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Thomason v. Ocwen Loan Servicing, LLC

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

July 8, 2019

OCWEN LOAN SERVICING, LLC, et al., Defendants.




         Before the Court are Defendants' Motions to Dismiss (Docs. 1-10, 1-11, 1-12), Plaintiff's Motion in Opposition to Dismiss (Doc. 1-7), Plaintiff's Motion to Amend and Motion for a Temporary Restraining Order (Doc. 1-9), and Plaintiff's Motion to Remand (Doc. 4). For the reasons stated more fully below, the undersigned Recommends that Plaintiff's Motions be denied and Defendants' Motions be granted.

         II. BACKGROUND[2]

         On November 28, 2005, Plaintiff's wife, Ms. Thomason, obtained two mortgages from Defendant EvaBank in order to finance the purchase of a homestead. Thomason II, (Doc. 1-10) at 4. Shortly after closing on the mortgage, EvaBank sold the mortgage to Defendant IndyMac Bank, F.S.B. (“IndyMac”).[3] Thomason II, (Doc. 1-1) at 3-4; (Doc. 1-11) at 2. The mortgages subsequently fell into default. Thomason I, (Doc. 183) at 4. Ms. Thomason passed away in October 2009. Thomason II, (Doc. 1-1) at 4. Plaintiff continued making payments on the mortgages for a year after Ms. Thomason's death but eventually ceased, with the last payment being made on November 4, 2010. Thomason I, (Doc. 183) at 4-5. In March 2011, Plaintiff sought bankruptcy protection to avoid foreclosure. Thomason II, (Doc. 1-1) at 4; (Doc. 1-10) at 4. Plaintiff's bankruptcy case was dismissed in November 2011. Thomason II, (Doc. 1-1) at 6. On March 26, 2012, Plaintiff filed another bankruptcy petition, but it was dismissed the following month. Thomason II, (Doc. 1-1) at 7.

         On July 11, 2012, Plaintiff filed a Complaint with this Court alleging various claims arising from Defendant OWB's handling of his “application for a loan modification.” Thomason I, (Doc. 1); Thomason II (Doc. 1-11) at 2. OWB filed a Motion to Dismiss the Complaint. Thomason I, (Doc. 6). Thereafter, Plaintiff filed a Motion to Amend the Complaint to add additional claims and parties. Thomason I, (Doc. 17). The Court granted OWB's motion, dismissed Plaintiff's Complaint with prejudice and denied Plaintiff's Motion to Amend. Thomason I, (Docs. 30, 31). Plaintiff appealed the dismissal to the Eleventh Circuit. Thomason I, (Doc. 32). On November 1, 2013, servicing of Plaintiff's mortgages transferred to Defendant Ocwen Loan Servicing, LLC (“Ocwen”). Thomason I, (Doc. 183) at 5. The Eleventh Circuit remanded the case, directing this Court to allow Plaintiff to amend his Complaint. Thomason I, (Doc. 42.) Plaintiff subsequently amended his Complaint, adding Ocwen, Deutsche Bank, and EvaBank as parties and adding various causes of action. Thomason I, (Doc. 49). In October 2017, Defendants filed Motions for Summary Judgment. Thomason I, (Docs. 175, 182). In March 2018, this Court granted summary judgment to Defendants and dismissed Plaintiff's previous case. Thomason I, (Doc. 214); Thomason II, (Doc. 1-11) at 3.

         On April 25, 2018, Plaintiff appealed the Court's final judgment to the Eleventh Circuit. Thomason I, (Docs. 220, 224); Thomason II, (Doc. 1-11) at 3. On July 31, 2018, Plaintiff filed a Complaint in state court, alleging various claims against the same defendants arising out of the same events as the case under appeal in federal court. Thomason II, (Doc. 1-1). On November 15, 2018, the Eleventh Circuit dismissed Plaintiff's appeal for want of prosecution because Plaintiff failed to pay the required filing and docketing fees. Thomason I, (Doc. 234). On December 24, 2018, Plaintiff filed a Petition for Writ of Certiorari to the United States Supreme Court. Thomason II, (Doc. 1-11) at 3. In March 2019, Defendants filed separate Motions to Dismiss in Plaintiff's state court action arguing, inter alia, that Plaintiff's claims are barred by the doctrine of res judicata because there is already a prior, final judgment on the identical matter in this Court. Thomason II, (Docs. 1-10, 1-11).

         On April 8, 2019, the FDIC, in its capacity as Receiver for IndyMac, removed Plaintiff's state court action to this Court pursuant to 12 U.S.C. § 1819(b)(2)(B) and 28 U.S.C. § 1441(b). Thomason II, (Doc. 1). On April 24, 2019, The United States Supreme Court denied Plaintiff's Petition for Writ of Certiorari in his federal court case. Thomason I, (Doc. 242); Thomason II, (Doc. 11). On May 1, 2019, Plaintiff filed a Motion to Remand, arguing the FDIC is a “nominal defendant” and, therefore, not authorized under § 1819 to remove the case to federal court. Thomason II, (Doc. 4). The United States District Judge assigned to this case referred the case to the undersigned United States Magistrate judge for “all pretrial proceedings and entry of any orders or recommendation as may be appropriate.” Thomason II, (Doc. 3).


         “A fundamental precept of common-law adjudication, embodied in the related doctrines of collateral estoppel and res judicata, is that a ‘right, question or fact distinctly put in issue and directly determined by a court of competent jurisdiction . . . cannot be disputed in a subsequent suit between the same parties or their privies . . . .'” Montana v. United States, 440 U.S. 147, 153 (1979) (quoting S. Pac. R. Co. v. United States, 168 U.S. 1, 48-49 (1897)). “Under res judicata, a final judgment on the merits bars further claims by parties or their privies based on the same cause of action.” Id. (citing Lawlor v. Nat'l Screen Svs. Corp., 349 U.S. 322, 326 (1955); Cromwell v. Cty. of Sac, 94 U.S. 351, 352 (1877)).[4] “The purpose behind the doctrine of res judicata is that the ‘full and fair opportunity to litigate protects [a party's] adversaries from the expense and vexation attending multiple lawsuits, conserves judicial resources, and fosters reliance on judicial action by minimizing the possibility of inconsistent decisions.'” Ragsdale v. Rubbermaid, Inc., 193 F.3d 1235, 1238 (11th Cir. 1999) (quoting Montana, 440 U.S. at 153-54). “Res judicata bars the filing of claims which were raised or could have been raised in an earlier proceeding.” Id. (citing Citibank, N.A. v. Data Lease Fin. Corp., 904 F.2d 1498, 1501 (11th Cir. 1990)).

Under Eleventh Circuit precedent, a claim will be barred by prior litigation if all four of the following elements are present: (1) there is a final judgment on the merits; (2) the decision was rendered by a court of competent jurisdiction; (3) the parties, or those in privity with them, are identical in both suits; and (4) the same cause of action is involved in both cases.

Id. (citing Citibank, 904 F.2d at 1501).

         Here, based on a review of the record, the undersigned concludes that all four requirements are unquestionably met. First, the district court issued a final judgment in the prior litigation on March 26, 2018. See Thomason I, (Doc. 214); see also Stanley v. Cent. Intelligence Agency, 639 F.2d 1146, 1157 (5th Cir. 1981)[5] (noting that the granting of summary judgment is a disposition on the merits of the case). That final judgment was left standing by the Eleventh Circuit (Doc. 234) and the United States Supreme Court (Doc. 242). Hence, the undersigned finds that there is a final judgment on the merits in the prior litigation.

         Second, the undersigned finds the Court had proper jurisdiction to render that final judgment. A district court has “original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. A claim arises under federal law if a federal question appears on the face of the plaintiff's well-pleaded complaint. Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 152 (1908). “As a general rule, a case arises under federal law only if it is federal law that creates the cause of action.” Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir.1996) (citing Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 8-10 (1983)). Here, Plaintiff asserted claims arising under various federal statutes, to include 15 ...

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