Wellman v. PNC Bank
| Decision Date | 22 February 2012 |
| Docket Number | Case No. 2:11-cv-483 |
| Parties | Mark R. Wellman, et al., Plaintiffs, v. PNC Bank, et al., Defendants. |
| Court | U.S. District Court — Southern District of Ohio |
OPINION AND ORDER
Plaintiffs bring this action under 42 U.S.C. § 1983, asserting Defendants violated their rights to due process and equal protection under the Fourteenth Amendment to the U.S. Constitution by committing various wrongful acts in connection with a state court foreclosure proceeding. This matter is before the Court on Defendants' motions to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF Nos. 18, 19, and 20. For the reasons that follow, the Court grants Defendants' motions.
The Court derives the following facts from Plaintiffs' complaint.
This case arises from a state court foreclosure action in which Plaintiffs, as mortgagors, were the defendants. Plaintiffs Mark and Gina Wellman ("Plaintiffs" or "Wellmans") are individuals who live in the city of Circleville, which is located in Pickaway County, Ohio. The Wellmans sue PNC Bank ("PNC"), the successor ininterest to the original mortgage holder, Defendant National City Mortgage Company ("NCMC"). Plaintiffs also assert their claims against the Pickaway County, Ohio Common Pleas Judge who presided over the foreclosure action, Hon. P. Randall Knece, as well as four appellate judges who sat on the Ohio Fourth District of Appeals, Hon. Peter B. Abele, Hon. Roger L. Kline, Hon. William H. Harsha1, and Hon. Matthew W. McFarland. Plaintiffs sue all of the state court judges in both their individual and official capacities. Lastly, Plaintiffs name Pickaway County as a Defendant, arguing the County is responsible for the proper functioning of its courts.
Plaintiffs entered the mortgage agreement with NCMC in May 1994. NCMC filed foreclosure actions against Plaintiffs in the Pickaway County Court of Common Pleas in 1996 and again in March 2002. Judge Knece drew the latter case. The Wellmans and NCMC attempted to enter a Settlement Forbearance Agreement ("SFA"), which was to be signed in early 2003.
In February 2006, NCMC filed a motion in the foreclosure action to enforce the SFA. Judge Knece conducted a fifteen-minute oral hearing, after which it issued an entry granting NCMC's motion and dismissed the Wellmans' counterclaim for fraudulent accounting, without conducting a trial or summary judgment proceedings.
The Wellmans allege that NCMC made several fraudulent representations in connection with its motion to enforce the SFA. First, NCMC submitted to the state court a copy of the SFA which had not been validly executed. In addition, a vice president of NCMC provided an affidavit to the court which did not accurately state the balance forthe loan and which falsely indicated that the mortgage had only recently been assigned to NCMC's subsidiary, National City Bank, Columbus, when in fact the mortgage had been assigned additional times before the date of the affidavit. Further, the Wellmans maintain they were unaware the balance set forth in the SFA was inflated when they signed it and did not learn it was inflated until 2004.2 Moreover, the Wellmans aver NCMC was not the mortgage holder when the foreclosure action was filed in March 2002. They allege that NCMC assigned the mortgage in October 1995 and did not obtain reassignment of the mortgage until July 2007. The Wellmans additionally assert that NCMC improperly prepared the assignment to appear as though it was effective in March 2002.
The Wellmans appealed Judge Knece's decision to the Ohio Fourth District Court of Appeals. The appellate court affirmed Judge Knece's judgment.
The Wellmans filed the instant action on June 3, 2011, asserting two claims for relief under 42 U.S.C. § 1983. First, they contend Defendants violated their right to substantive due process under the Fourteenth Amendment to the U.S. Constitution. Second, the Wellmans maintain Defendants violated their Fourteenth Amendment right to equal protection of the law.
A claim survives a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) if it "contain[s] sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). "Theplausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. A complaint's "[f]actual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all of the complaint's allegations are true." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007) (internal citations omitted).
A court must also "construe the complaint in the light most favorable to the plaintiff." Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir. 2002). In doing so, however, plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555; see also Iqbal, 129 S. Ct. at 1949 (); Ass'n of Cleveland Fire Fighters v. City of Cleveland, Ohio, 502 F.3d 545, 548 (6th Cir. 2007). "[A] naked assertion .. . gets the complaint close to stating a claim, but without some further factual enhancement it stops short of the line between possibility and plausibility .. . ." Twombly, 550 U.S. at 557. Thus, "something beyond the mere possibility of [relief] must be alleged, lest a plaintiff with a largely groundless claim be allowed to take up the time of a number of other people, with the right to do so representing an in terrorem increment of the settlement value." Id. at 557-58 (internal citations omitted).
This case entails three categories of Defendants: (1) PNC; (2) the state court judges; and (3) Pickaway County. Each category moves separately to dismiss the Wellmans' complaint for failure to state a claim upon which relief may be granted. Thethree motions assert different grounds for dismissal tailored to each category. For example, PNC argues for dismissal of the Wellmans' claims on the ground that PNC was not a state actor, and therefore cannot be held liable under § 1983. The state court judges contend the Wellmans' claims are barred by the applicable statute of limitations and the doctrines of collateral estoppel and absolute judicial immunity. Pickaway County maintains the Wellmans fail to plead that the County engaged in any wrongdoing. In addition to those tailored arguments, all Defendants move to dismiss under the Rooker-Feldman doctrine. The Court will first examine that ground for dismissal.
The Rooker-Feldman doctrine is derived from two U.S. Supreme Court decisions which held that federal district courts lack jurisdiction to directly review state court judgments. Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 (1923); District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 482 n.16 (1983). Rather, only the U.S. Supreme Court has jurisdiction to review state court decisions pursuant to 28 U.S.C. § 1257. Rooker, 263 U.S. at 416. In 2005, the U.S. Supreme Court clarified the scope of the Rooker-Feldman doctrine:
The Rooker-Feldman doctrine, we hold today, is confined to cases of the kind from which the doctrine acquired its name: 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.
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 283-84 (2005). Under Exxon, whether Rooker-Feldman applies depends on the source of the plaintiffs injury. McCormick v. Braverman, 451 F.3d 382, 393 (6th Cir. 2006). Id.
Applying the source of injury test, courts in the Sixth Circuit have held '"Rooker-Feldman does not bar a federal-court challenge to an individual's improper conduct during a prior state court proceeding.'" Hammond v. Citybank, N.A., No. 2:10-cv-1071, 2011 WL 4484416, at *3 (S.D. Ohio Sept. 27, 2011) (quoting Pittman v. Cuyahoga Cty. Dep't of Children & Family Servs., 241 F. App'x 285, 288 (6th Cir. 2007)). In Hammond, the plaintiff asserted his injury arose from alleged fraud perpetrated in a state court foreclosure proceeding by the filing of a false affidavit but did not oppose the state court judgment itself. The court in Hammond held that because the fraudulent affidavit was the source of the plaintiffs injury, Rooker-Feldman was inapplicable, notwithstanding that the validity of the state court judgment and the alleged fraudulent nature of the affidavit were intertwined. Hammond, 2011 WL 4484416, at *4-5; see also Brown v. First Nationwide Mortgage Co., 206 F. App'x 436, 440 (6th Cir. 2006) (); Fletcher v. Federal Nat'l Mortg. Ass'n, No. 3:11-cv-83, 2011 WL 5175611, at *3-4 (S.D. Ohio Oct. 4, 2011) ().
Here, as in Hammond, Brown, and Fletcher, the Wellmans assert that NCMC obtained the foreclosure judgment with a fraudulent affidavit. In addition, like theplaintiffs in Fletcher, the Wellmans contend NCMC was not the mortgage holder when the foreclosure action was filed, which suggests NCMC lacked standing. In short, the Wellmans allege harm from wrongdoing independent of the state court judgmen...
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