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Hazel v. Wells Fargo Bank, N.A.

United States District Court, S.D. Ohio, Eastern Division

June 5, 2017

KARIN HAZEL, Plaintiff,
WELLS FARGO BANK, N.A., Defendant.

          Kemp Magistrate Judge.

          OPINION & ORDER

          JAMES L. GRAHAM United States District Judge.

         This matter is before the Court on Defendant Wells Fargo Bank, N.A.'s Motion to Dismiss. (Doc. 8). Because Plaintiff Karen Hazel's claims are precluded by res judicata and the Rooker-Feldman doctrine, the Court GRANTS Defendant's Motion to Dismiss.

         I. Background

         Plaintiff Karin Hazel, proceeding pro se, filed a Complaint and Motion for Emergency Restraining Order against Wells Fargo Bank, N.A. (“Wells Fargo”), requesting the Court enjoin a foreclosure sale of her residence scheduled to occur on December 2, 2016. The Court denied Hazel's Motion for Emergency Restraining Order. (Doc. 14). The Court found, amongst other things, that Hazel did not show a strong likelihood of success on the merits of her claims. Now, Wells Fargo moves to dismiss Hazel's claims.

The Court has already elucidated the relevant factual history in this case:
Hazel alleges that she purchased a home through a loan secured by a mortgage on the property. (Compl. at 2, Doc. 5). Hazel failed to pay on that mortgage, and on July 6, 2010, Wells Fargo filed a foreclosure complaint. (Id.). Hazel alleges that Wells Fargo failed to comply with certain regulations of federally insured mortgages, specifically, regulations from the U.S. Department of Housing and Urban Development (“HUD”) that (1) the mortgagee provide to the mortgagor a notice of default and acceleration, 24 C.F.R. § 201.50(b), and that (2) in most cases, a mortgagee attempt to meet face-to-face with a delinquent mortgagor before filing a foreclosure complaint, 24 C.F.R. § 203.604.
But Hazel didn't make these arguments in the state-court foreclosure action. Here's the procedural history of the foreclosure action. The trial court granted summary judgment to Wells Fargo and ordered a foreclosure sale. (Def.'s Ex. C to Mot. to Dismiss, Doc. 8-3). Hazel then filed a “Motion to Vacate Judgment and/or Relief from Judgment Pursuant to Civ. R 60, ” arguing that she had meritorious arguments that she did not have the opportunity to present to the trial court. (Def.'s Ex. D-1, Doc. 8-4). A Magistrate entered a Decision and Entry granting Hazel's motion to set aside the judgment against her. (Def.'s Ex. E-1, Doc. 8-6). Wells Fargo objected to the Magistrate's decision, but the state-court Judge adopted the Magistrate's report, overruling Wells Fargo's objections. (Def.'s Ex. E-2 at 3, Doc. 8-7). The Ohio Tenth District Court of Appeals reversed the judgment adopting the Magistrate's decision and remanded the case to the trial court. (Def.'s Ex. F at 2, Doc. 8-8). On remand, the Tenth District directed the trial court to consider whether Hazel complied with Ohio Civil Rule 9(C), (Id.), which says, “(C) Conditions precedent[:] In pleading the performance or occurrence of conditions precedent, it is sufficient to aver generally that all conditions precedent have been performed or have occurred. A denial of performance or occurrence shall be made specifically and with particularity, ” Ohio Civ. R. 9(C).
On remand, the trial court held that Hazel “did not specifically controvert the plaintiff's claim that it had complied with all the conditions precedent to foreclosure.” (Def.'s Ex. F at 4). Specifically, Wells Fargo, in its foreclosure complaint, alleged that it did comply with all the conditions precedent to foreclosure, but Hazel, in her Answer, only asserted a general denial. Therefore, the trial court held, “[s]ince Hazel's answer was insufficient to put the plaintiff's compliance with the HUD regulations at issue in the case, the Court finds that she has not established that she has a meritorious defense to present if relief is granted.” (Id. at 5). The trial court denied Hazel's motion for relief from judgment. (Id.). Hazel appealed that decision, but the Tenth District affirmed the decision of the trial court, Wells Fargo Bank, N.A. v. Hazel, 2016-Ohio-305, ¶ 9 (10th Dist., January 28, 2016), and the Ohio Supreme Court declined jurisdiction, Wells Fargo Bank, N.A. v. Hazel, 146 Ohio St.3d 1415, 2016-Ohio-3390, 51 N.E.3d 660 (table decision).
Then, Hazel filed this action in federal court. Hazel asserts three causes of action in her complaint: (I) breach of contract, (II) preliminary and permanent injunction, and (III) injunctive relief. (Compl. at 8-12). In Count I, Hazel alleges that Wells Fargo and Hazel “agreed, as a term of the Mortgage, that Wells Fargo would comply with all applicable HUD mortgage servicing regulations before initiating any foreclosure proceedings or taking any other action against Plaintiff. Therefore, Defendant Wells Fargo has materially breached its agreement with Plaintiff Hazel.” (Id. at 9). In Counts II and III, Hazel seeks an injunction preventing the foreclosure sale of her home, arguing that Wells Fargo has no legal right to do so. (Id. at 9-12).

(Op. & Order Denying Mot. for TRO at 1-3, Doc. 14).

         II. Legal Standard

         Wells Fargo styles their motion as one brought under Rule 12(b)(6), but because Wells Fargo also argues that this Court lacks subject-matter jurisdiction over two of Hazel's claims, the Court will consider Rule 12(b)(1) as well. See DLX, Inc. v. Kentucky, 381 F.3d 511, 516 (6th Cir. 2004) (analyzing Rooker-Feldman doctrine under Rule 12(b)(1)); see also In re Kapla, 485 B.R. 136, 143 n.1 (Bankr. E.D. Mich. 2012) (“Although the Defendants' motion to dismiss is brought under Fed.R.Civ.P. 12(b)(6) . . . the Defendants' Rooker-Feldman argument is more properly considered under Fed.R.Civ.P. 12(b)(1) . . . .”).

         Federal Rule of Civil Procedure 12 permits a party to assert by motion the defenses of a lack of subject-matter jurisdiction and failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(1), (6). Plaintiffs bear the burden of proving jurisdiction in order to survive a Rule 12(b)(1) ...

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