UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF OHIO 

EASTERN DIVISION 

TRACY L. CARTER, 

 Plaintiff, 

v. 

BARHAM LEGAL, LLC, et al., 

 Defendants. 

Case No. 2:17-cv-766 

JUDGE GEORGE C. SMITH 

Magistrate Judge Jolson 

OPINION AND ORDER 

This matter is before the Court upon the Motion to Dismiss of Defendants Barham Legal, 

LLC, Daniel Barham, and Partners for Payment Relief DE IV, LLC (Doc. 6). The motion is 

fully briefed and ripe for disposition. For the following reasons, Defendants’ Motion is 

GRANTED IN PART and DENIED IN PART. 

I. BACKGROUND 

This is the second of two related actions concerning Defendants’ attempt to foreclose on 

a second mortgage loan secured by Plaintiff Tracy Carter’s home. Defendant Partners for 

Payment Relief DE IV, LLC (“PPR”) is currently the holder of the note secured by the mortgage, 

although the parties dispute exactly when PPR acquired the note. Defendants Daniel Barham 

(“Barham”) and Barham Legal, LLC (“BL”), as legal counsel for PPR, commenced the first 

action (the “Foreclosure Action”) seeking a foreclosure sale of Carter’s home on August 30, 

2016, in the Court of Common Pleas for Franklin County, Ohio. (Doc. 1-1, Foreclosure 

Complaint). The Foreclosure Complaint contained as an exhibit what purported to be a true and 
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accurate copy of the note. (Doc. 1-1, Note, PAGEID #30–32). The copy of the note attached to 

the Foreclosure Complaint indicated that the loan was originated by Homecomings Financial 

Network, Inc. and had subsequently been indorsed by Homecomings to “Residential Funding 

Corporation,” and then subsequently indorsed by Residential Funding to “U.S. Bank National 

Association as Trustee.” (Id. at PAGEID #32). No further indorsements or allonges were 

included with the Foreclosure Complaint. 

Carter filed an Answer and Counterclaim to the Foreclosure Complaint on January 5, 

2017, alleging that PPR violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. 

§ 1692 et seq., and Ohio’s Consumer Sales Practices Act (“OCSPA”), R.C. § 1345.01 et seq., by 

commencing the Foreclosure Action while PPR lacked the right to enforce the note. (Doc. 1-3, 

Countercl. ¶¶ 45–65). According to Carter, PPR was not entitled to enforce the note because the 

note indorsements attached to the Foreclosure Complaint indicated that the mortgage had been 

assigned to an unrelated third party (U.S. Bank), and also because PPR had failed to register with 

Ohio’s Secretary of State as a foreign entity transacting business in Ohio, which meant it was 

prohibited by Ohio statute from commencing any litigation in Ohio. (Id. ¶¶ 2–12). 

During discovery in the Foreclosure Action, Defendants purported to make the original 

note held by PPR available for inspection to Carter’s counsel on February 28, 2017. (Doc. 1, 

Compl. ¶¶ 34–35). Carter’s counsel noted that the original note provided to her was identical to 

the note attached to the Foreclosure Complaint—that is, it indicated that the note had been 

indorsed to U.S. Bank, not PPR. (Id. ¶¶ 36–37). Defendants later realized that two additional 

allonges had inadvertently been separated from the original note, and produced the two allonges 

in discovery on April 5, 2017. (Id. ¶ 38). These two allonges were undated and assigned the 

note from “U.S. Bank National Association as Trustee” to “U.S. Bank National Association, as 
3 

Trustee for Residential Asset Securities Corporation, Home Equity Mortgage Asset-Backed 

Pass-Through Certificates, Series 2006-KS1,” and from “U.S. Bank National Association, as 

Trustee for Residential Asset Securities Corporation, Home Equity Mortgage Asset-Backed 

Pass-Through Certificates, Series 2006-KS1” to PPR. (Doc. 1-5, Allonges). 

Carter moved for sanctions in the Common Pleas Court, arguing that PPR and Barham 

engaged in frivolous conduct when they commenced the Foreclosure Action despite not having 

the relevant allonges in their possession. (Doc. 6-1, Mot. for Sanctions, PAGEID #153–165). 

Alternatively, if Defendants did have the allonges in their possession at the time the Foreclosure 

Complaint was filed, then the representations in the Foreclosure Complaint and accompanying 

affidavit, to the effect that a true and accurate copy of the note was attached to the Foreclosure 

Complaint, were false. (Id.). On August 29, 2017, the Common Pleas Court declined to issue 

sanctions, finding no evidence that Defendants intentionally misled Carter and noting that they 

acted promptly to make the original allonges available when they discovered the omission. 

(Doc. 6-1, Order Denying Sanctions, PAGEID #256–57). 

On August 30, 2017, the day after the Common Pleas Court denied Carter’s request for 

sanctions, Carter voluntarily dismissed her counterclaims in the Foreclosure Action. (Doc. 6-1, 

Notice of Dismissal, PAGEID #263). That same day, Carter also commenced the present action 

in this Court, seeking damages under the FDCPA and the OCSPA based on PPR’s inability to 

enforce the note at the time the Foreclosure Complaint was filed. (Doc. 1, Compl.). Defendants 

now move to dismiss Carter’s Complaint for failure to state a claim upon which relief can be 

granted under Federal Rule of Civil Procedure 12(b)(6). Alternatively, Defendants seek 

dismissal pursuant to the Younger or Colorado River abstention doctrines. 
4 

II. DISCUSSION 

Because substantive analysis of Carter’s claims will be unnecessary should the Court 

decide abstention is appropriate, the Court turns to Defendants’ abstention arguments first. 

A. Motion to Dismiss in Favor of Abstention 

Defendants argue for abstention by this Court, in deference to the Foreclosure Action 

now pending in the Franklin County Court of Common Pleas, under two separate doctrines: 

those set forth in each of Younger v. Harris, 401 U.S. 37 (1971) and Colorado River Water 

Conservation Dist. v. U.S., 424 U.S. 800 (1976). As a general matter, federal courts are typically 

“obliged to decide cases within the scope of federal jurisdiction. Abstention is not in order 

simply because a pending state-court proceeding involves the same subject matter.” Sprint 

Commc’ns, Inc. v. Jacobs, 571 U.S. 69, 134 S. Ct. 584, 588 (2013). There are certain contexts 

that warrant abstention, but these contexts represent narrow exceptions to the “virtually 

unflagging obligation of the federal courts to exercise the jurisdiction given them.” Id.; Romine 

v. Compuserve Corp., 160 F.3d 337, 339 (6th Cir. 1998) (quoting Colorado River, 424 U.S. at 

817). 

1. Abstention is not warranted under Younger.

Younger abstention applies primarily when the federal action from which a federal court 

is asked to abstain parallels a state criminal proceeding; however, the doctrine is also applicable 

in certain other limited circumstances. Doe v. Univ. of Kentucky, 860 F.3d 365, 369 (6th Cir. 

2017). The Supreme Court laid out the categories of state proceedings subject to Younger in 

New Orleans Pub. Serv., Inc. v. Council of City of New Orleans, 491 U.S. 350, 368 (1989) 

(“NOPSI”): Namely, abstention may be appropriate if the state proceedings involve (1) a 

criminal prosecution; (2) civil enforcement proceedings that “are akin to criminal prosecutions”; 

or (3) civil proceedings involving certain orders that are uniquely in furtherance of the state 
5 

courts’ ability to perform their judicial functions. NOPSI, 491 U.S. at 368; Sprint Commc’ns, 

Inc. v. Jacobs, 571 U.S. 69, 134 S. Ct. 584, 591 (2013) (affirming that the three “exceptional” 

categories listed in NOPSI “define Younger’s scope.”). 

If and only if the Court determines that the state proceeding falls within one of the NOPSI

categories, the Court then evaluates the state proceeding using a three-factor test laid out in 

Middlesex County Ethics Committee v. Garden State Bar Ass’n, 457 U.S. 423 (1982). See 

Sprint, 134 S. Ct. at 593–94 (clarifying that the Middlesex factors are only considered by a court 

after the court decides that one of the NOPSI exceptional circumstances is present). Middlesex 

permits abstention when three criteria are met: (1) state proceedings are currently pending; 

(2) the proceedings involve an important state interest; and (3) the state proceedings will provide 

the federal plaintiff with an adequate opportunity to raise his constitutional claims. Middlesex, 

457 U.S. at 432-34. 

The Foreclosure Action related to this case does not meet any of the NOPSI 

“exceptional” categories. The Foreclosure Action is neither criminal in nature, nor a civil 

enforcement proceeding akin to a criminal prosecution, nor does it implicate Ohio’s interest in its 

courts’ ability to perform their judicial functions. Rather, the Foreclosure Action is merely a 

private dispute between private parties; it was neither initiated or defended by the State nor 

implicates any important State interest. Simply put, the Foreclosure Action is not the sort of 

proceeding which the Younger abstention doctrine was created to address. Abstention is 

therefore not warranted under Younger. 

2. Abstention is warranted under Colorado River.

The Colorado River abstention doctrine is somewhat broader than that of Younger, in that 

the threshold inquiry depends not on the type of state proceeding, but merely whether there are 

concurrent state and federal proceedings that are “parallel.” Romine, 160 F.3d at 339. “‘[E]xact 
6 

parallelism’ is not required; ‘[i]t is enough if the two proceedings are substantially similar.’” Id. 

at 340 (quoting Nakash v. Marciano, 882 F.2d 1411, 1416 (9th Cir. 1989)). 

If parallel state and federal proceedings exist, the Court proceeds to balance the eight 

factors laid out in Colorado River: (1) whether the state court has assumed jurisdiction over any 

res or property; (2) the convenience of the federal forum; (3) the avoidance of piecemeal 

litigation; (4) the order in which the state and federal proceedings were filed; (5) the relative 

progress of the state and federal litigation; (6) whether the claims present a federal question; 

(7) the adequacy of the state forum to protect the rights of the federal plaintiffs; and (8) the 

presence or absence of concurrent jurisdiction. Romine, 160 F.3d at 340–341 (citing Colorado 

River, 424 U.S. at 818–19). The Supreme Court has cautioned that “[n]o one factor is 

necessarily determinative; [rather,] a carefully considered judgment taking into account both the 

obligation to exercise jurisdiction and the combination of factors counselling against that 

exercise is required.” Colorado River, 424 U.S. at 819–20. 

The Court is persuaded that the present federal action is parallel to the state Foreclosure 

Action. Carter’s claims under the FDCPA and the OCSPA were initially raised in the 

Foreclosure Action as counterclaims, and although Carter voluntarily dismissed her 

counterclaims in the Foreclosure Action, she continues to advance the underlying issues as 

defenses to the Foreclosure Action on summary judgment.1 Resolution of the Foreclosure 

Action will therefore require disposition of the issues raised by Carter in this action. See Blake v. 

Wells Fargo Bank, NA, 917 F. Supp. 2d 732, 737 (S.D. Ohio 2013) (Frost, J.) (federal claims 

under the Truth in Lending Act were parallel with state foreclosure proceedings when the federal 

claims were also asserted as counterclaims in the foreclosure proceedings). 

 

1

 The Court may take judicial notice of state court records. Lyons v. Stovall, 188 F.3d 327, 332 n. 3 (6th Cir. 1999). 
7 

Additionally, nearly all of the Colorado River factors favor abstention. First, and “[m]ost 

significantly, the Ohio state court has assumed jurisdiction of the property, satisfying arguably 

the most important factor given the subject matter of this litigation.” Blake, 917 F. Supp. 2d at 

737 (citing Beepot v. J.P. Morgan Chase Nat. Corp. Servs., Inc., No. 3:10-CV-423-J-34TEM, 

2011 WL 4529604, at *8 (M.D. Fla. Sept. 30, 2011) and United States v. Fairway Capital Corp.,

483 F.3d 34, 40 n. 2 (1st Cir. 2007)). And, as the Common Pleas Court is less than a mile away 

from the seat of this Court, the second factor (convenience of the federal forum) is neutral. 

Abstention is favored by the third factor, avoidance of piecemeal litigation, because, 

“should both this action and the state action continue to proceed independently, there is a risk of 

inconsistent results, ‘which would throw the ownership of the subject property in turmoil.’” 

Blake, 917 F.Supp. 2d at 737–38 (quoting Beepot, 2011 WL 4529604, at *9). See also Moses H. 

Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 19 (1983) (noting that “the paramount 

consideration” in Colorado River was “the danger of piecemeal litigation”). Allowing both 

actions to proceed would also create “perverse incentives for each party ‘to accelerate or stall 

proceedings in one of the forums in order to ensure that the court most likely to rule in its favor 

will decide a particular issue first.’” Emerald Logistics, Inc. v. Crutcher, No. 2:07-CV-1112, 

2008 WL 3926441, at *1–2 (S.D. Ohio Aug. 25, 2008) (Marbley, J.) (quoting LaDuke v. 

Burlington N.R.R., 879 F.2d 1556, 1560 (7th Cir.1989)). 

Further, while it is possible that Carter had a legitimate reason for dismissing her 

counterclaims in the Foreclosure Action almost immediately after the Common Pleas Court 

denied her motion for sanctions, and then commencing the present action asserting nearly 

identical claims the same day, the Court is not unconcerned by the possibility that Carter 

engaged in forum shopping after receiving an unfavorable decision in the state court. Dual-track 
8 

proceedings “that are the product of gamesmanship or that result in conflicting adjudications” 

threaten the “legitimacy of the court system in the eyes of the public and fairness to the 

individual litigants.” Emerald Logistics, 2008 WL 3926441 at *4 (quoting Lumen Const., Inc. v. 

Brant Const. Co., Inc., 780 F.2d 691, 694 (7th Cir. 1985)). 

The fourth and fifth factors also favor abstention, because the Foreclosure Action was 

commenced in state court a year prior to the commencement of this action, and the Foreclosure 

Action has already proceeded through pleadings, discovery, dispositive motions, and is 

approaching readiness for trial in the next two to three months.2 In contrast, the action in this 

Court is still in the early stages with discovery continuing through May 1, 2018, and dispositive 

motions not due until June 1, 2018. (Doc. 11, Mem. of First Pretrial Conference). 

The sixth through eighth factors involve the ability of the state court to adequately 

adjudicate the claims asserted in the federal action. Again, these factors favor abstention. Some 

of Carter’s claims are expressly brought under the OCSPA, an Ohio statute, and even much of 

her federal statutory claims under the FDCPA turn on the interpretation of Ohio statutes 

governing registration and licensure of foreign limited liability companies. Moreover, the state 

court has concurrent jurisdiction over Carter’s FDCPA claims. Ruth v. Unifund CCR Partners, 

No. 5:08CV2689, 2009 WL 585847, at *8 (N.D. Ohio Mar. 6, 2009), aff’d, 604 F.3d 908 (6th 

Cir. 2010). There is therefore no reason why Carter’s claims asserted in this action could not be 

fully and fairly adjudicated by the state court in the Foreclosure Action. 

After balancing the Colorado River factors (seven of which favor abstention and one of 

which is neutral), the Court concludes that abstention is appropriate in this case. The Court will 

therefore abstain under Colorado River from exercising jurisdiction over Carter’s claims asserted 

 

2

 The online docket for the Foreclosure Action reflects a trial date initially set for January 2018. The parties have 

informed the Court that the trial was continued and has not yet been rescheduled, though at the most recent state 

court conference, there was discussion of setting the trial for June or July of 2018. 
9 

in the federal action. However, while Defendants seek dismissal on abstention grounds, the 

Sixth Circuit has counseled that Colorado River abstention requires a stay, not dismissal, of the 

federal action. Bates v. Van Buren Twp., 122 F. App’x 803, 809 (6th Cir. 2004). See also 

Quackenbush v. Allstate Ins. Co., 517 U.S. 706 (1996) (holding that dismissal on abstention is 

inappropriate where claims in federal court are for money damages and not equitable relief); 

Gray v. Bush, 628 F.3d 779, 785 (6th Cir. 2010) (same). If, at the conclusion of the Foreclosure 

Action, “any party still has a claim for which it is entitled to a federal forum, and it is not barred 

by res judicata or a similar doctrine, it may return to federal court.” Bates, 122 Fed. App’x at 

809. 

B. Motion to Dismiss for Failure to State a Claim 

In addition to moving for dismissal on abstention grounds, Defendants move in the 

alternative to dismiss Carter’s claims under Federal Rule of Civil Procedure 12(b)(6) for failure 

to state a claim upon which the Court can grant relief. Because the Court has decided to abstain 

from adjudicating the merits of Carter’s claims until the conclusion of the Foreclosure Action, 

the Court need not address the Rule 12(b)(6) portion of Defendants’ motion. 

III. CONCLUSION 

For the foregoing reasons, Defendants’ Motion to Dismiss is GRANTED IN PART and 

DENIED IN PART. This action is STAYED pending the resolution of the Foreclosure Action 

in the Franklin County Court of Common Pleas. The parties are ORDERED to inform the Court 

within three days of the entry of a final judgment on the merits in the Foreclosure Action. 

The Clerk shall remove Document 6 from the Court’s pending motions list. 

IT IS SO ORDERED. 

 /s/ George C. Smith 

GEORGE C. SMITH, JUDGE 

UNITED STATES DISTRICT COURT