Klimowicz v. Deutsche Bank National Trust Co.
264 F. Supp. 3d 309
D. Mass.2017Background
- Plaintiff Jeanne Klimowicz owned 32 Mary Heights, Fitchburg, MA; she executed a mortgage to New Century Mortgage Co. in 2004. New Century filed bankruptcy in 2007 and was later liquidated.
- An assignment of the mortgage from New Century to Deutsche Bank (as trustee of New Century Home Equity Loan Trust 2005-1) was recorded in 2008; Carrington Mortgage Services prepared the assignment and acted as attorney-in-fact for both assignor and assignee at relevant times.
- Klimowicz filed for bankruptcy (2006), pursued an adversary proceeding challenging the mortgage (dismissed for service defects), and New Century obtained relief from stay leading to foreclosure proceedings; Deutsche Bank purchased the property at foreclosure and obtained title.
- Deutsche Bank later pursued summary process (eviction) in Worcester Housing Court; Klimowicz moved to amend a counterclaim to challenge the assignment’s validity (denied); judgment entered for Deutsche Bank and her appeal was dismissed for failure to post bond.
- Klimowicz sued in federal court asserting wrongful foreclosure, Chapter 93A violation, breach of covenant of good faith, and emotional distress, seeking vacation of the state foreclosure judgment under Mass. R. Civ. P. 60(b) and injunctive and monetary relief.
- Defendants moved to dismiss; the district court dismissed the complaint for lack of subject‑matter jurisdiction under Rooker–Feldman and, alternatively, on res judicata (issue and claim preclusion) grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal court has jurisdiction given plaintiff seeks to vacate state foreclosure judgment | Klimowicz seeks to vacate the Land Court final judgment and pursue related tort and consumer claims in federal court | Rooker–Feldman bars federal review of state-court judgments and prevents plaintiff from obtaining relief that would effectively nullify the state foreclosure judgment | Court: Rooker–Feldman bars jurisdiction because success would require invalidating the state judgment |
| Whether claims are barred by issue preclusion (res judicata) | Klimowicz contends the Housing Court did not fully adjudicate the assignment/invalidity issues and her appeal dismissal for failure to post bond deprives finality | Defendants argue the Housing Court denied her motion to amend to assert invalidity, the issue was actually litigated and was final/appealable, so preclusion applies | Court: Issue preclusion applies; the invalidity claim was raised, decided (denied amendment), and was subject to appeal, so plaintiff is barred |
| Whether additional claims are barred by claim preclusion | Klimowicz contends some claims were never litigated elsewhere (e.g., loan origination improprieties) | Defendants assert all claims arise from the same transaction/nucleus of facts and could have been raised in the prior proceeding | Court: Claim preclusion bars other claims that arose from the same operative facts and parties |
| Whether other defenses (bankruptcy surrender, judicial estoppel) required resolution | Klimowicz disputes that she surrendered the property or is estopped by bankruptcy proceedings | Defendants raised bankruptcy surrender and judicial estoppel as alternative bases for dismissal | Court: Declined to reach these defenses after disposing of the case on Rooker–Feldman and res judicata grounds |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must state a plausible claim)
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard for complaints)
- Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (limits federal court review of state-court judgments; Rooker–Feldman framework)
- Lance v. Dennis, 546 U.S. 459 (defines scope of Rooker–Feldman for state-court losers)
- Miller v. Nichols, 586 F.3d 53 (Rooker–Feldman analysis does not depend on issues actually litigated in state court)
- Ruiz v. Bally Total Fitness Holding Corp., 496 F.3d 1 (First Circuit standard on accepting well-pleaded facts on Rule 12(b)(6))
- In re Sonus Networks, Inc. S’holder Derivative Litig., 499 F.3d 47 (federal courts give state judgments the same preclusive effect under 28 U.S.C. § 1738)
- Jarosz v. Palmer, 49 Mass. App. Ct. 834 (describes finality requirement for issue preclusion under Massachusetts law)