Court Opinion

ID: 3196976
Source: CourtListenerOpinion
Date Created: 2016-04-22 19:01:15.692017+00
Date Added: 2024-06-11T12:05:34.581033
License: Public Domain

FILED
                                                                    United States Court of Appeals
                      UNITED STATES COURT OF APPEALS                        Tenth Circuit

                             FOR THE TENTH CIRCUIT                         April 22, 2016
                         _________________________________
                                                                        Elisabeth A. Shumaker
                                                                            Clerk of Court
MICHAEL L. CALLOWAY,

      Plaintiff - Appellant,

and

MICHAEL L. AND LILLIE E.
CALLOWAY REVOCABLE TRUST;
LILLIE E. CALLOWAY,

      Plaintiffs,
                                                          No. 15-6176
v.                                                (D.C. No. 5:15-CV-00068-M)
                                                         (W.D. Okla.)
BANK OF AMERICA CORPORATION;
BANK OF AMERICA N.A., BAC home
loan servicing, L.P., f/k/a Countrywide
Home Loans Servicing, L.P.; B OF A
MERRILL LYNCH ASSETS
HOLDINGS,

      Defendants - Appellees.
                      _________________________________

                             ORDER AND JUDGMENT*
                         _________________________________

Before HARTZ, MURPHY, and PHILLIPS, 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 This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral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.
       In 2008, Michael and Lillie Calloway took out a $350,000 mortgage secured by

real property in Edmond, Oklahoma (the Property). After they defaulted on the loan,

Bank of America, N.A. (BANA) brought a foreclosure action in the district court of

Oklahoma County. The state court entered a foreclosure judgment in 2013, and in 2014

BANA purchased the Property at a foreclosure sale, which the court confirmed.

       Less than two weeks later, Michael Calloway (Calloway), Lillie Calloway, and the

Michael L. and Lillie E. Calloway Revocable Trust (Plaintiffs) filed an action to quiet

title against Bank of America Corporation, BANA, and BofA Merrill Lynch Assets

Holdings, Inc. (Defendants) in the district court of Oklahoma County. Defendants

removed the case to the United States District Court for the Western District of

Oklahoma. They then moved to dismiss because the quiet-title claim was barred under

claim and issue preclusion. The district court granted their motion and denied

Calloway’s motion to reconsider.

       Calloway, proceeding pro se and in forma pauperis, appeals from the district

court’s judgment dismissing the complaint with prejudice and its order denying the

motion to reconsider. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

         I.   DISCUSSION

       “We review de novo the grant of a Rule 12(b)(6) motion to dismiss for failure to

state a claim.” Gee v. Pacheco, 627 F.3d 1178, 1183 (10th Cir. 2010). In evaluating the

sufficiency of the complaint, the court must accept as true the complaint’s well-pleaded

allegations, see id. at 1184–85, but it may consider matters that can be judicially noticed,

see id. at 1186. We review the denial of a motion to reconsider for abuse of discretion.

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See Barber ex rel. Barber v. Colorado Dep’t of Revenue, 562 F.3d 1222, 1228 (10th Cir.

2009).

         Because Calloway is proceeding pro se, we liberally construe his pleadings, see

Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991), and address all the arguments we

can discern in his unartful brief. In doing so, however, we are mindful to avoid assuming

the role of his attorney. See id. He appears to argue that the federal court could not hear

the matter, that he should prevail based on the merits of his quiet-title claim, that the

court violated his due-process rights, and that the court abused its discretion in denying

his motion to reconsider. We address these arguments in turn.

                   A. Federal Court’s Authority to Hear the Matter

         Defendants removed the action to federal court under 28 U.S.C. § 1446 based on

diversity of citizenship, see 28 U.S.C. § 1332. The requirements for diversity jurisdiction

are satisfied: the amount in controversy exceeds $75,000 because the Property was

valued by the county assessor at $472,349, and complete diversity exists between the

Plaintiffs and Defendants.

         Calloway does not dispute that the requirements for diversity jurisdiction are

satisfied. But he nevertheless contends that we are without authority to hear this dispute.

First, he argues that we do not have jurisdiction because there is no basis for federal-

question jurisdiction. But he misunderstands the requirements for federal jurisdiction: a

federal question is sufficient but not necessary, see 28 U.S.C. § 1331. Diversity of

citizenship is an independent ground for federal jurisdiction when the amount in

controversy exceeds the jurisdictional threshold. See id. at § 1332.

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       Next, Calloway argues that the district court lacked subject-matter jurisdiction

under the Rooker–Feldman doctrine. But the Supreme Court has limited Rooker–

Feldman to “cases brought by state-court losers complaining of injuries caused by state-

court judgments rendered before the district court proceedings commenced and inviting

district court review and rejection of those judgments.” Exxon Mobil Corp. v. Saudi

Basic Indus. Corp., 544 U.S. 280, 284 (2005) (noting that the doctrine occupies a

“narrow ground”). Seeking relief that is inconsistent with a state-court judgment is not

enough; Rooker–Feldman defeats federal jurisdiction only when an element of the

plaintiff’s claim is “that the state court wrongfully entered its judgment.” Campbell v.

City of Spencer, 682 F.3d 1278, 1283 (10th Cir. 2012). The basis of Calloway’s quiet-

title claim appears to be that Defendants had no interest in the Property because the note

and mortgage on which they rely were cancelled. This claim could be brought

independently of the state-court foreclosure judgment. Indeed, the complaint’s prayer for

relief does not even mention the earlier judgment. Thus, Rooker–Feldman is inapplicable

to Calloway’s quiet-title claim.1

       Calloway also seems to argue that Defendants lack standing because they have no

interest in the Property. But they allege an interest and the state court confirmed

BANA’s purchase of the Property. That more than suffices for standing.

       1
        To the extent that the complaint may be read as seeking to set aside the state
court’s confirmation of the sale of the Property, that claim would be barred by
Rooker–Feldman. But the district court did not discuss such a claim and Calloway
does not raise it on appeal. In particular, he does not argue that the state-court
judgment lacks preclusive effect because of its invalidity.
                                             4
       In addition, Calloway challenges the removal to federal court on the ground that

Defendants did not consent to removal as required by 28 U.S.C. § 1446(b), because local

counsel did not enter an appearance for over 30 days after Defendants were served with

the complaint. This argument was properly rejected by the district court. Defendants

consented to removal through the notice of removal filed by their counsel. Although

Defendants did not yet have local counsel, the out-of-state counsel who filed the notice

was admitted to practice in the district court.

       Finally, Calloway argues that the district court could not proceed in this case

because his wife Lillie was not a party (he lacked authority to file a complaint including

her as a party) yet she is an indispensable party. But he did not raise this issue in district

court, so we will not address it. See Niemi v. Lasshofer, 770 F.3d 1331, 1346 (10th Cir.

2014) (“It is a general rule that a federal appellate court will not consider an issue which

was not presented to, considered or decided by the trial court.” (internal quotation marks

omitted)).

                  B. Issue Preclusion

       Calloway argues that the district court improperly granted judgment to

Defendants. We disagree. The court correctly ruled that the factual allegations

underlying his claim are precluded. Under Oklahoma law, “once a court has decided an

issue of fact or law necessary to its judgment, the same parties or their privies may not

relitigate that issue in a suit brought upon a different claim,” see Okla. Dep’t of Pub.

Safety v. McCrady, 176 P.3d 1194, 1199 (Okla. 2007), even against one who was a

stranger to the judgment, see Anco Mfg. & Supply Co. v. Swank, 524 P.2d 7, 13 (Okla.

                                               5
1974). “An issue is actually litigated and necessarily determined if it is properly raised in

the pleadings, or otherwise submitted for determination, and judgment would not have

been rendered but for the determination of that issue.” McCrady, 176 P.3d at 1199. Issue

preclusion thus bars relitigation of issues necessary to the state court’s foreclosure

judgment—regardless of whether those issues were correctly decided.

       Calloway’s quiet-title claim is based on the allegation that Defendants have no

interest in the Property because they did not hold a valid note and mortgage. But the

district court properly took judicial notice that in the foreclosure action he unsuccessfully

raised the same argument. Because the issue was actually litigated and necessarily

determined, it cannot be relitigated.

                  C. Due Process

       Calloway argues that the district court violated his due-process rights by

dismissing his complaint with prejudice without holding a hearing or allowing him an

opportunity to amend. But he received adequate notice from Defendants’ motion to

dismiss; he could have moved to amend his complaint but did not do so. See Hall, 935

F.2d at 1110. In any event, he fails to indicate what new evidence he would have

presented at an evidentiary hearing or how he wants to amend his complaint. And, as

discussed above, it cannot be disputed that his quiet-title claim is precluded by the state

court’s foreclosure judgment.

                  D. Motion to Reconsider

       Calloway makes vague arguments about how the district court abused its

discretion in denying his motion to reconsider, such as by disregarding the facts alleged

                                              6
in the complaint. We agree with the district court that the motion was meritless. It did

not abuse its discretion in denying the motion.

       II.    CONCLUSION

       We AFFIRM the district court’s judgment and its denial of the motion to

reconsider.

                                             Entered for the Court

                                             Harris L Hartz
                                             Circuit Judge

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