Court Opinion

ID: 4113124
Source: CourtListenerOpinion
Date Created: 2017-01-04 18:00:42.844043+00
Date Added: 2024-06-11T07:45:44.201936
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ___________

                                      No. 16-2820
                                      ___________

                              CHARLESWORTH LEWIS,
                                          Appellant

                                             v.

            LAUREN E. O’DONNELL, Esq.; KEVIN C. RAKOWSKI, Esq;
    FRANK J. KEENAN, Esq; PENNYMAC CORP.; M. E. WILEMAN; C. LAFFERTY
                  ____________________________________

                     On Appeal from the United States District Court
                              for the District of New Jersey
                         (D.C. Civil Action No. 2-16-cv-01514)
                       District Judge: Honorable Jose L. Linares
                      ____________________________________

                    Submitted Pursuant to Third Circuit LAR 34.1(a)
                                  December 16, 2016

              Before: AMBRO, KRAUSE and NYGAARD, Circuit Judges

                             (Opinion filed: January 4, 2017)
                                      ___________

                                       OPINION*
                                      ___________

PER CURIAM

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
          Charlesworth Lewis appeals from an order of the United States District Court for

the District of New Jersey dismissing his complaint. For the reasons that follow, we will

affirm.

          Lewis defaulted on a mortgage that had been assigned to PennyMac Corporation.

Consequently, PennyMac filed a foreclosure action in the Superior Court of New Jersey,

Chancery Division (Essex County). Lewis failed to respond, and a final judgment by

default was entered against him in October 2014.1 In May 2015, Lewis initiated a

separate action against PennyMac in the Chancery Division, alleging that the assignment

of his mortgage was fraudulently drafted, executed, and recorded. On August 21, 2015,

the Chancery Division granted PennyMac’s motion to dismiss and dismissed the action

with prejudice.

          In March 2016, Lewis filed a complaint in the District Court, challenging the

foreclosure action on the ground that the assignment of the mortgage to PennyMac was

“defective.” In particular, he alleged violations of the Fair Debt Collection Practices Act

(FDCPA), the Racketeer Influenced and Corrupt Organizations (RICO) Act, the New

Jersey Consumer Fraud Act (CFA), and civil conspiracy laws. Lewis named as

defendants PennyMac, attorneys who represented PennyMac, and individuals involved in

1
 Thereafter, Lewis filed a motion to vacate the default judgment, arguing that the
assignment of the mortgage to PennyMac was invalid. The Chancery Division denied
Lewis’ motion. Lewis appealed, and the Superior Court, Appellate Division, affirmed.
See Pennymac Corp. v. Lewis, 2016 WL 3981210, at *2 (N.J. Super. Ct. App. Div. July
26, 2016) (not precedential).

                                               2
executing and notarizing the PennyMac assignment. The defendants were not served

with the complaint but, upon learning of its existence through their own docket search,

filed a motion to dismiss. Lewis filed a response in opposition. The District Court

denied the motion to dismiss as moot, but nevertheless dismissed the complaint, holding

that Lewis’ claims were barred by the Rooker-Feldman doctrine and New Jersey’s entire

controversy doctrine.2 Lewis appealed.3

       In his brief, Lewis primarily alleges that his procedural due process rights were

violated by the District Court’s dismissal of his complaint before the Defendants were

served, entered an appearance, and participated in discovery. In Oatess v. Sobolevitch,

we held that dismissal of a complaint prior to service of process is inappropriate. 914

F.2d 428, 430 (3d Cir. 1990). Here, however, although the Defendants were not served,

they filed a motion to dismiss, Lewis filed a response in opposition to that motion, the

District Court rendered its decision, and Lewis appealed. Consequently, the concerns

underlying our decision in Oatess – “interfere[nce] with the orderly process of the

case[,]” “bypass[ing] our tradition of adversarial proceedings[,]” and “greater

2
  The District Court also denied as moot Lewis’ “motion to show bona fides,” wherein he
sought an order directing the Defendants’ attorneys to explain their “authority to defend
this action.” There is no merit to Lewis’ argument on appeal that the District Court was
required to hold a hearing to address that motion.
3
  We have jurisdiction under 28 U.S.C. § 1291 and review de novo the District Court’s
dismissal of the complaint. We may affirm the District Court’s judgment on any basis
that the record supports. See Murray v. Bledsoe, 650 F.3d 246, 247 (3d Cir. 2011) (per
curiam).

                                             3
inefficiency” because “if an appeal is taken the case shuttles between the district and

appellate courts[,]” id. at 431 – are absent here. See Roman v. Jeffes, 904 F.2d 192, 196

(3d Cir. 1990) (stating that “there are times when a court may sua sponte raise the issue

of the deficiency of a pleading under Rule 12(b)(6) provided that the litigant has the

opportunity to address the issue either orally or in writing.”). In addition, Lewis has

failed to identify how he was prejudiced by the filing of the Defendants’ motion to

dismiss three days before their attorney entered an appearance. Also, contrary to Lewis’

contention, the District Court was permitted to dismiss the complaint prior to discovery.

See Neitzke v. Williams, 490 U.S. 319, 326-27 (1989).

       We also conclude that the Defendants’ motion to dismiss adequately demonstrated

that Lewis’ claims are barred by res judicata.4 See Fed. R. Civ. P. 8(c) (listing res

judicata as an affirmative defense); see also Ball v. Famiglio, 726 F.3d 448, 459 n.16 (3d

Cir. 2013) (noting that res judicata may be raised in a 12(b)(6) motion to dismiss). Res

judicata bars claims that were actually litigated or could have been litigated in a prior

action. See Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 398 (1981). For res

judicata to apply, a defendant must show that there has been “(1) a final judgment on the

merits in a prior suit involving (2) the same parties or their privies and (3) a subsequent

suit based on the same causes of action.” United States v. Athlone Indus., Inc., 746 F.2d

977, 983 (3d Cir. 1984). “In deciding whether two suits are based on the same ‘cause of

4
  This conclusion obviates the need for us to consider the District Court’s application of
the Rooker-Feldman and entire controversy doctrines. See Murray, 650 F.3d at 247.
                                             4
action,’ we take a broad view, looking to whether there is an ‘essential similarity of the

underlying events giving rise to the various legal claims.’” CoreStates Bank, N.A. v.

Huls Am., Inc., 176 F.3d 187, 194 (3d Cir. 1999) (citation omitted).

       Based on our review of Lewis’ complaint and the state court documents submitted

by the Defendants, it is clear that those requirements have been met and that Lewis is

merely attempting to re-litigate issues that were already decided in state court. See

Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 293 (2005) (recognizing

that “a federal court may be bound to recognize the claim- and issue-preclusive effects of

a state-court judgment”). First, Lewis’ prior state court actions were dismissed on the

merits. See Morris v. Jones, 329 U.S. 545, 550-51 (1947) (holding that a default

judgment constitutes a decision on the merits for res judicata purposes); DeGroot, Kalliel,

Traint & Conklin, P.C. v. Camarota, 404 A.2d 1211, 1213 (N.J. Super. Ct. App. Div.

1979) (same). Second, PennyMac is a party here and in the prior actions.5 Finally, the

5
  With respect to the individual defendants named here, only one, M.E. Wileman, was
named in the state court proceedings. Nevertheless, we conclude that the individual
defendants were in privity with PennyMac. “Privity ‘is merely a word used to say that
the relationship between one who is a party on the record and another is close enough to
include that other within the res judicata.’” Marran v. Marran, 376 F.3d 143, 151 (3d Cir.
2004) (quoting EEOC v. U.S. Steel Corp., 921 F.2d 489, 493 (1990)). Indeed, the
individual defendants all worked for or on behalf of PennyMac. See Henry v. Farmer
City State Bank, 808 F.2d 1228, 1235 n.6 (7th Cir. 1986) (“Even though the Bank was
the only actual party to the state court mortgage foreclosure proceedings, the other
defendants, as directors, officers, employees, and attorneys of the Bank, are in privity
with the Bank for purposes of res judicata.”); see also Collins v. E.I. DuPont de Nemours
& Co., 34 F.3d 172, 176 (3d Cir. 1994) (stating that, under New Jersey law, “[a]
relationship is usually considered ‘close enough’ [for res judicata purposes] only when
the party is a virtual representative of the non-party, or when the non-party actually
                                               5
present action and the prior state suits involve the issue whether the mortgage was

fraudulently assigned to PennyMac. We note that Lewis could have raised in state court

claims under the FDCPA, the RICO Act, the New Jersey CFA, and civil conspiracy laws.

See e.g., Hodges v. Sasil Corp., 915 A.2d 1, 7 (N.J. 2007) (addressing FDCPA claim in

connection with landlord-tenant dispute); Mayo, Lynch & Assocs., Inc. v. Pollack, 799

A.2d 12, 20-22 (N.J. Super. Ct. App. Div. 2002) (considering federal RICO claim).

       For these reasons, we will affirm the District Court’s judgment.6

controls the litigation.”).
6
 Lewis’ “motion for attorney to show bona fides and authority” and “motion to strike
appellees’ answer brief and sanction the Appellees’ attorneys” are denied. We also deny
as moot Appellees’ “motion for leave to file opposition to Appellant’s motion for
attorney to show bona fides and authority.”
                                            6