Omotosho v. Freeman Investment & Loan
136 F. Supp. 3d 235
| D. Conn. | 2016Background
- Pro se plaintiff sued CitiMortgage, MERS, and Hunt Leibert seeking to void a Connecticut Superior Court foreclosure judgment, obtain title, and recover damages. Plaintiff had filed bankruptcy (Chapter 13 converted to Chapter 7) on April 22, 2014 and received a discharge in January 2015; his Schedule B did not disclose these claims.
- Foreclosure was initiated February 9, 2010; final judgment of foreclosure entered November 24, 2014; plaintiff’s motion to open denied January 20, 2015; law day April 21, 2015.
- Complaint asserted multiple claims: § 1983 deprivation of rights (Count I); conspiracy/ fraud and challenges to the Note–Mortgage “bifurcation”/securitization (Counts II, VII); abuse/misuse of process and fraud on the court (Counts IV, VIII); due-process/obstruction (Count V); § 1985/1986 conspiracy (Count VI); mail fraud (Count IX); and related state-law fraud theories.
- Defendants moved to dismiss under Rules 12(b)(1) and 12(b)(6). Court considered bankruptcy–estate ownership, Rooker–Feldman, res judicata/collateral estoppel, statute of limitations, failure to state a claim, and litigation privilege.
- Court dismissed the complaint in full and denied leave to amend as futile. Several counts were held to be property of the bankruptcy estate or barred by Rooker–Feldman or res judicata; others failed for lack of private causes of action, statute of limitations, or insufficient facts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue (bankruptcy estate ownership) | Claims arise from fraud/breach at loan inception and foreclosure; plaintiff may pursue them | Many claims accrued before April 22, 2014 and were omitted from Schedule B, so they became estate property | Counts II, IV, VII owned by bankruptcy estate; plaintiff lacks standing to pursue them |
| Rooker–Feldman jurisdictional bar | Federal court may adjudicate wrongful-foreclosure and related constitutional claims | Rooker–Feldman bars federal review of state-court foreclosure judgment and related claims | Counts I, III, V, VI, VIII (as pleaded) barred by Rooker–Feldman |
| Res judicata / claim preclusion | Foreclosure judgment should not bar separate federal tort/constitutional claims | Foreclosure was final; claims could have been raised in state court; MERS in privity with assignee | Claims against CitiMortgage and MERS (Counts I–VI / I–VII as applicable) barred by res judicata; privity does not bind Hunt Leibert |
| Failure to state viable federal claims | Allegations state § 1983, § 1985/1986, federal crimes, and mail fraud | Many federal statutes invoked provide no private cause of action, or claims are time-barred, or lack state-action or factual specificity | Remaining counts also dismissed for failure to state a claim (including § 1983, § 1985/1986, mail fraud); litigation privilege protects attorneys from fraud claims |
Key Cases Cited
- Moore v. Paine-Webber Inc., 189 F.3d 165 (2d Cir.) (standards for 12(b)(1) and 12(b)(6) review are identical)
- Scheuer v. Rhodes, 416 U.S. 232 (1974) (court must accept complaint allegations as true on motion to dismiss)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (complaint must plead facts plausibly showing entitlement to relief)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions need not be accepted as true; plausibility standard)
- Vossbrinck v. Accredited Home Lenders, Inc., 773 F.3d 423 (2d Cir.) (Rooker–Feldman bars federal suit seeking to undo state foreclosure judgment obtained by alleged fraud)
- Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (2005) (Rooker–Feldman implicates federal subject-matter jurisdiction)
- Taylor v. Sturgell, 553 U.S. 880 (2008) (nonparty preclusion and privity principles for res judicata)
- Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75 (1984) (federal courts must give state-court judgments same preclusive effect as state law)