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Brown v. Bank of America, N.A.

United States District Court, E.D. Wisconsin

May 24, 2016

AMY JO BROWN, Plaintiff,
v.
BANK OF AMERICA, N.A., RESIDENTIAL CREDIT SOLUTIONS, INC., AND DOES 1-10 INCLUSIVE, Defendants, and AMY JO BROWN, Plaintiff,
v.
BANK OF AMERICA, N.A., RESIDENTIAL CREDIT SOLUTIONS, INC., AND DOES 1-10 INCLUSIVE, Defendants.

         ORDER GRANTING IN PART AND DENYING IN PART BANK OF AMERICA, N.A.’S MOTION TO DISMISS (DKT. NO. 5), GRANTING BANK OF AMERICA’S MOTION TO CONSOLIDATE (DKT. NO. 17), GRANTING RESIDENTIAL CREDIT SOLUTIONS, INC.’S MOTION TO DISMISS (CASE NO. 15-CV-1526, DKT. NO. 2), AND SCREENING PLAINTIFF’S COMPLAINT

          HON. PAMELA PEPPER, UNITED STATES DISTRICT JUDGE

         Plaintiff Amy Jo Brown, proceeding without a lawyer, filed a civil action alleging that the defendants, Bank of America, N.A. (“Bank of America”), and Residential Credit Solutions, Inc. (“RCS”), wrongfully obtained a judgment of foreclosure against her in a Wisconsin state court action involving a mortgage on real property located in Brookfield, Wisconsin (the “Property”). Brown v. Bank of America, N.A., No. 15-cv-1250 (E.D. Wis.). She then filed a second civil action against the same defendants, which she captioned an “independent action in equity.”[1] Brown v. Bank of America, N.A., 15-cv-1526 (E.D. Wis.).

         In both cases, the plaintiff seeks the same relief-an order vacating a final judgment of foreclosure entered in the Circuit Court of Waukesha County, Wisconsin. That judgment was affirmed by the Wisconsin Court of Appeals, and the Wisconsin Supreme Court denied the plaintiff’s petition for review. The plaintiff now asks this court to vacate the state court’s final judgment. She also requests a declaration that the defendants have no legal claim to the Property, no right to collect payments from her, and no right to foreclose on the Property. The plaintiff also appears to allege that Bank of America violated the Truth in Lending Act, 15 U.S.C. §1601, et seq. (“TILA”), by transferring her mortgage to a new servicer and failing to provide her with timely notice of the transfer.

         Bank of America moved to dismiss the plaintiff’s complaint in Case No. 1250, arguing that all of her claims are barred by the Rooker-Feldman doctrine, res judicata, and collateral estoppel, and the Anti-Injunction Act, and the complaint fails to state a claim on which relief can be granted. Bank of America additionally argues that the plaintiff’s TILA claim is barred by the TILA’s one-year statute of limitations. In Case No. 15-cv-1526, RCS moved to dismiss the plaintiff’s claims based on res judicata, the Rooker-Feldman doctrine, and because her complaint fails to state a claim on which relief can be granted.[2]

         For the reasons discussed in this order, the court will consolidate both cases into this case for all purposes. The court finds that the plaintiff’s claims for wrongful foreclosure, quiet title, and declaratory and injunctive relief directly attack the state court judgment and are barred by the Rooker-Feldman doctrine.[3] Accordingly, the court will grant in part the defendants’ motions to dismiss and dismisses those claims for lack of subject matter jurisdiction. The court finds, however, that the record is insufficient to establish that the plaintiff’s TILA claim is barred by the Rooker-Feldman doctrine, res judicata, or collateral estoppel, and it does not appear to be barred by the TILA’s one-year statute of limitations. The court will allow only that claim to proceed, to the extent it is not barred by the statute of limitations, does not attack the state court’s judgment, and may provide relief independent from that judgment.

         I. BACKGROUND

         In September 2004, the plaintiff executed a promissory note for a loan in the amount of $383, 200. The note was secured by a mortgage on the Property. The plaintiff stopped making payments on the loan in September 2009, and Bank of America filed a foreclosure action against her in September 2011. Bank of America moved for summary judgment on its claims. In support of its motion, Bank of America filed an affidavit from one of its employees who attested that Bank of America held the original note and that the plaintiff was in default. In response, the plaintiff filed counterclaims and third-party claims, including a claim for a declaratory judgment to quiet title, a claim for fraud, and a claim under the Fair Debt Collection Practices Act. Bank of America moved to dismiss those claims. After a hearing, the circuit court entered summary judgment in favor of Bank of America, and granted its motion to dismiss the plaintiff’s counterclaims and third-party claims.

         The plaintiff appealed, arguing that Bank of America lacked standing to foreclose on the Property, was not the real party in interest, and did not establish a prima facie case for summary judgment. The court of appeals rejected all of her arguments and affirmed the circuit court’s order. That court concluded that Bank of America had standing to foreclose on the Property, and was the proper party to do so, because it was the possessor of the original note and was injured when the plaintiff defaulted. The court further concluded that Bank of America had made a prima facie case for summary judgment, that the plaintiff failed to establish a genuine issue of material fact, and that Bank of America was entitled to judgment as a matter of law. In January 2015, the Wisconsin Supreme Court denied the plaintiff’s petition for review.

         Nine months later, in October 2015, the plaintiff filed her complaint in Case No. 15-cv-1250. The plaintiff served Bank of America, which responded by filing a motion to dismiss. In December 2015, after briefing had closed on Bank of America’s motion to dismiss, the plaintiff filed her second case in this court against Bank of America and RCS, Case No. 15-cv-1526. She styled that case as an “independent action in equity, ” invoking Fed.R.Civ.P. 60(d), and asked the court to vacate the Waukesha County Circuit Court’s 2013 judgment against her. RCS responded by moving to dismiss. A few weeks later, the plaintiff filed a “Notice of Filing of Bankruptcy Petition and of the Automatic Stay” in both of her cases in this court. By order dated January 20, 2016, the court advised the plaintiff that §362(a)(1) of the Bankruptcy Code provides that a bankruptcy petition operates as a stay of actions against the debtor, but it does not stay her actions against the defendants. Bank of America then filed a motion to consolidate both of the plaintiff’s cases into this case. Briefing now has closed on all motions pending in both cases, and all such motions are ripe for decision.

         II. DISCUSSION

         A. The Court Will Consolidate Case No. 15-cv-1526 With This Case For All Purposes.

         The court will grant Bank of America’s motion to consolidate Case No. 15-cv-1250 with Case No. 15-cv-1526. Under Fed.R.Civ.P. 42(a), the court may consolidate cases which involve a common question of law or fact and may issue any orders to avoid unnecessary cost or delay. Consolidation “is a matter committed to the sound discretion of the trial judge.” Canedy v. Boardman, 16 F.3d 183, 185 (7th Cir. 1994). Courts “consider such factors as judicial economy, avoiding delay, and avoiding inconsistent or conflicting results, ” along with “the possibility of juror confusion or administrative difficulties.” Habitat Educ. Ctr., Inc. v. Kimbell, 250 F.R.D. 390, 394 (E.D. Wis. 2008). The Seventh Circuit has stated that “considerations of judicial economy strongly favor simultaneous resolution of all claims growing out of one event . . . .” Ikerd v. Lapworth, 435 F.2d 197, 204 (7th Cir. 1970).

         The Seventh Circuit has explained there are different types of consolidation, including one that is appropriate for this case:

Where several actions are combined into one, lose their separate identity, and become a single action in which a single judgment is rendered. An illustration of this is the situation in which several actions are pending between the same parties stating claims that might have been originally set out as separate counts in one complaint[.]

Ivanov-McPhee v. Washington Nat’l Ins. Co., 719 F.2d 927, 929 (7th Cir. 1983) (quoting 9 C. Wright & A. Miller, Fed. Prac. & Proc. §2382, at 254 (1971)). Thus, if the claims stated in two separate cases could have been brought originally in a single case, the court can consolidate both cases into one case. In this case, both of the plaintiff’s complaints arise out of the same underlying foreclosure dispute, involve common questions of law and fact, and are filed against the same defendants. The plaintiff enumerated three causes of action in her first complaint, and proceeded under Rule 60(d) in her second, but there is no reason the plaintiff could not have invoked Rule 60(d) in her first complaint.

         Moreover, it appears to the court that the plaintiff’s second complaint may have an attempted end-run around Bank of America’s motion to dismiss her first complaint. Even though the court did not grant the plaintiff permission to file a sur-reply in opposition to RCS’s motion to dismiss in Case No. 15-cv-1526, the plaintiff filed one anyway. In that brief, she stated that Case No. 15-cv-1526 “avoids res judicata as it is an Independent Action in Equity. This case attacks the judgment that was entered in Waukesha County Court.” No. 15-cv-1526, Dkt. No. 11, at 2. The fact that the plaintiff filed her second action to evade the looming dismissal of her first action further militates in favor of consolidation.

         At bottom, both of the plaintiff’s complaints are pleaded against the same defendants and ask the court to do the same thing-vacate the Waukesha County Circuit Court’s foreclosure judgment. Therefore, the court finds that it is appropriate to consolidate the plaintiff’s cases into the plaintiff’s earlier filed case-No. 15-cv-1250.

         B. Screening Of The Plaintiff’s Complaint And The Defendants’ Motions To Dismiss

         1. ...


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