Whitmore v. Bank of New York Mellon
2:17-cv-01265
E.D. La.May 16, 2017Background
- Pro se plaintiff Wilmore Whitmore sued after foreclosure activity on his home, alleging defendants breached a HAFA/HAMP short-sale agreement and foreclosed before he could sell.
- Whitmore and his wife previously filed a state-court action against BNY Mellon (trustee) seeking injunctive relief; that action was voluntarily dismissed with prejudice in August 2013 pursuant to a state-court order referencing a compromise/settlement.
- Defendants include BNY Mellon (trustee), Ditech (current servicer), and Bank of America N.A. (former servicer). Defendants moved to dismiss or for judgment on the pleadings asserting res judicata among other grounds.
- The Court applied Louisiana res judicata principles to determine preclusive effect of the prior dismissal with prejudice and took judicial notice of the state-court dismissal order.
- The district court found the elements of res judicata satisfied as to Whitmore’s claims arising from the same transaction/occurrence and dismissed the complaint without prejudice, but allowed Whitmore leave to amend to clarify whether he asserts any contract claim based on the settlement/compromise in the state-court order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Whitmore’s current claims are barred by res judicata | Whitmore contends defendants breached the short-sale/HAFA agreement and/or otherwise violated rights relating to foreclosure | Defendants argue the prior dismissal with prejudice in state court bars relitigation of claims arising from the same transaction; servicers are in privity with trustee | Court: Res judicata applies; the prior dismissal with prejudice is a final valid judgment, parties/privity satisfied, and current claims arise from same transaction — claims barred |
| Whether servicers (BANA, Ditech) are bound by the state-court judgment against trustee (BNY Mellon) | Whitmore did not dispute servicers’ preclusive burden | Defendants assert privity between trustee and servicers for res judicata purposes | Court: Servicers are in privity with trustee; res judicata binds them |
| Whether tort claims distinct from contract claims survive res judicata | Whitmore argued differing legal theories mean claims are not precluded | Defendants argued all claims arising from same transaction were precluded regardless of theory | Court: Louisiana law bars all claims arising from same transaction/occurrence even if legal theories differ; tort claims barred |
| Whether any claim survives because of the settlement/compromise referenced in the state-court dismissal | Whitmore ambiguously suggests settlement terms may have been breached | Defendants did not emphasize this point | Court: Unclear from complaint whether Whitmore alleges breach of the settlement; plaintiff given leave to amend to clarify any claim based on the settlement |
Key Cases Cited
- Johnson v. Johnson, 385 F.3d 503 (5th Cir.) (Rule 12(c) standard equals Rule 12(b)(6) standard)
- Brittan Communications Int’l Corp. v. Southwestern Bell Telephone Co., 313 F.3d 899 (5th Cir.) (pleadings construed liberally; accept well-pled facts)
- Bosarge v. Mississippi Bureau of Narcotics, 796 F.3d 435 (5th Cir.) (scope of materials considered on Rule 12(c))
- Hebert Abstract Co. v. Touchstone Properties, Ltd., 914 F.2d 74 (5th Cir.) (Rule 12(c) precedents)
- Weaver v. Texas Capital Bank N.A., 660 F.3d 900 (5th Cir.) (federal courts apply state preclusion law for state judgments)
- Burguieres v. Pollingue, 843 So.2d 1049 (La.) (elements to establish res judicata under Louisiana law)
- Henkelmann v. Whiskey Island Pres., LLC, 145 So.3d 465 (La. App.) (res judicata bars relitigation of subject matter arising from same transaction)
- Schnell v. Mendoza, 142 So.3d 238 (La. App.) (plaintiff must assert all causes of action existing at time of judgment regardless of legal theory)
- Mandalay Oil & Gas, L.L.C. v. Energy Dev. Corp., 880 So.2d 129 (La. App.) (nonparty bound where interests were adequately represented/privity)
- Sours v. Kneipp, 923 So.2d 981 (La. App.) (res judicata applies despite different legal theory)