Fabian v. Brock & Scott, PLLC
7:10-cv-00044
E.D.N.C.Nov 18, 2010Background
- JATAP Group LLC claims fee simple ownership of a Brunswick County, North Carolina parcel; ownership allegedly arising from forfeiture in Alan Fabian’s Maryland criminal case (June 2009).
- U.S. Bank, NA (successor trustee) initiated foreclosure against the Property in August 2009, through Brock & Scott, PLLC.
- Clerk of Court dismissed the foreclosure on March 30, 2010, finding the deed of trust did not secure any debt; Bank appealed to Brunswick County Superior Court which is pending.
- In March 2010, JATAP and Alan Fabian (with Jacqueline Richards-Fabian) filed actions seeking a declaratory judgment that they own the Property free of defendants’ claims; requests include publication notice and cancellation of the deed of trust.
- Court sua sponte recognizes declaratory judgment action is discretionary and that ongoing state foreclosure proceedings may render the federal action inappropriate; court dismisses the DJ action without prejudice to avoid duplicative litigation and potential forum issues.
- Clerk is directed to close the case; defendants’ motion to dismiss is denied as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the DJ action should be entertained or dismissed | JATAP seeks resolution of ownership and quiet-title issues. | Defendants contend state foreclosure proceedings should resolve any title dispute. | DJ action declined; dismissed without prejudice. |
| Whether the federal court should abstain given ongoing state proceedings | State process cannot adequately resolve federal-order issues. | State action already underway; potential efficiency gains in state court. | Jurisdiction declined; stay/dismissal appropriate. |
| Whether to apply Brillhart/Wilton factors to discretionary dismissal | Federal forum preferable for declaratory relief. | Avoid duplicative litigation and forum shopping; state court better suited. | Factors favor dismissal of the DJ action. |
Key Cases Cited
- Wilton v. Seven Falls Co., 515 U.S. 277 (1995) (declaratory judgments discretionary; stay/dismissal allowed)
- Brillhart v. Excess Ins. Co., 316 U.S. 491 (1942) (establishes abstention and discretionary approach to DJ actions)
- Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321 (4th Cir. 1937) (early framework for DJ discretion in federal courts)
- Centennial Life Ins. Co. v. Poston, 88 F.3d 255 (4th Cir. 1996) (discretionary stay/dismissal considerations in DJ actions)
- United Capitol Ins. Co. v. Kapiloff, 155 F.3d 488 (4th Cir. 1998) (guides balancing factors for parallel state/federal proceedings)
- Great Am. Ins. Co. v. Gross, 468 F.3d 199 (4th Cir. 2006) (factors to assess procedural fencing and forum-shopping in DJ cases)