Opinion
No. 112315.
04-10-2015
Bret D. LANDRITH, Appellant, v. Stephen E. SUMMERS, et al., Appellees.
Bret D. Landrith, appellant pro se. Bradley S. Anderson and Scott Mueller, of Galloway, Johnson, Tompkins, Burr & Smith, PLC, of St. Louis, Missouri, for appellees Debashree Tosh–Mitchell Trust, Dimitri Mitchell, and Debashree ToshMitchell. Gerald A. King, of Armstrong Teasdale, LLP, of Kansas City, Missouri, for appellee Stephen E. Summers. Thomas E. Nanney and Logan M. Rutherford, of Bryan Cave LLP, of Kansas City, Missouri, for appellee Bank of New York Mellon.
Bret D. Landrith, appellant pro se.
Bradley S. Anderson and Scott Mueller, of Galloway, Johnson, Tompkins, Burr & Smith, PLC, of St. Louis, Missouri, for appellees Debashree Tosh–Mitchell Trust, Dimitri Mitchell, and Debashree ToshMitchell.
Gerald A. King, of Armstrong Teasdale, LLP, of Kansas City, Missouri, for appellee Stephen E. Summers.
Thomas E. Nanney and Logan M. Rutherford, of Bryan Cave LLP, of Kansas City, Missouri, for appellee Bank of New York Mellon.
Before ARNOLD–BURGER, P.J., POWELL, J., and MERLIN G. WHEELER, District Judge, assigned.
MEMORANDUM OPINION
POWELL, J.
Bret D. Landrith appeals from the district court's order dismissing his forcible detainer and quiet title action. The court reasoned that Landrith's involvement in a prior state foreclosure action and his pursuit of claims in a federal court proceeding both involving the same parties resulted in legal determinations that Landrith lacked standing to assert his claims and were res judicata to his current action. We agree and affirm.
Factual and Procedural Background
Prior Litigation
In February 2010, the Bank of New York Mellon Corporation (Bank), as trustee of the Certificate holders of Alternative Loan Trust 2007–OA–7, filed a foreclosure action in Johnson County District Court entitled Bank of New York Mellon v. Basler, case no. 10 CR 1749, against Jeffrey Basler on property he owned at 9743 Sagamore Road, Leawood, Kansas (the property). Service to Basler by certified mail was returned undelivered, so the Bank served Basler by publication with approval from the district court.
On April 27, 2010, the Bank obtained a default judgment against Basler; the district court foreclosed Basler and the junior lienholders' interests and granted the Bank's first priority claim. The property was ultimately sold at a sheriff's sale in April 2011 to the Bank. After the 3–month redemption period, during which time no one redeemed the property, the Bank received a sheriffs deed to the property on August 2, 2011. The property was later sold to the Debashree Tosh–Mitchell Trust (Mitchell Trust); Dimitri Mitchell and Debashree Tosh–Mitchell (the Mitchells) currently reside in the residence.
On August 1, 2011, Basler conveyed his interest in the property by executing a quitclaim deed to Landrith. The quitclaim deed listed Basler's address as the same address at which the Bank attempted to serve Basler in the foreclosure action. Several days after the sheriff's deed was issued, Landrith filed a “Notice of Successor in Interest and Motion for Extension of Time to Answer” in the foreclosure case. Landrith presented the district court with the quitclaim deed along with a rejection notice from the Johnson County Department of Records that the deed was not recorded due to technical deficiencies in its execution. Landrith did not attempt to redeem the property.
Without a court order approving an answer out of time, Landrith then filed an answer and motion to set aside the sale of judgment of foreclosure. The Bank filed a motion to strike Landrith's pleadings on the ground he did not have a cognizable interest in the property and thus lacked standing to seek any relief. In November 2011, the district court struck Landrith's pleadings, finding that Landrith lacked standing to set aside the judgment or to file an answer because his purported quitclaim deed was dated after Basler's rights to the property were extinguished. Landrith did not appeal from this ruling.
At about the time the Johnson County district court ruled on Landrith's pleadings, Landrith shifted forums and filed an action in the State of New York against the pooled mortgage trust containing Basler's mortgage. In that case, Landrith claimed the Bank had obtained the Kansas foreclosure order on the property by committing fraud on the court. The New York court apparently dismissed that claim on the grounds of forum non conveniens.
In late April 2012, Landrith filed a motion for relief from the foreclosure judgment in the original foreclosure case, citing K.S.A. 60–260(b)(3), asserting the Bank had perpetrated fraud by misrepresenting its right to foreclose on the property and again arguing that proper service had not been made on Basler. To establish fraud, Landrith relied upon a proposed settlement agreement in a New York case between the Bank and its investors involving mortgage-backed securities, including those contained in the trust that held Basler's mortgage. Landrith alleged that the information from the New York case demonstrated the Bank's knowledge of the deficiencies in the transfer of the mortgage notes thereby precluding the Bank's ability to enforce the note or mortgage. The Bank again moved to strike Landrith's pleading due to lack of standing. The district court found Landrith had presented no new evidence to establish he possessed standing to pursue the claims and struck the motion to set aside the judgment.
Landrith appealed from the district court's second dismissal of his pleadings and claims, arguing the district court erred in denying his motion for relief from the foreclosure because the original owner was not served with process and because he established a prima facie case of fraud pursuant to K.S.A. 60–260(b). This court found it had jurisdiction to consider only the district court's second ruling striking Landrith's pleadings, not the original district court ruling filed in 2011, and ultimately affirmed the district court. Bank of New York Mellon v. Basler, No. 108,352, 2013 WL 1010685, at *4 (Kan.App.2013) (unpublished opinion). Because the original district court ruling involved the same claims, identical relief, and the same parties, the panel held that Landrith's amended motion was barred by the doctrine of res judicata. Basler, 2013 WL 1010685, at *3. Landrith did not file a petition for review with the Supreme Court.
Undeterred, Landrith then filed an action in the United States District Court for the District of Kansas, again challenging the Bank's foreclosure, but this time asserting his fraud claims based upon the Racketeer Influenced and Corrupt Organizations (RICO) Act, 18 U.S.C. § 1962(c) and (d). The defendants—including the Bank and others—filed motions to dismiss. The federal district court found Landrith was collaterally estopped based upon the Johnson County district court's rulings and dismissed his claims. See Landrith v.. Bank of New York Mellon, No. 12–2352–EFM, 2013 WL 789427 (D.Kan.2013) (unpublished opinion) (Landrith I ).
Landrith filed a timely motion under Fed. R. Civ. Proc. 59(e), seeking to alter or amend the federal district court's judgment. The court again rejected Landrith's various arguments, held that collateral estoppel properly applied because the state court's ruling striking his pleadings was a final judgment under Kansas law, and found Landrith lacked standing to seek relief because he never possessed a cognizable interest in the property. The court also found that long-established Kansas law held that a quitclaim deed conveys only whatever title the grantor possessed at the time of its execution, but that any claim Basler may have had to sue for fraud was a chose-in-action that did not run with the land; thus, Landrith did not obtain any right to pursue a fraud claim Basler may have had against the defendants. Consequently, the federal district court denied Landrith's motion to alter or amend. See Landrith v. Bank of New York Mellon, No. 12–2352–EFM, 2013 WL 1151488 (D.Kan.2013) (unpublished opinion) (Landrith II ).
Landrith appealed these rulings to the Tenth Circuit Court of Appeals (Tenth Circuit). The Tenth Circuit affirmed, holding that Landrith had no standing to bring the RICO action because he had no ownership interest in the real property upon which the claims were based but declined to address the propriety of the collateral estoppel ruling. The Tenth Circuit specifically found Landrith's purported interest in the property arose from a quitclaim deed executed after the expiration of the owner's redemption period, meaning that Basler had no interest in the property to convey. See Landrith v. Bank of New York Mellon, 531 Fed. Appx. 944 (10th Cir.2013) (Landrith III ), cert. denied 134 S.Ct. 1886 (2014).
Current Litigation
In March 2014, Landrith filed a new petition for peaceable entry and forcible detainer in Johnson County District Court, naming the Bank, Stephen E. Summers, and John Does 1 through 5 as defendants. Landrith alleged he was the legal owner of the property based upon the quitclaim deed from Basler and again asserted that the prior foreclosure on the property was void ab initio because it failed to personally serve Basler. Landrith claimed that because of the lack of service on Basler, the foreclosure order was void and the Bank did not legally receive title to the property after the sheriff's sale. Landrith admitted he had brought prior claims relating to the Bank's foreclosure proceeding.
In this latest petition, Landrith claimed he had newly discovered evidence the Bank had made misrepresentations to the court in the original foreclosure proceeding and that the Bank had no interest in the mortgage, promissory note, or other secured interest in the property under the loan trusts that held the mortgages. Landrith requested possession of the property, an order requiring the occupants to vacate the property, and reimbursement of lost rental income of $3,000 per month during the time he had been denied possession of the property.
Before any answers were filed by the defendants, Landrith filed a First Amended Petition, adding the Mitchell Trust—whose beneficiaries resided on the property—as a defendant, reiterating his factual allegations, adding a claim for quiet title, and alleging he had filed his August 1, 2011, quitclaim deed with the Johnson County Department of Records and Tax Administration on March 10, 2014. Landrith also cited to an order in a false claims act case pending in another state where various complaints were unsealed and the realtors were allowed to proceed with their claims in the case, but the Bank was not specifically identified in the caption.
After reciting the history of Landrith's various lawsuits, the Bank, Summers, and the Mitchell Trust argued that Landrith's claims were barred by res judicata and/or collateral estoppel. The Bank filed a motion to dismiss on the grounds of res judicata, and Summers requested monetary sanctions and/or an injunction barring Landrith from further filings in state court on the case.
The district court treated the defendants' motions as motions to dismiss, finding that it was not required to accept the legal conclusions in Landrith's petition and that taking judicial notice of prior court proceedings did not require it to treat the motions as motions for summary judgment. Focusing solely on Landrith's claim that he had an ownership interest in the property as a basis for each of his claims, the court took judicial notice of the foreclosure case, noted Landrith had filed pleadings only after the sheriff's sale, and found the trial court handling the original foreclosure case had concluded that Landrith failed to obtain any interest in the property from the quitclaim deed. The district court also noted that the prior court's rulings were affirmed on appeal and cited the rulings by the federal courts that Landrith lacked standing to pursue claims attacking the foreclosure proceeding. The district court concluded that Landrith's interest in the property was fully and finally adjudicated in prior proceedings, and the courts had repeatedly found Landrith had no interest in the property based upon the quitclaim deed. As a result, the district court found Landrith's claim was barred by collateral estoppel and granted the defendants' various motions to dismiss. However, the district court denied defendants' motions for sanctions.
Landrith timely appeals.
Did the District Court Err in Finding Res Judicata and/or Collateral Estoppel Barred Landrith from Asserting Standing?
On appeal, Landrith makes a multi-faceted attack on the district court's ruling. Many of these challenges are identical or substantially similar to the arguments he asserted in the prior appeal to this court and in the federal court actions. Contrary to Rule 6.02(a)(4) (2014 Kan. Ct. R. Annot. 40), the factual statement in Landrith's brief is replete with argument and legal authorities. Moreover, the brief regurgitates many allegations of fraud and misconduct that do not relate to the district court's ultimate ruling.
Because the district court did not address the merits of Landrith's claims, we are in no position to do so. Rather, we are limited to reviewing the district court decision that Landrith's claims are barred by res judicata. Whether the doctrine of res judicata applies in a certain situation is a question of law over which we exercise unlimited review. Miller v. Glacier Development Co., 293 Kan. 665, 668, 270 P.3d 1065 (2011).
Under Kansas law, res judicata, or otherwise known as claim preclusion, prevents the relitigation of claims when certain elements exist. “[C]laim preclusion requires: (1) the same claim; (2) the same parties; (3) claims that were or could have been raised; and (4) a final judgment on the merits.” In re Tax Appeal of Fleet, 293 Kan. 768, 777–78, 272 P.3d 583 (2012). When a judgment has been entered in a federal court, the res judicata effect is similar. To establish that claim preclusion bars a subsequent claim, the federal courts require (1) a final judgment on the merits of the earlier action; (2) identity of parties or privies in the two actions; and (3) identity of the causes of action in both suits. Wilkes v. Wyoming Dept. of Employment Division of Labor Standards, 314 F.3d 501, 504 (10th Cir.2002), cert. denied 540 U.S. 826 (2003).
Landrith argues that none of the four elements of res judicata exist in this case. First, he claims the parties in the various actions were not the same because he was never officially a party in the prior litigation. Landrith asserts that because his pleadings were stricken and the defendants claimed he lacked standing, he was not a “party” to the original foreclosure case; therefore, the defendants are barred by the doctrine of judicial estoppel from claiming he was a party to the actions when they successfully asserted he lacked standing. Estate of Belden v. Brown County, 46 Kan.App.2d 247, 262, 261 P.3d 943 (2011) (“Judicial estoppel precludes a party from taking one position in a case to induce the court to act in a certain way and then taking a contrary or conflicting position in a related proceeding involving the same opposing parties.”).
Landrith's argument is incredulous. The legal finding by the court that Landrith lacked standing did not make him a “nonparty” for purposes of claim preclusion. Landrith inserted himself in the Basler case by vigorously challenging the foreclosure proceeding and the sheriff's sale and by responding to the Bank's motions. After the trial court found he lacked standing, he unsuccessfully attempted to pursue an action in the state of New York. He then filed a motion to amend the judgment in the original Basler case. When that motion was denied, he appealed to this court. Both Landrith and the Bank were parties in the Basler case in which Landrith pursued claims of fraud by the Bank and sought to void the foreclosure judgment. These are the same claims and same parties.
Although Landrith's federal case was filed as a RICO claim, the Bank and Summers were named as defendants, and the factual assertions and arguments were the same as those raised in the Basler case and in the present proceeding: the foreclosure was void for lack of personal jurisdiction and the Bank had engaged in fraudulent acts. Landrith III, 531 Fed. Appx. at 945 ; Landrith II, 2013 WL 1151488, at *1.
In this case, Landrith asserts essentially the same claims under the label of a forcible detainer or quiet title action. Again, he sues the Bank and Summers; he added the Mitchells as parties after learning they resided on the property. The claims reiterate the same mantra challenging the foreclosure judgment and claiming fraud by the Bank: The Mitchells are in privity with the Bank as purchasers or lessors of the property.
“Privity requires, at a minimum, a substantial identity between the issues in controversy and showing the parties in the two actions are really and substantially in interest the same. [Citation omitted.] Privity has been held to exist in the following relationships: concurrent relationship to the same property right (i .e. trustee and beneficiary); successive relationship to the same property or right (i.e. seller and buyer); or representation of the interests of the same person. [Citation omitted.]” (Emphasis added.)
Lowell Staats Mining Co., Inc. v. Philadelphia Electric Co., 878 F.2d 1271, 1274–75 (10th Cir.1989).
Similarly, the fact that Landrith relabeled his claims in the various cases using different theories—fraud, RICO violations, quiet title, forcible detainer—does not make them different claims for purposes of claim preclusion. Claim preclusion bars “relitigation of every matter related to a cause of action, including particular theories of liability and particular defenses to those theories.” Estate of Belden, 46 Kan.App.2d at 299. Claim preclusion is based on the need for finality in judgments and “ ‘is founded on the principle that the party, or some other party in privity, has litigated or had an opportunity to litigate the same matter in a former action in a court of competent jurisdiction. [Citations omitted.]’ “ Knowles v. Fleetwood Motorhomes of California, Inc., 40 Kan.App.2d 573, 578, 194 P.3d 38 (2008) (quoting Jackson Trak Group, Inc. v. Mid States Port Authority, 242 Kan. 683, 690, 751 P.2d 122 [1988] ). Landrith's various lawsuits were all based upon a common nucleus of facts regarding the validity of the foreclosure action and alleged fraud perpetrated by the Bank. See Stanfield v. Osborne Industries, Inc., 263 Kan. 388, 400–01, 949 P.2d 602 (1997), cert. denied 525 U.S. 831 (1998). Consequently, the present case clearly involves the same claims and the same parties or their privies.
Landrith also contends res judicata does not apply because the prior dismissals of his claims for lack of standing were not final decisions for purposes of the doctrine. Kansas courts, however, have found that an order striking a pleading or striking a claim for lack of standing is considered final if “ ‘it has the features of finality by serving the same purpose as a demurrer to test the sufficiency of a claim or defense.’ “ State ex rel. Topeka Police Dept. v. $895.00 U.S. Currency, 281 Kan. 819, 831, 133 P.3d 91 (2006) (quoting 4 Gard & Casad, Kansas C. of Civ. Proc. Annot. § 60–212, p. 74 [4th ed.2003] ); see Landrith II, 2013 WL 1151488, at *2.
Landrith claims the Tenth Circuit's decision in Landrith III and the holding of Weaver v. Frazee, 219 Kan. 42, 547 P.2d 1005 (1976), establish that neither collateral estoppel nor res judicata apply in the present case. We disagree. The Tenth Circuit did not find the district court's application of collateral estoppel was improper; it simply did not address that portion of the lower court's ruling. The appellate court limited its review to the standing issue and agreed that Landrith lacked standing because the quitclaim deed transferred no interest in the property to him. Landrith III, 531 Fed. Appx. at 945.
Similarly, the Weaver decision provides no support for Landrith's claim that res judicata does not apply. Weaver was the original title owner of property that had been foreclosed, but he alleged he was not properly served with process and the defendants committed fraud by failing to inform him about the foreclosure proceeding. The Weaver court held that preclusive doctrines did not prevent the landowner from suing for fraud in the procuring of the foreclosure and sale and was sufficiently different from an earlier action to quiet title. 219 Kan. at 49. As noted by the federal district court, the key distinguishing factor in Weaver was that the litigant had, at one point, a cognizable interest in the property whereas Landrith never had a recognizable interest. Landrith II, 2013 WL 1151488, at *2.
Landrith then argues that recording the quitclaim deed with the Johnson County Register of Deeds cured the defect in his standing and therefore prevented the application of collateral estoppel or res judicata. Granted, the curable defects doctrine is recognized in the Tenth Circuit and other federal courts. See Smith v. Pittsburgh Gage & Supply Co., 464 F.2d 870, 874 (3d Cir.1972) ; Park Lake Resources Ltd. Liability Co. v. U.S. Dept. of Agriculture, 378 F.3d 1132, 1137 (10th Cir.2004) ; Safadi v. Novak, 574 F.Supp.2d 52, 56 (D.D.C.2008). Landrith fails to grasp, however, that the various courts' rulings that he lacked standing were not due to his failure to record his quitclaim deed. Instead, each court found that the quitclaim deed was ineffective to transfer any interest in the property because Basler no longer held any interest in the property to convey at the time he executed the deed. See Landrith III, 531 Fed. Appx. at 945 ; Landrith II, 2013 WL 1151488, at *1 ; Landrith I, 2013 WL 789427, at *3 ; Basler, 2013 WL 1010685, at *2. Consequently, Landrith's filing of the quitclaim deed did not trigger the curable defects doctrine as the lack of recording of the deed was not the jurisdictional defect.
Finally, Landrith asserts that the finding of res judicata was based upon the district court's view of his character, which is not a factor supporting res judicata. It is clear the various courts' decisions were not based on Landrith's character but on the fact that Basler had no interest in the property when he quitclaimed it to Landrith. Landrith's character was discussed by the federal court only because it chose to impose filing restrictions on Landrith as a result of his baseless claims and tactics in Landrith and other cases that “exemplif[ied] the concerns expressed by the Kansas Supreme Court in disbarring [him].” Landrith v. Schmidt, 732 F.3d 1171, 1173–74 (10th Cir.2013), cert. denied 134 S.Ct. 1037 (2014).
Based upon the record before the court, the district court correctly found that Landrith's claims were barred by res judicata/claim preclusion based upon the judgments in Landrith III and Basler. Because Landrith's claims were properly dismissed, we need not address Landrith's allegations that he should have been permitted to amend his petition to add a claim for punitive damages.
Are the Mitchells Entitled to Recover Attorney Fees?
After briefing, the Mitchells filed a timely motion for attorney fees and costs. Landrith has filed no response to the motion. The Mitchells contend Landrith's appeal is frivolous and his claim to any interest in the property has been adjudicated in multiple venues and jurisdictions. The Mitchells argue Landrith's appeal was baseless and was filed to harass them as the current owners and residents of the property. They seek over $10,000 in attorney fees and $94.72 in costs. Given that Landrith failed to object to the Mitchells' request for attorney fees and costs, we grant them in their entirety.
Alternatively, in order to avoid more motions in this case, we also grant the Mitchells' request on the merits. Supreme Court Rule 7.07(b)(1) (2014 Kan. Ct. R. Annot. 70) provides that attorney fees may be awarded for services on appeal when the district court would have had authority to award such fees. Fees also may be awarded if we find an appeal is frivolous or taken solely for the purposes of harassment or delay. Supreme Court Rule 7.07(c) (2014 Kan. Ct. R. Annot. 70). In order to obtain fees, an affidavit must be attached specifying the nature and extent of the services rendered, the time expended on the appeal, and the factors considered in determining reasonableness of the fee. Supreme Court Rule 7.07(b)(2) (2014 Kan. Ct. R. Annot. 70).
While the affidavit in support of the Mitchells' motion is very succinct—specifying only the number of attorney and paralegal hours, the hourly rates for each, making conclusory statements regarding the experience of the lead attorney and the reasonableness of the time and rates—we conclude, given the tortured history by which this case came to us, that the time expended and rates were reasonable. The hourly rates of $175 and $150 charged for attorney time are reasonable for the Kansas City region (and also for St. Louis, Missouri, where counsel is based). While a total of 61.72 hours of attorney time seems a bit high for the 11–page brief filed on the Mitchells' behalf, counsel were required to wade through the morass of Landrith's briefs and arguments. The amount of $10,521 in fees and $94.72 in costs does not appear unreasonable under the circumstances of this case.
The question then becomes whether Landrith's appeal was frivolous under Supreme Court Rule 7.07(c) (2014 Kan. Ct. R. Annot. 70). In light of his repeated efforts to relitigate these issues in a variety of forums, the appeal falls squarely within the Supreme Court's definition of a frivolous appeal as being “ ‘[o]ne in which no justiciable question has been presented and appeal is readily recognized as devoid of merit in that there is little prospect that it can ever succeed.’ Black's Law Dictionary 601 (5th ed.1979).” Blank v. Chawla, 234 Kan. 975, 982, 678 P.2d 162 (1984).
The district court's dismissal of Landrith's claims is affirmed, and the Mitchells' motion for attorney fees and costs is granted.