Rooker-Feldman, Res Judicata and Collateral Estoppel

It’s obvious that Rooker Feldman and related doctrines are being misused again because of an underlying presumption that the homeowner is guilty of not paying a bona fide creditor according to the terms of a promissory note.

In fact, in most cases, the homeowner is not guilty of anything — but in most instances the homeowner and the lawyer representing the homeowner both believe that there was a default and that therefore the homeowner is guilty, but maybe he can escape on some technicality. This approach is obvious to any judge who is going to lean heavily toward enforcement of the contract because the court doesn’t know that there isn’t any contract between the homeowner and the enforcing party.

Having been denied access to the information about the identity of his creditor and whether there is any connection between that creditor and the paper trail created by banks and servicers, the homeowner would do any rational business person would do — stop paying the party demanding money and challenge that party’s right to enforcement.

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Rooker Feldman stands for the proposition that if the matter was adjudicated to a conclusion in a state or federal court it cannot be relitigated in another court. It is a Federal Doctrine but it applies to both as a matter of practice.

If an issue was (a) raised in a prior proceeding and (b) was specifically the issue or one of the issues decided and (c) a final order ensued in which the court’s final order expressly decides that issue, it is subject to res judicata, collateral estoppel and hence the Rooker Feldman doctrine. In layman terms you can’t have two bites of the same apple.

Just because the issue might have been raised in a prior proceeding as a motion to dismiss or affirmative defense or in a memorandum of law, does not mean that the issue was tried and a decision rendered on that issue. But there is a gray area.

So for example, if you raise the issue of a void assignment, but the foreclosure is dismissed or blocked for other reasons, then the issue of the void assignment has not been decided, expressly or otherwise.

If the court decision is that the foreclosing party lacked standing, you can’t use any of the above doctrines unless the trial court expressly rules that the assignment is void as a matter of law and fact.

If a trial occurs on that issue, you are on pretty safe grounds to assert Res Judicata, Collateral Estoppel or Rooker Feldman if the Court states that the assignment was void — but not if the court decides that the assignment was untimely or otherwise unenforceable. That is not the same as your contention that the assignment was void — i.e., that it is a false document that never should have been executed, much less recorded.

If the Trial Court decides that the assignment was not void, then the question becomes whether this was the result of a hearing or trial in which the facts of the matter were adjudicated.

Often the trial judges inappropriately rule on the issue without getting the facts and giving the homeowner a right to be heard on why the facts show that the assignment was void — i.e., that the “transaction” giving rise to the instrument (e.g. the assignment of mortgage) never happened — thus negating the foundation (a term of art used in evidence law) for the admission of the assignment into evidence and giving rise to the ability of the homeowner’s lawyer to object and/or move to strike the assignment and the testimony that had been used as foundation for the assignment of mortgage.

Banks have successfully cowed both foreclosure defense lawyers and judges into thinking that if the homeowner’s motion to dismiss was denied after raising such issues that the matter has “already been decided.” This is not true. In a motion to dismiss all matters are taken as true and the motion is directed not at the truth of the matters asserted but rather at whether the complaint (judicial states) or implied complaint (nonjudicial states) fulfills the requirement of pleading.

While additional clarity could come from a higher court of appeal, in the end, it is on a case by case basis that such matters are decided — whether the matter has already been litigated. But it is true that judges are routinely ignoring the requirement that the matter was actually litigated and conflating a procedural decision with a trial that may or may not have ever happened.

Granting a motion for summary judgment, trial courts have been persuaded that their prior decision denying the homeowner’s motion to dismiss, should be used as a matter that has already been decided. Likewise, some Federal Judges have decided that Rooker Feldman applies even though there never was an adjudication on the merits of that very specific claim by the homeowner.

Also granting a motion to dismiss or a motion for summary judgment in federal court on the basis of an order to dismiss or an order granting summary judgment is wrong because the matter was not adjudicated and because the homeowner’s right to due process is thus violated — he never got to say and prove why the assignment should be treated as a complete nullity.

SCOTUS might take up the issue because the abuse of the Rooker Feldman doctrine is rampant. Continuing with the presumed guilt (default) of the homeowner, trial judges are straining for any excuse to stop the homeowner from raising frivolous defenses — even if those defenses are manifestly true and even those defenses would defeat any “successor mortgagee” or “successor beneficiary”.

So it is a close call as to whether SCOTUS will actually accept the writ because the rules are not going to change if they decide the issue. But the application of the rules is what needs to be changed and it can and should be argued that there is nothing wrong with the doctrine but there is a lot wrong with the way it is being used.

8 Responses

  1. A review and retrospect of

    by Retired Anonymous Real Estate Lawyer

    The facts of this case are unique.

    When Fannie’s original suit was dismissed, the suit was dismissed with prejudice. Whether the decision was correct or not then became irrelevant when Fannie did not appeal the decision thus leaving every issue in the case determined against them. The key words were dismissal with prejudice. Dismissals with prejudice are RARE – ESPECIALLY against semi government agencies.

    However, as Fannie, choose to not appeal the dismissal with prejudice all its rights were terminated including the rights under the underlying mortgage – this effectively the entire loan transaction from the chain of title etc.

    In the situation wherein the mortgage for some reason is invalid, the underlying mortgage note is still valid and can still be enforced. It is good to see a Court actually enforcing the law against a quasi government agency. Do not expect this to happen too often.

    The Florida land cases of the year 2005 et al, are cases that should be examined by law enforcement. (In fact many were, but it was not politically correct to address them honestly and candidly – it exposed not only rampant fraud by lending institutions but by government regulators)

    To understand the law, one must read 15 USCA 1701 et seq. and realize that Florida has a long history of INTERSTATE LAND FRAUD. Indeed, it is legend *****.

    Starting with the Nixon Administration the government became enamored of mass home ownership. During the Clinton Administration an effort was made by government regulators to obviate any financial criteria for obtaining a loan. Banks were encouraged to make loans to totally unqualified applicants and of course foreclosures were anticipated. Quasi government agencies recognizing that there was going to be a piper to be paid, cut back on sale of bundled mortgages as the investment community was more astute than the general public and actually read the prospective that was submitted with every investment.

    The government regulators put more and more pressure on the Banks to make improper loans reasonably calculated to fail, and offered cash incentives. In addition clout heavy developers found that with the use of appraisals that were as accurate as three dollar bills they could not only get government funds, but, they could sell condominiums a 300=400% of value. Banks used various devices to address the worthless loans, but the most common was to bundle the mortgages and sell the bundle to the public. The Clinton SEC actually wrote me a letter telling me that they had no jurisdiction over these securities.

    The hype in the condominium sales, especially in Florida, was incredible and people who should have known better were sucked into the fray with promises of unlimited profits. It is an embarrassment to indicate or even suggest the names of some of the victims. Almost zero percent employed attorneys in regard to their condominium investments.

    Naturally the market collapsed – in Florida and California long before the rest of the US. The collapse of the market was not subtle, however, I received a flood of cases. As every purchase was less than a year old, we sent out mass rescissions as provided for in the act. The Banks became hysterical as did the developer. The FBI, the IRS, and FDIC joined in the fray; however, the Political elite became hysterical. Florida judges were ordered to ignore 15 USCA 1701 and its provisions and foreclosures commenced. The legal community was very unhappy but the honesty of the FBI, IRS, and FDIC agents made political correctness very difficult and 99% of my clients escaped the high handed collection methods employed by the criminals who populate the lending community, but, stories abound.

    The politically correct political elite escaped and more frauds have occurred and are still occurring. It is nice to know that some judges (such as the judge who entered the dismissal with prejudice) have the integrity to remember the doctrine of UNCLEAN HANDS! (I spent years fighting these bastards)

    ONE-AND-DONE IN MAINE if you didn’t get there already

  3. If a defective assignment of mortgage is previously ruled as voidable then, perhaps, homeowners could challenge it at a different angle, say for example, precluding homeowner as party of PSA. Any suggestions or comments on this about what position to take to challenge?

  4. I actually won a state district court judgment of $2.8 million that Chase simply ignored because it originated as a WAMU issue. They later filed in Federal District Court and the judge simply “threw out” the judgment even though Rooker-Feldman should have prevented this from happening. The judge simply ignored the law.

    Chase also refused to provide payoff information to the title company when I had the house sold, and argued that they did not have to deal in a fair and equitable manner. The judge rubber stamped their arguments.

    There was also no chain of title, major violations of the FCRA, and several other major points that were deemed by the judge as “non material” when awarding summary judgment to Chase.

    All of this is a matter of public record.

  5. Hello Neil and thank you for your work. Could you perhaps apply your reasoning to a motion to dismiss due to lack of subject matter jurisdiction I raised because the transaction was rescinded (mailed, received and recorded). The Judge merely stated that the rescission was untimely and a residential mortgage transaction and therefore irrelevant and then of course denied my motion. Nothing was litigated nothing was vacated. It was just the Judge saying it was untimely and not covered by TILA. Then the Judge declared the recorded rescission letter a frivolous filing and declared it null and void. Interestingly enough it is still recorded but declared null and void. What’s up with that???

  6. This is how we can counter attack sounds like.

  7. SCOTUS desperately needs to POLICE its runaway, out of control, Federal Court Judges that make up their own laws, espouse their own personal prejudices and Judge Anna Brown, 12th Dis Fed Ct, Portland MOST CERTAINLY DID..I bet she would try to jail me for the comtempt I have for her fallacious and biased treatment of a simple man, pro se, needing proer judical and compassionate guidance so as not to let herslf be conned by the attorneys wh most certainly conned her into giving my home to Wilbur Ros/AHMSI/OCWEN/HSBC..which she did, unlawfully because AHMSI had admitted, UNDER SWORN OATH that they did not possess any evidence of proof of standing, i.e. “NO NOTE, NO MORTGAGE, NO STANDING” thats the law, FEDERAL LAW TILLA 1959 which she and her boss Cheif Justice swore to uphold even if she disagreed with the laws. Her boss, Cheif Justice blithly brushed my compalints re her Judgement against me in 2010..and refused to even consider recission of her orders to award my home with no proof of standing. no where in what ever crap her clerls sent me does it say Ross/ASHMSI/OCWEN/HSBC ever produced the ORIGINAL NOTE or ORIGINAL MORTGAGE..this goes all the way back to when Wells Fargo offed a PTIME loan (to my son) in 2006 to the subprime and very corrupt OPTION ONE MORTGAGE SERVICING criminals. The 12th Dist Fed Ct needs to have SCOTUS reprimand the Cheif Justice/Portland and his junior judge, Anna Brown..but SCOTUS won’t give a ratz ass about a paupers plea for justice. ..At least not in my case. Where are the “good honest attorys who practice law because of a calling for justice..rather than how fast they can climb the economic scale to wealth paid them by the likes of scum such as Wilbur Ross and his scum partner CEO (ex) of Ocwen, and WTF does HSBC have to do with being involved in kivking my aged arse? The hereby challenge SCOTUS to review the Judge ANNA BROWNs judgement orders and I defy them to prove that Ross, et ever produced a shred of evidence proving he/they had a nickles worth of legal standing. brown should have done exactly what the lower court and most Honorable judge Horner (Polk County,OR 12th Dist Circut Ct) did when teresa Shill wimpered out testifying under oath that Ross/AHMSI had no original note and no mortgage. But she and her pal, atty Mr Cody sure drew a fat retainer check from the scumbag Ross, et al..a bet they cracked a 1939 bottle of Dom perignon open and ate russian cavbier in celebrationof kicking Bruce R nelsons pro se, am I ever bittter. good thing ‘free speech” is not against the law..or is it?

    bruce R nelson
    Banner Elk, NC

  8. I am likely on my way to scouts on exactly these issues. Do you know if an attorney who will take it?

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