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Grigat v. Mortgage Lenders Network, USA

United States District Court, D. Colorado

September 26, 2017

JOSEPH G. GRIGAT, and BRIGITTE A. GRIGAT, Plaintiffs,
v.
MORTGAGE LENDERS NETWORK, USA, BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, and JP MORGAN CHASE BANK, Defendants.

          RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          MICHAEL E. HEGARTY, UNITED STATES MAGISTRATE JUDGE.

         Defendant, Bank of New York Mellon Trust Company (“BNY”), seeks to dismiss Plaintiffs Joseph Grigat and Brigitte Grigat's Complaint in its entirety. According to BNY, this Court lacks jurisdiction pursuant to the Rooker-Feldman doctrine. Because Plaintiffs seek to completely undo their final state court foreclosure proceeding, the Court agrees with BNY that Rooker-Feldman bars this Court from granting the relief Plaintiffs seek. Accordingly, the Court respectfully recommends dismissing this case in its entirety.

         BACKGROUND

         I. Facts

         The following are factual allegations made by Plaintiffs in their Complaint and submitted by BNY in support of its motion. “Because [BNY's] Rooker-Feldman argument presents a factual challenge to this [C]ourt's subject matter jurisdiction, the [C]ourt . . . has wide discretion to allow affidavits and other documents to resolve any jurisdictional facts.” Garcia v. Aronowitz & Macklenburg, LLP, No. 13-cv-00241-RBJ-MJW, 2013 WL 3895044, at *3 (D. Colo. July 26, 2013); Holt v. United States, 46 F.3d 1000, 1002-03 (10th Cir. 1995) (stating that when a defendant does not attack the complaint's allegations as to subject matter jurisdiction, a court may refer to evidence outside the pleadings).

         On April 26, 1999, Plaintiffs executed a promissory note for the benefit of Defendant Mortgage Lenders Network USA, Inc. (“Mortgage Lenders”). Compl. ¶ 24, ECF No. 1; ECF No. 1-1. The next day, Mortgage Lenders assigned the deed of trust to Bank One National Association (“Bank One”). ECF No. 20-3. In October 2008 Plaintiffs asked their lender to identify the lawful owner of their mortgage and whether they would receive clear and marketable title to their home once they paid their loan in its entirety. Compl. ¶ 18. After receiving what they considered to be an inadequate response, Plaintiffs withheld their mortgage payments. Id. ¶¶ 19-20. On February 26, 2015, Bank One assigned the deed of trust to BNY, as successor to JPMorgan Chase Bank. ECF No. 20-4.

         Because Plaintiffs stopped paying their mortgage, BNY initiated foreclosure proceedings on May 27, 2015. Compl. ¶ 20; ECF No. 20-5 (notice of election and demand for sale by public trustee). After Plaintiffs failed to respond to BNY's motion for order authorizing sale, the court permitted the sale to go forward pursuant to Colorado Rule of Civil Procedure 120. ECF No. 20-10 (order authorizing sale). BNY subsequently purchased the property at the foreclosure sale, ECF No. 20-12, and the court issued an order approving sale on August 15, 2016. ECF No. 20-14. On May 16, 2017, BNY posted a demand for possession and notice to vacate. ECF No. 20-15.

         II. Procedural History

         Proceeding pro se, Plaintiffs initiated this case on May 30, 2017. Compl., ECF No. 1. Plaintiffs contend the mortgage on their property is unenforceable, because, among other reasons, transferring the deed of trust caused a modification of the mortgage without their consent. Compl. 25. Plaintiffs also argue that BNY lacked standing to foreclose on the invalid mortgage. Id. Accordingly, Plaintiffs assert claims for “cancellation and expungement” of the mortgage instrument and a declaration that the “recordation of mortgage was voidable.” Id. at 20-25.

         BNY responded to Plaintiffs' Complaint by filing the present Motion to Dismiss. ECF No. 20. BNY contends the Court lacks subject matter jurisdiction over Plaintiffs' claims pursuant to the Rooker-Feldman doctrine. Id. at 8. According to BNY, because Plaintiffs' claims challenge the final foreclosure order in a Colorado state court case, granting “the relief sought in Plaintiffs' Complaint would turn this Court into a de facto appellate court.” Id. at 10. Additionally, BNY argues that even if this Court finds it has subject matter jurisdiction, Plaintiffs fail to state a claim. Id. at 11-30. Plaintiffs filed a response brief on August 23, 2017. Resp. to Mot. to Dismiss, ECF No. 38. Regarding BNY's jurisdictional argument, Plaintiffs argue Rule 120 proceedings do not result in final judgments that “trigger application of the Rooker-Feldman doctrine.” Id. at 12. BNY filed its reply brief on September 6, 2017. ECF No. 44.

         LEGAL STANDARDS

         I. Dismissal under Fed.R.Civ.P. 12(b)(1)

         Rule 12(b)(1) empowers a court to dismiss a complaint for “lack of subject matter jurisdiction.” Fed.R.Civ.P. 12(b)(1). Dismissal under Rule 12(b)(1) is not a judgment on the merits of a plaintiff's case, but only a determination that the court lacks authority to adjudicate the matter. See Pueblo of Jemez v. United States, 790 F.3d 1143, 1151 (10th Cir. 2015) (recognizing federal courts are courts of limited jurisdiction and may only exercise jurisdiction when specifically authorized to do so). A court lacking jurisdiction “must dismiss the cause at any stage of the proceeding in which it becomes apparent that jurisdiction is lacking.” Id. (citing Full Life Hospice, LLC v. Sebelius, 709 F.3d 1012, 1016 (10th Cir. 2013)). A Rule 12(b)(1) motion to dismiss “must be determined from the allegations of fact in the complaint, without regard to mere [conclusory] allegations of jurisdiction.” Groundhog v. Keeler, 442 F.2d 674, 677 (10th Cir. 1971). The burden of establishing subject matter jurisdiction is on the party asserting jurisdiction. Pueblo of Jemez, 790 F.3d at 1151. Accordingly, Plaintiffs in this case bear the burden of establishing that this Court has jurisdiction to hear their claims.

         II. Dismissal of a Pro Se ...


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