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2003 Guaranty Applied To 2007 Promissory Note And Other Post-2003 Liabilities

Borrower’s Federal Court Claims, Following State Court Foreclosure, Dismissed

This will supplement my December 19, 2013 post:  Rooker-Feldman Doctrine:  Dismissing A Borrower’s Post-Foreclosure Federal Court CaseLucas v. JPMorgan Chase Bank, 2013 U.S. Dist. LEXIS 33672 (N.D. Ind. 2013) (.pdf) is another case applying the Rooker-Feldman doctrine.  As with the cases addressed in my prior post, the Court in Lucas also dismissed Borrower’s federal court case. 

Timetable.  Here is what happened in Lucas: 

8/9/10  Lender filed state court mortgage foreclosure action

9/9/11  Borrower filed separate lawsuit in state court against Lender

10/11  Lender filed motion to dismiss Borrower’s state court suit

12/06/11  State court entered default judgment against Borrower in original foreclosure action

2/12  State court dismissed Borrower’s state court suit

8/31/12  Borrower filed federal court lawsuit against Lender

Lender’s motion to dismiss.  Borrower’s federal court action basically claimed that Lender wrongfully attempted to enforce the subject promissory note.  Lender filed a motion to dismiss “because to award relief in [Borrower’s] favor the Court would have to review and reverse the two underlying [state court] judgments.” 

Rules/policies.  The Court in Lucas utilized the same legal principles addressed in my prior post.  Essentially, lower federal courts lack jurisdiction to review the decisions of state courts in civil cases.  One of the policies behind the Rooker-Feldman doctrine is to prevent “a state-court loser from brining suit in federal court in order effectively to set aside the state-court judgment.”  The Lucas opinion, like my prior post, delved into the “inextricably intertwined” test that may, in certain instances, apply to a court’s analysis of the doctrine. 

Conclusion.  The Lucas Court found that Borrower’s complaint ran afoul of the doctrine.  Borrower filed the federal case after two state courts ruled against her.  “She now requests this Court to review – and, in effect, undo – these two judgments from Indiana state courts.”  The Court concluded it had no jurisdiction to do so. 

Reasoning.  The Court said that the Rooker-Feldman doctrine divested it of jurisdiction to hear the claim in Borrower’s complaint.  Here were the Court’s reasons:

Because the [state court] in the first action implicitly determined that the [Lender] was able to enforce the promissary note at issue, the Complaint appears to be a direct challenge to the [state court’s] Default Judgment and Decree of Foreclosure.  Further, the [state court] in the second action dismissed the [Borrower’s] claim for wrongful foreclosure, suggesting that the Complaint is also a direct challenge to the state court decision in that action.  The [Borrower] does not actually request this Court to overturn either [state court] decision.  However, the Court finds that her Complaint is inextricably intertwined with the previous state court judgments because it is ‘in essence’ a request that this Court ‘review the state-court decision[s].’  Moreover, the Court finds that the [Borrower] had opportunity to bring the claims in her Complaint as part of the foreclosure action or as part of her second state court filing. 

As previously stated here, a losing borrower in state court generally can only appeal.  Borrowers cannot get second bites at the apple in federal court.