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Mitchell v. Bank of New York Mellon

United States District Court, D. Utah

June 6, 2019

PAULA A. MITCHELL, Plaintiff,
v.
THE BANK OF NEW YORK MELLON; a New York Chartered Bank; BRAD DeHAAN; an individual; HILLARY McCORMACK, an individual; BRIGHAM LUNDBERG, an individual; LUNDBERG & ASSOCS, PC; a Utah Professional Corporation; NuVENTURE GROUP, LLC, a Utah Limited Liability Company; STATUTORY BENEFICIARY DOES, 1-1000; REPURCHASING DOE; and DOES 1001-2000 Defendants.

          MEMORANDUM DECISION AND ORDER GRANTING MOTIONS TO DISMISS

          Clark Waddoups United States District Court Judge.

         Currently before the court are four Motions: (1) the Lundberg Defendants' Motion to Dismiss, (ECF No. 10); (2) the Bank of New York Mellon's (the Bank) Motion to Dismiss (ECF No. 27); (3) Paula Mitchell's (Ms. Mitchell) Motion to Dismiss the Bank's Counterclaims, (ECF No. 29); and (4) NuVenture Group LLC's Motion for Certification, (ECF No. 41). As explained below, the court GRANTS both Defendants' Motions to Dismiss (ECF Nos. 10 & 27). The court dismisses NuVenture's Crossclaim for failing to adequately plead diversity jurisdiction. This MOOTS Nuventure's Motion, (ECF No. 41). The court dismisses the Bank's Counterclaim under the Colorado River doctrine. This MOOTS Ms. Mitchell's Motion to Dismiss, (ECF No. 29).

         Background

         Ms. Mitchell is the current occupant of real property located at 3 Mistywood Lane, Sandy, Salt Lake County, Utah. (See Compl. ¶ 1, ECF No. 2 at 1.) Ms. Mitchell “acquired an ownership interest in the Property by a Special Warranty Deed executed on May 23, 2006, and recorded on May 24, 2006, in the Salt Lake County Recorder's Office . . . .” (ECF No. 10-1 at 3.) “On May 23, 2006, ” Ms. Mitchell “as trustor, executed and delivered a certain trust deed . . . to Stewart T. Matheson, as trustee, for the benefit of Mortgage Electronic Registration Systems, Inc., as nominee for America's Wholesale Lender, its successors, and assigns, to secure obligations under a certain promissory note executed in conjunction therewith.” (ECF No. 10-1 at 3.) “[T]he Mitchell Trust Deed was recorded in the Salt Lake County Recorder's Office . . . .” (ECF No. 10-1 at 3.) “On May 23, 2006, in conjunction with the execution of the Mitchell Trust Deed, ” Ms. Mitchell “executed a promissory note . . . with a mortgage rider . . . in the amount of $1, 000, 000.00.” (ECF No. 10-1 at 3.)

         “The Note obligated” Ms. Mitchell “to make monthly principal and interest payments . . . beginning July 1, 2006.” (ECF No. 27-15 at 5.) Ms. Mitchell's “obligations under the Note, Rider, and Mitchell Trust Deed were secured by the Property.” (ECF No. 27-15 at 5.) Ms. Mitchell “breached the terms and conditions of the Note, Rider, and Mitchell Trust Deed by failing to make the required monthly payments when due.” (ECF No. 27-15 at 5.) “Based upon” Ms. Mitchell's “failure to pay the monthly payments under the terms of the Note, Rider, and Mitchell Trust Deed, ” Ms. Mitchell was in default. (ECF No. 27-15 at 5.)

         A Notice of Default was entered “on or about August 17, 2010.” (ECF No. 27-1 at 7.) On January 18, 2011, Ms. Mitchell filed a Complaint in the Third Judicial District Court, County of Salt Lake, State of Utah, seeking, among other things, for the state court to declare that the Bank of New York Mellon “lack[s] any interest in the subject property which might permit them to foreclose, or attempt to foreclose the property through non-judicial means, and that their activities are void ab initio . . . .” (ECF No. 27-1 at 28.) On March 13, 2012, the state court dismissed nine of Ms. Mitchell's eleven causes of action. (ECF No. 27-2 at 8.) On September 19, 2013 the state court dismissed Ms. Mitchell's remaining causes of action. (ECF No. 27-3 at 14.)

         Ms. Mitchell later filed a Motion, “requesting that the [state] Court correct its misstatements to the effect that all of the claims have been resolved so as to avoid any confusion as to whether there is a final judgment, and any possible confusion over questions of appeal.” (ECF No. 27-5 at 8.) On February 28, 2014 the state court denied Ms. Mitchell's Motion, providing, in relevant part:

Even if the Court were to consider Plaintiffs' argument, the Court would not be persuaded to reconsider its earlier rulings. The Court's three prior rulings, taken together, dismissed all claims against all defendants. Plaintiffs have failed to identify a single claim that was not disposed of by the earlier rulings. Rather, Plaintiffs have merely repackaged arguments that have already been considered and rejected by the Court. The Court sees no reason to reconsider its earlier rulings or to correct any “misstatements as to the status of the case.”

(ECF No. 27-6 at 4.)

         Ms. Mitchell then filed an appeal but later filed a Motion to Dismiss that Appeal for Lack of Jurisdiction. (See ECF No. 27-7 at 3 (“Mitchells have been placed in the unfortunate dilemma of being forced to seek an appeal only to argue that the appeal is premature and must be dismissed because the trial court has not entered a final judgment.”).) On January 14, 2015, the Utah Court of Appeals entered an Order denying Ms. Mitchell's “motion to dismiss [her] own appeal, ” finding that the “district court has resolved all causes of action raised in the litigation.” (ECF No. 27-8 at 2.)

         On April 18, 2016, the Utah Court of Appeals issued an opinion affirming the district court's judgment. Mitchell v. ReconTrust Co. NA, 373 P.3d 189, 206 (Utah Ct. App. 2016) (“The Mitchells have not demonstrated that the district court erred in dismissing several of their causes of action upon Bank Defendants' motion to dismiss. The Mitchells have also failed to show that the district court erred in its evidentiary rulings or in granting summary judgment to the defendants on their remaining claims. Accordingly, we affirm.”).

         On June 10, 2016, Ms. Mitchell filed a Petition for Rehearing. (ECF No. 27-9.) This Petition was denied. On July 29, 2016, Ms. Mitchell filed a Petition for Writ of Certiorari with the Utah Supreme Court. (ECF No. 27-10.) This Petition was denied on December 2, 2016. Mitchell v. ReconTrust Co, 387 P.3d 508 (Utah 2016).

         On April 15, 2016, the Bank of New York Mellon, through the Lundberg Defendants, brought a foreclosure suit against Ms. Mitchell in the Third Judicial District Court, Salt Lake Department, Salt Like County, State of Utah. (ECF No. 27-11 at 10.) The Bank of New York Mellon sought “a judgment and order that the Mitchell Trust Deed is a good and sufficient lien upon the Property” and sought an order “that the Property be foreclosed . . . .” (ECF No. 27-11 at 8.) On March 3, 2017, Ms. Mitchell filed an Answer and First Amended Counterclaim. (See ECF No. 27-12 at 76.) In her counterclaim, Ms. Mitchell raised arguments regarding the “finality of Mitchell I.” (See ECF No. 27-12 at 29.)

         On March 30, 2017, Judge Shaughnessy entered an order dismissing Ms. Mitchell's First Amended Counterclaim, holding that almost “[a]ll of the issues and claims set forth in the First Amended Counterclaim were, or could have been asserted in the Mitchell I case . . . .” (See ECF No. 27-14 at 2.) Regarding those claims wherein she sought “to collaterally attack the decisions of the Utah Court of Appeals and Utah Supreme Court, ” Judge Shaughnessy found “no legal, factual, or logical support for [those] claims and decline[d] to entertain them . . . .” (ECF No. 27-14 at 2.)

         On November 27, 2017, Judge Shaughnessy entered an Order Granting Summary Judgment for the Bank of New York Mellon. (ECF No. 27-15 at 2.) In this Order, Judge Shaughnessy held that the Bank of New York Mellon was “entitled to judicially foreclose the Mitchell Trust Deed and sell the Property to recover any unpaid obligations owed . . . .” (ECF No. 27-15 at 7.) On that same day, Judge Shaughnessy entered a Final Judgment in favor of the Bank of Mellon “for the amount of $1, 343, 034.81 plus additional interest, costs, taxes, and other fees owing to Plaintiff and incurred after May 31, 2018.” (ECF No. 27-16 at 4.) The Final Judgment also provided that the Bank was “entitled to judicially foreclose the Mitchell Trust Deed and sell the Property . . . .” (ECF No. 27-16 at 4.)

         On November 27, 2017, Ms. Mitchell filed an “Objection to [Judge Shaughnessy's] Sua Sponte Entry of ‘Final Judgment.'” (ECF No. 27-17.) On December 22, 2017, Ms. Mitchell filed a “Combined Rule 59 and Rule 52 Motions to Alter or Amend ‘Final Judgment' and Request for Hearing” with the state court. (ECF No. 27-18.) On January 18, 2018, Judge Shaughnessy entered an Order denying Ms. Mitchell's Combined Rule 59 and 52 Motions. (ECF No. 27-20.) In this order, Judge Shaughnessy wrote, in part:

The majority of Mitchell's Motion to Alter or Amend consists of re-arguing issues that have already been presented to and ruled on by the court, including on motions other than the summary judgment motion that fully resolved the issues in the case. To the extent Mitchell disagrees with the court's rulings, her remedy is to file an appeal not to serially re-argue those issues with this court.

(ECF No. 27-20 at 2.) Both Ms. Mitchell and the Bank of New York Mellon acknowledge that Ms. Mitchell appealed Judge Shaughnessy's ruling. (See ECF NO. 27 at 4 (“The [Rule 59 and Rule 52] motions were denied . . . and Ms. Mitchell appealed.”); see also ECF No. 33 at 15 (“The reality is that Mitchell is not attempting to ‘modify or set aside' the ‘Final Judgment' because she has her active appeal to do that.”) (bold added).) Ms. Mitchell filed a Notice of Appeal on February 16, 2018, “to the Utah Supreme Court of the sua sponte ‘Final Judgment entered by Judge Shaughnessy . . . on November 27, 2017” wherein she appealed, among other things, Judge Shaughnessy's “Order Granting Summary Judgment in Plaintiff's favor” “and the trial court's premature authorization of a foreclosure sale by the Salt Lake County Sheriff . . . .”[1]

         On February 13, 2018, the Property was sold at a sheriff's sale. (See ECF No. 27-22 at 2 (“On the 13th of February 2018, at 12 o'clock noon of said day at the County Courthouse, Salt Lake City, Salt Lake County, State of Utah and after due legal notice I caused to be sold at public auction . . . the real property of the Bank of New York Mellon . . . .”).) A sheriff's deed was executed on August 16, 2018, the by Salt Lake County Sheriff conveying to the Bank of New York Mellon “as Trustee for the Certificate Holders of the CWMBS Inc, CHL Mortgage pass Through Trust 2006-HYB5, Mortgage Pass Through Certificates, Series 2006-HYB5 party of the second part.” (ECF No. 27-23 at 2.)

         On August 14, 2018, Plaintiff filed, in this court, her Complaint against the Bank of New York Mellon, Brad DeHaan, Hillary McCormack, Brigham Lundberg, Lundberg and Associates, (the Lundberg Defendants) NuVenture Group, LLC, Statutory Beneficiary Does, 1-1000; Repurchasing Doe, and Does 1001-2000. (ECF No. 2.) In her Complaint, Ms. Mitchell brought thirteen causes of action:

1. “Quiet Tittle Action to Determine Current Owner of Property and the Validity of Any Other Claimed Interest Against the Property” (ECF No. 2 at 11.)
2. “Wrongful Foreclosure” (ECF No. 2 at 14.)
3. “Breach of Contract” (ECF No. 2 at 18.)
4. “Declaratory Judgment Invalidity of Note and Trust Deed and Any Transfer of the Debt” (ECF No. 2 at 19.)
5. “Denial of Due Process: No. Final Judgment in Mitchell I” (ECF No. 2 at 20.)
6. “Denial of Due Process Re: No. Res Judicata Effect of Mitchell I” (ECF No. 2 at 26.)
7. “Declaratory Judgment Re: Ownership of the Debt, Note and Trust Deed” (ECF No. 2 at 31.)
8. “Declaratory Judgment Re: Lack of Required Notice to Cure.” (ECF No. 2 at 32.)
9. “Declaratory Judgment Re: Assignment by MERS to” the Bank (ECF No. 2 at 34.)
10. “Severance of Security from Debt” (ECF No. 2 at 37.)
11. “Re: Possible Satisfaction or Reduction of Debt” (ECF No. 2 at 38.)
12. “FDCPA Violations” (ECF No. 2 at 39.)
13. “Declaratory Judgment Re: Credit Bid” (ECF No. 2 at 40.)

         The fifth, sixth, and twelfth claims are federal causes of action. ...


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