United States District Court, M.D. Pennsylvania
John E. Jones III, Judge
pending before this Court is Defendants' Motion to
Dismiss Plaintiffs' Complaint, (Doc. 12), filed by
Defendants Caliber Home Loans (“Caliber”) and
LSF9 Master Participation Trust (“LSF9”). For the
reasons that follow, we grant the motion in full.
there are scant facts pled therein, we take the following
from Plaintiffs' Complaint and assume it to be true, as
we must. Where Plaintiffs' Complaint is lacking, we take
from the public record, as we are permitted to
bring the instant claim before this Court for actual,
emotional, and putative damages based upon a Pennsylvania
state foreclosure judgment on their home. Plaintiffs cite
perceived defects in the state court foreclosure action to
support their various claims, arguing that Defendants engaged
in misrepresentations that led to the allegedly unlawful
foreclosure and that Defendants charged unlawful fees in
servicing their mortgage.
September 30, 2005, Plaintiffs executed and delivered a
Mortgage Agreement to Mortgage Electronic Registration
Systems, Inc. (“MERS”) against their home located
at 5993 Anderson Road, Stewartstown, PA 17363 (“the
Mortgage”) to secure a Note executed and delivered on
March 11, 2004 (“the Note”). (Doc. 1 at 1, 3).
The principal balance of the Mortgage was $225,
000.00.The Mortgage was properly assigned to BAC
Home Loans servicing, L.P. (“BAC”) on August 25,
2010. Id. BAC was succeeded in merger by Bank of
America, N.A. Id.
March 1, 2010, Plaintiffs defaulted on the Mortgage.
Id. Bank of America initiated a Complaint in
Mortgage Foreclosure in the York County Court of Common Pleas
on February 6, 2015. Id. On February 11, 2016, the
York County Court of Common Pleas entered a default judgment
against Plaintiffs in the amount of $331,
211.33. Since that time, Plaintiffs have attempted
to open the default judgment,  filed several Emergency Stay
Petitions on the Sheriff's Sale of the Property,
appealed those decisions to the Pennsylvania Superior Court,
to no avail. The Sheriff's Sale on the Property has been
continued several times.
October 1, 2016, Defendant Caliber became the servicer of the
Mortgage. (Doc. 1 at 5). Defendant LSF9 became the creditor
at this time. Id. On April 8, 2017, Caliber sent
Plaintiffs a Loss Mitigation Application, which Plaintiffs
completed and returned to Caliber. Id. However,
Caliber claimed they were not required to review the
application and no action was taken. Id. Plaintiffs
unsuccessfully attempted to modify their loan on November 12,
2018. Id. On April 8, 2019, Plaintiffs filed a
Notice of Bankruptcy with the Sheriff's Office and the
Sheriff's Sale was canceled. Plaintiffs filed a Complaint
in our Court, reiterating the above facts and proceedings, on
April 5, 2019. (Doc. 1).
their Complaint, Plaintiffs allege violation of the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C.A.
§ 1692, et seq., (Count I); breach of contract,
(Count II); respondeat superior, (Count III); unjust
enrichment, (Count IV); violation of the Racketeering
Influenced and Corrupt Organizations Act
(“RICO”), 18 USC § § 1961-1968, (Count
V); violation of the Pennsylvania Unfair Trade Practices and
Consumer Protection Law (“UTPCPL”), 73 Pa.C.S.A.
§ 201 et seq., (Count VI); violation of the
Real Estate Settlement Procedures Act (“RESPA”),
12 U.S.C. § 2601 et seq., (Count VII); and
violation of 12 C.F.R. § 1024.41, (Count VIII).
Plaintiffs seek actual, emotional, and putative damages based
upon the allegedly unlawful state foreclosure action and the
allegedly impermissible actions on the part of Defendants
that led to that foreclosure.
Caliber and LSF9 filed the instant Motion to Dismiss on July
9, 2019. (Doc. 12). The Motion has been fully briefed, (Docs.
13, 14, 19), and is ripe for disposition.
STANDARD OF REVIEW
raise three separate arguments as to why we should dismiss
Plaintiffs' claims in their entirety. Under the
Rooker-Feldman doctrine, Defendants argue that the
state foreclosure judgment bars federal courts from hearing
claims already decided by the state court. Second, Defendants
argue that, even if Rooker-Feldman does not apply,
res judicata precludes disposition by this Court
because the state foreclosure judgment satisfies the elements
of res judicata in Pennsylvania. Finally, Defendants
argue that Plaintiffs' have failed to state a cognizable
claim under the Iqbal and Twombly standards
that would permit us to grant relief.
first note that, while Defendants raise their arguments under
F.R.C.P. 12(b)(6), their Rooker-Feldman doctrine
argument is more properly brought under F.R.C.P. 12(b)(1).
Singleton v. Jas Automotive LLC, 378 F.Supp.3d 334,
344 (E.D. Pa 2019) (holding that Rooker-Feldman
arguments are properly addressed under 12(b)(1)). Therefore,
we will address Defendants' Rooker-Feldman
arguments as such. (“When a requirement goes to
subject-matter jurisdiction, courts are obligated to consider
sua sponte issues that the parties have disclaimed
or have not presented.” Gonzalez v. Thaler,
565 U.S. 134, 141 (2012) (citing United States v.
Cotton, 535 U.S. 625, 630 (2002))).
res judicata and deficient pleading arguments are
both properly examined under Rule 12(b)(6).
Rule 12(b)(1) motion, a court must first determine if the
motion is a “facial” or a “factual”
attack. Constitution Party of Pa. v. Aichele, 757
F.3d 347, 357 (3d Cir. 2014). A facial attack
“considers a claim on its face” and argues that
the claim “is insufficient to invoke the subject matter
jurisdiction of the court.” Id. at 358. With a
facial attack, “the court must only consider the
allegations of the complaint and documents referenced therein
and attached thereto, in the light most favorable to the
plaintiff.” Id. (quoting In re Schering
Plough Corp. Intron, 678 F.3d 235, 243 (3d Cir. 2012)).
With a factual attack, by contrast, “a court may weigh
and ‘consider evidence outside the
pleadings.'” Id. (quoting Gould Elecs.
Inc. v. United States, 220 F.3d 169, 176 (3d Cir.
Defendants do not challenge jurisdiction based on the factual
assertions contained in Plaintiff's Complaint. Rather,
they contend that jurisdiction is lacking strictly as a
matter of law based on the Rooker Feldman doctrine.
Therefore, while Defendants do not expressly state which type
of attack they are advancing, we construe their motion as a
facial attack because they present a legal argument against
jurisdiction as opposed to a factual one. See
Constitution Party of Pennsylvania v. Aichele, 757 F.3d
347, 358 (3d Cir. 2014) (“A factual attack requires a
factual dispute, and there is none here.”). Thus, we
consider whether Plaintiffs' allegations, attached
documents, and referenced proceedings establish the necessary
jurisdiction in the light most favorable to Plaintiffs.
the Rooker-Feldman doctrine, “federal district
courts lack jurisdiction over suits that are essentially
appeals from state-court judgments.” Great W.
Mining & Mineral Co. v. Fox Rothschild, LLP, 615
F.3d 159, 165 (3d Cir. 2010). The doctrine applies only in
“limited circumstances” and is “confined to
cases… brought by state-court losers inviting district
court review and rejection of the state court's
judgments.” Skinner v. Switzer, 562 U.S. 521,
532 (2011) (quoting Exxon Mobil Corp. v. Saudi Basic
Indus. Corp., 544 U.S. 280, 291-92 (2005).
attempt to limit the doctrine's reach, the Third Circuit
has instituted the following four requirements to bar a
federal claim under Rooker-Feldman: (1) [T]he
federal plaintiff lost in state court; (2) the plaintiff
“complain[s] of injuries caused by [the] state-court
judgments”; (3) those judgments were rendered before
the federal suit was filed; and (4) the plaintiff is inviting
the district court to review and reject the state judgments.
Great W. Mining & Mineral Co., 615 F.3d at 166
(quoting Exxon Mobil, 544 U.S. at 284) (alterations
first and third requirements present a straightforward
analysis. Great W. Mining & Mineral Co., 615
F.3d at 166. Indeed, both requirements are met here for all
counts because Plaintiffs lost the foreclosure action in
state court when a default judgment was entered on February
11, 2016 and this action was initiated over three years later
in federal court on April 5, 2019.
the second factor, whether plaintiff “complain[s] of
injuries caused by [the] state-court judgments, ”
“[i]f the defendants, rather than the state court
judgments, caused the injuries complained of,
Rooker-Feldman does not apply and the district court
is not barred from reviewing those injuries.”
Mikhail v. Kahn, 991 F.Supp.2d 596, 614 (E.D. Pa.
2014). In other words, “[t]he question is: was the
source of the injury the defendant's conduct or the state
court judgment?” When the injury is caused by the state
court judgment, federal courts are barred from hearing the
claim. Minton v. Cach, LLC, No. 14-4371, 2014 WL
4764183, at *3 (E.D. Pa. Sept. 25, 2014).
second and fourth requirements are “closely
related.” Id. at 168. The fourth requirement
asks, “whether the plaintiff's claims will require
appellate review of state-court decisions by the district
court.” Id. at 169. “Prohibited
appellate review consists of a review of the proceedings
already conducted by the ‘lower' tribunal to
determine whether it reached its result in accordance with
the law.” Id.
plaintiff attempts to litigate a matter that was previously
litigated, “there is jurisdiction as long as the
‘federal plaintiff present[s] some independent
claim,' even if that claim denies a legal conclusion
reached by the state court.” Id. (quoting
Exxon Mobil, 544 U.S. at 293). Put another way,
“if the federal court's review does not concern
‘the bona fides of the prior judgment,' the federal
court ‘is not conducting appellate review, regardless
of whether compliance with the second judgment would make it
impossible to comply with the first judgment.'”
In re Phila. Entmt. & Dev. Partners, 879 F.3d
492, 500 (3d Cir. 2018) (quoting Great W. Mining &
Mineral Co., 615 F.3d at 166).
considering a motion to dismiss pursuant to Rule 12(b)(6),
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. Cty. 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)).
resolving a motion to dismiss pursuant to Rule 12(b)(6), a
court generally should consider only the allegations in the
complaint, as well as “documents that are attached to
or submitted with the complaint…and any matters
incorporated by reference or integral to the claim, items
subject to judicial notice, matters of public record, orders,
[and] items appearing in the record of the case.”
Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260
(3d Cir. 2006).
determining the applicability of principles of res
judicata, we must give the same preclusive effect to the
judgment in the state foreclosure action as the courts in
Pennsylvania, the state in which the judgment was entered,
would give. See Lance v. Dennis, 546 U.S. 459,
(2006) (“Congress has directed federal courts to look
principally to state law in deciding what effect to
give state-court judgments.”); see also Allegheny
Int'l, Inc. v. Allegheny Ludlum Steel Corp., 40 F.3d
1416, 1429 (3d Cir.1994) (citing Kremer v. Chem. Constr.
Corp., 456 U.S. 461, 466 (1982), and 28 U.S.C. §
establish res judicata in Pennsylvania, a defendant
must demonstrate that there have been two actions which
share: (1) the thing sued upon or for; (2) the cause of
action; (3) the persons and parties to the action; and (4)
the capacity of the parties to sue or be sued. Bearoff v.