ORDER
PAUL
G. GARDEPHE, U.S.D.J.
In this
diversity action, pro se Plaintiff Harriet Nicholson
seeks declaratory relief and damages for “fraud on the
courts.” The Second Amended Complaint
(“SAC”) is styled as “an independent
equitable action pursuant to Fed.R.Civ.P. 60 (d)(1),
Fed.R.Civ.P. 60 (d)(3), Fed.R.Civ.P. 60 (b)(3), Fed.R.Civ.P
60 (b)(4), and Fed.R.Civ.P. 60 (b)(6) to set aside a void
Texas state court judgment for denial of due process, fraud
on the court and lack of jurisdiction.” (Second Am
Cmplt. (“SAC”) (Dkt. No. 35) at p. 1) Defendant
Bank of New York Mellon is the assignee of Plaintiff s home
loan, which is secured by a “deed of trust” - the
Texas equivalent of a mortgage - on Nicholson's home in
Grand Prairie, Texas.
Defendant
has moved to dismiss the SAC, pursuant to Rules 12(b)(1) and
12(b)(6) of the Federal Rules of Civil Procedure. (Dkt. No
53) Plaintiff has moved for leave to amend. (Dkt. No. 59)
This Court referred the motions to Magistrate Judge Katharine
H. Parker for a Report & Recommendation
(“R&R”). (Dkt. No. 79) On November 7, 2022
Judge Parker issued an R&R recommending that
Defendant's motion to dismiss be granted because
Plaintiffs
claims are precluded by the Rooker-Feldman doctrine
and res judicata, and that leave to amend be denied.
(R&R (Dkt. No. 83))
For the
reasons stated below, the R&R will be adopted to the
extent that it finds
Plaintiffs
claims are barred by res judicata. This Court
likewise adopts the R&R's recommendation that leave
to amend be denied.
BACKGROUND[1]
In 2001, Plaintiff Harriet Nicholson purchased a home in
Grand Prairie, Texas, where she lives. She borrowed $125,048
from Mid America Mortgage, Inc. (“Mid America”)
to make the purchase, which was secured by a Deed of Trust
(“DOT”), which in Texas is the functional
equivalent of a mortgage against real property. The DOT was
assigned several times, first to Countrywide Home Loans, then
to The Bank of New York Mellon. . .. Nationstar Mortgage LLC
(“Nationstar”) is the current loan servicer,
having taken over for prior loan servicers.
In July 2012, after Plaintiff defaulted on her loan payments,
a non-judicial foreclosure sale of the property took place,
and the property was sold to [Bank of New York Mellon], which
took title through a Substitute Trustee's Deed
(“[Bank of New York Mellon] Deed”). [Bank of New
York Mellon] then brought an action to evict Plaintiff.
Plaintiff then sued in Texas state court for wrongful
foreclosure and to stop her eviction. She brought the claims
against [Bank of New York Mellon] and other entities,
including Nationstar and the Harvey Law Group (outside
counsel to [Bank of New York Mellon]), in a case encaptioned
Harriet Nicholson v. The Bank of New York Mellon, etc.,
et al.. Cause No.: 342262692-12 (the “Texas
Action”). Plaintiff amended her complaint multiple
times and asserted sprawling claims including violations of
the Texas Civil Practice &
Remedies and Property Codes, negligence, and fraud by [Bank
of New York Mellon], the Harvey Law Group and others. She
sought, among other things, to vitiate the [Bank of New York
Mellon] Deed, re-obtain quiet title to her home, preclude any
eviction actions against her and to recover money damages,
including for emotional distress, against various parties.
After extensive litigation in Texas, which included removal
to federal court and then remand to state court, Plaintiff
succeeded in having the [Bank of New York Mellon] Deed
vacated and she was awarded possession and costs; however,
she did not succeed in obtaining quiet title or any damages.
Thus, she is still on the hook for the loan. She also did not
succeed in her claims against Nationstar or the Harvey Law
Group, which were stricken as parties.
(R&R (Dkt. No. 83) at 1-3)
Nicholson
appealed to the Texas Court of Appeals, Second Appellate
District, seeking to reverse the trial court's grant of
summary judgment against her as to the claims on which she
had not prevailed. In a March 31, 2022 decision, the Texas
Court of Appeals affirmed the grant of summary judgment.
See Nicholson v. Bank of New York Mellon as Tr. for
Certificateholders of CWMBS, Inc., CWMBS Reforming Loan Remic
Tr. Certificates Series 2005-R2 (“Nicholson
I”), No. 02-20-00379-CV, 2022 WL 963990 (Tex. App.
Mar. 31, 2022).
Inter
alia, the Texas Court of Appeals
• held that “the trial court did not abuse its
discretion” by “striking Nationstar and Harvey
Law Group,” which “Nicholson [had] argued were
necessary and indispensable parties”;
• affirmed the trial court's grant of summary
judgment on Nicholson's common-law fraud claim, in which
Nicholson had contended “that the [Bank of New York
Mellon and other defendants in the Texas Action] had
committed fraud when they represented to her that they had
effectuated a valid foreclosure sale and were awarded a
judgment of possession and then ‘clandestinely
executed, filed, and recorded' a notice contending that
the lien and underlying debt had been reinstated and
‘repeatedly t[old her] wrong and inconsistent
information to coerce her to start repaying the
loan'”; and
• affirmed the trial court's grant of summary
judgment on Nicholson's claim pursuant to Section
12.002(a) of the Texas Civil Practice and Remedies Code, in
which Nicholson had contended “that Nationstar (who was
not in the case at this point) as [Bank of New York
Mellon's] agent had presented a document with knowledge
that it was fraudulent, had intended the fraudulent document
to be given legal effect, and
had intended to cause her physical or financial injury or
mental anguish,” - i.e., that
“Nationstar, as Countrywide's attorney-in-fact, had
executed an assignment of the original deed of trust from
Countrywide to [Bank of New York Mellon] and that doing so
amounted to a fraudulent claim on her property.”
Id. *7-8, 11, *13-14 (quoting Nicholson's
summary judgment brief).[2]
Nicholson
subsequently filed (1) a motion for en banc
reconsideration; (2) a motion for rehearing; and (3) a
“motion to set aside” the Texas Court of
Appeals' decision. The Texas Court of Appeals denied
those motions in orders issued on April 7, April 14, and
April 18, 2022,
respectively. The Texas Court of Appeals' mandate was
issued on June 30, 2022.[3] (Texas Court of Appeals Docket Sheet
(Dkt. No. 84) at 5-6)[4]
The
Complaint was filed on April 18, 2022; the Amended Complaint
was filed on May 25, 2022; and the SAC was filed on May 27,
2022. (Dkt. Nos. 1, 30, 35) The SAC generally complains that
(1) the Bank of New York Mellon's and Nationstar's
loan documents are “fraudulent,” such that
referring to them in litigation is a “fraud on the
court”; and (2) the Texas trial judge's ruling
striking Nationstar and the Harvey Law Group as parties was
also a “fraud on the court.”
Defendant
moved to dismiss the SAC on June 22, 2022, and Plaintiff
moved for leave to file a Third Amended Complaint on June 27,
2022. (Dkt. Nos. 53, 59)[5]
In its
motion to dismiss, Defendant argues that
[b]ecause Plaintiffs claims were already decided in the Texas
Action that went to judgment, the preclusion doctrines of
res judicata and collateral estoppel both apply to
bar reassertion of the same or substantially similar claims
here.
Both res judicata and collateral estoppel act as a
bar to Plaintiff s claims in this case and require their
dismissal. It is not in dispute - indeed, Plaintiff even
pleads - that the Texas Action between ... Defendant [and
her] was adjudicated to a
final judgment. Nor is it in dispute that the same issues and
subject matter were at play in the Texas Action, as that is
exactly what Plaintiff seeks relitigation of in this case.
However, because the Texas Action previously went to
judgment, Plaintiff may not bring further claims related to
what was at issue therein - the validity of the prior
foreclosure sale of the Property and any damage Plaintiff
claims as a result - in this lawsuit.
Most significantly, collateral estoppel would bar
relitigation of the very issues decided in the Texas Action
that Plaintiff seeks to relitigate here: (i) the striking of
Nationstar and [the Harvey Law Group] as party-defendants to
the action; (ii) Plaintiffs claims of fraud committed by [the
Harvey Law Group]; and (iii) the validity of the original and
amended final judgments as they pertained to the dismissal of
Plaintiff s claims, with prejudice. What Plaintiff seeks to
relitigate related to those issues was “fully and
fairly litigated” against her in the Texas Action, as
the case was actively litigated for many years including the
filing of numerous motions throughout and the conducting of a
hearing before the final disposition. And each of Plaintiff s
claims for declaratory relief in this case relates to an
issue that was part and parcel of the final judgment issued
in the Texas Action.
Because of the identity of adversarial parties between the
two actions, identity of issues to be decided, and the
undisputed entry of a final judgment that remains operative,
Plaintiffs claims in this action are all barred by res
judicata and collateral estoppel.
(Def. Br. (Dkt. No. 55) at 26-28 (citations omitted))
On
November 3, 2022, this Court referred Defendant's motion
to dismiss and Plaintiffs motion for leave to amend to Judge
Parker for an R&R. (Dkt. No. 79)
In a
November 7, 2022 R&R, Judge Parker recommends that
Defendant's motion to dismiss be granted, and that leave
to amend be denied. (...
