Pruitt v. GMAC Mortgage, LLC et al

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re:
RESIDENTIAL CAPITAL, LLC., et al.,
Debtors.
NOT FOR PUBLICATION
Case No. 12-12020 (MG)
Chapter 11
Jointly Administered
ALFREDIA PRUITT,
Plaintiff,
v.
RESIDENTIAL CAPITAL, LLC, et al.,
Defendants.
Adv. Pro. No. 13-01350 (MG)
MEMORANDUM OPINION AND ORDER GRANTING DEBTOR DEFENDANTS’
MOTION TO DISMISS ADVERSARY COMPLAINT
A P P E A R A N C E S:
MORRISON & FOERSTER LLP
Attorneys for Debtors
1290 Avenue of the Americas
New York, NY 10104
By: 	Jeffrey K. Rosenberg, Esq.
ALFREDIA PRUITT
Pro Se Plaintiff
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MARTIN GLENN
UNITED STATES BANKRUPTCY JUDGE
Before the Court is the Debtor Defendants’ Motion to Dismiss Plaintiff’s Adversary
Complaint (the “Motion,” ECF Doc. # 26).1 Through the Motion, Residential Captital, LLC
(“ResCap”) and GMAC Mortgage, LLC (“GMACM”) (collectively, the “Defendants”), seek to
dismiss on res judicata grounds the adversary proceeding filed by Alfredia Pruitt (the
“Plaintiff”). The Plaintiff filed a response (the “Response,” ECF Doc. # 28), and the Defendants
filed a reply (the “Reply,” ECF Doc. # 30). The Plaintiff then filed what appears to be an
unauthorized sur-reply (ECF Doc. # 33), as well as a Motion to Verify a Trial Was Never Held in
the Above Cases [referencing her Georgia state court actions] (ECF Doc. # 34), and a Motion for
Adverse Party Demonstrate Case(s) in the Lower Court Has Been Heard on the Merits (ECF
Doc. # 35). The Court held a hearing on December 17, 2013, and Ms. Pruitt appeared
telephonically. The Court reserved decision on the Motion. For the reasons that follow, Court
GRANTS the Debtor Defendants’ Motion, and the adversary proceeding is DISMISSED WITH
PREJUDICE.
I. 	BACKGROUND
On May 14, 2012 (the “Petition Date”), each of the Debtors filed a voluntary petition for
chapter 11 relief. Since the Petition Date, the Debtors have operated their businesses and
managed their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the
Bankruptcy Code. On December 10, 2013, the Court entered an Order confirming the Debtors’
Second Amended Joint Chapter 11 Plan. (ECF Case No. 12-12020, Doc. # 6065.)
1 	Unless otherwise indicated, all references to the docket are to Adv. Pro. No. 13-01350.
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A. 	The Property and Foreclosure
On September 7, 2010, property owned by the Plaintiff at 2360 Hickory Station Circle,
Snellville, Georgia 30078 (the “Property”), was sold at foreclosure. On that same day, the
Plaintiff filed a petition for relief under chapter 13 of the Bankruptcy Code in the United States
Bankruptcy Court for the Northern District of Georgia (the “Georgia Bankruptcy Court”)—her
third bankruptcy filing within a one year period. On September 21, 2010, GMACM filed a
motion in the Plaintiff’s bankruptcy case asking the court to confirm that the Plaintiff’s
September 7, 2010 bankruptcy filing did not give rise to the automatic stay due to the dismissal
of her two prior bankruptcy cases in the preceding year. On September 22, 2010, the Georgia
Bankruptcy Court issued an order confirming that “the automatic stay under § 362(a) did not go
into effect upon or since the filing of [the] case and, as of the date [t]hereof, no order has been
entered imposing a stay to the extent provided in 11 U.S.C. § 362(c)(3)(A).” (See Motion, Ex. 1-
D.)
B. 	The Plaintiff’s State Court Actions
Prior to filing this adversary proceeding, the Plaintiff filed at least four actions in the
Superior Court of Gwinnett County, State of Georgia (the “Superior Court”), bringing claims in
connection with the allegedly wrongful foreclosure of the Property (the “State Court Actions”).
The Plaintiff initiated her First Action2 against GMACM and other defendants in the
Superior Court on December 6, 2010, by filing a motion for a preliminary injunction. In this
First Action, the Plaintiff asserted that the foreclosure of the Property was unlawful and
requested a preliminary injunction preventing GMACM from proceeding with eviction despite a
dispossessory order that GMACM had obtained on December 1, 2010. On January 31, 2011, the
2 	Pruitt v. Fed. Nat’l Mortg. Ass’n, et al., No. 10-A-109723-3 (Sup. Ct. Ga. 2010).
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Superior Court denied the Plaintiff’s request for a restraining order and injunctive relief, affirmed
the dispossessory order, and granted final judgment in favor of the defendants, including
GMACM. (See Motion, Ex. 1-G.)
On September 21, 2011, in her Second Action,3 the Plaintiff requested a temporary
restraining order (“TRO”) against GMACM and other parties, and an order setting aside the
foreclosure sale. On the following day, the Superior Court entered an order denying the TRO
and dismissing the complaint for failure to state a claim upon which relief may be granted. (See
Motion, Ex. 1-I.)
On October 7, 2011, the Plaintiff filed a Third Action4 against GMACM and other parties
which, again, sought a TRO and asserted a cause of action for “wrongful foreclosure, fraudulent
conveyance of property.” The Superior Court dismissed the Third Action on October 10, 2011,
for failure to state a claim upon which relief could be granted. (See Motion, Ex. 1-K.)
Additionally, on January 26, 2012, the Superior Court directed the clerk to cancel two lis
pendens which the Plaintiff had recorded against the Property. (See Motion, Ex. 1-L.)
On February 15, 2012, the Plaintiff filed a Fourth Action5 in the Superior Court. In the
Fourth Action, Plaintiff once again asserted that the foreclosure of the Property was wrongful,
sought to quiet title, and requested compensatory and punitive damages against the defendants,
including GMACM and Fannie Mae. On March 12, 2012, the Superior Court entered an order
dismissing the Fourth Action. (See Motion, Ex. 1-A.) In addition, having presided over three
prior lawsuits involving identical allegations in connection with the foreclosure of the Property,
3 	Pruitt v. Fed. Nat’l Mortg. Ass’n, et al., No. 11-A-10084-3 (Sup. Ct. Ga. 2011).
4 	Pruitt v. Fed. Nat’l Mortg. Ass’n, et al., No. 11-A-10675-3 (Sup. Ct. Ga. 2011).
5 	Pruitt v. MERS/GMAC, et al., No. 12-A-01388-3 (Sup. Ct. Ga. 2012).
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the State Court issued a Bill of Peace enjoining the Plaintiff from continuing her attempts to
relitigate the same issues:
[A]s this is the fourth suit in addition to an appeal from Magistrate Court that
Plaintiff has filed with respect to the property located at 2360 Hickory Station
Circle, 	Snellville, 	Georgia 	30078 	and 	the 	claims 	having 	been 	previously
adjudicated in the three prior actions between the same parties, Plaintiff Alfredia
Pruitt is hereby permanently enjoined from filing or serving in the above-styled
case or filing or serving in any other case in any court any pleadings or suits
related to the property located at 2360 Hickory Station Circle, Snellville, Georgia
30078 without further Order of this Court, with the exception of notices of appeal
from this Order. See O.C.G.A. § 23-3-110 (a)(2).
(Motion, Ex. 1-A at 3.)6
C. 	The Plaintiff’s Actions Before This Court
On September 27, 2012, the Plaintiff filed Proof of Claim No. 835 in the Debtors’ chapter
11 cases, asserting a claim against ResCap in the amount of $271,330.00, the stated basis of
which was “mortgage note.” (See Motion, Ex. 1-P.) Thereafter, on October 9, 2012, the
Plaintiff withdrew her proof of claim. (See id., Ex. 1-Q.) On March 14, 2013, the Plaintiff filed
a motion seeking relief from the automatic stay, apparently for the purpose of initiating another
action arising out of the same facts and circumstances as each of the State Court Actions. On
March 15, 2013, the Plaintiff filed an amended motion, seemingly requesting the same relief, but
attaching additional documentation. On April 12, 2013, the Court denied the Plaintiff’s motion
for relief from the automatic stay. (See Order Denying Relief from Stay, ECF Case No. 12-
12020, Doc. # 3433.) The Order Denying Relief from Stay states: “stay relief would not result
in a complete resolution of the issues, since the claims raised in Pruitt’s Motion have already
been dismissed at least five times. Allowing stay relief will not help resolve issues that are
already effectively settled by multiple judicial orders.” (Id. at 7.) The Order further states that
6 	At the hearing on the Motion, Debtors’ counsel informed this Court that the Plaintiff filed a new action in
the Superior Court on November 21, 2013, which the Superior Court dismissed on November 26, 2013, referring
back to the Bill of Peace. (See Dec. 17, 2013 H’rg Tr. 66:17–21.)
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“any future action may be barred by the Superior Court’s Bill of Peace order [and] . . . judicial
economy also does not favor allowing Pruitt to proceed with claims that have been dismissed.”
(Id.)
The Plaintiff initiated this adversary proceeding by filing the Complaint on May 24, 2013
(ECF Doc. # 1), as amended (ECF Doc. # 4). Through the Complaint, the Plaintiff seeks
essentially the same relief she has sought through each of her State Court Actions. The
Complaint raises allegations that the Defendants wrongfully foreclosed upon her property
because GMACM was not properly assigned the note and in violation of the automatic stay
imposed by her chapter 13 filing. In addition to other relief, the Plaintiff seeks $20 million.
II. 	DISCUSSION
Res judicata, or claim preclusion, provides that “a final judgment on the merits of an
action precludes the parties or their privies from relitigating issues that were or could have been
raised in that action.” Burgos v. Hopkins, 14 F.3d 787, 789 (2d Cir. 1994) (quoting Allen v.
McCurry, 449 U.S. 90, 94 (1980)). “[T]he preclusive effect of a state court determination in a
subsequent federal action is determined by the rules of the state where the prior action
occurred . . . .” New York v. Sokol (In re Sokol), 113 F.3d 303, 306 (2d Cir. 1997) (citing 28
U.S.C. § 1738). “In applying the doctrine of res judicata, [a court] must keep in mind that a state
court judgment has the same preclusive effect in federal court as the judgment would have had in
state court.” Burka v. New York City Transit Auth., 32 F.3d 654, 657 (2d Cir. 1994) (citation
omitted).
Under Georgia law, the doctrine of res judicata applies if three prerequisites are met:
“(1) identity of the parties or their privies; (2) identity of the cause of action; and (3) previous
adjudication on the merits by a court of competent jurisdiction.” Brown & Williamson Tobacco
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Corp. v. Gault, 627 S.E.2d 549, 551 (Ga. 2006). All three of these requirements are met here.
First, GMACM was a named party in each of the Plaintiff’s State Court Actions. Second, the
cause of action asserted in the Complaint is the same as was asserted in the State Court Actions.
“[T]he doctrine of res judicata bars subsequent actions as to all matter[s] put in issue or which
could have been put in issue.” Dove v. Ty Cobb Healthcare Sys., Inc., 729 S.E.2d 58, 61 (Ga. Ct.
App. 2012) (internal quotation marks omitted). All of the assertions raised in the Complaint
relate to the foreclosure of the Property, and could have been asserted in any of the previous
cases. Third, the State Court Actions were all dismissed for failure to state a claim, constituting
final judgments on the merits by a court of competent jurisdiction. See Hodo v. Basa, 449 S.E.2d
523, 525 (Ga. Ct. App. 1994) (holding that “‘the sustaining of a motion to dismiss for failure to
state a claim is res judicata on the merits of the claim’” (quoting Dillingham v. Doctors Clinic,
P.A., 223 S.E.2d 625, 626 (Ga. 1976))). Therefore, the adversary proceeding is barred by res
judicata.
The Plaintiff raises various arguments in her filings, none of them convincing. The
Plaintiff claims that her appeal in the First Action was not decided on the merits, but was
dismissed for failure to pay the requisite fees. However, a review of the Final Order and
Judgment issued in that case reveals that the court considered the merits of the Plaintiff’s
arguments, and found that she “failed to proffer any evidence or authority to suggest that” the
earlier order was in error. (See Motion, Ex. 1-G.) That order also expressly states that “FINAL
JUDGMENT be and hereby is entered in favor of all DEFENDANTS as to all claims asserted by
Plaintiff in this proceeding.” (Id.) No issues were left to be decided, constituting a final
judgment on the merits under Georgia law. See Standridge v. Spillers, 587 S.E.2d 862, 864 (Ga.
Ct. App. 2003). The Plaintiff also asserts that the foreclosure took place in violation of the
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automatic stay imposed by her chapter 13 filing. As discussed above, the Georgia Bankruptcy
Court issued an order confirming that the stay did not go into effect upon the filing of her third
bankruptcy case in a one year period. (See Motion, Ex. 1-D.) The Plaintiff seems convinced that
because she was never granted the jury trial she demanded, her claims were never adjudicated on
the merits. The Plaintiff, however, is mistaken. The Superior Court considered, and dismissed,
her related actions at least five times. The Plaintiff does not get to relitigate those claims here.
III. 	CONCLUSION
For all of the foregoing reasons, the Court GRANTS the Debtor Defendants’ motion to
dismiss. The Complaint, as amended, is barred by res judicata and is hereby DISMISSED
WITH PREJUDICE.
IT IS SO ORDERED.
Dated: 	January 23, 2014
New York, New York
_____Martin Glenn____________
MARTIN GLENN
United States Bankruptcy Judge
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