Mac Pherson v. State Street Bank and Trust Co.

• Decision Date: 20 September 2006
• Docket Number: No. 05 Civ. 2960(DRH)(JO).,05 Civ. 2960(DRH)(JO).
• Citation: 452 F.Supp.2d 133
• Parties: Donald MAC PHERSON, Plaintiffs, v. STATE STREET BANK AND TRUST COMPANY, as Trustee Defendant.
• Court: U.S. District Court — Eastern District of New York

Page 133

452 F.Supp.2d 133

Donald MAC PHERSON, Plaintiffs, v. STATE STREET BANK AND TRUST COMPANY, as Trustee Defendant.

No. 05 Civ. 2960(DRH)(JO).

United States District Court, E.D. New York.

September 20, 2006.

Irwin Popkin, Esq. Parkway Shirley, NY, for Plaintiff.

Shapiro & DiCaro, LLP by Robert S.. Leni, Esq., Rochester, NY, for Defendant.

MEMORANDUM & ORDER

HURLEY, Senior District Judge.

Plaintiff Donald Mac Pherson ("Plaintiff" or "Mac Pherson") brought the present suit after the foreclosure of his property by Defendant State Street Bank and Trust Company ("Defendant" or "State Street"). Plaintiff asserts that he was not served with proper notice prior to the foreclosure and, thereby, was deprived of his Fourteenth Amendment right to Due Process. Defendant moves to dismiss the Amended Complaint pursuant to Federal Rule, of Civil Procedure ("Rule") 12(c) on the ground that this Court lacks subject matter jurisdiction according to the Rooker-Feldman doctrine, which proscribes federal district courts from hearing cases that that amount to appeals of state court proceedings, or, alternatively according to the doctrine of res judicata. Plaintiff counter-moves for summary judgment. For the reasons set forth herein, the Court GRANTS Defendant's motion.

BACKGROUND

The following summary of facts is drawn from the Amended Complaint and the affidavits and evidence submitted by the parties with regard to the present motion.

On April 24, 2000, Dortha Coakley ("Coakley") secured her purchase of 230 South Magee Street, Southampton, New York ("230 South Magee") when she executed a purchase money mortgage, with the mortgagee being IndyMac Mortgage Holdings, Inc. Six days later, on April 30, 2000, the mortgage was assigned to Defendant. Defendant is a corporation with its principal place of business in Vernon Hills, Illinois.

By deed dated May 1, 2000, and filed July 19, 2000, Coakley conveyed her full interest in the property by deed to Plaintiff. (See Aff. of Robert S. Leni, dated Oct. 10, 2005 ("Leni Aff."), Ex. B.) Due to a default in payment for the monthly installment due January 1, 2001, and for each subsequent monthly payment thereafter n May 21, 2001, Defendant commenced an action in the Supreme Court of the State of New York in and for the County of Suffolk ("state trial court") before the Honorable Robert A. Lifson. Defendant sought to foreclosure on the mortgage and secure 230 South Magee.

Defendant made efforts to personally serve Plaintiff, but represented to the state trial court, through an affirmation of its attorney John A. DiCaro, Esq. ("DiCaro"), that it had been unable to personally serve Plaintiff. As a result, Defendant requested to serve notice via publication, and the state trial court granted the request. (Leni Aff., Ex. D.) According to Plaintiff, DiCaro misrepresented his efforts to the state trial court because Plaintiff was then residing at the same street address that was indicated on the May 1, 2000 deed. (See Am. Compl. ¶ 7.)

On June 19, 2003, a judgment of foreclosure and sale was made. (See Leni Aff., Ex. E.) Plaintiff had not appeared. On February 24, 2004, however, Plaintiff submitted an Order to Show Cause in the state trial court, pursuant to New York CPLR 5015(4) to vacate and set aside the judgment of foreclosure and sale on the grounds that the state trial court lacked personal jurisdiction over Plaintiff due to the lack of proper notice. One month later, on March 25, 2004, the state trial court denied the motion to vacate "without prejudice to the right of either named defendant [i.e., Mac Pherson or Coakley] to redeem by payment of any amounts due pursuant to the judgment of foreclosure . . . on or prior to May 1, 2004." (See Leni Aff., Ex. F.) The court held not only that "service by publication can be sufficient to confer personal jurisdiction," but also that "the moving papers [were] utterly devoid of any assertion of a meritorious defense by one, possessed of personal knowledge." (Id.) The property was conveyed to Defendant on May 12, 2004 by the referee named in the foreclosure action.

Almost two weeks prior to the conveyance, on April 30, 2004, Plaintiff filed a Notice of Appeal with the Appellate Division, Second Department. Plaintiff argued that DiCaro had misrepresented the diligence of his efforts to the state trial court, and contended that the determination by the state trial court to allow service by publication did not "satisfy `due process' mandates" because Defendant had not established that "all reasonable efforts to locate and personally serve had been made." (See Affirm. of Irwin Popkin, dated Nov. 14, 2005, Ex. B, Mac Pherson Aff. (hereinafter "Mac Pherson Aff.") ¶ 8.) Plaintiff's attorney affirmed to the Appellate Division his belief that the service by publication ratified by the state trial court violated Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950). (See Affirm. of Irwin Popkin, dated Nov. 14, 2005, Ex. B, Popkin Aff. (hereinafter "Popkin Aff.") ¶ 8.)

By Decision and Order dated March 7, 2005, the Appellate Division affirmed the state trial court's decision. The court first noted that "[a]lthough the impracticability standard is not capable of easy definition, it does not require the applicant to satisfy the more stringent standard of `due diligence' under CPLR § 308(4), or to make a showing that actual prior attempts to serve a party under each and every method provided in the statute have been undertaken." State Street Bank and Trust Co. v. Coakley, 16 A.D.3d 403, 790 N.Y.S.2d 412 (2d Dep't 2005). The court then held that "[c]ontrary to [Mac Pherson's] contention, the Supreme Court providently exercised its discretion in directing an alternative method for service of process upon him. Under the circumstances, the Supreme Court reasonably concluded that service pursuant to the other relevant sections of CPLR § 30$ was impracticable," Id. By Decision and Order dated June 7, 2005, the New York Court of Appeals dismissed Plaintiffs motion for leave to appeal on the grounds that the order from which Plaintiff was appealing did not finally determine the action within the meaning of the New York Constitution.

Plaintiff subsequently brought suit in federal court, asserting three claims against Defendant. As to Count One, brought pursuant to 42 U.S.C. § 1983, Plaintiff alleged that "[s]ervice by publication alone is constitutionally defective" (Am.Compl.¶ 23) and that, as a result, Defendant had "deprived Mac Pherson of his property without due process of law." (Id. ¶ 24.) Count Two alleged that Defendant's actions had been "deceptive acts and practices," in violation of New York General Business Law § 349. Count III simply requested entry of an order declaring that Plaintiff had title to 230 South Magee "in fee and is entitled to the possession of the real property." (Id. 35.) Defendant subsequently moved for judgment on the pleadings on the grounds that this Court lacked subject matter jurisdiction over the proceedings. Plaintiff opposed the motion and submitted a counter-motion for summary judgment demanding entry of the above-requested order.

STANDARD

Defendant moves for judgment on the pleadings pursuant to Rule 12(c), seeking to dismiss the complaint for lack of subject matter jurisdiction. Although subject matter jurisdiction is usually challenged by way of a Rule 12(b)(1) motion to dismiss, it may also be raised on a Rule 12(c) motion for judgment on the pleadings. See Scaglione v. Chappaqua Central Sch. Dist., 209 F.Supp.2d 311, 312 (S.D.N.Y.2002); Peters v. Timespan Comm., Inc., No. 97 CIV. 8750(DC), 1999 WL 135231, at *3 (S.D.N.Y. Mar. 12, 1999). A Rule 12(c) motion for judgment on the pleadings based upon a lack of subject matter jurisdiction is treated as a Rule 12(b)(1) motion to dismiss the complaint. Weisman v. Internal Revenue Serv., 972 F.Supp. 185, 186-87 (S.D.N.Y.1997).

"A case is properly dismissed for lack of subject matter jurisdiction under [Rule] 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir.2000); Reserve Solutions Inc. v. Vernaglia, 438 F.Supp.2d 280, 286 (S.D.N.Y.2006). In contrast to the standard for a motion to dismiss for failure to state a claim under Rule 12(b)(6), a "plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Id. A district court may consider evidence outside the pleadings when resolving a challenge to the court's subject matter jurisdiction. Filetech S.A. v. France Telecom S.A., 157 F.3d 922, 932 (2d Cir.1998); see also Flores v. S. Peru Copper Corp., 414 F.3d 233, 255 n. 30 (2d Cir.2003).

DISCUSSION

Defendant moves for judgment on the pleadings, dismissing this action for lack of subject matter jurisdiction under the Rooker Feldman doctrine, because Plaintiffs "express purpose" is to "overturn the state court judgment and, in fact the plaintiff is specifically attempting to evade the results there from." (Def.'s Mem. at 2.) Plaintiff counters that he "is not asking this Court to review or reject the prior state court foreclosure judgment, but rather to focus on the constitutional infirmities inherent in New York CPLR 308(5), the law that allows a New York judge to determine any alternative manner of service whenever service is otherwise impracticable." (Pl.'s Opp'n Mem. at 4.)

Rooker-Feldman establishes the clear principle that federal district courts lack jurisdiction over suits that are, in substance, appeals from state-court judgments. See Hoblock v. Albany County Bd. of Elections, 422 F.3d 77, 84 (2d Cir.2005). The doctrine grew out of two United States Supreme Court decisions, Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923), and D.C. Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983). Taken together, Rooker a...