Hohenstein v. MGC Mortg. Inc.

ROBERT HOHENSTEIN, Plaintiff,

v.MGC MORTGAGE, INC., et al., Defendants.

Case No. 2:12-cv-46

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO EASTERN DIVISION

Date: February 1, 2012

JUDGE GREGORY L. FROST

Magistrate Judge Mark R. Abel

OPINION AND ORDER

This matter is before the Court for consideration of the following filings: a motion for a temporary restraining order (ECF No. 4) filed by Plaintiff, Robert Hohenstein; a memorandum in opposition (ECF No. 9) filed by Defendants, MGC Mortgage, Inc. and Dovenmuehle Mortgage, Inc.; and a reply memorandum (ECF No. 10) filed by Plaintiff. For the reasons that follow, this Court finds the motion not well taken.

I. Background

According to the complaint,¹ Plaintiff, Robert Hohenstein, is a homeowner who resides in Pataskala, Ohio. Plaintiff executed a promissory note and mortgage related to his Pataskala property. He alleges that he made payments for years to First NLC Financial Services, LLC, which did business as The Lending Center. Around October 2010, however, Defendant MGC Mortgage, Inc. ("MGC") purportedly acquired the note and mortgage. Plaintiff asserts that because MGC never provided him with notice of the transfer of the note and mortgage, he keptmaking payments to his prior mortgage servicer. At some point, Plaintiff apparently learned of the transfer and contacted MGC, which informed him that he was three payments behind in his mortgage. MGC then transferred the note and mortgage to Defendant Dovenmuehle Mortgage, Inc. ("Dovenmuehle"). Plaintiff asserts that he was again provided no notice of a transfer. A state court foreclosure proceeding culminated in a scheduled February 3, 2012 sheriff's sale of Plaintiff's property.

Plaintiff initiated the instant action on January 17, 2012. In a six-count complaint, he asserts claims against MGC for violation of 12 U.S.C. § 2605(c), 15 U.S.C. § 1641(g), and 15 U.S.C. § 2605(b), as well as claims against Dovenmuehle for violation of 12 U.S.C. § 2605(c) and 15 U.S.C. § 1641(g). (ECF No.2 ¶¶ 20-40.) Hohenstein also seeks temporary injunctive relief in the first count of his complaint, and on January 18, 2012, Plaintiff filed a motion for a temporary restraining order to stop the scheduled sheriff's sale. (ECF No. 4.) Pursuant to S. D. Ohio Civ. R. 65.1(a), this Court therefore held an informal preliminary telephone conference with the parties on January 19, 2012. Because the parties elected to proceed on briefing and without the presentation of testimony, the Court set an expedited briefing schedule on the injunctive relief motion. (ECF No. 7.) The parties have completed briefing on the motion, which is now ripe for disposition.

II. Discussion

A. Standard Involved

In considering whether injunctive relief is warranted, this Court must consider (1) whether Plaintiff has demonstrated a strong likelihood of success on the merits; (2) whether Plaintiff will suffer irreparable injury in the absence of equitable relief; (3) whether theinjunction would cause substantial harm to others; and (4) whether the public interest is best served by granting the injunction. Cooey v. Strickland, 589 F.3d 210, 218 (6th Cir. 2009) (citing Workman v. Bredesen, 486 F.3d 896, 905 (6th Cir. 2007); Ne. Ohio Coal. for Homeless & Serv. Employees Int'l Union, Local 1199 v. Blackwell, 467 F.3d 999, 1009 (6th Cir. 2006)). As the Sixth Circuit has explained, " '[t]hese factors are not prerequisites that must be met, but are interrelated considerations that must be balanced together.' " Id. (quoting Mich. Coal. of Radioactive Material Users, Inc. v. Griepentrog, 945 F.2d 150, 153 (6th Cir. 1991)).

B. Analysis

Defendants correctly argue that Plaintiff is not entitled to temporary injunctive relief on numerous grounds. This Court agrees.

Federal cases such as this that arise out of state foreclosure actions present a threshold question of whether the state court proceeding has concluded. Review of the state court foreclosure case docket submitted as an attachment to Defendants' memorandum in opposition indicates that Plaintiff lost in the state court and that a judgment entry of foreclosure issued. An order of sale followed. Plaintiff did not appeal, but filed an unsuccessful motion for reconsideration in the common pleas court. The sheriff's sale is scheduled for February 3, 2012, and in the event of a sale, there will be a confirmation of sale filed with the state court.

Such a scenario may invoke the Rooker-Feldman doctrine. Recently, a judicial officer in the Northern District of Ohio addressed the application of this doctrine in a case that similarly arose from a state foreclosure proceeding and in which a plaintiff sought relief related to alleged fraud. That judicial officer explained:

As a threshold matter, this Court cannot void the judgment of foreclosure. Federal district courts do not have jurisdiction over challenges to state courtdecisions even if those challenges allege that the State court's action was unconstitutional. See District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 483 n. 16, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983); Rooker v. Fidelity Trust Co., 263 U.S. 413, 415-16, 44 S.Ct. 149, 68 L.Ed. 362 (1923). Federal appellate review of state court judgments can only occur in the United States Supreme Court, by appeal or by writ of certiorari. Id. Under this principle, generally referred to as the Rooker-Feldman Doctrine, a party losing his case in state court is barred from seeking what in substance would be appellate review of the state judgment in a United States District Court based on the party's claim that the state judgment itself violates his or her federal rights. Johnson v. DeGrandy, 512 U.S. 997, 1005-06, 114 S.Ct. 2647, 129 L.Ed.2d 775 (1994). Federal jurisdiction cannot be invoked merely by couching the claims in terms of a civil rights action. Lavrack v. City of Oak Park, No. 98-1142, 1999 WL 801562, at *2 (6th Cir. Sept. 28, 1999); see Valenti v. Mitchell, 962 F.2d 288, 296 (3d Cir. 1992).

The United States Sixth Circuit Court of Appeals has applied two elements to a Rooker[-]Feldman analysis. First, in order for the Rooker-Feldman doctrine to apply to a claim presented in federal district court, the issue before the court must be inextricably intertwined with the claim asserted in the state court proceeding. Catz v. Chalker, 142 F.3d 279, 293 (6th Cir. 1998); see Tropf v. Fidelity National Title Insurance Co., 289 F.3d 929, 937 (6th Cir. 2002). "Where federal relief can only be predicated upon a conviction that the state court was wrong, it is difficult to conceive the federal proceeding as, in substance, anything other than a prohibited appeal of the state court judgment." Catz, 142 F.3d at 293. The Rooker-Feldman doctrine applies when the party losing his case in state court files suit in federal district court seeking redress for an injury allegedly caused by the state court's decision itself. Coles v. Granville, 448 F.3d 853, 857-59 (6th Cir. 2006). Second, the Rooker-Feldman doctrine precludes a district court's jurisdiction where the claim is a specific grievance that the law was invalidly or unconstitutionally applied in plaintiffs' particular case as opposed to a general constitutional challenge to the state law applied in the state action. Id.

In the present action, Plaintiff essentially questions the state court's decision granting a foreclosure and sale. Any review of federal claims asserted in this context would require the Court to review the specific issues addressed in the state court proceedings against him. This Court lacks subject matter jurisdiction to conduct such a review or grant the relief as requested. Feldman, 460 U.S. at 483-84 n.16; Catz, 142 F.3d at 293.

Dunn v. Clunk, No. 1:11 CV 2075, 2011 WL 4730406, at *1-2 (N.D. Ohio Oct. 7, 2011). This same rationale might apply in the instant case where, in order to grant relief on the claims Plaintiff asserts, or at least most certainly on the Count I claim for temporary and permanentinjunctive relief, this Court would be called upon to revisit and invalidate the state courts' foreclosure decision. See King v. CitiMortgage, Inc., No. 2:10-cv-01044, 2011 WL 2970915, at *5 (S.D. Ohio July 20, 2011) (applying Rooker-Feldman to a count that sought to declare a foreclosure void, but not to other counts targeting fraud in the procurement of the foreclosure).

Despite asking this Court to stop the execution of the state court judgment, Plaintiff argues that he "has made no allegation that the common pleas court incorrectly applied the law to his case, or that the common pleas court was mistaken in rendering judgment against him. Rather, Plaintiff alleges Defendants' independent acts caused him damages as alleged in the complaint." (ECF No. 4, at 9.) This effort to evade application of Rooker-Feldman tracks the rationale behind some judicial officers declining to apply the Rooker-Feldman doctrine in select foreclosure cases. For example, in Fletcher v. Federal National Mortgage Association, No. 3:11cv00083, 2011 WL 5175611 (S.D. Ohio Oct. 4, 2011), a judicial officer from this District rejected the contention that Rooker-Feldman applied. The Fletcher magistrate judge focused on the source of the alleged injury at issue, explaining:

The Rooker-Feldman Doctrine prevents federal district courts from exercising appellate jurisdiction over state court judgments and applies to 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, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005). Accordingly, federal district courts lack jurisdiction under Rooker-Feldman when (1) a case is brought by parties unsuccessful in state court, (2) the plaintiff complains of injuries caused by state-court judgments, (3) the state-court judgment was rendered

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