Opinion
Civil Action 2:13-cv-0643
08-15-2013
Gwendolyn C. Pace and Gabriel C. Pace, as Trustee for The Prosperity World Legacy Trust, Plaintiffs v. Union Savings Bank, et al., Defendants
Judge Sargus
Magistrate Judge Abel
Initial Screening Report and Recommendation
Plaintiffs bring this action alleging federal claims arising out of Flagstar Bank, FSB's foreclosure on Gwendolyn C. Pace's residence. Plaintiffs' motions to proceed without prepayment of fees and costs are GRANTED.
This matter is before the Magistrate Judge for screening of the complaint under 28 U.S.C. §1915(e)(2) to identify cognizable claims, and to recommend dismissal of the complaint, or any portion of it, which is frivolous, malicious, fails to state a claim upon which relief may be granted, or seeks monetary relief from a defendant who is immune from such relief. See, McGore v. Wrigglesworth, 114 F.3d 601, 608 (6th Cir. 1997). The Magistrate Judge finds that the complaint pleads claims that could have been raised in a Franklin County Common Pleas Court foreclosure action brought by Flagstar Bank, FSB against Ms. Pace and, therefore, recommends dismissal of the complaint because the claims pleaded are barred by res judicata.
The complaint alleges that on or about May 21, 2009 Gwendolyn C. Pace executed and delivered to the defendant bank a promissory note in the amount of $350,581.00 along with a deed of trust securing the note by a lien on a homestead in Tarrant County Texas. The complaint further alleges that "at the moment the original notes were executed and delivered by Plaintiff to Defendant Bank, Defendant Bank not only had not made their loan to Plaintiff, but did not have the funds to make their loan." Complaint, ¶ 27, Doc. 1-1. PageID 12. Although not entirely clear, the complaint appears to allege that the lending bank "created" money by depositing Pace's promissory note in an account as an asset. Id., ¶¶ 29-30, PageID 12-13. The complaint pleads a large number of claims, including a violations of 12 U.S.C. § 1828(g)(2), the Consumer Credit Protection Act, the Truth-in-Lending Act, and the Fair Debt Collection Practices Act. There are also claims for breach of contract, fraud, promissory estoppel, breach of a covenant of good faith and fair dealing, breach of fiduciary duty, deceptive trade practices, negligent misrepresentation, conversion, and usury.
Analysis. Although the complaint alleges that the note was secured by a homestead in Texas, the August 5, 2013 motion of defendants BSI Financial Services, Inc., Shamrock Acquisitions, LLC, and FCI Lender Services to dismiss or, alternatively, for a more definite statement (doc. 7) asserts that the note was reduced to judgment and the property foreclosed on in Flagstar Bank, FSB v. Gwendolyn C. Pace, et al., 10 CVE 03 04690 (Franklin County C.P. Ct. 2010)(Docket accessed August 14, 2013: http://fcdcfcjs.co.franklin.oh.us/CaseInformationOnline/caseSearch?tGUdTLe2qToNa DKulbRh). And, indeed, that appears to be the case. On April 12, 2011, the Common Pleas Court entered judgment against Ms. Pace on the note in the amount of $348,885.50, plus 5% per annum interest, and late charges. Further, the mortgage on 183 Creekside Green Dr., filed with the Franklin County Recorder on June 1, 2009, Gahanna, Ohio 43230 was foreclosed.
Federal courts are required to give state court judgments the same preclusive effect as the state. So this Court must look to Ohio law to determine the preclusive effect of the judgment Flagstar Bank, FSB v. Gwendolyn C. Pace, et al., 10 CVE 03 04690 (Franklin County C.P. Ct. April 12, 2011). Migra v. Warren County School District Board of Education, 465 U.S. 75, 81 (1984). The Ohio rule is that a prior judgment is conclusive of all claims that were litigated or could have been litigated. Grava v. Parkman Township, 73 Ohio State 3d 379, 382 (1995). An Ohio court judgment "is conclusive as to all claims which were or might have been litigated in a first law-suit." National Amusements, Inc. v. City of Springdale, 53 Ohio State 3d 60, 62 (1990). All existing claims between opposing parties that arise out of the same transaction or occurrence must be litigated in a single lawsuit, regardless of who files the suit. Rettig Enterprises, Inc. v. Koehler, 68 Ohio State 3d 274, headnote 1 (1994).
The United States Court of Appeals for the Sixth Circuit has consistently held that any claims a litigant could have litigated against a party in a prior law-suit are barred from being raised in a second lawsuit involving the same party. Rivers v. Barberton Board of Education, 143 F.3d 1029, 1032 (6th Cir. 1998); J.Z.G. Resources, Inc. v. Shelby Insurance Company, 84 F.3d 211, 214 (6th Cir. 1996); Os-born v. Ashland County Board of Education, 979 F.2d 1131, 1133-34 (6th Cir. 1992).
Here all of Pace's claims could have been asserted in the Common Pleas Court suit. They are essentially "defenses" to that suit. Because she failed to raise the claims in Flagstar Bank, FSB v. Gwendolyn C. Pace, et al., 10 CVE 03 04690 (Franklin County C.P. Ct. 2010), they cannot now be raised in this lawsuit.
Alternatively, I find that the complaint fails to give the individual defendants fair notice of what they allegedly did to cause plaintiffs harm. Under Rule 8(a), Fed. R. Civ. P., a complaint must include "a short and plain statement of the claim[s]." The United States Supreme Court held in Erickson v. Pardus, 551 U.S. 89, 93 (2007):
. . . Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." Specific facts showing that the pleader is entitled to relief are not necessary; the statement need only "'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957).Although Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," it is not true that notice pleading means that a complaint need plead no facts. The form complaints appended to the Federal Rules of Civil Procedure all include basic facts, such as the date the actionable event(s) took place and a brief description of them. E.g., Forms 9-14 and 17. Here the complaint does not allege the date(s) on which any actionable event took place, except the allegation that the note was signed May 21, 2009. Further, it does not plead any facts that would give the individual defendants notice of the claims against them and the grounds on which they rest. It merely repeatedly alleges that the "Defendant Bank" engaged in actionable conduct without identifying which defendant bank or other entity engaged in the alleged actionable conduct.
Accordingly, the Magistrate Judge RECOMMENDS that the complaint be DISMISSED it is barred by res judicata. Defendants do not have to respond to the complaint unless the Court rejects this Report and Recommendation.
IT IS FURTHER ORDERED that plaintiff's application to proceed without prepayment of fees be GRANTED. The United States Marshal is ORDERED to serve upon each defendant named in the complaint a copy of the complaint and a copy of this Order.
If any party objects to this Report and Recommendation, that party may, within fourteen (14) days, file and serve on all parties a motion for reconsideration by the Court, specifically designating this Report and Recommendation, and the part thereof in question, as well as the basis for objection thereto. 28 U.S.C. §636(b)(1)(B); Rule 72(b), Fed. R. Civ. P.
The parties are specifically advised that failure to object to the Report and Recommendation will result in a waiver of the right to de novo review by the District Judge and waiver of the right to appeal the judgment of the District Court. Thomas v. Arn, 474 U.S. 140, 150-52 (1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981). See also, Small v. Secretary of Health and Human Services, 892 F.2d 15, 16 (2d Cir. 1989).
The Clerk of Court is DIRECTED to mail a copy of the complaint and this Report and Recommendation to each defendant.
Mark R. Abel
United States Magistrate Judge