Wilson v. HSBC Bank, USA

• Court: Court of Appeals for the Second Circuit
• Decided: October 29, 2020
• Docket: 19-920-cv
• Status: Unpublished

Opinion

19-920-cv Wilson v. HSBC Bank, USA

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION "SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 29th day of October, two thousand twenty.

PRESENT: BARRINGTON D. PARKER, DENNY CHIN, Circuit Judges, TIMOTHY STANCEU, ∗ Judge. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

SHERWIN A. WILSON, Plaintiff-Appellant,

-v- 19-920-cv

HSBC BANK, USA, Defendant-Appellee,

MORTGAGEIT, INC., a corporation, ALL PERSONS AND ENTITIES WITH INTEREST IN REAL PROPERTY LOCATED AT 4 WILLIAM STREET,

∗ Chief Judge Timothy Stanceu, of the United States Court of International Trade, sitting by designation. OSSINING, NEW YORK, DOES 1-100, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., as a nominee of MORTGAGEIT, INC., PRUDENTIAL RAND REALTY, INC., a business, Defendants.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

FOR PLAINTIFF-APPELLANT: SHERWIN A. WILSON, pro se, Ossining, New York.

FOR DEFENDANT-APPELLEE: PATRICK G. BRODERICK, Greenberg Traurig, LLP, New York, New York.

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

New York (Román, J.).

UPON DUE CONSIDERATION, IT IS ORDERED, ADJUDGED, AND

DECREED that the judgment of the district court is AFFIRMED.

Plaintiff-appellant Sherwin Wilson, proceeding pro se, sued defendant-

appellee HSBC Bank, USA ("HSBC"), and defendants MortgageIT, Inc. ("MortgageIT"),

Mortgage Electronic Registration Systems, Inc. ("MERS"), Prudential Rand Realty, Inc.

("Prudential"), and other unidentified individuals and entities in connection with a

mortgage loan on property in Ossining, New York, and its subsequent foreclosure,

raising fourteen claims under state and federal law. The district court, by opinion and

order entered on March 1, 2019, granted defendants' motion to dismiss under Federal

Rule of Civil Procedure 12(b)(1) and (6), holding that certain claims were barred by the

2 Rooker-Feldman doctrine, certain claims were barred by res judicata, and two claims

failed to state a plausible claim. The court entered judgment against Wilson on March

4, 2019. This appeal followed. We assume the parties' familiarity with the underlying

facts, the procedural history of the case, and the issues on appeal.

On appeal from a judgment dismissing an action for lack of subject-matter

jurisdiction under Federal Rule of Civil Procedure 12(b)(1), "we review factual findings

for clear error and legal conclusions de novo." Makarova v. United States, 201 F.3d 110,

113 (2d Cir. 2000) (internal quotation marks omitted). In resolving a Rule 12(b)(1)

motion, a district court "may refer to evidence outside the pleadings." Id. We review

the grant of a motion to dismiss for failure to state a claim under Federal Rule of Civil

Procedure 12(b)(6) "de novo, accepting as true all factual claims in the complaint and

drawing all reasonable inferences in the plaintiff's favor." Fink v. Time Warner Cable, 714

F.3d 739, 740–41 (2d Cir. 2013). In addition to the complaint, courts may consider

documents that are "integral" to the complaint. Chambers v. Time Warner, Inc., 282 F.3d

147, 153 (2d Cir. 2002) (a document is integral to the complaint "where the complaint

relies heavily upon its terms and effect"). A district court's application of the Rooker-

Feldman doctrine or res judicata is a legal question reviewed de novo. See Hoblock v.

Albany Cty. Bd. of Elections, 422 F.3d 77, 83 (2d Cir. 2005) (Rooker-Feldman); Brown Media

Corp. v. K&L Gates, LLP, 854 F.3d 150, 157 (2d Cir. 2017) (res judicata).

3 As a preliminary matter, Wilson's appeal challenges only the dismissal of

claims based on the Rooker-Feldman doctrine and res judicata. Wilson raises no

challenge to the district court's dismissal of his Fair Credit Reporting Act or § 1983

claims or its denial of his motion for leave to amend his complaint to add a defendant.

He has accordingly waived these issues, and we decline to consider them. See LoSacco v.

City of Middletown, 71 F.3d 88, 93 (2d Cir. 1995) ("[W]e need not manufacture claims of

error for an appellant proceeding pro se, especially when he has raised an issue below

and elected not to pursue it on appeal."). We address Wilson's arguments concerning

the Rooker-Feldman doctrine and res judicata in turn.

I. Rooker-Feldman Doctrine

Under the Rooker-Feldman doctrine, lower federal courts lack 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). The doctrine applies where the federal-court

plaintiff: (1) lost in state court, (2) complains of injuries caused by the state-court

judgment, (3) invites the district court to review and reject the state-court judgment, and

(4) commenced the district court proceedings after the state-court judgment was

rendered. See Vossbrinck v. Accredited Home Lenders, Inc., 773 F.3d 423, 426 (2d Cir. 2014).

4 The district court properly found that it lacked jurisdiction over six of Wilson's claims

pursuant to this doctrine.

The foreclosure judgment satisfies the first and fourth elements of the

Rooker-Feldman doctrine: the state court ruled against Wilson, and the judgment was

entered in March 2016 -- more than 30 days before the October 2016 commencement of

this action. See N.Y. C.P.L.R. § 5513(a) (establishing thirty-day deadline for appeal).

Wilson's second, third, sixth, seventh, ninth, and twelfth causes of action each

complained of injuries resulting from the foreclosure judgment and invited the federal

court to review and reject that judgment, satisfying the two remaining Rooker-Feldman

requirements.

The premise of each of these claims was that Wilson suffered an injury

when the state court erroneously determined the amount due on the loan, the

enforceability of the loan terms, or ownership of the note and property in entering the

foreclosure judgment, and the relief requested involved undoing that judgment. Cf.

Vossbrinck, 773 F.3d at 427 (finding it "evident from the relief [plaintiff] request[ed]" --

title and tender of property and a declaration that a state judgment was void -- that the

injury complained of was a state foreclosure judgment). To resolve these claims in

Wilson's favor, the district court would have to determine that the state court entered its

judgment in error. Accordingly, the court properly applied the Rooker-Feldman doctrine

to these claims.

5 II. Res Judicata

Under the Full Faith and Credit Act, 28 U.S.C. § 1738, a federal court must

apply New York res judicata law to New York state court judgments. See Hoblock, 422

F.3d at 93. In New York, "[r]es judicata gives binding effect to the judgment of a court

of competent jurisdiction and prevents the parties to an action, and those in privity with

them, from subsequently relitigating any questions that were necessarily decided

therein." Watts v. Swiss Bank Corp., 27 N.Y.2d 270, 277 (1970) (internal quotation marks

omitted). Under New York's transactional approach to res judicata, "once a claim is

brought to a final conclusion, all other claims arising out of the same transaction or

series of transactions are barred, even if based upon different theories or if seeking a

different remedy." Giannone v. York Tape & Label, Inc., 548 F.3d 191, 194 (2d Cir. 2008)

(internal quotation marks omitted); see also Maharaj v. BankAmerica Corp., 128 F.3d 94, 97

(2d Cir. 1997) (explaining that a second cause of action "involves the same transaction or

connected series of transactions as the earlier suit" if it "requires the same evidence to

support it and is based on facts that were also present in the first." (internal quotation

marks omitted)). The district court properly found that Wilson's first, fourth, fifth,

eighth, tenth, and eleventh causes of actions -- the only other claims at issue on appeal --

were barred by res judicata, as the foreclosure judgment was a final judgment and an

adjudication on the merits.

6 These remaining causes of action all arise out of the same facts as those

underlying the foreclosure judgment. The first alleged that the defendants negligently

maintained inaccurate records of his mortgage loan; the fourth alleged that the

defendants or others committed a fraud by misrepresenting the loan terms and the

consequences of withholding payments; the fifth and tenth alleged a breach of contract

and breach of an implied covenant of good faith and fair dealing by reneging on a

promise to modify or novate the loan and not to foreclose on it; the eighth alleged that a

company demanded payments on the loan for amounts not owed; and the eleventh

alleged a civil conspiracy to collect money not owed in connection with the loan.

Wilson's argument that his claims in this action rely on facts postdating

the 2006 loan creation is unavailing; the issue is whether he could have raised his claims

during the subsequent foreclosure proceedings, in which judgment was not entered

until 2016. To the extent Wilson argues that defendants engaged in misconduct after

the 2016 foreclosure judgment was entered, these allegations did not appear in his

complaint and played no part in the causes of action that the district court dismissed as

barred by res judicata. Wilson's assertion that he could not have raised claims for

damages as a defendant in a foreclosure action is incorrect: he had a right to assert

counterclaims in that action. See N.Y. C.P.L.R. § 402.

Finally, Wilson, HSBC, MortgageIT, and MERS were all parties to both the

state foreclosure action and the present federal action, and the requirements of res

7 judicata are satisfied with respect to those parties. Without specifically identifying

Prudential, Wilson argues on appeal that res judicata is inapplicable because the parties

are not identical in the present action. While four of the causes of action dismissed on

res judicata grounds were nominally asserted against "all defendants" or "all defendants

. . . except the credit reporting agency defendants," there are no allegations connecting

these claims to Prudential. We therefore affirm the dismissal of these claims against

Prudential as frivolous. See Fitzgerald v. First E. Seventh St. Tenants Corp., 221 F.3d 362,

363-64 (2d Cir. 2000) (per curiam) (recognizing district court's inherent authority to

dismiss a complaint sua sponte as frivolous); see also Cox v. Onondaga Cty. Sheriff's Dep't,

760 F.3d 139, 145 (2d Cir. 2014) (the Court may affirm on any grounds with support in

the record).

Accordingly, the court properly applied res judicata to these claims.

* * *

We have considered Wilson's remaining arguments and conclude they are

without merit. For the foregoing reasons, we AFFIRM the judgment of the district

court.

FOR THE COURT: Catherine O'Hagan Wolfe, Clerk