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Squirek v. Law Offices of Sessoms Rogers, P.A.

United States District Court, M.D. North Carolina
May 5, 2003
1:02CV00040 (M.D.N.C. May. 5, 2003)

Summary

applying Rooker-Feldman to bar complaint by debtor-plaintiff which effectively challenged the prior state court proceedings between the parties

Summary of this case from Lewis v. Kesterson

Opinion

1:02CV00040

May 5, 2003


MEMORANDUM OPINION


This case is currently before the Court on Plaintiff Thomas J. Squirek's Amended Motion to Dismiss Defendants' Counterclaim [Document #10], in which Plaintiff seeks to have the claims asserted against him dismissed for failure to state a claim upon which relief may be granted, and Plaintiff's Amended Motion to Strike Defendants' "First Defense" within Defendants' Answer and Counterclaim [Document #12]. For the reasons stated below, Plaintiff's Complaint is DISMISSED.

I. FACTUAL AND PROCEDURAL BACKGROUND

The documents available to the Court indicate that on November 9, 2000, First Select Incorporated ("First Select") filed two lawsuits against Plaintiff Thomas J. Squirek ("Plaintiff" or "Squirek") in the General Court of Justice of Guilford County, North Carolina. In the first suit, 00CVD11879, First Select, owner of Plaintiff's credit account, sought to collect $6,266.92 plus interest and attorneys' fees from Plaintiff because he defaulted on debts he incurred pursuant to a credit card agreement. (Defs.' Answer and Countercl., Exh. 10.) Similarly, in the second suit, 00CVD11882, First Select, sought to collect $9,370.94 plus interest and attorneys' fees because Plaintiff defaulted on debts incurred pursuant to a different credit card agreement. (Defs.' Answer and Countercl., Exh. 9.) In response to First Select's lawsuits, Squirek filed two motions to dismiss alleging that First Select's attorney, William J. Allen ("Allen") of Columbia, South Carolina, was not licensed to practice law in North Carolina and that First Select was not registered to conduct business in the State of North Carolina. (Defs.' Answer and Countercl., Exhs. 1, 2.) Squirek also filed motions for sanctions in both cases. Notably, in February 2001, Stuart M. Sessoms ("Sessoms") of the Durham, North Carolina law firm Sessoms Rogers, P.A. (collectively "Defendants") replaced Allen as counsel for First Select. (Defs.' Answer and Countercl., Exhs. 7, 8.)

In response to Squirek's motions, First Select, represented by Sessoms, provided certification that Allen was an active member of the North Carolina Bar Association in good standing. (Defs.' Answer and Countercl., Exhs. 3, 4.) First Select also noted that while it was not registered to transact business in North Carolina, it was not required to do so in order to collect debts due to it. (Defs.' Answer and Countercl., Exhs. 3, 4.) First Select thereafter filed motions for summary judgment. In response, the state court, on November 21, 2001, granted First Select's motions for summary judgment and issued Orders and Judgments in both actions finding that Allen was licensed to practice law in North Carolina, and that as a matter of law Squirek owed First Select the amounts of his outstanding debts plus interest and attorneys' fees. (Defs.' Answer and Countercl., Exhs. 5, 6.) Additionally, in one case, the state court assessed sanctions against Squirek in the sum of $1000 for his failure to present any justiciable issue in his motions to dismiss and motions for sanctions. (Defs.' Answer and Countercl., Exh. 6.)

On January 18, 2002, Plaintiff, acting pro Se, filed the instant action in the Middle District of North Carolina alleging that Defendants used unfair and deceptive trade practices in violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., (Compl. ¶ 1.) Specifically, Plaintiff asserts that Defendants "willingly chose to ignore a fiduciary duty and responsibility to Plaintiff, neglecting to prove or validate any contract or agreement between First Select Inc. and Plaintiff, and further neglecting to cease collection of the alleged debt until Defendants obtained verification of the alleged debt, all contrary to [ 15 U.S.C. § 1692g(b)]." (Compl. ¶ 9.) Plaintiff contends that via a letter dated August 4, 2000, he requested that Allen validate any alleged debt with First Select Inc., as to Plaintiff. (Compl. ¶ 10.) Plaintiff contends that neither Allen nor Sessoms, after his substitution, ever responded to Plaintiff's letter. (Compl. ¶¶ 11, 14.) Moreover, Plaintiff alleges that Defendants perpetrated fraud upon the state court by not providing the court with certified evidence of a signed contract or agreement between Plaintiff and First Select and by not providing the state court with evidence that Plaintiff received any valuable consideration from First Select in violation of 15 U.S.C. § 1692f(1) and 15 U.S.C. § 1692e(2)(A)(B)(5)(10)(11) (sic). (Compl. ¶¶ 16, 17.) Plaintiff also asserts claims under both the Fair Debt Collection Practices Act and the North Carolina Unfair and Deceptive Trade Practices Act, Chapter 75 of the North Carolina General Statutes, for false representation and using unfair and unconscionable means to collect debt from Plaintiff. Plaintiff requests that this Court issue a declaration that Defendants' acts are in violation of the Fair Debt Collection Practices Act, award statutory damages of $1000, and assess fees and costs against Defendants.

On February 7, 2002, Defendants filed their Answer and Counterclaim denying Plaintiff's allegations. Specifically, Defendants plead as their first defense that Plaintiff fails to state a claim upon which relief may be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure ("First Defense"). Defendants also filed a counterclaim against Plaintiff for filing a complaint that "was utterly without merit and frivolous and malicious." (Defs.' Answer and Countercl. ¶ 28.) Specifically, Defendants assert that Plaintiff brought his action in bad faith and for the purpose of harassing Defendants. (Defs.' Answer and Countercl. ¶ 29.) Defendants' counterclaim alleges that they are entitled to costs and reasonable attorneys' fees pursuant to 15 U.S.C. § 1692k(a)(3). Plaintiff then filed a Motion to Dismiss Defendants' Counterclaim for failure to state a claim upon which relief may be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Plaintiff also filed a Motion to Strike Defendants' First Defense pursuant to Rule 12(f) of the Federal Rules of Civil Procedure. On April 29, 2003, the Court held a hearing at which Defendants raised for the first time the threshold issue of subject matter jurisdiction contending that the Court lacked subject matter jurisdiction over Plaintiff's Complaint so as to preclude the Court from further consideration of this matter. The Court will address these Motions in turn.

Lack of subject matter jurisdiction may be raised at any time by the parties or the court. Ins. Corp. of Ireland v. Compagnie des Bauxites, 456 U.S. 694, 701-02, 102 S.Ct. 2099, 2104, 72 L.Ed.2d 492 (1982); United States v. White, 139 F.3d 998, 999-1000 (4th Cir. 1998).

II. DISCUSSION

A. Subject Matter Jurisdiction

A threshold matter raised by Defendants at the April 23, 2003 hearing concerns the Court's subject matter jurisdiction over Plaintiff's Complaint. Defendants contend that pursuant to the Rooker-Feldman doctrine, the Court, as a lower federal court, lacks subject matter jurisdiction over Plaintiff's claims, which effectively attempt to challenge the state court judgments in the prior proceedings between the parties. Viewed in the light most favorable to Plaintiff, Plaintiff's claims before the Court do in fact assert that Defendants did not validate Plaintiff's debt, and that Defendants perpetrated fraud upon the state court by not providing it with evidence of Plaintiff's debt in violation of the Fair Debt Collection Practices Act.

The Rooker-Feldman doctrine provides that "a United States District Court has no authority to review final judgments of a state court in judicial proceedings." District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 482, 103 S.Ct. 1303, 1315, 75 L.Ed.2d 206 (1983); see also Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923). "[J]urisdiction to review such decisions lies exclusively with superior state courts and, ultimately, the United States Supreme Court."Plyler v. Moore, 129 F.3d 728, 731 (4th Cir. 1997). Only habeas corpus petitions or actions sounding in habeas corpus are excepted from the Rooker-Feldman bar. Plyler, 129 F.3d at 732, 733.

The Rooker-Feldman doctrine bars not only direct review of issues actually decided by the state court, but also consideration of those claims which are "inextricably intertwined" with state court decisions.Feldman, 460 U.S. at 486-87, 103 S.Ct. at 1315-16; Plyler, 129 F.3d at 731. The "inextricably intertwined" prong of the doctrine bars a claim that was not actually decided by the state court but where "success on the federal claim depends upon a determination that the state court wrongly decided the issues before it." Plyler, 129 F.3d at 731 (internal quotation marks omitted). Under either the "actually decided" or the "inextricably intertwined" prong, the principle is the same: "[A] party losing in state court is barred from seeking what in substance would be appellate review of the state judgment in a United States district court, based on the losing party's claim that the state judgment itself violates the loser's federal rights." Johnson v. De Grandy, 512 U.S. 997, 1005-06, 114 S.Ct. 2647, 2654, 129 L.Ed.2d 775 (1994).

Rooker-Feldman is one of a number of doctrines that safeguards our dual system of government from federal judicial erosion. Cf. Atl. Coast Line R.R. v. Brotherhood of Locomotive Eng'rs, 398 U.S. 281, 286, 90 S.Ct. 1739, 1743, 26 L.Ed.2d 234 (1970) ("[F]rom the beginning we have had in this country two essentially separate legal systems. Each system proceeds independently of the other with ultimate review in [the Supreme] Court of the federal questions raised in either system."). "The independence of state courts would surely be compromised if every adverse decision in state court merely rang the opening bell for federal litigation of the same issues." Brown Root, Inc. v. Breckenridge, 211 F.3d 194, 198 (4th Cir. 2000).

Even more fundamentally, the Rooker-Feldman doctrine is rooted in the principle of separation of powers. It rests on two basic propositions of federal jurisdiction. First, Congress has vested the authority to review state court judgments in the United States Supreme Court alone. 28 U.S.C. § 1257 (a); Feldman, 460 U.S. at 482, 103 S.Ct. at 1315. The Rooker-Feldman doctrine thus "interprets 28 U.S.C. § 1257 as ordinarily barring direct review in the lower federal courts of a decision reached by the highest state court, for such authority is vested solely in [the Supreme] Court." ASARCO Inc. v. Kadish, 490 U.S. 605, 622, 109 S.Ct. 2037, 2048, 104 L.Ed.2d 696 (1989). Second, Congress has empowered the federal district courts to exercise only original jurisdiction. See, e.g., 28 U.S.C. § 1331, 1332; Rooker, 263 U.S. at 416, 44 S.Ct. at 150. "While the lower federal courts were given certain powers in the [Judiciary Act of 1789], they were not given any power to review directly cases from state courts, and they have not been given such powers since that time." Atl. Coast Line, 398 U.S. at 286, 90 S.Ct. at 1743. And it is well settled that "Congress has the constitutional authority to define the jurisdiction of the lower federal courts." Keene Corp. v. United States, 508 U.S. 200, 207, 113 S.Ct. 2035, at 2040, 124 L.Ed.2d 118 (1993).

Importantly, "the Rooker-Feldman doctrine precludes not only review of adjudications of the state's highest court, but also the decisions of [the state's] lower courts." Jordahl v. Democratic Party of Virginia, 122 F.3d 192, 199 (4th Cir. 1997); accord FOCUS v. Allegheny County Court of Common Pleas, 75 F.3d 834, 840 (3d Cir. 1996) ("We have interpreted the doctrine to encompass final decisions of lower state courts."). "The Rooker-Feldman doctrine is in no way dependent upon the temporal procedural posture of the state court judgment." Jordahl, 122 F.3d at 202. "[R]ather, the doctrine reinforces the important principle that review of state court decisions must be made to the state appellate courts, and eventually to the Supreme Court, not by federal district courts or courts of appeal." Id.

In this case, Plaintiff cannot succeed on his federal claim unless the Court reexamines issues already decided by the North Carolina state court in the two prior state court actions. The issues before the North Carolina state court were whether Squirek was lawfully indebted to First Select for debts he incurred on his written revolving credit accounts, originally opened with Chase Manhattan Bank and Greenwood Trust Company. (Defs.' Answer and Countercl., Exhs. 5, 6.) Because Squirek did not respond to First Select's requests for admissions, the North Carolina state court found that all of First Select's requests were deemed admitted and conclusively established, as provided for under state law. (Defs.' Answer and Countercl., Exhs. 5, 6.) Accordingly, the state court granted summary judgment in favor of First Select in both cases.

In the instant action, Squirek alleges that Sessoms, as counsel for First Select in the state court actions, violated the Fair Debt Collection Practices Act when he did not provide Squirek with validation of Squirek's debts owed to First Select. However, in reaching its decisions, the North Carolina state court determined that Squirek "entered into written revolving credit account agreement[s]" which were "subsequently sold and assigned to [First Select]." (Defs.' Answer and Countercl., Exhs. 5, 6.) In other words, the state court determined that the debts owed by Squirek to First Select were valid. Because the state court already addressed the validity of the debts Squirek now alleges were not properly validated in state court actions, this Court cannot subsequently examine whether Sessoms violated the Fair Debt Collection Practices Act on the ground Squirek asserts, which he contends to be Sessoms' failure to validate his debts. In order to do so, this Court would have to evaluate issues which could result in the Court effectively overruling the state court's findings. Therefore, pursuant to the Rooker-Feldman doctrine, the Court does not have subject matter jurisdiction over the instant matter because Plaintiff's Complaint raises issues that were already adjudicated adversely to him in his two prior state court proceedings. Consequently, Plaintiff's Complaint is DISMISSED for lack of subject matter jurisdiction.

B. Plaintiff's Motion to Dismiss and Motion to Strike

As previously noted, Plaintiff has filed two motions before the Court, a Motion to Dismiss Defendants' Counterclaim for failure to state a claim upon which relief may be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure, and a Motion to Strike Defendants' First Defense. However, because the Court finds that it does not have subject matter jurisdiction over the instant action, Plaintiff's Motion to Dismiss and Motion to Strike are DISMISSED for lack of subject matter jurisdiction.

III. CONCLUSION

Because the Court lacks subject matter jurisdiction over the instant action, Plaintiff's Complaint is hereby DISMISSED. Also for the reasons discussed above, Plaintiff's Amended Motion to Dismiss Defendants' Counterclaim [Document #10] and Plaintiff's Amended Motion to Strike Defendants' First Defense [Document #12] are hereby DISMISSED.

An Order and Judgment consistent with this Memorandum Opinion will be filed contemporaneously herewith.

ORDER AND JUDGMENT

For the reasons stated in the Court's Memorandum Opinion, filed contemporaneously herewith, IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT Plaintiff's Complaint [Document #1] is DISMISSED.

It is also HEREBY ORDERED, ADJUDGED AND DECREED THAT Plaintiff's Amended Motion to Dismiss Defendants' Counterclaim [Document #10] and Plaintiff's Amended Motion to Strike Defendants' First Defense [Document #12] are DISMISSED for lack of subject matter jurisdiction.


Summaries of

Squirek v. Law Offices of Sessoms Rogers, P.A.

United States District Court, M.D. North Carolina
May 5, 2003
1:02CV00040 (M.D.N.C. May. 5, 2003)

applying Rooker-Feldman to bar complaint by debtor-plaintiff which effectively challenged the prior state court proceedings between the parties

Summary of this case from Lewis v. Kesterson
Case details for

Squirek v. Law Offices of Sessoms Rogers, P.A.

Case Details

Full title:THOMAS J. SQUIREK, Plaintiff, v. THE LAW OFFICES OF SESSOMS ROGERS, P.A.…

Court:United States District Court, M.D. North Carolina

Date published: May 5, 2003

Citations

1:02CV00040 (M.D.N.C. May. 5, 2003)

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