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Stolarick v. Keycorp

United States District Court, E.D. Pennsylvania

October 17, 2017

KYLE E. STOLARICK, for himself and all others similarly situated Plaintiff
KEYCORP, trading as KEYBANK, N.A, et al., Defendants




         Before this Court is the partial motion to dismiss under Federal Rule of Civil Procedure (“Rule”) 12(b)(6) filed by Defendant Keycorp, trading as KeyBank, N.A. (“Defendant” or “KeyBank”), which seeks the dismissal of all but one[1] of the claims asserted against it by Plaintiff Kyle E. Stolarick (“Plaintiff”) based on the doctrine of res judicata.[2] [ECF 13]. Specifically, Defendant argues that the claims that Plaintiff now asserts against Defendant were, or should have been, litigated in a previous action before this Court captioned Stolarick v. First Niagara Financial Group., Inc., Civ. A. No. 16-0296. Plaintiff opposed the motion. [ECF 17].

         The issues raised in the partial motion to dismiss have been fully briefed and are ripe for disposition.[3] For the reasons stated herein, Defendant's partial motion to dismiss is granted.


         The basis for Defendant's partial motion to dismiss rests on the doctrine of res judicata. “Although res judicata and collateral estoppel are affirmative defenses, they may be raised in a motion to dismiss under [Rule] 12(b)(6).” Walzer v. Muriel, Siebert & Co., Inc., 221 Fed.Appx.. 153, 155 (3d Cir. 2007). In considering a Rule 12(b)(6) motion to dismiss, 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. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)). “Generally, to the extent that a court considers evidence beyond the complaint in deciding a 12(b)(6) motion, it is converted to a motion for summary judgment. The defense of claim preclusion [also known as res judicata], however, may be raised and adjudicated on a motion to dismiss and the court can take notice of all facts necessary for the decision. Specifically, a court may take judicial notice of the record from a previous court proceeding between the parties.” Toscano v. Conn. Gen. Life Ins. Co., 2008 WL 2909628, at * 1 (3d Cir. July 30, 2008) (citations omitted). The ordinary requirement that a potential res judicata defense appear “on the face” of the underlying complaint is inapplicable where, like here, the previously litigated matter and the current matter were assigned to the same district court, and where the two comparative pleadings are matters of public record. Hoffman v. Nordic Naturals, Inc., 837 F.3d 272, 280 (3d Cir. 2016).


         On January 22, 2016, Plaintiff commenced an action against his mortgage lender, First Niagara Financial Group, Inc. (“First Niagara”), captioned Stolarick v. First Niagara Financial Group, Inc., Civ. A. No. 16-0296 (the “Previous Litigation”), and asserted claims against First Niagara for, inter alia, violations of the Fair Debt Collections Practices Act (“FDCPA”), 15 U.S.C. §1692a, et seq., and Pennsylvania's Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 Pa. Con. Stat. §201-2, et seq. That matter was assigned to this Court. Stolarick's claims were premised on allegations that following a successful completion of his Chapter 13 bankruptcy in August 2014, First Niagara continued to process his mortgage account as if it was not current, in default, and nonperforming, despite the account being current. Because the damages alleged were below $150, 000, the matter was placed in the court's mandatory arbitration program pursuant to Local Rule of Civil Procedure 53.2 and scheduled for an arbitration hearing to be held on December 2, 2016.

         Two months before the scheduled arbitration, Plaintiff filed a motion for leave to amend the complaint seeking to add class action claims and a claim for a violation of §2605 of RESPA. Plaintiff's proposed RESPA claim was premised upon First Niagara's alleged failure, as a mortgage servicer, to address requested corrections to Plaintiff's mortgage account after Plaintiff sent First Niagara a Qualified Written Request (“QWR”). By Order dated November 16, 2016, this Court denied Plaintiff's motion to amend the complaint because the correspondence attached to the proposed amended complaint did not, as a matter of law, constitute the requisite QWR for such a claim. As such, this Court found that Plaintiff's proposed amendment was futile.

         On December 2, 2016, Plaintiff and First Niagara participated in the scheduled arbitration which resulted in an award of $30, 000.00 in Plaintiff's favor. On January 10, 2017, a civil judgment was entered on the arbitration award and the matter was closed.

         On February 8, 2017, less than a month after judgment was entered in the Previous Litigation, Plaintiff commenced the current litigation against Defendant KeyBank in which he asserts claims for violations of the FDCPA, Pennsylvania's UTPCPL, and RESPA. While Plaintiff's current complaint contains some limited facts that occurred the afternoon following the arbitration, most of the allegations therein are identical or at least similar to those alleged in the Previous Litigation. As in the Previous Litigation, Plaintiff essentially contends in the current complaint that following the successful completion of his Chapter 13 bankruptcy, KeyBank (First Niagara's successor-in-interest)[4] continued to incorrectly process Plaintiff's mortgage account as if it was not current, in default, and non-performing. (See Compl. at ¶30). Like Plaintiff's proposed amended complaint in the Previous Litigation, Plaintiff's current complaint alleges a RESPA claim premised upon KeyBank's alleged failure to respond to Plaintiff's QWR, in violation of 12 U.S.C. §2605(e). (See Compl. at ¶¶116-117).


         In its partial motion to dismiss, Defendant KeyBank argues that Plaintiff's current claims against it (with the one exception noted) should be dismissed on the basis that these claims are precluded by the doctrine of res judicata. Specifically, Defendant KeyBank contends that those specific claims were previously litigated, or should have been litigated, in the Previous Litigation, which went to mandatory arbitration and was ultimately adjudicated in Plaintiff's favor. This Court agrees that the currently challenged claims are premised on facts which existed prior to the final adjudication of the Previous Litigation, and, therefore, those claims are barred by res judicata.

         The doctrine of res judicata “protect[s] litigants from the burden of relitigating an identical issue with the same party or his privy and . . . promot[es] judicial economy by preventing needless litigation.” Parklane Hosiery Co. v. Shore, 439 U.S. 322, 327 (1979). For the doctrine of res judicata to apply, the following three requirements must be met: “(1) a final judgment on the merits in a prior suit involving (2) the same parties or their privies and (3) a subsequent suit based on the same cause of action.” Lubrizol Corp. v. Exxon Corp., 929 F.2d 960, 963 (3d Cir. 1991); see also Mullarkey v. Tamboer (In re Mullarkey), 536 F.3d 215, 225 (3d Cir. 2008). In determining whether the causes of action are the same, a court must “look toward the ‘essential similarity of the underlying events giving rise to the various legal claims.'” Lubrizol, 929 F.2d at 963 (citations omitted). Under this approach, the focus of the inquiry is “‘whether the facts complained of were the same, ...

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