Indiana Deficiency Judgments: Separate Action Not Applicable
Foreclosing on Contaminated Real Estate (Brownfields), Part I: Are Banks Protected?

Federal District Court Flushes Another Borrower’s Post-Foreclosure Case

My research turned up another Indiana federal court opinion regarding the Rooker-Feldman doctrine, which I have discussed on three prior occasions (most recently, Another Rooker-Feldman Knock-Out:  Federal Court Ends Post-Foreclosure Lawsuit).  Roberts v. Cendant, 2013 U.S. Dist. LEXIS 80210 (S.D. Ind. 2013) (.pdf) is a fourth recent opinion in which the Court granted a defendant mortgagee’s motion to dismiss a pro se plaintiff’s federal court action. 

The law.  With regard to the applicability of Rooker-Feldman, the Court stated “the fundamental question is whether the injury alleged by the federal plaintiff resulted from the state court judgment itself or is distinct from that judgment.”  The doctrine prevents federal courts from exercising subject-matter jurisdiction where federal claims were “tantamount to a request to vacate the state court’s judgment of foreclosure.”  In Roberts, the Court concluded that the success of the plaintiff’s statutory and constitutional claims required “evaluation of the state court’s judgment” in the underlying foreclosure action.  The plaintiff borrower’s core argument was that the lender never had standing, but “the underlying action necessarily concluded that the [foreclosing lender] had standing to foreclose.”

Foreclosure firm.  One thing that distinguished Roberts from the cases in my prior posts was that the borrower named in his federal court suit the law firm that handled the state court foreclosure case.  Judge Magnus-Stinson held that “the Rooker-Feldman arguments are equally effective at barring the claims against . . . [the foreclosure firm/lawyers], and the Court dismisses the claims against them as well.” 

Dismissed.  The Court ultimately held:

Accordingly, because the success of [borrower’s] statutory and constitutional claims require evaluation of the state court judgment in the foreclosure action, and those claims can only succeed if the Court were to conclude that the state court acted erroneously in finding that [lender] had standing to foreclose and granting judgment in favor of [lender], the Rooker-Feldman doctrine bars the Court from exercising subject-matter jurisdiction in this matter.

The Rooker-Feldman doctrine is a powerful and well-recognized defense – at least in Indiana – for lenders to obtain a quick and inexpensive exit to what, in the final analysis, really are frivolous claims brought by disgruntled pro se (unrepresented) borrowers.