In re Mayeres v. BAC Home Loans
| Decision Date | 21 July 2011 |
| Docket Number | Case No. 10-44816 (MBK),Adv. Proc. No. 11-1516 (MBK) |
| Parties | Re: Valerie Jane Mayeres v. BAC Home Loans |
| Court | U.S. Bankruptcy Court — District of New Jersey |
TRENTON, NEW JERSEY 08608
Hon. Michael B. Kaplan
Karen F. DeSoto, Esq.
35 Journal Square, Suite 491
Attorney for Debtor-Plaintiff, Valerie Jane Mayeres
Stuart I. Seiden, Esq.
Parker McCay P.A.
Three Greentree Centre
7001 Lincoln Drive West
Marlton, NJ 08053
Attorney for Defendant, BAC Home Loans Servicing
Counselors:
This matter is before the Court upon the motion of BAC Home Loans Servicing, fka Countrywide Home Loan Servicing ("BAC", "Defendant", or "Creditor"), to dismiss the adversary complaint filed by Valerie Jane Mayeres ("Plaintiff or "Debtor"). The Court has heard oral arguments and has reviewed the submissions filed in the above referenced matter. The Court issues the following ruling:
I. Jurisdiction
The Court has jurisdiction over this proceeding under 28 U.S.C. §§ 1334(a) and 157(a) and the Standing Order of the United States District Court dated July 10, 1984 referring all bankruptcy cases to the bankruptcy court. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2)(B) and (K). Venue is proper in this Court pursuant to 28 U.S.C. §§1408 and 1409. The following constitutes the Court's findings of fact and conclusions of law as required by Fed. R. Bankr. P. 7052.1
II. Background
On February 23, 2005, Debtor, Valerie Mayeres, executed a Note in favor of Countrywide Home Loans, Inc. ("Countrywide"), in the sum of $140,500.00. To secure repayment of the Note, Debtor executed a Mortgage in favor of Mortgage Electronic Registration Systems, Inc. ("MERS"), as nominee for Countrywide, for property commonly known as 16 Morgan Court, Bedminister, New Jersey. The Mortgage was duly recorded in the Office of the Clerk of Somerset County on March 9, 2005.
The loan at issue is part of a pool of loans held by the Bank of New York Mellon ("BONY"), fka The Bank of New York, as Trustee for the Certificate Holders of CWALT 2005-10CB. Defendant, BAC, is the servicing agent for BONY and has been in physical possession of the original Note and Mortgage since March 30, 2005. Said loan was transferred from MERS to BONY pursuant to a written Assignment of Mortgage executed on January 25, 2010. The Assignment of Mortgage was recorded in the Office of the Clerk of Somerset County on May 3, 2010.
On October 1, 2009, the requisite monthly mortgage payment was not tendered to BAC. This constituted a default under the Note and Mortgage. The Debtor failed to cure said default. As a result, on January 29, 2010, Defendant filed a foreclosure complaint against the Debtor in the Superior Court of New Jersey, Chancery Division, Somerset County. The Debtor filed anAnswer to the foreclosure complaint and discovery was commenced and completed. Thereafter, on October 5, 2010, the Superior Court granted summary judgment affirming the foreclosure.2
On November 8, 2010, Debtor filed a voluntary petition for relief under Chapter 13 of Title 11 of the United States Code. On December 7, 2010, BAC filed an objection to Debtor's Chapter 13 Plan on the ground that Debtor's Chapter 13 Plan failed to provide for full payment of mortgage arrears. On December 8, 2010, BAC filed a Proof of Claim totaling $117,764.53, with additional arrears of $22,507.04.
Thereafter, on March 19, 2011, Debtor instituted this adversary complaint (the "Complaint") seeking to invalidate Defendant's mortgage lien due to fraud and to have Defendant's Proof of Claim expunged. Specifically, Plaintiff's Complaint alleges two counts. First, Plaintiff argues that Defendant's Proof of Claim must be expunged and its lien invalidated because it relies upon fraudulent mortgage documents. Second, Plaintiff argues that the relief requested is warranted because BAC lacks standing as it has not provided authenticated documentation.
In response, BAC filed the aforementioned motion to dismiss (the "Motion to Dismiss"), arguing that, pursuant to Federal Rule of Civil Procedure 12(b)(6), made applicable in an adversary proceeding pursuant to Fed. R. Bankr. P. 7012, Plaintiff has failed to state a claim upon which relief can be granted. BAC also argues that the Rooker-Feldman doctrine precludes this Court from addressing the validity of BAC's lien because the Superior Court has alreadygranted BAC summary judgment as to this issue. A hearing on the Motion was held on June 14, 2011. For the reasons set forth below, Defendant's Motion to Dismiss will be granted.
III. Discussion
The overriding issue raised in BAC's motion concerns this Court's subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1).3 As a fundamental matter, "[i]t must be determined whether jurisdiction exists before proceeding to the merits of a case." Mills v. Capital One Bank, 2009 WL 2713244 (D.N.J. 2009) (quoting Cohen v. Kurtzman, 45 F.Supp.2d 423, 429 (D.N.J. 2009)). In determining whether jurisdiction exists, the court need not accept the plaintiffs allegations as true, and if a factual question pertaining to jurisdiction exists, the court may consider evidence beyond the face of the pleadings to assure itself of its authority to hear the case. Surgick v. Cirella, 2011 WL 2600650 (D.N.J. 2011) (citing Robinson v. Dalton, 107 F.3d 1018, 1021 (3d Cir. 1997). In the Rule 12(b)(1) context, "plaintiff bears the burden of proving that the relevant jurisdictional requirements are met." Sindram v. Fox, 2009 WL 541578 (E.D. Pa. 2009) (citing Dev. Fin. Corp. v. Alpha Housing & Health Care, 54 F.3d 156, 158 (3d Cir. 1995)). If a court lacks subject matter jurisdiction, it must dismiss the case without prejudice. In re Orthopedic "Bone Screw" Prod. Liab. Litig., 132 F.3d 152, 155-56 (3d Cir. 1997).
BAC argues that the Rooker-Feldman doctrine deprives the Court of subject matter jurisdiction. The Rooker-Feldman doctrine provides that federal courts, other than the United States Supreme Court, lack subject matter jurisdiction to review and reverse judgments renderedby state courts. See Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923); District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983); see also 28 U.S.C. § 1257 ().4 In other words, "the Rooker-Feldman doctrine divests a lower federal court of subject matter jurisdiction of an action if the relief requested would effectively reverse a state court decision or void its ruling." In re Sabertooth, 443 B.R. 671, 679 (Bankr. E.D. Pa. 2011). See, e.g., Turner v. Crawford Square Apts. III. L.P., 449 F.3d 542, 547 (3d Cir. 2006); In re Knapper, 407 F.3d 573, 580 (3d Cir. 2005).
The Supreme Court has explained that applicability of the Rooker-Feldman doctrine is not without limit. Exxon Mobil Corp. v. Saudi basic Industries Corp., 544 U.S. 280, 284, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005); Lance v. Dennis, 546 U.S. 459, 464-66, 126 S.Ct. 1198, 163 L.Ed.2d 1059 (2006). To that end, Rooker-Feldman does not bar "a district court from exercising subject matter jurisdiction simply because a party attempts to litigate in federal court a matter previously litigated in state court." Exxon Mobil, 544 U.S. at 293. Instead, it applies only to the "narrow ground" of "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." Id.
Last year, in Great Western Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159 (3d Cir. 2010), the Court of Appeals "[broke] down the holding of Exxon Mobil, [and] conclude[d] that there are four requirements that must be met for the Rooker-Feldman doctrine to apply: (1) the federal plaintiff lost in state court; (2) the plaintiff complains of injuries caused by the state-court judgments; (3) those judgments were rendered before the federal suit was filed; and (4) the plaintiff is inviting the district court to review and reject the state judgments." 615 F.3d at 166 (internal quotations and alterations omitted). When these requirements are met, the district court lacks subject matter jurisdiction over the complaint. Id.
With these principles in mind, this Court holds that the Great Western Mining requirements have been met in this case. It is indisputable that: (1) Plaintiff is a state court loser, having suffered a state court foreclosure judgment; (2) Plaintiff complains of injuries caused by that state-court judgment, with the crux of the Complaint being that BAC wrongfully foreclosed on the property in question because BAC is not a holder in due course of the Note and Mortgage; (3) Plaintiff asks the Court to disregard, and essentially reverse, the state court's decision by quieting title in their favor; and (4) the state court judgment was rendered approximately seven months before Plaintiff commenced this action.
Moreover, Courts in this Circuit, including this Court, have consistently found Rooker-Feldman to be applicable and a bar to plaintiff's relief in a federal district court in the context of state foreclosure actions. See, e.g., In re Rusch, 2010 WL 5394789 (Bankr. D.N.J. 2010)("A federal district court 'cannot directly or indirectly review, negate, void, or provide relief that would invalidate a decision in a State Foreclosure Action.'") (citing Kushner v. Wachovia Bank, N.A., 2010 WL 5094511 (D.N.J. 2010)); Klein v. U.S. Bank, 2010 WL 5018881 (M.D. Pa.2011); Hansford v. Bank of America, 2008 WL 4078460, *5 (E.D.Pa. 2008). Here, Plaintiff's requested remedy, invalidation of the lien foreclosed in state court and expungement of BAC's Proof of Claim, reveals that the injury stems from the foreclosure and the essence of Plaintiff's claim is to reverse the state...
To continue reading
Request your trial