Armstrong v. JPMorgan Chase Bank National Ass'n, 633 F. App'x 909

Background

In 2007 Armstrong obtained a mortgage note (secured by a deed of trust) from Stewart Mortgage Services (SMS); MERS was the deed beneficiary as SMS’s nominee. JPMorgan Chase later claimed the note was assigned via an allonge and endorsed in blank.
Armstrong defaulted in 2010; Chase Home Finance initiated foreclosure and Armstrong sued in Colorado state court seeking a declaration that defendants held no interest and an injunction against foreclosure.
While the state action was pending Armstrong filed Chapter 7 bankruptcy and, under penalty of perjury, declared among other things that the foreclosure was his only proceeding, he had no contingent claims, Chase Manhattan Mortgage held the secured mortgage claim, and he intended to reaffirm and keep the property.
Armstrong’s bankruptcy was dismissed and closed in 2011; a subsequent Rule 120 application by JPMorgan to authorize sale was denied by the state court for failure to prove an enforceable note (finding the allonge not properly authenticated or affixed).
Armstrong then sued JPMorgan in state court for declaratory relief and to quiet title; JPMorgan removed to federal court and the district court dismissed, holding (alternatively) that Armstrong had forfeited/waived the claims by failing to disclose them in bankruptcy and that Armstrong’s sworn bankruptcy statements were binding judicial admissions; the quiet-title claim also failed for lack of superior title allegations.
On appeal the Tenth Circuit affirmed, principally on the basis that Armstrong’s bankruptcy judicial admissions were binding and dispositive.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Armstrong’s undisclosed/uncited bankruptcy statements bar his later suit	Armstrong argued the district court wrongly treated his bankruptcy statements as dispositive and that the state Rule 120 denial undermines reliance on them	JPMorgan argued Armstrong’s sworn bankruptcy statements were judicial admissions binding him and precluded his contrary litigation position	Court held Armstrong’s bankruptcy statements were judicial admissions and binding, so dismissal was proper
Whether the district court erred by considering bankruptcy filings on a Rule 12(b)(6) motion	Armstrong argued consideration converted the motion to summary judgment and denied him opportunity to present materials	JPMorgan argued bankruptcy filings are public records courts may judicially notice on a 12(b)(6) motion	Court held public-record bankruptcy filings may be judicially noticed on 12(b)(6) and did not convert the motion
Whether Rooker–Feldman barred the federal suit because state Rule 120 ruling rejected JPMorgan’s proof of the note	Armstrong argued the district court’s ruling conflicted with the state Rule 120 decision and Rooker–Feldman barred relitigation	JPMorgan argued the Rule 120 order is not an appealable final judgment and thus Rooker–Feldman does not apply	Court held Rooker–Feldman did not apply because Rule 120 orders are not final judgments and the issue is one of preclusion (which the Rule 120 order lacks)
Whether Armstrong’s quiet-title claim pleaded superior title	Armstrong contended JPMorgan had no enforceable interest and sought to quiet title	JPMorgan argued Armstrong failed to plead facts showing superior title or entitlement to quiet title	Court held quiet-title claim failed for lack of facts showing superior title and affirmed dismissal

Key Cases Cited

Lane v. Simon, 495 F.3d 1182 (10th Cir. 2007) (standard for reviewing Rule 12(b)(6) dismissal)
Pace v. Swerdlow, 519 F.3d 1067 (10th Cir. 2008) (courts may judicially notice public records on Rule 12(b)(6))
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (U.S. 2005) (explaining Rooker–Feldman doctrine scope)
Miller v. Deutsche Bank Nat’l Trust Co. (In re Miller), 666 F.3d 1255 (10th Cir. 2012) (Rule 120 rulings are not final judgments and lack preclusive effect)
Kempter v. Hurd, 713 P.2d 1274 (Colo. 1986) (definition and effect of judicial admissions under Colorado law)
Salazar v. Am. Sterilizer Co., 5 P.3d 357 (Colo. Ct. App. 2000) (judicial admissions are binding and may furnish basis for verdict)
Nichols v. Bd. of Cty. Comm’rs, 506 F.3d 962 (10th Cir. 2007) (full faith and credit requires giving state rulings the preclusive effect they have under state law)
Bronson v. Swensen, 500 F.3d 1099 (10th Cir. 2007) (issues omitted from opening brief are forfeited on appeal)
People v. McKimmy, 338 P.3d 333 (Colo. 2014) (Colorado limitation of judicial-admission doctrine to factual matters)