WILLIFORD v. LSF8 MASTER PARTICIPATION TRUST
2:17-cv-01516
E.D. Pa.Jan 17, 2018Background
- Williford financed a Philadelphia home with a mortgage that was later assigned to MERS and then to LSF8 (the "Second Assignment").
- LSF8 sued in state court for foreclosure, moved for summary judgment, and submitted evidence showing assignment to LSF8 and borrower default; Williford (pro se) did not respond. The state court granted summary judgment and entered final judgment for LSF8.
- Williford then filed this federal suit asserting quiet title, fraudulent misrepresentation, civil conspiracy, and UTPCPL claims, all premised on the alleged invalidity or forgery of the Second Assignment (including an allegation an individual signed without authority).
- Defendants moved to dismiss under Rule 12(b)(6), arguing issue preclusion from the state foreclosure judgment because the validity of the assignment was already decided.
- The district court found all claims depended on relitigating the Second Assignment’s validity, that the state judgment necessarily decided that issue, and that Williford had a full and fair opportunity to litigate it despite being pro se and failing to respond.
- The complaint was dismissed with prejudice as amendment would be futile; leave to amend was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Williford may relitigate the validity of the Second Assignment after the state foreclosure judgment | The assignment was invalid/forged; therefore Williford retains rights and can bring federal claims | State foreclosure judgment decided assignment validity; issue preclusion bars relitigation | Issue precluded: state court necessarily decided assignment validity; relitigation barred |
| Whether Williford had a full and fair opportunity to litigate in state court | Pro se status and failure to respond meant he lacked full and fair opportunity | He had the opportunity to litigate; failure to respond does not prevent preclusion | He had a full and fair opportunity; preclusion applies despite pro se status and no reply |
| Whether the foreclosure summary judgment actually decided assignment validity | The issue was not actually decided because Williford did not argue it in state court | The summary judgment motion and order necessarily resolved assignment/standing issues | The state court’s summary judgment necessarily resolved assignment and standing; issue was decided |
| Whether dismissal should be without leave to amend | Complaint could be cured by amendment to allege other independent bases for relief | Claims are dependent on the precluded issue; amendment would be futile | Dismissal with prejudice; leave to amend denied as futile |
Key Cases Cited
- Mayer v. Belichick, 605 F.3d 223 (3d Cir. 2010) (courts may consider complaint exhibits and public records on Rule 12(b)(6) review)
- Lum v. Bank of Am., 361 F.3d 217 (3d Cir. 2004) (district courts may consider certain documents integral to the complaint)
- Warren Gen. Hosp. v. Amgen, 643 F.3d 77 (3d Cir. 2011) (plausibility standard for pleading under Rule 12(b)(6))
- Taylor v. Extendicare Health Facilities, Inc., 147 A.3d 490 (Pa. 2016) (Pennsylvania issue preclusion elements and principles)
- Dauphin Deposit Bank & Tr. Co. v. Tenny, 513 A.2d 459 (Pa. Super. Ct. 1986) (prior foreclosure judgment bars re-litigation of mortgage validity and standing)
- Alston v. Parker, 363 F.3d 229 (3d Cir. 2004) (futility standard for denying leave to amend)