U.S. COURT OF APPEALS FOR THE TENTH CIRCUIT
No. 16-1252. Mayotte v. U.S. Bank National Ass’n. 1/23/2018. D.Colo. Judge Hartz. CRCP 120—Nonjudicial Foreclosure—Real Estate Settlement Procedures Act—Rooker-Feldman Doctrine—Preclusion Doctrine.
Plaintiff was the debtor on a note held by defendant U.S. Bank, NA. The note was secured by a deed of trust assigning a security interest in her home to the public trustee of Denver County and creating a power of sale in the trustee. Defendants fled a nonjudicial foreclosure action under CRCP 120 seeking title to plaintiff's home and obtained an order authorizing a foreclosure sale. Before the sale, plaintiff sued defendants in federal court seeking damages and a declaration that defendants had no interest in her home. The district court dismissed plaintiff’s claim under the Real Estate Settlement Procedures Act (RESPA) and ruled that the Rooker-Feldman doctrine barred plaintiff's other claims.
Plaintiff challenged on appeal the dismissal under Rooker-Feldman. The Tenth Circuit explained that the CRCP 120 nonjudicial foreclosure procedure is available only if there is a deed of trust that authorizes sale of the property to pay a debt and names the county’s public trustee as trustee. CRCP 120 requires creditors pursuing nonjudicial foreclosure to first obtain a Colorado trial court ruling that there is a reasonable probability that a default exists. The court examines only whether the facts authorize a sale and does not consider other issues that might affect the validity of the foreclosure. An order authorizing a sale is without prejudice to claims in an independent action seeking an injunction to prohibit the sale or other relief.
The Rooker-Feldman doctrine prohibits lower federal courts from modifying or setting aside a state-court judgment because the state proceedings should not have led to that judgment. The Tenth Circuit held that the Rooker-Feldman doctrine did not apply to bar plaintiff's claims because she was not seeking to set aside the Rule 120 foreclosure order, and her claims were based on events predating the Rule 120 proceedings. Further, plaintiff could obtain damages without setting aside the foreclosure sale. Although her request that she be given title to her home could produce an inconsistent result with the foreclosure order, inconsistent judgments may be resolved by federal courts under the preclusion doctrine. The dismissal of plaintiff’s RESPA claim was affirmed. The Rooker-Feldman dismissal of the other claims was reversed and the case was remanded for consideration of whether the Rule 120 proceedings and the sale of plaintiff's home had any...