Reza Farzan v. ( 2021 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 21-1334
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In re: REZA FARZAN, a/k/a Ray Farzan, a/k/a Raymond Farzan,
f/d/b/a America’s Consulting Enterprise, Inc., Debtor
REZA FARZAN,
Appellant
v.
BAYVIEW LOAN SERVICING LLC; SAMANTHA DICKIE;
SCHILLER, KNAPP, LEFKOWITZ & HERTZEL LLP
____________________________________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil Action No. 3-20-cv-03330)
District Judge: Honorable Freda L. Wolfson
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
September 2, 2021
Before: AMBRO, PORTER and SCIRICA, Circuit Judges
(Opinion filed: September 8, 2021)
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OPINION*
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*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
PER CURIAM
Pro se appellant Reza Farzan appeals the District Court’s order affirming the
Bankruptcy Court’s dismissal of his adversary complaint. For the reasons detailed below,
we will affirm the District Court’s judgment.
In 2005, Farzan obtained a mortgage-loan and purchased a home in New Jersey.
In 2009, the originator of the loan transferred the mortgage and note to JP Morgan Chase
Bank; Farzan alleges that the transfer was fraudulent. In 2014, Chase prepared an
affidavit of lost note; Farzan contends that document is also fraudulent. Soon thereafter,
through what Farzan claims is a third fraudulent transaction, Chase transferred its interest
to Bayview Loan Servicing LLC. Finally, Farzan says that, in 2016, Bayview fabricated
a mortgage modification document.
That same year, Bayview instituted foreclosure proceedings in New Jersey state
court. In that action, Farzan claimed, among other things, that Bayview lacked the right
to foreclose because the 2009 transfer, the 2014 affidavit of lost note, and the 2014
transfer were all invalid. The state court rejected Farzan’s defenses and counterclaims
and granted Bayview’s motion for summary judgment. The court entered final judgment
in September 2019, and Farzan did not appeal.
In October 2019, Farzan filed for Chapter 13 bankruptcy. In those proceedings, he
filed an adversary complaint against Bayview, its law firm, and a notary. He claimed that
these defendants had violated his rights by engaging in the transactions described above.
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The defendants moved to dismiss the complaint. The Bankruptcy Court granted those
motions, concluding that the action was barred by the Rooker-Feldman doctrine. See
D.C. Ct. of App. v. Feldman, 460 U.S. 462 (1983); Rooker v. Fid. Trust Co., 263 U.S.
413 (1923).1 Farzan appealed, and the District Court affirmed the Bankruptcy Court’s
order. Farzan then appealed to this Court. In this Court, he has filed a motion “to
supplement the records of this appeal with the records of all related open cases in federal
courts.”
The District Court had jurisdiction pursuant to 28 U.S.C. § 158(a)(1). We have
jurisdiction under 28 U.S.C. § 158(d)(1). We apply the same standard of review “as that
exercised by the District Court over the decision of the Bankruptcy
Court[,] . . . exercis[ing] plenary review over questions of law.” In re Giacchi, 856 F.3d
244, 247 (3d Cir. 2017).
We question whether Farzan’s claims are truly barred by the Rooker-Feldman
doctrine.2 However, the claims are barred by New Jersey’s preclusion rules. See In re
1
The Bankruptcy Court also denied Farzan’s motion to vacate the dismissal order. We
do not understand Farzan to challenge that order in his brief, but in any event, because we
conclude that the complaint was properly dismissed, we likewise conclude that he is not
entitled to relief as to that motion.
2
The Rooker-Feldman doctrine deprives federal courts of subject-matter jurisdiction over
claims when “(1) the federal plaintiff lost in state court; (2) the plaintiff ‘complains of
injuries caused by the state-court judgments’; (3) those judgments were rendered before
the federal suit was filed; and (4) the plaintiff is inviting the district court to review and
reject the state judgments.” Great W. Mining & Mineral Co. v. Fox Rothschild LLP, 615
F.3d 159, 166 (3d Cir. 2010) (alterations omitted) (quoting Exxon Mobil Corp. v. Saudi
3
Mullarkey, 536 F.3d 215, 229–30 (3d Cir. 2008); Rycoline Prods., Inc. v. C & W
Unlimited, 109 F.3d 883, 885–86 (3d Cir. 1997).3 Under New Jersey law, which governs
the inquiry, see McCarter v. Mitcham, 883 F.2d 196, 199 (3d Cir. 1989), “when a
Basic Indus. Corp., 544 U.S. 280, 284 (2005)). We doubt that the doctrine applies here,
for two reasons. First, as the District Court explained, Farzan still had time to appeal the
foreclosure order at the time he filed the adversary complaint, see generally In re
Hoffinger Indus., Inc., 329 F.3d 948, 952 (8th Cir. 2003), and thus the requisite state
court “judgment” did not exist at the time he filed his complaint, see Malhan v. Sec’y
U.S. Dep’t of State, 938 F.3d 453, 459 (3d Cir. 2019); see generally Exxon Mobil Corp.,
544 U.S. at 292–93. Second, Farzan largely complains of injuries allegedly traceable to
the defendants’ conduct, not the state court judgment. See Vuyanich v. Smithton
Borough, 5 F.4th 379, 386 (3d Cir. 2021); Great W. Mining & Min. Co., 615 F.3d at 167.
In any event, we need not conclusively resolve these issues because preclusion principles
are dispositive of Farzan’s claims. See Hoffman v. Nordic Nats., Inc., 837 F.3d 272, 277
(3d Cir. 2016) (ruling that Court was “permitted to ‘bypass’ the jurisdictional inquiry in
favor of a non-merits dismissal on claim preclusion grounds”).
3
We may affirm on any ground supported by the record, see Munroe v. Cent. Bucks Sch.
Dist., 805 F.3d 454, 469 (3d Cir. 2015), and Bayview raised the preclusion defense
before the Bankruptcy Court, the District Court, and this Court. Given Farzan’s
discussion of the foreclosure action in his complaint, we conclude that it is appropriate to
reach this defense here. See generally Hoffman, 837 F.3d at 280. In performing this
analysis, we may take judicial notice of the record of the prior proceeding, see Oneida
Motor Freight, Inc. v. United Jersey Bank, 848 F.2d 414, 416 n.3 (3d Cir. 1988), in
addition to considering “the complaint, exhibits attached to the complaint, matters of
public record, as well as undisputedly authentic documents if the complainant’s claims
are based upon these documents,” Davis v. Wells Fargo, 824 F.3d 333, 341 (3d Cir.
2016) (quotation marks omitted). Finally, although the non-Bayview defendants did not
raise the preclusion defense, Bayview’s motion provided adequate notice of the issue to
Farzan, so it is permissible for us to consider the defense as to those defendants, too. See
generally Arizona v. California, 530 U.S. 392, 412 (2000); Acequia, Inc. v. Prudential
Ins. Co. of Am., 226 F.3d 798, 807 (7th Cir. 2000) (stating “where one defendant
succeeds in winning summary judgment on a ground common to several defendants, the
district court may also grant judgment to the non-moving defendants, if the plaintiff had
an adequate opportunity to argue in opposition”).
4
controversy between parties is once fairly litigated and determined it is no longer open to
relitigation,” Adelman v. BSI Fin. Servs., Inc., 179 A.3d 431, 436 (N.J. Super. Ct. App.
Div. 2018) (quoting Lubliner v. Bd. of Alcoholic Beverage Control for Paterson, 165
A.2d 163, 167 (N.J. 1960)). Res judicata applies if there is “(1) a final judgment by a
court of competent jurisdiction, (2) identity of issues, (3) identity of parties, and (4)
identity of the cause of action.” Brookshire Equities, LLC v. Montaquiza, 787 A.2d 942,
947 (N.J. Super. Ct. App. Div. 2002). Here, Farzan raised most of the same allegations in
the foreclosure action—including various iterations of his claims that the defendants
violated his rights through the 2009 transfer, the 2014 affidavit of lost note, and the 2014
transfer—but the trial court denied Farzan’s defenses and counterclaims and granted
summary judgment to Bayview. See Velasquez v. Franz, 589 A.2d 143, 147 (N.J. 1991)
(explaining that an order granting summary judgment is final for these purposes).
Therefore, to the extent that Farzan seeks to relitigate the same claims, they are barred by
res judicata. See Delacruz v. Alfieri, 145 A.3d 695, 708 (N.J. Super. Ct. Law Div. 2015).
Moreover, to the extent there is any difference between the claims or parties in the
two actions, Farzan’s claims are nevertheless barred by New Jersey’s Entire Controversy
Doctrine. Under this doctrine, a party must bring in one action “‘all affirmative claims
that [it] might have against another party, including counterclaims and cross-claims,’”
and must join “‘all parties with a material interest in the controversy,’” or “be forever
barred from bringing a subsequent action involving the same underlying facts.” Rycoline
5
Prods., Inc., 109 F.3d at 885–86 (alteration in original) (quoting Circle Chevrolet Co. v.
Giordano, Halleran & Ciesla, 662 A.2d 509, 513 (N.J. 1995)). This doctrine bars any
variations of the claims concerning the allegedly fraudulent transactions that Farzan seeks
to raise in this action. See Delacruz, 145 A.3d at 708 (“Claims or defenses that went to
the validity of the mortgage, the amount due, or the right of [mortgagee] to foreclose had
to be raised in the foreclosure proceeding or they were barred.”).
Accordingly, we will affirm the District Court’s judgment. We deny Farzan’s
motion to supplement the record.
6