FROST v. FEDERAL NATIONAL MORTGAGE ASSOCIATION et al

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
KEVIN B. FROST,
Plaintiff,
v.
FEDERAL NATIONAL
MORTGAGE ASSOCIATION and
BROCK & SCOTT, PLLC,
Defendants.
)
)
)
)
)
)
)
)
)
)
)
Docket No. 2:23-cv-00198-NT
ORDER ON DEFENDANTS’ MOTIONS TO DISMISS
Before me are the motion to dismiss filed by Defendant Federal National
Mortgage Association (“Fannie Mae”) (ECF No. 7) and the motion to dismiss filed by
Defendant Brock & Scott, PLLC (“B&S”) (ECF No. 5) for failure to state a claim upon
which relief can be granted. For the reasons stated below, I GRANT B&S’s motion,
but I conclude that abstention is appropriate for the claims brought against Fannie
Mae and therefore DENY Fannie Mae’s motion and STAY the case.
BACKGROUND
This is Plaintiff Kevin B. Frost’s second case before me. Because this matter,
like the prior case, involves the Defendants’ attempts to collect on the mortgage on
Frost’s property in South Paris, Maine, I do not repeat the full story here. A
comprehensive background on the history of the mortgage and collection attempts
through March 25, 2021 can be found in my order dismissing Frost’s 2021 action. See
Frost v. Castle Point Mortg., Inc., et al., No. 2:21-cv-00112-NT (“Frost I”) (ECF No.
Case 2:23-cv-00198-JAW Document 22 Filed 11/30/23 Page 1 of 13 PageID #:
<pageID>

2
21) (D. Me. Oct. 25, 2021), available at 2021 WL 4952506. Suffice it to say that Frost’s
first lawsuit sought: (1) a declaration that certain assignments in the chain of the
mortgage were invalid and therefore he held title to the South Paris property
unencumbered by the Mortgage; and (2) an order enjoining Fannie Mae and others
from asserting any interest in the property that was adverse to him, including
enforcement of the mortgage and underlying note. See Frost I Compl. (ECF No. 1-1).
On April 14, 2023, Frost brought this current action seeking declaratory and
injunctive relief. As before, Frost filed his Complaint in state court, but Fannie Mae
(with B&S’s consent) removed the case to this Court.1 Compl. (ECF No. 4-3); Notice
of Removal (ECF No. 1). Frost names both Fannie Mae and B&S as defendants.
Compl. ¶ 7. As to Fannie Mae, he asks the court “to scrutinize the conveyance of real
estate” and he “contest[s] the overall legality of the obtaining and the recording of a
quitclaim assignment obtained and recorded by the Federal National Mortgage
Association” and seeks equitable relief. Compl. 1–2. Frost asks that I “deem the
quitclaim assignment defective” and/or issue a ruling to preserve his right “to raise
these issues in any future court litigation including but not limited to foreclosure
and/or any debt collection attempts.” Compl. 13. His allegations against B&S relate
to the debt collection activities that B&S took against Frost relating to the South
Paris mortgage and underlying debt. See Compl. ¶¶ 26, 30, 35, 45–47, 64–68.
1 	I have jurisdiction over the action because there is complete diversity of citizenship between
Frost and all Defendants and the amount in controversy exceeds $75,000. See 28 U.S.C. § 1332(a)(1).
On May 18, 2023, Frost moved to remand to state court (ECF No. 10), but later withdrew his motion
(ECF No. 16).
Case 2:23-cv-00198-JAW Document 22 Filed 11/30/23 Page 2 of 13 PageID #:
<pageID>

3
Fannie Mae and B&S separately moved to dismiss the Complaint pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim. The
parties’ briefing on the motions to dismiss reveals that on March 7, 2023, Fannie Mae,
with B&S serving as Fannie Mae’s counsel, filed a foreclosure action against Frost in
state court. Mot. to Dismiss as to Brock & Scott, PLLC (“B&S Mot.”) at 3; Pl.’s Opp’n
to Fed. Nat’l Mortg. Ass’n’s Mot. to Dismiss at 2 (ECF No. 14); Def. Fed. Nat’l Mortg.
Ass’n’s Reply Mem. of Law in Further Supp. of its Mot. to Dismiss Pl.’s Compl. at 2
(ECF No. 17); see also Ex. A to B&S Mot. (ECF No. 5-1).
On October 17, 2023, I invited supplemental briefing on an issue that had not
been addressed by the parties—whether, given the foreclosure action that has been
initiated by Fannie Mae against Frost in state court, I should abstain under the
doctrine first set forth in Colorado River Water Conservation District v. United States,
424 U.S. 800 (1976). See Jiménez v. Rodríguez–Pagán, 597 F.3d 18, 27 n.4 (1st Cir.
2010) (appropriate to raise Colorado River abstention sua sponte). B&S filed a
supplemental brief, maintaining that the Colorado River doctrine does not apply to
the claims against B&S and pointing out that Frost “had already agreed” that B&S
should be dismissed from this action. Suppl. Br. in Supp. of Mot. to Dismiss as to
Brock & Scott, PPLC at 2 (ECF No. 19). Fannie Mae also filed a supplemental brief.
In it, Fannie Mae confirms that, by the time Frost had filed this action on April 14,
2023, Fannie Mae “had already filed its Foreclosure Action with the South Paris
District Court by Complaint dated March 7, 2023.” Def. Fed. Nat’l Mortg. Ass’n’s
Suppl. Br. in Further Supp. of its Mot. to Dismiss Pl.’s Compl. (“Fannie Mae’s
Case 2:23-cv-00198-JAW Document 22 Filed 11/30/23 Page 3 of 13 PageID #:
<pageID>

4
Suppl. Br.”) at 2 (ECF No. 20). Fannie Mae argues that there is “no doubt at all” that
the state foreclosure action would resolve all of the claims in this federal case, and
therefore abstention under Colorado River is appropriate. Fannie Mae’s Suppl. Br. 2.
Frost filed a response to the Defendants’ supplemental memoranda. Pl.’s Resp. to
Def.’s Fed. Nat’l Mortgage Ass’n and Brock & Scott PPLC’s Suppl. Brs. (“Pl.’s Suppl.
Resp.”) (ECF No. 21). Frost opposes abstention, arguing that at the time he filed this
action the Defendants’ foreclosure action “was sitting dormant and inactive on the
shelf” and that the “two cases are not the same” and the argument he is pursuing
“about the legality of the quitclaim assignment is in jeopardy.” Pl.’s Suppl. Resp. at
1–2. Alternatively, he asks that if I abstain, I remand his case back to the state court
or if I dismiss, that the dismissal be without prejudice. Pl.’s Suppl. Resp. at 4–5.
DISCUSSION
I. 	Plaintiff’s Claims Against Brock & Scott, PLLC
Defendant B&S is correct that Frost has already stated that he was “willing to
accept dismissal as to Brock & Scott only.” See Pl.’s Opp’n to Mot. to Dismiss with
Prejudice as to Brock & Scott PLLC at 1 (ECF No. 6). In his supplemental response,
Frost clarifies that his “agreeable statements about dismissing Brock & Scott were
contingent on the fact that Brock & Scott were not pursuing this debt as owners of
this debt but rather solely as agents for Fannie Mae.” Pl.’s Suppl. Resp. at 4. The
record before me, including Exhibit G attached to Frost’s complaint, shows that B&S
was acting as an agent for Fannie Mae, not as the owner of the mortgaged debt. See,
e.g., Compl. Ex. G. (ECF No. 4-10) (“Brock & Scott, PLLC is a debt collector. We are
Case 2:23-cv-00198-JAW Document 22 Filed 11/30/23 Page 4 of 13 PageID #:
<pageID>

5
trying to collect a debt that is owed to Federal National Mortgage Association.”).2
Given this fact and Frost’s concession, I am dismissing B&S from this action.
II. 	Plaintiff’s Claims Against Fannie Mae
As to Frost’s claims against Fannie Mae, Fannie Mae moved to dismiss the
Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for
failure to state a claim. Fannie Mae argues that the Plaintiff’s theory—that the note
and Mortgage should be invalidated because the initial assignment from Mortgage
Electronic Registration Systems is ineffective under Bank of America v. Greenleaf,
2014 ME 89, 96 A.3d 700, and the original lender, Castle Point, has forfeited its
corporate status—fails as a matter of law. Mem. of Law in Supp. of the Mot. to
Dismiss Pl.’s Compl. by Def. Nat’l Mortg. Ass’n at 3, 5–6 (ECF No. 7-1). Even though
Fannie Mae did not initially raise the abstention issue, it now takes the position that
Colorado River abstention is warranted.
The Colorado River abstention doctrine “rest[s] on considerations of wise
judicial administration, giving regard to conservation of judicial resources and
comprehensive disposition of litigation.” Colo. River, 424 U.S. at 817 (internal
quotations omitted). Accordingly, this abstention doctrine “allows federal courts in
limited instances to stay or dismiss proceedings that overlap with concurrent
litigation in state court.” Jiménez, 597 F.3d at 21 (citing Colo. River, 424 U.S. 800).
The cases that merit Colorado River abstention are rare, however, because “[o]f all
2 	In reviewing a motion to dismiss for failure to state a claim, I “can consider (a) implications
from documents attached to or fairly incorporated into the complaint, (b) facts susceptible to judicial
notice, and (c) concessions in plaintiff’s response to the motion to dismiss.” Schatz v. Republican State
Leadership Comm., 669 F.3d 50, 55–56 (1st Cir. 2012) (internal quotations and footnote omitted).
Case 2:23-cv-00198-JAW Document 22 Filed 11/30/23 Page 5 of 13 PageID #:
<pageID>

6
the abstention doctrines, it is to be approached with the most caution, with ‘only the
clearest of justifications’ warranting dismissal.” Id. at 27 (quoting Colo. River, 424
U.S. at 819).
The 	First 	Circuit 	has 	developed 	an 	“exceptional-circumstances 	test” 	to
determine if such a clear justification exists for a given case. Id. (quoting Moses H.
Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 16 (1983)). Where a parallel
state proceeding is pending, the relevant factors that a federal court may consider in
deciding whether to abstain, include, but are not limited to:
(1) whether either court has assumed jurisdiction over a res; (2) the
geographical inconvenience of the federal forum; (3) the desirability of
avoiding piecemeal litigation; (4) the order in which the forums obtained
jurisdiction; (5) whether state or federal law controls; (6) the adequacy
of the state forum to protect the parties’ interests; (7) the vexatious or
contrived nature of the federal claim; and (8) respect for the principles
underlying removal jurisdiction.
Jiménez, 597 F.3d at 27–28. “No one factor is necessarily determinative.” Colo. River,
424 U.S. at 818. “ ‘[T]he decision whether to dismiss a federal action because of
parallel state-court litigation does not rest on a mechanical checklist, but on a careful
balancing of the important factors as they apply in a given case, with the balance
heavily weighted in favor of the exercise of jurisdiction.’ ” Jiménez, 597 F.3d at 28
(quoting Moses H. Cone, 460 U.S. at 16).
A. 	Existence of a Parallel State Proceeding
A threshold question before engaging with the list of factors is whether the
state foreclosure action is in fact a “parallel state court action” that could trigger
Colorado River abstention. Advantage Payroll Servs., Inc. v. Rode, No. 2:21-cv-00020-
NT, 2021 WL 5999187, at *4 (D. Me. Dec. 20, 2021) (quoting Ambrose v. New Eng.
Case 2:23-cv-00198-JAW Document 22 Filed 11/30/23 Page 6 of 13 PageID #:
<pageID>

7
Ass’n of Schs. & Colls., Inc., 100 F. Supp. 2d 48, 49 (D. Me. 2000)). “ ‘While the two
suits need not have a perfect identity of parties and issues’ to be parallel, they must
have ‘substantially the same parties litigating substantially the same issues in
different forums.’ ” Id. (quoting Ambrose, 100 F. Supp. 2d at 50). Here, the state court
foreclosure action involves both Frost and Fannie Mae, and the allegations that Frost
raises in this lawsuit contesting the validity of a quitclaim assignment in the chain
of his mortgage rests on the same “factual predicate[ ]” and “legal theories” as the
foreclosure action. See Ambrose, 100 F. Supp. 2d at 50. To succeed on its foreclosure
action, Fannie Mae will (as Frost points out) have to prove its standing as the current
holder of the note and mortgage under Greenleaf. Frost’s claims here go to that same
question and would be defenses in the foreclosure case so the same evidence and
witnesses are implicated. Accordingly, I find that the pending foreclosure proceeding
is a parallel state court action.
B. 	Applying the Colorado River Factors
The first factor—whether either the state or federal court has assumed
jurisdiction over a res3—is based on a prudential concern for deferring to another
court for the sake of “ ‘comprehensive disposition of rights in a particular piece of
property.’ ” Jiménez, 597 F.3d at 28 n.6 (citation omitted). Frost’s federal complaint
for declaratory and equitable relief boils down to the question of whether, by virtue
of the Frost-disputed quitclaim assignment to Fannie Mae, Fannie Mae has any right
3 	“Res” is Latin for “thing.” Black’s Law Dictionary (11th ed. 2019). “[W]hen property is the main
subject of a lawsuit, a court’s exercise of jurisdiction over the property in that lawsuit may be termed
‘in rem’ jurisdiction, and the property at issue may be termed the ‘res.’ ” Sexton v. NDEX W., LLC, 713
F.3d 533, 536 n.4 (9th Cir. 2013).
Case 2:23-cv-00198-JAW Document 22 Filed 11/30/23 Page 7 of 13 PageID #:
<pageID>

8
to foreclose and obtain the title to the same South Paris property that is the subject
of the state foreclosure proceeding. Both the state foreclosure action and this action
are in rem proceedings that ultimately involve the same property.4 See KeyBank Nat’l
Ass’n v. Keniston, 2023 ME 38, ¶ 16, 298 A.3d 800 (“A foreclosure action is in rem in
nature . . . .”); In re Bateman, 397 F. Supp. 3d 113, 122 (D. Mass. 2019) (“Maine’s
generally applicable quiet title statute is ‘a proceeding in rem against the land.’ ”
(quoting 14 M.R.S. § 6657)). If my analysis of the quitclaim assignment to Fannie
Mae differs from that of the state court hearing the foreclosure matter, “[t]here is . . .
a possibility for inconsistent dispositions of property.” Jiménez, 597 F.3d at 28.
Therefore, this factor favors abstention.
The third factor—the desirability of avoiding piecemeal litigation—similarly
weighs in favor of abstention. “The ‘piecemeal litigation’ to be avoided is something
more than just the repetitive adjudication that takes place in all cases implicating
[the] Colorado River doctrine.” Jiménez, 597 F.3d at 29. “[A] duplication of effort,
while wasteful, is not exceptional,” id., so the piecemeal-litigation concern “should
focus on the implications and practical effects of litigating suits deriving from the
same transaction in two separate fora, not on the mere possibility of duplication.”
Gonzalez v. Cruz, 926 F.2d 1, 4 (1st Cir. 1991). The potential “for harmful inconsistent
determinations” in the state and federal courts is one such implication. Id. Here, that
4 	In Latin, “in rem” means “against a thing” and in legal use means “involving or determining
the status of a thing, and therefore the rights of persons generally with respect to that thing.” Black’s
Law Dictionary. “ ‘An action in rem is one in which the judgment of the court determines the title to
property and the rights of the parties, not merely as between themselves, but also as against all
persons at any time dealing with them or with the property upon which the court had adjudicated.’ ”
Black’s Law Dictionary (quoting R.H. Graveson, Conflict of Laws 98 (7th ed. 1974)).
Case 2:23-cv-00198-JAW Document 22 Filed 11/30/23 Page 8 of 13 PageID #:
<pageID>

9
possibility looms large and the danger of unfairness to the parties is real. For
example, if I hypothetically found on the limited facts before me that the quitclaim
assignment to Fannie Mae is valid, that could lead Fannie Mae to seek to preclude
Frost from challenging the assignment in the foreclosure proceeding on res judicata
grounds. Or the state court judge might reach a different conclusion about the
assignment and whether it gives Fannie Mae standing to foreclose. In addition, the
First Circuit has “found that a risk of piecemeal litigation arises when ‘a ruling from
the state court would render [the federal court’s] opinion merely advisory.’ ” United
States v. Fairway Cap. Corp., 483 F.3d 34, 42 (1st Cir. 2007) (quoting Rivera-Feliciano
v. Acevedo-Vilá, 438 F.3d 50, 62 (1st Cir. 2006)). That risk is present here where Frost
seeks “scrutiny” from me about Fannie Mae’s right to enforce Frost’s mortgage in the
foreclosure action. See Fannie Mae’s Mot. to Dismiss 6–7.5 All these reasons suggest
that this case is one of the exceptional ones where the piecemeal litigation concern is
well-founded.
The remaining factors are either neutral or slightly favor abstention. The
second factor, the geographical inconvenience of the federal forum, carries little-to-no
weight because the South Paris District Court in Oxford County and the federal court
in Portland, which are about a one-hour drive apart, are equally convenient. See
Burns v. Watler, 931 F.2d 140, 147 (1st Cir. 1991) (“[A] two-hour drive does not denote
5 	B&S also maintains that “[t]he propriety of the quit claim assignment of mortgage itself is a
question of law to be determined at trial in the Foreclosure Action” and that that court “should address
all of Frost’s claims in the Foreclosure Action.” B&S Mot. to Dismiss 5–6, 7.
Case 2:23-cv-00198-JAW Document 22 Filed 11/30/23 Page 9 of 13 PageID #:
<pageID>

10
a degree of inconvenience that should significantly influence the question of whether
the proceedings in the federal court should be stayed.”).
As to the fourth factor, I should “favor[ ] the case that is the more advanced at
the time the Colorado River balancing is being done.” Jiménez, 597 F.3d at 30–31
(internal quotations omitted). According to the clerk’s certificate of foreclosure that
was recorded in the Oxford County Registry of Deeds, the state court obtained
jurisdiction first because the foreclosure action was filed on March 7, 2023, and Frost
did not file the instant action until April 14, 2023. See B&S Mot. to Dismiss Ex. A
(ECF No. 5-1); Compl. Although Frost’s characterization of Fannie Mae’s foreclosure
filing as “sitting on the shelf” suggests that the state action has not advanced
significantly, it is likely more developed than the case before me where, due to their
pending motions to dismiss, neither defendant has yet filed an answer. See Colo.
River, 424 U.S. at 820 (finding that the absence of any federal proceedings beyond a
motion to dismiss favors the surrender of jurisdiction).
Turning to the next factors, state law controls (fifth factor) and, to the extent
it is relevant, the state forum is adequate to protect the parties’ interests (sixth
factor). See United States v. Fairway Cap. Corp., 483 F.3d 34, 43 (1st Cir. 2007)
(noting 	that 	this 	factor 	is 	important 	“only 	when 	it 	disfavors 	abstention” 	and
concluding it was neutral because “the possibility that the state court proceeding
might adequately protect the interests of the parties is not enough to justify the
district court’s deference to the state action” (internal quotations omitted)). I view
Case 2:23-cv-00198-JAW Document 22 Filed 11/30/23 Page 10 of 13 PageID #:
<pageID>

11
these factors as neutral. As to the seventh factor, that too is neutral because there is
no evidence that the proceeding Frost initiated was vexatious or contrived.6
In considering all these factors, I have “heavily weighted” the balance “in favor
of the exercise of jurisdiction.” Villa Marina Yacht Sales, Inc. v. Hatteras Yachts, 915
F.2d 7, 13 (quoting Moses H. Cone, 460 U.S. at 16). While none of the factors favor
the federal forum and most are neutral, the first and third factors and the exceptional
circumstances of this case present a clear justification for abstention because the
ownership 	interest 	in 	a 	res—Frost’s 	mortgaged 	property—is 	at 	issue 	and 	my
involvement in the case would result in piecemeal litigation and could result in
potentially harmful conflicting rulings in the federal case and the state foreclosure
action.7 Although Colorado River abstention “is to be used sparingly and approached
with great caution,” it is appropriate in exceptional circumstances. Nazario–Lugo v.
Caribevisión Holdings, Inc., 670 F.3d 109, 115 (1st Cir. 2012). This is one of those
cases.
6 	The eighth factor—respect for the principles underlying removal jurisdiction—is not relevant
here because Frost expressed his wish to have his case proceed in state court by filing it there and by
initially seeking remand after removal. See United States v. Fairway Cap. Corp., 483 F.3d 34, 44 (1st
Cir. 2007) (explaining that this factor is relevant “if a plaintiff was attempting to evade the policy in
28 U.S.C. § 1441 that only a defendant be able to remove a lawsuit from state court to federal court”).
7 	One additional consideration peculiar to my analysis here is the availability of the Maine
Foreclosure Diversion Program. At some point in the foreclosure action, the parties will likely engage
in free State-provided mediation, and I am concerned that any decision I might make here could have
a deleterious effect on the parties’ efforts to reach a resolution. Indeed, Frost’s supplemental response
suggests that said mediation is occurring. See Pl.’s Suppl. Resp. at 2 (stating that the “foreclosure
action is in effect on a stay pending mediation”).
Case 2:23-cv-00198-JAW Document 22 Filed 11/30/23 Page 11 of 13 PageID #:
<pageID>

12
III. 	Next Steps
Having found that Colorado River abstention is proper, I must now determine
whether 	the 	appropriate 	disposition 	is 	a 	dismissal 	or 	a 	stay 	of 	the 	federal
proceedings.8 The First Circuit seemingly favors a stay because “it may likely produce
the same result as a dismissal while still leaving the docket open in case loose ends
remain at the conclusion of the state proceedings.” Jiménez, 597 F.3d at 31. That said,
“the decision to invoke Colorado River necessarily contemplates that the federal court
will have nothing further to do in resolving any substantive part of the case, whether
it stays or dismisses.” Moses H. Cone, 460 U.S. at 28. Given the First Circuit’s
preference, I opt to stay the federal action but with the “[t]he expectation . . . that the
controversy will be resolved in the state court proceeding, and that if the part[ies]
return[ ] to federal court after the state court action is over, the most that will be
needed is to dispose of the federal suit on principles of res judicata or collateral
estoppel.” 17A C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure
§ 4247 (3d ed. 2007).
8 	The Plaintiff urges that I follow a third option and remand the case to state court, but “[t]he
Court has no power to remand under Colorado River, which allows courts to stay or dismiss certain
actions in exceptional circumstances.” Ambrose v. New Eng. Ass’n of Schs. & Colls., Inc., 100 F. Supp.
2d 48, 49 n.1 (D. Me. 2000), aff’d, 252 F.3d 488 (1st Cir. 2001). As the Fifth Circuit has explained:
It is clear . . . that remand is not an option. In addition to being unsupported by any
authority in the removal statute or elsewhere, it is simply illogical. Where a court has
already determined under the Colorado River analysis that an existing state court case
“will be an adequate vehicle for the complete and prompt resolution of the issues
between the parties,” Moses H. Cone, 460 U.S. at 28, 103 S. Ct. 927, no purpose is
served by sending the federal case back to state court to litigate the same issues.
Saucier v. Aviva Life & Annuity Co., 701 F.3d 458, 465–66 (5th Cir. 2012). Here, the existing state
foreclosure action is an adequate vehicle to resolve the mortgage-related issues raised by Frost in his
Complaint. Nothing in my orders entered here in federal court is meant to preclude him from raising
his concerns as affirmative defenses or counterclaims in the state court action.
Case 2:23-cv-00198-JAW Document 22 Filed 11/30/23 Page 12 of 13 PageID #:
<pageID>

13
CONCLUSION
For the reasons stated above, Brock & Scott, PPLC’s motion to dismiss is
GRANTED and Brock & Scott, PLLC is DISMISSED without prejudice. The
remaining 	case 	against 	Defendant 	Federal 	National 	Mortgage 	Association 	is
STAYED, and Defendant Federal National Mortgage Association is directed to file a
status report on the progress of the foreclosure action on January 5, 2024, and every
sixty days thereafter.
SO ORDERED.
/s/ Nancy Torresen
United States District Judge
Dated this 30th day of November, 2023.
Case 2:23-cv-00198-JAW Document 22 Filed 11/30/23 Page 13 of 13 PageID #:
<pageID>