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Betskoff v. Diane S. Rosenberg & Assocs., LLC

United States District Court, D. Maryland, Southern Division

August 16, 2019

KEVIN C. BETSKOFF, Plaintiff,
v.
DIANE S. ROSENBERG & ASSOCS., LLC, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          Paul W. Grimm, United States District Judge.

         On September 22, 2006, Plaintiff Kevin Betskoff refinanced his mortgage and obtained a $436, 500.00 loan secured by the real property he owned at 3423 Nottingham Road, Westminster, Maryland 21157 (the "Property"). Compl. ¶ 9, ECF No. 1; Pl.'s State Ct. Countercl. ¶¶ 14, 17, 19, ECF No. 12-4.[1] In about 2008, Betskoff no longer could "make the requested mortgage payments," due to a "decline in [his] income and [an] increase in monthly mortgage payments throughout the repeated transfers of his mortgage servicing and ARM adjustments." Pl.'s State Ct. Countercl. ¶ 27. Diane Rosenberg and her associates at Diane S. Rosenberg and Associations, LLC, as Substitute Trustees, initiated a foreclosure action against Betskoff in Carroll County Circuit Court, No. 06-C-13-064213 (the “Foreclosure Action”), Compl. ¶ 9, resulting in the sale of the Property and a state court Final Order of Ratification, State Ct. Docket, http://casesearch.courts.state.md.us/casesearch/inquiryDetail.jis?caseId=06C13064213&loc=61 &detailLoc=ODYCIVIL. Betskoff, who is proceeding without counsel, then filed this lawsuit against Diane Rosenberg and Diane S. Rosenberg and Associations, LLC (“Substitute Trustees”), challenging their conduct in conjunction with the foreclosure on his Property. Compl.

         Currently pending is the Substitute Trustees' Motion to Dismiss, ECF No. 12, which the parties fully briefed, ECF Nos. 12-1, 14, 15. A hearing is not necessary. See Loc. R. 105.6. Because res judicata bars Betskoff's claims against the Substitute Trustees, I will dismiss the case without reaching the alternative grounds Defendants raise for dismissal.

         Background

         The Substitute Trustees filed the Foreclosure Action against Betskoff in Carroll County Circuit Court on June 21, 2013. State Ct. Docket. In response, Betskoff filed a third-party complaint and counterclaims against them on August 19, 2013, [2] both of which the state court dismissed with prejudice on April 3, 2014. Id. The court issued an order declaring that its dismissal was a final order under Maryland Rule 2-602(b). Id. Betskoff filed an appeal to the Court of Special Appeals on April 28, 2014, and the Maryland intermediate court affirmed the state circuit court on June 10, 2015, id.; see Betskoff v. Rosenberg, No. 0380 (Md. Ct. Spec. App. June 10, 2015) (unreported), ECF No. 12-5. Betskoff filed a petition for writ of certiorari to the Maryland Court of Appeals, which was denied on September 23, 2015. State Ct. Docket.

         Betskoff filed another motion to dismiss the Foreclosure Action on May 22, 2017, which the court denied on July 12, 2017. Id. Then, on March 7, 2018, he removed the Foreclosure Action to this Court. Id.; see Rosenberg v. Betskoff, No. GLR-18-672 (D. Md.). Following the removal, the Substitute Trustees sold the Property and filed a Notice of Report of Sale in state court on March 27, 2018. State Ct. Docket. After this Court determined that it did not have jurisdiction over the Foreclosure Action and remanded the case to state court on April 25, 2018, ECF No. 29 in GLR-18-672, the state court issued a Final Order of Ratification on May 14, 2018, State Ct. Docket. Betskoff filed a petition to set aside the foreclosure sale in state court on May 23, 2018, which the court denied on July 2, 2018. State Ct. Docket.

         At that point, when the state court had issued a Final Order of Ratification but the Foreclosure Action remained open, Betskoff filed his Complaint in this Court against the Substitute Trustees on July 12, 2018, alleging violations of the Fair Debt Collections Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”), as well as state law claims arising from the foreclosure of his Property. Compl.[3]

         Meanwhile, he continued to file motions in the Foreclosure Action. On July 23, 2018, he filed a motion for sanctions in state court, which the court denied on August 3, 2018. State Ct. Docket. On August 15, 2018, he filed both a motion for reconsideration in the state circuit court and an appeal to the Court of Special Appeals. Id. The state circuit court denied the motion for reconsideration on September 13, 2018, and Betskoff supplemented his appeal on October 4, 2018. Id. The state circuit court issued an order granting possession of property, and Betskoff filed a motion for reconsideration on October 31, 2018, which the court denied on November 30, 2018. Id. On April 4, 2019, the Court of Special Appeals dismissed his appeal. Id.

         Standard of Review

         The Substitute Trustees move to dismiss pursuant to Rule 12(b)(6), under which Betskoff's pleadings are subject to dismissal if they “fail[ ] to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), and must state “a plausible claim for relief, ” Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). “A claim has facial plausibility when the [claimant] pleads factual content that allows the court to draw the reasonable inference that the [opposing party] is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “Although courts should construe pleadings of self-represented litigants liberally, Erickson v. Pardus, 551 U.S. 89, 94 (2007), legal conclusions or conclusory statements do not suffice, Iqbal, 556 U.S. at 678.” Moore v. Jordan, No. TDC-16-1741, 2017 WL 3671167, at *4 (D. Md. Aug. 23, 2017).

         Rule 12(b)(6)'s purpose “is to test the sufficiency of a [claim] and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Velencia v. Drezhlo, No. RDB-12-237, 2012 WL 6562764, at *4 (D. Md. Dec. 13, 2012) (quoting Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006)). If an affirmative defense, such as res judicata, “clearly appears on the face of the [pleading], ” however, the Court may rule on that defense when considering a motion to dismiss. Kalos v. Centennial Sur. Assocs., No. CCB-12-1532, 2012 WL 6210117, at *2 (D. Md. Dec. 12, 2012) (quoting Andrews v. Daw, 201 F.3d 521, 524 n.1 (4th Cir. 2000) (citation and quotation marks omitted)).

         Discussion

         Betskoff brings a federal statutory claim under the FDCPA and state tort claims of fraud and negligence against the Substitute Trustees. Compl. ¶¶ 35-57. In response, Defendants raise the affirmative defense of res judicata, and they argue in the alternative that Betskoff fails to state a claim. Defs.' Mem. 1. When, as here, federal court litigants assert that a state court judgment has preclusive effect, “[the] federal court must give to [the] state court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered.” Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984). Under Maryland law, res judicata, or claim preclusion, provides grounds for dismissal if a defendant establishes that “(1) the present parties are the same or in privity with the parties to the earlier dispute, (2) the claim presented is identical to the one determined in the prior adjudication, and (3) there has been a final judgment on the merits.” Capel v. Countrywide Home Loans, Inc., No. WDQ-09-2374, 2010 WL 457534, at *3 (D. Md. Feb. 3, 2010) (citing Anne Arundel County Bd. of Educ. v. Norville, 887 A.2d 1029, 1037 (Md. 2005)).

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