Gunn v. Ambac Assurance Corp.
| Decision Date | 26 June 2012 |
| Docket Number | 11 Civ. 5497 (PAC) (JLC) |
| Parties | LA MAR GUNN, Plaintiff, v. AMBAC ASSURANCE CORPORATION; EQCC HOME EQUITY LOAN TRUST 1998-2 DATED 6.1.98 (CUSIP NO. 268917EN7); and EQCC HOME EQUITY LOAN TRUST 1998-3, DATED 9.1.98 (CUSIP NO. 268917EV9), Defendants. |
| Court | U.S. District Court — Southern District of New York |
REPORT AND RECOMMENDATION
Plaintiff La Mar Gunn, who is proceeding pro se, has brought this action against Ambac Assurance Corporation ("Ambac") and two securitization trusts, EQCC Home Equity Loan Trust 1998-2 dated 6.1.98 (Cusip No.: 268917EN7) and EQCC Home Equity Loan Trust 1998-3 dated 9.1.98 (Cusip No.: 268917EV9) ("the trusts"). Gunn alleges that defendants—as well as the trustee for the trusts, U.S. Bank National Association ("U.S. Bank"), and its servicing agent, Select Portfolio Servicing, Inc. ("SPS")—committed fraud and engaged in racketeering, which led to the foreclosure of his Delaware home. Ambac and SPS, on behalf of the trusts (together, "Defendants"), have each moved to dismiss Gunn's complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. Defendants argue that: (1) this Court lacks subject-matter jurisdiction over the instant action under the Rooker-Feldman doctrine because Delaware state courts have previously litigated and rejected the same claims Gunn now brings in federal court; (2) Gunn's claims are barred by the doctrines of collateral estoppel and res judicata; (3) certain of Gunn's claims are time-barred; and (4) Gunn has failed to state a claim for fraud, racketeering, civil conspiracy, or malicious prosecution. For the reasons that follow, I recommend that Ambac and SPS's motions to dismiss be GRANTED, Gunn's motion to amend DENIED, and the complaint be dismissed with prejudice. Moreover, because dismissal would render moot several additional motions that Gunn has fded, I recommend that Gunn's outstanding motions be DENIED.
The following facts and chronology of events are taken from the complaint as well as court documents from prior state court actions in Delaware. This recitation is provided only to present the information necessary to understand the procedural posture of this case. It is not intended to summarize all of the factual and legal issues before the Delaware state courts in the prior actions because such a presentation is not required to understand the Court's consideration of Defendants' motions to dismiss.
Gunn's claims concern the ownership of the residential property located at 201 Cornwell Drive, Bear, Delaware 19701 (the "Property"), and the proceeding to foreclose on the Property that began in 2002 ("the foreclosure proceeding"). Gunn's involvement with the Property has been discussed extensively by the Delaware state courts in the context of several prior actions including, and arising from, the foreclosure proceeding. As these decisions have noted, the first relevant events occurred in 1997, when the owners of the Property, Leisa and Robert Johnson, took out a first mortgage from EquiCredit Corporation of Delaware ("EquiCredit DE") to secure a note for $235,000. See, e.g., U.S. Bank Nat'l Assoc. v. Johnson, No. 02L-07-075 (FSS), 2010WL 705723, at *1 (Del. Super. Ct. Feb. 25, 2010). In 1998, the Johnsons took out a second mortgage from a different lender. Id. Gunn's claims arise from the first mortgage, on which the Johnsons defaulted in 2001. Id.
According to documents submitted by SPS, EquiCredit DE assigned the first mortgage to EquiCredit Corporation of America ("EquiCredit America") on December 1, 1997, and EquiCredit America in turn assigned the mortgage to U.S. Bank as trustee for EQCC Home Equity Loan Asset Backed Certificates, Series 1998-3 on the same day. (Declaration of Jessica Priselac dated Jan. 20, 2012 ("Priselac Decl.") (Dkt. No. 39), Exhibit ("Ex.") 2 (Dkt. No. 39-2)). The Delaware Superior Court, however, has observed that "[a]ccording to the parties, . . . EquiCredit DE assigned its interest in the mortgage to a securitization trust, with U.S. Bank acting as trustee" on September 30, 2002. 2010 WL 705723, at *1. This latter date is corroborated by a document submitted by Gunn in a subsequent filing with the Court (denominated as a "mandatory judicial notice and request for an evidentiary hearing"), namely a copy of an Assignment of Mortgage from EquiCredit DE to U.S. Bank, which is dated September 30, 2002 and which describes the Property. (.1
Following the Johnsons' default, U.S. Bank commenced a foreclosure proceeding on July 19, 2002, and the Delaware Superior Court entered a default judgment of foreclosure on August 29, 2002. 2010 WL 705723, at *1. After U.S. Bank requested a writ of levari facias to satisfythe default judgment in 2003, the Johnsons filed for bankruptcy under Chapter 13 of the United States Bankruptcy Code, which stayed the pending sheriff's sale of the Property. Id.
On December 16, 2003, despite "[k]nowing the loan was in default and in foreclosure," Gunn purchased the second mortgage and the Property by quitclaim deed, which he recorded on March 4, 2004. Id. He alleges that he thereafter made improvements on the Property, expending more than $200,000. Id.2
In early 2004, the Johnsons' bankruptcy petition under Chapter 13 was dismissed and the stay of the sheriff's sale was lifted. Id. However, in June of 2004, the Johnsons filed for bankruptcy under Chapter 7 of the Bankruptcy Code, which again stayed the sheriff's sale. Id. In October, 2004, after that stay was lifted, U.S. Bank again sought to proceed with the foreclosure and a sheriff's sale again was scheduled. Id. On November 9, 2004, Gunn moved to stay the sheriff's sale, asserting ownership of the Property and arguing that the assignment from EquiCredit DE to U.S. Bank was never recorded so that U.S. Bank did not have standing to bring the foreclosure proceeding. Id. The sale was stayed on December 14, 2004, and the assignment from EquiCredit DE to U.S. Bank was recorded on December 30, 2004. Id.
Beginning in October, 2006 and throughout 2007 and 2008, U.S. Bank continued its efforts to proceed with the foreclosure and sheriff's sale, but the sale did not occur until December 9, 2008 because Gunn continued to challenge U.S. Bank's standing. Id. at *1-2. Gunn moved to set aside the December 9, 2008 sale in January, 2009. Id. at *2. The Superior Court denied Gunn's motion, but permitted him to intervene in the foreclosure proceeding given that he had already participated in the litigation for several years. Id.
Gunn appealed the denial of his motion to set aside the sale, arguing that the Superior Court should have permitted him to take discovery concerning U.S. Bank's standing. Id. The Delaware Supreme Court agreed and remanded the action so that Gunn could conduct further discovery on the standing issue, specifically referring to Gunn's request to depose U.S. Bank. Id. Gunn, however, failed to conduct any discovery, instead choosing to submit additional documentary evidence disputing U.S. Bank's standing to initiate the foreclosure proceeding. Id. at *3.
On February 25, 2010, the Superior Court again found that U.S. Bank was the real party in interest to the foreclosure proceeding and the sheriff's sale was proper. Id. The court acknowledged that EquiCredit DE's assignment of its interest in the first mortgage to the trusts did not occur until after U.S. Bank initiated the foreclosure proceeding, but concluded that "the delay in filing the assignment has been legally insignificant since December 30, 2004[,]" the date the assignment was recorded. Id. It further noted that when Gunn purchased the Property and second mortgage, he "may not have known about the assignment" but Id. The Superior Court's decision was affirmed by the Delaware Supreme Court on June 30, 2010. Gunn v. U.S. Bank Nat'l Ass'n, 998 A.2d 850 (Table), 2010 WL 2606343, at *1 (Del. June 30, 2010).
On November 12, 2010, the Superior Court granted a writ of possession to U.S. Bank. . The Delaware Supreme Court affirmed on May 26, 2011. Gunn v. U.S. Bank Nat'l Assoc., 23 A.3d 865, 2011 WL 2090203, at *1-2 .
On December 27, 2011, Gunn filed a "Motion to Vacate Final Judgment, Void Writ Of Possession And Request An Evidentiary Hearing Based Upon Fraud On The Court" with the Delaware Superior Court. See U.S. Bank Nat. Ass'n v. Johnson, No. 02L-07-075, 2012 WL 1414085, at ¶ 6 (Del. Super. Ct. Mar. 21, 2012). Despite Gunn's insistence that U.S. Bank, "the Plaintiff in the foreclosure[,] did not have standing, and it obtained the foreclosure by fraud on the court[,]" on March 21, 2012, the Superior Court denied the motion and determined that "notwithstanding any problems with the original assignment documents, the paperwork was correct before the sheriff's sale was authorized and, by the time of the sale, the loan was seriously in default." Id. at ¶¶ 6, 9.
In addition to participating in the foreclosure proceeding, Gunn has brought several other collateral actions related to the foreclosure proceeding, which, as noted above, are described only for completeness because the parties make reference to them in the motion papers. On April 13,...
To continue reading
Request your trial