Court Opinion

ID: 623539
Source: CourtListenerOpinion
Date Created: 2012-02-25 01:01:36+00
Date Added: 2024-06-11T17:51:04.587021
License: Public Domain

DLD-120                                              NOT PRECEDENTIAL

                     UNITED STATES COURT OF APPEALS
                          FOR THE THIRD CIRCUIT
                               ___________

                                   No. 11-3886
                                   ___________

                                T. BARRY GRAY,
           Individually and As Executor of The Estate of Thelma L. Gray,
                                                    Appellant

                                         v.

  ANGELA L. MARTINEZ, Individually and In Her Capacity as Director of Office of
 Judicial Support of Delaware County; DEBORAH GASTON, Individually and In Her
 Capacity as Former Director of Office of Judicial Support of Delaware County; TCIF
      REO CIT LLC; WACHOVIA BANK NAT'L ASSOC, FKA FIRST UNION
NATIONAL BANK; JOSEPH F. MCGINN, Individually and In His Capacity as Sheriff
 of Delaware County; SELECT PORTFOLIO SERVICING, INC., FKA FAIRBANKS
                            CAPITAL CORPORATION
                      ____________________________________

                  On Appeal from the United States District Court
                      for the Eastern District of Pennsylvania
                          (D.C. Civil No. 2-08-cv-02603)
                   District Judge: Honorable Timothy J. Savage
                   ____________________________________

                      Submitted for Possible Summary Action
                 Pursuant to Third Circuit LAR 27.4 and I.O.P. 10.6
                                 February 16, 2012
            Before: AMBRO, JORDAN and VANASKIE, Circuit Judges

                         (Opinion filed: February 24, 2012)
                                     _________

                                    OPINION
                                    _________
                                         1
PER CURIAM

      The pro se appellant, T. Barry Gray, requests review of a series of District Court

decisions dismissing his complaint against the appellees. Finding no substantial question

to be presented by this appeal, we will summarily affirm.

      Gray brought suit in June of 2008, seeking ―declaratory and injunctive relief and

money damages under 42 U.S.C. § 1983 and the Pennsylvania Unfair Trade Practices and

Consumer Protection Law[,] and Pennsylvania Statutes and common law.‖ Compl. ¶ 1,

ECF No. 17. He complained that the defendants had all played a part in unlawfully

foreclosing on the home of his mother, Thelma L. Gray, by knowingly exploiting certain

irregularities in the pertinent mortgage documents and manipulating state-court

proceedings. Those defendants were: Angela Martinez and Deborah Gaston, Directors of

Delaware County‘s Office of Judicial Support who were ―responsible for the records of

the Court of Common Pleas,‖ Compl. ¶¶ 6–7; Joseph McGinn, the sheriff of Delaware

County, Compl. ¶ 11; Select Portfolio Servicing (SPS), Compl. ¶ 9; TCIF REO CIT, LLC

(TCIF),1 an alleged affiliate of SPS, Compl. ¶¶ 8, 52; and Wachovia Bank, the successor

in interest to the original mortgage and its accompanying note, Compl. ¶¶ 10, 14. Gray

alleged that TCIF, SPS, and Wachovia (the ―financial defendants‖) had ―deceived‖ the

state courts into entering a default judgment against the Grays, Compl. ¶ 21; that McGinn

                                            2
―scheduled a sheriff‘s sale . . . based on this excessive judgment,‖ Compl. ¶ 26; and that

Martinez and Gaston entered the incorrect judgment amounts ―pursuant to an official

policy entering default judgments in whatever amount is sought by plaintiff, regardless of

whether that amount is supported,‖ Compl. ¶ 29; see also Compl. ¶¶ 31–34. Gray

organized his complaint into four claims, and sought relief that included a ―judgment . . .

ordering defendants to return title of Plaintiffs[‘] home to them as it was entered prior to

the state court judgment.‖ Compl. IX ¶ 4.

       Over the course of the litigation, the defendants succeeded in dismissing the

complaint in piecemeal fashion through similar motions under Fed. R. Civ. P. 12(b)(1)

and 12(b)(6). See Orders, ECF Nos. 27, 36 (dismissing claims against SPS, Martinez,

Gaston, and McGinn). The District Court dismissed claims against the final two

defendants, Wachovia and TCIF, as part of a lengthy memorandum that also discussed

the Court‘s decision to set aside default judgments against those two defendants. See

Gray v. Martinez, No. 08–2603, 2011 WL 4389543, at *2 (E.D. Pa. Sept. 21, 2011).2

The Court determined that the complaint was defective under the Rooker-Feldman3

doctrine, depriving it of jurisdiction. It also observed that Gray had failed to adequately

1
  TCIF‘s successor, VRF, is the entity participating in the litigation. As our recitation
today focuses on the deficiencies of the complaint, which named TCIF, we will use that
designation to avoid additional confusion.
2
  TCIF also requested injunctive relief under 28 U.S.C. §§ 1651 and 2283, which does
not appear to have been granted. See Memo. of Law 14–17, ECF No. 71-4; Order, ECF
No. 80.
                                              3
plead a claim against the non-state actors. Id. at *3–4. This appeal followed.

         We have jurisdiction under 28 U.S.C. § 1291 and conduct plenary review of Rule

12(b)(1) and 12(b)(6) dismissals, as well as of the District Court‘s jurisdictional

determination. Queen City Pizza, Inc. v. Domino‘s Pizza, Inc., 124 F.3d 430, 436 (3d

Cir. 1997). A decision to set aside a default judgment is reviewed for abuse of discretion.

Stjernholm v. Peterson, 83 F.3d 347, 349 n.1 (10th Cir. 1996); O‘Connor v. Nevada, 27

F.3d 357, 364 (9th Cir. 1994); cf. Budget Blinds, Inc. v. White, 536 F.3d 244, 251 (3d

Cir. 2008). We may summarily affirm if the appeal does not present a substantial

question, and may do so on any basis supported by the record. Murray v. Bledsoe, 650

F.3d 246, 247 (3d Cir. 2011) (per curiam); Fairview Park Excavating Co. v. Al Monzo

Constr. Co., 560 F.2d 1122, 1123 n.2 (3d Cir. 1977).

         Under the Rooker-Feldman doctrine, a losing state-court party is ―barred from

seeking what in substance would be appellate review of the state judgment in a United

States district court, based on [a] claim that the state judgment itself violates the loser‘s

federal rights.‖ Johnson v. De Grandy, 512 U.S. 997, 1005–06 (1994). ―[T]here are four

requirements that must be met for the Rooker-Feldman doctrine to apply: (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‖; the

3
    D.C. Ct. of App. v. Feldman, 460 U.S. 462 (1983); Rooker v. Fidelity Trust Co., 263
                                               4
second and fourth factors are ―the key to determining whether a federal suit presents an

independent, non-barred claim.‖ Great W. Mining & Mineral Co. v. Fox Rothschild

LLP, 615 F.3d 159, 166 (3d Cir. 2010) (internal citations, quotations, and alterations

omitted). We have recently emphasized the narrowness of the doctrine, distinguishing

between injuries caused by the state-court judgment and those brought about by the

defendants‘ actions. See id. at 167–68. In so doing, we have ―recognized that caution is

now appropriate in relying on our [prior] formulation of the Rooker-Feldman doctrine,

which focused on whether the state and federal suits were ‗inextricably intertwined.‘‖ Id.

at 169 (internal quotations, citations omitted).

       According to the record, a default judgment in the state foreclosure action was

entered in 2002; shortly thereafter, the Grays attempted to strike the default judgment, but

were denied relief. A 2003 appeal was unsuccessful. First Union Nat‘l Bank v. Gray,

841 A.2d 582 (Pa. Super. Ct. 2003) (table). As part of its motion to dismiss, TCIF

enclosed a recent copy of the state-court docket, showing that the proceedings continued

for long after the 2003 appeal. However, there is no indication that the default judgment

was ever overturned or otherwise nullified. While the state proceedings may have still

been ongoing when Gray commenced this federal civil suit—the state docket appears to

reflect activity through mid-2009—we are satisfied that the default judgment suffices for

the purposes of Rooker-Feldman.

U.S. 413 (1923).
                                              5
       Having reviewed the record, and liberally interpreting Gray‘s pleadings, see

Moore v. Coats Co., 270 F.2d 410, 411 (3d Cir. 1959), we conclude that the Rooker-

Feldman doctrine bars suit against Gaston and McGinn. For these defendants, the injury

directly flows from the state-court judgment; Gaston allegedly entered the judgment

(indeed, that is the only conduct about which Gray complains), while McGinn brought

about its outcome. To find the defendants‘ conduct unlawful would require us to directly

review the validity of the state-court judgment, which Rooker-Feldman is intended to

prevent.

       With regard to Martinez, Gray‘s only charge is that she ―continues the policies

utilized by defendants Gaston and McGinn as set forth in this action.‖ It is unclear

whether Gray intends to allege that Martinez was directly involved in entering the

complained-of state-court judgment. If she was, then the claims against her are barred by

Rooker-Feldman as explained above. If she was not, and if Gray alleges only that she

continues to enter orders in accordance with a policy to which Gray objects, the claims

against her are jurisdictionally defective for lack of Article III standing, as Gray does not

explain how Martinez was involved in any non-speculative injury to him. See Nat‘l Org.

for Women v. Scheidler, 510 U.S. 249, 255 (1994) (Article III standing is jurisdictional);

Danvers Motor Co. v. Ford Motor Co., 432 F.3d 286, 290–91 (3d Cir. 2005) (explaining

requirements for Article III standing).

       Gray appears to allege that the financial defendants committed fraud by their

                                              6
actions in commencing and executing the foreclosure action; that they, in other words,

misrepresented various values to the state courts, acted in a deceptive manner, and

otherwise deceived the tribunal, causing him injury. Part of the harm allegedly occurred

before the default judgment, a question of timing that we have identified as a ―useful

guidepost‖ in thinking about Rooker-Feldman. See Great W., 615 F.3d at 167. Gray

further alleges additional malfeasance in appraising the property and in connection with

the sheriff‘s sale. All told, while the question is close, we cannot conclude that Gray‘s

claims against the financial defendants would require us to directly review the state-court

decision. As such, Rooker-Feldman does not present a bar to jurisdiction.4

       However, we hold further that Gray has failed to state a claim against the

remaining defendants on which relief could be granted. To the extent that he attempts to

proceed via 42 U.S.C. § 1983, he has not shown that the financial defendants ―acted

under color of state or territorial law.‖ Groman v. Twp. of Manalapan, 47 F.3d 628, 633

(3d Cir. 1995); see also Kach v. Hose, 589 F.3d 626, 646 (3d Cir. 2009). His 42 U.S.C.

4
  In finding otherwise, the District Court observed: ―Whether the movants had the legal
right to foreclose on the mortgage loan has been determined in state court and cannot be
reconsidered by a federal court.‖ Gray, 2011 WL 4389543, at *4. However, ―[i]f a
federal plaintiff ‗present[s] some independent claim, albeit one that denies a legal
conclusion that a state court has reached in a case to which he was a party . . ., then there
is jurisdiction and state law determines whether the defendant prevails under principles of
preclusion.‘‖ Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 293 (2005)
(citing GASH Assocs. v. Rosemont, 995 F.2d 726, 728 (7th Cir. 1993)). Were the
financial defendants to have engaged in fraud, collusion, or other malfeasance in securing
foreclosure, Rooker-Feldman would not prevent the exercise of jurisdiction simply
because relief would cast doubt on the state-court judgment.
                                             7
§ 1985 claim fails because, inter alia, his conspiracy allegations are merely conclusory.

Cf. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). Finally, while Gray invoked

violations of state common law and/or state consumer-protection statutes, his complaint

fails to actually plead those violations, aside from their inclusion in its preamble and in

reference to Gaston and McGinn, whom we have already excluded from liability. See

Compl. ¶ 45.

       In sum, we determine that the complaint was partially barred by Rooker-Feldman,

and partially defective for failure to state a claim on which relief could be granted. These

defects go to the heart of the action, and we are satisfied that amendment would be futile.

Grayson v. Mayview State Hosp., 293 F.3d 103, 114 (3d Cir. 2002). Finally, we detect

no abuse of discretion in setting aside the default judgments against selected defendants.

We will therefore summarily affirm the judgment of the District Court. See 3d Cir.

L.A.R. 27.4; I.O.P. 10.6. Appellees‘ outstanding motions for summary action are denied

as unnecessary.5

5
  We must address two arguments raised in the motion for summary affirmance filed by
Martinez, Gaston, and McGinn. First, those appellees claim that Gray‘s notice of appeal
is untimely as to the specific order dismissing them from the case. But that order was not
a ―final‖ order that would give us jurisdiction. 28 U.S.C. § 1291; Catlin v. United States,
324 U.S. 229, 233 (1945). Second, they argue that Gray‘s notice of appeal ―is for the
September 21, 2011 Order only and not the January 24, 2011 Order relative to‖ them. It
has been our longstanding practice to construe a pro se notice of appeal liberally so as to
include prior orders and judgments that substantially relate to the specific order being
appealed. See Ghana v. Holland, 226 F.3d 175, 180 (3d Cir. 2000).
                                              8