Powell v. Ocwen Loan Servicing, LLC

P
    19-2735
    Powell v. Ocwen Loan Servicing, LLC


                                      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 [email protected]). 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 28th day of December, two thousand twenty.

    PRESENT:
                         DENNY CHIN,
                         JOSEPH F. BIANCO,
                         STEVEN J. MENASHI,
                                   Circuit Judges.
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    GARY POWELL, GAIL POWELL,
                   Plaintiffs-Appellants,

                        v.                                                             19-2735

    OCWEN LOAN SERVICING, LLC, as Servicer
    for DEUTSCHE BANK NATIONAL TRUST
    COMPANY, LITTON LOAN SERVICING LP,
    DOES, 1-50,
                   Defendants-Appellees.

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FOR PLAINTIFFS-APPELLANTS:                                    Gary Powell and Gail
                                                              Powell, pro se,
                                                              Wallingford, CT.

FOR DEFENDANTS-APPELLEES:                                     Marissa Delinks, Hinshaw
                                                              & Cubertson, LLP, Boston,
                                                              MA.



              Appeal from a judgment of the United States District Court for the District

of Connecticut (Meyer, J.).


              UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.

              Plaintiffs-appellants Gary and Gail Powell, appearing pro se, sued

defendants-appellees Litton Loan Servicing, LLC and its successor, Ocwen Loan

Servicing, LLC ("Ocwen"), in the court below a few months after a Connecticut court

rendered a judgment of strict foreclosure against them. They asserted claims under

federal law for violations of the Fair Debt Collection Practices Act ("FDCPA"), 15

U.S.C. § 1692, and the Truth in Lending Act ("TILA"), 15 U.S.C. § 1631, and under state

law for breach of contract and the covenant of good faith and fair dealing,

estoppel/unclean hands, accounting, and fraud. The district court dismissed the

FDCPA and TILA claims for failure to state a claim and also deemed them abandoned,

dismissed the breach of contract and estoppel/unclean hands claims as barred under the

Rooker-Feldman doctrine, and dismissed the accounting and fraud claims as barred by
res judicata. The Powells appealed. We assume the parties= familiarity with the

underlying facts, the procedural history of the case, and the issues on appeal.

         I.   Rooker-Feldman

              The Rooker-Feldman doctrine provides that federal courts lack subject

matter jurisdiction over "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 (2005). The Rooker-

Feldman doctrine applies where: (1) the federal-court plaintiff lost in state court; (2) she

complains of injuries caused by a state court judgment; (3) she seeks district court

review and rejection of that judgment; and (4) the state court judgment has been

rendered before the district court proceedings commenced. Hoblock v. Albany Cnty. Bd.

of Elections, 

422 F.3d 77

, 85 (2d Cir. 2005). We review the district court's application of

the Rooker-Feldman doctrine de novo. Sung Cho v. City of N.Y., 

910 F.3d 639

, 644 (2d Cir.

2018).

              Here, the district court correctly found that all four requirements of the

Rooker-Feldman doctrine were satisfied. As to the first and fourth requirements, the

Powells filed this federal lawsuit three months after they had lost in state court, when



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the court rendered its amended judgment of strict foreclosure, and after the Powells'

time to appeal the judgment had passed. Exxon Mobil 

Corp., 544 U.S. at 284

. The

Powells argue that they did not lose in state court because Connecticut did not afford

them an opportunity to appeal from the foreclosure. But they do not explain how or

why they did not have an opportunity to appeal the foreclosure judgment and provide

no case law or other support for their conclusory statement. While the Rooker-Feldman

doctrine does not apply if the "plaintiff had neither a practical reason nor a legal basis to

appeal the state-court decision that caused her alleged injuries," Green v. Mattingly, 

585 F.3d 97

, 103 (2d Cir. 2009), the Powells had an opportunity to appeal from the

foreclosure, Danzig v. PDPA, Inc., 

11 A.3d 153

, 158 (Conn. App. Ct. 2010) ("[A] judgment

of foreclosure constitutes an appealable final judgment when the court has determined

the method of foreclosure and the amount of the debt.").

              The district court also correctly held that the second and third

requirements were satisfied. The Powells' claim for injunctive relief and their breach of

contract and estoppel/unclean hands causes of action sought to enjoin the foreclosure

and invalidate the legal basis for the foreclosure judgment. The Powells argue on

appeal that they are not seeking redress for injuries caused by the state court judgment,

but instead are seeking relief from problems they did not bring to the state court's



                                              4
attention—namely, Deutsche Bank's refusal to clarify certain terms of the loan

modification. They also argue that Rooker-Feldman does not apply because they sought

damages from Ocwen's breach of the loan modification agreement.

             The Powells' arguments are unavailing. After a mediator found that they

failed to make payments pursuant to the loan modification, the state court ordered

foreclosure. In other words, the foreclosure judgment was based on the Powells'

breach of the modification agreement. In the court below, they argued that defendants'

alleged breach of contract rendered the loan modification "void and/or voidable";

claimed that defendants' alleged misrepresentations estopped them from executing the

foreclosure; and sought to enjoin defendants "from instituting, prosecuting or

maintaining foreclosure proceedings on [the property] or from otherwise taking any

steps to deprive [them] of ownership." Record on Appeal, Dkt. No. 1 ¶¶ 55, 62;

id. at 10.

             Thus, the core injury of which the Powells complain, "and which [they

seek] to have remedied, is the state foreclosure judgment" – correcting their loan

balance as found by the state court – and their stated aim in filing their complaint was

"to have the state judgment declared 'void.'" Vossbrinck v. Accredited Home Lenders, Inc.,

773 F.3d 423

, 427 (2d Cir. 2014) (per curiam). That is true regardless of their preferred



                                            5
remedy. Because the validity of the loan modification agreement lay at the heart of

both the state court's foreclosure judgment and these two claims, the district court could

not have passed upon these claims without inviting a "review and rejection" of the state

court's judgment. Exxon Mobil 

Corp., 544 U.S. at 284

.

              As all four requirements of Rooker-Feldman were satisfied, the district court

correctly concluded that the doctrine barred the Powells' breach of contract and unclean

hands/estoppel claims.

              For the same reasons, the Powells’ fraud claim is also barred from review

by the Rooker-Feldman doctrine. In their claim for fraud, the Powells seek a correction

of the mortgage balance found by the state court, contending that their actual mortgage

balance is much less. Thus, this claim also invites a "review and rejection," Exxon Mobil

Corp., 544 U.S. at 284

, of the amount of debt determined by the state court in its final

judgment of foreclosure, see 

Danzig, 11 A.3d at 158

.

       II.    TILA and FDCPA Claims

              In their opposition to the motion to dismiss, the Powells did not address

defendants' arguments that their FDCPA claim was time-barred and that they could not

bring a TILA claim against loan servicers. They requested, in passing, that they should

have an opportunity to amend their complaint in the event the district court granted the



                                             6
motion to dismiss but did not otherwise suggest how they would amend these claims.

The district court held that the Powells: (1) failed to state a FDCPA claim because they

did not allege any facts suggesting improper debt collection took place within a year of

the date that they filed their federal complaint, thereby running afoul of the FDCPA

statute of limitations; and (2) failed to state a TILA claim because only "creditors" could

be sued and loan servicers were not creditors. Alternatively, the district court deemed

those claims abandoned because the Powells did not address them in opposition to the

motion to dismiss.

              On appeal, the Powells argue that the district court erred in dismissing

their FDCPA and TILA claims by considering them abandoned. They then assert that,

given its obligation to afford pro se filings a liberal construction, the district court

should have provided them the opportunity to conduct discovery and amend their

complaint. They do not advance any new factual allegations that they would make if

granted leave to amend, but merely claim, in a conclusory fashion, that amendment

should have been granted because they are appearing pro se. They also have not

challenged the district court's dismissal of the FDCPA and TILA claims for failure to

state a claim, thereby abandoning those issues. LoSacco v. City of Middletown, 

71 F.3d 88

, 92–93 (2d Cir. 1995).



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              Here, the district court did not consider whether it should have allowed

amendment; it relied on district court cases discussing abandonment as apparently

obviating the need to do so. We have taken a dim view of plaintiffs' attempts to

resurrect abandoned claims on appeal. See, e.g., Edward B. Marks Music Corp. v. Cont'l

Record Co., 

222 F.2d 488

, 492 (2d Cir. 1955) ("[A] plaintiff in his opposition to a motion

for summary judgment cannot abandon an issue and then, after an unpalatable decision

by the trial judge, on appeal, by drawing on the pleadings resurrect the abandoned

issue."). By abandoning their FDCPA and TILA claims, the Powells have acceded to

the district court's holding that the claims are barred.

              Additionally, the Powells sought leave to amend only in the final sentence

of their opposition to the motion to dismiss and at no point offered any new factual

allegations that they would make if granted leave to amend. See Metz v. U.S. Life Ins.

Co. in City of N.Y., 

662 F.3d 600

, 603 (2d Cir. 2011) (per curiam) (leave to amend

unwarranted when, both before the district court and on appeal, the plaintiff "[did] not

advance new factual allegations that she would make if granted leave to amend, but

merely claim[ed] in conclusory fashion that had she been permitted to amend, she

could have pled allegations sufficient to make out a claim"). "It is within the court's

discretion to deny leave to amend implicitly by not addressing the request when leave



                                              8
is requested informally in a brief filed in opposition to a motion to dismiss." In re

Tamoxifen Citrate Antitrust Litig., 

466 F.3d 187

, 220 (2d Cir. 2006), abrogated on other

grounds by F.T.C. v. Actavis, Inc., 

570 U.S. 136

(2013); see also 

Metz, 662 F.3d at 603

(denial

of leave to amend proper when plaintiff "sought leave to amend only in the final

sentence of her opposition to the motion to dismiss"). The district court therefore

properly dismissed the FDCPA and TILA claims.

       Finally, the Powells' appellate brief does not raise any arguments concerning the

district court's dismissal of their accounting claim. Accordingly, they have waived any

challenge to the dismissal of this claim. 

LoSacco, 71 F.3d at 92

–93.

              We have considered the Powells' remaining arguments and find them to

be without merit. Accordingly, we AFFIRM the judgment of the district court.



                                            FOR THE COURT:
                                            Catherine O'Hagan Wolfe, Clerk of Court




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