Opinion
Civ. 3:21-CV-521
04-30-2024
MARIA DISEN, Plaintiff, v. BAYVIEW LOAN SERVICING, LLC, Defendant.
Carlson Magistrate Judge
REPORT AND RECOMMENDATION
MARTIN C. CARLSON UNITED STATES MAGISTRATE JUDGE
I. Factual Background and Procedural History
This case, which comes before us for consideration of a motion to dismiss filed by the defendant, represents the latest effort of the pro se plaintiff, Maria Disen, to stave off her mortgage foreclosure. The well-pleaded allegations in Disen's complaint, which guide our consideration of this motion, indicate that Disen purchased a property in 2000, which was subject to a mortgage. (Doc. 1 ¶¶ 1-6). Disen appears to be under the impression that this mortgage debt was discharged in a bankruptcy which she filed in 2004. (Id. ¶ 5). Nonetheless, Disen avers that in 2019 she was the subject of mortgage foreclosure proceedings brought in state court by the defendant, Bayview. (Id. ¶¶ 12-44). These proceedings concluded with the entry of a state court judgment in favor of Bayview, and in this federal lawsuit Disen asserts that the state trial and appellate courts committed multiple legal errors in the course of this state mortgage foreclosure, including failing to properly recognize the alleged bankruptcy court discharge of this debt. (Id.) According to Disen, these state court errors were a product of misleading behavior by Bayview in the course of the state court litigation. (Id.)
Disen contends that these state court rulings and the actions of Bayview throughout this foreclosure action violated the federal Fair Debt Collection Practices Act, (FDCPA) 15 U.S.C. §1692, and the Fourteenth Amendment to the United States Constitution. (Id. ¶¶ 6-7). Based upon these alleged state court errors, Disen urges us to invalidate the foreclosure judgment and award her compensatory and punitive damages.
Initially, in March of 2021, this case was transferred to the bankruptcy court for consideration of Disen's claims that the bankruptcy court discharge order had been violated. (Docs. 3 and 4). After proceedings before the bankruptcy court, Disen's claim that Bayview had violated a prior bankruptcy discharge order was denied by that court. (Doc. 24-10, 24-11). The bankruptcy court declined, however, to address Disen's FDCPA and Fourteenth Amendment claims, finding that it lacked jurisdiction over those allegations. Instead, the bankruptcy court concluded that these averments could only be addressed by the district court. (Id.) Following this bankruptcy court ruling which addressed the issue of the scope of the bankruptcy discharge order, in August of 2023, this bankruptcy referral was withdrawn by the district court, setting the stage for merits consideration of this complaint. (Doc. 5). Bayview then filed a motion to dismiss the complaint, (Doc. 24), which has been fully briefed by the parties, (Docs. 24-31), and is now ripe for resolution.
For the reasons set forth below, it is recommended that the motion to dismiss be granted.
II. Discussion
A. Motions to Dismiss Under Rule 12(b)(1) and 12(b)(6)—Standards of Review.
1. Rule 12(b)(1)
Bayview has moved to dismiss Disen's complaint citing Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil procedure. Rule 12(b)(1) permits the dismissal of an action for “lack of subject matter jurisdiction.” A motion to dismiss under Rule 12(b)(1) thus challenges the power of the court to hear a case or consider a claim. Petruska v. Gannon Univ., 462 F.3d 294, 302 (3d Cir. 2006). When faced with a 12(b)(1) motion, the plaintiff has the burden to “convince the court it has jurisdiction. Gould Elecs., Inc. v. United States, 220 F.3d 169, 178 (3d Cir. 2000); see also Kehr Packages v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991) (“When subject matter jurisdiction is challenged under Rule 12(b)(1), the plaintiff must bear the burden of persuasion”).
A Rule 12(b)(1) motion may be treated as either a facial or factual challenge to the court's subject matter jurisdiction. See Morten v. First Fed. Sav. And Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1997). First, a facial attack “contests the sufficiency of the pleadings.” Common Cause of Pa. v. Pennsylvania, 558 F.3d 249, 257 (3d Cir. 2009) (quoting Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 187-88 (3d Cir. 2006)). Such a facial challenge “attacks the complaint on its face without contesting its alleged facts, [and] is like a 12(b)(6) motion in requiring the court ‘to consider the allegations of the complaint as true.'” Hartig Drug Company, Inc. v. Senju Pharmaceutical Co. Ltd., 836 F.3d 261, 268 (3d Cir. 2006). Thus, in ruling on such a motion, the court assumes the truth of the allegations in the complaint but must analyze the pleadings to determine whether they state an action that comes within the court's jurisdiction. United States ex rel. Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506, 514 (3d Cir. 2016). A facial 12(b)(1) motion should be granted only if it appears certain that the assertion of subject matter jurisdiction is improper. Kehr Packages, 926 F.2d 1406, 1408-09 (3d Cir. 1991); Empire Kosher Poultry, Inc. v. United Food & Commericial Workers Health & Welfare Fund of Ne. Pa., 285 F.Supp.3d 573, 577 (M.D. Pa. 2003).
In contrast, a “factual” attack on subject matter jurisdiction asserts that, although the pleadings facially satisfy jurisdictional requirements, one or more allegations in the complaint is untrue, which therefore causes the action to fall outside the court's jurisdiction. Carpet Group, Int'l v. Oriental Rug Imps. Ass'n, Inc., 227 F.3d 62, 69 (3d Cir. 2000); Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1997). In ruling on factual challenges, a court must consider the merits of the disputed allegations, since “the trial court's . . . very power to hear the case” is in dispute. Mortensen, 549 F.2d at 891.
2. Rule 12(b)(6).
While Rule 12(b)(1) considers the power of the court to hear a case, a motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of a complaint. It is proper for the court to dismiss a complaint in accordance with Rule 12(b)(6) of the Federal Rules of Civil Procedure only if the complaint fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). With respect to this benchmark standard for legal sufficiency of a complaint, the United States Court of Appeals for the Third Circuit has aptly noted the evolving standards governing pleading practice in federal court, stating that:
Standards of pleading have been in the forefront of jurisprudence in recent years. Beginning with the Supreme Court's opinion in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), continuing with our opinion in Phillips [v. County of Allegheny, 515 F.3d 224, 230 (3d Cir. 2008)], and culminating recently with the Supreme Court's decision in Ashcroft v. Iqbal, -U.S.-, 129 S.Ct. 1937 (2009), pleading standards have seemingly shifted from simple notice pleading to a more heightened form of pleading, requiring a plaintiff to plead more than the possibility of relief to survive a motion to dismiss.Fowler v. UPMC Shadyside, 578 F.3d 203, 209-10 (3d Cir. 2009).
In considering whether a complaint fails to state a claim upon which relief may be granted, the court must accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom are to be construed in the light most favorable to the plaintiff. Jordan v. Fox, Rothschild, O'Brien & Frankel, Inc., 20 F.3d 1250, 1261 (3d Cir. 1994). However, a court “need not credit a complaint's bald assertions or legal conclusions when deciding a motion to dismiss.” Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). Additionally, a court need not “assume that a . . . plaintiff can prove facts that the . . . plaintiff has not alleged.” Associated Gen. Contractors of Cal. v. California State Council of Carpenters, 459 U.S. 519, 526 (1983). As the Supreme Court held in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), in order to state a valid cause of action, a plaintiff must provide some factual grounds for relief which “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of actions will not do.” Id. at 555. “Factual allegations must be enough to raise a right to relief above the speculative level.” Id.
In keeping with the principles of Twombly, the Supreme Court has underscored that a trial court must assess whether a complaint states facts upon which relief can be granted when ruling on a motion to dismiss. In Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Supreme Court held that, when considering a motion to dismiss, a court should “begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.” Id. at 679. According to the Supreme Court, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 678. Rather, in conducting a review of the adequacy of a complaint, the Supreme Court has advised trial courts that they must:
[B]egin by identifying pleadings that because they are no more than conclusions are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.Id. at 679.
Thus, following Twombly and Iqbal, a well-pleaded complaint must contain more than mere legal labels and conclusions; it must recite factual allegations sufficient to raise the plaintiff's claimed right to relief beyond the level of mere speculation. As the United States Court of Appeals for the Third Circuit has stated:
[A]fter Iqbal, when presented with a motion to dismiss for failure to state a claim, district courts should conduct a two-part analysis. First, the factual and legal elements of a claim should be separated. The District Court must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions. Second, a District Court must then determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a “plausible claim for relief.” In other words, a complaint must do more than allege the plaintiff's entitlement to relief. A complaint has to “show” such an entitlement with its facts.Fowler, 578 F.3d at 210-11.
As the Court of Appeals has observed:
The Supreme Court in Twombly set forth the “plausibility” standard for overcoming a motion to dismiss and refined this approach in Iqbal. The
plausibility standard requires the complaint to allege “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570, 127 S.Ct. 1955. A complaint satisfies the plausibility standard when the factual pleadings “allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). This standard requires showing “more than a sheer possibility that a defendant has acted unlawfully.” Id. A complaint which pleads facts “merely consistent with” a defendant's liability, [ ] “stops short of the line between possibility and plausibility of ‘entitlement of relief.' ”Burtch v. Milberg Factors, Inc., 662 F.3d 212, 220-21 (3d Cir. 2011), cert. denied, 132 S.Ct. 1861, 182 L.Ed.2d 644 (2012).
In practice, consideration of the legal sufficiency of a complaint entails a three-step analysis: “First, the court must ‘tak[e] note of the elements a plaintiff must plead to state a claim.' Iqbal, 129 S.Ct. at 1947. Second, the court should identify allegations that, ‘because they are no more than conclusions, are not entitled to the assumption of truth.' Id. at 1950. Finally, ‘where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief.' Id.” Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010).
In considering a motion to dismiss, the court generally relies on the complaint, attached exhibits, and matters of public record. Sands v. McCormick, 502 F.3d 263, 268 (3d Cir. 2007). The court may also consider “undisputedly authentic document[s] that a defendant attached as an exhibit to a motion to dismiss if the plaintiff's claims are based on the [attached] documents.” Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). Moreover, “documents whose contents are alleged in the complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered.” Pryor v. Nat'l Collegiate Athletic Ass'n, 288 F.3d 548, 560 (3d Cir. 2002); see also U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 382, 388 (3d Cir. 2002) (holding that “[a]lthough a district court may not consider matters extraneous to the pleadings, a document integral to or explicitly relied upon in the complaint may be considered without converting the motion to dismiss in one for summary judgment”). However, the court may not rely on other parts of the record in determining a motion to dismiss, or when determining whether a proposed amended complaint is futile because it fails to state a claim upon which relief may be granted. Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994).
It is against these legal guideposts that we assess the legal sufficiency of this complaint.
B. The Motion to Dismiss Should Be Granted.
Bayview's motion to dismiss launches a multi-facetted attack upon the legal sufficiency of Disen's complaint, noting that the complaint runs afoul of res judicata principles, is barred by various federal abstention doctrines, and is legally insufficient in a variety of respects. Bayview's objections to this latest effort by Disen to avoid mortgage foreclosure raise familiar legal principles which have in the past barred similar attempts to collaterally attack state court mortgage foreclosure decisions. Edwards v. Specialized Loan Servicing, LLC, No. 1:15-CV-335, 2015 WL 3488203, at *5-10 (M.D. Pa. June 2, 2015). Upon consideration and following these settled legal tenets, we agree that Disen may not maintain this lawsuit in federal court.
1. The Rooker-Feldman Doctrine and Res Judicata Principles Bar These Claims.
At the outset, we note a fundamental and overarching flaw in this complaint. This matter arises out of prior state mortgage litigation which concluded with the entry of a judgment against the plaintiff. Disen unsuccessfully appealed this judgment to the state appellate court which affirmed the decision denying her relief on this mortgage. Thus, the complaint contains claims which necessarily invite a federal court to, de novo, review, re-examine, and reject state court rulings in this prior state mortgage case.
This we cannot do. Indeed, the United States Supreme Court has spoken to this issue and has announced a rule, the Rooker-Feldman doctrine, which compels federal district courts to decline invitations to conduct what amounts to appellate review of state trial court decisions. As described by the Third Circuit:
That doctrine takes its name from the two Supreme Court cases that gave rise to the doctrine. Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923); District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983). The doctrine is derived from 28 U.S.C. § 1257 which states that “[f]inal
judgments or decrees rendered by the highest court of a state in which a decision could be had, may be reviewed by the Supreme Court....”. See also Desi's Pizza, Inc. v. City of Wilkes Barre, 321 F.3d 411, 419 (3d Cir.2003). “Since Congress has never conferred a similar power of review on the United States District Courts, the Supreme Court has inferred that Congress did not intend to empower District Courts to review state court decisions.” Desi's Pizza, 321 F.3d at 419.Gary v. Braddock Cemetery, 517 F.3d 195, 200 (3d Cir. 2008).
Because federal district courts are not empowered by law to sit as reviewing courts, reexamining state court decisions, “[t]he Rooker-Feldman doctrine deprives a federal district court of jurisdiction in some circumstances to review a state court adjudication.” Turner v. Crawford Square Apartments III, LLP,, 449 F.3d 542, 547 (3d Cir. 2006). Cases construing this jurisdictional limit on the power of federal courts have quite appropriately:
[E]mphasized the narrow scope of the Rooker-Feldman doctrine, holding that it “is confined to cases of the kind from which the doctrine acquired its name: 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.” [Exxon Mobil Corp. v. Saudi Basic Industries Corp.], 544 U.S. at 284, 125 S.Ct. at 1521-22; see also Lance v. Dennis, 546 U.S. 459,----, 126 S.Ct. 1198, 1201, 163 L.Ed.2d 1059 (2006).Id.
However, even within these narrowly drawn confines, it has been consistently recognized that the Rooker-Feldman doctrine prevents federal judges from considering lawsuits “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,” particularly where those lawsuits necessarily require us to re-examine state mortgage litigation rulings. See, e.g., Moncrief v. Chase Manhattan Mortgage Corp., 275 Fed.Appx. 149 (3d Cir. 2008) (Rooker-Feldman doctrine precludes re-litigation of state mortgage foreclosure in federal court); Ayres-Fountain v. Eastern Savings Bank, 153 Fed.Appx. 91 (3d Cir. 2005) (same); In re Knapper, 407 F.3d 5773 (3d Cir. 2005) (same); Downey v. Perrault, No. 09-1018, 2009 WL 3030051 (D.N.J. Sept.15, 2009) (same); Easley v. New Century Mortgage Corp., No. 08-4283 (E.D.Pa. July 28, 2009) (same); Laychock v. Wells Fargo Home Mortgage, No. 07-4478, 2008 WL 2890962 (E.D.Pa. July 23, 2008) (same).
In the context of federal litigation challenging prior state mortgage judgments, a:
[C]laim is barred by Rooker-Feldman under two circumstances; first, if the federal claim was actually litigated in state court prior to the filing of the federal action or, second, if the federal claim is inextricably intertwined with the state adjudication, meaning that federal relief can only be predicated upon a conviction that the state court was wrong. In either case, Rooker-Feldman bars a litigant's federal claims and divests the District Court of subject matter jurisdiction over those claims.In re Knapper, 407 F.3d at 580. For purposes of applying this doctrine to federal lawsuits attacking prior state mortgage cases:
A federal claim is inextricably intertwined with an issue adjudicated by a state court when: (1) the federal court must determine that the state
court judgment was erroneously entered in order to grant the requested relief, or (2) the federal court must take an action that would negate the state court's judgment.... In other words, Rooker-Feldman does not allow a plaintiff to seek relief that, if granted, would prevent a state court from enforcing its orders.Id. at 581 (citations omitted). Thus:
“Rooker-Feldman does not allow a plaintiff to seek relief that, if granted, would prevent a state court from enforcing its own orders.” In re Knapper, 407 F.3d 573, 580 (3d Cir.2005). “A mortgage foreclosure action depends upon the existence of a valid mortgage.....[Therefore] if [plaintiff's] claim ... were permitted to proceed and [plaintiff] obtained a favorable judgment, the resulting federal judgment would necessarily negate the state court foreclosure judgment, a judgment which had been rendered prior to the commencement of [this action]. This result [would be] precisely the outcome prohibited by the Rooker-Feldman doctrine.” In re Madera, 388 B.R. 586, 597-98 (E.D.Pa.2008) (dismissing TILA claim following default foreclosure judgment).Easley v. New Century Mortg. Corp., 2009 WL 2256692 at *1.
Moreover, there is a second threshold legal hurdle that Disen must cross when endeavoring to bring this action. Entirely aside from the Rooker-Feldman doctrine, it is also well settled that an effort to use the federal courts to invalidate, challenge or:
[R]elitigate [a state] foreclosure action, ..., is prohibited by Pennsylvania's preclusion doctrine. Federal courts are required to give state court judgments the same preclusive effect that the issuing state courts would give them. See Rycoline Prods., Inc. v. C & W Unlimited, 109 F.3d 883, 887 (3d Cir. 1997). Under Pennsylvania law, claim preclusion is a doctrine by which a former adjudication bars a later action on all or part of the claim which was the subject of the first action. Any final, valid judgment on the merits by a court of competent jurisdiction precludes any future suit between the parties or their privies on the same cause of action. [Claim preclusion] applies not only to
claims actually litigated, but also to claims which could have been litigated during the first proceeding if they were part of the same cause of action. Balent v. City of Wilkes-Barre, 542 Pa. 555, 669 A.2d 309, 313 (1995) (internal citations omitted).Moncrief v. Chase Manhattan Mortg. Corp. 275 F.Appx. 149, 153 (3d Cir. 2008).
These principles are directly applicable here and are fatal to this complaint which explicitly seeks to relitigate the validity of this mortgage. As to these claims, the gravamen of Disen's complaint is that the mortgage itself was invalid due to the prior bankruptcy discharge. Thus, Disen invites this Court to set aside the prior judgment entered by the state courts, a judgment which Disen unsuccessfully challenged in state court. Moreover, in each instance, these claims invite us to find that the legal predicate to this state litigation—a valid mortgage—did not exist. These arguments, therefore, involve litigation of a claim concerning the validity of the mortgage, an issue that has been preclusively determined by the prior state litigation. In this setting, issue preclusion principles forbid us from re-visiting this question at this late date in the guise of a federal lawsuit.
2. The Court Should Refrain from Entering Any Injunctive Relief Which Would Affect the Pending State Mortgage Foreclosure.
In addition, we note that the plaintiff also plainly requests injunctive relief which, if granted, would effectively interfere with this state mortgage foreclosure action. (Doc. 1.) To the extent that the complaint invites this Court to effectively enjoin this pending state case, this pro se pleading runs afoul of a settled tenet of federal law, the Younger abstention doctrine.
The Younger abstention doctrine is inspired by basic considerations of comity that are fundamental to our federal system of government. As defined by the courts: “Younger abstention is a legal doctrine granting federal courts discretion to abstain from exercising jurisdiction over a claim when resolution of that claim would interfere with an ongoing state proceeding. See Younger v. Harris, 401 U.S. 37, 41 (1971) (‘[W]e have concluded that the judgment of the District Court, enjoining appellant Younger from prosecuting under these California statutes, must be reversed as a violation of the national policy forbidding federal courts to stay or enjoin pending state court proceedings except under special circumstances.').” Kendall v. Russell, 572 F.3d 126, 130 (3d Cir.2009).
This doctrine, which is informed by principles of comity, is also guided by these same principles in its application. As the United States Court of Appeals for the Third Circuit has observed:
“A federal district court has discretion to abstain from exercising jurisdiction over a particular claim where resolution of that claim in federal court would offend principles of comity by interfering with an ongoing state proceeding.” Addiction Specialists, Inc. v. Twp. of Hampton, 411 F.3d 399, 408 (3d Cir.2005) (citing Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971)). As noted earlier, the Younger doctrine allows a district court to abstain, but that discretion can properly be exercised only when (1) there are ongoing state proceedings that are judicial in nature; (2) the state proceedings implicate important state interests; and (3) the state proceedings afford
an adequate opportunity to raise federal claims. Matusow v. TransCounty Title Agency, LLC, 545 F.3d 241, 248 (3d Cir.2008).Kendall v. Russell, 572 F.3d at 131.
Once these legal requirements for Younger abstention are met, the decision to abstain rests in the sound discretion of the district court and will not be disturbed absent an abuse of that discretion. Lui v. Commission on Adult Entertainment Establishments, 369 F.3d 319, 325 (3d Cir. 2004). Moreover, applying these standards, federal courts frequently abstain from hearing matters which necessarily interfere with on-going state cases. Lui v. Commission on Adult Entertainment Establishments, 369 F.3d 319 (3d Cir. 2004); Zahl v. Harper, 282 F.3d 204 (3d Cir. 2002). In this case, the plaintiff's pro se complaint reveals that all of the legal prerequisites for Younger abstention are present here. First, it is evident that there were state proceedings in this case. Second, it is also apparent that those proceedings afforded the plaintiff a full and fair opportunity to litigate the issues raised in this lawsuit in these state cases. See Sullivan v. Linebaugh, 362 Fed.Appx. 248, 249-50 (3d Cir. 2010). Finally, it is clear that the state proceedings implicate important state interests. Since the legal requirements for Younger abstention are fully met here, the decision to abstain rests in the sound discretion of this Court. However, we believe that the proper exercise of this discretion weighs in favor of abstention and dismissal of this federal case at the present time. Indeed, we note that the United States Court of Appeals for the Third Circuit has expressly relied upon Younger abstention in the past to decline invitations to interfere with on-going state mortgage foreclosure cases. See Gray v. Pagano, 287 Fed.Appx. 155, 158 (3d Cir. 2008). Therefore, consistent with this settled case law, the Court should refrain from entertaining this complaint, to the extent that it invites us to intrude into this pending state foreclosure action.
3. Disen May Not Collaterally Attack the Bankruptcy Court Decision Denying Discharge of this Mortgage.
Nor can Disen use this lawsuit to collaterally attack the bankruptcy court's determination that this mortgage debt was not discharged. This issue has been conclusively litigated before, and determined by, the bankruptcy court. On this score, we note that:
Issue preclusion applies to the decisions of bankruptcy courts in a subsequent district court proceeding. Katchen v. Landy, 382 U.S. 323, 334, 86 S.Ct. 467, 15 L.Ed.2d 391 (1966) (“The normal rules of res judicata and collateral estoppel apply to the decisions of bankruptcy courts.”); Bd. Of Trustees v. Centra, 983 F.2d 495, 505-06 (3d Cir. 1992) (preclusive effect of bankruptcy court order in district court proceeding); Slawek v. Guiliano, 1994 WL 551523, at *5 (E.D.Pa. Oct.6, 1994) (“An adjudication by the Bankruptcy Court is entitled to the same verity as other judgments or decrees of courts of competent jurisdiction and it cannot be collaterally attacked as to matters as were necessarily decided therein.”); Cuneo v. Settlement Capital Corp., 2007 WL 2495135, at *4 (W.D.Pa. Aug.31, 2007) (same). Additionally, bankruptcy court orders which allow or deny claims are final and appealable for collateral estoppel purposes. In re A & P Diversified Techs. Realty, 467 F.3d 337, 341 (3d Cir.2006).Roach v. Verterano, No. CIV.A. 14-947, 2015 WL 672248, at *7 (W.D. Pa. Feb. 17, 2015). Accordingly, under the issue preclusion doctrine, this bankruptcy court decision is not subject to yet another collateral attack by Disen.
4. Disen's FDCPA Claim Fails.
Further, we observe that claims under the Fair Debt Collection Practices Act, must be brought “within one year from the date on which the violation occurs.” 15 U.S.C. § 1692k (d). In this case, Disen appears to allege that Bayview violated the FDCPA by failing to properly credit a payment in March of 2019 and bringing this foreclosure action in October of 2019. Yet, Disen first filed this case in March of 2021, well beyond the one-year limitations period prescribed by statute. Therefore, by operation of the statute of limitations, these claims should be dismissed.
Moreover, on its merits, the gist of Disen's FDCPA claim is that Bayview attempted to illegally enforce a mortgage which had been discharged in bankruptcy. However, this claim—which forms the factual premise for Disen's FDCPA claim— has been expressly rejected by the bankruptcy court which has found that this debt was not discharged. Since this allegation, which constitutes the lynchpin of Disen's FDCPA averments, fails as a matter of law, Disen's FDCPA claim necessarily collapses and should be dismissed.
5. Disen's Fourteenth Amendment Claim Fails as a Matter of Law.
Finally, to the extent that Disen endeavors in this complaint to bring a Fourteenth Amendment federal civil rights complaint against Bayview pursuant to the federal civil rights statute, 42 U.S.C. § 1983, this claim also fails for a single, simple reason. As we have observed in the past:
Under this statute, in order to maintain a claim, a plaintiff must plead two elements: (1) deprivation of a constitutional right or violation of federal law, and (2) that the constitutional deprivation was caused by a person acting under the color of state law. Phillips v. County of Allegheny, 515 F.3d 224, 235 (3d Cir.2008); see also West v. Atkins, 487 U.S. 42, 47, 108 S.Ct. 2250, 101 L.Ed.2d 40 (1988). The requirement of state action is a “threshold issue” in cases brought under section 1983, Bailey v. Harleysville National Bank & Trust, 188 Fed.Appx. 66, 67 (3d Cir. July 18, 2006), because “there is no liability under § 1983 for those not acting under color of law.” Groman v. Twp. of Manalapan, 47 F.3d 628, 638 (3d Cir.1995).Swope v. Nortumberland Nat. Bank, No. 4:13-CV-2257, 2014 WL 4716944, at *4 (M.D. Pa. Sept. 22, 2014), affd sub nom. Swope v. Northumberland Nat. Bank, 625 Fed.Appx. 83 (3d Cir. 2015). While Disen apparently insists that pursuit of this garden variety state mortgage foreclosure lawsuit somehow converted Bayview into a state actor who is subject to civil liability for alleged Constitutional infractions:
[C]ourts have in numerous cases held that similar arguments in the foreclosure context, or against banks [or mortgage lenders] generally, have been inadequate to state a claim for relief under section 1983. See, e .g., Zebrowski, 657 F.Supp.2d at 522 (dismissing federal claims on the pleadings, finding insufficient allegations to support a finding of state action, and finding that further amendment of the complaint would be futile); Nanya-Nashut ex rel., Hand v. Centex Home Equity Corp., No. Civ. A. 03-3661,2003 WL 22871667, at *2 (E.D.Pa. Dec.2, 2003);
Nanya-Nashut ex rel. Hand v. BankOne, Nat'l Ass'n Tr., No. Civ. A. 03-4022, 2003 WL 22078022, at *3 (E.D.Pa. Sept.9, 2003); Shipley v. First Fed. Sav. & Loan Ass'n of Del., 703 F.Supp. 1122, 1125-31 (D.Del.1988), affd, 877 F.2d 57 (3d Cir.1989).
Moreover, the Third Circuit Court of Appeals has repeatedly found that constitutional claims brought against banks [and mortgage lenders] fail as a matter of law because banks and their employees do not qualify as state actors. See Brookhart v. Rohr, 385 Fed.Appx. 67, 68 (3d Cir.2010) (dismissing appeal from order that dismissed allegations of unconstitutional conduct by private parties in state court foreclosure proceedings because the parties were not state actors); James v. Heritage Valley Fed. Credit Union, 197 Fed.Appx. 102, 106 (3d Cir.2006) (defendant credit union not a state actor for purposes of section 1983); Awala v. Wachovia Corp., 156 Fed.Appx. 527, 528 (3d Cir.2005) (bank held not to be a state actor merely because it operates within a regulated industry).Swope, 2014 WL 4716944, at *5. Therefore, since the essential element of state action necessary for a federal civil rights claim is missing here this claim also fails as a matter of law and should be dismissed.
III. Recommendation
For the foregoing reasons, IT IS RECOMMENDED that Bayview's motion to dismiss, (Doc. 24), should be GRANTED.
The parties are hereby placed on notice that pursuant to Local Rule 72.3:
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.