United States District Court, W.D. North Carolina, Charlotte Division
D. Whitney Chief United States District Judge
MATTER is before the Court upon the mandate of the Fourth
Circuit, which affirmed in part, vacated in part, and
remanded for further proceedings this Court's Order
dismissing Plaintiffs' Complaint. See Vicks v. Ocwen
Loan Servicing, LLC, No. 16-1909, 2017 WL 360546 (4th
Cir. Jan. 25, 2017). Upon remand, Defendant filed an Amended
and Renewed Motion to Dismiss Plaintiff's Complaint
pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc.
No. 20). The matter is fully briefed and is ripe for review.
For the reasons stated herein, Defendant's motion is
GRANTED, and Plaintiffs' Complaint is DISMISSED.
25, 2016, Plaintiffs filed the instant action invoking
diversity jurisdiction. (Doc. No. 1). While Plaintiffs'
pleadings are often difficult to follow, their position is
perhaps most succinctly summarized as “trying to get a
loan servicer to stop attempting to complete a foreclosure
action.” (Id. at ¶ 1). The foreclosure at
issue in this case is, apparently, the same as that presented
in a separate case already remanded to North Carolina State
Court. See Vicks v. Wells Fargo, No.
foreclosure at issue originates from an action brought in the
Superior Court of Union County, North Carolina. (Doc. No. 3).
In the state foreclosure action, the Clerk of Union County
Superior Court entered an Order allowing Wells Fargo to
proceed with foreclosure under a Deed of Trust in May 2011.
(Id.). Since that time, Plaintiffs have filed six
separate lawsuits (three in state court, three in this
district) and nine separate motions in various attempts to
collaterally attack the Union County Clerk of Court's May
2011 Order. (Id. at 5). When these attempts proved
unsuccessful, Plaintiffs allegedly proceeded to file fourteen
complaints with the Consumer Financial Protection Bureau
(“CFPB”). (Id. at 6). Plaintiffs'
attempts to disrupt or prevent the foreclosure have now
culminated in removing a pending state court case to this
Court-that matter has been remanded-and the instant suit.
not entirely clear, Plaintiff's Complaint seeks relief
under a number of theories, including four claims for relief:
(1) a Declaration that “any rights to the loan before
April 19, 2011, simply did not exist”; (2) violations
of N.C. Gen. Stat. § 45-102; (3) violations of RESPA
Regulation X, 12 C.F.R. § 1024.35; (4) violations of the
North Carolina Debt Collection Act, N.C. Gen. Stat. §
75-50-56; and (5) Intentional Infliction of Emotional
Distress (“IIED”). (Doc. No. 1). Plaintiffs'
prayer for relief seeks monetary damages-actual, general, and
punitive-but omits any reference to the declaratory relief
sought in Plaintiffs' first cause of action. The Court,
nonetheless, liberally construes Plaintiffs' Complaint to
seek both legal and equitable remedies.
14, 2017, this Court entered an Order (1) dismissing
Plaintiffs' first four claims based on the
Rooker-Feldman doctrine and (2) dismissing the fifth
claim for IIED under Fed.R.Civ.P. 12(b)(6). (Doc. No. 11).
The Fourth Circuit vacated and remanded this Court's
dismissal of Plaintiffs' first four claims, concluding
that the Rooker-Feldman doctrine did not apply in
this case. Vicks, No. 16-1909, 2017 WL 360546, at
*2. The Fourth Circuit further stated, however, that it
“express[es] no opinion as to the legal sufficiency of
[Plaintiffs'] reinstated claims or to the application of
the doctrines of issue preclusion and claim preclusion to
those claims.” Id. Upon remand to this Court,
Defendant filed the instant Amended and Renewed Motion to
Dismiss (Doc. No. 20) requesting that the Court dismiss the
first four claims in Plaintiffs' Complaint pursuant to
order to survive a 12(b)(6) motion to dismiss for failure to
state a claim upon which relief can be granted,
Plaintiffs' “complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007)). “A claim has facial plausibility when the
plaintiff pleads sufficient factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id.
(citing Twombly, 550 U.S. at 556). While the Court
accepts plausible factual allegations in the complaint as
true and considers those facts in the light most favorable to
a plaintiff in ruling on a motion to dismiss, a court
“need not accept as true unwarranted inferences,
unreasonable conclusions, or arguments.” Eastern
Shore Mkt.'s Inc. v. J.D. Assoc.'s, LLP, 213
F.3d 175, 180 (4th Cir. 2000).
first two claims are barred by the doctrine of collateral
estoppel. Under that doctrine, “a final judgment on the
merits prevents relitigation of issues actually litigated and
necessary to the outcome of the prior action in a later suit
involving a different cause of action between the parties or
their privies.” Thomas M. McInnis & Assocs.,
Inc. v. Hall, 349 S.E.2d 552, 557 (1986). In North
Carolina, before authorizing a foreclosure to proceed, the
clerk must determine that a valid debt exists, the debtor is
in default, the trustee has the right to foreclose, and
sufficient notice was given. See N.C. Gen. Stat.
§ 45-21.16(d). A party may appeal the foreclosure action
to the superior court for a de novo hearing that is
limited to the same issues. Funderburk v. JPMorgan Chase
Bank, N.A., 775 S.E.2d 1, 6 ( N.C. Ct. App. 2015).
“Any issue that the clerk decides in a foreclosure
proceeding under N.C. Gen. Stat. § 45-21.16(d) is
conclusive unless appealed and reversed and cannot be
relitigated in a subsequent lawsuit.” Hardin v.
Bank of Am., N.A., No. 7:16-CV-75-D, 2017 WL 44709, at
*5 (E.D. N.C. Jan. 3, 2017).
first two claims rests upon the premise that no valid debt
existed and that Defendant failed to provide the required
pre-foreclosure notice. (Doc. No. 1, ¶¶ 35, 40).
The North Carolina clerk, however, resolved these issues
against Plaintiffs in the foreclosure proceeding, which is
binding and conclusive on those issues. Plaintiffs fail to
allege a legitimate reason why this Court should disregard
the valid and binding state court determinations, and those
determinations are fatal to Plaintiffs' first two claims.
third and fourth claims allege that Defendant violated state
law by proceeding with the foreclosure without providing the
required pre-foreclosure notice and by unfairly collecting
the debt. (Doc. No. 1, ¶¶ 41, 48). Plaintiffs,
however, cannot prosecute claims based upon errors that run
contrary to the final and binding Order of Foreclosure in
which the clerk found that Wells Fargo was allowed to proceed
with foreclosure under the Deed of Trust. See
Funderburk, 775 S.E.2d at 7 (“Where the
foreclosures were conducted pursuant to orders by the clerk
and superior court judge, we hold plaintiffs cannot recover
damages resulting from the foreclosures.”).
Accordingly, these claims also fail.
to the extent that [Plaintiffs] failed to raise any of these
issues as a defense in the underlying foreclosure proceeding,
the doctrine of res judicata bars [Plaintiffs] from raising
them here.” Hardin, No. 7:16-CV-75-D, 2017 WL
44709, at *5; see Goins v. Cone Mills Corp., 367
S.E.2d 335, 336-37 ( N.C. Ct. App. 1988) (noting that res
judicata bars “every ground of recovery or defense
which was actually presented or which could have been
presented in the previous action”). Plaintiffs were a
party to and addressed their concerns with the foreclosure
through all levels of the state court judicial system,
including the Clerk, Superior Court, and the Court of
Appeals. Not only were Plaintiffs consistently denied the
relief they sought, but the foreclosure was consistently
Plaintiffs essentially seek to attack and undermine the
legitimacy of the state foreclosure proceedings that found a
valid debt, in default, subject to foreclosure, and the
validity of the foreclosure has been previously litigated in
various state court actions. Plaintiffs may not now challenge
collection and foreclosure efforts predicated upon a valid
Order of Foreclosure. Accordingly, Plaintiffs' claims are
barred by the doctrines of collateral estoppel and res
judicata, and Plaintiffs' Complaint fails to state a
claim upon which relief can be granted under Fed.R.Civ.P.
THEREFORE, ORDERED that Defendant's Amended and Renewed
Motion to Dismiss (Doc. No. 20) is GRANTED, and