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Springer v. Wells Fargo Bank, N.A.

United States District Court, M.D. Alabama, Northern Division

July 16, 2018

JEANETTA SPRINGER and JACOB SPRINGER, Plaintiffs,
v.
WELLS FARGO BANK, N.A., et al., Defendants.

          RECOMMENDATION OF THE MAGISTRATE JUDGE

          WALLACE CAPEL, JR. CHIEF UNITED STATES MAGISTRATE JUDGE

         On October 13, 2017, pro se Plaintiffs filed a complaint in the above-styled case. See Doc. 1. Although not a model of clarity, it appears that Plaintiffs are alleging that their due process rights were violated when Plaintiff Jeanetta Springer's property was wrongfully foreclosed. Id. at 4. Plaintiffs further assert that the property was seized based upon a state tax lien against Defendant Jacob Springer, who was not a party to the mortgage on the property. Id. Based upon these allegations, Plaintiffs sue (1) Defendant Wells Fargo, N.A. (“Wells Fargo”), the entity that held the foreclosure sale of Plaintiff Jeanetta Springer's property, purchased the property at said foreclosure sale, and later filed a state-court eviction action against both Plaintiffs to remove them from the property, see Doc. 11-1; (2) Defendant Sirote & Permutt (“S&P”), the entity that represented Defendant Wells Fargo in state court when Defendant Wells Fargo pursued eviction of Plaintiffs, [1] see Doc. 7 at 7; and (3) Defendant Vernon Barnett (“Barnett”), Commissioner of the Alabama Department of Revenue, because he purportedly seized Plaintiff Jeanetta Springer's property to satisfy Plaintiff Jacob Springer's personal tax liability, see Doc. 1; Doc. 13 at 1-2; Doc. 21-2; Doc. 21-3. Defendant S&P filed a Motion to Dismiss (Doc. 7) Plaintiffs' Complaint, as did Defendant Wells Fargo and Defendant Barnett (Docs. 11, 13). Plaintiffs responded in opposition to the motions (Doc. 21), and Defendants S&P and Wells Fargo replied (Docs. 23, 24). As the matter is fully briefed, it is ripe for recommendation to the District Judge.[2]

         I. The Parties' Filings

         a. Plaintiffs' Complaint

         In Plaintiffs' form complaint, Plaintiffs provide the following statement of their claim:

A foreclosure proceeding was held at Circuit Court of Randolph County, Alabama in order to pressure me, Jacob C. Springer, into signing a check issued by the Circuit Court of Randolph County, Alabama in another civil action. The first time this was attempted it was on ‘deceased property[.]' The second time was because of the ‘late payments[.]' The Evidence clearly showed the house had not reached foreclosure status[;] however, this evidence was not presented due to violation of due process. The house was unlawfully seized by the State of Alabama Department of Revenue by issuing a writ to seize the property for $998.69, even though I (Jacob Springer) never had an account with Wells Fargo Bank or had any dealings with them.

Doc. 1 at 4. Based upon these facts, Plaintiffs request that the court return the property to their possession and provide compensation for any damage or destruction that has occurred to the property since its foreclosure. Id. Plaintiffs also seek compensatory damages “for the violation of [their] Constitutional Rights and abuses by the state actors under color of law[, ]” as well as punitive damages “to prevent this from happening again[.]” Id.

         b. Defendants' Motions to Dismiss

         Defendant S&P argues that Plaintiffs' complaint should be dismissed because the court is without subject matter jurisdiction to entertain Plaintiffs' requested relief pursuant to the Rooker-Feldman abstention doctrine. Doc. 7 at 1, 7-8. Further, Defendant S&P argues that Plaintiffs fail to state any legally cognizable claim against it because Plaintiffs have failed to assert any wrongdoing by Defendant S&P other than naming it as a Defendant. Id. at 1, 4-7.

         Defendant Wells Fargo argues that Plaintiffs' complaint should be dismissed because Plaintiffs have not alleged that Defendant Wells Fargo is a state actor subject to a due process violation, Doc. 11-1 at 4-6; because Plaintiffs' claims are barred by res judicata, id. at 6-8; and because the Rooker-Feldman doctrine bars this court's reconsideration of the judgment entered in the state-court eviction action, id. at 8-11.

         Defendant Barnett, in his capacity as the Commissioner of the Alabama Department of Revenue, argues that Plaintiffs' complaint should be dismissed because Plaintiffs' claims are barred by the Rooker-Feldman doctrine, Doc. 13 at 2-3; because the claims are barred by the Tax Injunction Act (“TIA”), 28 U.S.C. § 1341, and principles of comity, id. at 3-4; because of official capacity immunity under the Eleventh Amendment, id. at 4; and because Plaintiffs have failed to state a claim for relief under Federal Rule of Civil Procedure 12(b)(6), id.

         c. Plaintiffs' Response in Opposition to the Motions

         Plaintiffs argue that Defendants' motions to dismiss should not be granted because (1) res judicata does not apply; (2) the Rooker-Feldman doctrine does not apply; and (3) a cause of action has been sufficiently alleged within the complaint. Doc. 21.

         As to the doctrine of res judicata, Plaintiffs argue that “it does not apply in this case because the issues in this case and the case defendant refer[s] to are not identical.” Id. at 2. Specifically, Plaintiffs assert that the previous state-court case was based upon whether “there was a lawful ejectment from the property owned by plaintiff Jeanetta Springer based on failure to her condition of payment of the mortgage of the house foreclosed upon” and whether “plaintiffs Jeanetta and Jacob Springer breached the contract/mortgage.” Id. In the case before this court, Plaintiffs assert that the issue is “whether defendant Wells Fargo committed fraud by intentionally using a writ of garnishment aimed at Plaintiff Jacob Springer for Alabama State Taxes owed, knowing that Plaintiff Jacob Springer was NOT listed as a party to the mortgage” on the property. Id. Thus, Plaintiffs assert that, even though both cases involve ejectment, the issues are not the same to warrant application of res judicata because “one was based on the theory of mortgage foreclosure while the case at bar [is] based on garnishment.” Id. at 2-3. Finally, Plaintiffs argue that, even if the issues are the same, res judicata would not apply because this case “involve[s] fraud on the part of the defendant.” Id. at 3.

         As to the Rooker-Feldman doctrine, Plaintiffs argue that it does not apply because “this is not an attempt to appeal whether or not the foreclosure and resulting ejectment due to the foreclosure was proper which was the issue in state court.” Id. Instead, Plaintiffs assert that the alleged fraud forming the basis of this complaint “occurred on or about October 15, 2015, ” which is “well after the events that took place and was complained of in the cause of action the Defendant references.” Id.

         Finally, as to whether Plaintiffs have stated a claim for relief, Plaintiffs argue that they have stated the “material facts, ” which were that “the writ of garnishment against petitioner Jacob Springer did NOT authorize them to seize property owned only by petitioner Jeanetta Springer.” Id. at 3-4. Plaintiffs continue that the

Sheriff of Randolph County, Alabama relied on this misrepresentation and/or omission and seized Plaintiff Jeanetta Springer's Property. Additionally, [b]oth plaintiffs relied on the misrepresentation of defendant that they had authority to seize plaintiff Jeanetta Springer's Property based on Plaintiff Jacob Springer's debt, or in the alternative, both plaintiffs relied on the defendants['] intentional or reckless omission of the material fact they did not have the authority to seize plaintiff Jeanetta Springer's House to satisfy a tax debt owed by Jacob Springer when his name was NOT on the mortgage.

Id. at 4.

         II. Motion to Dismiss Standard-Federal Rule of Civil Procedure 12(b)(6)

         The purpose of a Rule 12(b)(6) motion is to test the facial sufficiency of a claimant's statement for relief. Vernon v. Med. Mgmt. Assocs. of Margate, Inc., 912 F.Supp. 1549, 1553 (S.D. Fla. 1996). It is read alongside Fed.R.Civ.P. 8(a), which requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” The rule is not designed to strike inartistic pleadings or to provide a more definite statement to answer an apparent ambiguity, and the analysis of a 12(b)(6) motion is limited primarily to the face of the complaint and attachments thereto. See 5 Charles A. Wright & Arthur Miller, Federal Practice and Procedure § 1356 at 590-92 (1969) (Wright & Miller). While a complaint need not provide detailed factual allegations, the standard “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)); see also Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 958 (11th Cir. 2009); Cobb v. State of Fla., 293 Fed.Appx. 708, 709 (11th Cir. 2008). “[N]aked assertion[s]” bereft of “further factual enhancement” do not suffice. Twombly, 550 U.S. at 557. Indeed, a complaint's “factual allegations must be enough to raise a right to relief above the speculative level.” Id. at 555. “Moreover, the facts supporting the claim must be ‘consistent with the allegations in the complaint.'” Wilchombe, 555 F.3d at 958 (quoting Twombly, 550 U.S. at 562). On a motion to dismiss, a court should accept the non-conclusory allegations in the complaint as true and evaluate all plausible inferences derived from those facts in favor of the plaintiff. See Hughes v. Lott, 350 F.3d 1157, 1159-60 (11th Cir. 2003) (internal citation omitted); see also Cobb, 293 Fed.Appx. at 709; Brown v. Budget Rent-A-Car Syst., Inc., 119 F.3d 922, 923 (11th Cir. 1997).

         Courts therefore conduct a “two-pronged approach” when considering a motion to dismiss under Rule 12(b)(6). Iqbal, 556 U.S. at 679. A court should first ask whether the pleading properly asserts “well-pleaded factual allegations” or whether, instead, it merely asserts “‘legal conclusions' [that are] not entitled to the assumption of truth.” Id. at 679-680 (quoting Twombly, 550 U.S. at 555). If the complaint contains factual allegations that are well pled, the court should assume their veracity and then move to the next step, asking whether the factual allegations “plausibly give rise to an entitlement to relief.” Id. at 679. Thus, where the pleading asserts non-conclusory, factual allegations that, if true, would push the claim “across the line from conceivable to plausible, ” the motion to dismiss should be denied. Id. at 680 (quoting Twombly, 550 U.S. at 570) (quotation marks omitted).

         III. Factual Background[3]

         On August 10, 1998, Plaintiff Jeanetta Springer, along with her mother and father, executed a mortgage in favor of SouthTrust Bank (“SouthTrust”) for property located at 619 Lafayette Highway, Roanoke, Alabama. See Doc. 21-1 at 1. Plaintiff Jacob Springer was not a party to that mortgage. See id. Defendant Wells Fargo is the successor-by-merger to SouthTrust.[4]

         On October 19, 2011, Defendant Wells Fargo held a non-judicial foreclosure sale of the aforementioned property and purchased the property at the sale. See Doc. 1 at 4; Doc. 11-3 at 2. On April 25, 2012, Defendant Wells Fargo filed a state-court eviction action against both Plaintiffs, who were occupants of the property at that time. See Doc. 11-3 at 2. Plaintiffs argued in that state-court eviction action that the foreclosure of the property was wrongful, but the Circuit Court of Randolph County entered judgment in favor of Defendant Wells Fargo, finding that the foreclosure sale was proper and that Defendant Wells Fargo was entitled to immediate possession of the property. See Doc. 11-3 at 7-11. Plaintiff appealed that judgment to the Alabama Court of Civil Appeals, which affirmed the trial court's decision without opinion on April 17, 2015. Doc. 7-1 at 5. Plaintiffs' petition for writ of certiorari to the Alabama Supreme Court was denied on June 12, 2015. Id.

         In this case, Plaintiffs assert that the October 19th non-judicial foreclosure sale was conducted “in order to pressure” Plaintiff Jacob Springer “into signing a check issued by the Circuit Court of Randolph County [ ] in another civil action.” Doc. 1 at 4. Plaintiffs also assert that the foreclosure was wrongful because, although the property “had not reached foreclosure status[, ]” that evidence was “not presented [prior to the foreclosure] due to violation of due process.” Id. Plaintiffs continue that the property was then seized by the State of Alabama Department of Revenue based upon a writ issued against Plaintiff Jacob Springer for his failure to pay individual liability taxes. See id. Plaintiffs provide two documents from the Alabama Department of Revenue (“ADR”): (1) a certificate of lien for taxes issued against Plaintiff Jacob Springer on February 3, 2015, and (2) a writ of garnishment issued against Plaintiff Jacob Springer on September 25, 2015.[5] Doc. 21-2 at 1-2.

         For purposes of the motion to dismiss, Plaintiffs' well-pleaded factual assertions that appear within Plaintiffs' complaint will be assumed true. The undersigned is not required to consider the mere legal conclusions asserted by Plaintiffs for purposes of this recommendation.

         IV. Plaintiffs' Claims

         Before wading into the analysis of the arguments presented by Defendants within their motions to dismiss Plaintiffs' complaint, the undersigned will first define the scope of the claims Plaintiffs present in their complaint. Clearly, Plaintiffs attempt to allege a due process claim. See Doc. 1 at 3 (noting that the complaint's basis for jurisdiction is “Due Process Guarantee in Amendment V; . . . Amendment XIV”). Plaintiffs also state that they are bringing a claim pursuant to “Amendment VII (Jury Trial in Civil Cases).” See id. However, the undersigned finds no factual predicate for such a claim. See infra Section III. Thus, as far as the claims explicitly alleged by Plaintiffs in the complaint, the undersigned concludes that Plaintiffs are asserting a claim for a violation of due process only.

         As to claims which may be construed from Plaintiffs' complaint, the undersigned finds that a liberal construction of the pleading suggests that Plaintiffs may be attempting to assert (1) a claim for wrongful foreclosure; (2) a claim for wrongful ejectment; and (3) a state-law fraud claim. See generally Doc. 1 at 4.

         There are two bases for construing a wrongful foreclosure claim from Plaintiffs' factual assertions. First, Plaintiffs' complaint states that “[a] foreclosure proceeding was held at Circuit Court of Randolph County, Alabama in order to pressure me, Jacob C. Springer, into signing a check issued by the Circuit Court of Randolph County, Alabama in another civil action.” Id. This statement suggests that Plaintiffs may be attempting to assert that the foreclosure of Plaintiff Jeanetta Springer's property was wrongful due to coercion or fraud. Second, Plaintiffs' complaint states that, despite the fact that Plaintiff Jeanetta Springer's property “had not reached foreclosure status, ” the property was foreclosed because evidence showing that the property was not in delinquent status was not presented because of a violation of due process. Id. This statement suggests that Plaintiffs may be attempting to assert that the foreclosure of the property was wrongful due to a violation of due process. Accordingly, the undersigned recommends that a liberal construction of Plaintiffs' complaint suggests that Plaintiffs are attempting to assert a claim for wrongful foreclosure.

         As to a claim for wrongful ejectment, Plaintiffs' complaint states that the property “was siezed [sic] by the State of Alabama Department of Revenue by issuing a writ to seize the property for $998.69, even though I (Jacob Springer) never had an account with Wells Fargo Bank or had any dealings with them.” Id. The undersigned concludes that this statement is insufficient, even under liberal standards, to assert a claim for wrongful ejectment. This is especially so considering there is no factual support for the claim within the complaint, nor do the judicially-noticed facts appearing outside of the complaint establish such support. As set out further below, Plaintiffs' argument that the property was seized because of a personal tax lien against Plaintiff Jacob Springer, who was not a party to the mortgage of the property makes little ...


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