modification[.]" (Compl. Count I.)

This is not an attack on the state court judgment because damages could be awarded under the FDCPA without disturbing the judgment of foreclosure. See Ruffino v. Bank of Am., N.A., No. 13 C 50124, 2013 WL 5519456, at *3 (N.D. Ill. Oct. 3, 2013) ( Rooker-Feldman doctrine does not preclude consideration of FDCPA claim); accord Hochstetler v. Fed. Home Loan Mortgage Corp., No. 12 CV 772, 2013 WL 3756502, at *4 (N.D. Ind. July 16, 2013); Brooks v. Flagstar Bank, FSB, No. 11-CV-67, 2011 WL 2710026, at *4 (E.D. La. July 12, 2011) ("[W]hen the FDCPA plaintiff is not challenging the validity of the debt, but rather the collection practices of the creditor, the FDCPA claim is independent from the state court collection action and the federal court has subject matter jurisdiction over that FDCPA claim.") (internal quotation marks and citation omitted) (collecting cases); but see Byrd v. Homecomings Fin. Network, 407 F.Supp.2d 937, 943-44 (N.D. Ill. 2005) ( Rooker-Feldman barred FDCPA and other consumer protection claims). As such, the court has jurisdiction over the federal claim.

II. Gonzalez fails to adequately plead a claim under the FDCPA

A review of the complaint demonstrates that it does not adhere to pleading requirements set out in Twombly and Iqbal, even in light of the more forgiving review given a pro se pleading. See Erickson, 551 U.S. at 94; Estelle, 429 U.S. at 106. Count I is not plausible on its face. This count hinges on some type of loan modification program that defendants allegedly designed and implemented as part of a scheme to obtain money from distressed borrowers. (Compl. ¶ 8A.)[6] Gonzalez alleges that defendants' actions violated six separate provisions of the FDCPA. He alleges no specific facts, however, supporting any alleged violation. It is unclear from the complaint whether Gonzalez requested a loan modification or was eligible for one, whether defendants agreed to modify his loan or approve a trial period plan, whether Gonzalez made payments towards such a plan, and what was false, harassing, deceptive, or unfair about this process as it specifically relates to Gonzalez. Moreover, because MERS did not service Gonzalez's loan, there is no apparent basis to allege that MERS violated the FDCPA. The conclusional facts contained in the complaint fail to provide fair notice of what Gonzalez believes defendants did wrong. Thus, unless Gonzalez can allege that Bank of America or its predecessor BAC acted or failed to act on specific occasions in a specific manner in violation of a specific provision of the FDCPA, Gonzalez's federal claim must fail. At the least, any claim against MERS is entirely implausible.[7]

III. The Rooker-Feldman doctrine deprives this court of jurisdiction over the remaining claims against Bank of America and MERS

Gonzalez's remaining claims must be dismissed for lack of jurisdiction because of the Rooker-Feldman doctrine. In the first place, Gonzalez's allegations that the assignment of the mortgage to Bank of America is void and that its filing the law suit was based on a fraudulent affidavit, merely assert defenses to the foreclosure, not independent causes of action. Even if they were independent causes of action, because the alleged injury resulted from the foreclosure judgment, this court lacks jurisdiction to adjudicate them.

Count II alleges that, because MERS acted as Countrywide's nominee, MERS did not have authority to assign Gonzalez's mortgage to BAC, violating Gonzalez's Fourteenth Amendment rights.[8] Gonzalez requests "a Quiet Title Judgment determining that [he is] the owner of the property and that the Defendant has no rights, title, estate lien or interest in the property." (Compl. Count II.) These allegations directly challenge the state court judgment by suggesting that the mortgage and note upon which it relied were invalid. The claim is therefore barred by Rooker-Feldman. See Fogarty St., Ltd. v. Mortgage Elec. Registration Sys., No. 3:12-CV-412 RLM, 2012 WL 5831163, at *3 (N.D. Ind. Nov. 14, 2012) ( Rooker-Feldman bars claims for fraud in the foreclosure proceedings where plaintiffs "haven't identified any injury separate from the foreclosure judgment... [and] their prayer for relief is to retain possession and regain title to the foreclosed property").

Count III rests on facts similar to those alleged in Count II, that MERS had "no legal authority" to assign the mortgage to BAC and that "MERS is contractually prohibited from exercising any rights in a foreclosure case without the authorization of the lender, and... [t]here is no evidence of any such authorization in the instant case." (Compl. Count III.) As such, Gonzalez alleges that BAC lacked standing to initiate foreclosure proceedings against him. ( Id. ) Unlike Count II, which requests a quiet title determination, Count III seeks damages. The Rooker-Feldman doctrine still applies, however. Cf. Nora v. Residential Funding Co., LLC, ___ F.Appx. ___, 2013 WL 6171046, at *2 (7th Cir. Nov. 26, 2013) ("[A] request for review of a state-court foreclosure decision that includes a claim for damages based on charges of defrauding the state court does not elude Rooker-Feldman. "). The allegations in Count III directly challenge BAC's standing to initiate foreclosure proceedings against Gonzalez and, as such, they are barred under Rooker-Feldman.

The same conclusion applies to Count IV, which alleges that that Bank of America violated the Illinois Mortgage Foreclosure Law and related state court rules by, for example, failing to file the foreclosure complaint under oath and obtaining a fraudulent prove-up affidavit in support its motion for summary judgment. (Compl. Count IV). Gonzalez was aware of the facts supporting Counts II, III, and IV before the state court entered judgment, and it appears that he had a reasonable opportunity to raise his claims in the prior proceeding. As such, the Rooker-Feldman doctrine deprives the court of subject matter jurisdiction over those claims asserted against Bank of America. See, e.g., Hochstetler, 2013 WL 3756502, at *4 (holding that the Rooker-Feldman doctrine precluded consideration of "claims attacking the validity of the mortgage note" because they were "inextricably intertwined with the [foreclosure] claims brought to the state court below"); accord Green v. Wells Fargo, No. 12 C 6848, 2013 WL 1966567, at *2 (N.D. Ill. May 13, 2013) (collecting cases); Moore v. Chase Home Fin., LLC, No. 06 C 3202, 2007 WL 1119204, at *3 (N.D. Ill. Apr. 11, 2007).

Finally, although MERS was not a party to the foreclosure action (as it had no interest at stake), to the extent it could have been liable for a faulty assignment, its liability would have been to Bank of America, which would have been unable to foreclose because of MERS's wrongdoing. To the extent MERS had any potential liability to Gonzalez due to the assignment, it would have been a necessary party which Gonzalez should have joined to the foreclosure action. Because this law suit is "inextricably intertwined" with a state court decision "such that success in the federal court would require overturning the state court decision, claims against MERS are also barred.

For all of these reasons, this complaint must be dismissed.


Defendants' motion to dismiss (dkt. #14) for lack of jurisdiction is granted as to Counts II, III, and IV. MERS's motion to dismiss Count I is granted with prejudice. Bank of America's motion to dismiss Count I is continued for further hearing and for ruling on January 23, 2014, at 11:00 a.m. Plaintiff must show cause in writing by January 16, 2014, as to why amendment of the complaint would not be futile so as to avoid a dismissal with prejudice. Pierce & Associates, P.C. is dismissed without prejudice because service of process was not made.

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