Christopher Hintz v. JPMorgan Chase Bank
2012 U.S. App. LEXIS 14121
8th Cir.2012Background
- Appellants refinanced their home in 2007, executing a note and mortgage to Washington Mutual for $6.75 million.
- Washington Mutual's assets were seized by the FDIC in 2008 and sold to Chase; Chase became holder of the Note and Mortgage.
- Purchase and Assumption Agreement provided Chase did not assume WaMu liabilities for borrower-relief claims.
- Chase foreclosed in 2008 and a sheriff’s sale occurred in 2009; Appellants later sought rescission in 2009.
- Appellants filed a 2010 state court suit alleging misrepresentation and notice failures; the court dismissed with prejudice.
- A 2010 federal removal/diversity case asserted RESPA and TILA claims; the district court dismissed most claims as res judicata or failing to state a claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars non-RESPA claims | Hintz contends earlier state judgment did not adjudicate merits | Chase asserts final merit-based dismissal on the same claims | Yes; non-RESPA claims barred by res judicata |
| Whether the state court dismissal was on the merits | State court order not explicitly on merits | Dismissal on merits given grounds like default or failure to state a claim | Yes; dismissal on the merits under Minnesota law |
| Whether RESPA claim could be amended to cure defects | Attach QWR letters to cure pleading deficiencies | Amendment futile without showing actual damages | No; amendment would be futile and damages not pled with specificity |
| Whether TILA rescission claim expired upon sheriff's sale | Rescission rights remained post-sale | Rescission claim time-barred by sale | Affirmed; TILA rescission expired at sale |
| Whether leave to amend RESPA claim should be granted | Amendment could cure RESPA pleading defects | Leave to amend would be futile under Rule 12(b)(6) | Denied; amendment would be futile |
Key Cases Cited
- Hauschildt v. Beckingham, 686 N.W.2d 829 (Minn. 2004) (res judicata elements and final judgment on merits)
- Johnson v. Hunter, 447 N.W.2d 871 (Minn. 1989) (dismissal with prejudice does not always mean on the merits)
- Charchenko v. City of Stillwater, 47 F.3d 981 (8th Cir. 1995) (qualification on Johnson and merits-based dismissal)
- Unbank Co., LLP v. Merwin Drug Co., Inc., 677 N.W.2d 105 (Minn. App. 2004) (dismissal bases beyond merits affect res judicata)
- Bryson v. Guarantee Reserve Life Ins. Co., 520 F.2d 563 (8th Cir. 1975) (record must be enlarged to review prior judgment)
- Dakota Indus., Inc. v. Dakota Sportswear, Inc., 988 F.2d 61 (8th Cir. 1993) (record expansion for res judicata review)
- In re Senior Cottages of Amer., 482 F.3d 997 (8th Cir. 2007) (de novo review of futility in 12(b)(6) context)
- Cornelia I. Crowell GST Trust v. Possis Med., Inc., 519 F.3d 778 (8th Cir. 2008) (leave to amend when futility shown; need to plead actual damages)