Opinion
CIVIL ACTION NO. 3:18-cv-00718
08-29-2019
JUNE GARRETT, Plaintiff, v. PENNYMAC LOAN SERVICES, et al., Defendants.
(CAPUTO, J.)
() REPORT AND RECOMMENDATION
This civil action was commenced by the plaintiff, June Garrett, by the filing of a fee-paid pro se complaint on April 3, 2018. (Doc. 1). Garrett has asserted various federal and state law claims against a long list of defendants, all related to state court foreclosure and ejectment proceedings, a sheriff's sale, and her ultimate, forcible eviction from her home, located in Monroe County, Pennsylvania.
The matter now comes before the Court on motions to dismiss filed by seven separately represented sets of defendants: (a) Todd Martin, the Sheriff of Monroe County ("Sheriff Martin"); (b) the Chase Defendants; (c) the PennyMac Defendants; (d) the Duane Morris Defendants; (e) the Delaware Defendants; (f) the Grenen & Birsic Defendants; and (g) the Federal Agency Defendants. (Doc. 20 (Sheriff Martin); Doc. 49 (Chase Defendants); Doc. 51 (PennyMac Defendants); Doc. 52 (Duane Morris Defendants); Doc. 58 (Delaware Defendants); Doc. 65 (Grenen & Birsic Defendants); Doc. 70 (Federal Agency Defendants).) In addition to dismissal, the PennyMac Defendants have moved for sanctions pursuant to Rule 11(c) of the Federal Rules of Civil Procedure. These motions are fully briefed and ripe for disposition.
The "Chase Defendants" include JPMorgan Chase Bank, N.A. ("Chase") and twelve of its corporate directors: James Dimon; Linda B. Bammann; James A. Bell; Crandall C. Bowles; Stephen B. Burke; Todd A. Combs; James S. Crown; Timothy P. Flynn; Mellody Hobson; Laban P. Jackson, Jr.; Michael A. Neal; and Lee R. Raymond.
The "PennyMac Defendants" include PennyMac Loan Services, LLC ("PennyMac") and eleven of its corporate directors: Stanford L. Kurland; James K. Hunt; Matthew Botein; Patrick Kinsella; Joseph Mazzella; Anne D. McCallion; Farhad Nanji; David A. Spector; Theodore W. Tozer; Mark Wiedman; and Emily Youssouf.
The "Duane Morris Defendants" include the law firm Duane Morris LLP and one of its partners, attorney Brett L. Messinger.
The "Delaware Defendants" include the State of Delaware's Department of State and its Secretary of State, Jeffrey W. Bullock.
The "Grenen & Birsic Defendants" include the law firm Grenen & Birsic, P.C. and two of its employees: attorney Kristine M. Anthou and paralegal Elizabeth M. Cagnon.
The "Federal Agency Defendants" include the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency.
I. BACKGROUND
According to the plaintiff's pro se complaint, the plaintiff and her husband, Lundes Garrett, executed a mortgage agreement with Wachovia Corp. in August 2003. In August 2010, Chase initiated a foreclosure proceeding on the mortgaged property, naming only the plaintiff's husband. The plaintiff alleges that Chase did so based upon a fraudulent mortgage assignment.
In January 2013, the plaintiff alleges that Chase expressly released its mortgage lien on the Garrett's home as a result of a settlement agreement with various unspecified federal and state agencies. In July 2013, however, the plaintiff alleges that Chase resumed foreclosure proceedings on the Garrett's property, based on the same fraudulent documentation. The plaintiff further alleges that Chase subsequently assigned its mortgage interest in the property to PennyMac.
The plaintiff alleges that she filed administrative complaints with the Federal Agency Defendants, to no avail. The allegations of the complaint also indicate that she and her husband each filed for bankruptcy protection at some point during this process, and the defendants' allegedly wrongful conduct in some manner violated protections to which they were entitled under the Bankruptcy Code.
According to the complaint, the Garrett's property was sold at a sheriff's sale on July 29, 2016, and they were forcibly evicted from their home on March 28, 2018. In addition to being dispossessed of their home and real property, they were deprived of unspecified personal property left behind in the home.
The plaintiff seeks an award of actual, statutory, and punitive damages, plus costs and attorney fees, as well as declaratory and injunctive relief. In particular, the plaintiff seeks an order to direct the defendants to return the plaintiff's real and personal property to them, to invalidate the deed of trust and mortgage lien on the property, and to quiet title in the real property in favor of the plaintiff and her husband.
II. LEGAL STANDARDS
A. Rule 12(b)(1) Standard
The plaintiff bears the burden of establishing the existence of subject matter jurisdiction under Rule 12(b)(1). See Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991). A defendant may challenge the existence of subject matter jurisdiction in one of two fashions: it may attack the complaint on its face or it may attack the existence of subject matter jurisdiction in fact, relying on evidence beyond the pleadings. See Gould Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000); Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). Where a defendant attacks a complaint as deficient on its face, "the court must consider the allegations of the complaint as true." Mortensen, 549 F.2d at 891. "In deciding a Rule 12(b)(1) facial attack, the court may only consider the allegations contained in the complaint and the exhibits attached to the complaint; matters of public record such as court records, letter decisions of government agencies and published reports of administrative bodies; and 'undisputably authentic' documents which the plaintiff has identified as a basis of his claims and which the defendant has attached as exhibits to his motion to dismiss." Medici v. Pocono Mountain Sch. Dist., No. 09-CV-2344, 2010 WL 1006917, at *2 (M.D. Pa. Mar. 16, 2010). However, when a motion to dismiss attacks the existence of subject matter jurisdiction in fact, "no presumptive truthfulness attaches to plaintiff's allegations," and "the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case." Mortensen, 549 F.2d at 891. This case falls into the latter category.
B. Rule 12(b)(6) Standard
Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes a defendant to move to dismiss for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). "Under Rule 12(b)(6), a motion to dismiss may be granted only if, accepting all well-pleaded allegations in the complaint as true and viewing them in the light most favorable to the plaintiff, a court finds the plaintiff's claims lack facial plausibility." Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77, 84 (3d Cir. 2011) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56 (2007)). In deciding the motion, the Court may consider the facts alleged on the face of the complaint, as well as "documents incorporated into the complaint by reference, and matters of which a court may take judicial notice." Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). Although the Court must accept the fact allegations in the complaint as true, it is not compelled to accept "unsupported conclusions and unwarranted inferences, or a legal conclusion couched as a factual allegation." Morrow v. Balaski, 719 F.3d 160, 165 (3d Cir. 2013) (quoting Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007)). Nor is it required to credit factual allegations contradicted by indisputably authentic documents on which the complaint relies or matters of public record of which we may take judicial notice. In re Washington Mut. Inc., 741 Fed. App'x 88, 91 n.3 (3d Cir. Sept. 25, 2018); Sourovelis v. City of Philadelphia, 246 F. Supp. 3d 1058, 1075 (E.D. Pa. 2017); Banks v. Cty. of Allegheny, 568 F. Supp. 2d 579, 588-89 (W.D. Pa. 2008).
III. DISCUSSION
In her complaint, the plaintiff seeks to hold three dozen defendants liable for conspiring together to fraudulently and wrongfully foreclose upon and evict her and her husband from their home. She claims that this alleged conduct by the defendants violated her federal civil rights under the United States Constitution, various federal statutes, and the 2012 National Mortgage Settlement, and she further claims that it constitutes a pattern of racketeering activity, in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq. She also asserts various state tort claims based on the same conduct. The Federal Agency Defendants have moved to dismiss for lack of subject matter jurisdiction. The Duane Morris Defendants have moved to dismiss for failure to state a claim upon which relief can be granted. The rest of the defendants have moved to dismiss both for lack of subject matter jurisdiction or, in the alternative, for failure to state a claim upon which relief can be granted. In addition, the PennyMac Defendants have moved for Rule 11 sanctions against the plaintiff.
See generally Consumer Fin. Prot. Bureau, What Was the National Mortgage Settlement? (May 10, 2017), available at https://perma.cc/CA8Z-E8HC.
A. Federal Agency Defendants
The plaintiff alleges that she filed a complaint with the Federal Agency Defendants regarding the allegedly fraudulent conduct of the other defendants. Based on the apparent inaction of the Federal Agency Defendants in response to her complaint, she alleges that the Federal Agency Defendants were participants in a conspiracy with the other defendants to defraud the plaintiff and her husband, and that the National Mortgage Settlement was "nothing but a diversion tactic designed to camouflage the real [theft] of property." (Doc. 1 ¶ 75.)
The Federal Agency Defendants have moved to dismiss for lack of subject matter jurisdiction on the ground that, as federal agencies, they are entitled to sovereign immunity from suit.
As the Third Circuit has summarized:
Under the doctrine of sovereign immunity, the United States "is immune from suit save as it consents to be
sued . . . and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit." "A waiver of the Federal Government's sovereign immunity must be unequivocally expressed in statutory text, and will not be implied."Cooper v. Comm'r, 718 F.3d 216, 220 (3d Cir. 2013) (quoting United States v. Testan, 424 U.S. 392, 399 (1976), and Lane v. Pena, 518 U.S. 187, 192 (1996)) (citations omitted). "Absent a waiver, sovereign immunity shields the Federal Government and its agencies from suit." Fed. Deposit Ins. Corp. v. Meyer, 510 U.S. 471, 475 (1994); see also Clark v. Wells Fargo Bank, 585 Fed. App'x 817, 819-20 (3d Cir. 2014) (per curiam) (addressing claims against the OCC); Albrecht v. Comm. on Emp. Benefits of Fed. Reserve Emp. Benefits Sys., 357 F.3d 62, 67 (D.C. Cir. 2004) (addressing claims against the Board of Governors of the Federal Reserve System); Rodriguez v. Bank of America, N.A., Civil No. 16-8197 (RBK/AMD), 2017 WL 3086369, at *5 (D.N.J. July 20, 2017) (same).
As noted above, it is the plaintiff's burden to establish the existence of subject matter jurisdiction. See Kehr Packages, 926 F.2d at 1409. Thus, it has been stated that a "party suing the United States must point to an unequivocal waiver of sovereign immunity." McMillan v. Dep't of the Interior, 907 F. Supp. 322, 325 (D. Nev. 1995); see also Malone v. Bowdoin, 369 U.S. 643, 645 (1962) (claimant must plead source of waiver of sovereign immunity); St. Tammany Parish ex rel. Davis v. Fed. Emergency Mgmt. Agency, 556 F.3d 307, 315 (5th Cir. 2009) ("Plaintiff bears the burden of showing Congress's unequivocal waiver of sovereign immunity."); Cole v. United States, 657 F.2d 107, 109 (7th Cir. 1981) ("A party who sues the United States has the burden of pointing to a congressional act that gives consent."); Hatten v. Bledsoe, Civil Action No. 1:13-CV-00209, 2014 WL 5473571, at *6 (M.D. Pa. Aug. 4, 2014) (citing Malone). Garrett has failed to identify any statute that provides such a waiver, nor has she pleaded any facts to implicate such a statute. See Quality Mech. Contractors, Inc. v. Moreland Corp., 19 F. Supp. 2d 1169, 1172-73 (D. Nev. 1998).
In their brief in support of dismissal, the Federal Agency Defendants have addressed the possible application of the Federal Tort Claims Act ("FTCA"). Subject to exceptions not at issue here, the FTCA waives the sovereign immunity of the United States with respect to a variety of state-law tort claims. See 28 U.S.C. § 1346(b)(1). The Federal Agency Defendants contends that any claims brought under the FTCA would be barred because Garrett has failed to allege the exhaustion of administrative remedies. As the FTCA provides:
We note also that an FTCA claim may only be brought against the United States itself. See Boyd v. United States, 482 F. Supp. 1126, 1128 (W.D. Pa. 1980) ("Only the United States Government itself is amenable to suit under [the FTCA]. Employees and specific government agencies are not proper defendants."). But substitution of the United States as defendant in place of the agency is the appropriate remedy for that defect, rather than dismissal. See Fields v. Blake, 349 F. Supp. 2d 910, 913 (E.D. Pa. 2004).
An action shall not be instituted upon a claim against the United States for money damages for injury or loss of property or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, unless the claimant shall have first presented the claim to the appropriate Federal agency and his claim shall have been finally denied by the agency in writing and sent by certified or registered mail.28 U.S.C. § 2675(a). "Fulfillment of the administrative exhaustion requirement is essential to a court's subject matter jurisdiction over a claim under the FTCA. A complaint's failure to allege exhaustion of administrative remedies, therefore, requires dismissal of the complaint for lack of subject matter jurisdiction." Biase v. Kaplan, 852 F. Supp. 268, 283 (D.N.J. 1994) (citations omitted); see also Gomez v. United States, No. 1:14-CV-01176, 2016 WL 826899, at *3 (M.D. Pa. Mar. 3, 2016) ("Although the exhaustion requirement under the Prison Litigation Reform Act of 1995 is an affirmative defense and can be waived, the exhaustion of administrative remedies under the FTCA is jurisdictional and cannot be waived."). To the extent Garrett's complaint may be construed to assert state-law tort claims against the Federal Agency Defendants pursuant to the FTCA, she has failed to allege the exhaustion of administrative remedies, and thus any state-law tort claims against the Federal Agency Defendants are barred by federal sovereign immunity and we lack subject matter jurisdiction to grant any relief.
Moreover, we note that the Federal Agency Defendants have filed declarations by officials with both agencies confirming that a review of their records reveals that neither agency has received an administrative tort claim from June Garrett. (Doc. 71-1; Doc. 71-2.) Garrett has adduced no evidence to the contrary.
Accordingly, we recommend that all of the plaintiff's claims against the Federal Agency Defendants be dismissed with prejudice for lack of subject matter jurisdiction, pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure.
B. Delaware Defendants
Both of the primary defendants, Chase and PennyMac, are incorporated in the State of Delaware. The plaintiff seeks to hold the Delaware Defendants liable for failing to adequately monitor and police the alleged misconduct of Chase and PennyMac.
Garrett has named the Delaware Department of State and its Secretary of State, Jeffrey W. Bullock, as party-defendants in this action. The only factual allegations concerning these defendants are that they are "charged with the monitoring authority of each and every business that is registered" in Delaware, that Chase and PennMac are Delaware corporations that have repeatedly violated federal laws, and that these defendants "by their gross, deliberate and intentional negligence" have "contributed to" Chase's and PennyMac's alleged "fraud, abuses, [and] unfair and deceptive business practices." (Doc. 1 ¶ 78.) Because these allegations identify Bullock solely in the context of his official employment and refers exclusively to his professional duties, we construe the plaintiff's claims against Bullock as claims against him in his official capacity. See Campfield v. Dougherty, Civil Action No. 18-3696, 2019 WL 3288101, at *3 (E.D. Pa. July 19, 2019); Jones v. Dalton, 867 F. Supp. 2d 572, 586 (D.N.J. 2012).
To the extent Garret may have intended to sue Bullock in his personal capacity, she has failed to state a claim upon which relief can be granted. Her claims are expressly premised on the Delaware Secretary of State's purported duty to monitor and police the conduct of all Delaware-registered companies. But Delaware state law imposes no such duty on the Delaware Secretary of State or the Delaware Department of State. With respect to corporations, the duties of the secretary and department are largely concerned with recordkeeping. See, e.g., 29 Del. Code Ann. § 2301 et seq.; id. § 8701 et seq.
Absent abrogation by Congress or waiver by the state, the Eleventh Amendment to the United States Constitution provides that states, and their constituent agencies or departments, are immune from suit in federal court. Pennhurst State. Sch. & Hosp. v. Halderman, 465 U.S. 89, 101-02 (1984). To the extent the plaintiff seeks to recover money damages from an individual defendant in his official capacity, that claim is likewise barred by the Eleventh Amendment. See Betts v. New Castle Youth Dev'p Ctr., 621 F.3d 249, 254 (3d Cir. 2010) ("Individual state employees sued in their official capacity are also entitled to Eleventh Amendment immunity because 'official-capacity suits generally represent only another way of pleading an action' against the state.") (quoting Hafer v. Melo, 502 U.S. 21, 25 (1991)).
Accordingly, we recommend that all of the plaintiff's claims against the Delaware Defendants be dismissed with prejudice for lack of subject matter jurisdiction, pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure.
C. The Rooker-Feldman Doctrine
Several sets of defendants argue that this action should be dismissed for lack of subject matter jurisdiction under the Rooker-Feldman doctrine. But Rooker-Feldman "is a narrow doctrine, confined to 'cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments.'" Lance v. Dennis, 546 U.S. 459, 464 (2006) (per curiam) (quoting Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005)). "[T]here are four requirements that must be met for the Rooker-Feldman doctrine to apply: (1) the federal plaintiff lost in state court; (2) the plaintiff 'complain[s] of injuries caused by [the] state-court judgments'; (3) those judgments were rendered before the federal suit was filed; and (4) the plaintiff is inviting the district court to review and reject the state judgments." Great W. Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 166 (3d Cir. 2010) (alterations in original) (quoting Exxon Mobil, 544 U.S. at 284).
All but the Federal Agency and Duane Morris Defendants.
With respect to the first element, in Lance, the Supreme Court of the United States explicitly held that courts cannot import state law concepts of privity into the Rooker-Feldman doctrine. Lance, 546 U.S. at 466 ("The Rooker-Feldman doctrine does not bar actions by nonparties to the earlier state-court judgment simply because, for purposes of preclusion law, they could be considered in privity with a party to the judgment."). Here, the plaintiff, June Garrett, was not a party to the underlying state foreclosure and ejectment proceedings against her spouse, Lundes Garrett. Holding that Rooker-Feldman would bar a state court loser's spouse from asserting claims simply because they have similar legal interests risks doing exactly what the Supreme Court forbade in Lance: "erroneously conflat[ing] preclusion law with Rooker-Feldman." Id.; see also id. ("Whatever the impact of privity principles on preclusion rules, Rooker-Feldman is not simply preclusion by another name. The doctrine applies only in 'limited circumstances,' where a party in effect seeks to take an appeal of an unfavorable state-court decision to a lower federal court."). Because she was not a party to the prior state foreclosure and ejectment proceedings, June Garrett is not barred from bringing this action under the Rooker-Feldman doctrine.
D. Res Judicata
The plaintiff's claims against most of the remaining defendants are barred by the doctrine of res judicata. Under this doctrine, a claim is barred where three circumstances are present: "(1) a final judgment on the merits in a prior suit involving (2) the same parties or their privies and (3) a subsequent suit based on the same cause of action." Lubrizol Corp. v. Exxon Corp., 929 F.2d 960, 963 (3d Cir. 1991).
With respect to the first factor, the underlying state mortgage foreclosure proceedings against Lundes Garrett concerned the validity of the very same mortgage instruments upon which most of this plaintiff's present claims are based, and the underlying state ejectment proceedings against Lundes Garrett likewise concerned the validity of the very same sheriff's sale and deed conveying the home to PennyMac upon which the remainder of this plaintiff's present claims are based. Both proceedings were litigated to a final judgment against Lundes Garrett. See JPMorgan Chase Bank, N.A. v. Garrett, No. 7192 CV 2010 (Monroe Cty. (Pa.) C.C.P. judgment entered Aug. 5, 2013) (judgment order in foreclosure proceedings) (Doc. 51-2, at 42), aff'd, No. 2436 EDA 2013, 2014 WL 10915511 (Pa. Super. Ct. July 15, 2014); PennyMac Corp. v. Garrett, No. 8505 CV 2016 (Monroe Cty. (Pa.) C.C.P. judgment entered May 3, 2017) (judgment order in ejectment proceedings) (Doc. 51-2, at 68), appeal voluntarily dismissed, No. 1657 EDA 2017 (Pa. Super. Ct. Mar. 22, 2018). These constitute final judgment on the merits for res judicata purposes. See Federated Dep't Stores, Inc. v. Motie, 452 U.S. 394, 399-400 (1981) (discussing Reed v. Allen, 286 U.S. 191, 198 (1932)) (ejectment); Moncrief v. Chase Manhattan Mortgage Corp., 275 Fed. App'x 149, 153 (3d Cir. 2008) (foreclosure); Straker v. Deutsche Bank Nat'l Tr., Civil No. 3:09-CV-338, 2012 WL 7829989, at *7-*8 (M.D. Pa. Apr. 26, 2012) (foreclosure), report and recommendation adopted by 2013 WL 1314021 (M.D. Pa. Mar. 28, 2013); Creciun v. McCann, 67 A.2d 622, 624 (Pa. Super. Ct. 1949) (ejectment). Thus, the first Lubrizol factor has been satisfied in this case.
With respect to the second factor, while June Garrett was not a party to the foreclosure or ejectment proceedings, she stands in privity with her spouse, Lundes Garrett, who was a party to those state actions. See Liggon-Redding v. Am. Sec. Ins. Co., No. 3:06cv227, 2009 WL 3101068, at *5 (M.D. Pa. 2009); Seamon v. Bell Tel. Co. of Pa., 576 F. Supp. 1458, 1461 (W.D. Pa. 1983), aff'd, 740 F.2d 958 (3d Cir. 1984) (table decision). Similarly, while Chase and PennyMac are the only defendants who were actual parties in the prior litigation, their directors, employees, and attorneys are in privity with them for res judicata purposes. See Henry v. Farmer City State Bank, 808 F.2d 1228, 1235 n.6 (7th Cir. 1986) ("Even though the Bank was the only actual party to the state court mortgage foreclosure proceedings, the other defendants, as directors, officers, employees, and attorneys of the Bank, are in privity with the Bank for purposes of res judicata."); see also Lewis v. O'Donnell, 674 Fed. App'x 234, 237 n.5 (3d Cir. 2017) (per curiam) (quoting Henry); Ritz v. Erie Indem. Co., No. 1:17-CV-00340-CRE, 2019 WL 438086, at *5 (W.D. Pa. Feb. 4, 2019) (citing Henry); Iseley v. Talaber, Civil Action No. 1:05-CV-444, 2008 WL 906508, at *3 n.1 (M.D. Pa. Mar. 31, 2008) (finding attorney was in privity with client with respect to prior litigation). Moreover, under this factor, it is not necessary for the full roster of named defendants in each action to be identical. See Coggins v. Carpenter, 468 F. Supp. 270, 280 (E.D. Pa. 1979) ("Res judicata operates to bar a subsequent action . . . even though the subsequent action names fewer or more parties than the previous action."). Thus, the second Lubrizol factor has been satisfied in this case.
The remainder of the Chase and PennyMac Defendants.
The complaint names Whitney K. Cook, a Chase employee, as a party-defendant. (Doc. 1 ¶ 33.) Cook has not been served with process or appeared to defend herself in this action. But as an employee of Chase, she is clearly entitled to the benefit of this same res judicata defense, and so we recommend dismissal with prejudice of claims against Cook as well.
The Duane Morris and Grenen & Birsic Defendants.
Finally, with respect to the third factor, in determining whether a subsequent suit concerns the same cause of action as an earlier one, the analysis does not rest on the specific legal theories invoked, but rather it turns on "the essential similarity of the underlying events giving rise to the various legal claims." Davis v. U.S. Steel Supply, 688 F.2d 166, 171 (3d Cir. 1982). In conducting this inquiry, the analysis focuses on "whether the acts complained of were the same, whether the material facts alleged in each suit were the same, and whether the witnesses and documentation required to prove such allegations were the same." Lubrizol, 929 F.2d at 963 (quoting United States v. Athlone Indus., Inc., 746 F.2d 977, 984 (3d Cir. 1984)). Moreover, res judicata bars not only claims that were actually brought in the previous action, but also claims that, "although not litigated, could have been raised in the earlier proceeding." CoreStates Bank, N.A. v. Huls Am., Inc., 176 F.3d 187, 194 (3d Cir. 1999) (emphasis in original). Here, both the present federal litigation and the prior state foreclosure and ejectment proceedings rest on the validity of the very same mortgage instruments and the very same sheriff's sale and deed. June Garrett raises the very same allegations of fraud and other defects in this case that Lundes Garrett previously raised in defending against the foreclosure and ejectment proceedings. The plaintiff here is merely attempting to re-litigate the same issues that were already decided in the state court. See Lewis, 674 Fed. App'x at 237; Moncrief, 275 Fed. App'x at 153; Straker, 2012 WL 7829989, at *8. Thus, the third Lubrizol factor has been satisfied in this case.
Therefore, having satisfied all three Lubrizol factors, Garrett's claims against the Chase Defendants, the PennyMac Defendants, the Duane Morris Defendants, the Grenen & Birsic Defendants, and defendant Cook in this federal civil action are barred by the doctrine of res judicata. Accordingly, we recommend that all of the plaintiff's claims against the Chase Defendants, the PennyMac Defendants, the Duane Morris Defendants, the Grenen & Birsic Defendants, and defendant Cook be dismissed with prejudice for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.
E. Sheriff Martin
The plaintiff asserts unspecified federal civil rights claims against Sheriff Martin based on his role in conducting the sheriff's sale and in the plaintiff's subsequent ejectment from the property. Sheriff Martin has moved to dismiss the plaintiff's claims against him on qualified immunity grounds.
"The doctrine of qualified immunity protects government officials from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known." Pearson v. Callahan, 555 U.S. 223, 231 (2009) (internal quotation marks omitted). "Qualified immunity balances two important interests—the need to hold public officials accountable when they exercise power irresponsibly and the need to shield officials from harassment, distraction, and liability when they perform their duties reasonably." Id.
Because qualified immunity results in "immunity from suit rather than a mere defense to liability," determining whether officials are entitled to qualified immunity should be determined "at the earliest possible stage in the litigation." Id. at 231-32. But, as the Third Circuit has cautioned, "it is generally unwise to venture into a qualified immunity analysis at the pleading stage as it is necessary to develop the factual record in the vast majority of cases." Newland v. Reehorst, 328 Fed. App'x 788, 791 n.3 (3d Cir. 2009) (per curiam). Thus, at the pleading stage, "qualified immunity will be upheld on a 12(b)(6) motion only when the immunity is established on the face of the complaint." Thomas v. Independence Twp., 463 F.3d 285, 291 (3d Cir. 2006) (quoting Leveto v. Lapina, 258 F.3d 156, 161 (3d Cir. 2001)).
A qualified immunity determination involves a two-pronged inquiry: (1) whether a constitutional or federal right has been violated; and (2) whether that right was "clearly established." Saucier v. Katz, 533 U.S. 194, 201 (2001), overruled in part by Pearson, 555 U.S. at 236 (permitting federal courts to exercise discretion in deciding which of the two Saucier prongs should be addressed first). "It is the defendants' burden to establish that they are entitled to such immunity." Beers-Capitol v. Whetzel, 256 F.3d 120, 142 n.15 (3d Cir. 2001) (citing Stoneking v. Bradford Area Sch. Dist., 882 F.2d 720, 726 (3d Cir. 1989)).
Here, we have the uncommon case where qualified immunity is established on the face of the complaint. Accepting all well-pleaded allegations in the complaint as true and viewing them in the light most favorable to the plaintiff, but disregarding unsupported conclusions, unwarranted inferences, and legal conclusions couched as factual allegations, the facts alleged in this case describe a "'garden variety sheriff's sale' of the Property [which] does not present a § 1983 claim here. Indeed, 'any other conclusion would transform every foreclosure action between private parties into state action of constitutional dimensions.'" Pilchesky v. Lackawanna Cty., No. 3:16-CV-2537, 2018 WL 2230471, at *4 (M.D. Pa. May 16, 2018) (quoting Swope v. Northumberland Nat'l Bank, 625 Fed. App'x 83, 86-87 (3d Cir. 2015)) (citation omitted); see also Gangoo v. Fed. Home Loan Mortg. Corp., Civil Action No. 3:17-227, 2017 WL 679972, at *5 (M.D. Pa. Feb. 21, 2017) ("Since plaintiff had available state court remedies to challenge the foreclosure sale of his property as well as his ejectment, by filing an appeal, he fails to state a Fourth Amendment due process claim."). Moreover, as Garrett has not suggested any facts in the complaint that the foreclosure and ejectment did not occur pursuant to "facially valid" state court judgments, Sheriff Martin is entitled to quasi-judicial immunity from any constitutional tort claims. See Pilchesky, 2018 Wl 2230471, at *4 (citing Conklin v. Anthou, 495 Fed. App'x 257, 264 (3d Cir. 2012), and Watkins v. City of Philadelphia, Civil Action No. 17-0060, 2017 WL 3394618, at *2 (E.D. Pa. Aug. 8, 2017)). Finally, even assuming arguendo that Garrett's constitutional or federal rights were violated, "[g]iven th[e] settled case law which [has] consistently rejected civil rights claims like those advanced here by [Garrett], nothing could have alerted [Sheriff Martin] that [his] actions would have violated 'clearly established statutory or constitutional right[s] of which a reasonable person would have known.'" See Pilchesky v. Lackawanna Cty., Civil No. 3:16-CV-2537, 2018 WL 2248749, at *13 (M.D. Pa. Feb. 22, 2018) (quoting Wilson v. Layne, 526 U.S. 603, 609 (1999)), report and recommendation adopted in relevant part and rejected in part on other grounds by 2018 WL 2230471 (M.D. Pa. May 16, 2018).
Although the gist of Garrett's claims is that the foreclosure and ejectment orders were fraudulently and unlawfully obtained from the state courts, that factual premise for her claims against Sheriff Martin is foreclosed by the doctrine of collateral estoppel (or issue preclusion). See generally Metro. Edison Co. v. Pa. Pub. Util. Comm'n, 767 F.3d 335, 351 (3d Cir. 2014). Moreover, even if the proceedings had been corrupted, that does not speak at all to whether the resultant judgment orders upon which Sheriff Martin acted were facially valid. --------
Therefore, Sheriff Martin is entitled to qualified immunity from damages. Accordingly, we recommend that the plaintiff's claims against Sheriff Martin be dismissed with prejudice for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.
F. Supplemental State Law Claims
Garrett asserts various related state-law tort claims as well. But where a district court has dismissed all claims over which it had original jurisdiction, the Court may decline to exercise supplemental jurisdiction over state law claims. 28 U.S.C. § 1367(c)(3). Whether the Court will exercise supplemental jurisdiction is within its discretion. Kach v. Hose, 589 F.3d 626, 650 (3d Cir. 2009). That decision should be based on "the values of judicial economy, convenience, fairness, and comity." Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988). Ordinarily, when all federal law claims have been dismissed and only state-law claims remain, the balance of these factors indicates that these remaining claims properly belong in state court. Cohill, 484 U.S. at 350. Finding nothing in the record to distinguish this case from the ordinary one, the balance of factors in this case "point[s] toward declining to exercise jurisdiction over the remaining state law claims." See Cohill, 484 U.S. at 350 n.7. Therefore, it is recommended that Garrett's state-law claims be dismissed without prejudice pursuant to 28 U.S.C. § 1367(c)(3).
G. Leave to Amend
The Third Circuit has instructed that if a civil rights complaint is vulnerable to dismissal for failure to state a claim, the district court must permit a curative amendment, unless an amendment would be inequitable or futile. Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002). Based on the facts alleged in the complaint and the extensive history of litigation (and re-litigation) of these same issued by the plaintiff and her husband, it is clear that any amendment would be futile. It is therefore recommended that the complaint be dismissed without leave to amend.
H. Rule 11 Sanctions
The PennyMac Defendants have moved for sanctions pursuant to Rule 11(c) of the Federal Rules of Civil Procedure on the ground that Garrett's attempt to relitigate the underlying issues, previously addressed by the state courts on numerous occasions, is legally frivolous and her complaint was filed in bad faith in an attempt to harass the defendants. In particular, the PennyMac Defendants note that Garrett and her husband have been barred by the state courts from further challenging the foreclosure and ejectment proceedings.
We agree that Garrett's attempt to relitigate claims barred by the doctrine of res judicata is legally frivolous. See Napier v. Thirty or More Unidentified Fed. Agents, 855 F.2d 1080, 1091 (3d Cir. 1988); Gary v. Worker's Comp. Appeal Bd., 2019 WL 2162302, at *4 (E.D. Pa. May 17, 2019); Randall v. Berks Cty., Pa., Civil Action No. 19-CV-1342, 2019 WL 1934878, at *2 (E.D. Pa. Apr. 30, 2019), appeal filed, No. 19-2830 (3d Cir. Aug. 14, 2019). We further agree that the history of prior litigation by the Garretts is suggestive of an intent to harass the defendants. But we are nevertheless constrained to recommend the denial of the PennyMac Defendants' request for sanctions.
The procedural requirements for a Rule 11 sanctions motion are clearly stated in the rule itself:
A motion for sanctions must be made separately from any other motion and must describe the specific conduct that allegedly violates Rule 11(b). The motion must be served under Rule 5, but it must not be filed or presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service . . . .Fed. R. Civ. P. 11(c)(2).
Here, the PennyMac Defendants have failed to file a separate motion for Rule 11 sanctions, combining it instead with its Rule 12(b)(6) motion to dismiss. The reason for the "separate motion" requirement imposed in the first sentence quoted above becomes clear upon considering a second defect in the PennyMac Defendants' Rule 11 motion: its failure to comply with the "safe harbor" requirement imposed in the second sentence above, which requires that a Rule 11 motion for sanctions be served on the opposing party at least twenty-one days before presenting it to the Court, thus depriving Garrett of "the opportunity to correct [her] errors." In re Schaefer Salt Recovery, Inc., 542 F.3d 90, 99 (3d Cir. 2008). "[S]trict compliance with the safe harbor rule is required." In re Miller, 730 F.3d 198, 204 (3d Cir. 2013). "If the twenty-one day period is not provided the motion must be denied." Schaefer Salt Recovery, 542 F.3d at 99 (emphasis added); see also Cannon v. Cherry Hill Toyota, Inc., 190 F.R.D. 147, 159 (D.N.J. 1999) (denying Rule 11 motion where the court could not determine if movant had complied with the safe harbor provision); Carofino v. Forester, 450 F. Supp. 2d 257, 274 (S.D.N.Y. 2006) (denying Rule 11 motion that did not comply with the separate motion provision).
Here, the PennyMac Defendants filed their motion to dismiss and for sanctions (Doc. 51) on June 11, 2018. There is nothing to indicate that a copy of the motion had been served on Garrett at least twenty-one days prior to its filing with the Court. Indeed, the motion itself includes a certificate of service indicating that it had been served on Garrett by mail on June 11, 2018, the same day the motion was filed with the Court. (Doc. 51, at 35.) The motion papers include a copy of a letter to Garrett from defense counsel dated May 30, 2018, detailing various deficiencies in the complaint and demanding that Garrett withdraw her complaint within ten days or face a Rule 11 motion for sanctions. (Doc. 51-2, at 508-13.) But "a party seeking sanctions must serve a copy of its Rule 11 motion on the other party; warnings and informal applications will not suffice." Soccer Shots Franchising v. Lookingland, No. 1:13-cv-00928, 2013 WL 5408642, at *2 (M.D. Pa. Sept. 25, 2013) (finding email correspondence warning that Rule 11 motion would be filed did not satisfy safe harbor requirement); see also Miller, 730 F.3d at 204 n.5 (noting that other circuits had rejected the proposition that an informal notification letter may satisfy the safe harbor requirement). Moreover, the letter afforded Garrett ten days to respond, rather than the twenty-one required by the safe harbor provision.
Accordingly, we recommend that the PennyMac Defendants' motion for Rule 11 sanctions be DENIED without prejudice.
IV. RECOMMENDATION
For the foregoing reasons, it is recommended that:
1. The motions to dismiss filed by Sheriff Martin (Doc. 20), the Chase Defendants (Doc. 49); the Duane Morris Defendants (Doc. 52), the Delaware Defendants (Doc. 58), the Grenen & Birsic Defendants (Doc. 65), and the Federal Agency Defendants (Doc. 70) be GRANTED;
2. The motion to dismiss and for sanctions filed by the PennyMac Defendants (Doc. 51) be GRANTED in part and DENIED in part;
3. All claims against the Federal Agency Defendants and the Delaware Defendants be DISMISSED with prejudice for lack of subject matter jurisdiction, pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure;
4. All claims against Sheriff Martin, the Chase Defendants, the PennyMac Defendants, the Duane Morris Defendants, the Grenen & Birsic Defendants, and Whitney K. Cook be DISMISSED with prejudice for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure;
5. The PennyMac Defendants' request for sanctions pursuant to Rule 11(c) of the Federal Rules of Civil Procedure be DENIED without prejudice; and
6. The Clerk be directed to mark this case as CLOSED. Dated: August 29, 2019
s/Joseph F . Saporito , Jr.
JOSEPH F. SAPORITO, JR.
United States Magistrate Judge NOTICE
NOTICE IS HEREBY GIVEN that the undersigned has entered the foregoing Report and Recommendation dated August 29, 2019. Any party may obtain a review of the Report and Recommendation pursuant to Local Rule 72.3, which provides:
Any party may object to a magistrate judge's proposed findings, recommendations or report addressing a motion or matter described in 28 U.S.C. § 636(b)(1)(B) or making a recommendation for the disposition of a prisoner case or a habeas corpus petition within fourteen (14) days after being served with a copy thereof. Such party shall file with the clerk of court, and serve on the magistrate judge and all parties, written objections which shall specifically identify the portions of the proposed findings, recommendations or report to which objection is made and the basis for such objections. The briefing requirements set forth in Local Rule 72.2 shall apply. A judge shall make a de novo determination of those portions of the report or specified
proposed findings or recommendations to which objection is made and may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge, however, need conduct a new hearing only in his or her discretion or where required by law, and may consider the record developed before the magistrate judge, making his or her own determination on the basis of that record. The judge may also receive further evidence, recall witnesses or recommit the matter to the magistrate judge with instructions.
Failure to file timely objections to the foregoing Report and Recommendation may constitute a waiver of any appellate rights. Dated: August 29, 2019
s/Joseph F . Saporito , Jr.
JOSEPH F. SAPORITO, JR.
United States Magistrate Judge