Roggio v. Federal Deposit Insurance Corporation

• Court: District Court, District of Columbia
• Decided: October 25, 2020
• Docket: Civil Action No. 2009-1733
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

VINCENT ROGGIO,

Plaintiff,

v. Civil Action No. 9-1733 (TJK) FEDERAL DEPOSIT INSURANCE CORPORATION,

Defendant.

MEMORANDUM OPINION

Vincent Roggio sues the FDIC, as receiver for the now-defunct Washington Mutual, for

various contract and tort claims arising out of Washington Mutual’s foreclosure on two

properties owned by Roggio and associated litigation in the New Jersey state courts. The FDIC

moved to dismiss, arguing that all of Roggio’s claims are barred by the doctrine of collateral

estoppel as a result of the aforementioned New Jersey state litigation, that the Court lacks

jurisdiction over some counts, and that some counts fail to state a claim. For the reasons

explained below, the Court will grant the FDIC’s motion to dismiss.

Background

This case has a long and complicated procedural history. In 2006, Washington Mutual

(“WaMu”) initiated a pair of actions in New Jersey Superior Court, which were later

consolidated, to foreclose on two of Roggio’s properties. See ECF No. 60 (“Am. Compl.”) ¶ 18.

As part of those proceedings, Roggio and WaMu entered into a settlement in January 2007

through which Roggio agreed to waive his affirmative defenses and counterclaims if WaMu

undertook actions to retract derogatory credit reporting about him that it had provided to credit

rating bureaus. Id. ¶ 19. But Roggio, proceeding pro se, opposed entry of the orders memorializing the settlement, claiming that they did not accurately reflect the parties’ agreement.

ECF No. 62-4 at 3. 1 The New Jersey court entered the orders over Roggio’s objections in April

2007. Id.; see ECF No. 62-3. Roggio, by then proceeding with counsel, moved to vacate

portions of the settlement order in January 2008, claiming that WaMu had breached the

agreement by failing to correct his credit reporting. See ECF No. 62-9 at 8–9. The court denied

the motion in March 2008, and around the same time, the New Jersey Chancery Court entered a

final judgment against Roggio in one of the actions (the “Red Bank action”). See id.; ECF No.

62-5. Later that month, Roggio moved for reconsideration of that judgment; in August 2008, he

filed an amended counterclaim in the other action (the “Rumson action”) alleging that WaMu

breached the settlement agreement; and in December 2008, he moved to declare WaMu in

breach of the settlement, seeking to reinstate his counterclaims and defenses as well as file a new

counterclaim for damages. ECF No. 62-8 at 8, 12; ECF No. 62-6 at 3–4, 25–28. Roggio alleged

that by the time WaMu corrected his credit reporting, his business, which relied on his good

credit, had been destroyed. Am. Compl. ¶¶ 8, 21. The New Jersey Superior Court denied both

motions in June 2010, finding that WaMu had breached the settlement by failing to make the

appropriate corrections to Roggio’s credit until November 2008 but also that Roggio himself had

breached the settlement. ECF No. 62-8 at 21–23. Roggio then filed another motion for

reconsideration, which the court denied in October 2010. ECF No. 62-9. Finally, in October

2010, he moved to dismiss, arguing that WaMu’s successor in the case, JPMorgan Chase, N.A.

1 The Court may consider the FDIC’s exhibits pertaining to the New Jersey litigation because the Amended Complaint refers to them. See EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997) (permitting the court to “consider only the facts alleged in the complaint, any documents either attached to or incorporated in the complaint and matters of which [it] may take judicial notice”). Additionally, the Court “may take judicial notice of public records from other proceedings.” Youkelsone v. FDIC, 910 F. Supp. 2d 213, 221 (D.D.C. 2012).

2 (“Chase”) did not have standing to foreclose on him because it had not properly acquired his

loan. See ECF No. 62-10 at 13–14. The court denied that motion as well. Id. at 14.

Meanwhile, in September 2008, the FDIC was appointed receiver of WaMu. Am.

Compl. ¶ 23. Roggio filed an administrative claim with the FDIC, and after it was disallowed,

he filed this case in September 2009. Id. ¶¶ 24–25; ECF No. 62-7; ECF No. 1 (“Compl.”). The

Complaint asserts several causes of action for WaMu’s alleged failure to abide by the settlement.

Compl. ¶¶ 27–54. For many years, the case was repeatedly stayed at the request of both parties

“in light of the parallel state court action” in New Jersey. ECF No. 5. On March 4, 2014, the

Court entered a Minute Order directing the Clerk to administratively close the case, but noted

that it would be “reinstated upon notice by either party.” Minute Order of Mar. 4, 2014.

Back in New Jersey, Roggio appealed to the Appellate Division of the New Jersey

Superior Court in the Red Bank action, reasserting his argument that Chase lacked standing

because it did not own the loans. See ECF No. 62-10 at 3. The Appellate Division affirmed the

trial court, rejecting Roggio’s argument, in August 2012. See generally id. Nothing of note

appears to have happened until August 2017, when Chase filed an amended complaint in the

Rumson action. See ECF No. 62-2 ¶ 17. The New Jersey court entered final judgment against

Roggio over his objection in the Rumson action in February 2018. ECF No. 62-12; ECF No. 62-

2 ¶¶ 19–20. Roggio then filed a motion for reconsideration, which was denied. ECF No. 62-2

¶ 21; see ECF No. 62-13 at 3.

Roggio moved to return this case to active status in February 2018, ECF No. 27, and

amended his complaint in June 2018, 2 Am. Compl. The FDIC moved to dismiss, arguing that all

2 The parties engaged in substantial motions practice throughout 2018 which does not bear on the disposition of this motion. See Roggio v. FDIC, No. 09-1733 (TJK), ECF No. 71 at 1 (D.D.C. Aug. 17, 2018).

3 the claims in Roggio’s Amended Complaint are collaterally estopped by the final judgments in

the New Jersey foreclosure proceedings, that the Court lacks subject-matter jurisdiction over

Counts II, III, IV, V, and VIII, and that Counts III through VIII otherwise fail to state a claim.

See ECF No. 62 at 1.

Legal Standard

The plaintiff bears the burden of establishing by a preponderance of the evidence that the

court has jurisdiction to entertain his claims. Fed. R. Civ. P. 12(b)(1); Grand Lodge of Fraternal

Order of Police v. Ashcroft, 185 F. Supp. 2d 9, 13 (D.D.C. 2001) (holding that the court has an

“affirmative obligation to ensure that it is acting within the scope of its jurisdictional authority”);

Pitney Bowes, Inc. v. U.S. Postal Serv., 27 F. Supp. 2d 15, 19 (D.D.C. 1998). While the Court

must accept as true all the factual allegations contained in the complaint when reviewing a

motion to dismiss pursuant to Rule 12(b)(1), Leatherman v. Tarrant County Narcotics Intel. &

Coordination Unit, 507 U.S. 163, 164 (1993), because the plaintiff has the burden of proof to

establish jurisdiction, the “plaintiff's factual allegations in the complaint . . . will bear closer

scrutiny in resolving a 12(b)(1) motion than in resolving a 12(b)(6) motion for failure to state a

claim,” Grand Lodge, 185 F. Supp. 2d at 13–14 (cleaned up). A court is not limited to the

allegations in the complaint but may consider material outside of the pleadings in its effort to

determine whether the court has jurisdiction in the case. See EEOC v. St. Francis Xavier

Parochial Sch., 117 F.3d 621, 624–25 n.3 (D.C. Cir. 1997).

Under Rule 12(b)(6), the Court must dismiss a claim if a plaintiff fails to plead “sufficient

factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft

v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570

(2007)). The Court must accept “well-pleaded factual allegations as true and draw all reasonable

inferences from those allegations in the plaintiff's favor.” Arpaio v. Obama, 797 F.3d 11, 19

4 (D.C. Cir. 2015). Even so, “a complaint must have ‘facial plausibility,’ meaning it must ‘plead[ ]

factual content that allows the court to draw the reasonable inference that the defendant is liable

for the misconduct alleged.’” Hettinga v. United States, 677 F.3d 471, 476 (D.C. Cir. 2012)

(quoting Iqbal, 556 U.S. at 678). When considering a Rule 12(b)(6) motion, the Court may

consider “the facts alleged in the complaint, documents attached as exhibits or incorporated by

reference in the complaint, or documents upon which the plaintiff’s complaint necessarily relies

even if the document is produced not by the plaintiff in the complaint but by the defendant in a

motion to dismiss.” Ashbourne v. Hansberry, 245 F. Supp. 3d 99, 103 (D.D.C. 2017), aff’d, 894

F.3d 298 (D.C. Cir. 2018) (citation and internal quotation marks omitted).

While a pro se complaint “must be construed liberally, the complaint must still present a

claim on which the Court can grant relief.” Budik v. Dartmouth-Hitchcock Med. Ctr., 937

F. Supp. 2d 5, 11 (D.D.C. 2013) (citation and internal quotation marks omitted). “A court

considering a pro se plaintiff’s complaint should look to all filings, including filings responsive

to a motion to dismiss, to discern whether the plaintiff has nudged her claims across the line from

conceivable to plausible.” Mehrbach v. Citibank, N.A., 316 F. Supp. 3d 264, 268 (D.D.C. 2018)

(cleaned up); see Brown v. Whole Foods Mkt. Grp., Inc., 789 F.3d 146, 152 (D.C. Cir. 2015).

Analysis

A. Subject-Matter Jurisdiction

The Court must first address the FDIC’s challenge to its subject-matter jurisdiction under

Rule 12(b)(1). The FDIC argues that the Court lacks subject-matter jurisdiction over Counts II–

V, and VIII because Roggio failed to press the claims in those counts in the FDIC’s

administrative process, and thereby failed to exhaust his remedies. See ECF No. 62-1 (“Def.’s

Mem.”) at 10–13.

5 The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA)

“establishes an exclusive administrative claims process for handling claims against banks in

receivership with the FDIC.” Avery v. FDIC, 113 F. Supp. 3d 116, 119 (D.D.C. 2015); see 12

U.S.C. § 1821(d)(13)(D). A claimant must exhaust this administrative process before suing, and

exhaustion is a jurisdictional requirement. Avery, 113 F. Supp. 3d at 119; see Westberg v. FDIC,

741 F.3d 1301, 1303 (D.C. Cir. 2014).

The parties agree that Roggio filed a claim with the FDIC. See Am. Compl. ¶ 24; Def.’s

Mem. at 12; ECF No. 62-6. But in his proof of claim to the FDIC, Roggio referenced only his

counterclaim in New Jersey Superior Court for “breach of [the] settlement agreement and for

compensatory and punitive damages related thereto,” in the amount of $9,000,000. ECF No. 62-

6 at 3. He also attached the counterclaim. Id. at 22–28. By contrast, Counts II–V and VIII of

Roggio’s Amended Complaint allege breach of implied covenant of good faith and fair dealing,

tortious interference with prospective economic advantage, intentional misrepresentation,

negligent misrepresentation, and violation of the New Jersey Consumer Fraud Act. Am. Compl.

¶¶ 30–47, 55–60.

The FDIC correctly argues Roggio did not present these claims to the FDIC in his

administrative proof of claim, and so the Court lacks jurisdiction over them. Def.’s Mem. at 12–

13. Roggio’s proof of claim focuses only on his breach of contract claim and provides no hint as

to the tort and statutory claims he raises in this litigation. See ECF No. 62-6 at 2–4, 20–28.

Courts in this Circuit have consistently held that where “a complaint alleges entirely new legal

theories that are different than those reflected in the administrative proof of claim, the Court is

without subject matter jurisdiction to consider the new causes of action.” Jahn v. FDIC, 828 F.

Supp. 2d 305, 317 (D.D.C. 2011); see also Westberg, 741 F.3d at 1308–09; BHC Interim

6 Funding II, L.P. v. FDIC, 851 F. Supp. 2d 131, 138–39 (D.D.C. 2012) (collecting cases).

Roggio does not meaningfully respond to the FDIC’s argument on this point. 3 The Court will

therefore grant the FDIC’s motion and dismiss Counts II–V, and VIII for lack of subject-matter

jurisdiction.

B. Collateral Estoppel

The FDIC argues that Roggio’s remaining claims—Counts I, VI, and VII—must be

dismissed under Rule 12(b)(6) because they are barred by the doctrine of nonmutual defensive

collateral estoppel. In support, the FDIC contends that Roggio has already litigated these claims

against WaMu, and its successor, Chase, in the Red Bank and Rumson actions, each of which

culminated in a final judgment. All these claims relate to WaMu’s alleged breach of the

settlement agreement. Count I alleges breach of contract, Count VI seeks determination of the

proof of claim Roggio submitted to the FDIC (which, as discussed above, raised a breach of

contract claim), and Count VII seeks a declaratory judgment that WaMu breached the settlement

agreement. 4 Am. Compl. ¶¶ 27–29, 48–54.

Nonmutual defensive collateral estoppel “precludes a plaintiff from contesting an issue it

has previously litigated and lost in another case against a different defendant.” Pharm. Care

Mgmt. Ass’n v. District of Columbia, 522 F.3d 443, 446 (D.C. Cir. 2008). Although the FDIC

grounds its arguments on the federal law of collateral estoppel (also known as issue preclusion),

3 Roggio contends that this Court’s Minute Order of March 4, 2014 precludes the FDIC from raising an exhaustion defense. But that order only prevents the FDIC from arguing that Roggio’s claims are untimely or unexhausted “as a result of [the] stay” in this case. Minute Order of Mar. 4, 2014. 4 The FDIC argues that a declaratory judgment cannot be a stand-alone claim in a complaint, and rather, should be part of the complaint’s prayer for relief. See Def.’s Mem. at 17 (citing Intelsat U.S. Sales Corp. v. Juch-Tech, Inc., 935 F. Supp. 2d 101, 120 (D.D.C. 2013)). Mindful of Roggio’s pro se status, the Court construes him as seeking a declaratory judgment on his contract claim.

7 “a federal court must give to a state-court judgment the same preclusive effect as would be given

that judgment under the law of the State in which the judgment was rendered.” Migra v. Warren

City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984). Thus, the Court must apply New Jersey

rules of res judicata. See Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373, 380

(1985); Presidential Bank, FSB v. 1733 27th St. SE LLC, 404 F. Supp. 3d 1, 11 (D.D.C. 2019).

In New Jersey, the party asserting collateral estoppel (here, the FDIC) must show that: “(1) the

issue to be precluded is identical to the issue decided in the prior proceeding; (2) the issue was

actually litigated in the prior proceeding; (3) the court in the prior proceeding issued a final

judgment on the merits; (4) the determination of the issue was essential to the prior judgment;

and (5) the party against whom the doctrine is asserted was a party to or in privity with a party to

the proceeding.” Olivieri v. Y.M.F. Carpet, Inc., 897 A.2d 1003, 1009 (N.J. 2006) (quotation

omitted). Further, collateral estoppel “will not be applied when it is unfair to do so.” Id.

(quotation omitted).

In determining the first factor—whether the issues are identical—a court must consider:

“(1) whether the acts complained of and the demand for relief are the same . . . (2) whether the

theory of recovery is the same; (3) whether the witnesses and documents necessary at trial are the

same . . . and (4) whether the material facts alleged are the same.” First Union Nat’l Bank v.

Penn Salem Marina, Inc., 921 A.2d 417, 424 (N.J. 2007) (emphasis in original) (quotation

omitted). Although in some cases “the test for the ‘identity of a cause of action for claim

preclusion purposes is not simple,’” it is here. Id. (citation omitted). In this case, Roggio alleges

that WaMu breached the January 25, 2007 settlement agreement. Am. Compl. ¶ 28. In the New

Jersey actions, he alleged precisely the same thing. See ECF No. 62-8; ECF No. 62-9. The

demands for relief are slightly, but not meaningfully, different. Here, Roggio asks for a

8 declaration that WaMu breached the settlement, a declaration that he may recover against the

FDIC for WaMu’s breach, and compensatory and punitive damages totaling $9,000,000. Am.

Compl. ¶¶ 27–29, 49–50, 51–54. He also asks for a declaratory judgment that the FDIC

wrongfully disallowed his claim. Id. ¶ 54. In the New Jersey actions, Roggio sought to hold

WaMu in breach of the settlement agreement to permit him to reinstate his counterclaims and file

another counterclaim for damages. ECF No. 62-8 at 2. He also sought to stay the foreclosure

actions. Id. at 2–3. Although the form of the relief is slightly different, the substance is the

same—ultimately, in both cases Roggio sought damages resulting from WaMu’s alleged breach.

The rest of the factors also support a finding that the issues are identical. The theory of

recovery—that WaMu breached the settlement agreement by failing to correct Roggio’s credit

score in time—is the same. See Am. Compl. ¶¶ 19–22. The material facts are the same, and no

party has identified any evidence about WaMu’s alleged breach that this Court would need to

consider that the New Jersey courts did not. Roggio responds by arguing that the issues are not

identical because the FDIC was not a party in the state cases. ECF No. 72 (“Pl.’s Opp.”) at 4.

But this is irrelevant, as New Jersey recognizes nonmutual defensive collateral estoppel. See

Olivieri, 897 A.2d at 1009 (requiring only that the party against whom estoppel is asserted was a

party to the prior proceeding). For these reasons, the issues sought to be determined in Counts I,

VI, and VII of Roggio’s Amended Complaint are identical to those determined in the New Jersey

actions.

The other requirements for collateral estoppel here are also satisfied. The issue of

whether WaMu breached the settlement agreement, and whether Roggio could seek relief for that

breach, were litigated and determined in New Jersey actions, where the Superior Court held that

both parties breached the agreement, and so Roggio should not be relieved from his obligations

9 under the settlement or recover damages. ECF No. 62-8 at 23–24. The court reaffirmed this

ruling on reconsideration. ECF No. 62-9 at 21–33. The Appellate Division then affirmed the

Superior Court’s ruling in the Red Bank action, although the breach issue was not raised on

appeal. See ECF No. 62-10. In both foreclosure actions, courts issued final judgments on the

merits. ECF No. 62-5; ECF No. 62-12. The court’s determinations of these issues were essential

to those judgments; indeed, it was essentially the only issue that the Superior Court considered in

its written opinion. And finally, Roggio was a party to the New Jersey court actions. Thus, all

the requirements for collateral estoppel are satisfied.

Roggio argues that the New Jersey courts did not have jurisdiction, because FIRREA

limits jurisdiction for claims against a failed institution for which the FDIC has been appointed

as receiver to certain specific federal courts. Pl.’s Opp. at 4; see City of Plainfield v. Pub. Serv.

Elec. & Gas Co., 412 A.2d 759, 765 (N.J. 1980) (requiring the judgment to have been issued by

a court “of competent jurisdiction” for issue preclusion to apply) (citation omitted). And to be

sure, 12 U.S.C. § 1821(d)(6)(a)(ii) provides that after a claimant exhausts the FDIC

administrative process, he may “file suit on such claim (or continue an action commenced before

the appointment of the receiver) in the district or territorial court of the United States for the

district within which the depository institution’s principal place of business is located or the

United States District Court for the District of Columbia (and such court shall have jurisdiction

to hear such claim).” 12 U.S.C. § 1821(d)(6)(a)(ii). But here, Roggio’s counterclaim for breach

of the settlement agreement in the Rumson action was filed in August 2008, before WaMu failed

in September 2008, and it was thus an action “commenced before the appointment of the

receiver” which could continue. ECF No. 62-6 at 25–28; 12 U.S.C. § 1821(d)(6)(a)(ii). And

courts have recognized that this provision permits pre-receivership actions to continue and does

10 not divest the prior court of jurisdiction. See, e.g., Damiano v. FDIC, 104 F.3d 328, 333 (11th

Cir. 1997) (“[C]ourts in which lawsuits were pending when [the receiver is appointed] remain

vested with jurisdiction.”); Holmes Fin. Assocs., Inc. v. Resol. Tr. Corp., 33 F.3d 561, 567 (6th

Cir. 1994) (state court was not divested of jurisdiction); Poku v. FDIC, 752 F. Supp. 2d 23, 29

(D.D.C. 2010) (the District of Maryland retained jurisdiction over a pre-receivership action

because “[u]nder FIRREA, courts have recognized that a plaintiff can continue an action

commenced before the appointment of the receiver, whether or not the case was originally filed

in this Court or in the district within which the depository institution’s principal place of business

is located”) (citation and internal quotation marks omitted). Because Roggio’s counterclaim was

filed before WaMu failed, his action could continue in the New Jersey state courts, which were

not divested of jurisdiction.

Having determined that the requirements of collateral estoppel are satisfied, the Court

now turns to whether application of the doctrine would be fair. Estopping a party could be unfair

if, for example, that party lacked a full and fair opportunity to litigate the issue in the prior

proceeding, he lacked incentive to litigate the issue in the prior proceeding, or new evidence has

become available that could likely lead to a different result. See Barker v. Brinegar, 788 A.2d

834, 839–40 (N.J. Super. Ct. App. Div. 2002); Panniel v. Diaz, 871 A.2d 156, 167 & n.6 (N.J.

Super. Ct. Law Div. 2004) (listing exceptions to collateral estoppel). No such unfairness or

corresponding exception is present here. Roggio had a full opportunity and incentive to

vigorously litigate WaMu’s alleged breach in the New Jersey courts, and he did so. Indeed, the

parties agreed to stay this action for many years specifically so that the state court litigation

could conclude; Roggio cannot now claim surprise at being bound by the outcome of those

proceedings. See, e.g., ECF No. 5 (consent motion to stay this action “in light of the parallel

11 state court action pending in the Superior Court of New Jersey”); ECF No. 25 (consent motion to

stay because “[a] parallel state court action continues to proceed in the State of New Jersey”).

Roggio argues that estoppel would be unfair because in state court he litigated against WaMu,

rather than the FDIC, and additionally that he “agreed to stay this litigation against WaMu—not

Chase bank.” 5 See Pl.’s Opp. at 6–7. But he does not explain why the identity of the defendant

would make any practical difference to him; he only reiterates his jurisdictional arguments the

Court already rejected. Id. at 7–8. And although he asserts that only the FDIC could be liable

for his claims against WaMu, even assuming that is true, he does not contend that he would have

been unable to execute any judgment obtained in the state court action against WaMu. See id.

Roggio also argues that the New Jersey foreclosure proceedings were invalid, and thus

that it would be unfair to apply collateral estoppel, because WaMu, and later Chase, did not own

his loans, which had been sold to another financial institution. Am. Compl. ¶¶ 17–18; Pl.’s Opp.

at 4–6. But even if WaMu did not own the loans, that would not affect whether Roggio had a

full and fair opportunity to litigate the issue of whether WaMu breached the settlement

agreement. And in any event, the Superior Court’s Appellate Division affirmed the trial court’s

determination that Chase could enforce its loan on the Red Bank property (and thus foreclose on

Roggio) because it possessed the loan. 6 ECF No. 62-10 at 16–23.

For these reasons, all the claims over which the Court has jurisdiction are barred by

collateral estoppel, and it is not unfair to apply the doctrine here. Thus, the Court will grant the

5 Although the parties briefed the federal law of collateral estoppel, the bodies of law are similar enough so that the parties’ arguments also apply to New Jersey law. 6 Arguments about the Rumson property were not before the Appellate Division. ECF No. 62-10 at 6 n.1.

12 FDIC’s motion to dismiss these remaining claims under Rule 12(b)(6), and it need not consider

the FDIC’s additional arguments for dismissal.

Conclusion

For all these reasons, Defendant’s Motion to Dismiss, ECF No. 62, will be granted. The

Court will also deny Roggio’s Motion to Certify, ECF No. 86, as moot, and which in any event

did not comply with the procedures laid out in the Court’s Order of August 17, 2018. A separate

Order will issue.

/s/ Timothy J. Kelly TIMOTHY J. KELLY United States District Judge

Date: October 25, 2020