United States District Court, D. Colorado
RECOMMENDATION OF UNITED STATES MAGISTRATE
Y. WANG, Magistrate Judge.
matter comes before the court on Defendant Ventures Trust
2013-I-NH by MCM Capital Partners, LLC Its Trustees'
Motion to Dismiss Plaintiff's Complaint Pursuant to
Fed.R.Civ.P. 12(b)(6) and 8(a) [#15, filed on June 16, 2015],
Defendant Ventures Trust 2013-I-NH by MCM Capital Partners,
LLC Its Trustees' Motion to Dismiss Plaintiff's
Amended Complaint Pursuant to Fed.R.Civ.P. 12(b)(6) and 8(a)
[#27, filed July 8, 2015], Eagle Vista Equities, LLC's
Motion to Dismiss dated January 8, 2016 [#50], and Eagle
Vista Equities LLC's second Motion to Dismiss dated
January 8, 2016 [#53] (collectively, "Motions to
Dismiss"). These Motions to Dismiss were referred
to this Magistrate Judge pursuant to 28 U.S.C. Â§ 636(b)(1),
the Orders of Reference dated June 3, 2015 [#11]; [#12], and
the Memoranda dated June 17, 2015 [#16], July 8, 2015, and
January 8, 2016 [#52]; [#54].
Penelope Zeller ("Ms. Zeller" or
"Plaintiff"), initiated this action by her pro
se filing of the original Complaint on May 22,
2015. [#1]. Defendant Ventures Trust 2013 I-NH by MCM Capital
Partners, LLC its Trustee ("Ventures Trust") filed
a Motion to Dismiss the original Complaint on June 16, 2015.
[#15]. Ms. Zeller then filed the operative Amended Complaint
on June 17, 2015. [#18].
Amended Complaint, Plaintiff alleges wrongful foreclosure and
illegal transfer of her homeowner's note and deed of
trust in a property located at 3030 St. Paul Street, Denver,
Colorado 80205 (the "Property"), and names as
defendants Ventures Trust, Debra Johnson as Public Trustee
for Denver County ("Public Trustee"), and Eagle
Vista Equities, Inc. ("Eagle"). [ Id. at
3]. She avers that the Property was the subject of a wrongful
foreclosure in that that the entity who is claimed an adverse
interest in the Property was not a proper plaintiff in the
foreclosure action, is not a holder and due course, and did
not have standing to initiate the foreclosure proceeding. [
following facts are relevant to the pending Motions to
Dismiss. In 2005, Ms. Zeller obtained a mortgage to purchase
the Property. [#18 at 8]. In 2007, Ms. Zeller executed a
promissory note, refinancing her loan with Countrywide Home
Loans ("Countrywide"). [#18 at 8]. Bank of America
("BOA") later purchased Countrywide. [#18 at 8]. In
2012, BOA initiated foreclosure proceedings on the Property,
but no foreclosure sale was scheduled. [#18 at 11]. In 2013,
Ventures Trust began communicating with Ms. Zeller regarding
the note and, in 2014, commenced foreclosure proceedings on
the property. [#18 at 13]; [#27 at 5, Â¶ 5]. Ventures Trust
filed a Colo. R. Civ. P. 120 proceeding and, after a
contested hearing, on May 11, 2015, the District Court for
the City and County of Denver, Colorado ("Denver
District Court") entered an Order Authorizing Sale. [#27
at 6]; [#27-11 at 1].
22, 2015, the same day Ms. Zeller filed the initial
Complaint, she also filed an ex parte application
for a temporary restraining order. [#3]. Ms. Zeller filed an
amended application for the temporary restraining order four
days later on May 26, 2015. [#5]. The Honorable Philip A.
Brimmer denied the amended application for a temporary
restraining order the same day, and Ms. Zeller then filed an
Amended Amended Ex-Parte Application for Temporary
Restraining Order on May 27, 2015. [#8]. Judge Brimmer held a
hearing and denied the Amended Amended Ex-Parte Application
for Temporary Restraining Order on May 28, 2015. [#10].
28, 2015, the Public Trustee held a foreclosure sale, in
which Eagle purchased the Property. [#27 at 6]; [#27-13 at
1]; [#17 at 10]. The Public Trustee issued a Public
Trustee's Confirmation Deed to Eagle, [#27-14], and on
June 3, 2015, the Denver District Court entered an order
approving sale [#27-15]. On June 11, 2015, Eagle served a
notice to vacate the Property, directing Ms. Zeller to vacate
the property on or before June 16, 2015. [#25-1 at 14].
17, 2015, Ms. Zeller filed an application for a preliminary
injunction against Eagle [#17] to enjoin it from evicting her
from the Property in state court. Eagle asserts that
Plaintiff refused to vacate the Property. [#25 at 1]. Two
days later, Eagle filed the Complaint in Unlawful Detainer in
the County Court for the City and County of Denver, Colorado
("Denver County Court"), seeking judgment in its
favor for, among other things, "possession of the
Premises." [#25-1]. On July 2, 2015, the detainer action
was transferred to the Denver District Court.
August 7, 2015, Ms. Zeller then filed another motion for a
temporary restraining order to prevent her eviction from the
Property. [#37]. On August 10, 2015, Judge Brimmer denied the
application for a preliminary injunction [#17] and the motion
for a temporary restraining order [#37] without prejudice,
concluding that the Anti-Injunction Act, 28 U.S.C. Â§ 2283,
and Younger v. Harris, 401 U.S. 37 (1971) prohibited
the court from interfering in the detainer action that was
pending in state court. [#40].
November 23, 2015, Eagle filed a Status Report in this case
providing an update on the state court action between Eagle
and Ms. Zeller. [#48]. Eagle represented that on September
28, 2015, summary judgment was ordered in favor of Eagle and
against Ms. Zeller on all issues. [#48 at 1]. Ms. Zeller
filed a Motion to Reconsider, and the state court denied that
motion on November 18, 2015. [ Id. ]. Eagle
represented that at the time of its Status Report, it was
proceeding under state law to obtain possession of the
Property. [ Id. ].
Procedural Background of the Pending Motions to Dismiss
Amended Complaint includes a number of claims based on
different legal theories relating to what Ms. Zeller alleges
was the wrongful foreclosure on the Property. [#18]. These
claims include: (1) unjust enrichment; (2) violation of the
Real Estate Procedures Act ("RESPA"), and its
implementing regulation, Regulation X; (3) violation of the
Fair Debt Collection Practices Act ("FDCPA"), and
(4) violation of the Fourteenth and Fifth Amendments based on
the deprivation of Ms. Zeller's Property without due
process, and deprivation of constitutional rights pursuant to
42 U.S.C. Â§ 1983. See generally [ id. ].
Ms. Zeller seeks a declaration that she has the only valid
interest in the Property. [ Id. at 4]. She further
requests that the court set aside the Public Trustee sale
that occurred on May 28, 2015 as void and invalid and order
the title to the Property to be quieted in her favor. [
Id. at 45-46].
Trust filed its Second Motion to Dismiss, directed at the
Amended Complaint, on July 8, 2015. [#27]. Ventures Trust
contends that the claims against it should be dismissed
because Plaintiff's claims are barred by the
Rooker-Feldman doctrine, which prevents the federal
court from exercising subject matter over Ms. Zeller's
claims because they were already decided by a state court. [
Id. ]. Ventures Trust also argues that Ms.
Zeller's Amended Complaint fails to state a plausible
claim under Fed.R.Civ.P. 8(a)(2), including because she
relies entirely on "vague unsupported legal theories,
bare assertions and wild speculation." [#27-1 at 3].
According to Ventures Trust, the only facts discernible from
the Amended Complaint show that Ms. Zeller obtained a loan to
purchase the Property, defaulted on the loan, and was
foreclosed by an entity with standing to foreclose under
Colorado law. [ Id. ].
Eagle filed two Motions to Dismiss on January 8, 2016. [#50,
#53]. Eagle argues that due to the state court's judgment
on its behalf, it is entitled to dismissal on Zeller's
claims in this case pursuant to Fed.R.Civ.P. 12(b)(1) and
(6), claim preclusion, res judicata and collateral estoppel.
[#53 at 2]. Eagle also requests an order for attorneys'
fees incurred in preparing its Motion to Dismiss. [
Id. at 8]. Ms. Zeller responds that preclusion
should not apply in this proceeding because there was not a
final judgment in the state court that related to Eagle and
the subject matter in this case, which she characterizes as
fraud, was not addressed within the previous judgment. [#55
Debra Johnson, Public Trustee for the City and County of
Denver, has not joined any of the currently pending Motions
to Dismiss. She filed her Answer to the Amended Complaint on
August 7, 2015. [#38].
Standard of Review
well-settled that federal courts are courts of limited
jurisdiction, and as such, "are duty bound to examine
facts and law in every lawsuit before them to ensure that
they possess subject matter jurisdiction." The
Wilderness Soc. v. Kane Cty., Utah, 632 F.3d 1162, 1179
n.3 (10th Cir. 2011) (Gorsuch, J., concurring). Indeed,
courts have an independent obligation to determine whether
subject matter jurisdiction exists, even in the absence of a
challenge from any party. Image Software, Inc. v.
Reynolds & Reynolds, Co., 459 F.3d 1044, 1048 (10th Cir.
2006) (citing Arbaugh v. Y & H Corp., 546 U.S. 500
(2006)). Under Fed.R.Civ.P. 12(b)(1), a court may dismiss a
complaint for lack of subject matter jurisdiction. When a
court dismisses a case under Rule 12(b)(1), this is not a
determination on the merits of the case, but only a decision
that the court lacks the authority to adjudicate the action.
See Castaneda v. INS, 23 F.3d 1576, 1580
(10th Cir. 1994) (recognizing federal courts are courts of
limited jurisdiction and may only exercise jurisdiction when
specifically authorized to do so). A court that lacks
jurisdiction "must dismiss the cause at any stage of the
proceeding in which it becomes apparent that jurisdiction is
lacking." Basso v. Utah Power & Light Co., 495
F.2d 906, 909 (10th Cir. 1974). The burden of establishing
subject matter jurisdiction is on the party asserting
jurisdiction. See Basso, 495 F.2d at 909.
Accordingly, Plaintiff in this case bears the burden of
establishing that this Court has jurisdiction to hear her
motion to dismiss pursuant to Rule 12(b)(1) may take two
forms: a facial attack or a factual attack. Stuart v.
Colo. Interstate Gas Co., 271 F.3d 1221, 1225 (10th Cir.
2001); Holt v. United States, 46 F.3d 1000, 1002
(10th Cir. 1995). "In reviewing a facial attack on the
complaint, a district court must accept the allegations in
the complaint as true." Holt, 46 F.3d at 1002.
Mere conclusory allegations of jurisdiction are insufficient.
Groundhog v. Keeler, 442 F.2d 674, 677 (10th Cir.
1971). Nevertheless, "a court is required to convert a
Rule 12(b)(1) motion to dismiss into a Rule 12(b)(6) motion
or a Rule 56 summary judgment motion when resolution of the
jurisdictional question is intertwined with the merits of the
case." Id. As explained in the Holt
case, "the jurisdictional question is intertwined with
the merits of the case if subject matter jurisdiction is
dependent on the same statute which provides the substantive
claim in the case." Holt, 46 F.3d at 1002.
Standard Applied to Review of a Pro Se
litigant appears before the court pro se, the court
"review[s] his pleadings and other papers liberally and
hold[s] them to a less stringent standard than those drafted
by attorneys." Trackwell v. United States, 472
F.3d 1242, 1243 (10th Cir. 2007) (citations omitted);
seeHaines v. Kerner,404 U.S. 519, 520-21
(1972). This rule "applies to all proceedings involving
a pro se litigant." Hall v. Bellmon, 935 F.2d
1106, 1110 n.3 (10th Cir. 1991) (citations omitted). However,
"the court cannot take on the responsibility of serving
as the litigant's attorney in constructing arguments and
searching the record." Garrett v. Selby Connor
Maddux & Janer,425 F.3d 836, 840 (10th Cir. 2005);
see alsoFirstenberg v. City of Santa Fe, New
Mexico,696 F.2d 1018, 1024 (10th Cir. 2012)