KNEZEL

v.

WILMINGTON SAVINGS FUND SOCIETY FSB

Plaintiff Knezel sues Defendant Wilmington Savings Fund Society, FSB in connection with a mortgage loan she alleges was mishandled by Defendant, which resulted in the eventual foreclosure and divestment of her residential property. Dkt. 78. In her five-count amended complaint, Plaintiff seeks monetary damages. Id. This matter is before the Court on Defendant’s Motion to Dismiss Complaint (Dkt. 79), Plaintiff’s response in opposition (Dkt. 81), and Defendant’s reply. Dkt. 85. After careful consideration of the motion to dismiss, applicable law, and the allegations of the amended complaint, the Court grants the motion to dismiss due to a lack of federal subject matter jurisdiction under the Rooker-Feldman doctrine. Accordingly, this federal case is remanded and closed.

I. Procedural and Factual Background1

Plaintiff purchased a home in Lakeland with her husband in 2003 and signed the mortgage but not the note. Dkt. 78 at ¶ 7. They refinanced the home with

Bank of America (“BOA”). Plaintiff and her husband fell into arrears on the mortgage during the recession, and BOA initiated foreclosure in 2009. Id. ¶ 14. Plaintiff’s husband, the sole signer on the note, filed bankruptcy in 2010, and received a discharge on the note. Id. ¶ 16. Defendant Wilmington came to own the mortgage, which it claimed was in arrears since 2010, Dkt. 79 ¶ 2, and in 2015 Defendant filed an in rem foreclosure complaint on the mortgage. Id. ¶ 22. At that point, various disputes arose as to forced placed insurance on the house with ensuing storm damage, escrow matters, and accounting on the mortgage debt. Plaintiff defended the foreclosure with present counsel, and filed an amended answer setting forth affirmative defenses. Dkt. 79-1. Included in

Plaintiff’s defenses were the 19th defense, which alleged bad faith and breach in imposing “force-placed” insurance, including placing this insurance at high cost through a related party, accepting commissions and profit on this insurance, and

On April 13, 2018, Plaintiff moved to file a second amended answer and defenses, with newly-alleged counterclaims and a third-party complaint against Bank of America, a new party to the suit. The counterclaims against Wilmington were for failure to purchase insurance/wrongful foreclosure and for intentional and/or negligent infliction of emotional distress. Id. at 459–463. The trial court judge denied this motion two days before the April 26 trial. Dkt. 63-5 at 20. No transcript exists from that hearing. Dkt. 63-5 at 15.

The matter was raised again at the start of trial and the state circuit court again denied the motion due to timing, and because the issue regarding insurance was not compulsory. Id. The trial court heard two days of testimony on the history of the debt, and how it was handled, including the force-placed insurance issue. Plaintiff testified as did a CPA on her behalf. The trial court also took written closing and rebuttal arguments, and thereafter heard oral closing arguments. The court entered judgment and the discussion of the judgment included merits consideration of the force-placed insurance issue (Dkt. 63-3, Ex. 1 at 650–653; Dkt. 63-4, Ex. 2 at 869–883).

Plaintiff took a timely appeal. In her appeal to the Second District Court of Appeal, Plaintiff argued that the original lender misapplied payments, dragged its feet in acknowledging insurance, wrongfully force-placed insurance, usurped insurance and tax payments, and then wrongly demanded money to “cure the default.” Dkt. 63-5 at 6–7. The misapplication of insurance proceeds continued until 2017, she alleged. Id. at 14. She reasserted on appeal the lender misconduct set forth in her affirmative defenses, described above. Dkt. 63-5 at 19. Plaintiff also firmly argued that the trial court erred in denying her late motion to amend. Dkt. 63-5 at 43; 63-6 at 18. The state appellate court affirmed the judgment of foreclosure, after oral argument, in December 2019. Dkt. 63-7. There was no written opinion.

Plaintiff filed the instant complaint during the pendency of her state court appeal. The complaint was filed in state court and removed here by the Defendants under diversity jurisdiction. Plaintiff sued both Defendants Wilmington and BOA. The BOA claim has settled. Dkts. 68, 69. The amended complaint against Wilmington seeks recovery in Count I for breach of contract, alleging that Wilmington breached the mortgage, the mortgage note, and any attendant documents such as the escrow waiver agreement. These were the documents that were the subject of, and directly addressed by, the state foreclosure litigation.

In Count II of the amended complaint, Plaintiff attempts to state a claim for violation of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2605 and “The Dodd-Frank Act.” Dkt. 78 at ¶¶ 33-51. She sets forth several pages of statutory text and lists forth how Defendant Wilmington violated this text by, inter alia: obtaining and wrongfully handling force-placed insurance, failing to notify Plaintiff of any assignment in timely fashion, falsely filing affidavits and verified pleadings in the state court foreclosure suit, failing to timely correct errors regarding payments under the debt, failing to provide true and correct balances for pay off of the loan to avoid foreclosure, failing to remove errors, refund improper late fees or otherwise correct the erroneous accounting on the mortgage, etc. Id. In Count III Plaintiff seeks recovery under the Florida and federal Fair Debt

Collection Practices Acts. She alleges Wilmington attempted and threatened to enforce a debt it knew was not legitimate, falsely stated Plaintiff did not comply with the mortgage and did not pay the note which she did, sent her erroneous monthly statements, and falsely stated the amount of the debt and sought to collect it. Dkt. 78 at ¶¶ 52–66.

Count IV asserts common law fraud. It contends that Wilmington’s positions asserted on force-placed insurance were false. Count IV alleges Wilmington claimed entitlement to a mortgage escrow account, and the accounting for sums due and owing on the mortgage, were true – but Wilmington knowingly lied. Also it alleges that Defendant Wilmington swore false damages to the foreclosure court regarding uninsured storm losses. The foreclosure injured Plaintiff’s credit and reputation, and caused loss of her home based on intentionally false accounting records, this Count alleges, also causing physical injury and mental injury. Dkt. 78 at ¶¶ 67–75. Count V, for intentional and/or negligence infliction of emotional distress,

echoes Count IV. It states that Defendant wrongfully prosecuted frivolous and meritless claims, which actions were enabled by Defendant “engaging in bullying tactics, and otherwise attempting to wear down the spirits of Plaintiff.” Dkt. 78 at ¶¶ - 89). This included Defendant’s various false statements concerning the mortgage including related to insurance, adding false charges due to the principal, and falsely acting as servicer. This action included “[t]he institution of a foreclosure action by Defendant when it knew or should have known that it did not have any viable claim to a Note rendered its claim frivolous.” Id. at ¶ 85. The count further alleges: “The Defendant never owned a Note or mortgage, sued for foreclosure wrongfully, accused Plaintiff of being dishonest, accused all of the contractors who had worked on Plaintiff’s home as fraudulently colluding with Plaintiff in order to perpetrate a fraud on Defendant, claimed that it paid for insurance on the home (which turned out to be another false statement), claimed that Plaintiff had failed to timely pay her mortgage (another false statement), failed to properly decelerate the debt after BOA’s foreclosure was voluntarily dismissed and sought to take Plaintiff’s home from her without any right whatsoever.” Id. at ¶ 87.

II. Legal Standard

To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead sufficient facts to state a claim that is “plausible on its face.” Ashcroft v. Iqbal, 556

U.S. 662, 678 (2009) (citation omitted). In considering the motion, the court accepts all factual allegations of the complaint as true and construes them in the light most favorable to the plaintiff. Pielage v. McConnell, 516 F. 3d 1282, 1284 (11th Cir. 2008) (citation omitted). Courts should limit their “consideration to the well-pleaded factual allegations, documents central to or referenced in the complaint, and matters judicially noticed.” La Grasta v. First Union Sec., Inc., 358 F. 3d 840, 845 (11th Cir. 2004) (citations omitted).

III. Discussion

Rooker-Feldman Doctrine Bars this Suit “Courts have an independent obligation to determine whether subject-matter jurisdiction exists, even when no party challenges it.” Hertz Corp. v. Friend, 559

U.S. 77, 94 (2010). Here, Defendant claims this Court lacks subject matter jurisdiction because of the Rooker-Feldman doctrine3. “The Rooker–Feldman doctrine places limits on the subject matter jurisdiction of federal district courts and courts of appeal over certain matters related to previous state court litigation.” Goodman v. Sipos, 259 F. 3d 1327, 1332 (11th Cir. 2001). The Supreme Court applies the doctrine to only 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 Indus. Corp., 544 U.S. 280, 284 (2005). Under the Rooker-

Feldman doctrine, federal courts do not have jurisdiction to review state court decisions. May v. Morgan Cty. Ga., 878 F. 3d 1001, 1004 (11th Cir. 2017) (citations omitted). The doctrine is a narrow one. To apply the doctrine, a defendant must demonstrate the case is one (1) brought by a state-court loser (2)

Pretext is not tolerated.” May, 878 F. 3d at 1005. To determine whether a claim invites rejection of a state court decision, courts must consider whether a claim was either actually adjudicated by a state court or is “inextricably intertwined” with a state court judgment. Target Media Part. v. Specialty Marketing Corp., 881 F. 3d

1279, 1286 (11th Cir. 2018) (citation omitted). A claim is “inextricably intertwined” with a state court judgment if it asks to “effectively nullify the state court judgment, or it succeeds only to the extent that the state court wrongly decided the issues.” Id. (internal quotation and citation omitted). That said, a federal claim is not “inextricably intertwined” with a state court judgment when there was no “reasonable opportunity to raise” that claim during the relevant state court proceeding. Id. (citation omitted). Here, there was a reasonable opportunity to raise these claims, and they were raised both at the trial court and appellate court level. Had the counterclaims been raised timely, they could have been heard. Although the state circuit court denied a tardy, and last-minute, second motion to amend to assert counterclaims and bring in a third-party defendant after four continuances, the issue related to insurance, mortgage accounting, proper allocation of payments, etc. were entirely and fully litigated both at trial as affirmative defenses, and on appeal. The circuit court below by its judgment found no material breach of the mortgage and it adjudicated amounts due, proper insurance issues, etc. Mortgage payments and accounting were heard in evidence, addressed, and adjudicated on the merits. These claims are just refashioned here as other causes of action in an attempt to change a loss in state court into a win. See generally Figueroa v. MERSCORP, Inc., 477 F. App’x 558 (11th Cir. 2005); Harper v. Chase Manhattan Bank, 138 F. Appx 130, 132 (11th Cir. 2005) (dismissing TILA and FDCPA claims as inextricably intertwined with state foreclosure suit). This Court would have to partially reverse or rule against the state court judgment below to fashion relief sought here, something this Court may not do. Echeverry v. Wells Fargo Bank, N.A., No. 16-cv-61635-Gayles, 2017 W.L. 733374 (S.D. Fla. Feb. 24, 2017). Plaintiff may seek remedies in state court after remand. No subject matter jurisdiction exists here and the amended complaint is dismissed. The Clerk is directed to terminate any pending motions, to remand this case to the Tenth Judicial Circuit, in and for Polk County, Florida, and to thereafter close the file. DONE AND ORDERED in Tampa, Florida on August 6, 2020.

WILLIAM F. iS

UNITED STATES DISTRICT JUDGE

COPIES FURNISHED TO: Counsel of Record