Court Opinion

ID: 9347342
Source: CourtListenerOpinion
Date Created: 2022-12-19 20:00:45.874354+00
Date Added: 2024-06-11T16:41:17.817039
License: Public Domain

USCA11 Case: 21-10561    Document: 36-1      Date Filed: 12/19/2022    Page: 1 of 10

                                                    [DO NOT PUBLISH]
                                    In the
                 United States Court of Appeals
                         For the Eleventh Circuit

                           ____________________

                                 No. 21-10561
                           ____________________

        SUSAN LYNNE ROHE
                                                       Plaintiff-Appellant,
        versus
        WELLS FARGO BANK, NA,

                                                     Defendant-Appellee.

                           ____________________

                  Appeal from the United States District Court
                      for the Southern District of Florida
                     D.C. Docket No. 1:19-cv-23805-RNS
                           ____________________
USCA11 Case: 21-10561     Document: 36-1      Date Filed: 12/19/2022    Page: 2 of 10

        2                      Opinion of the Court               21-10561

        Before WILLIAM PRYOR, Chief Judge, JILL PRYOR, and GRANT, Cir-
        cuit Judges.
        PER CURIAM:
                For nearly a decade, across state and federal courts, Susan
        Rohe has fought the foreclosure of her home by Wells Fargo. After
        Wells Fargo initiated foreclosure proceedings and prevailed in a
        Florida court, Rohe filed a bankruptcy petition in federal court and
        objected to Wells Fargo’s claims as a creditor on the same grounds
        that she had raised in state court. Rohe also attempted to remove
        her appeal of the state judgment to federal court and to stay the
        ongoing state proceedings. These efforts failed. The bankruptcy
        court denied Rohe’s removal motion, lifted the stay of state pro-
        ceedings, and concluded that Wells Fargo had a valid claim. Soon
        after, a Florida court dismissed her appeal.
               Rohe appealed the bankruptcy court’s orders to the district
        court, which granted Wells Fargo’s motion to dismiss. On appeal
        to this Court, Rohe challenges the bankruptcy court’s procedural
        rulings and the legitimacy of Wells Fargo’s proof of claim. Rohe’s
        procedural objections lack merit, and because the state court ruled
        that Wells Fargo is entitled to a judgment of foreclosure, Rohe’s
        challenge to Wells Fargo’s proof of claim is barred by res judicata.
        We affirm.
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        21-10561               Opinion of the Court                       3

                                I. BACKGROUND
                In 2005, Susan Rohe and her husband purchased a home
        with a mortgage of $448,000. When the Rohes stopped making
        payments on the mortgage in 2012, the assignee of the mortgage,
        Wells Fargo, instituted foreclosure proceedings in a Florida court.
        In 2018, the state court found that Wells Fargo had authenticated
        its assignment of the promissory note that secured the mortgage
        and that the Rohes had defaulted on the mortgage. The state court
        entered judgment in favor of Wells Fargo. The Rohes appealed to
        the Florida Third District Court of Appeals.
               While the state-court appeal was pending, Susan Rohe filed
        a bankruptcy petition in federal court. Rohe moved to stay the state
        court litigation based on the commencement of the bankruptcy
        proceeding. See 11 U.S.C. § 362(a). But the state court denied her
        motion. Soon after, the bankruptcy court formally lifted the stay.
               Rohe then filed a flurry of motions and adversary complaints
        in bankruptcy court to try to delay the sale of her home. Rohe chal-
        lenged Wells Fargo’s proof of claim over the property; moved the
        bankruptcy court to reconsider its order lifting the stay and allow-
        ing the sale of her property; and filed a notice of a purported re-
        moval of the state court appeal to federal court. The bankruptcy
        court rejected these motions and dismissed Rohe’s new com-
        plaints.
             The Florida appeals court then affirmed the foreclosure
        judgment, and the trial court set a date for the foreclosure sale.
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        4                      Opinion of the Court                 21-10561

        Wells Fargo also sought relief from the bankruptcy court to pro-
        ceed with the sale of the property, which the bankruptcy court
        granted. Rohe appealed the bankruptcy court’s dismissal of her mo-
        tions and adversary complaints to the district court. Rohe simulta-
        neously commenced a collateral action under the All Writs Act, see
        28 U.S.C. § 1651, which was dismissed by the district court and af-
        firmed on appeal by this Court. See Rohe v. Wells Fargo Bank,
        N.A., 988 F.3d 1256 (11th Cir. 2021).
               The district court granted Wells Fargo’s motion to dismiss
        Rohe’s appeal. The court found that Rohe had improperly split re-
        lated claims between the bankruptcy action and her All Writs peti-
        tion. As to the remaining claims, the district court found they were
        barred under the doctrine of issue preclusion because the underly-
        ing bases of Rohe’s challenges had been adjudicated in state court.
                          II. STANDARDS OF REVIEW
               Two standards govern our review. We review the bank-
        ruptcy court’s factual findings for clear error. In re Brown, 746 F.3d
        1236, 1239 (11th Cir. 2014). And we review the bankruptcy court
        and district court’s legal conclusions de novo. Id. We may affirm
        on any ground supported by the record. In re Feshbach, 974 F.3d
        1320, 1328 (11th Cir. 2020).
                                 III. DISCUSSION
               We divide our discussion into three parts. First, we explain
        that Rohe’s purported removal of the Florida court action was a
        nullity that the state court correctly treated as ineffective. Second,
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        21-10561                 Opinion of the Court                            5

        we explain that Rohe’s claims against Wells Fargo are barred by res
        judicata based on the state foreclosure judgment. Third, we explain
        that no violation of the automatic stay provision occurred.
           A. Rohe’s Removal of the State-Court Action Was a Nullity.
               Rohe argues that the Florida appellate court erred in ignor-
        ing her “notice of removal” of the proceedings to federal bank-
        ruptcy court. Rohe contends that various filings by Wells Fargo
        and orders by the state appellate and trial courts were void because
        they were entered after the purported removal. We conclude the
        state court proceedings were valid because the purported removal
        was ineffective.
                Before removing an action to federal court, the defendant
        must comply with certain procedural requirements. A defendant
        “desiring to remove any civil action from a State court shall file in
        the district court of the United States for the district and division
        within which such action is pending a notice of removal.” 28 U.S.C.
        § 1446(a). After a valid removal has occurred, the state court “shall
        effect the removal and the State court shall proceed no further un-
        less and until the case is remanded.” Id. § 1446(d). So, before the
        state court stays its proceedings, there must be a valid removal.
        And for removal to be valid, there must be a “pending” state action
        to remove. See also id. § 1452(a) (providing that in bankruptcy
        cases, “a party may remove any claim or cause of action in a civil
        action . . . to the district court for the district where such civil action
        is pending”) (emphasis added).
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        6                       Opinion of the Court                   21-10561

               In this case, there was no pending civil action to be removed
        under section 1446(a). By the time Rohe filed her notice of re-
        moval, the state trial court had already issued its judgment in favor
        of Wells Fargo. The underlying case was no longer awaiting deci-
        sion, so there was no “claim” or “action . . . pending” that could be
        removed. See id. §§ 1446(a), 1452(a). When Rohe filed her notice
        of removal, she had already appealed to Florida’s Third District
        Court of Appeals. The state trial court litigation had ended.
                The state-court appeal could not qualify as a “pending” ac-
        tion for purposes of removal. It is a basic principle of federal juris-
        diction that a federal district court may not review the judgment of
        a state court on an issue of state law on direct appeal. See generally
        Martin v. Hunter’s Lessee, 14 U.S. 304 (1816); see also Rooker v.
        Fid. Tr. Co., 263 U.S. 413 (1923); D.C. Ct. of Appeals v. Feldman,
        460 U.S. 462 (1983); Rohe, 988 F.3d at 1262 (explaining that the
        Rooker-Feldman doctrine “reflects the fact that federal courts other
        than the Supreme Court do not possess appellate jurisdiction over
        state-court judgments”). Removal to federal court may not occur
        after a state trial court has issued its judgment. As a result, the Flor-
        ida appeal was not a “pending” action under section 1446(a) that
        could support removal.
                Rohe erroneously argues that even if her removal was inva-
        lid, the state court had to stay its proceedings until a federal court
        expressly decided if the removal was effective. The governing stat-
        ute instructs the state court to “effect the removal,” which pre-
        sumes that there is a valid removal to “effect.” In this case, the state
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        21-10561                 Opinion of the Court                            7

        appeals court correctly concluded that the removal was not valid
        because it postdated the state trial court’s decision. So, a stay was
        not warranted and the later state proceedings are valid.
                B. The Doctrine of Res Judicata Bars Rohe’s Claims.
                Because the state court proceedings were valid, the final
        judgment entered by the state court is also entitled to preclusive
        effect. Res judicata bars the relitigation of a prior cause of action
        when the following four elements are satisfied: “(1) the prior deci-
        sion must have been rendered by a court of competent jurisdiction;
        (2) there must have been a final judgment on the merits; (3) both
        cases must involve the same parties or their privies; and (4) both
        cases must involve the same causes of action.” In re Piper Aircraft
        Corp., 244 F.3d 1289, 1296 (11th Cir. 2001). “The court next deter-
        mines whether the claim in the new suit was or could have been
        raised in the prior action; if the answer is yes, res judicata applies.”
        Id. Under this framework, the foreclosure judgment entered by the
        state court against Rohe bars the claims that she raised in bank-
        ruptcy court.
                   The applicability of res judicata turns on the final element.
        It is indisputable that the Florida trial court litigation, which also
        involved Rohe and Wells Fargo, satisfies the first three elements of
        res judicata. To decide whether causes of action are the same, “a
        court must compare the substance of the actions, not their form
        . . . . [I]f a case arises out of the same nucleus of operative fact, or is
        based upon the same factual predicate, as a former action, [then]
        the two cases are really the same ‘claim’ or ‘cause of action’ for
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        8                       Opinion of the Court                   21-10561

        purposes of res judicata.” Id. at 1297 (quoting Ragsdale v. Rubber-
        maid, Inc., 193 F.3d 1235, 1239 (11th Cir. 1999)).
               Rohe’s federal claims arise out of the same nucleus of oper-
        ative facts as the claims against her in state court. In both state and
        federal court, Rohe argued that Wells Fargo’s proof of claim over
        the mortgage was invalid. In state court, Rohe argued that foreclo-
        sure was not proper because “Wells Fargo failed to provide suffi-
        cient evidence to” authenticate the assignment of the promissory
        note that secured the mortgage. Rohe also argued that Wells Fargo
        had committed fraud in attempting to authenticate the promissory
        note. The state trial court rejected both of Rohe’s arguments. It
        found that the assignment was valid and that Wells Fargo cured
        any deficiencies in the promissory note. It also found that Wells
        Fargo did not commit fraud and “expressly rejected” Rohe’s argu-
        ments to the contrary. The state court found that Wells Fargo was
        “entitled to a judgment of foreclosure.”
                In federal bankruptcy court, Rohe raised claims about the
        same facts. She objected to Wells Fargo’s proof of claim on the ba-
        sis that it failed to prove the transfer of the loan and had committed
        fraud in authenticating the note. One of Rohe’s adversary com-
        plaints rehearsed the same arguments. These claims all arise out of
        the same nucleus of operative facts alleged in Florida state court.
        The claims also raise the same legal theories Rohe raised in state
        court to contest the validity of the mortgage. See Maldonado v.
        U.S. Att’y Gen., 664 F.3d 1369, 1377 (11th Cir. 2011) (“A new claim
        is barred by res judicata if it is based on a legal theory that was . . .
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        21-10561                Opinion of the Court                         9

        used in the prior action.”). So, res judicata bars Rohe from relitigat-
        ing these claims.
             C. The State Court Did Not Violate the Automatic Stay.
               Rohe separately argues that the state appeals court violated
        the automatic stay that occurs when a bankruptcy petition is filed.
        Rohe argues that the state court’s decision was void because the
        court did not have jurisdiction while the stay was in place. Her ar-
        gument lacks merit.
               When a bankruptcy action is filed, a stay of other relevant
        proceedings—including “any act to obtain possession of property
        of the estate”—goes into place. 11 U.S.C. § 362(a)(3). In this case,
        Rohe filed her bankruptcy petition on February 15, 2019, triggering
        the stay. A few months later, on July 3, 2019, the bankruptcy court
        granted Wells Fargo’s motion to lift the stay. Rohe then filed a mo-
        tion for reconsideration of the court’s order. But, on August 19,
        2019, the bankruptcy court dismissed her motion for reconsidera-
        tion. Following that order, on August 21, 2019, the state appeals
        court affirmed the trial court.
                The state court did not violate the automatic stay. It issued
        its substantive decision more than a month after the stay had been
        lifted. The state court took no actions of consequence during the
        gap. And the state court had jurisdiction to issue the order that has
        res judicata effect on these proceedings.
               Rohe points to three orders that the state court issued during
        the time the stay was active and argues that they were void. But
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        10                     Opinion of the Court                21-10561

        those orders only denied a “[m]isc[ellaneous] motion,” ordered a
        response, and denied an extension of time. They were not substan-
        tive. And Rohe was the party who sought the extension. The orders
        do not affect the state court’s mandate, and withdrawing them
        would afford Rohe no relief.
               Rohe also argues that the automatic stay existed until Sep-
        tember 2, 2019, thus extending beyond the state court decision on
        August 21, 2019. Rohe correctly observes that the Federal Rules of
        Bankruptcy Procedure provide that a “stay does not expire until 14
        days after the Order is entered, absent language in the Order to the
        contrary.” (Citing FED. R. BANKR. P. 4001). But a motion for recon-
        sideration does not toll the stay’s fourteen-day expiration date. See
        FED. R. CIV. P. 60(c). Therefore, the stay expired on July 17—not
        September 2. As already noted, the state court took no actions of
        consequence during this time.
               Finally, Rohe contends that she should be awarded dam-
        ages, attorney’s fees, or other costs because Wells Fargo filed mo-
        tions in state court while the stay was in place. Federal law makes
        such awards possible only when “an individual [is] injured by any
        willful violation of a stay.” 11 U.S.C. § 362(k)(1). And the record
        lacks evidence that Rohe was injured by any violation of the stay
        or that Wells Fargo’s actions were willful.
                                IV. CONCLUSION
              We AFFIRM the dismissal of Rohe’s appeal.