Oketch v. JPMorgan Chase & Co.
3:12-cv-00102
W.D.N.C.Jun 13, 2012Background
- Oketch filed suit against JPMorgan Chase & Co. alleging breach of contract, fraud, and unfair/deceptive trade practices related to a loan secured by real estate,” which originated with North Carolina Federal Savings and Loan Association and later involved Fleet Mortgage and Washington Mutual; HUD subsidy payments partially funded the loan, with alleged subsidy failures from Oct 2000–Feb 2001 causing arrearage.
- Washington Mutual foreclosed in North Carolina Superior Court by a default judgment entered Nov. 14, 2005, awarding $58,337.48 and authorizing foreclosure; no appeal is documented.
- Oketch alleges JPMorgan Chase is successor in interest to predecessors but the complaint asserts only a single, generalized imputing statement linking defendant to predecessors in interest.
- Plaintiff asserts foreclosure and alleged miscalculation of amounts owed as bases for breach of contract and fraud claims.
- Defendant moved to dismiss under Rule 12(b)(6), arguing it did not assume liability for predecessor actions and that the claims are barred by res judicata; the court granted the motion.
- The order concluded that all actions occurred before JPMorgan Chase purchased WaMu assets on Sept. 25, 2008, and thus the claims were properly dismissed with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the defendant can be liable for predecessors' actions | Oketch asserts imputed liability to Defendant via predecessors. | P&A Agreement Section 2.5 insulates Defendant from predecessor liabilities. | Yes; claims fail due to lack of conduct by Defendant and insulation of liability. |
| Whether claims are barred by res judicata | Plaintiff seeks to relitigate findings of the 2005 Judgment. | Judgment precludes relitigation of contract and related claims. | Yes; res judicata bars the claims based on the 2005 Judgment. |
| Whether the complaint pleads facts plausibly supporting liability | Plaintiff identifies alleged loan, note, and foreclosure-related harms. | Complaint lacks factual allegations tying Defendant to action. | Yes; complaint fails Plausibility standard under Twombly-Iqbal. |
| Whether HUD subsidy misstatement amounts to breach or fraud | Misrepresentation about owed amount and subsidy status. | Not pled with sufficient specificity and barred by res judicata. | Barred by res judicata; insufficient new facts. |
| Whether other claims (good faith, U&DTPA) survive | Allege breach of covenant and unfair practices. | No independent facts to support beyond already adjudicated claims. | Barred by res judicata; dismissed. |
Key Cases Cited
- Sartin v. Macik, 535 F.3d 284 (4th Cir. 2008) (preclusive effect of final judgments and res judicata guidance)
- Cromwell v. County of Sac, 94 U.S. 351 (1877) (judgment on a promissory note is conclusive on future actions)
- Phillips v. Phillips, 46 N.C. App. 558, 265 S.E.2d 441 (1980) (broad preclusive effect of res judicata in NC; defenses not raised in prior action are preserved)
- Painter v. Wake County Bd. of Educ., 288 N.C. 165, 217 S.E.2d 650 (1975) (preclusive effect of res judicata extends to all matters litigable in prior action)
- Yeomalakis v. FDIC, 562 F.3d 56 (1st Cir. 2009) (preemption of successor liability where assets acquired; applicable to similar context)