Opinion
C. A. 9:22-4262-DCN-KDW
09-28-2023
Terry Lennette Grant, Plaintiff, v. Peter Wolf & Associates PC; Peter Wolf; Wolf & Mogil LLC; Carol A. Russell; Greenpoint Mortgage Funding, Inc.; Capital One Financial Corp.; MERSCORP Holdings, Inc.; Mortgage Electronic Registration Systems, Inc.; Deutsche Bank National Trust Co.; Deutsche Bank Holding, Inc.; Deutsche Bank Trust Corp.; Deutsche Bank AG; NovaStar Mortgage, Inc.; Angeline Panaciulli; Alicia Massaro; NovaStar Mortgage Funding Trust Series 2006-5; NovaStar Home Equity Loan Asset-Backed Certificate, Series 2006-5; Finkel Law Firm, LLC; Maggie A. Arcure; Jean Jensen; Andrew M. Wilson; Joanne A. Tomasini Muniz; Elizabeth S. Moore; Teresa D. Van Vlakke; Susan S. White; Beverly J. Finkel; Joseph T. Merli; Thomas A. Shook; Ana Silva; Dominique F. Biggers; Kara De Young; Katherine Klaiber; Lauren Luviano; Callison, Tighe & Robinson, LLC; Demetri Koutrakos; Kathleen S. Romero; Brock & Scott, PLLC; Chad Wilson Burgess; Wesley D. Dial; Brook Dangerfield; Caroline Richardson Glenn; Genevieve Speese Johnson; Mary R. Powers; William Price Stork; Kenneth Gregory Wooten, III; Lauren Browder; Kristen E. Washburn; Ilina Tchakova; Sloan Law Firm, PA; William H. Sloan; Gary Kubik; Dale L. Butts; Donald S. Cook, Cook Land Surveying; and Fidelity National Title Insurance Co., Defendants.
REPORT AND RECOMMENDATION
Kaymani D. West United States Magistrate Judge
Plaintiff Terry Lennette Grant, proceeding pro se, initiated this current lawsuit, pursuant to 28 U.S.C. § 1331 and 18 U.S.C. § 1961, alleging a multitude of Defendants engaged in a conspiracy and violated several federal and state laws in conjunction with an ongoing foreclosure dispute in Beaufort County, South Carolina. It is clear from Plaintiff's Complaint that she, and many of the Defendants, have by all accounts, been involved in a contentious foreclosure action that has been heavily litigated in state court since December 2009. Prior to considering the allegations within this Complaint, the undersigned finds its necessary to give a brief overview of the state court proceedings.This disagreement, at its core, is a fight over a foreclosure, that is at present day still winding its way through state court. The foreclosure in question was premised upon an Adjustable Rate Note for $680,000.00 (the “Note”) and a corresponding mortgage (the “Mortgage”) covering the property located at 226 Wildhorse Road, Hilton Head, South Carolina (the “Property”). See ECF No. 1; See Exhibit 1 to Plaintiff's Complaint, ECF No. 1-1 at 4. On or about December 1, 2009, Defendant Deutsche Bank National Trust Co., the purported lienholder, first filed suit, seeking to foreclose on the Property. See Case No. 2009-CP-07-05612, filed in the Beaufort County Court of Common Pleas.
The undersigned hereby takes judicial notice of Plaintiff's underlying state foreclosure actions. See Aloe Creme Labs., Inc. v. Francine Co., 425 F.2d 1295, 1296 (5th Cir. 1970) (noting that a federal court may take judicial notice of the contents of its own records, as well as those records and proceedings of other courts); Colonial Penn Ins. Co. v. Coil, 887 F.2d 1236, 1239 (4th Cir. 1989); see also Tisdale v. South Carolina Highway Patrol, No. 0:09-cv-1009-HFF-PJG, 2009 WL 1491409, at *1 n.1 (D.S.C. May 27, 2009), aff'd, 347 Fed.Appx. 965 (4th Cir. Aug. 27, 2009) (noting that the court may also take judicial notice of factual information located in postings on government web sites).
Defendants state that Plaintiff improperly named Deutsche Bank National Trust Company, Deutsche Bank Holding, Inc., Deutsche Bank Trust Corporation, and Deutsche Bank AG as named Defendants, and the proper Defendant is Deutsche Bank National Trust Company as Trustee for Novastar Mortgage Funding Trust, Series 2006-5 Novastar Home Equity Loan Asset-Backed Certificates, Series 2006-5 (hereinafter, “Deutsche Bank”). ECF No. 31, at 2.
In this current lawsuit, Plaintiff contends she never completed the closing, there is no valid Mortgage on the Property, and these documents have been forged, as she did not sign the documents. ECF No. 1 at 12. Plaintiff further alleges the legal description of the Property was incorrect, and that Judge Dukes “allowed” reformation of the legal description. ECF No. 1 at 12. In other words, the allegations before this court call into question the very same foreclosure sale that is the subject of current state court action, as will be described in detail below.
Once the first state court action was dismissed pursuant to Rule 41(a)(1) of the South Carolina Rules of Civil Procedure, Deutsche Bank filed a second foreclosure action. See Case No. 2010-CP-07-01690 filed in the Beaufort County Court of Common Pleas. On May 28, 2014, Deutsche Bank obtained a Final Judgment of Foreclosure and Sale; however, Deutsche Bank later moved to vacate the judgment and dismiss the action without prejudice. See Case No. 2010-CP-07-01690. On April 6, 2021, in the third state foreclosure action, Deutsche Bank again received a Final Judgment of Foreclosure and Sale, but the parties filed a Consent Order to Vacate Judgment. See Case No. 2016-CP-07-01466, filed in the Beaufort County Court of Common Pleas (the “Pending State Foreclosure Action”). Deutsche Bank then filed its Motion for Summary Judgment in Pending State Foreclosure Action on September 7, 2022, while Plaintiff filed her own Motion for Summary Judgment on October 21, 2022. See Case No. 2016-CP-07-01466. Plaintiff then filed suit in federal court on November 28, 2022. After the filing of this lawsuit, on June 28, 2023, a Master in Equity issued an order in the Pending State Foreclosure Action granting Deutsche Bank's Motion and provided for a foreclosure sale. See id. Plaintiff filed a Motion for Reconsideration on July 7, 2023. See id.
Several Motions to Dismiss are currently pending in this current, federal court case. They are outlined below:
1. On January 20, 2023, Defendant Donald S. Cook, Cook Land Surveying filed a Motion to Dismiss for Failure to State a Claim. ECF No. 21. According to the allegations in Plaintiff's Complaint, Donald S. Cook, Cook Land Surveying conducted an “illegal survey” on Plaintiff's property, said property being the subject of the foreclosure dispute in question.
2. On January 23, 2023, Defendants Maggie A. Arcure, Dominique F. Biggers, Kara De Young, Finkel Law Firm LLC, Beverly J. Finkel, Jean Jensen, Katherine Klaiber, Lauren Luviano, Joseph T. Merli, Elizabeth S. Moore, Thomas A. Shook, Ana Silva, Joanne A. Tomasini Muniz, Teresa D. Van Vlakke, Susan S. White, and Andrew M. Wilson (the “Finkel Defendants”) filed a Motion to Dismiss for Failure to State a Claim. ECF No. 25. According to the allegations in Plaintiff's Complaint, Finkel Law Firm LLC and its employees represented Defendant Deutsche Bank in filing the initial state foreclosure action in December 1, 2009. ECF No. 1 at 12.
3. On January 24, 2023, Defendants Sloan Law Firm, PA, and William H. Sloan (the “Sloan Defendants”) filed their Motion to Dismiss for Failure to State a Claim. ECF No. 28. According to the allegations in Plaintiff's Complaint, Sloan Law Firm, PA and its employees represented Plaintiff in the underlying state foreclosure proceedings on or around September 2016 but were relieved as her counsel on May 22, 2018. ECF No. 1 at 15.
4. On January 25, 2023, Defendants MERSCORP Holdings, Inc., Mortgage Electronic Registration Systems, Inc. (the “MERS Defendants”), Deutsche Bank National Trust Company, Deutsche Bank Holding, Inc., Deutsche Bank Trust Corporation, and Deutsche Bank AG (the “Deutsche Bank Defendants”) collectively filed a Motion to Dismiss, ECF No. 31. According to the allegations in Plaintiff's Complaint, MERSCORP is an operating
company that owns and operates the MERS System, and is engaged in the business of purchasing, selling and securing mortgages. ECF No. 1 at 4; 35. Further, Plaintiff alleges the MERS Defendants identified as the “mortgagee” of the mortgage in question and is a separate corporation acting as nominee for the lender involved in the transaction. ECF No. 1 at 29-30.
5. On January 25, 2023 Defendant Gary Kubic (identified by Plaintiff as Gary Kubik) filed a Motion to Dismiss for Failure to State a Claim. ECF No. 33. Upon review, this Motion to Dismiss appears to be duplicative to the Motion to Dismiss filed by Defendant Gary Kubic on the same day, ECF No. 34. Plaintiff responded to the latter Motion to Dismiss. Accordingly, the undersigned recommends dismissing this initial Motion, ECF No. 33, as moot.
6. On January 25, 2023, Defendant Gary Kubic filed a second Motion to Dismiss for Failure to State a Claim. ECF No. 34. According to the allegations in Plaintiff's Complaint, Defendant Kubic is or was the Beaufort County Administrator at all times relevant to the allegations within Plaintiff's Complaint. ECF No. 1 at 7.
7. On January 25, 2023, Defendant Marvin H. Dukes, III, filed a Motion to Dismiss. ECF No. 35. Defendant Dukes, a judge in Beaufort County was dismissed from this lawsuit by order dated February 9, 2023. ECF No. 51. Accordingly, the undersigned recommends dismissing this Motion to Dismiss as moot.
8. On January 25, 2023, Defendant Dale L. Butts filed a Motion to Dismiss for Failure to State a Claim. ECF No. 36. According to the allegations in Plaintiff's Complaint, Defendant Butts was the Beaufort County Register of Deeds at all times relevant to the allegations contained within Plaintiff's Complaint. ECF No. 1 at 7.
9. On January 25, 2023, Defendants Brock & Scott, PLLC, Lauren Browder, Chad Wilson Burgess, Brook Dangerfield, Wesley D. Dial, Caroline Richardson Glenn, Genevieve Speese Johnson, Mary R. Powers, William Price Stork, Ilina Tchakova, Kristen E. Washburn, and Kenneth Gregory Wooten, III, (the “Brock & Scott Defendants”) filed a Motion to Dismiss for Failure to State a Claim, ECF No. 37. According to the allegations in Plaintiff's Complaint, Brock & Scott, PLLC and its employees are engaged in the practice of law and is a law firm that represented Plaintiff in the underlying state court proceedings. ECF No. 1 at 6.
10. On January 26, 2023, Defendants Callison, Tighe, & Robinson, LLC, Demetri Koutrakos, and Kathleen S. Romero filed a Motion to Dismiss Case as Frivolous. ECF No. 43. According to the allegations in Plaintiff's Complaint, Callison, Tighe & Robinson, LLC is a law firm whose employees provide legal services to clients and represented Deutsche Bank on or around June 2016. ECF No. 1 at 14.
11. On January 30, 2023, Defendant Fidelity National Title Insurance Company (“Fidelity”) filed a Motion to Dismiss. ECF No. 43. According to the allegations in Plaintiff's Complaint, Defendant Fidelity National Title Insurance Company hired Defendant Donald R. Cook to conduct a survey of Plaintiff's Property. ECF No. 1 at 25.
In total, there are eleven outstanding Motions to Dismiss. Plaintiff has responded to these Motions. See ECF Nos. 80; 58; 75; 59; 77; 74; 61; 79 and 76. Several Defendants filed Replies. See ECF Nos. 92; 72; 90; 64; 82; 73; 71 and 89. All pretrial proceedings in this case were referred to the undersigned pursuant to the provisions of 28 U.S.C. § 636 (b)(1)(B) and Local Civil Rule 73.02(B)(2), D.S.C, which provides for all pretrial proceedings in certain types of matters be referred to a United States Magistrate Judge. Because the Motions are dispositive, the undersigned enters this Report and Recommendation (the “R&R”) for the district judge's consideration.
I. Factual Background
Approximately one month after Plaintiff filed a summary judgment motion in the Pending State Foreclosure Action, Plaintiff filed the instant federal action. ECF No. 1. Within the Complaint, Plaintiff challenges the aforementioned state foreclosure proceedings and the purported deceptive practices employed therein. Of particular importance, Plaintiff alleges that because there was no valid mortgage agreement, Deutsche Bank manufactured “assignments and other mortgage documents” in its previous and ongoing attempts to foreclose on the Property. ECF No. 1 at 12. Plaintiff further claims that Judge Dukes, a former Defendant in this case, allowed these “fraudulent documents to pass through his courtroom,” and permitted Deutsche Bank “to reform the legal description of the alleged Mortgage” without evidence of a valid interest in the loan. ECF No. 1 at 23, 18. According to Plaintiff, Judge Dukes ultimately gave Deutsche Bank “authority to illegally close on [her] Property” based on the bank's word alone. ECF No. 1. While the Complaint is difficult to follow, it further appears that Plaintiff alleges that Defendant Deutsche Bank falsely contends that she executed and delivered the Note in the amount of $680,000.00 to secure the Property at a closing. ECF No. 1 at 8-9.
The filing of the 2009 lawsuit kicked off what can only be described as a lengthy history of litigation between Plaintiff and several of these Defendants. Plaintiff alleges that one or more Defendants, including the lawyers representing the parties involved, worked in tandem to cause her injury and have attempted to take the Property from her illegally. She brings several causes of action, including: (1) violations of the Racketeering Influenced and Corrupt Organizations Act (“RICO”); (2) legal malpractice; (3) civil conspiracy; (4) fraud; (5) “Unfair Trade Practices Act” violations; (6) Fair Debt Collections Practices Act violations; (7) intentional infliction of emotional distress; (8) violations of the Truth in Lending Act; (9) Real Estate Settlement Procedure Act violations; and (10) violations of 18 USC § 1001.
It is difficult to ascertain which claims are asserted against which Defendants, as Plaintiff often summarily references “all Defendants” in the causes of action, though she does not specify the conduct to which she is referring or how a particular Defendant may be liable. At other times, she references Defendants by the paragraph number in which the Defendant is first referenced within the Complaint. Further, as previously mentioned, there has been a litany of lawsuits filed in the state courts, which Plaintiff not only readily acknowledges, but cites to in her Complaint as well as includes in the various timelines she provides in her Responses. These lawsuits include:
1. Deutsche Bank National Trust Company, as Trustee for NovaStar Mortgage Funding Trust, Series 2006-5 v. Terry Lennette Grant, et al., Case Number 2009-CP-07-05612, State of South Carolina, Court of Common Pleas, Beaufort County.
2. Deutsche Bank National Trust Company, as Trustee for NovaStar Mortgage Funding Trust, Series 2006-5 v. Terry Lennette Grant, et al., Case Number 2010-CP-07-01690, State of South Carolina, Court of Common Pleas, Beaufort County.
3. Terry Lennette Grant v. Marvin H. Dukes, III d/b/a Master in Equity, et al., Case 1:14-CV-01091-JDB, United States District Court for the District of Columbia.
4. Terry Lennette Grant v. Master in Equity, et al., Case Number 2014-CP-07-01769, State of South Carolina, Court of Common Pleas, Beaufort County.
5. Deutsche Bank National Trust Company, as Trustee for NovaStar Mortgage Funding Trust, Series 2006-5 NovaStart Home Equity Loan Asset-Backed Certificates, Series 2006-5 v. Terry Lennette Grant, et al., Case Number 2016-CP-07-01466 (the “Pending State Foreclosure Action”), State of South Carolina, Court of Common Pleas, Beaufort County.
This case was filed in federal court and as noted by the Callison Tighe Defendants, was dismissed sua sponte for lack of subject matter jurisdiction. See ECF No. 43 at 13. Judge Bates's order explained that the court lacked subject matter jurisdiction because the parties in that case were not of diverse citizenship and because the complaint “appears to present no questions of federal law.” Grant v. Dukes, No. CV 14-1091-JDB, 2014 WL 2946746, at *1 (D.D.C. July 1, 2014). Judge Bates further explained that Ms. Grant brought various state common-law claims arising out of the purchase of real property, and the impending foreclosure of that property, claims which belong in the state court system. Id.
Where appropriate, the undersigned has taken judicial notice of these documents in considering a motion to dismiss as these are all matters of public record. Philips v. Pitt Cnty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009) (explaining that in reviewing a motion to dismiss pursuant to 12(b)(6), a court can take judicial notice of matters of public record). As the undersigned will outline below, with respect to each response to the several motions to dismiss, Plaintiff devotes little time to responding to the substance of any of the arguments provided by Defendants and instead reiterates stock, generalized arguments that she repeats without specificity in each Response. While the undersigned is mindful of the fact that Plaintiff is proceeding pro se, the court will not create Plaintiff's arguments for her out of whole cloth. See Bauer v. Summey, 568 F.Supp.3d 573, 599 (D.S.C. 2021) (declining to consider conclusory arguments and noting that “the court will not attempt to grapple with every hint of an argument, no matter how poorly developed; as the Fourth Circuit has now repeatedly explained, judges “are not like pigs, hunting for truffles buried in briefs. Similarly, it is not our job to [ ] make arguments for either party.” Hensley v. Price, 876 F.3d 573, 581 (4th Cir. 2017)); State Farm Fire & Cas. Co. v. Morningstar Consultants, Inc., No. CV 6:16-01685-MGL, 2017 WL 2265919, at *3 (D.S.C. May 24, 2017).
In fact, the MERS Defendants and Deutsche Bank Defendants argue in their Motion that Plaintiff's Complaint is an “impermissible shotgun pleading.” ECF No. 31. A shotgun pleading is one that fails to articulate claims with sufficient clarity to allow a defendant to frame a responsive pleading. Hill v. Stryker Sales Corp., No. 4:13-CV-0786-BHH, 2014 WL 4198906, at *2 (D.S.C. Aug. 20, 2014) (citing SunTrust Mortgage, Inc. v. Old Second Nat. Bank, 2012 WL 1656667 (E.D.Va. May 10, 2012)). Here, Plaintiff summarily alleges several claims against “all Defendants” or refers to Defendants by numbers that correlate to other paragraphs in her Complaint. In responding to this allegation, Plaintiff states that she stated her Complaint as clear as she could and asserts that all Defendants “got caught in the act” trying to use rule and procedures against pro se litigants “to circumvent and avoid the court from getting to the facts and evidence.” Pl.'s Br. at 12. The undersigned agrees with the MERS Defendants and the Deutsche Bank Defendants that the Complaint appears to summarily allege all claims against all Defendants and appears to include any individual or corporation who had any involvement, no matter how small, in the foreclosure proceedings over the past 13 years.
II. Standard of Review
Defendants filed their Motions to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1), 12(b)(6) and 9(b). ECF No. 30. Federal Rule of Civil Procedure 9(b) provides: “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally.”
For a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) challenging the Court's subject matter jurisdiction, the burden rests with the petitioner, as the party asserting jurisdiction, to prove that federal jurisdiction is proper. McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936); Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). A motion to dismiss pursuant to Rule 12(b)(1) can attack subject matter jurisdiction in two ways. First, a Rule 12(b)(1) motion may attack the petition on its face, asserting that the petition fails to state a claim upon which subject matter jurisdiction can lie. Adams, 697 F.2d at 1219. Alternatively, a Rule 12(b)(1) motion may challenge the existence of subject matter jurisdiction in fact, apart from the pleadings. See Richmond, Fredericksburg & Potomac R.R. v. United States, 945 F.2d 765, 768 (4th Cir. 1991).
“A motion filed under Rule 12(b)(6) challenges the legal sufficiency of a complaint.” Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009). A motion to dismiss for failure to state a claim should not be granted unless it appears certain that the plaintiff can prove no set of facts that would support his claim and would entitle him to relief. Fed.R.Civ.P. 12(b)(6).
The Supreme Court considered the issue of well-pleaded allegations, explaining the interplay between Rule 8(a) and Rule 12(b)(6) in Bell Atlantic Corp. v. Twombly:
Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief,” in order to “give the
defendant fair notice of what the . . . claim is and the grounds upon which it rests.” While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the “grounds” of his “entitle[ment] to relief” requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level . . .550 U.S. 544, 555 (2007) (internal citations omitted); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” (citing Twombly, 550 U.S. at 556); see also Tobey v. Jones, No. 11-2230, 2013 WL 286226, at *3 (4th Cir. Jan. 25, 2013) (affirming district court's denial of Rule 12(b)(6) motion, noting that Twombly reiterated that a plaintiff “was not required to state [] precise magical words” to plausibly plead claim). When ruling on a motion to dismiss, the court “must accept as true all of the factual allegations contained in the complaint.” Erickson v. Pardus, 551 U.S. 89, 94 (2007). The court is also to “‘draw all reasonable inferences in favor of the plaintiff.'” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (quoting Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 253 (4th Cir. 2009)).
Although a court must accept all facts alleged in the complaint as true, this is inapplicable to legal conclusions, and “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678 (citation omitted). While legal conclusions can provide the framework of a complaint, factual allegations must support the complaint for it to survive a motion to dismiss. Id. at 679. Therefore, a pleading that provides only “labels and conclusions” or “naked assertion[s]” lacking “some further factual enhancement” will not satisfy the requisite pleading standard. Twombly, 550 U.S. at 555, 557. Further, the court need not accept as true “unwarranted inferences, unreasonable conclusions, or arguments.” E. Shore Mkts., Inc. v. J.D. Assocs., Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000). Pro se complaints are to be construed liberally. King v. Rubenstein, 825 F.3d 206, 214 (4th Cir. 2016) (citing Erickson v. Pardus, 551 U.S. 89, 94 (2007)). While the federal court is charged with liberally construing a complaint filed by a pro se litigant to allow the development of a potentially meritorious case, see, e.g., Cruz v. Beto, 405 U.S. 319, 322 (1972), court is not required to recognize “obscure or extravagant claims.” Weller v. Dep't of Soc.Servs., 901 F.2d 387, 391 (4th Cir. 1990). Furthermore, in analyzing a Rule 12(b)(6) motion to dismiss, a court may consider “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).
III. Analysis
A. Jurisdiction
The undersigned begins her analysis by considering whether the court has jurisdiction. See Sprint Comm., Inc. v. Jacobs, 571 U.S. 69, 72 (2013) (“federal courts are obliged to decide cases within the scope of federal jurisdiction). 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). Although the absence of subject matter jurisdiction may be raised at any time during the case, determining jurisdiction at the outset of the litigation is the most efficient procedure. Lovern v. Edwards, 190 F.3d 648, 654 (4th Cir. 1999). There is no presumption that a federal court has jurisdiction over a case. Pinkley, Inc. v. City of Frederick, MD., 191 F.3d 394, 399 (4th Cir. 1999).
One or more Defendants argue this court lacks jurisdiction to hear this case, contending that Plaintiff's claims implicate the law of the case doctrine, or that the Rooker-Feldman abstention, Colorado River abstention, and/or Younger abstention should apply. The law of the case doctrine provides that when a court decides upon a rule of law, that decision should govern the same issues in later stages of the same case. Arizonav. California, 460 U.S. 605, 618-19 (1983). This doctrine further provides that a party is precluded from re-litigating issues decided in a lower court order when that party abandons its appeal of that order. Hudson ex rel. Hudson v. Lancaster Convalescent Ctr., 754 S.E.2d 486, 407 S.C. 112 (2014). The Brock & Scott Defendants argue that the February 7, 2014 Master's Order granted its client, Deutsche Bank, partial summary judgment, reformed the legal description contained in the Mortgage that is the subject of this case, and granted Deutsche Bank and its successors an easement. Within this Master's Order, attached to the Brock & Scott Defendants' Motion, the state court determined that Plaintiff entered into the subject Note and Mortgage, that Deutsche Bank is or was the lienholder at the time the Order was entered, and that Deutsche Bank was entitled to judgment as to its causes of action for reformation of the Mortgage based upon mutual mistake. Defs.' Br. at 8; ECF No. 37-1; see ECF No. 37-2, Exhibit 1. The Brock and Scott Defendants argue that Plaintiff did not appeal this decision; thus this decision must stand. Plaintiff does not disagree or otherwise refute the contention that Plaintiff did not appeal the Master's Order, and the Master's Order has not otherwise been vacated. Nor does Plaintiff explicitly ask this court to set aside this state court order. Instead, she summarily alleges that one or more Defendants were engaged in a conspiracy or otherwise fraudulent conduct because these Defendants relied upon an allegedly fraudulent mortgage to obtain this Order. See ECF No. 1 at 45 (“Defendant(s) completed a closing without my signature”); ECF No. 1 at 45 (“Defendant(s) either forged my signature, had someone to forge my signature and/or allowed someone to forge my signature”). Specifically, in response to this argument that this court lacks jurisdiction, Plaintiff contends that the Brock & Scott Defendants “continued to file documents into the public recording system that is ‘materially false and/or fraudulent,' and is a sham legal process.” ECF No. 1 at 27. She also contends that the foreclosure actions filed in state court are an attempt to steal the Property without a proper or valid Note or Mortgage. ECF No. 1 at 27.
Under the Rooker-Feldman doctrine, “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.” Smalley v. Shapiro & Burson, LLP, 526 Fed.Appx. 231, 235 (4th Cir. 2013) (quoting Johnson v. DeGrandy, 512 U.S. 997, 1005-06 (1994)). This doctrine prevents a litigant from attempting to seek review of a state court's decision by a lower federal court. Id. The focus in a Rooker-Feldman analysis is whether a party is seeking to have a federal district court review a state court decision and pass upon the merits of that state court decision. Id. at 235-36. In other words, to grant the requested relief, the federal court must determine that the state court judgment was erroneously entered or would otherwise render that judgment ineffectual. Id. at 236. Further, the doctrine applies to matters both directly addressed by the state court and also claims which are “inextricably intertwined” with the state court decision. Id.
In considering the arguments made by the parties, the undersigned finds that allowing Plaintiffs case to go forward in federal court is problematic for several reasons. First, this court runs the risk of making a determination contrary to the determinations made in the prior and current state court proceedings, including the Master's Order specifically cited by the Brock & Scott Defendants. As is evidenced by Plaintiff's own allegations, the underlying state court proceedings have found time and again that the lienholder may foreclose on the Property, and as pointed out by the Brock & Scott Defendants, Plaintiff has not appealed at least one such order. Second, the Complaint reads as a thinly veiled attempt by Plaintiff to seek appellate review in this court of the underlying state court judgments. This becomes even more explicit when looking at the damages requested in the Complaint. Plaintiff seeks an order awarding damages for the amount foreclosed on the Property, as well as remediation of property records and clear title to her property. ECF No. 1 at 46. Put simply, the undersigned agrees with Defendants that whether Plaintiff filed this action seeking for this court to invalidate the state court actions by ruling that the foreclosure actions were void on the basis of fraud or otherwise seeks to remediate property records that were previously reformed in state court, the practical effect would be an improper review of a state court decision. See Smalley, 526 Fed.Appx. at 236. The undersigned therefore recommends finding that under the Rooker-Feldman doctrine, this court lacks subject matter jurisdiction to hear these claims.
Alternatively, one or more Defendants argue that the Complaint should be dismissed under either or both the Younger and the Colorado River abstention doctrines. ECF Nos 31; 37; 47. In Younger v. Harris, 401 U.S. 37 (1971), the Supreme Court held that a federal court should not equitably interfere with state criminal proceedings except in the most narrow and extraordinary of circumstances. Younger abstention may apply in a noncriminal proceeding when three elements are met: “(1) there are 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 Human Relations, 38 F.3d 1392, 1398 (4th Cir. 1994)). Plaintiff argues that she is not asking this court to interfere with pending state court litigation and further argues that this case can go forward to hold all Defendants accountable for their purported actions while the ongoing state proceedings also continue.
The undersigned recommends finding that the Younger elements are met in this case. First, at least one action is currently pending in state court where Plaintiff seeks to have a motion granting the foreclosure sale of the Property reconsidered. Second, foreclosure matters implicate important state interests as they bear upon real property and state laws implicating the foreclosure process. Third, Plaintiff has had ample opportunity to question the veracity of the documents now purportedly in question that bear directly upon the Pending State Foreclosure Action. Indeed, as is evident from her Complaint, Plaintiff was at times represented by counsel. Plaintiff provides no plausible explanation for why she has not raised the majority of the causes of action she now raises during the pendency of the current Pending State Foreclosure Action.
More telling, in reviewing Plaintiff's Memorandum in support of her own Motion for Summary Judgment in state court, she alleges many of the same arguments she now brings in this court. For example, Plaintiff references the Truth in Lending Act, one of the claims she alleges against Defendants in this case. See Case No. 2016-CP-07-01466.
Alternatively, even if the district court finds that Younger abstention is not warranted, the undersigned recommends abstention is appropriate under the Colorado River doctrine. Even though federal and state courts may share concurrent jurisdiction with respect to a dispute, and federal courts should generally exercise jurisdiction, abstention is appropriate when exceptional circumstances warrant abstention in deference to the parallel state proceedings. Dennis v. HSBC Mortg. Servs., Inc., No. CA 0:10-2693-MJP-PJG, 2011 WL 3876916, at *3 (D.S.C. Aug. 11, 2011), report and recommendation adopted, No. CA 0:10-2693-MBS, 2011 WL 3876909 (D.S.C. Aug. 31, 2011) (citing Colorado River Water Conservation District v. United States, 424 U.S. 800, 817-19 (1976)). In analyzing whether to abstain, courts should consider: (1) whether any court has assumed jurisdiction over property; (2) the inconvenience of the federal forum; (3) the desirability of avoiding piecemeal litigation; and (4) the order in which jurisdiction was obtained by the concurrent forums. Moses H. Cone Mem l Hosp. v. Mercy Constr. Corp., 460 U.S. 1, 15 (1983) (quoting Colorado River, 424 U.S. at 818-19); Hunt v. Mortg. Elec. Registration, 522 F.Supp.2d 749, 753 (D.S.C. 2007). Additionally, the court may examine “whether a federal question is presented in the case and whether either the state or federal lawsuit was a contrived, defensive reaction to the other.” Hunt, 522 F.Supp.2d at 753 (citing McLaughlin v. United Va. Bank, 955 F.2d 930, 934-35 (4th Cir. 1992)).
In determining whether two actions are parallel, the court should determine if substantially the same parties are attempting to litigate the same issues in different forums. New Beckley Min. Corp. v. Int'l Union, United Mine Works of Am., 946 F.2d 1072, 1073 (4th Cir. 1991). Plaintiff does not provide a substantive argument as to why abstention under the Colorado River doctrine should not apply. In reviewing the pleadings, the Pending State Foreclosure Action and this current federal court action can be properly viewed as parallel proceedings because they involve much of the same parties and litigate the same issues (and the attorneys currently named as Defendants in this litigation are or were involved in the state court action). The documents alleged to be in question in this lawsuit are the documents relied upon in the Pending State Foreclosure Action. It is also equally clear that the state court first assumed jurisdiction over the Property in question, and the state court is located where the Property is located. Therefore, the state court is the more convenient forum. Moreover, it would be a more efficient use of judicial resources to have the issues surrounding the Property, the Note, and the Mortgage decided in one forum, particularly one that has been the forum for litigation over the past 13 years. Finally, this court could decide a result contrary to the decisions made in state court. Thus, the undersigned recommends finding that this court should refrain from exercising jurisdiction in this case. Alternatively, the federal claims brought by Plaintiff should be dismissed for the reasons that follow.
For the reasons that follow, the undersigned recommends dismissing the federal claims brought against Defendants in this case, which include claims brought pursuant to RICO, The Federal Trades Commission Act, the FDCPA, TILA and RESPA. If the district judge agrees with this recommendation, the undersigned recommends the court decline to exercise supplemental jurisdiction over the remaining state law claims.
1. RICO
As to Plaintiff's RICO claims, Racketeering activity under RICO can include wire fraud. 18 U.S.C. § 1961. Civil wire fraud claims are subject to a heightened pleading standard. Mitchell Tracey v. First American Title Ins. Co., 935 F.Supp.2d 826, 844 (D. Md. 2013) (“When mail and wire fraud are asserted as predicate acts in a civil RICO claim, each must be pled with particularity”). Private RICO actions are governed by a four-year statute of limitations, which runs from the date when the plaintiff discovered, or should have discovered, the injury. Potomac Elec. Power Co. v. Elec. Motor & Supply, Inc., 262 F.3d 260, 266 (4th Cir. 2001) (emphasis added); Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143, 156 (1987). At the outset, it is important to note that Plaintiff does not allege that, as to this claim (or any of her other claims) she did not discover the existence of any facts or conduct that prevented her from bringing the claim within the applicable statute of limitations timeframe.
Ordinarily, a statute of limitations defense must be raised as an affirmative defense; thus, a motion to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6) generally does not reach the merits of an affirmative defense, such as an argument that a plaintiff's complaint is time-barred. However, in the rare circumstances where facts sufficient to rule on this affirmative defense are alleged and are clear on the face of the complaint, the defense may be considered. Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007).
As to the Finkel Defendants, Plaintiff's causes of actions are related solely to their involvement in the lawsuits filed on behalf of their client, Deutsche Bank, in 2009 and 2010. Defs.' Br. at 6, ECF No. 25-1. Plaintiff alleges the Finkel Law Firm initiated a lawsuit on behalf of its client, Deutsche Bank, in a foreclosure action on or about December 1, 2009. ECF No. 1 at 12. This lawsuit was dismissed on February 12, 2010. ECF No. 1 at 13. The Finkel Law Firm initiated a second lawsuit on or about April 12, 2010, which involved foreclosure of the same Mortgage encumbering the same real Property as the prior lawsuit. ECF No. 1 at 13. Indeed, as pointed out in Plaintiff's Complaint, the Finkel Defendants had no further involvement in the foreclosure action after November 18, 2015, as Brock & Scott, PLLC were substituted as counsel of record for Defendant Deutsche Bank. ECF No. 14; see also Defs.' Br. at 2; ECF No. 25-1. Therefore, any conduct on the part of the Finkel Defendants occurred more than seven years prior to the filing of this lawsuit, and Plaintiff provides no explanation or allegation that she not aware of the Finkel Defendants' involvement until much later in time. Thus, the undersigned recommends finding that any alleged RICO claims are barred by the applicable statute of limitations as to the Finkel Defendants.
The Sloan Defendants were relieved as attorneys for Plaintiff on May 22, 2018. ECF No. 1 at 15. Because they had no further involvement with Plaintiff since that time, and more than four years have elapsed since that time and the filing of this lawsuit, the Sloan Defendants argue the statute of limitations for RICO claims bars this cause of action against them. ECF No. 28 at 2. The undersigned agrees. They further argue that Plaintiff fails to sufficiently allege the elements of mail fraud to support a RICO claim. Id. Plaintiff generally alleges that “mail fraud commenced by all Defendants each time fraudulent documents was used to continue the fraud upon the court by emailing, mailing via U.S.P.S., filing via electronic media documents that was altered, created fraudulently, prepared after the fact, and by presenting these same documents to the courts and me.” ECF No. 1 at 21. The elements of mail fraud are (1) a scheme disclosing an intent to defraud, and (2) the use of the mail in furtherance of the scheme. Chisolm v. TranSouth Fin. Corp., 95 F.3d 331, 336 (4th Cir. 1996) (citing Pereira v. United States, 347 U.S. 1, 8 (1954)). First, the Sloan Defendants represented Plaintiff in her claims against one or more of the Defendants in the underlying state court proceedings. Second, Plaintiff fails to allege any scheme that the Sloan Defendants were involved in or otherwise allege the Sloan Defendants mailed her anything; indeed, Plaintiff argues in her Response that the Sloan Defendants failed to file necessary documents in court. Pl.'s Br. at 7; ECF No. 75. Thus, the undersigned agrees with the Sloan Defendants that, aside from this claim being barred by the statute of limitations, Plaintiff fails to sufficiently plead any facts to sustain this cause of action against the Sloan Defendants.
As to the MERS Defendants and the Deutsche Bank Defendants, Plaintiff argues that she anticipated she would have the opportunity to bring these claims against these Defendants in the state court actions; however, the actions would be dismissed prior to her having the opportunity to raise them. Pl.'s Br. at 4-5; ECF No. 59. The undersigned has considered Plaintiff's arguments. However, it is clear from Plaintiff's Complaint that her RICO claim is based on the allegedly wrongful conduct in filing suit to foreclose on her Property over the last thirteen years. By Plaintiff's own admission, this conduct began as early as 2009. See ECF No. 1 at 8-12. Plaintiff provides no cogent explanation for why she never brought any of these arguments in the prior cases against the MERS Defendants or the Deutsche Bank Defendants, or otherwise filed a separate lawsuit in the applicable time frame to bring these causes of actions, other than alleging that Plaintiff is “still discovering the injury” based upon acts and practices that are current and ongoing in 2022 and 2023. However, Plaintiff does not provide any allegations within her Complaint related to these nebulous injuries, and moreover, any alleged acts or conduct in 2023 would not apply to a lawsuit filed in 2022. Accordingly, the undersigned recommends dismissing any RICO claims against the MERS Defendants and the Deutsche Bank Defendants as time barred.
As to the Brock & Scott Defendants, they argue that Plaintiff's RICO claims must be denied for failure to state a claim for relief. Plaintiff alleges that Defendants committed mail fraud upon the court each time fraudulent documents were used. ECF No. 21. The undersigned agrees with the Brock and Scott Defendants that this conclusory-type allegation on the part of Plaintiff is insufficient to support a RICO claim based on the elements previously outlined. Thus, the undersigned recommends finding this cause of action should be dismissed.
As to the Callison Tighe Defendants, these Defendants point out that within her Complaint, Plaintiff expressly alleges that these Defendants “refiled a foreclosure action” against her in June 2016. See ECF No. 1 at 14. Thus, it is apparent on the face of the Complaint that Plaintiff knew of these Defendants' involvement in the foreclosure issues and the filing of documents with the court by these Defendants as early as 2016. However, Plaintiff did not file this lawsuit until November 28, 2022, more than six years after any involvement on the part of the Callison Tighe Defendants. Accordingly, the undersigned recommends dismissing any alleged RICO claim against the Callison Tighe Defendants as time barred. As to Defendants Cook, Kubic, Butts and Fidelity, while Plaintiff brings this claim against “all Defendants,” she does not allege any conduct on the part of these Defendants in pleading her RICO claim. Accordingly, the undersigned recommends dismissing any alleged RICO claim against these Defendants, as well.
2. Fair Debt Collections Practices Act (“FDCPA”)
Similarly, claims brought pursuant to the FDCPA are subject to a one-year statute of limitations, which begins to run on “the date on which the violation occurs.” 15 U.S.C. § 1692k(d). For the reasons previously stated, Plaintiff's claims against the Finkel Defendants, the Sloan Defendants, the MERS Defendants and Deutsche Bank Defendants, the Brock & Scott Defendants, and the Callison Tighe Defendants are time-barred. Moreover, to state a claim for relief under the FDCPA, a plaintiff must allege that: (1) she was the object of collection activity arising from a consumer debt as defined in the FDCPA; (2) defendant(s) are the debt collectors, as defined in the FDCPA; and (3) the defendants are engaged in an act or omission prohibited by the FDCPA. See Boosahda v. Providence Dane LLC, 462 Fed.Appx. 331, 333 n.3 (4th Cir. 2012) (citing Ruggia v. Wash. Mut., 719 F.Supp.2d 642, 647 (E.D. Va. 2010)). Plaintiff does not allege any of these elements against any Defendants. For example, as pointed out by the MERS Defendants and the Deutsche Bank Defendants, Plaintiff fails to allege that they (or any other Defendants) are debt collectors, and the FDCPA only applies to debt collectors. A “debt collector” as defined under the FDCPA is any person “who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). Plaintiff has failed to sufficiently plead any action under the FDCPA. Accordingly, the undersigned recommends dismissing this claim against all Defendants.
3. Truth in Lending Act (“TILA”)
TILA “is a federal statute applicable only to creditors and governs the terms and conditions of consumer credit by requiring that lenders disclose certain details about loans, fees, and costs.” Davis v. Wilmington Fin., Inc., No. PJM 09-1505, 2010 WL 1375363, at *4 (D. Md. Mar. 26, 2010). TILA mandates, for example, that a lender “clearly and conspicuously” disclose a borrower's right to rescind the loan. 15 U.S.C. § 1635(a). TILA has a one-year statute of limitations. Rogers v. Pulliam Motor Co., No. 3:05-2002JFABM, 2007 WL 1290545, at *1 (D.S.C. Apr. 30, 2007) (citing 15 U.S.C. § 1640(e)). At most, there is a three-year statute of limitations with respect to violations of Section 1639, 1639(b) or 1639(c). 15 U.S.C. § 1640(e). Plaintiff does not allege what part of TILA was violated. Thus, as an initial matter, the undersigned recommends dismissing this claim in its entirety for failure to state a claim for relief.
TILA provides requirements for lenders with respect to certain necessary disclosures to borrowers. The only conduct alleged by Plaintiff against any Defendant in this section is that Defendant Deutsche Bank or Defendant Peter Wolf and Associates, LLC (who has not appeared in this lawsuit) did not disclose any information to Plaintiff regarding what was being charged or sent to other institutions, nor did she receive a Notice to Rescind. ECF No. 1 at 44. However, Plaintiff fails to cite a single provision within the Act to support her claim. As alleged in the Complaint, the closing occurred in 2006. Thus, any such claim would also be time-barred as the origination of the loan was in September of 2006. Therefore, the undersigned recommends dismissing Plaintiff's TILA claim as to all Defendants.
4. Real Estate Settlement Procedures Act (“RESPA”)
Similarly, the undersigned recommends dismissing Plaintiff's RESPA claims. RESPA creates a private right of action for only three types of wrongful acts: (1) failure of a loan servicer to provide proper notice about a transfer of servicing rights or to respond to a qualified written request for loan information, 12 U.S.C. § 2605; (2) payment of a kickback or unearned fees for real estate settlement services, 12 U.S.C. § 2607; and (3) requiring a buyer to use a title insurer chosen by the seller, 12 U.S.C. § 2608. Grant v. Shapiro & Burson, LLP, 871 F.Supp.2d 462, 470 (D. Md. 2012). None of these allegations are alleged by Plaintiff. Further, RESPA has a one-year statute of limitations if the claim is brought pursuant to Section 2607, subject to tolling based on fraudulent concealment. § 12 U.S.C. 2614. Edmonson v. Eagle Nat'lBank, 922 F.3d 535, 545 (4th Cir. 2019). Claims brought pursuant to Sections 2605 have a three-year statute of limitations period. 12 U.S.C. § 2614. Much like the TILA claim, this claim is predicated upon conduct that allegedly occurred on or around the closing date. Plaintiff does not allege what section of RESPA was violated. Instead, Plaintiff alleges that “Defendant(s) completed a closing without my signature on all closing documents as required by law.” ECF No. 1 at 45. Plaintiff further alleges that, pursuant to an e-mail dated September 19, 2006, “they” did not have a signed 1003 form. ECF No. 1 at 45. Finally, Plaintiff alleges that her signature was forged on the note. Id. Plaintiff argues that this claim should not be time-barred because several Defendants relied upon these allegedly forged documents and used these documents to complete a closing. Pl.'s Br. at 11; ECF No. 59. Plaintiff further argues that lawsuits are “ongoing” as of today. Pl.'s Br. at 11. The undersigned has considered these arguments made by Plaintiff; however, Plaintiff's new arguments are not only general and non-specific, but they fail to overcome the fact that it is clear from the face of her Complaint that any alleged RESPA violations are time-barred under either applicable statute of limitations. Thus, the undersigned recommends dismissing Plaintiff's RESPA claims against all Defendants.
5. 15 U.S.C. § 45/Unfair Trade Practices
15 U.S.C. § 45 (the Federal Trades Commission Act) declares unlawful unfair methods of competition in or affecting commerce, as well as unfair or deceptive acts or practices in or affecting commerce. See 15 U.S.C. § 45(a)(1). However, it is well settled law that there is no private, federal claim for which the court can grant the requested relief for violations of the Federal Trade Commission Act. Wildcat Retro Brands, LLC v. NWL Distributing LLC, No. 8:20-CV-04207, 2021 WL 1546011, at *3 (D.S.C. April 20, 2021). Accordingly, the undersigned recommends dismissing this cause of action entirely.
Finally, the MERS Defendants and the Deutsche Bank Defendants argue that Plaintiff's cause of action pursuant to 18 U.S.C. § 1001 should be dismissed as it is a criminal statute and does not allow for a private cause of action. Fed. Sav. & Loan Ins. Corp. v. Reeves, 816 F.2d 130, 137 (4th Cir. 1987) (agreeing with the defendants in that case who argued that there is no basis for implying a civil cause of action under 18 U.S.C. §§ 657, 1001, 1006, 1008 and 1014). Plaintiff does not respond to this argument. The undersigned agrees with the MERS Defendants and the Deutsche Bank Defendants and recommends dismissing any cause of action against all Defendants brought pursuant to this claim.
B. Res Judicata
Alternatively, several Defendants raise the affirmative defense of res judicata and/or collateral estoppel. Specifically, the Brock & Scott Defendants point to the Master's Order filed in Case No. 2010-CP-07-1690 to argue that res judicata applies. Similarly, the Callison Tighe Defendants also raise the issue of res judicata, noting that Plaintiff has previously sued them in two other matters, one of which was dismissed for lack of subject matter jurisdiction. See Terry Lennette Grant v. Marvin H. Dukes, III d/b/a Master in Equity, et. al., Case No. 1:14-cv-01091 (D.D.C. July 1, 2014); Terry Lennette Grant v. Master in Equity, et al., Case Number 2014-CP-07-01769, State of South Carolina, Court of Common Pleas, Beaufort County. ECF No. 43 at 1314. Defendants argue that the issues now raised by Plaintiff in this case could have been or were raised previously in the prior state court lawsuits. Plaintiff herself alleges that the Defendants named in this lawsuit have also filed lawsuits against her. By way of example, Plaintiff states that Callison, Tighe & Robinson re-filed the foreclosure action against her on June 29, 2016. ECF No. 1 at 14.
Res judicata includes both (1) claim preclusion and (2) issue preclusion. Marrese v. American Acad. of Orthopaedic Surgeons, 470 U.S. 373, 376 n. 1 (1985). Claim preclusion provides for the preclusive effect of a judgment in preventing matters which should have been raised in an earlier suit, and issue preclusion refers to the effect of a judgment to preclude the relitigation of a matter previously litigated and decided. Id. A “federal court must give to a statecourt judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered.” Weston v. Margaret J. Weston Med. Ctr., No. 1:05-2518-RBH, 2007 WL 2750216, at *1 (D.S.C. Sept. 20, 2007) (quoting Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984)). In this case, the undersigned must analyze South Carolina law with respect to res judicata. Under South Carolina law, “res judicata . . . defines the effect a valid judgment may have on subsequent litigation between the same parties” and “ends litigation, promotes judicial economy and avoids the harassment of relitigation of the same issues.” Plum Creek Development Co., Inc. v. City of Conway, 512 S.E.2d 106, 108-09, 334 S.C. 30 (1999). It operates as a bar to a later-filed action “by the same parties when the claims arise out of the same transaction or occurrence that was the subject of a prior action between those parties.” Id. To establish this doctrine applies, a defendant must prove: (1) identity of the parties; (2) identity of the subject matter; and (3) adjudication of the issue in the prior suit. Id. South Carolina courts hold that the doctrine of res judicata applies to issues adjudicated in the prior suit and issues which could have been raised. Hilton Head Center of S.C. v. Public Service Comm 'n, 362 S.E.2d 176, 177, 294 S.C. 9 (S.C. 1987).
Here, Plaintiff has been involved in several previous lawsuits with Deutsche Bank related to the foreclosure of the Property outlined in the Mortgage that secured the Note, documents which now Plaintiff alleges are fraudulent or were fraudulently filed. In the underlying state court actions, Plaintiff could have adjudicated the issue of whether these documents were fraudulent. Accordingly, the undersigned agrees that res judicata should apply to the claims brought against the Deutsche Bank Defendants.
Relatedly, the MERS Defendants and the Deutsche Bank Defendants argue that Plaintiff should have brought these claims (with the exception of the legal malpractice claim) as compulsory counterclaims pursuant to Rule 13(a) of the South Carolina Rules of Civil Procedure. That rule provides:
A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication of the presence of third parties of whom the court cannot acquire jurisdiction.
South Carolina courts have interpreted this Rule to mean that a counterclaim is compulsory when there is a logical relationship between the claim and the counterclaim. Hough v. Ag S. Farm Credit ACA, No. 8:16-CV-03878-DCC, 2018 WL 1430960, at *2 (D.S.C. Mar. 22, 2018) (citing N.C. Fed. Sav. and Loan Ass'n v. DAV Corp., 381 S.E.2d 903, 905 (S.C. 1989) and explaining that South Carolina uses the “logical relationship test” to determine whether a counterclaim is compulsory). In Hough, the court explained that in the foreclosure context, the determination focuses on whether the counterclaim(s) would affect a lender's right to enforce the note and foreclose on the mortgage. Id. Plaintiff agrees that these claims could all have been raised in state court, but Plaintiff argues that it was Defendants who “vacated and dismissed” the foreclosure judgment (though they re-filed the action several times), appearing to suggest that she was unable to bring her counterclaims. The undersigned finds that the claims in the instant lawsuit all center around the allegedly fraudulent nature of the foreclosure documents or the conduct of several of the Defendants in the state foreclosure proceedings, which would, if raised and were successful in the underlying state court claims, likely invalidate the lender's ability to enforce the Note and foreclose on the Property. Thus, alternatively, the undersigned recommends finding that Plaintiff s claims should be dismissed, with the exception of the legal malpractice claim,for failure to raise them in the Pending State Foreclosure Action.
The undersigned does not find that Plaintiff's claim for legal malpractice would have been compulsory under Rule 13(a) and therefore would not recommend dismissing the legal malpractice claim on this ground.
IV. Recommendation
The undersigned has carefully considered the arguments made by all parties in this case. After considering these arguments, the undersigned recommends abstaining from exercising jurisdiction in this case and dismissing this action. Alternatively, the undersigned recommends:
1. granting Defendant Donald S. Cook, Cook Land Surveying's Motion to Dismiss for Failure to State a Claim, ECF No. 21;
2. granting the Finkel Defendants' Motion to Dismiss for Failure to State a Claim, ECF No. 25;
3. granting the Sloan Law Firm Defendants' Motion to Dismiss for Failure to State a Claim, ECF No. 28;
4. granting the MERS Defendants and Deutsche Bank Defendants' Motion to Dismiss, ECF No. 31;
5. denying Defendant Gary Kubic's Motion to Dismiss for Failure to State a Claim, ECF No. 33, as moot;
6. granting Defendant Gary Kubic's Motion to Dismiss, ECF No. 34;
7. denying Defendant Marvin H. Dukes, III's Motion to Dismiss, ECF No. 35, as moot;
8. granting Defendant Dale L. Butts' Motion to Dismiss for Failure to State a Claim, ECF No. 36;
9. granting the Brock & Scott Defendants' Motion to Dismiss for Failure to State a Claim, ECF No. 37;
10. granting the Callison Tighe Defendants' Motion to Dismiss as Frivolous, ECF No. 43; and
11. granting Defendant Fidelity's Motion to Dismiss, ECF No. 47.
Further, the Callison Tighe Defendants and the Finkel Defendants seek sanctions pursuant to 28 U.S.C. § 1927. The Finkel Defendants additionally request the court enjoin Plaintiff from bringing further suit against them. The Callison Tighe Defendants argue that this is the third frivolous lawsuit filed against them by Plaintiff. The Finkel Defendants argue that their only involvement in the underlying proceedings was simply representing a client. The undersigned acknowledges the expense and time involved in responding to the voluminous accusations lodged against them related to a dispute that reaches back as far as 2009. The undersigned leaves the decision whether to award sanctions in the sound discretion of the district judge, should the district judge accept the undersigned's recommendation.
IT IS SO RECOMMENDED.
The parties are directed to note the important information in the attached “Notice of Right to File Objections to Report and Recommendation.”
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 Post Office Box 2317 Florence, South Carolina 29503
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).