Morgan v. Wells Fargo
2:18-cv-07264
E.D.N.YJan 23, 2020Background
- In 2007 Joseph A. Collier executed a mortgage note on property at 603 Franklin Ave, Massapequa, NY; Wells Fargo acquired the note in 2009.
- Collier died; William Morgan identifies himself as a beneficiary of the estate/loan.
- The loan defaulted in 2010; Wells Fargo sued in New York Supreme Court in 2016 and obtained a final judgment of foreclosure and sale in September 2017 after defendants failed to answer.
- The property was sold at foreclosure in December 2018 to defendant Kamran Ghazvini.
- Morgan (pro se) sued Wells Fargo and Ghazvini in federal court seeking to rescind the mortgage and void the foreclosure sale. Wells Fargo moved to dismiss for lack of subject-matter jurisdiction and other grounds.
- The district court declined to apply Younger abstention (state proceeding not pending) but concluded Rooker–Feldman barred federal review and dismissed the complaint without prejudice; Morgan’s request for appointment of counsel was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal court has jurisdiction under Rooker–Feldman | Morgan seeks to nullify the mortgage/foreclosure and obtain title | Wells Fargo: federal suit is effectively an attack on the state-court foreclosure judgment | Rooker–Feldman applies; federal court lacks jurisdiction; complaint dismissed without prejudice |
| Whether Younger abstention requires dismissal | Morgan contends federal forum appropriate / no pending state matter | Wells Fargo asserted the foreclosure action was "pending" and Younger should apply | Younger inapplicable: state court rendered final judgment and no evidence of a pending state proceeding |
| Whether a beneficiary (nonparty) is bound by the state foreclosure judgment | Morgan claims injury to his property interests and challenges the sale | Wells Fargo: executor/administrator litigated the foreclosure; representative judgment binds beneficiaries | State judgment binds Morgan under representative/ preclusion principles; his federal suit invites reversal of that judgment and is barred |
| Request for appointment of counsel | Morgan requested the court “hire an attorney” (pro bono counsel) | — | Denied |
Key Cases Cited
- Makarova v. United States, 201 F.3d 110 (2d Cir. 2000) (standard for Rule 12(b)(1) dismissal review)
- Sykes v. Bank of Am., 723 F.3d 399 (2d Cir. 2013) (pro se pleadings construed liberally)
- Erickson v. Pardus, 551 U.S. 89 (2007) (pro se complaints held to less stringent standards)
- Spargo v. N.Y. State Comm'n on Judicial Conduct, 351 F.3d 65 (2d Cir. 2003) (elements for mandatory Younger abstention)
- Vossbrinck v. Accredited Home Lenders, Inc., 773 F.3d 423 (2d Cir. 2014) (Rooker–Feldman bars federal review of state-court judgments, applied to foreclosure context)
- Hoblock v. Albany Cty. Bd. of Elecs., 422 F.3d 77 (2d Cir. 2005) (articulating the four-part Rooker–Feldman test)
- Taylor v. Sturgell, 553 U.S. 880 (2008) (when representative suits bind nonparties for preclusion purposes)
- Chicago, Rock Island & Pacific Ry. Co. v. Schendel, 270 U.S. 611 (1926) (prior judgment against an estate beneficiary may bind the estate’s representative and related parties)