United States District Court, D. Delaware
October 31, 2014
RUDOLPH COLAHAR and JAN'E CO LAHAR, Plaintiffs,
WELLS FARGO BANK N.A. and U.S. BANK, NATIONAL ASSOCIATION, Defendants
Rudolph and Jan'e Colahar, Plaintiffs, Pro se, Bear, Delaware.
Geoffrey Graham Grivner, Esquire, Buchanan Ingersoll & Rooney P.C., Wilmington, Delaware. Counsel for Defendants.
Sue L. Robinson, District Judge.
Plaintiffs Jan'e Colahar (" Jan'e" ) and Rudolph Colahar (" Rudolph" ) (together " plaintiffs" ) proceed pro se and have paid the filing fee. They filed this lawsuit against defendants Wells Fargo Bank N.A. (" Wells Fargo" ) and U.S. Bank, National Association (" U.S. Bank" ) (together " defendants" ) alleging the wrongful foreclosure of real property located at 53 Hempstead Drive, Newark, Delaware. (D.I. 2.) Before the court are numerous motions filed by the parties. (D.I. 14, 19, 20, 22, 26, 27, 29)
II. PROCEDURAL AND FACTUAL BACKGROUND
The court construes plaintiffs' initial pleading, " notice of lis pendens," as a complaint. The complaint was filed on April 7, 2014. (D.I. 2) It does not appear from the court docket tat the parties have been served as required by Fed.R.Civ.P. 4.
The complaint states that " this action comes from a foreclosure issue involving a bankruptcy discharge." (D.I. 2, ¶ 3) The complaint alleges that Wells Fargo is using an in rem proceeding to take the property in question. ( Id. at ¶ 7) Wells Fargo is the servicer of the mortgage on the property and U.S. Bank is the holder/owner of the mortgage. (D.I. 14) The complaint refers to an affidavit of obligation served upon Wells Fargo, alleges that Wells Fargo has not rebutted the affidavit, that the affidavit creates a commercial lien when not rebutted, and that the surety for the affidavit of obligation is the real property at issue. (D.I. 2, ¶ ¶ 8-11) The complaint alleges that property was identified by the bankruptcy trustee on grounds there are liens against the property of greater value than the property itself. ( Id. at ¶ 4) The complaint challenges a judgment as " void" and alleges that " the expected end results are an offset of the balance that the alleged bank claim[s] is owed on the property, even though the house was discharge[d] in bankruptcy." ( Id. at ¶ ¶ 2, 12)
The court takes judicial notice that the real property at issue is the subject of a foreclosure action in the Superior Court of the State of Delaware in and for New Castle County (" Superior Court" ), U.S. Bank v. Colahar, C.A. No. N09L-11-024 JAP (Del. Super.), that commenced on November 4, 2009. (D.I. 10, Ex. A) Default judgment was entered against plaintiffs on May 27, 2010. (D.I. 14, ex. A) The foreclosure proceeding was stayed after Jan'e filed a Chapter 7 bankruptcy petition, In re Jane Colahar, Bankr. No. 12-12014-BLS. ( Id. at ex. B)
Jan'e's bankruptcy proceeding was dismissed on August 27, 2012 following a motion to dismiss by the bankruptcy trustee noting that Jan'e had filed a Chapter 13 bankruptcy case on September 13,2010, Bankr. No. 10-12868 (converted to a Chapter 7 on January 18, 2011), that Jan'e was granted a discharge on April 19, 2011, making dismissal appropriate. ( Id. at ex. C) Jan'e also filed a lawsuit against U.S. Bank contesting the foreclosure proceedings, Colahar v. U.S. Bank, Civ. No. N11 C-04-128 JAP (Del. Super.). ( Id. at ex. D) The case was dismissed with prejudice on August 30, 2012. ( Id. at ex. E)
The property was scheduled for a sheriffs sale on April 8, 2014, but the sale was stayed when Rudolph filed a Chapter 13 petition for bankruptcy in the United States Bankruptcy Court for the District of Maryland (" Maryland Bankruptcy Court" ) on April 3, 2014, In re: Colahar, Bankr. No. 14-15282-PM (Bankr. D. Md.). (D.I. 10, exs. A, B, C) Rudolph also filed two other bankruptcy petitions in the Maryland Bankruptcy Court, both of which resulted in an automatic stay. See In re: Colahar, Bankr. No. 11-25341 (Bankr. D. Md.) filed July 27, 2011; In re: Colahar, Bankr. No. 13-23620 (Bankr. D. Md.) filed August 9,2-13. On April 22,2014, the Maryland Bankruptcy Court dismissed In re: Colahar, Bankr. No. 14-15282-PM after Rudolph failed to pay the required filing fee. ( Id. at Ex. D) In the same order, the Maryland Bankruptcy Court terminated the automatic stay that had been imposed pursuant to 11 U.S.C. § 362(a). ( Id.) On July 17, 2014, plaintiffs filed a writ of de novo alleged fraud upon the court in the State foreclosure proceeding. (D.I. 24, ex.)
Defendants Wells Fargo and U.S. Bank move to dismiss the complaint for failure to state a claim upon which relief may be granted and pursuant to the Rooker-Feldman doctrine. (D.I. 14) In turn, plaintiffs filed the following motions: motion for declaratory judgment (D.I. 19), motion for time to respond to defendants' motion to dismiss (D.I. 20), motion for summary judgment (D.I. 22), motions to amend complaint (D.I. 26, 29), and motion for entry of default of defendants (D.I. 27). Plaintiffs oppose the motion to dismiss on the grounds that they were never served with a copy of the motion. (D.I. 22)
III. STANDARD OF REVIEW
Under Rule 12(b)(6), a motion to dismiss may be granted only if, accepting the well-
pleaded allegations in the complaint as true and viewing them in the light most favorable to the plaintiff, a court concludes that those allegations " could not raise a claim of entitlement to relief." Bell A. Corp. v. Twombly, 550 U.S. 544, 558, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). " In deciding motions to dismiss pursuant to Rule 12(b)(6), courts generally consider only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim." Lum v. Bank of Am., 361 F.3d 217, 221 n.3 (3d Gir. 2004). Though " detailed factual allegations" are not required, a complaint must do more than simply provide " labels and conclusions" or " a formulaic recitation of the elements of a cause of action." Davis v. Abington Mem'l Hosp., 765 F.3d 236, 241 (3d Gir. 2014) (quoting Twombly, 550 U.S. at 555). To survive a motion to dismiss under Fed. R. Giv. P. 12(b)(6), a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. See Williams v. BASF Catalysts LLC, 765 F.3d 306, 315 (3d Gir. 2014) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) and Twombly, 550 U.S. at 570).
To determine whether a complaint meets the pleading standard as set forth in Twombly and Iqbal, the court must: (1) outline the elements a plaintiff must plead to a state a claim for relief; (2) peel away those allegations that are no more than conclusions and thus not entitled to the assumption of truth; and (3) look for well-pled factual allegations, assume their veracity, and then " determine whether they plausibly give rise to an entitlement to relief." Bistrian v. Levi, 696 F.3d 352, 365 (3d Cir. 2012) (internal citations omitted) (citing Iqbal, 556 U.S. at 679; Argueta V. United States Immigration and Customs Enforcement, 643 F.3d 60,73 (3d Cir. 2011). The last step is " a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679. Because plaintiffs proceed pro se, their pleading is liberally construed and their complaint, " however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers." Erickson V. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (internal quotation marks omitted).
Defendants move for dismissal on the grounds that the Rooker-Feldman doctrine bars plaintiffs' claim because the relief they appear to seek would require this court to determine that the state court judgment was erroneously entered or to take action that would negate the state court's judgment. Plaintiffs do not address this issue in their opposition to the motion to dismiss.
Defendants further move to dismiss on the grounds that plaintiffs have failed to state a claim upon which relief may be granted. Plaintiffs respond that they were not served with a copy of the motion to dismiss. The court finds that, even if plaintiffs were not served with a copy at the time the motion to dismiss was filed, no prejudice has occurred, given that they were ultimately served a copy of the motion to dismiss ( see D.I. 16), and plaintiffs filed their objection to the motion. Plaintiffs further argue that dismissal is not appropriate because " there was no reason why Wells Fargo  should have hired an attorney when they failed to answer the affidavit of obligation prior to the filing of this case." (D.I. 22)
The court turns first to the Younger abstention doctrine which the
court may raise sua sponte. See O'Neill v. City of Philadelphia, 32 F.3d 785, n.1 (3d Cir. 1994). Under Younger, a federal district court must abstain from hearing a federal case which interferes with certain state proceedings. See Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). Abstention is appropriate when: (1) there are ongoing state proceedings that are judicial in nature; (2) the state proceedings implicate important state interests; and (3) the state proceedings provide an adequate opportunity to raise the federal claims. Lazaridis v. Wehmer, 591 F.3d 666, 670 (3d Cir. 2010). The doctrine applies to proceedings until all appellate remedies have been exhausted, unless the matter falls within one of the Younger exceptions. Huffman v. Pursue Ltd., 420 U.S. 592, 608, 95 S.Ct. 1200, 43 L.Ed.2d 482 (1975).
The Younger elements have been met and none of the exceptions apply. First, there are on-going state proceedings for the foreclosure of real property. Second, Delaware has an important interest in resolving real estate issues, and a ruling in the Delaware courts implicates the important interest of preserving the authority of the state's judicial system. See e.g., Almazan v. 1st 2nd Mortg. Co. of NJ, Inc., 2011 WL 2670871 (D.N.J. June 2,2011) (finding that the State has important interests in the foreclosure of property under the Younger doctrine); Gray v. Pagano, 287 F.App'x 155 (3d Cir. 2008) (unpublished) (court abstained under the Younger doctrine where plaintiffs sought a declaration that the judge was not authorized to nullify transfer of title and for an order enjoining the sheriff from conducting a sheriff's sale.). Finally, plaintiffs have an adequate opportunity to raise any potential claims in state court. Accordingly, the court must abstain pursuant to Younger and its progeny. See Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 15, 107 S.Ct. 1519, 95 L.Ed.2d 1 (1987) (stating that Younger abstention is favored even after the plaintiffs failed to raise their federal claims in the ongoing state proceedings).
In the alternative, the Rooker-Feldman doctrine prohibits this court from maintaining subject matter jurisdiction over plaintiffs' complaint which effectively seeks to vacate orders of the Superior Court. " The Rooker-Feldman doctrine prevents the lower federal courts from exercising jurisdiction over cases brought by 'state-court losers' challenging 'state-court judgments rendered before the district court proceedings commenced.'" Lance v. Dennis, 546 U.S. 459, 460, 126 S.Ct. 1198,
163 L.Ed.2d 1059 (2006) (citations omitted). The court finds that the Rooker-Feldman doctrine claim bars plaintiffs' complaint because the relief they seek would require " (1) the federal court [to] determine that the state court judgment was erroneously entered in order to grant the requested relief, or (2) the federal court [to] take an action that would negate the state court's judgment . . . ." In re Knapper, 407 F.3d 573, 581 (3d Cir. 2005).
For the above reasons, the court will deny as moot plaintiffs' motions and will grant defendants' motion to dismiss. (D.I. 14, 19, 20, 22, 26, 27, 29) The court finds amendment futile.
A separate order shall issue.
At Wilmington this 3rd day of October, 2014, for the reasons set forth in the memorandum opinion issued this date;
IT IS HEREBY ORDERED that:
1. Defendants' motion to dismiss is granted. (D.I. 14) The complaint is dismissed by reason of abstention. Amendment is futile.
2. Plaintiffs' pending motions (D.I. 19, 20, 22, 26, 27, 29) are denied as moot.
3. The Clerk of Court is directed to close the case.