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Davis v. Deutsche Bank National Trust Co.

United States District Court, D. Colorado

July 5, 2017

JOHN DAVIS, Plaintiff,
DEUTSCHE BANK NATIONAL TRUST COMPANY, as trustee for GSAA Home Equity Trust 2007-5, Asset-Back Certificates, Series 2007-5, CYNTHIA D. MARES, Arapahoe County Public Trustee (Nominal Defendant), JUDGE ELIZABETH WEISHAUPL (Nominal Defendant), LAWRENCE E. CASTLE, in his corporate capacity, LAWRENCE E. CASTLE, in his individual capacity, ROBERT J. HOPP, in his corporate capacity, ROBERT J. HOPP, in his individual capacity, CHRISTINA WHITMER, Public Trustee of Grand County Nominal Defendant, JUDGE JOHN DOE, and DOES 1-10, Defendants.



         This matter is before the Court on the following motions: (1) Defendant Lawrence E. Castle's Motion to Dismiss Plaintiff's Amended Complaint Pursuant to Fed.R.Civ.P. 12(b)(6) [#29][1] (“Castle's Motion”), (2) Defendant Weishaupl's Motion to Dismiss the First Amended Complaint [#33] (“Weishaupl's Motion”), (3) Defendant Deutsche Bank National Trust Company's Motion to Dismiss Plaintiff's First Amended Verified Complaint [#35] (“Deutsche Bank's Motion”), (4) Defendant Christina Whitmer's Motions to Dismiss the First Amended Complaint Pursuant to F.R.Civ.P. 12(b)(6) [#40] (“Whitmer's Motion”), (5) Defendant Robert J. Hopp's Joining in the Castle Motion to Dismiss Plaintiff's First Amended Complaint [#43] (“Hopp's Motion”), (6) Defendant Cynthia Mares' Motion to Dismiss First Amended Complaint [#58] (“Mares' Motion”), and (7) Plaintiff's Motion to Withdraw Judge Weishaupl's Status as Nominal Defendant for Cause [#66] (“Motion to Change Status”). Plaintiff filed a combined Response [#63] to Defendants Deutsche Bank, Castle, and Hopp's Motions. These Defendants' Replies are at [#73, #75, and #76], respectively. Plaintiff appears to have attempted to file a Response to Weishaupl's Motion, but the document attached is solely the Certificate of Service. See [#57]. Plaintiff filed a Response [#60] to Defendant Mares' Motion, to which she filed a Reply [#71]. Defendant Weishaupl filed a Response [#78] in opposition to the Motion to Change Status, and Plaintiff filed a Reply [#81]. No Response or Reply was filed with respect to Defendant Whitmer's Motion.

         Pursuant to 28 U.S.C. § 636(b)(1) and D.C.COLO.LCivR 72.1(c)(3), the Motions have been referred to the undersigned for recommendation. See [#30, #34, #36, #41, #45, #59, #67]. Having reviewed all motions and related briefing, the entire case file, the relevant law, and being sufficiently advised in the premises, the Court respectfully RECOMMENDS that all Defendants' Motions be GRANTED, all claims be DISMISSED, and that Plaintiff's Motion to Change Status be DENIED.

         I. Background

         Plaintiff, who is a pro se litigant, [2] claims an interest in residential property that has been foreclosed on and sold. See Order Approving Sale [#35-7]. Plaintiff initiated these proceedings on September 6, 2016, see Complaint [#1], and filed the Amended Complaint [#26] on October 18, 2016. Plaintiff filed a Motion for Temporary Restraining Order and Preliminary Injunction on December 12, 2016. See [#61]. On December 16, 2016, the Court denied the portion of Plaintiff's motion seeking a temporary restraining order. See [#64]. On December 30, 2016, the Court denied the portion of Plaintiff's motion seeking a preliminary injunction. See [#77].

         Plaintiff was given two opportunities to amend the Amended Complaint. On October 26, 2016, Plaintiff filed a Motion to File a Second Amended Complaint [#31], which was denied without prejudice on November 14, 2016, because the Motion was incomplete, as it was obviously missing pages and lacked Plaintiff's signature block. See Minute Order [#52]. Plaintiff was told in the Minute Order that “he may re-file a complete version” of the motion. He did not do so. Plaintiff was again advised in a Minute Order entered on April 12, 2017, that his Amended Complaint [#26] remained the operative pleading, and he was allowed until May 3, 2017, to file a proper motion for leave to amend. See Minute Order [#96]. To date, Plaintiff has not done so.

         Plaintiff raises eight claims for relief in the Amended Complaint: (1) violation of the Fourteenth Amendment pursuant to 42 U.S.C. § 1983, (2) conspiracy pursuant to § 1983, (3) fraud, (4) unjust enrichment, (5) a request for injunctive relief pursuant to Ex Parte Young, (6) violation of the Fair Debt Collection Practices Act, (7) adverse possession, and (8) malicious abuse of process. Plaintiff alleges that § 38-38-101 of the Colorado Revised Statutes as amended by HB-1387, as well as Colorado's foreclosure procedures under Rule 120, violate due process and equal protection pursuant to the Fourteenth Amendment. Plaintiff brings these claims against the following Defendants: (1) the lender (Defendant Deutsche Bank), (2) the State Court District Judge who presided over his foreclosure proceedings (Defendant Weishaupl), (3) two Public Trustees (Defendants Whitmer and Mares), and (4) two private attorneys (Defendants Castle and Hopp).[3]

         II. Legal Standards

         A. Federal Rule of Civil Procedure 12(b)(1)

         The purpose of a motion to dismiss pursuant to Rule 12(b)(1) is to test whether the Court has jurisdiction to properly hear the case before it. Because “federal courts are courts of limited jurisdiction, ” the Court must have a statutory basis to exercise its jurisdiction. Montoya v. Chao, 296 F.3d 952, 955 (10th Cir. 2002); Fed.R.Civ.P. 12(b)(1). Statutes conferring subject-matter jurisdiction on federal courts are to be strictly construed. F & S Const. Co. v. Jensen, 337 F.2d 160, 161 (10th Cir. 1964). “The burden of establishing subject-matter jurisdiction is on the party asserting jurisdiction.” Id. (citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)).

         A motion to dismiss pursuant to Rule 12(b)(1) may take two forms: facial attack or factual attack. Holt v. United States, 46 F.3d 1000, 1002 (10th Cir. 1995). When reviewing a facial attack on a complaint, the Court accepts the allegations of the complaint as true. Id. By contrast, when reviewing a factual attack on a complaint, the Court “may not presume the truthfulness of the complaint's factual allegations.” Id. at 1003. With a factual attack, the moving party challenges the facts upon which subject-matter jurisdiction depends. Id. The Court therefore must make its own findings of fact. Id. In order to make its findings regarding disputed jurisdictional facts, the Court “has wide discretion to allow affidavits, other documents, and a limited evidentiary hearing.” Id. (citing Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990); Wheeler v. Hurdman, 825 F.2d 257, 259 n.5 (10th Cir. 1987)). The Court's reliance on “evidence outside the pleadings” to make findings concerning purely jurisdictional facts does not convert a motion to dismiss pursuant to Rule 12(b)(1) into a motion for summary judgment pursuant to Rule 56. Id.

         B. Federal Rule of Civil Procedure 12(b)(6)

         The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test “the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994); Fed.R.Civ.P. 12(b)(6) (stating that a complaint may be dismissed for “failure to state a claim upon which relief can be granted”). “The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.” Sutton v. Utah State Sch. for the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999) (citation omitted). To withstand a motion to dismiss pursuant to Rule 12(b)(6), “a complaint must contain enough allegations of fact ‘to state a claim to relief that is plausible on its face.'” Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (quoting Bell Atlantic Co. v. Twombly, 550 U.S. 544, 570 (2007)); see also Shero v. City of Grove, Okla., 510 F.3d 1196, 1200 (10th Cir. 2007) (“The complaint must plead sufficient facts, taken as true, to provide ‘plausible grounds' that discovery will reveal evidence to support the plaintiff's allegations.” (quoting Twombly, 550 U.S. at 570)). “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, 556 U.S. 662, 678 (2009). “A pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertion[s] devoid of further factual enhancement.” Id. (brackets in original; internal quotation marks omitted).

         To survive a motion to dismiss pursuant to Rule 12(b)(6), the factual allegations in the complaint “must be enough to raise a right to relief above the speculative level.” Christy Sports, LLC v. Deer Valley Resort Co., 555 F.3d 1188, 1191 (10th Cir. 2009). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, ” a factual allegation has been stated, “but it has not show[n][ ]that the pleader is entitled to relief, ” as required by Fed.R.Civ.P. 8(a). Iqbal, 552 U.S. at 679 (second brackets added; citation and internal quotation marks omitted).

         III. Analysis

         A. Defendant Weishaupl's Motion to Dismiss [#33][4]

         In the Amended Complaint, Plaintiff alleges that Defendant Weishaupl, the State Court District Judge who presided over his foreclosure proceeding, made a misstatement with respect to the rule governing the proceeding, violated principles of due process, ignored case law, and engaged in “taking” Plaintiff's property. See, e.g., Am. Compl. [#26] ¶¶ 8, 14, 16, 59-65, 70, 107-119, 130.

         To the extent that Plaintiff sues Defendant Weishaupl in her official capacity, “[s]uits against state officials in their official capacit[ies] should be treated as suits against the state.” Hafer v. Melo, 502 U.S. 21, 25 (1991) (citing Kentucky v. Graham, 473 U.S. 159, 166 (1985)); see also Duncan v. Gunter, 15 F.3d 989, 991 (10th Cir.1994) (stating that state officers sued in their official capacity are not “persons” subject to suit under 42 U.S.C. § 1983). Pursuant to the Eleventh Amendment, the Court lacks subject matter jurisdiction to adjudicate an action brought by a citizen of a state against the state itself, its agencies, or its officials in their official capacities. See Johns v. Stewart, 57 F.3d 1544, 1552 (10th Cir.1995). Further, Eleventh Amendment immunity bars claims against individuals sued in their official capacities “for money damages and relief for prior acts.” See Hunt v. Colo. Dep't. of Corr., 271 F. App'x 778, 781 (10th Cir. 2008). Therefore, the Court respectfully recommends that any claims made against Defendant Weishaupl in her official capacity be dismissed without prejudice for lack of subject matter jurisdiction on the basis of Eleventh Amendment immunity. See Brereton v. Bountiful City Corp., 434 F.3d 1213, 1216 (10th Cir. 2006) (“[W]here the district court dismisses an action for lack of jurisdiction, . . . the dismissal must be without prejudice.” (citations omitted)).

         The principles of judicial and quasi-judicial immunity apply to individual-capacity claims. Crowe & Dunlevy, P.C. v. Stidham, 640 F.3d 1140, 1156 (10th Cir. 2011) (citation omitted). “[A]bsolute immunity is necessary so that judges can perform their functions without harassment or intimidation.” Van Sickle v. Holloway, 791 F.2d 1431, 1435 (10th Cir. 1986). A judge will lose judicial immunity only for (1) “nonjudicial actions, i.e., actions not taken in the judge's judicial capacity” or (2) judicial actions “taken in the complete absence of all jurisdiction.” Mireles v. Waco, 502 U.S. 9, 11-12 (1991). “[T]he factors determining whether an act by a judge is a ‘judicial' one relate to the nature of the act itself, i.e., whether it is a function normally performed by a judge, and to the expectations of the parties, i.e., whether they dealt with the judge in his judicial capacity.” Stump v. Sparkman, 435 U.S. 349, 362 (1978).

         Here, Defendant Weishaupl's actions were indisputably judicial in nature, as Plaintiff has only challenged the propriety of her actions in connection with the foreclosure proceeding over which she presided. See Brackhahn v. Eder, No. 13-cv-00141-CMA-KMT, 2013 WL 2394980, at *5 (D. Colo. May 31, 2013) (allegations arising out of a judge's official duties in handling a foreclosure action and authorizing a sale constitute judicial acts normally performed by a judge). Additionally, “the doctrine of judicial immunity now extends to suits against judges where a plaintiff seeks not only monetary relief, but injunctive relief as well[, ]” except where “a declaratory decree was violated or declaratory relief was unavailable.” Lawrence v. Kuenhold, 271 F. App'x 763, 766 n.6 (10th Cir. 2008); Brackhahn, 2013 WL 2394980, at *4. Plaintiff does not allege, nor does it otherwise appear, that a declaratory decree was violated or that declaratory relief was unavailable to Plaintiff. Therefore, the Court respectfully recommends that the individual-capacity claims against Defendant Weishaupl be dismissed with prejudice on the basis of judicial immunity. See Flanders v. Snyder Bromley, No. 09-cv-01623-CMA-KMT, 2010 WL 2650025, at *6 (D. Colo. Apr. 9, 2010) (stating that judicial immunity applies to both monetary and injunctive relief sought against a judicial officer); Brereton v. Bountiful City Corp., 434 F.3d 1213, 1219 (10th Cir. 2006) (“A dismissal with prejudice is appropriate where a complaint fails to state a claim under Rule 12(b)(6) and granting leave to amend would be futile.”).

         B. § 1983 Claims

         To state a claim under § 1983, Plaintiff must allege deprivation of a right secured by the Constitution or laws of the United States and that the deprivation was committed “under color of state law.” See Brokers' Choice of Am., Inc. v. NBC Universal, Inc., 757 F.3d 1125, 1143 (10th Cir. 2014) (citing Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 49-50 (1999)).

         1. Claim One: Individual § 1983 Claims

         In Plaintiff's first claim brought pursuant to § 1983, he alleges that Defendants violated his Fourteenth Amendment procedural and due process rights. In essence, Plaintiff alleges that the legislation amending Colorado's foreclosure statute lowered creditors' standard of proof and thereby violated Plaintiff's - and other homeowners' - due process rights, that Rule 120 is procedurally defective under the Fourteenth Amendment, and that his own Rule 120 proceedings were conducted “in a manner inconsistent with due process.” Am. Compl. [#26] at 9, 10, 15. As relief, Plaintiff seeks an order voiding the foreclosure, a declaration that Rule 120 is procedurally defective, and a declaration that the amendments to Colorado's foreclosure statute are unconstitutional. See Am. Compl. [#26] at 34-35. These aspects of Claim One will be addressed in turn.

         a. Rooker-Feldman Doctrine

         Various Defendants argue that Plaintiff's claims are barred by the Rooker-Feldman doctrine. See Weishaupl's Motion [#33] at 9-11; Deutsche Bank's Motion [#35] at 7-8; Mares' Motion [#58] at 7. The Rooker-Feldman doctrine prevents “state-court losers” from seeking review and rejection of a state-court judgment “rendered before the district court proceedings commenced.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005); see also Miller v. Deutsche Bank Nat'l Trust Co., 666 F.3d 1255, 1261 (10th Cir. 2012). “Rooker-Feldman precludes federal district courts from effectively exercising appellate jurisdiction over claims ‘actually decided by a state court' and claims ‘inextricably intertwined' with a prior state-court judgment.” Mo's Express, LLC v. Sopkin, 441 F.3d 1229, 1233 (10th Cir. 2006) (citations omitted). Such prohibited review of state court judgments “includ[es] those that authorize and confirm the sale of property.” Yokomizo v. Deutsche Bank Securities, Inc., No. 11-cv-01630-CMA-KLM, 2011 WL 5024899, at *5 (D. Colo. Oct. 21, 2011).

         Appropriate application of the Rooker-Feldman doctrine to a Rule 120 foreclosure proceeding is dependent on a few variables, including when the federal case was initiated and what relief is sought by the plaintiff. The Tenth Circuit Court of Appeals has applied the Rooker-Feldman doctrine to a plaintiff's claim arising out of a Rule 120 proceeding, where the plaintiff was “not seeking to enjoin the sale of her home; rather, she [was] attempting to completely undo the foreclosure and eviction proceedings, which were both final before she ever initiated [the lawsuit].” Dillard v. Bank of New York, 476 F. App'x 690, 692 n.3 (10th Cir. 2012). Here, the foreclosure sale was approved by the state court on September 16, 2016, but Plaintiff initiated this lawsuit several days prior, on September 6, 2016. See Order Approving Sale [#35-7];[5] Compl. [#1]. Similar to the Dillard plaintiff, Plaintiff in this matter does not request an injunction preventing the foreclosure of his house; he asks for a declaratory judgment that the foreclosure of his property was void ab initio, and “[t]o vacate and set aside any foreclosure sale that may occur . . . .” Am. Compl. [#26] at 34, 35. Thus, in effect, Plaintiff is attempting to completely undo the foreclosure proceeding, which became final during the early stages of this litigation.[6] Therefore, regardless of the fact that Plaintiff initiated this lawsuit several days prior to the entry of the Order Approving Sale, the Rooker-Feldman doctrine precludes this Court's subject matter jurisdiction over review of the Rule 120 proceeding in dispute because the foreclosure proceeding has fully concluded, and because the relief that Plaintiff seeks, i.e., declaring the foreclosure void and vacating the foreclosure sale, would completely undo the foreclosure proceeding. See Lewis v. Wells Fargo Bank NA, No. 11-CV-03387-CMA-KLM, 2012 WL 4097709, at *6-7 (D. Colo. Aug. 21, 2012) (finding that Rooker-Feldman applied where order authorizing foreclosure sale entered after initiation of federal court case because “entire foreclosure process” had concluded), report and recommendation adopted, No. 11-CV-03387-CMA-KLM, 2012 WL 4097739 (D. Colo. Sept. 17, 2012).

         The Court now addresses Plaintiff's argument that, because Rule 120 proceedings are limited in scope, Rooker-Feldman does not apply because matters such as due process claims cannot be raised in a Rule 120 proceeding. See Response [#63] at 8. Plaintiff's argument misses the mark; the question is not whether the same claims before this Court were considered by the state court, but whether granting the relief that Plaintiff requests would reverse the state court proceedings. Thus, for the reasons discussed above, to the extent that Plaintiff seeks to undo his foreclosure proceedings, he challenges the judicial process previously undertaken by the state courts. Accordingly, the Court respectfully recommends that Claim One, to the extent that Plaintiff seeks to undo his foreclosure proceeding, be dismissed without prejudice pursuant to the Rooker-Feldman doctrine. See, e.g., Driskell v. Thompson, 971 F.Supp.2d 1050, 1063 (D. Colo. 2013). On the contrary, Rooker-Feldman does not generally bar the review of a plaintiff's facial challenge to the constitutionality of a state law. Kenman Engineering v. City of Union, 314 F.3d 468, 476 (10th Cir. 2002). Plaintiff's claims that Rule 120 and the amendment to Colorado's foreclosure laws ...

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