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BGH Holdings v. DL Evans Bank

United States District Court, W.D. Washington, Seattle

December 9, 2019

BGH HOLDINGS, et al., Plaintiffs,
DL EVANS BANK, Defendant.


          Robert S. Lasnik United States District Judge

         This matter comes before the Court on defendant's “Motion for Partial Summary Judgment” (Dkt. #31), and plaintiffs' cross-motion for partial summary judgment (Dkt. #33). Upon review of the parties' cross-motions, the Court is not persuaded that it has subject matter jurisdiction over the majority of plaintiffs' complaint. For the reasons described below, plaintiffs are ORDERED to show cause why their complaint should not be dismissed for lack of subject matter jurisdiction.

         I. BACKGROUND

         On January 13, 2010, defendant DL Evans Bank obtained a default judgment against plaintiff Henry Dean in a Blaine County, Idaho court in the amount of $1, 063, 503.16. See Dkt. #32-1 (Ex. A). On October 4, 2010, defendant domesticated the Idaho judgment in King County Superior Court of Washington. See Id. (Ex. B). Defendant renewed and extended the Idaho judgment in the Blaine County District Court on January 5, 2015. Id. (Ex. C). It then renewed and extended the foreign Idaho judgment in King County Superior Court on January 23, 2015. Id. (Ex. D). On August 2, 2018, defendant sought and obtained a writ of execution in the King County Superior Court. Dkt. #5-1 (Ex. A). In August 2018, the King County Sheriff levied upon the writ of execution, allegedly entering plaintiffs' residence to seize personal property including certain stock shares and stock options, as well as personal, business, and legal records. Dkt. #4 (Compl.) at ¶ 2.6. Plaintiffs subsequently filed this federal lawsuit against defendant, bringing claims under 42 U.S.C. § 1983 (“Section 1983”) for violations of their Fourth Amendment and Fourteenth Amendment rights (id. at ¶¶ 4.1-5.15), for conversion (id. at ¶¶ 6.1-6.2), for unjust enrichment (id. at ¶¶ 7.1-7.2), and for declaratory and injunctive relief regarding the right of execution under the Idaho Default Judgment (id. at ¶¶ 8.1-8.2). Defendant raised counterclaims against plaintiffs for declaratory judgment regarding the existence and validity of the debt (Dkt. #18 (Countercls.) at ¶¶ 30-44), declaratory judgment regarding enforcement of the judgment in Washington (id. at ¶¶ 45-52), fraudulent transfers (id. at ¶¶ 53-77), and injunctive relief to prevent further fraudulent transfers (id. at ¶¶ 78-82).

         On May 23, 2019, the parties filed cross-motions for partial summary judgment. See Dkt. #31, 33. The central issue presented in the parties' cross-motions is whether King County Superior Court validly issued the 2018 writ of execution.[1]


         This Court has an ongoing duty to establish subject matter jurisdiction. See, e.g., Qin Zhang v. Google, Inc., 609 Fed.Appx. 459, 460 (9th Cir. 2015) (citing Scholastic Entm't, Inc. v. Fox Entm't Grp., Inc., 336 F.3d 982, 985 (9th Cir. 2003)). On this basis, the Court raises the applicability of the Rooker-Feldman doctrine sua sponte, despite the parties' failure to do so.

         a. Rooker-Feldman Doctrine

         Under the Rooker-Feldman doctrine, federal district courts lack subject matter jurisdiction over cases that constitute a de facto appeal from a state court decision. See Noel v. Hall, 341 F.3d 1148, 1155 (9th Cir. 2003). The principle that federal courts other than the United States Supreme Court lack jurisdiction to hear appeals from state courts was set forth in Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923). In D.C. Court of Appeals v. Feldman, the Supreme Court explained that “[i]f the constitutional claims presented to a United States District Court are inextricably intertwined with the state court's denial in a judicial proceeding of a particular plaintiff's application [for relief], then the District Court is in essence being called upon to review the state court decision . . . . [which] the District Court may not do.” 460 U.S. 462, 483 n.16 (1983). “Essentially, the Rooker-Feldman doctrine bars ‘state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced' from asking district courts to review and reject those judgments.” Henrichs v. Valley View Dev., 474 F.3d 609, 613 (9th Cir. 2007) (quoting Exxon Mobil Corp. v. Saudi Basics Indus. Corp., 544 U.S. 280, 284 (2005)).

         In cross-moving for summary judgment, the parties have in essence asked the Court to review the validity of the King County Superior Court's issuance of a writ of execution on a domesticated foreign judgment. Such an inquiry falls squarely within the prohibition of the Rooker-Feldman doctrine. Upon review, the Court views the gravamen of plaintiffs' complaint as a challenge to the King County Superior Court's issuance of a writ of execution on a state law judgment. See generally Dkt. #4. “Under the Rooker-Feldman doctrine, this Court is precluded from reviewing that judgment and its execution.” Busch v. Torres, 905 F.Supp. 766, 771 (CD. Cal. 1995). The Court addresses each of plaintiffs' causes of action in turn.

         b. Plaintiffs' Claims

         i. Fourth Amendment (First Cause of Action)

         Plaintiffs' bring their first claim against defendant under Section 1983 for violation of their Fourth Amendment rights. Dkt. #4 at ¶¶ 4.1-4.24. Plaintiffs broadly allege that defendant “acted under color of state law” to “cause[]” the King County Superior Court to issue the 2018 writ of execution and to “cause[]” the King County Sheriff to unlawfully search plaintiffs' home and seize their personal property. Id. at ¶ 4.5. Although plaintiffs' Section 1983 allegations are not particularly clear, their complaint can be liberally construed to state claims for Fourth Amendment violations based on (1) the issuance of the writ of execution, see, e.g., id. at ¶ 4.14 (“The Writ of Execution was not the product of any substantive impartial judicial review . . . .”), and (2) defendant's conduct in enforcing the writ of possession, see, e.g., id at ¶ 4.10 (“[Defendant], through its agent Mr. Green, showed up at [p]laintiffs' home, with two armed deputies . . . [which] plainly involved the threat of use of legal force.”).

         Pursuant to the Rooker-Feldman doctrine, the Court lacks subject matter jurisdiction over plaintiffs' Section 1983 claim for violation of their Fourth Amendment rights insofar as the claim contests the validity of the King County Superior Court's issuance of the 2018 writ of execution. See, e.g., Noel, 341 F.3d at 1164 (“If a federal plaintiff asserts as a legal wrong an allegedly erroneous decision by a state court, and seeks relief from a state court judgment based on that decision, Rooker-Feldman bars subject matter jurisdiction in federal district court.”). This constitutional claim is “inextricably intertwined” with the Washington state court's decision in a judicial proceeding, and would impermissibly require the Court to review and set aside the state court's decision. See Feldman, 460 U.S. at 483 n. 16; see also Busch, 905 F.Supp. at 771 (citations omitted) (“[I]f a suit seeking damages for the execution of a judicial order is just a way to contest the order itself, then the Rooker-Feldman doctrine is in play.”).[2]To the extent that plaintiffs' Section 1983 claim under the Fourth Amendment pertains to defendant's alleged conduct during the entrance and search of plaintiffs' residence, “that claim does not run afoul of the Rooker-Feldman ...

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