Court Opinion

ID: 6345478
Source: CourtListenerOpinion
Date Created: 2022-05-31 17:00:34.198028+00
Date Added: 2024-06-11T15:49:20.332717
License: Public Domain

Appellate Case: 21-4108     Document: 010110690652      Date Filed: 05/31/2022   Page: 1
                                                                                 FILED
                                                                     United States Court of Appeals
                       UNITED STATES COURT OF APPEALS                        Tenth Circuit

                              FOR THE TENTH CIRCUIT                         May 31, 2022
                          _________________________________
                                                                        Christopher M. Wolpert
                                                                            Clerk of Court
  DAVID A. GOODWILL, individually,

        Plaintiff - Appellant,

  and

  ESTATE OF PHYLLIS A. HANSEN,

        Plaintiff,

  v.                                                         No. 21-4108
                                                    (D.C. No. 2:18-CV-00948-CW)
  ETITLE INSURANCE AGENCY,                                     (D. Utah)
  a Foreclosure Commissioner designated
  by the Secretary of Housing and Urban
  Development on October 29, 2008;
  SECRETARY OF HOUSING AND
  URBAN DEVELOPMENT,

        Defendants - Appellees.
                       _________________________________

                              ORDER AND JUDGMENT *
                          _________________________________

 Before TYMKOVICH, Chief Judge, HOLMES and ROSSMAN, Circuit Judges.
                  _________________________________

        *
         After examining the briefs and appellate record, this panel has determined
 unanimously that oral argument would not materially assist in the determination of
 this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
 ordered submitted without oral argument. This order and judgment is not binding
 precedent, except under the doctrines of law of the case, res judicata, and collateral
 estoppel. It may be cited, however, for its persuasive value consistent with
 Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Appellate Case: 21-4108   Document: 010110690652        Date Filed: 05/31/2022     Page: 2

       David Goodwill, appearing pro se, 1 appeals the district court’s dismissal of his

 claims against eTitle Insurance Agency (eTitle) and the United States Secretary of

 Housing and Urban Development (HUD). Exercising jurisdiction under 28 U.S.C.

 § 1291, we affirm.

                                   BACKGROUND

       Mr. Goodwill’s mother, Phyllis Hansen, owned a condominium in Murray,

 Utah. She obtained a reverse mortgage—a loan using the equity in the condominium

 as collateral. Mr. Goodwill was not a party to the reverse mortgage, and his name

 was not on any of the reverse mortgage documents. The terms of the reverse

 mortgage allowed HUD to declare default and foreclose on the property if

 Ms. Hansen died before repaying the loan. When Ms. Hansen died in 2016, HUD

 foreclosed on the property. HUD used eTitle as its designated representative to

 execute the foreclosure. See 12 U.S.C. § 3754(a) (allowing HUD to designate a

 foreclosure commissioner for single-family dwellings). The foreclosure proceeded to

 a sale at auction, where HUD purchased the property as the high bidder.

       1
          “While we generally construe pro se pleadings liberally, the same courtesy
 need not be extended to licensed attorneys.” Mann v. Boatright, 477 F.3d 1140, 1148
 n.4 (10th Cir. 2007) (internal citation omitted). Mr. Goodwill was a licensed attorney
 at the outset of this case, but he informed the court of his suspension from the
 practice of law during its pendency. See R. vol. 3 at 12. In this case, our resolution
 of the issues on appeal would be the same regardless of whether we construe
 Mr. Goodwill’s pleadings liberally.
        .
                                           2
Appellate Case: 21-4108    Document: 010110690652        Date Filed: 05/31/2022     Page: 3

       Mr. Goodwill sued HUD and eTitle in Utah state court in 2018. 2 The

 complaint sought a declaratory judgment that Mr. Goodwill was the sole owner of the

 condominium by devise after Ms. Hansen’s death, that “[t]he foreclosure sale and

 purchase by HUD was void ab initio,” R. vol. 2 at 11, and that the foreclosure sale

 constituted slander of title. HUD removed the case to federal court under 28 U.S.C.

 § 1442(a). HUD and eTitle moved to dismiss for lack of subject-matter jurisdiction

 and for failure to state a claim, respectively. A lengthy delay ensued when

 Mr. Goodwill filed for bankruptcy protection and the bankruptcy trustee took no

 action to substitute himself for Mr. Goodwill as the plaintiff in the action against

 HUD and eTitle. The court dismissed the case for lack of standing, but later

 reopened it after the bankruptcy case concluded and Mr. Goodwill filed an amended

 complaint.

       The amended complaint included three counts. Count I sought a declaratory

 judgment that Mr. Goodwill was the sole owner of the condominium, Count II

 alleged HUD and eTitle breached the implied duty of good faith and fair dealing in

 the reverse mortgage contract, and Count III sought damages for “wrongful

 foreclosure,” R. vol. 1 at 168. In connection with Count III, Mr. Goodwill alleged

 that HUD had prematurely served him with a five-day notice to vacate the

       2
          At the outset of the suit, Mr. Goodwill appeared both on his own behalf and
 as counsel for Ms. Hansen’s estate, which asserted the same claims. Mr. Goodwill
 later withdrew as counsel for the estate, but continued to prosecute his own claims
 pro se. The estate never hired counsel, so the court eventually dismissed its claims
 without prejudice for failure to prosecute. The estate is not a party in this appeal.
                                             3
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 condominium, and that a HUD representative had promised him he could assume

 Ms. Hansen’s reverse mortgage if he fully paid the outstanding property taxes and

 other fees associated with the condominium.

       HUD and eTitle renewed their motions to dismiss. Mr. Goodwill argued the

 court should convert those motions into motions for summary judgment because they

 included exhibits. He also filed his own motion for summary judgment, arguing

 HUD’s actions amounted to an unconstitutional deprivation of property without due

 process. After a hearing, the district court granted HUD and eTitle’s motions to

 dismiss “[f]or the reasons stated in the motions to dismiss and on the record.”

 R. vol. 3 at 55. The court denied Mr. Goodwill’s motion for summary judgment.

 Mr. Goodwill then moved for reconsideration, which the district court also denied.

 This timely appeal followed.

                                      DISCUSSION

    1. Claims against HUD

       “We review the district court’s dismissal for lack of subject[-]matter

 jurisdiction de novo.” U.S. West, Inc. v. Tristani, 182 F.3d 1202, 1206 (10th Cir.

 1999) (italics omitted). “The burden of establishing a federal court’s subject[-]matter

 jurisdiction rests upon the party asserting jurisdiction.” Safe Streets All. v.

 Hickenlooper, 859 F.3d 865, 878 (10th Cir. 2017) (internal quotation marks omitted).

       Mr. Goodwill failed to establish the district court had jurisdiction over his

 claims against HUD. Because Mr. Goodwill originally filed his suit in state court,

 the district court acquired no greater jurisdiction than the Utah state court had

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 initially. See Lambert Run Coal Co. v. Baltimore & O.R. Co., 258 U.S. 377, 382

 (1922) (“The jurisdiction of the federal court on removal is, in a limited sense, a

 derivative jurisdiction. If the state court lacks jurisdiction of the subject-matter or of

 the parties, the federal court acquires none, although it might in a like suit originally

 brought there have had jurisdiction.”). Under the Quiet Title Act, Mr. Goodwill

 could only have brought his first claim for relief, which sought to vindicate his own

 title to the property as superior to the government’s, in federal court. See 28 U.S.C.

 § 1346(f) (granting federal district courts exclusive jurisdiction of actions to quiet

 title in which the United States is a party). 3 And, under the Tucker Act, 28 U.S.C.

 § 1491(a)(1), the Court of Federal Claims had exclusive jurisdiction over

 Mr. Goodwill’s second and third claims for relief, in which he sought damages for

 HUD’s conduct in connection with the foreclosure.

       Mr. Goodwill’s primary arguments on appeal do not address these

 jurisdictional issues, so we need not reach them. See Bell v. Hood, 327 U.S. 678, 682

 (1946) (“[Q]uestion[s] of law and . . . issues of fact . . . must be decided after and not

 before the court has assumed jurisdiction over the controversy.”). Because Mr.

 Goodwill did not carry his burden to establish the subject-matter jurisdiction of the

 district court, it correctly dismissed his claims against HUD.

       3
          Although Mr. Goodwill amended his complaint in federal court, “when a
 defendant timely raises the derivative jurisdiction doctrine, it erects a mandatory bar
 to the court’s exercise of federal jurisdiction, and a plaintiff cannot circumvent that
 bar merely by filing an amended complaint invoking federal jurisdiction.” Ricci v.
 Salzman, 976 F.3d 768, 773 (7th Cir. 2020).
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    2. Claims against eTitle

        “We review de novo a district court’s decision on a Rule 12(b)(6) motion for

 dismissal for failure to state a claim. Under this standard, we must accept all the

 well-pleaded allegations of the complaint as true and must construe them in the light

 most favorable to the plaintiff.” Waller v. City & Cnty. of Denver, 932 F.3d 1277,

 1282 (10th Cir. 2019) (italics, citation, and internal quotation marks omitted). “To

 survive a motion to dismiss, a 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) (internal quotation marks omitted). “Where a

 complaint pleads facts that are merely consistent with a defendant’s liability, it stops

 short of the line between possibility and plausibility of entitlement to relief.” Id.

 (internal quotation marks omitted).

        The allegations in Mr. Goodwill’s amended complaint do not implicate any of

 eTitle’s conduct. He does not allege eTitle, in its role as HUD’s statutorily

 designated foreclosure commissioner, has any interest in the property adverse to his

 alleged interest, so his quiet title claim fails. And under Utah law, “to find a breach

 of the duty of good faith and fair dealing, there must be some type of preexisting

 contractual relationship.” Andreini v. Hultgren, 860 P.2d 916, 921 (Utah 1993).

 Here, Mr. Goodwill’s claim for breach of the implied duty of good faith and fair

 dealing stems from the reverse mortgage contract, but neither he nor eTitle were

 party to that contract. Finally, the facts Mr. Goodwill pled in connection with his

 claim for “wrongful foreclosure” made no mention of wrongdoing by eTitle.

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       In relation to his claims against eTitle, Mr. Goodwill’s argument that the

 district court should have converted the motion to dismiss to a motion for summary

 judgment fails because “the dismissal can be justified under Rule 12(b)(6) without

 reference to matters outside of the plaintiff’s complaint.” Brown v. Zavaras, 63 F.3d

 967, 970 (10th Cir. 1995). So even if the court should have converted eTitle’s

 motion to one for summary judgment, its failure to do so was harmless. See id.

                                   CONCLUSION

       We affirm the judgment of the district court.

                                           Entered for the Court

                                           Veronica S. Rossman
                                           Circuit Judge

                                           7