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Love v. Southlaw, P.C.

United States District Court, D. Kansas

March 3, 2017

Miekel Love, Plaintiff,
v.
Southlaw, P.C., et al ., Defendants.

          MEMORANDUM AND ORDER

          J. Thomas Marten United States District Court Judge

         According to her Complaint, plaintiff Miekel Love fell behind on her residential mortgage payments. The loan holder, MidFirst Bank, obtained a judgment on the property, which was sold at a sheriff's sale on January 26, 2016. Love now sues MidFirst and its servicing agent, Midland Mortgage Company, as well as its property manager, Safeguard Properties Management, for conversion, contending that they converted her interest in the residence by assuming control of the property. She contends she had not vacated the residence, as defendants assumed, but “was suffering from severe depression and spending extended periods of time at the home of a friend, ” and that she “checked on the condition of her home periodically.” (Dkt. 1, ¶ 20).[1] Love has also sued SouthLaw, the law firm which brought the foreclosure, under the Fair Debt Collections Practices Act (FDCPA), as well as its process server, Aristocrat Investigations.

         Both Aristocrat Investigations (Dkt. 9) and Southlaw (Dkt. 27) moved to dismiss the action, arguing that they were not “debt collectors” within the meaning of the FDCPA. In addition, Southlaw argued that Love's claim was precluded under the Rooker-Feldman doctrine. See Rooker v. Fidelity Trust, 263 U.S. 413 (1923). That doctrine bars federal courts from exercising jurisdiction over claims “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 (2005).

         Subsequently, Love filed an Amended Complaint (Dkt. 32), as well as a response to Aristocrat's motion to dismiss. (Dkt. 33). In the foreclosure action, Aristocrat reported that it had been unable to serve Love at the residence, and that the person living at the residence reported he did not know Love. The Amended Complaint contends that Aristocrat's report was wrong, and it should have conducted a diligent inquiry in trying to find her. She also alleges that she had kept some personal property at the residence. She alleges that Southlaw then used Aristocrat's false report to justify service of the foreclosure by publication.

         Aristocrat then filed a renewed motion to dismiss (Dkt. 36), while Southlaw moved to dismiss the Amended Complaint under Fed.R.Civ.Pr. 15(a)(1)(B). Both parties repeated their earlier contention that they were not acting to collect a debt within the meaning of the FDCPA, and both argued that the court has no jurisdiction to entertain the action under the Rooker-Feldman doctrine. Ultimately Love filed a separate motion (Dkt. 49) seeking leave to filed a proposed Amended Complaint.

         The court finds that plaintiff's claims are inextricably intertwined with the validity of the underlying state court judgment, and that the Rooker-Feldman doctrine bars the present action against Aristocrat and Southlaw. For purposes of the doctrine, “[a] claim is inextricably intertwined if the state-court judgment caused, actually and proximately, the injury for which the federal court plaintiff seeks redress.” Tal v. Hogan, 453 F.3d 1244, 1256 (10th Cir.2006) cert. denied, 549 U.S. 1209 (2007).

         Both defendants cite the Tenth Circuit's decision in Crutchfield v. Countrywide Home Loans & Mortg. Elec. Registration Sys., 389 F.3d 1144 (10th Cir. 2004), and the court finds that the case strongly supports dismissal of the present FDCPA action.

         In Crutchfield, the plaintiff brought an action under the Truth in Lending Act (TILA) seeking to rescind his assumption of a mortgage following the mortgagor's death. The district court granted summary judgment to the defendants, finding in part no evidence of a consumer credit transaction which would provide a basis for recission. The Tenth Circuit did not reach the merits of the matter in the subsequent appeal, agreeing with the defendants that in any event such an action was precluded by Rooker-Feldman doctrine. The court observed:

To determine whether a federal plaintiff's claim is inextricably intertwined with a state court judgment we must pay close attention to the relief the plaintiff seeks. See Kenmen Eng'g v. City of Union, 314 F.3d 468, 476 (10th Cir.2002). While a litigant may be able to make a federal claim appear unrelated to a state court judgment through artful pleading, the requested relief can quickly reveal whether Rooker-Feldman applies. Where a plaintiff seeks a remedy that would “disrupt or undo” a state court judgment, the federal claim is inextricably intertwined with the state court judgment.

389 F.3d at 1147-48. Rooker-Feldman barred the plaintiff's claim, the court explained, to the extent that it rested on the argument that plaintiff had not received the required notice under state law:

Mr. Crutchfield appeals the district court's ruling that notice in the state court foreclosure action was proper. Rooker-Feldman bars our subject matter jurisdiction to entertain this argument. The District Court for Oklahoma County held that Mr. Crutchfield was personally served with a summons in the manner required by law and that the court “approves the service as meeting the statutory requirements.” In response to the Defendants' first motion for summary judgment in federal court, Mr. Crutchfield contended that the state court's holding was contrary to Oklahoma's notice statute. This was, in substance, a request that the federal district court overturn the judgment of the state court, which the federal court may not do. When a state court actually decides an issue, Rooker-Feldman prevents federal courts from hearing an appeal of that claim. Rooker, 263 U.S. at 415-16, 44 S.Ct. 149. Allowing parallel litigation on the same point of law would invite chicanery from litigants.

Id. at 478 (record citation omitted). The conclusion was no different as to the plaintiff's contention that he had a right to recision of the mortgage under federal law, even though the matter was not explicitly addressed in the judgment.

Unlike the adequacy of notice, the state court did not actually decide whether Mr. Crutchfield had a right to rescission under TILA. Consequently, we must determine whether that claim is inextricably intertwined with the state court judgment. The effect of the state court judgment was to foreclose the mortgage on the home that Mr. Crutchfield inherited from his mother. If he were to receive his requested relief, the district court would issue a declaratory judgment that he had validly rescinded the mortgage and thus removed the lien on the property. Mr. Crutchfield is thus asking a federal court to do precisely what Rooker-Feldman prohibits: to undo the effect of the state court judgment. He tells us as much when he characterizes the ...

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