Casares v. Wells Fargo Bank, N.A.
268 F. Supp. 3d 248
| D.D.C. | 2017Background
- Casares, a former Wells Fargo Advisors (WFA) financial advisor, alleges appraisal/mortgage fraud led to the loss of his Vero Beach home and that WFA later fired him in retaliation for a critical website; he asserts treason, conspiracy, obstruction, discrimination, and retaliation claims.
- He previously litigated the foreclosure in Florida state court, where he filed counterclaims; the state court held a two-day bench trial and entered judgment for Wells Fargo, which was affirmed on appeal and review was denied by the Florida Supreme Court.
- Casares’s amended federal complaint (10 counts) pleads: Counts I–V (foreclosure-related: treason/conspiracy, civil-rights deprivation, obstruction, mail/wire fraud, judicial obstruction) and Counts VII–X (employment claims: Title VII and ADA discrimination and retaliation).
- In 2014 the Court stayed this action and compelled arbitration of the employment claims (Counts VII–X); the parties proceeded to FINRA arbitration, which was later terminated.
- Defendants moved to dismiss: (1) Counts I–V on res judicata/claim preclusion grounds because they were or could have been litigated in state foreclosure proceedings; (2) Counts VII–X because they are subject to a binding arbitration agreement. The Court granted dismissal of all counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Counts I–V are barred by res judicata | Casares challenges the foreclosure and brings new federal claims based on alleged fraud and judicial misconduct | The foreclosure litigation and counterclaims in Florida encompassed the same factual nucleus, so relitigation is barred | Dismissed: Counts I–V are claim-precluded by prior final judgment in Florida state court |
| Whether Counts VII–X may proceed in federal court | Casares seeks Title VII and ADA relief in federal court | Employment agreement contains an arbitration clause requiring arbitration of employment/termination disputes | Dismissed: Employment claims must be arbitrated per the FAA and parties’ agreement |
| Whether the Court should consider prior state-court records on Rule 12(b)(6) review | Casares implicitly opposes reliance on state-court records | Defendants rely on judicially noticeable public records from the Florida case | Court took judicial notice of state-court filings and considered them in resolving res judicata challenge |
| Whether dismissal, rather than stay, is appropriate when all claims are arbitrable or precluded | Casares previously obtained a stay to pursue arbitration | Defendants argue dismissal is proper when no federal claims remain | Dismissed: With Counts I–V precluded and Counts VII–X arbitrable, the complaint is dismissed in its entirety |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading must state plausible claim)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility standard for complaints)
- Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (federal policy favoring arbitration)
- Porter v. Shah, 606 F.3d 809 (res judicata elements in D.C. Circuit)
- Apotex, Inc. v. FDA, 393 F.3d 210 (claim preclusion bars new legal theories arising from same facts)
- Smalls v. United States, 471 F.3d 186 (transactional approach to defining the ‘same claim’ for res judicata)