Mains v. Citibank, N.A.
2017 U.S. App. LEXIS 5429
| 7th Cir. | 2017Background
- Mains executed a mortgage in 2006; WAMU failed in 2008, FDIC became receiver, and Chase later serviced/purchased the loan; Citibank obtained the mortgage and foreclosed in state court.
- Citibank filed for summary judgment in the 2010 foreclosure; the state trial court granted summary judgment in 2013; the Indiana Court of Appeals affirmed and the Indiana Supreme Court denied transfer in 2015.
- Mains filed a 90‑page federal complaint (2015) alleging fraud, robo‑signing, undisclosed consent judgments, and a February 2015 rescission; he asserted federal claims (RESPA, TILA, FDCPA, RICO) and multiple state claims.
- The district court dismissed the federal suit under the Rooker‑Feldman doctrine as an improper attempt to overturn the state foreclosure judgment and indicated dismissal with prejudice; the Seventh Circuit modified dismissal to be without prejudice where jurisdictional.
- The Seventh Circuit held most federal claims barred by Rooker‑Feldman (or precluded by issue preclusion); some claims were dismissed on the merits (e.g., time‑barred TILA rescission), and FIRREA exhaustion barred claims linked to WAMU/FDIC actions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal court may hear claims that effectively challenge state foreclosure judgment | Mains: discovered new evidence of fraud and rescinded mortgage in 2015; federal court should adjudicate fraud claims | Defendants: suit is an impermissible collateral attack on a final state judgment; federal court lacks jurisdiction under Rooker‑Feldman | Rooker‑Feldman bars adjudication because relief sought would nullify the state judgment; dismissal for lack of subject‑matter jurisdiction (mostly without prejudice) |
| Whether RESPA/accounting claims are independently reviewable | Mains: Chase improperly charged late fees and proceeded without proper accounting | Defendants: RESPA theory is aimed at undoing state foreclosure; state court already determined amounts due | RESPA claims that seek to overturn foreclosure are barred by Rooker‑Feldman; any discrete pre‑foreclosure accounting claim is precluded by state judgment |
| Whether TILA rescission and disclosure claims survive | Mains: defendants misrepresented terms and ignored his February 2015 rescission | Defendants: rescission time‑bar exceeded and rescission would be inconsistent with final foreclosure judgment | Rescission claim time‑barred (TILA §1635(f)); any TILA claim seeking to invalidate foreclosure is barred by Rooker‑Feldman or precluded on the merits |
| Whether FDCPA/RICO/attorney‑fee claims are independent injuries | Mains: statutory violations and RICO conspiracy caused independent injuries (fees, clouded title) | Defendants: any injury flows from state court loss and is not independent of foreclosure judgment | Claims premised on harms dependent on state judgment are barred by Rooker‑Feldman; pre‑foreclosure FDCPA claims are precluded by the state court’s determination that collection was authorized |
Key Cases Cited
- Rooker v. Fidelity Trust Co., 263 U.S. 413 (establishes limits on lower federal courts overturning state court judgments)
- District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (clarifies Rooker doctrine; lower federal courts lack appellate power over state decisions)
- Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (describes scope of Rooker‑Feldman and federal jurisdiction)
- Sykes v. Cook Cnty. Cir. Ct. Prob. Div., 837 F.3d 736 (7th Cir.) (explains when federal claims are tantamount to appeals of state judgments)
- Long v. Shorebank Dev. Corp., 182 F.3d 548 (7th Cir.) (federal courts must give preclusive effect to state court judgments)
- Harold v. Steel, 773 F.3d 884 (7th Cir.) (FDCPA claims premised on litigation conduct barred by Rooker‑Feldman when injury arises only after adverse state ruling)
- Frederiksen v. City of Lockport, 384 F.3d 437 (7th Cir.) (dismissing under Rooker‑Feldman is a Rule 12(b)(1) jurisdictional dismissal and cannot be with prejudice)
- Haber v. Biomet, Inc., 578 F.3d 553 (7th Cir.) (explains Indiana approach to finality and preclusive effect)
- Farnik v. FDIC, 707 F.3d 717 (7th Cir.) (FIRREA bars suit involving acts of a failed depository institution absent exhaustion of administrative remedies)