Nath v. Select Portfolio Servicing, Inc. ( 2018 )

17-806
Nath v. Select Portfolio Servicing, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION ASUMMARY ORDER@). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second
Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square,
in the City of New York, on the 24th day of July, two thousand eighteen.
PRESENT:
DENNIS JACOBS,
REENA RAGGI,
PETER W. HALL,
Circuit Judges.
_____________________________________
Prem Nath,
Plaintiff-Appellant,
v. 17-806
Select Portfolio Servicing, Inc., U.S. Bank,
N.A., indentured trustee for C.S.F.B. trust
2002-np14, Locke Lord, LLP,
Defendants-Appellees.
_____________________________________
FOR PLAINTIFF-APPELLANT: Prem Nath, pro se, Orangeburg, NY.
FOR DEFENDANTS-APPELLEES: Casey B. Howard (Samantha Ingram, on the
brief), Locke Lord LLP, New York, NY.
Appeal from a judgment of the United States District Court for the Southern
District of New York (Karas, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment of the district court is AFFIRMED.1
Appellant Prem Nath, pro se, appeals from a judgment in favor of Select Portfolio
Servicing, Inc. (“SPS”) (the servicer of his mortgage loan), U.S. Bank, N.A. (“U.S. Bank”),
as indentured trustee for CSFB Trust 2002-NP14, (the trust in which his mortgage loan
was pooled), and Locke Lord, LLP (the law firm representing SPS and U.S. Bank,
collectively, “defendants”). Nath sued the defendants for alleged violations of the Truth
in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. § 1692 et seq., and 18 U.S.C. § 709. He also alleged various state
law claims sounding in fraud.
Nath’s claims stemmed from a state court foreclosure proceeding brought by U.S.
Bank’s predecessor in interest and a subsequent bankruptcy proceeding. The foreclosure
proceeding was instituted in 2001, after Nath defaulted on his loan. In 2010, he entered
into a settlement agreement and loan modification agreement with the then-holder of his
note, LaSalle Bank (“LaSalle”). When he failed to comply with the terms of the
settlement agreement, the state court entered a judgment of foreclosure against Nath. Nath
then sought bankruptcy protection, and U.S. Bank, through SPS, filed a notice of claim
based on the foreclosed mortgage. The bankruptcy judge granted summary judgment in
favor of U.S. Bank and allowed the claim. Nath then filed the instant suit. The district
court dismissed, concluding that Nath’s claims were barred by the Rooker-Feldman
doctrine, by claim and issue preclusion, and otherwise failed to state a claim. This appeal
follows. We assume the parties’ familiarity with the underlying facts, the procedural
history of the case, and the issues on appeal.
We review de novo dismissals for lack of subject matter jurisdiction pursuant to
Federal Rule of Civil Procedure 12(b)(1), and dismissals for failure to state a claim
pursuant to Federal Rule of Civil Procedure 12(b)(6). Cayuga Nation v. Tanner, 824 F.3d
321, 327 (2d Cir. 2016) (Rule 12(b)(1)); Biro v. Condé Nast, 807 F.3d 541, 544 (2d Cir.
2015) (Rule 12(b)(6)). In reviewing a dismissal for failure to state a claim, we accept all
factual allegations as true and draw all inferences in plaintiff’s favor. Biro, 807 F.3d at
544. The complaint must plead “enough facts to state a claim to relief that is plausible on
its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). Although a court must accept as true all the factual allegations
in the complaint, that requirement is “inapplicable to legal conclusions.” Iqbal, 556 U.S.
at 678. “Threadbare recitals of the elements of a cause of action, supported by mere
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Nath’s motion for sanctions is DENIED.
conclusory statements, do not suffice,” and pleadings that “are no more than conclusions[]
are not entitled to the assumption of truth.” Id. at 678–79. “[W]e may affirm on any
ground supported by the record.” Freedom Holdings, Inc. v. Spitzer, 408 F.3d 112, 114
(2d Cir. 2005) (internal quotation marks omitted).
I. Federal Claims
On appeal, Nath argues that he adequately pleaded violations of TILA, the FDCPA,
and 18 U.S.C. § 709. With respect to his TILA claim, Nath argues that the district court
erred by concluding that his loan modification agreement was exempt from TILA’s notice
requirements. He argues that the exemption for refinancing or consolidation applies only
to agreements with the same creditor, and his loan modification agreement was with
LaSalle, not the original creditor. See 15 U.S.C. § 1635(e)(2); 12 C.F.R. § 226.23(f)(2).
However, Nath’s TILA claim is foreclosed by the settlement agreement he entered into in
state court, in which he stipulated that the loan modification agreement was not subject to
federal laws concerning consumer mortgage transactions because it had the effect of
lowering his principal balance. He cannot here maintain otherwise. See New Hampshire
v. Maine, 532 U.S. 742, 749-50 (2001) (observing that “courts have uniformly recognized”
that the purpose of judicial estoppel doctrine “is to protect the integrity of the judicial
process by prohibiting parties from deliberately changing positions according to the
exigencies of the moment” and is intended “to prevent improper use of judicial machinery”
(internal quotation marks omitted)).
With respect to his FDCPA claim, Nath argues that the district court erred in
determining that none of the defendants were debt collectors within the meaning of 15
U.S.C. § 1692a(6) because SPS was a registered debt collector and courts have found
foreclosure lawyers to be debt collectors. The argument does not persuade because the
only violation of the FDCPA Nath alleged was that Chase Manhattan Bank was falsely
listed on the notice of foreclosure sale even though it was no longer an entity when the
notice issued. The bank’s name, however, merely appeared in the caption for the
foreclosure proceeding that resulted in the sale, which inclusion Nath fails plausibly to
allege amounts to a “false, deceptive, or misleading representation . . . in connection with
the collection of any debt,” id. § 1692e, or could mislead the least sophisticated consumer,
see Taylor v. Fin. Recovery Servs., Inc., 886 F.3d 212, 214 (2d Cir. 2018). Accordingly,
Nath’s FDCPA claim fails regardless of whether any defendants were debt collectors under
the statute.
Finally, Nath asserts that the defendants’ conduct violated 18 U.S.C. § 709. We do
not pursue the point because § 709 is a criminal statute, and no private right of action exists
under criminal statutes absent an indication that Congress intended to create such a private
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right of action, which is not present here. See Cort v. Ash, 422 U.S. 66, 79–80 (1975);
Alaji Salahuddin v. Alaji, 232 F.3d 305, 307-08 (2d Cir. 2008). The same result obtains
to the extent that Nath alleges the defendants violated federal criminal mail and wire fraud
statutes. See 18 U.S.C. §§ 1341, 1343.2
II. State Law Claims
Nath principally argues that the district court erred by concluding that his claims for
monetary damages were barred under Rooker-Feldman. Under the Rooker-Feldman
doctrine, federal courts lack subject matter jurisdiction over claims that effectively
challenge state court judgments. See District of Columbia Court of Appeals v. Feldman,
460 U.S. 462, 486–87 (1983); Rooker v. Fidelity Trust Co., 263 U.S. 413, 415–16 (1923).
A claim is barred under Rooker-Feldman when (1) the federal court plaintiff lost in state
court; (2) the plaintiff complains of injuries caused by a state court judgment; (3) the
plaintiff invites the federal court to review and reject that judgment; and (4) the state court
judgment was rendered prior to the commencement of proceedings in the district court.
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005).
We agree that Nath’s claims were not barred under Rooker-Feldman. The Rooker-
Feldman doctrine does not prevent a district court from reviewing a claim for damages
stemming from an allegedly fraudulently obtained foreclosure judgment: the district court
can determine damages liability without reviewing the propriety of the state court
judgment. See Vossbrinck v. Accredited Home Lenders, Inc., 773 F.3d 423, 427-28 (2d
Cir. 2014) (per curiam); see also id. at 428 n.2 (citing favorably cases from other circuits
holding that Rooker-Feldman does not preclude claims based on lack of standing and
allegedly inauthentic evidence submitted by banks during foreclosure proceedings).
Even if Rooker-Feldman does not bar Nath’s state claims for damages, the claims
fail because they are pleaded conclusorily, and fail to allege cognizable causes of action.3
See Chavis v. Chappius, 618 F.3d 162, 170 (2d Cir. 2010) (recognizing “[e]ven in a pro se
2
To the extent Nath also alleges that the defendants violated various federal consent
orders, he raises no specific argument in his brief regarding the district court’s disposition
of those claims, which we therefore deem abandoned. See LoSacco v. City of
Middletown, 71 F.3d 88, 92-3 (2d Cir. 1995).
3
On appeal, Nath does not challenge the district court’s dismissal of his claim under
New York Real Property Actions and Proceedings Law § 1404, and, accordingly, the
claim is abandoned. See LoSacco, 71 F.3d at 92-93.
4
case,” “mere conclusory statements[] do not suffice” to defeat a motion to dismiss (internal
quotation marks omitted)). In alleging claims of fraud and other misdeeds by defendants
in state and bankruptcy court in order to procure foreclosure of his property, Nath fails to
plead the factual allegations necessary to “nudge[] [his] claims across the line from
conceivable to plausible.” See Twombly, 550 U.S. at 570; Fed. R. Civ. P. 8(a). Much
less has he pleaded fraud with the heightened particularity required by Fed. R. Civ. P. 9(b).
Accordingly, Nath’s state law claims were properly dismissed.
We have considered Nath’s remaining arguments and find them to be without merit.
Accordingly, we AFFIRM the judgment of the district court.4
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
4
Appellant has filed a number of frivolous matters in this court, including the appeals
docketed under 17-806-cv, 17-2019-cv, 17-1921-bk, and 17-1924-bk. Accordingly,
Appellant is hereby warned that the continued filing of duplicative, vexatious, or clearly
meritless appeals, motions, or other papers, will result in the imposition of a sanction,
which may require Appellant to obtain permission from this Court prior to filing any
further submissions in this Court. See In re Martin-Trigona, 9 F.3d 226, 229 (2d Cir.
1993); Sassower v. Sansverie, 885 F.2d 9, 11 (2d Cir. 1989).
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