489 B.R. 489
Bankr. S.D.N.Y.2013Background
- Foreclosure: loan originated May 2, 2009 for $175,950, secured by Deed of Trust on property at 6109 Bridgewood Dr., Killeen, TX; Deed later assigned to GMACM; foreclosure sale occurred Aug. 7, 2012.
- Plaintiffs Kimber and spouse filed two Chapter 13 cases in Texas; the first was dismissed, and the second proceeded to an adversary proceeding in Texas to challenge the foreclosure and related documents.
- In this Chapter 11 case, Debtors GMAC Mortgage, LLC and ETS filed an adversary complaint on Nov. 26, 2012 asserting identical claims to those in Texas; Turner and MERS are named as non-debtor defendants.
- Motions to dismiss were filed Mar. 6, 2013, raising Rule 12(b)(6) (failure to state a claim), Rule 12(b)(5) (insufficient service), and res judicata/collateral estoppel defenses; plaintiffs did not respond.
- The court held the matter ripe for dismissal, found res judicata barred the action due to the Texas Orders and final judgments on the merits, and granted dismissal with prejudice.
- The court noted service issues were not addressed due to alternative grounds for dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars the Adversary Proceeding | Kimber argues claims not barred by prior Texas orders | Defendants argue identical claims were adjudicated in Texas and final under Rule 12(b)(6) | Yes, res judicata applies; action dismissed. |
| Whether the Court may enter final judgment on core and non-core claims | Kimber did not affirmatively contest finality; consent implied | Debtors/Non-Debtors consent to final judgment by filing and proceeding | Yes, final judgment by bankruptcy court appropriate. |
| Whether service of process was insufficient | Kimber contends service adequate | Defendants assert lack of record of service | Not reached; dismissal on other grounds affirmed. |
Key Cases Cited
- L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419 (2d Cir.2011) (pleading plausibility standard after Iqbal; two-step analysis)
- Harris v. Coleman, 863 F.Supp.2d 336 (S.D.N.Y.2012) (Iqbal plausibility standard applied in SDNY)
- Bektic-Marrero v. Goldberg, 850 F.Supp.2d 418 (S.D.N.Y.2012) (plausibility and pleading standard guidance)
- King Cnty., Wash. v. IKB Deutsche Industriebank AG, 863 F.Supp.2d 288 (S.D.N.Y.2012) (context-specific plausibility assessment)
- EDP Med. Computer Sys., Inc. v. U.S., 480 F.3d 621 (2d Cir.2007) (res judicata; final judgments on merits can bar later actions)
- Teltronics Servs., Inc. v. L M Ericsson Telecommc’ns, Inc., 642 F.2d 31 (2d Cir.1981) (dismissal on merits under Rule 12(b)(6) has res judicata effect)
- Corbett v. MacDonald Moving Services, Inc., 124 F.3d 82 (2d Cir.1997) (test for res judicata: final judgment, same parties, competent court, same cause)
- In re Oldco M Corp., Executive Sounding Board Assocs., Inc., 484 B.R. 598 (Bankr.S.D.N.Y.2012) (authority on consent to final judgment by bankruptcy court for non-core matters)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (two-prong plausibility standard for pleading)