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Allison Straker v. Deutsche Bank National Trust

February 3, 2010


The opinion of the court was delivered by: Judge Caputo


Presently before the Court is the report and recommendation of Magistrate Judge Martin C. Carlson. (Doc. 43.) The report recommends that the motions to dismiss (Docs. 30, 33) be granted in part, and that the motion to strike (Doc. 35) be denied. For the reasons explained below, the report and recommendation will be adopted in part. The motions to dismiss will be granted in part, and the motion to strike will be denied.

I. Background

The plaintiff, Allison Straker, alleges in her briefing that in 2006 she was sold two subprime loans from Mortgage Electronic Registration Systems, Inc. (MERS), acting as a nominee for Fremont Loan & Investment. The first mortgage was assigned to Deutsche Bank National Trust Company as trustee. Straker defaulted on her mortgage obligations. Deutsche Bank instituted a foreclosure action in state court, which resulted in a judgment by default against Straker.

Eighteen months later Straker, proceeding pro se, filed a complaint in federal court against the defendants involved in her mortgage transactions as well as 1,000 John Doe defendants. (Doc. 1.) Her complaint was dismissed without prejudice, and the Court afforded Straker the opportunity to amend her complaint.

Straker filed an amended complaint. She brings claims against various defendants, whom she alleges were involved in her mortgage application process and violated her rights under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601 et seq, and the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq. She also brings claims of civil conspiracy, unjust enrichment, and fraudulent inducement, and seeks a declaratory judgment that no contract ever existed between her and any of the defendants. Defendants Deutsche Bank National Trust Company, Mortgage Electronic Registrations Systems, Inc. (MERS), and Homeq Servicing Corporation move to dismiss the amended complaint under Federal Rules of Civil Procedure 12(b)(6) and 12(b)(1). (Doc. 30.) In response, Straker moves to strike portions of this motion. (Doc. 35.) Defendant Fremont Investment & Loan also moves to dismiss the amended complaint under 12(b)(6) and 12(b)(1).

These motions were referred to Magistrate Judge Martin C. Carlson for a report and recommendation. Presently before the Court is Magistrate Judge Carlson's report, recommending dismissal in part of the amended complaint and denying the motion to strike. (Doc. 43.)

Straker timely objected. The Court has considered her objections. For the reasons explained below, the report and recommendation will be adopted in part and rejected in part.

II. Discussion

A. Legal Standard for Reviewing a Report and Recommendation

Where objections to the magistrate judge's report are filed, the court must conduct a de novo review of the contested portions of the report, Sample v. Diecks, 885 F.2d 1099, 1106 n.3 (3d Cir. 1989) (citing 28 U.S.C. § 636(b)(1)(c)), provided the objections are both timely and specific, Goney v. Clark, 749 F.2d 5, 6--7 (3d Cir. 1984). In making its de novo review, the court may accept, reject, or modify, in whole or in part, the factual findings or legal conclusions of the magistrate judge. See 28 U.S.C. § 636(b)(1); Owens v. Beard, 829 F. Supp. 736, 738 (M.D. Pa. 1993). Although the review is de novo, the statute permits the court to rely on the recommendations of the magistrate judge to the extent it deems proper. See United States v. Raddatz, 447 U.S. 667, 675--76 (1980); Goney, 749 F.2d at 7; Ball v. United States Parole Comm'n, 849 F. Supp. 328, 330 (M.D. Pa. 1994). Uncontested portions of the report may be reviewed at a standard determined by the district court. See Thomas v. Arn, 474 U.S. 140, 154 (1985); Goney, 749 F.2d at 7. At the very least, the court should review uncontested portions for clear error or manifest injustice. See, e.g., Cruz v. Chater, 990 F. Supp. 375, 376--77 (M.D. Pa. 1998).

B. Legal Standard on a Motion to Dismiss Under 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, for failure to state a claim upon which relief can be granted. In deciding a 12(b)(6) motion, courts "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). Dismissal is appropriate only if a plaintiff has failed to plead "enough facts to state a claim to relief that is plausible on its face," Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007), which is to say "enough facts to raise a reasonable expectation that discovery will reveal evidence of illegal[ity]." In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 319 (3d Cir. 2010) (quoting Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 2010) (alteration in Arista Records)).

"A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Twombly, 550 U.S. at 556). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. "Where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'shown'-'that the pleader is entitled to relief.'" Id. at 1950.

In line with the pleading standards established by the Supreme Court's decisions in Twombly and Iqbal, the Third Circuit has instructed district courts to conduct a two-part analysis when disposing of a motion to dismiss for failure to state a claim. See Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). This analysis proceeds as follows:

First, the factual and legal elements of a claim should be separated. The District Court must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions. Second, a District Court must then determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a "plausible claim for relief." In other words, a complaint must do more than allege the plaintiff's entitlement to relief. A complaint has to "show" such an entitlement with its facts.

Id. at 210--11 (internal citations omitted).

Courts must construe complaints "so as to do substantial justice." Fed. R. Civ. P. 8(e). Courts liberally construe pro se pleadings and "apply the applicable law, irrespective of whether the pro se litigant has mentioned it by name." Dluhos v. Strasberg, 321 F.3d 365, 369 (3d Cir. 2003) (citing Higgins v. Beyer, 293 F.3d 683, 688 (3d Cir. 2002)).

C. Subject Matter Jurisdiction under Rooker-Feldman

Straker objects to the application of the Rooker-Feldman doctrine to this case. She argues that the state court mortgage foreclosure action only involved defendant Deutsche Bank, and that none of the other defendants received a judgment in state court.

Straker appears to be confusing the Rooker-Feldman doctrine with collateral estoppel or res judicata. While the doctrines of collateral estoppel and res judicata require that federal courts give state court judgments preclusive effect in certain circumstances, application of these doctrines is not jurisdictional. By contrast, the Rooker-Feldman doctrine divests lower federal courts of subject matter jurisdiction over cases which seek to review and reject a state court judgment.

Straker additionally objects to the application of the Rooker-Feldman doctrine on the grounds that it does not apply to this case. She argues that she does not complain of injuries caused by the state court judgment in the mortgage foreclosure action. Instead, she asserts that the claims she presents now stand independent of the state court judgment.

Rooker-Feldman is a "narrow doctrine" which "applies only in limited circumstances." Lance v. Dennis, 546 U.S. 459, 464--66 (2006). The Rooker-Feldman doctrine "is confined to cases of the kind from which the doctrine acquired its name: cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments." Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). Such a case essentially invites lower federal courts to act in an appellate capacity over state courts, a function which is reserved by statute to the Supreme Court alone. Great W. Mining & Mineral Co. v. Rox Rothschild LLP, 615 F.3d 159, 164 (3d Cir. 2010).

However, when "a federal plaintiff asserts injury caused by the defendant's actions and not by the state-court judgment, Rooker-Feldman is not a bar to federaljurisdiction." Great W. Mining & Mineral Co., 615 F.3d at 167 (citing Coles v. Granville, 448 F.3d 853, 859 (6th Cir. 2006); Davani v. Va. Dep't of Transp., 434 F.3d 712, 719 (4th Cir. 2006)). The Rooker-Feldman doctrine is "not implicated 'simply because a party attempts to litigate in federal court a matter previously litigated in state court.'" Id. at 166 (citing Exxon Mobil, 544 U.S. at 293). So long as the federal plaintiff "presents some independent claim, albeit one that denies a legal conclusion that a state court has reached in a case to which he was a party . . . then there is jurisdiction and state law determines whether the defendant prevails under principles of preclusion." Id. (citing Exxon Mobil, 544 U.S. at 293) (emphasis added)). "A useful guidepost" in determining whether Rooker-Feldman applies "is the timing of the injury, that is, whether the injury complained of ...

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