Jerome McDonald v. Seterus, Inc.

• Court: Court of Appeals for the Eleventh Circuit
• Decided: October 2, 2019
• Docket: 19-10182
• Status: Unpublished

Opinion

Case: 19-10182 Date Filed: 10/02/2019 Page: 1 of 4

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 19-10182 Non-Argument Calendar ________________________

D.C. Docket No. 0:18-cv-61269-WPD

JEROME MCDONALD, WINSOME MCDONALD,

Plaintiffs - Appellants,

versus

SETERUS, INC., FEDERAL NATIONAL MORTGAGE ASSOCIATION,

Defendants - Appellees.

________________________

Appeal from the United States District Court for the Southern District of Florida ________________________

(October 2, 2019)

Before MARCUS, ROSENBAUM, and NEWSOM, Circuit Judges.

PER CURIAM: Case: 19-10182 Date Filed: 10/02/2019 Page: 2 of 4

Jerome and Winsome McDonald appeal the district court’s dismissal with

prejudice of their claim against Seterus, Inc. for violations of the Real Estate

Settlement Procedures Act, 12 U.S.C. §§ 2601–2617 (2012). Although the

McDonalds also sued the Federal National Mortgage Association (Fannie Mae) for

breach of contract, on appeal they concede that claim is barred. We hold that

because the RESPA claim against Seterus is inextricably intertwined with a prior

state-court foreclosure judgment, the district court did not err in dismissing the

McDonalds’ claims for lack of subject-matter jurisdiction pursuant to the Rooker-

Feldman doctrine. 1

* * *

The parties are familiar with the litigation history of this case; we summarize

the facts and proceedings only insofar as they are necessary to explain the context

of our decision.

Before it was foreclosed, the McDonalds’ mortgage was held by Fannie Mae

and serviced by Seterus. The McDonalds contested the foreclosure action filed in

Broward County, Florida, primarily arguing that the parties had executed a loan-

modification agreement prior to foreclosure. The state court rejected the

McDonalds’ argument and entered judgment for Fannie Mae, and the property was

1 The Rooker-Feldman doctrine stems from two Supreme Court cases: Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923) and D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983). See Exxon Mobil Corp. v. Saudi Basic Industries Corp., 544 U.S. 280, 283 (2005). 2 Case: 19-10182 Date Filed: 10/02/2019 Page: 3 of 4

sold. Following the ensuing denials of the McDonalds’ motions for

reconsideration, the state action became final for Rooker-Feldman purposes by

March of 2018, months before the McDonalds filed the federal action that

underlies this appeal. See Nicholson v. Shafe, 558 F.3d 1266, 1275 (11th Cir.

2009) (explaining when state-court actions become final under Rooker-Feldman).

Even in the wake of the state-court judgment, the McDonalds continued to

contest the foreclosure and sale. They sent three “Notices of Error” to Seterus,

disputing both the amount owed and the fact of foreclosure. When Seterus denied

the alleged errors, the McDonalds brought this action asserting that Seterus had

violated RESPA’s implementing regulations. See 12 C.F.R. § 1024.35 (2019).

Under RESPA, a mortgage servicer must investigate and respond to properly

submitted Notices of Error, and either correct them or determine that no error

exists. Id. at § 1024.35(e). Servicers are liable for any damages caused by a failure

to properly respond to a Notice of Error. See 12 U.S.C. § 2605(f). In the instant

case, among other damages the McDonalds seek the costs of defending the

allegedly wrongful state foreclosure action.

We review a district court’s application of the Rooker-Feldman doctrine de

novo. Lozman v. City of Riviera Beach, 713 F.3d 1066, 1069 (11th Cir. 2013)

(citation omitted). Under the doctrine, a federal district court lacks jurisdiction to

review the final judgment of a state court. Id. at 1072 (citation omitted). The

3 Case: 19-10182 Date Filed: 10/02/2019 Page: 4 of 4

federal court is barred from adjudicating “a claim [that] was either (1) one actually

adjudicated by a state court or (2) one ‘inextricably intertwined’ with a state court

judgment.” Target Media Partners v. Specialty Mktg. Corp., 881 F.3d 1279, 1286

(11th Cir. 2018) (citation omitted). This includes “cases in which a plaintiff seeks

damages . . . based on the issues related to the state case” rather than “relief that

would directly prevent the enforcement of a state court order.” Goodman ex rel.

Goodman v. Sipos, 259 F.3d 1327, 1333 (11th Cir. 2001).

Courts in our circuit have applied the Rooker-Feldman doctrine to dismiss

actions for lack of jurisdiction in similar circumstances—i.e., where a plaintiff

sought, in effect, to challenge state-court foreclosure judgments. See, e.g.,

Zaychick v. Bank of America, N.A., 146 F. Supp. 3d 1273, 1276–77 (S.D. Fla.

2015) (cataloguing cases). In the instant case, the McDonalds challenge the state

foreclosure action, in particular by seeking to recoup the costs of defending it. A

federal court could not find for the McDonalds without determining that the state

foreclosure—which was memorialized in a state-court judgment—was wrongful.

The Rooker-Feldman doctrine therefore applies, and the McDonalds’ complaint

was properly dismissed.

We affirm the district court’s dismissal of the McDonalds’ complaint for

lack of subject-matter jurisdiction under the Rooker-Feldman doctrine.

AFFIRMED.