Opinion
C. A. 6:22-cv-03916-DCC-KFM
10-12-2023
Derrick Mahoney, Valesia Mahoney; Plaintiffs; v. Nationstar Mortgage, LLC; Mortgage Electronic Registration Systems, Inc.; Finkel Law Firm; Thomas Shook; Orion; Defendants.
REPORT OF MAGISTRATE JUDGE
Kevin F. McDonald United States Magistrate Judge
This is a civil action filed by pro se non-prisoner plaintiffs. Pursuant to the provisions of 28 U.S.C. § 636(b) and Local Civil Rule 73.02(B)(2) (D.S.C.), this magistrate judge is authorized to review all pretrial matters in this case and submit findings and recommendations to the district court. The plaintiffs' amended complaint was entered on the docket on September 14, 2023 (doc. 38). Upon review, the undersigned recommends it be dismissed.
LITIGATION HISTORY AND ALLEGATIONS
The court takes judicial notice that on June 29, 2018, Mr. Mahoney purchased property located at 725 Streamside Drive, Piedmont, South Carolina 29673 (“the Subject Property”). See Title to Real Estate, https://viewer.greenvillecounty.org/countyweb/login Display.action?countyname=Greenville (click Login as Guest, Accept, Search Public Records, Book - Page, Choose Book Type “DE” and enter Book 2542 and Page 456, Click Search, Click on Instrument Number 2018049135) (last visited October 11,2023). On June 29, 2022, Nationstar Mortgage, LLC (“Nationstar”) filed a foreclosure proceeding for the Subject Property in the Greenville County Court of Common Pleas. Greenville County Public Index, https://publicindex.sccourts.org/ Greenville/PublicIndex/PISearch.aspx (enter 2022CP2303421) (last visited October 11, 2023) (“the Foreclosure Action”). In the Foreclosure Action, on July 22, 2022, Mr. Mahoney filed an answer, asserting verbatim:
1) Loan is disputed for Truth in Lending violation, Mr. Cooper was asked to provide a copy of the right of [rescission] they covered with me with my signature on it and it has not been done to date.
2) I request that the case be dismissed for failing Seal and Teste of Process which states: All writs and process issuing from a court of the United States shall be under the seal of the court and signed by the clerk thereof.
Greenville County Public Index (enter 2022CP2303421) (last visited October 11, 2023). The plaintiff, dissatisfied with foreclosure proceedings, filed a notice of removal in the Foreclosure Action on November 7, 2022. Id.; see Nationstar Mort., LLC v. Mahoney, et al., C/A No. 6:22-cv-03915-DCC-KFM (D.S.C.). On September 14, 2023, the Honorable Donald C. Coggins, Jr., United States District Judge, entered an order remanding the Foreclosure Action to the Greenville County Court of Common Pleas based on procedural defects with the removal. Nationstar Mort., LLC v. Mahoney, et al., C/A No. 6:22-cv-03915-DCC-KFM, at doc. 47 (D.S.C. Sept. 14, 2023). At this time, the Foreclosure Action, as remanded, remains pending before a Master in Equity in the Greenville County Court of Common Pleas. Greenville County Public Index (enter 2022CP2303421) (last visited October 11, 2023).
During this same time, Mr. Mahoney filed the instant action, seeking money damages and equitable relief with respect to the Foreclosure Action filed by the defendants regarding the Subject Property (doc. 1). After filing this action, Mr. Mahoney filed a quit claim deed regarding the Subject Property in the Greenville County Register of Deeds on November 14, 2022. See Title to Real Estate (click Login as Guest, Accept, Search Public Records, Book - Page, Choose Book Type “DE” and enter Book 2673 and Page 2646, Click Search, Click on Instrument Number 2022085352) (last visited October 11, 2023). The deed purported to transfer ownership of the Subject Property to Valesia Mahoney. Id. On September 14, 2023, an amended complaint presented by Mr. Mahoney and Mrs. Mahoney was entered on the docket (doc. 38).
The plaintiffs' amended complaint alleges that Mr. Mahoney purchased the Subject Property, but only received notice of the Foreclosure Action through the newspaper (id. at 2). Mr. Mahoney contends that Nationstar did not send him the appropriate pre-foreclosure notices (id. at 2-3). Mr. Mahoney also contends that he was not provided notice of “provisions of the Deed” or pursuant to S.C. Code § 29-3-10, et seq. (id. at 3). The first cause of action in the amended complaint is that the Foreclosure Action constitutes a breach of the contract (id. at 3-4). The second cause of action is wrongful foreclosure (id. at 4-5). The third cause of action seeks to rescind the Foreclosure Action (id. at 5-6). The fourth cause of action alleges bad faith by Nationstar in filing the improper Foreclosure Action (id. at 6-7). For relief, the plaintiffs seek money damages and to have the Foreclosure Action rescinded (id. at 7).
APPLICABLE LAW & ANALYSIS
As pro se litigants, the plaintiffs' pleadings are accorded liberal construction and held to a less stringent standard than formal pleadings drafted by attorneys. See Erickson v. Pardus, 551 U.S. 89 (2007) (per curiam). The requirement of liberal construction does not mean that the court can ignore a clear failure in the pleading to allege facts which set forth a claim cognizable in a federal district court. See Weller v. Dep't of Soc. Servs., 901 F.2d 387, 391 (4th Cir. 1990).
“The Federal Rules of Civil Procedure recognize that courts must have the authority to control litigation before them.” Ballard v. Carlson, 882 F.2d 93, 95 (4th Cir. 1989) (citing Fed.R.Civ.P. 41(b)). Federal courts are courts of limited jurisdiction, “constrained to exercise only the authority conferred by Article III of the Constitution and affirmatively granted by federal statute.” In re Bulldog Trucking, Inc., 147 F.3d 347, 352 (4th Cir. 1998). Since federal courts have limited subject matter jurisdiction, there is no presumption that the court has jurisdiction. Pinkley, Inc. v. City of Frederick, 191 F.3d 394, 399 (4th Cir. 1999) (citing Lehigh Mining & Mfg. Co. v. Kelly, 160 U.S. 337 (1895)). Accordingly, a federal court is required, sua sponte, to determine if a valid basis for its jurisdiction exists, “and to dismiss the action if no such ground appears.” Bulldog Trucking, 147 F.3d at 352; see also Fed.R.Civ.P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”). Here, it appears that this court should abstain from hearing this action under Younger and Colorado River. The court will address each abstention doctrine in turn.
In Younger v. Harris, 401 U.S. 37 (1971), the Supreme Court held that a federal court should not interfere with state criminal proceedings “except in the most narrow and extraordinary of circumstances.” Gilliam v. Foster, 75 F.3d 881, 903 (4th Cir. 1996). Younger abstention may apply in noncriminal proceedings when three elements are met: (1) ongoing state judicial proceedings; (2) the proceedings implicate important state interests; and (3) there is an adequate opportunity to raise federal claims in the state proceedings.” Brown-Thomas v. Hynie, 441 F.Supp.3d 180, 219 (D.S.C. 2019) (citing Martin Marietta Corp. v. Md. Comm'n on Hum. Rels., 28 F.3d 1392, 1398 (4th Cir. 1994)). Here, the first criterion is met, as the Foreclosure Action for the Subject Property remains pending at this time. Greenville County Public Index (enter 2022CP2303421) (last visited October 11, 2023). With respect to the second criterion, foreclosure matters implicate important state interests as they bear upon real property and state laws implicating the foreclosure process; thus, the second element is met. Third, Mr. Mahoney (and Mrs. Mahoney) have the ability to raise the claims asserted in this action regarding improper foreclosure proceedings (such as a failure to provide the required notices) in the pending Foreclosure Action. As such, Younger abstention applies, and this action should be dismissed.
Aside from Younger abstention, it also appears that abstention is appropriate under the Colorado River doctrine. In Colorado River, the United States Supreme Court outlined the circumstances when a federal court may abstain from hearing a case based on parallel ongoing state court proceedings. Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817-19 (1976). Although “federal and state courts may share concurrent jurisdiction” over a dispute - and federal courts should generally exercise jurisdiction - “abstention is appropriate when exceptional circumstances warrant abstention in deference to the parallel state proceedings.” See Dennis v. HSBC Mortg. Servs., Inc., C/A No. 0:10-cv-02693-MJP-PJG, 2011 WL 3876916, at *3 (D.S.C. Aug. 11,2011), Report and Recommendation adopted by 2011 WL 3876909 (D.S.C. Aug. 31, 2011) (citing Colo. River, 424 U.S. at 817-19). In analyzing the appropriateness of abstention under Colorado River, a court should consider (1) whether any court has assumed jurisdiction over property; (2) inconvenience of the federal forum; (3) desirability of avoiding piecemeal litigation; and (4) order in which jurisdiction was obtained by the concurrent forums. Id. (citing Moses H. Cone Mem' Hosp. v. Mercy Constr. Corp., 460 U.S 1, 15 (1983)). Suits are considered parallel if “substantially the same parties litigate substantially the same issues in different forums.” New Beckley Mining Corp. v. Intl Union, United Mine Workers of Am., 946 F.2d 1072, 1073 (4th Cir. 1991) (citing LaDuke v. Burlington N. R.R., 879 F.2d 1556, 1559 (7th Cir. 1989)). Here, the plaintiffs' amended complaint, seeking damages and rescission of the Foreclosure Action based upon wrongful foreclosure, involves substantially the same parties litigating substantially the same issues as in the Foreclosure Action; thus, the Foreclosure Action and the instant action are parallel actions. Because the two actions are parallel, the above factors must be considered with respect to the appropriateness of Colorado River abstention. With respect to factors one, two, and four, the Greenville County Court of Common Pleas assumed jurisdiction over the Subject Property when the Foreclosure Action was filed June 29, 2022, well before the instant matter was filed in this court on November 7, 2022 (see doc. 1). Greenville County Public Index (enter 2022CP2303421) (last visited October 11, 2023). Additionally, the state court is located where the Subject Property is located - making the state court the more convenient forum (doc. 1). See Greenville County Public Index (enter 2022CP2303421) (last visited October 11, 2023). The third factor likewise weighs in favor of abstention because it would be a more efficient use of judicial resources to have the issues surrounding the Subject Property, the Note, and the Mortgage all decided in the state forum, particularly since the Master in Equity there already has the matter pending. As such, in light of the foregoing, the undersigned recommends that this court abstain from exercising jurisdiction in this case.
CONCLUSION AND RECOMMENDATION
The undersigned is of the opinion that the plaintiffs cannot cure the defects identified above by amending the amended complaint. Therefore, the undersigned recommends that the district court dismiss this action without prejudice, without leave to amend, and without issuance and service of process. See Britt v. DeJoy, 49 F.4th 790 (4th Cir. 2022) (published) (noting that “when a district court dismisses a complaint or all claims without providing leave to amend . . . the order dismissing the complaint is final and appealable”). The attention of the parties is directed to the important notice on the next page.
IT IS SO RECOMMENDED.
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. “[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must ‘only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'” Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed.R.Civ.P. 72 advisory committee's note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); see Fed.R.Civ.P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk United States District Court 250 East North Street, Room 2300 Greenville, South Carolina 29601
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).