United States District Court, N.D. Illinois, Eastern Division
GUILLERMO R. MEDRANO, Plaintiff,
OCWEN LOAN SERVICING, LLC, BAYVIEW LOAN SERVICING, LLC, MRF ILLINOIS, ONE LLC, and BAYVIEW ASSET MANAGEMENT LLC, Defendants.
MEMORANDUM OPINION AND ORDER
D. Leinenweber, United States District Court Judge
the Court are the Defendants' Motions to Dismiss [ECF
Nos. 44 and 46]. For the reasons stated herein, the Court
grants the Motions and dismisses Medrano's Complaint with
Guillermo Medrano (“Medrano”) filed this lawsuit
in early 2016, complaining of conduct that took place after
the Defendants in this case brought a mortgage foreclosure
suit against him in the Circuit Court of Cook County.
According to Medrano, the Defendants - Bayview Asset
Management, LLC (“BAM”), its wholly-owned
subsidiary, Bayview Loan Servicing, LLC
(“Bayview”), MRF Illinois One, LLC, Ocwen
Financial Corporation (“Ocwen Financial”), and
its wholly-owned subsidiary, Ocwen Loan Servicing, LLC
(“Ocwen”) - engaged in a series of
“fraudulent assignments” of Medrano's
mortgage loan. See, ECF No. 30 (Am. Compl.)
¶¶ 37-68, 95-97, 108, and 121. They also charged
him “bogus” property inspection fees while he was
in default. Id. ¶¶ 51, 54, 65-68, 95, 109,
121, and 133-34. To benefit from their alleged fraudulent
assignments and assessment of fees, the Defendants refused to
“properly review and approve Plaintiff for a loan
modification.” Id. ¶¶ 67-70.
Instead, they foreclosed on and sold Medrano's mortgaged
contends that the Defendants' conduct runs afoul of both
federal and state law. In particular, he alleges that the
Defendants violated the Racketeer Influence and Corruption
Organizations Act (“RICO”) by fraudulently
assigning his loan and charging him fees; that Ocwen violated
the Real Estate Settlement Procedures Act
(“RESPA”) by obtaining a foreclosure judgment
against him while he was being reviewed for a loan
modification; and that Ocwen and Bayview discriminated
against him, a Hispanic, by failing to review his application
for a loan modification, thus violating the Equal Credit
Opportunity Act (“ECOA”). Medrano also brings two
causes of action predicated on state law.
bottom, the gravamen of Medrano's Complaint is that the
Defendants “fraudulently procured a foreclose
[sic] judgment” against him. Am. Compl.
¶¶ 65, 67. Medrano's alleged injuries stem from
this foreclosure and the subsequent sale of his home pursuant
to the judgment. For example, Medrano complains that he has
been harmed “because he has to incur attorney fees to
defend the Foreclosure, his home has been sold, and he has
had the fees assessed to his account based on the
Defendants['] scheme to defraud and he has loss
[sic] equity in his home.” Id. ¶
is at least correct in stating that the Defendants obtained a
foreclosure judgment against him. On November 24, 2014 - more
than a year before Medrano filed his current lawsuit - the
Circuit Court entered a default judgment of foreclosure and
sale in Medrano's case. See, ECF No. 17, Ex. A
(“Foreclosure Judgment”). The court characterized
its judgment as “fully dispositive of the interest of
all defendants, ” including Medrano, and found that the
creditors, Defendants in this case, were owed $199, 188.67.
Id. ¶ 2. In accordance with the Circuit
Court's order, the mortgaged property was then sold to
satisfy the debt. On October 28, 2016, while the case before
this Court was pending, the Circuit Court entered a final
order confirming the sale and approving of the distribution
of the proceeds. See, ECF No. 67, Ex. A
(“Order Confirming Sale”).
neither contested the Foreclosure Judgment nor appealed the
Order Confirming Sale. Instead, he complains of the actions
of the parties involved in his mortgage foreclosure by
bringing this federal suit.
discussed below, the Court questions whether it has subject
matter jurisdiction over Medrano's suit given the
jurisdictional limitation imposed by Rooker-Feldman.
Although the Court ultimately concludes that it has
jurisdiction, it finds that Medrano's federal claims are
barred by res judicata as a result of the judgment
rendered against him in the state foreclosure case. It
therefore relinquishes jurisdiction over his state-law claims
and dismisses the case in its entirety. See, Groce v. Eli
Lilly & Co., 193 F.3d 496, 501 (7th Cir. 1999).
Rooker-Feldman applies to a claim, district and
federal appellate courts are divested of their power to
address any issue related to that claim, including res
judicata. See, Garry v. Geils, 82 F.3d 1362,
1365 (7th Cir. 1996). The Court thus first looks to see if
Rooker-Feldman bars it from hearing Medrano's
put, Rooker-Feldman precludes lower federal courts
from deciding claims that seek review of state-court
judgments. See, e.g., Brown v. Bowman, 668 F.3d 437,
442 (7th Cir. 2012). As the Supreme Court said in the cases
from which the doctrine derived its name, the United States
Supreme Court is the only federal court that may review such
judgments. See, Rooker v. Fid. Tr. Co., 263 U.S.
413, 415-16 (1923); D.C. Court of Appeals v.
Feldman, 460 U.S. 462, 482 n.16 (1983). However, as the
Supreme Court has also explained, Rooker-Feldman is
a narrow doctrine. See, Exxon Mobil Corp. v. Saudi Basic
Indus. Corp., 544 U.S. 280, 284 (2005). It strips lower
federal courts of their jurisdiction only where
“state-court losers” bring suits
“complaining of injuries caused by state-court
judgments rendered before the district court proceedings
commenced.” Id. Moreover, the
“state-court losers” must be “inviting
district court review and rejection of those [state-court]
judgments” in their federal suits. Id.
invitations are extended both when a plaintiff seeks to set
aside a state-court judgment and when his claims are
“inextricably intertwined” with that judgment.
See, e.g., Brown, 668 F.3d at 442.
“The determination of whether a federal claim is
‘inextricably intertwined' hinges on whether it
alleges that the supposed injury was caused by the state
court judgment or, alternatively, whether the federal claim
alleges an independent prior injury that the state court
failed to remedy.” Id. Moreover, the plaintiff
must have had a reasonable opportunity to raise the issue in
state-court proceedings. See, id.; Long v.
Shorebank Dev. Corp.,182 F.3d 548, 557-58 (7th Cir.