Gabriel v. Forsyth Cnty. Clerk of Court Ms. Susan Frye Office of the 21ST Judicial Dist. Court

CHARLES GABRIEL, Plaintiff, v. FORSYTH COUNTY CLERK OF COURT MS. SUSAN FRYE OFFICEOF THE 21ST JUDICIAL DISTRICT COURT; and her deputy assistantHOLLEY ROBINSON; HOLLEY ROBINSON, INDIVIDUALLY;STATEBRIDGE COMPANY, LLC; BROUGHAM REO OWNER, LP;JOHN A. MANDULAK, HUTCHENS LAW FIRM; JOHN A. MANDULAK,INDIVIDUALLY; JOHN A. MANDULAK, TRUSTEE;and SUBSTITUTE TRUSTEE SERVICES, INC., Defendants.

1:18-cv-354

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

January 8, 2019

MEMORANDUM OPINION AND ORDER

THOMAS D. SCHROEDER, Chief District Judge.

This action arises out of a home foreclosure proceeding in the North Carolina state court system. Before the court are motions to dismiss from all Defendants: Statebridge Company, LLC and Brougham REO Owner, LP (together, the "Lender Defendants") (Doc. 4); John A. Mandulak, the Hutchens Law Firm, and Substitute Trustee Services, Inc. (together, the "Trustee Defendants") (Doc. 6); and Susan Frye and Holley Robinson (together, the "State Defendants") (Doc. 27). In addition, Plaintiff Charles Gabriel has moved to amend the complaint (Doc. 18) and to extend time to serve the State Defendants (Doc. 31). For the reasons set forth below, the Lender and Trustee Defendants' motions to dismiss will be granted. Gabriel's motion for extension of time to serve the State Defendants will also be granted, and the State Defendants' motion to dismiss will be denied without prejudice. Finally, Gabriel's motion to amend will be denied.

I. BACKGROUND

The allegations of the complaint, along with the contents of documents of which the court takes judicial notice,¹ show the following:

On July 21, 2016, Substitute Trustee Services, Inc. filed a "Notice of Hearing Prior to Foreclosure of Deed of Trust" in the Forsyth County Superior Court, scheduled for August 31, 2016. (Doc. 1 at 4; Doc. 5-1.) The notice was served on Gabriel as well as on Michelle Barber, the sole maker of the promissory note in default. (Doc. 1 at 5; Doc. 5-2.) The related deed of trust, meanwhile, had been executed by both Barber and Gabriel's father. (Doc. 5-3.) Gabriel alleges that both Barber and his father "transferred [their] entire interest" in the property to him at some time in or after 2008. (Doc. 1 at 4.) Nevertheless, when Gabriel appeared at the Forsyth County courthouse on August 31, 2016, he was denied entry into the hearing² by Holley Robinson, deputy to Clerk of Court Susan Frye, on the ground that Gabriel's name did not appear on the promissory note or deed of trust. (Id. at 5-6.)

Present at the hearing was attorney John A. Mandulak, of the Hutchens Law Firm, representing Substitute Trustee Services, Inc., which was the substitute trustee. (Doc. 1 at 5-7; Doc. 5-1.) Statebridge Company, LLC appears to have been the loan servicer. (Doc. 1 at 4-5.) It is unclear what role, if any, Brougham REO Owner, LP played in the foreclosure proceedings.

The hearing proceeded without Gabriel and resulted in an orderpermitting foreclosure. (Doc. 5-7.) Gabriel and Barber appealed the order on September 12, 2016, and the appeal bond was set at $5,526.07. (Doc. 5-8); see also N.C. Gen. Stat. § 45-21.16(d1) ("If an appeal is taken from the clerk's findings, the appealing party shall post a bond with sufficient surety as the clerk deems adequate to protect the opposing party from any probable loss by reason of appeal; and upon posting of the bond the clerk shall stay the foreclosure pending appeal."). However, because neither Gabriel nor Barber posted the bond (Doc. 5-11 at 3), the foreclosure sale was not stayed, and the property was sold on September 21, 2016 (Doc. 5-9). Gabriel and Barber's appeal was therefore dismissed as moot. (Doc. 5-11.)

On April 30, 2018, Gabriel filed the present action. (Doc. 1.) Construed liberally, the complaint claims deprivations of his constitutional due process rights and violation of the state statute governing foreclosure on the part of the State Defendants,³ as well as violation of U.S. Department of Housing and Urban Development regulations ("HUD regulations") and Consumer Financial Protection Bureau regulations ("CFPB regulations") on the part of the Lender Defendants. (Id. at 7-9.) The complaint further appears to make claims against all (or, at least, unspecified) Defendants based on fraud, unfair and deceptive trade practices,defamation, mental anguish, embarrassment, and intentional infliction of emotional distress. (Id. at 6-8, 10.) The complaint was followed by motions to dismiss by the Lender Defendants (Doc. 4), the Trustee Defendants (Doc. 6), and the State Defendants (Doc. 27). Gabriel filed a response to both the Lender and Trustee Defendants' motions to dismiss (Doc. 15), in which he construes the complaint as making out a conspiracy claim against Mandulak and Robinson and further references federal claims through 42 U.S.C. § 1983 against all Defendants. (Id. at 4-5.) Gabriel also filed a response to the State Defendants' motion to dismiss (Doc. 30), and — after the time for filing a response had elapsed — filed a supplement entitled "Plaintiff's Amended Memorandum in Support of Plaintiff's Opposition to Forsyh [sic] County Defendants Motion to Dismiss" (Doc. 34).⁴ On October 3, 2018, Gabriel filed a motionto amend the complaint (Doc. 18), which is opposed by all Defendants (Doc. 23; Doc. 28 at 8-9). On November 29, 2018, he moved to extend the time within which to serve the State Defendants. (Doc. 31.) No Defendant filed a response within the deadline set by the court. ⁵ All motions are now ready for decision.

II. ANALYSIS

A. Defendants' Motions to Dismiss

1. Standards

Federal Rule of Civil Procedure 8(a)(2) provides that a complaint must contain a short and plain statement of the claim showing that the pleader is entitled to relief. Under Federal Rule of Civil Procedure 12(b)(6), "a complaint must contain sufficient factual matter . . . 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)). A claim is plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678 (citing Twombly, 550 U.S. at 556).

"When reviewing a pro se complaint, federal courts should examine carefully the plaintiff's factual allegations, no matterhow inartfully pleaded, to determine whether they could provide a basis for relief. In addition, in order to determine whether the claim of a pro se plaintiff can withstand a motion to dismiss, it is appropriate to look beyond the face of the complaint to allegations made in any additional materials filed by the plaintiff." Armstrong v. Rolm A. Siemans Co., No. 97-12222, 1997 WL 705376, at *1 (4th Cir. Nov. 13, 1997) (citations omitted) (unpublished table decision). Nevertheless, the liberal construction of a pro se plaintiff's pleading does not require the court to ignore clear defects in pleading, Bustos v. Chamberlain, No. 3:09-1760-HMH-JRM, 2009 WL 2782238, at *2 (D.S.C. Aug. 27, 2009), or to "conjure up questions never squarely presented in the complaint," Brice v. Jenkins, 489 F. Supp. 2d 538, 541 (E.D. Va. 2007) (internal quotation marks and citation omitted). Nor does it require that the court become an advocate for the unrepresented party. Weller v. Dep't of Soc. Servs., 901 F.2d 387, 391 (4th Cir. 1990).

2. Lender Defendants' Motion to Dismiss

Construed liberally, Gabriel's materials can be read to make out the following claims against the Lender Defendants: violation of HUD and CFPB regulations, fraud, unfair and deceptive trade practices, defamation, mental anguish, embarrassment, andintentional infliction of emotional distress.⁶

To the extent Gabriel's claims of regulatory violations and fraud challenge the propriety of the foreclosure, see (Doc. 1 at 6-7 (alleging that "[n]ewly discovered documents suggest the Attorney representing the Lender was fully aware that the property which he was attempting to foreclose had been encumbered" and that the foreclosure hearing should have been therefore "set . . . aside")), this court lacks jurisdiction to consider them under the Rooker-Feldman doctrine,⁷ which "prohibits the United States District Courts, with the exception of habeas corpus actions, from 'sit[ting] in direct review of state court decisions.'" Jordahl v. Democratic Party of Va., 122 F.3d 192, 199 (4th Cir. 1997) (alteration in original) (quoting D.C. Court of Appeals v. Feldman, 460 U.S. 462, 482 n.16 (1983)). "The doctrine extends not only to. . . claims presented or adjudicated by the state courts but also to claims that are 'inextricably intertwined' with a state court judgment." Id. (quoting Feldman, 460 U.S. at 486-87). Claims are "inextricably intertwined" with a state court ruling where, "in order to grant the federal plaintiff the relief sought, the federal court must determine that the [state] court judgment was erroneously entered or must take action that would render the judgment ineffectual." Id. at 202 (alteration in original).

As this court has previously noted, "Rooker-Feldman applies to foreclosure proceedings before the Clerk of Superior Court and appeals of those proceedings in State court." Broadnax v. BSI Fin. Servs. Inc., No. 1:17cv42, 2017 WL 4220456, at *3 (M.D.N.C. Sept. 21, 2017); see also N.C. Gen. Stat. § 45-21.16(d1) ("The act of the clerk in so finding or refusing to so find [that foreclosure is proper] is a judicial act . . . ."). Since the Forsyth County Superior Court Clerk approved the foreclosure at issue here, this court lacks subject matter jurisdiction over any claim by Gabriel seeking to disturb that foreclosure. See Broadnax, 2017 WL 4220456, at *3; Brumby v. Deutsche Bank Nat'l Trust Co., No. 1:09CV144, 2010 WL 617368, at *3-5 (M.D.N.C. Feb. 17, 2010), adopted by 2010 WL 3219353 (M.D.N.C. Aug. 13, 2010). Any remedy available to Gabriel for defects in the foreclosure...