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Bolden v. Wells Fargo Bank

United States District Court, N.D. Illinois, Eastern Division

November 18, 2014

MARY BOLDEN, Plaintiff,


SARA L. ELLIS, District Judge.

After her property was foreclosed on in state court and her challenges to the foreclosure proceeding there were unsuccessful, Plaintiff Mary Bolden turned to federal court and filed this action disputing the title and ownership of the same property. In this action, she has sued several parties she claims had some involvement with the underlying mortgage and note that was at issue in the state foreclosure proceedings: Wells Fargo Bank, N.A. ("Wells Fargo"); Government National Mortgage Association as Trustee for Securitized Trust Ginnie Mae Remic Trust 2008-40; Ginnie Mae; Mortgage Electronic Registration System ("MERS"); and unnamed Does 1 through 100. MERS, the only Defendant to have appeared in the case, has filed a motion to dismiss Bolden's complaint.[1] Because Bolden's federal claims are time-barred and she has not alleged an independent basis for the Court to consider her state law claims, the Court grants the motion to dismiss [25].


On April 8, 2008, Bolden obtained a $144, 154 mortgage loan from Wells Fargo that was secured by a first mortgage and trust deed on her home at 12156 South Parnell Avenue, Chicago, Illinois (the "Property"). After Bolden allegedly failed to make payments on the loan, Wells Fargo filed a foreclosure action in state court in June 2010. The state trial court entered a judgment of foreclosure and sale on September 13, 2012. The order approving the foreclosure sale and distribution was entered on March 10, 2014. Bolden challenged the foreclosure judgment and sale several times in the state court proceeding, including after the sale was approved.

Meanwhile, Bolden brought this action against Wells Fargo, Ginnie Mae, and MERS on January 21, 2014. The complaint was deemed filed on February 20, 2014, when Bolden paid the filing fee.[3] Bolden alleges that Wells Fargo is the originator of her loan, Ginnie Mae is the trustee and master servicer of the Ginnie Mae Remic Trust 2008-40, and that MERS is the purported beneficiary under the mortgage and trust deed. Her loan was allegedly securitized as part of the Ginnie Mae Remic Trust 2008-40. Bolden contends that the title and ownership of the mortgage and trust deed have been unlawfully sold, assigned, and transferred and thus that the Court should quiet title to the property in Bolden's name. She alleges that the process by which her loan was securitized was improper, so that no Defendant has perfected title or a security interest in her property. Bolden brings ten claims against the Defendants: (1) wrongful foreclosure; (2) fraudulent concealment; (3) fraudulent inducement; (4) intentional infliction of emotional distress; (5) slander of title; (6) quiet title; (7) declaratory relief regarding possession of the property; (8) violation of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et seq. ;[4] (9) violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601 et seq. ; and (10) rescission. She seeks compensatory and punitive damages, in addition to declaratory relief.


A motion to dismiss under Rule 12(b)(1) challenges the Court's subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). The party asserting jurisdiction has the burden of proof. United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir. 2003), overruled on other grounds by Minn-Chem, Inc. v. Agrium, Inc., 683 F.3d 845 (7th Cir. 2012). The standard of review for a Rule 12(b)(1) motion to dismiss depends on the purpose of the motion. Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443-44 (7th Cir. 2009). If a defendant challenges the sufficiency of the allegations regarding subject matter jurisdiction (a facial challenge), the Court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in the plaintiff's favor. See id. ; United Phosphorus, 322 F.3d at 946. If, however, the defendant denies or controverts the truth of the jurisdictional allegations (a factual challenge), the Court may look beyond the pleadings and view any competent proof submitted by the parties to determine if the plaintiff has established jurisdiction by a preponderance of the evidence. See Apex Digital, 572 F.3d at 443-44; Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir. 2006).

A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint, not its merits. Fed.R.Civ.P. 12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion to dismiss, the Court accepts as true all well-pleaded facts in the plaintiff's complaint and draws all reasonable inferences from those facts in the plaintiff's favor. AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). 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 be facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "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." Iqbal, 556 U.S. at 678.


I. Rooker-Feldman Doctrine

MERS first argues that the Court lacks subject matter jurisdiction over Bolden's complaint because her claims are barred under the Rooker-Feldman doctrine. The Rooker-Feldman doctrine precludes federal district courts from exercising jurisdiction over "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." Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005). Rooker-Feldman does not prevent a plaintiff from proceeding in federal court, however, if the plaintiff has filed a federal suit before her state court proceeding has concluded. Parker v. Lyons, 757 F.3d 701, 705-06 (7th Cir. 2014) (" Rooker-Feldman does not bar the claims of federal-court plaintiffs who... file a federal suit when a state-court appeal is pending."); TruServ Corp. v. Flegles, Inc., 419 F.3d 584, 591 (7th Cir. 2005) ("[A]n interlocutory ruling does not evoke the doctrine or preclude federal jurisdiction."). In Illinois, the entry of a judgment of foreclosure is not final; rather, it becomes final and appealable only when the trial court enters an order confirming the sale and directing the distribution. EMC Mortg. Corp. v. Kemp, 982 N.E.2d 152, 154, 2012 IL 113419, 367 Ill.Dec. 474 (2012).

In the underlying foreclosure action, the state trial court entered a judgment of foreclosure on September 13, 2012. But the order approving the foreclosure sale and distribution was entered on March 10, 2014, after Bolden filed this action. Because Bolden filed the present lawsuit before the state court entered the order confirming the foreclosure sale, Rooker-Feldman does not apply.[5] Vazquez v. J.P. Morgan Chase Bank, N.A., No. 13-CV-04749, 2014 WL 4414505, at *4 (N.D. Ill. Sept. 8, 2014) ( Rooker-Feldman doctrine did not apply where plaintiff filed complaint after order of foreclosure but before entry of order approving sale of property); Garavito v. SunTrust Mortg., Inc., No. 11 C 6056, 2013 WL 856127, at *4-5 (N.D. Ill. Mar. 6, 2013) ( Rooker-Feldman did not apply even though judgment of foreclosure had been entered in state court proceeding because Seventh Circuit has held that "an interlocutory ruling does not evoke the doctrine or preclude federal jurisdiction" (quoting TruServ Corp., 419 F.3d at 591)).

II. Res Judicata

MERS next argues that if Rooker-Feldman does not divest the Court of jurisdiction, then Bolden's claims are barred by res judicata. See Arnold v. KJD Real Estate, LLC, 752 F.3d 700, 706 (7th Cir. 2014) (even though Rooker-Feldman does not apply, state court judgment may preclude relief by way of claim or issue preclusion). Res judicata is an affirmative defense but may be considered under Rule 12(b)(6) where the plaintiff has through the ...

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