561 F. App'x 577
8th Cir.2014Background
- Welk challenged foreclosure by Wells Fargo on his Minnesota residence; district court dismissed the claim and we affirmed earlier on res judicata grounds.
- Welk later sued Fannie Mae after Wells Fargo conveyed title to Fannie Mae by quitclaim deed; district court dismissed for failure to state a claim and for claim preclusion.
- This appeal concerns whether Welk’s new suit against Fannie Mae is barred by Minnesota claim preclusion when the earlier action involved Wells Fargo and the same foreclosure.
- Minnesota law governs preclusion; the district court held Welk had a final merits judgment and full opportunity to litigate, so res judicata applies.
- We recognize Wells Fargo and Fannie Mae were in privity for purposes of claim preclusion; Wells Fargo’s servicing and foreclosure actions affected Fannie Mae’s interests.
- Even if not barred, the complaint fails to plead plausible facts of an unrecorded assignment; the allegations are speculative and fail Rule 8/Rule 12 standards.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does claim preclusion bar Welk’s challenge to foreclosure? | Welk argues new ownership by Fannie Mae allows a fresh challenge. | Fannie Mae and Wells Fargo are in privity; prior judgment precludes this suit. | Yes; Welk is barred by res judicata. |
| Does the complaint plausibly allege an unrecorded assignment voiding foreclosure? | Unrecorded assignment from Wells Fargo to Fannie Mae could render foreclosure void under Minnesota law. | No plausible claim; allegations are speculative and lack sufficient factual support. | No; claim fails to state a plausible claim under Rule 8/12. |
Key Cases Cited
- Lundquist v. Rice Memorial Hosp., 238 F.3d 975 (8th Cir. 2001) (res judicata de novo review for summary of doctrine)
- Taylor v. Sturgell, 553 U.S. 880 (U.S. 2008) (preclusion framework; issues and privity considerations)
- New Hampshire v. Maine, 532 U.S. 742 (U.S. 2001) (final judgment on the merits; same claim scope)
- Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497 (U.S. 2001) (fed. preclusion law adopts state-law rules in diversity cases)
- Brown-Wilbert, Inc. v. Copeland Buhl & Co., P.L.L.P., 732 N.W.2d 209 (Minn. 2007) (elements of Minnesota claim preclusion)
- Rucker v. Schmidt, 794 N.W.2d 114 (Minn. 2011) (privity concepts in claim preclusion)
- Jackson v. Mortg. Elec. Registration Sys., Inc., 770 N.W.2d 487 (Minn. 2009) (separation of legal and equitable interests in mortgage)
- Ruiz v. 1st Fidelity Loan Servicing, LLC, 829 N.W.2d 53 (Minn. 2013) (unrecorded assignment arguments insufficient)
- Dunbar v. Wells Fargo Bank, N.A., 709 F.3d 1254 (8th Cir. 2013) (Rule 12(b)(6) dismissal standards; plausibility)
- Karnatcheva v. JPMorgan Chase Bank, N.A., 704 F.3d 545 (8th Cir. 2013) (pleading standards for mortgage-related claims)