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Bell v. Countrywide Home Loans, Inc.

United States District Court, W.D. Kentucky, Paducah Division

June 12, 2014

DENNIS BELL, Plaintiff,
COUNTRYWIDE HOME LOANS, INC., et al., Defendants.


JOSEPH H. McKINLEY, Jr., District Judge.

This matter is before the Court on the Motion to Dismiss [DN 4] of Countrywide Home Loans, Inc., Bank of America Corporation, and BAC Home Loans Servicing, LP (collectively, the "Defendants"). Plaintiff Bell has responded [DN 5]. Thus, this matter is ripe for decision. For the following reasons, the Defendants' motion to dismiss [DN 4] is GRANTED.


In this action, Plaintiff Bell challenges the Defendants' standing to foreclose on his three rental properties. Plaintiff generally alleges that fraud was perpetrated by the Defendants in the parties' prior state-court foreclosure proceeding, preventing him from obtaining "a fair and just result." (Compl. [DN 1] ¶ 6.) In specific, Plaintiff alleges fraud as to the ownership of the subject mortgages. According to Plaintiff, the Defendants "asserted that they were the owners of the mortgages" when, in fact, the mortgages had not been assigned to them. (Id. ¶ 9.) Plaintiff also alleges that the Defendants later attempted to cure the problem of not owning the mortgages by getting fraudulent assignments via the Mortgage Electronic Registration System. (Id. ¶ 14.)

The Defendants argue that the Court should dismiss Plaintiff Bell's complaint because: (1) he has not effected proper service under Fed.R.Civ.P. 12(b)(5); (2) pursuant to the Rooker-Feldman doctrine, the Court lacks subject-matter jurisdiction over Plaintiff's attempt to challenge the state-court judgment; (3) Plaintiff's claims are barred by the doctrine of res judicata; and (4) in any event, Plaintiff has failed to state a claim upon which relief can be granted. (See Mem. in Supp. of Defs.' Mot. to Dismiss [DN 4-1] 10.)


In early 2006, Countrywide declared three mortgages in default and foreclosed against Plaintiff Bell in the McCracken Circuit Court. The actions were consolidated into a single action in October 2006. (See Mem. Op. & Order [DN 4-2] 2.) Bell counterclaimed against Countrywide alleging several claims, including a fraud claim as to Countrywide's ownership of the mortgages. (State-Ct. Ans. & Countercl. [DN 4-3].) Bell also sought declaratory relief and punitive damages. (Id.) Subsequently, Bell obtained a default judgment on his counterclaims. This judgment was later set aside by the McCracken Circuit Court. (State-Ct. Order Vacating Default J. [DN 4-7].)

In the midst of this state-court litigation, Bell filed a lengthy complaint in this Court. Among other claims, Bell alleged a fraud claim premised on the accusation that Countrywide did not hold an actual interest in the mortgages. (Bell v. Countrywide Home Loans, Inc., No. 5:08-cv-00167-JHM [DN 1] 17-18.) In a February 4, 2009 stay order, this Court noted that the claims and issues asserted by Bell in the federal action were "virtually identical" to those already at issue in the state-court foreclosure action. (See id. [DN 48] at 4.) Accordingly, this Court stayed the federal action pending resolution of the parallel, ongoing state-court proceedings. (Id. at 9.)

In an order entered on September 1, 2009, the McCracken Circuit Court dismissed Bell's counterclaims and found that Countrywide was entitled to summary judgment. (Order [DN 4-12].) In that order, the McCracken Circuit Court expressly stated that Countrywide "certainly has standing to bring the action" and denied Bell's "Motion to Dismiss Challenging Standing." (Id. at 3.) On November 13, 2009, the McCracken Circuit Court entered judgment in favor of Countrywide and directed the sale of the mortgaged property.[1] (J. & Order of Sale [DN 4-14].)

Bell appealed the McCracken Circuit Court judgment to the Kentucky Court of Appeals. The Kentucky Court of Appeals affirmed the judgment, stating that "Countrywide established its standing" to bring the action and that, in any event, Bell waived its objection to Countrywide's standing by "his prior admissions and through his misconduct in this action." (Ky. Ct. of Appeals Order [DN 4-20] 3.) On March 13, 2013, the Kentucky Supreme Court denied Bell's motion for discretionary review. (Ky. Sup.Ct. Order [DN 4-21].)

After the final resolution of the state-court action, Countrywide renewed its motion to dismiss in this Court. Countrywide mainly argued that Bell's claims were barred by the doctrine of res judicata because they were fully and finally resolved by the Kentucky courts. (See Bell v. Countrywide Home Loans, Inc., No. 5:08-cv-00167-JHM [DN 52].) On May 16, 2013, the Court granted this motion to dismiss. (Id. [DN 54].) Bell did not appeal that order. On September 24, 2013, however, Bell filed the instant action. (See Compl. [DN 1].)


Plaintiff Bell's claims in this case are premised on the allegation that the Defendants perpetrated fraud as to their ownership of the mortgages and, therefore, did not have standing to bring the state-court foreclosure action. (See Compl. [DN 1].) As should be apparent from the background above, this issue was already fully litigated and resolved in state-court proceedings, in both the McCracken Circuit Court and the Kentucky Court of Appeals. Accordingly, the Court does not have jurisdiction over Plaintiff Bell's complaint under the Rooker-Feldman doctrine.

The Rooker-Feldman doctrine deprives federal courts of jurisdiction over "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); see also Dist. of Columbia Ct. of Appeals v. Feldman , 460 U.S. 462, 482 (1983); Rooker v. Fidelity Trust Co. , 263 U.S. 413, 415-16 (1923). Therefore, the Rooker-Feldman doctrine requires the dismissal of Plaintiff Bell's complaint. In essence, Bell is asking this Court to sit as a quasi-appellate court and enter an order which will circumvent the state court's final judgment and previous ruling on Countrywide's standing. This is simply impermissible. See, e.g., Givens v. Homecomings Fin. , 278 Fed.App'x 607, 608-09 (6th Cir. 2008) (finding that a district court's dismissal under the Rooker-Feldman doctrine was proper because the plaintiff was "effectively attempting to appeal from the state order granting possession to JP Morgan Chase"); McCroy v. N.Y. Bank & Trust Co., 2008 WL ...

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