United States District Court, D. Colorado
RECOMMENDATION OF U.S. MAGISTRATE JUDGE RE: MOTION TO
DISMISS [ECF #40] & MOTION TO AMEND [#67]
KATO CREWS UNITED STATES MAGISTRATE JUDGE.
Recommendation addresses PNC Financial Services Group, Inc.,
PNC Bank, N.A., and PNC Mortgage's
("Defendants") Motion to Dismiss Amended Complaint
("Motion to Dismiss"). [ECF. #40.] It also
addresses Plaintiff Elet Valentine's
("Valentine") Opposed Request to File 2nd Amended
Complaint and Add Defendants ("Motion to Amend").
[ECF. #67.] These motions were referred to the magistrate
judge for a recommendation. [ECF. #41 & ECF. #68.] The
Court has reviewed both motions, the related briefing, and
the governing law. Oral argument will not materially assist
this Court's analysis. For the following reasons, the
Court RECOMMENDS the Motion to Dismiss be GRANTED in part and
DENIED in part, and the Motion to Amend be DENIED.
FOR THE PRO SE PARTY
Court is recommending that Defendants' Motion to Dismiss
be granted in part and denied in part. Specifically, the
Court recommends that Valentine's breach of contract
claims as they pertain solely to Defendants' alleged
failure to properly apply loan payments be allowed to
proceed. The Court concludes the Amended Complaint fails to
state any other plausible claims for relief, and therefore,
the Court recommends dismissal of the other claims in the
Valentine's Motion to Amend, the Court reviewed the
proposed Second Amended Complaint and has determined it does
not comply with Fed.R.Civ.P. 8, which requires a short and
plain statement of the claims. Additionally, the proposed
amendments in the Second Amended Complaint would be futile
because they do nothing to cure the deficiencies in the
Amended Complaint-therefore, the Second Amended Complaint
would be subject to dismissal for the same reasons the Court
recommends granting (in part) the Motion to Dismiss. For
these reasons, the Court recommends denying the Motion to
Parties will have 14 days after service of this
Recommendation to file specific written objections to this
Recommendation with Judge Arguello for her review. Judge
Arguello may either adopt this Recommendation or reject this
Recommendation and issue an order based on her own findings
and conclusions. Should Judge Arguello adopt this
Recommendation, then the case will proceed on the allegations
in the Amended Complaint, and only on the claim for breach of
contract based on Defendants' alleged failure to properly
apply or credit loan payments.
proceeds pro se in this matter. She brought this
action alleging 11 claims for relief related to
Defendants' handling of her residential mortgage loan,
which resulted in Colo. R. Civ. P. 120 proceedings in state
court (the "Rule 120 Proceeding"). On August 1,
2018, the state trial court issued an order authorizing the
foreclosure sale of Valentine's home pursuant to C.R.S.
§ 38-38-101 et seq. Valentine then initiated
this action and requested the entry of a temporary
restraining order and preliminary injunction to stop the
foreclosure. [ECF. #6.] Defendants voluntarily agreed to
forego the sale at least until a ruling on Valentine's
request for injunctive relief. [ECF. #20.]
September 28, 2018, this Court recommended that
Valentine's request for a preliminary injunction and
restraining order be denied. [ECF. #42.] The District Judge
adopted this recommendation. [ECF. #71.] Thereafter,
Defendants proceeded with the foreclosure sale on November
29, 2018, and the state district court entered an Order
Approving Sale on December 21, 2018. [ECF. #70-1]
claims for relief in the Amended Complaint include: (1)
equitable tolling; (2) breach of promissory note; (3) breach
of deed of trust; (4) unjust enrichment; (5) fraud in the
inducement; (6) fraudulent concealment; (7) fraudulent
misrepresentation; (8) vicarious liability; (9) abuse of
process; (10) unfair and deceptive acts or practices under
the Colorado Consumer Protection Act; and (11) extreme and
outrageous conduct. [ECF #36.] Generally, these claims arise
out of allegations that, for at least a ten-year period,
Defendants failed to properly apply, or otherwise account
for, her monthly mortgage payments; inflated her account with
improper and unexplained additional fees and charges;
improperly instigated state court foreclosure proceedings;
and, by their handling of her account, violated certain
federal and state laws and breached provisions of the
promissory note and deed of trust. [See generally
move to dismiss all 11 claims. They argue the Amended
Complaint should be dismissed under the
Rooker-Feldman doctrine and because Valentine has
failed to state claims upon which relief could be granted.
[ECF. #40.] In addition to filing a Response to the Motion to
Dismiss,  Valentine also moved to file a Second
Amended Complaint which seeks to add new parties and new
factual allegations. [ECF. #67.]
Review of a Pro Se Party's Filings
federal court must construe a pro se plaintiff's
pleadings "liberally" and hold the pleadings
"to a less stringent standard than formal pleadings
filed by lawyers." Smith v. United States, 561
F.3d 1090, 1096 (10th Cir. 2009). But the court "will
not supply additional factual allegations to round out a
plaintiffs complaint or construct a legal theory on
plaintiffs behalf." Id. (citing Whitney v.
New Mexico, 113 F.3d 1170, 1173-74 (10th Cir. 1997)).
The Tenth Circuit has suggested:
[I]f the court can reasonably read the pleadings to state a
valid claim on which the plaintiff could prevail, it should
do so despite the plaintiffs failure to cite proper legal
authority, his confusion of various legal theories, his poor
syntax and sentence construction, or his unfamiliarity with
Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir.
1991). However, it is not "the proper function of the
district court to assume the role of advocate for the pro
se litigant." Id.; see also Dunn v.
White, 880 F.2d 1188, 1197 (10th Cir. 1989)
("[W]ewill not supply additional facts, nor will we
construct a legal theory for plaintiff that assumes facts
that have not been pleaded.").
The Motion to Dismiss and Fed.R.Civ.P. 12(b)(6)
deciding a motion under Fed.R.Civ.P. 12(b)(6), the Court must
"accept as true all well-pleaded factual allegations . .
. and view these allegations in the light most favorable to
the plaintiff." Casanova v. Ulibarri, 595 F.3d
1120, 1124-25 (10th Cir. 2010) (quoting Smith v. United
States, 561 F.3d 1090, 1098 (10th Cir. 2009)). But the
Court is not "bound to accept as true a legal conclusion
couched as a factual allegation." Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
"Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not
suffice." Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009). In addition, when considering a Rule
12(b)(6) motion, the court may consider exhibits attached to
the complaint without converting the motion to a motion for
summary judgment under Fed.R.Civ.P. 56. See Hall v.
Bellmon, 935 F.2d 1106, 1112 (10th Cir. 1991);
survive a motion to dismiss, "a complaint must contain
sufficient factual matter, accepted as true, to state a claim
to relief that is plausible on its face."
Iqbal, 556 U.S. at 678 (internal quotation marks
omitted). A claim is plausible when the plaintiff
"pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged." Id. This standard requires
more than the mere possibility that a defendant has acted
unlawfully. Id. Facts that are "merely
consistent" with a defendant's liability are
insufficient. Id. "[T]o state a claim in
federal court, a complaint must explain what each defendant
did to [the plaintiff]; when the defendant did it; how the
defendant's actions harmed [the plaintiff]; and what
specific legal right the plaintiff believes the defendant
violated." Nasious v. Two Unknown B.I.C.E.
Agents, 492 F.3d 1158, 1163 (10th Cir. 2007).
Court's ultimate duty is to "determine whether the
complaint sufficiently alleges facts supporting all the
elements necessary to establish an entitlement to relief
under the legal theory proposed." Forest Guardians
v. Forsgren, 478 F.3d 1149, 1160 (10th Cir. 2007).
"Nevertheless, the standard remains a liberal one, and
'a well-pleaded complaint may proceed even if it strikes
a savvy judge that actual proof of those facts is improbable,
and that recovery is very remote and unlikely.'"
Morgan v. Clements, No. 12-cv-00936-REB-KMT, 2013 WL
1130624, at *1 (D. Colo. Mar. 18, 2013) (quoting Dias v.
City & County of Denver, 567 F.3d 1169, 1178 (10th
The Motion to Amend and Fed.R.Civ.P. 15
15(a) provides that "[t]he court should freely give
leave [to amend a pleading] when justice so requires."
If the underlying facts or circumstances relied upon by a
plaintiff may be a proper subject of relief, he ought to be
afforded an opportunity to test his claim on the merits. In
the absence of any apparent or declared reason- such as undue
delay, bad faith or dilatory motive on the part of the
movant, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by
virtue of allowance of the amendment, futility of amendment,
etc.-the leave sought should, as the rules require, be
Foman v. Davis, 371 U.S. 178, 182 (1962). "The
purpose of the Rule is to provide litigants the maximum
opportunity for each claim to be decided on its merits rather
than on procedural niceties." Minter v. Prime Equip.
Co., 451 F.3d 1196, 1204 (10th Cir. 2006) (citations and
internal quotation marks omitted).
proposed amendment is futile if the complaint, as amended,
would be subject to dismissal." Full Life Hospice
LLC v. Sebelius, 709 F.3d 1012, 1018 (10th Cir. 2013)
(internal quotation marks omitted). In determining whether a
proposed amendment should be denied as futile, the court must
analyze a proposed amendment as if it were before the court
on a motion to dismiss under Rule 12(b)(6). Hunt v.
Riverside Transp., No. 11-2020-DJW, 2012 WL 1893515, at
*3 (D. Kan. May 23, 2012). The defendant bears the burden of
showing futility. Hunt, 2012 WL 1893515, at *3;
see also Carefusion 213, LLC v. Prof'l Disposables,
Inc., No. 09-2616-KHV-DJW, 2010 WL 4004874, at *5 (D.
Kan. Oct. 12, 2010).
The Motion to Dismiss the Amended Complaint
The Rooker-Feldman Doctrine Does Not Apply
argue the Amended Complaint should be dismissed in its
entirety because it seeks appellate-like review of the state
court's Rule 120 Order, and therefore, is barred by the
Rooker-Feldman doctrine. The Court is guided in its
analysis by the Tenth Circuit's decision in Mayotte
v. U.S. Bank Natl Assoc, 880F.3d 1169 (10th Cir.2018).
In Mayotte, which had a factual scenario similar to
the one here, the Tenth Circuit considered whether
Rooker-Feldman applied to Colorado's procedures
for "nonjudicial" foreclosures of
mortgages. The Circuit observed that a Rule 120
decision is simply a determination that a sale of
"property can proceed unless some other court, which
need pay no attention to the finding by the Rule 120 court,
decides to halt or otherwise modify the sale."
Id. at 1173. The rights created by a Rule 120
decision, therefore, are limited to clearing title to the
property and are "not definitive on other matters."
Id. at 1172-73.
Circuit noted the Rooker-Feldman doctrine "does
not deprive a federal court of jurisdiction to hear a claim
just because it could result in a judgment inconsistent with
a state-court judgment." Id. at 1174. It
clarified that "[w]hat is prohibited under
Rooker-Feldman is a federal action that tries to
modify or set aside a state-court judgment because
the state proceedings should not have led to that
judgment." Id. (emphasis in original). "In
other words, an element of the claim must be that the state
court wrongfully entered its judgment." Id. at
Court reviewed the Amended Complaint and does not read it to
allege that the state district court wrongfully issued its
orders in the Rule 120 Proceeding. Nor does the Amended
Complaint specifically seek to invalidate the state district
court's orders issued in those proceedings. Consequently,
the Court concludes the Rooker-Feldman doctrine does
not apply and affords no basis for dismissal of the Amended
The Amended Complaint's Breach of Contract
Amended Complaint asserts two breach of contract claims. As
the Court understands these claims, one alleges that
Defendants breached the Promissory Note (Claim Two) by
failing to properly apply loan payments and violating
provisions of the Housing and Urban Development
("HUD") guidelines. The second breach of contract
claim alleges that Defendants breached the Deed of Trust
(Claim Three) in various ways. Defendants contend that
Valentine failed to allege sufficient facts to establish any
breach of contract.
maintain a breach of contract claim, a plaintiff must
establish (1) the existence of a contract; (2) performance by
the plaintiff or justification for nonperformance; (3)
failure to perform by the defendant; and (4) resulting damage
to the plaintiff. W. Distrib. Co. v. Diodosio, 841
P.2d 1053, 1058 ...