Vongermeten v. Clauss (In re Vongermeten)
| Decision Date | 05 January 2021 |
| Docket Number | Adv. Proc. No. 20-2137-gmh,Case No. 20-25056-gmh |
| Parties | In re: DEAN RICHARD VONGERMETEN, Debtor. DEAN RICHARD VONGERMETEN, Plaintiff, v. Mark Clauss, et al., Defendants. |
| Court | U.S. Bankruptcy Court — Eastern District of Wisconsin |
Chapter 13 debtor Dean Richard Vongermeten filed this adversary proceeding against Planet Home Lending, LLC, its Chief Operating Officer, Suzy Lindblom, Judge Michael J. Piontek, who presided over Planet Home Lending's state-court foreclosure action against Vongermeten, and several lawyers.1 The defendants have moved to dismiss on several grounds, including contesting this court's jurisdiction over theadversary proceeding. ECF Nos. 15 & 16. Vongermeten has objected. This decision and order rules that this court lacks jurisdiction over Vongermeten's affirmative claims against the defendants, although there is jurisdiction to adjudicate Vongermeten's objections to the claim Planet Home Lending filed in his bankruptcy case.
Before Vongermeten commenced his bankruptcy case Planet Home Lending obtained a judgment against him in a Wisconsin circuit court to foreclose a mortgage on his Racine residence. Planet Home Lending, LLC v. Von Germeten, No. 2019CV001616 (Racine Cty. Cir. Ct. Feb. 14, 2020) and Adv. Proc. No. 20-2137-gmh, ECF No. 16, at 22-25. Vongermeten appealed. The appeal is pending in the Wisconsin Court of Appeals.2 Planet Home Lending, LLC v. Von Germeten, Appeal No. 2020AP000566.
In this adversary proceeding Vongermeten sues Planet Home Lending and various persons who either are (or were) affiliated with Planet Home Lending or otherwise involved in the foreclosure action, including Judge Piontek who presided over it. Adv. Proc. No. 20-2137, ECF Nos. 8 & 15, at 1. Vongermeten requests that this court declare that (a) Planet Home Lending cannot prove that Vongermeten owes it a debt or has a right to foreclose on his residence; (b) Vongermeten has already paid Planet Home Lending by virtue of documents and actions taken in earlier proceedings or otherwise; (c) the state-court foreclosure proceedings violated his due process rights and were conducted fraudulently; (d) he is not obligated to pay Planet Home Lending with any specific currency; instead, he may pay it by "issu[ing] payment instruments (notes, bills-of-exchange, money orders) via public law", which he claims he did by taking the following actions: (i) "filed numerous tender payable via us treasury that defendant mark clauss [Planet Home Lending's lawyer in the state court] received";(ii) "filed gsa bonds (twice) into racine county court case"; (iii) sent a "bill-of-exchange" to Judge Piontek that "he refused to process . . . or allow [Vongermeten] to settle via his trust agency"; and (iv) sending a "promissory note" to an officer at Planet Home Lending to "satisfy the account", making any further attempts to collect this debt a fraud on the court, ECF No. 8, at 2-3; (e) Planet Home Lending received his money order for full settlement and closure, which it negotiated on January 8, 2019, thus satisfying any debt to it; (f) defendants Mark Clauss, Matthew Lynch (chief legal counsel for the Wisconsin Department of Financial Institutions), and Judge Piontek committed fraud and violated his federal rights by favoring Planet Home Lending in the state-court proceedings, including by ordering the expungement of financing statements and other documents Vongermeten filed; and (g) the state court improperly excluded evidence of irregularities at the closing of the mortgage loan.3 ECF No. 8, at 2-5.
In requesting dismissal the defendants contend, among other things, that the Rooker-Feldman doctrine deprives this court of jurisdiction over Vongermeten's adversary proceeding. See D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983); Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923).4 The Rooker-Feldman "doctrine precludes federal district-court jurisdiction 'over cases brought by state court losers challenging state court judgments rendered before the district court proceedings commenced.'" Bauer v. Koester, 951 F.3d 863, 866 (7th Cir. 2020) (quoting Sykes v. Cook Cty. Circuit Court Prob. Div., 837 F.3d 736, 741 (7th Cir. 2016)); see also Skinner v. Switzer, 562 U.S. 521, 531-32 (2011); Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 291-92 (2005). The doctrine applies equally to bankruptcy proceedings like this one. Jacobson v. Wells Fargo Bank, N.A. (In re Jacobson), 614 B.R. 321, 325-26 (Bankr. E.D. Wis. 2020); see also In re Lisse, 921 F.3d 629, 640 (7th Cir. 2019).
Vongermeten does not dispute that he lost in state court. To the contrary, that is the gist of much of his complaint. Nor could he so contend: Planet Home Lending's judgment against him is a matter of public record. He instead argues that this court may entertain his claims because he alleges that the state-court judgment is void and the defendants conspired to commit fraud and other wrongful acts against him, including through the state-court lawsuit. Adv. Proc. No. 20-2137, ECF No. 13.
Whatever their merits these allegations are ones that binding precedent deems "'inextricably intertwined' with [the] state court judgment". Taylor v. Fed. Nat'l Mortg. Ass'n, 374 F.3d 529, 533 (7th Cir. 2004) (quoting Brokaw v. Weaver, 305 F.3d 660, 664 (7thCir. 2002)). As a result, they are subject to Rooker-Feldman's jurisdictional bar, because "even federal claims that were not raised in state court, or that do not on their face require review of a state court's decision, may be subject to Rooker-Feldman if those claims are closely enough related to a state-court judgment." Mains v. Citibank, N.A., 852 F.3d 669, 675 (7th Cir. 2017). As noted by the Seventh Circuit, if the court Id. at 676.
The Seventh Circuit's recent application of the Rooker-Feldman doctrine in Bauer v. Koester, 951 F.3d 863, controls the outcome here. After losing a foreclosure action in state court Donald and Lauretta Bauer and two of their children (collectively, the "Bauers") sued in federal court "many of the people and entities involved in the foreclosure: Donald and Lauretta's attorneys, the attorneys for the foreclosing plaintiffs, the bank that maintained an escrow account at issue and its employees, the state-court clerk and deputy clerks, and the judge who presided over the foreclosure proceedings." Id. at 865. The Bauers alleged that participants in the state-court action violated their rights under federal law. When the defendants sought dismissal on Rooker-Feldman grounds, the Bauers argued that Rooker-Feldman did not apply . Id. at 866. They further argued that the doctrine did not apply because it "d[id] not bar federal review of a fraud-based claim like theirs in which the defendants 'so far succeeded in corrupting the state judicial process as to obtain a favorable judgment.'" Id. (quoting Nesses v. Shepard, 68 F.3d 1003, 1005 (7th Cir. 1995)). The Seventh Circuit disagreed and affirmed the district court's order dismissing the case for lack of jurisdiction. Id. at 867-68.
The Bauers' claims are akin to Vongermeten's: like the Bauers, Vongermetenalleges that the foreclosure judgment his mortgage creditor obtained from the state court is the result of fraud and wrongful acts by the creditor, its lawyers, and the state court judge, which violated his due process rights. Notably, Vongermeten's allegations and requests for relief against Judge Piontek, Matthew Lynch, and others involved in the state-court foreclosure proceeding would require contradicting the state-court judgment, and, as in Bauer, these allegations and requests challenge how the state court conducted the proceedings and ruled rather than alleging an entirely corrupt judicial process. Compare Adv. Proc. No. 20-2137, ECF No. 8, at 3 () with Bauer, 951 F.3d at 866-87 ().
While most of the defendants in this adversary proceeding were not parties to the state-court action, Bauer holds that a dissimilarity in parties does not precludeapplication of the Rooker-Feldman...
To continue reading
Request your trial