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Rabbe v. Wells Fargo, N.A.

United States District Court, D. Nebraska

February 15, 2019

LISA A. RABBE, Plaintiff,
WELLS FARGO, N.A., GOVERNMENT NATIONAL MORTAGE ASSOCIATION, as Trustee for Guaranteed Remic Pass-Through Securities and MX Securities Ginnie Mae Remic Trust 2003-062; HOMESERVICES LENDING, LLC, and JOHN DOES 1-100, Defendants.



         This matter is before the Court on Plaintiff Lisa A. Rabbe's Motions for Temporary Restraining Order, ECF Nos. 10, 23; and Motion for Default Judgment, ECF No. 24. Also before the Court is the Motion to Dismiss for Failure to State a Claim, ECF No. 20, submitted by Defendant Wells Fargo, N.A. For the reasons stated below, the Motion to Dismiss will be granted; the Motions for Temporary Restraining Order will be denied; and the Motion for Default Judgment will be construed as a motion for clerk's entry of default and referred to the Clerk of Court.


         The following factual summary is based on Rabbe's allegations in her Complaint, ECF No. 1, and her factual assertions in a previous lawsuit, all of which the Court accepts as true for purposes of the Motion to Dismiss. The Court considers matters from Rabbe's previous lawsuit as “matters of public record.” See Levy v. Chi, 477 F.3d 988, 991 (8th Cir. 2007) (“In considering a 12(b)(6) motion, a court can consider certain documents outside the pleadings themselves, including exhibits to the pleadings, and matters of public record.”).

         On June 19, 2003, Rabbe obtained a home loan for $178, 589 (the “Loan”) which was transferred to Wells Fargo as owner and holder. Compl., ECF No. 1 at 6-7. The Loan was evidenced by a Promissory Note (the “Note”) and secured by a Deed of Trust (the “Deed of Trust”) encumbering real property located at 3108-10 North 95th Street, Omaha, Nebraska 68134 (the “Property). Id. at 2, 7.

         Before this action, on February 6, 2017, Rabbe and her husband filed a Complaint in the Douglas County, Nebraska, District Court, captioned Randolph Michael Rabbe and Lisa Ann Rabbe v. Wells Fargo Home Mortgage, Inc. and Wells Fargo, N.A., No. CI 17-983. The action was removed to this Court on April 13, 2017, and assigned No. 8:17-cv-00131 (the “First Lawsuit”). In the First Lawsuit, Rabbe and her husband alleged that Wells Fargo breached the terms of the Loan by funding the Loan with tender that was allegedly “not backed by or redeemable in Federal Reserve Notes, coins or lawful money of the United States” and by charging “an interest rate that was 20 times greater than what was authorized in the contract.” See No. 8:17-cv-00131, ECF No. 1-1. Rabbe and her husband also alleged Wells Fargo committed fraud, violations of the Truth in Lending Act (TILA), violations of the Racketeer Influenced Corrupt Organizations Act (RICO), and usury under Neb. Rev. Stat. § 45-101.04. Id. Rabbe and her husband sought an injunction barring Wells Fargo from enforcing its rights under the Deed of Trust. Id.

         On June 29, 2017, this Court granted Wells Fargo's motion for judgment on the pleadings and dismissed the First Lawsuit. The Court concluded that many of Rabbe's claims failed as a matter of law because they were premised on a faulty “vapor money” claim-that banks do not lend “real” money, a claim that “has been uniformly rejected by every court to consider it.” Mem. and Order, No. 8:17-cv-00131, ECF No. 24 at 4. The Court reasoned that Rabbe failed to allege a factual basis for any of her breach-of-contract, fraud, or racketeering claims, and provided “no factual basis for those claims.” Id. at 6. The Court also held that her usury claim was precluded by state law and her TILA claim was time-barred. Id. at 4. The Court concluded that Rabbe failed to state any viable claims and amendment of her pleadings would be futile. Id. at 10.

         Rabbe appealed the First Lawsuit to the United States Court of Appeals for the Eighth Circuit. That court summarily affirmed and held that “the denial of leave to amend was proper, ” and “the grant of judgment on the pleadings was correct for the reasons stated by the district court.” Rabbe v. Wells Fargo Home Mortg., Inc., 720 Fed.Appx. 819, 820 (8th Cir. 2018). Rabbe sought a rehearing en banc, which was denied. She did not appeal to the United States Supreme Court, and the decision became final.

         Rabbe filed this lawsuit on December 3, 2018, against Wells Fargo, Government National Mortgage Association, and Homeservices Lending, LLC. She asserts several causes of action based on wrongful foreclosure, fraud, intentional infliction of emotional distress, declaratory relief, as well as violations of the Real Estate Settlement Procedures Act (RESPA). Each of her claims is based on “Plaintiff's original loan transaction and subsequent securitization.” Comp., ECF No. 1 at 3. She asserts that Defendants Government National Mortgage Association, and Homeservices Lending, LLC have failed to answer or otherwise respond to her Complaint and summons.


         I. Wells Fargo's Motion to Dismiss

         Wells Fargo argues that Rabbe's claims against it are barred by the doctrine of res judicata. Res judicata, or “claim preclusion, ” which bars “relitigation of a claim on any grounds raised before or on any grounds which could have been raised in the prior action.” Poe v. John Deere Co., 695 F.2d 1103, 1105 (8th Cir. 1982). The doctrine applies “when the party against whom the earlier decision is being asserted had a ‘full and fair opportunity' to litigate the issue in question.” Lovell v. Mixon, 719 F.2d 1373, 1376 (8th Cir. 1983). “Under Nebraska law, [1]claim preclusion[2] bars relitigation of any right, fact, or matter directly addressed or necessarily included in a former adjudication if (1) the former judgment was rendered by a court of competent jurisdiction, (2) the former judgment was a final judgment, (3) the former judgment was on the merits, and (4) the same parties or their privies were involved in both actions.” Hill v. AMMC, Inc., 915 N.W.2d 29, 33 (Neb. 2018). “The doctrine bars relitigation not only of those matters actually litigated, but also of those matters which might have been litigated in the prior action.” Fetherkile v. Fetherkile, 907 N.W.2d 275, 286 (Neb. 2018).

         With respect to Wells Fargo, the elements of claim preclusion are met in this case. This Court's decision and the decision of the Eighth Circuit in the First Lawsuit were decisions rendered by courts of competent jurisdiction. The prior judgment was a final judgment on the merits and was unsuccessfully appealed by Rabbe, thus satisfying the second and third elements. Finally, both the First Lawsuit and this case involve Wells Fargo and both cases arise out of the same nucleus of operative fact. The First Lawsuit was based on the Loan and Wells Fargo's foreclosure of the Property securing its repayment. In this case, Rabbe alleges that the Defendants' security interests in the Property have not been perfected, and they lack standing to foreclose. Thus, as it relates to Wells Fargo, both lawsuits are based on whether Wells Fargo properly secured repayment of Rabbe's Loan. Accordingly, Plaintiff's claims could have been litigated in the First Lawsuit and are barred in this action.

         II. Motion for Temporary ...

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