Viegas et al v. LoanDepot Inc. et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Chief Judge Philip A. Brimmer
Civil Action No. 24-cv-02822-PAB-STV
KERI L VIEGAS, and
JAMES VIEGAS,
Plaintiffs,
v.
LOANDEPOT INC.,
THE SAYER LAW GROUP, P.C., and
ROUNDPOINT MORTGAGE SERVICING LLC,
Defendants.
ORDER
This matter comes before the Court on Plaintiffs Request for Emergency
Injunction to Halt Nonjudicial Foreclosure by Affidavit of Truth and Fact [Docket
No. 10]. 1 On November 26, 2024, defendant Roundpoint Mortgage Servicing LLC
(“Roundpoint”) filed a response. Docket No. 16. On December 2, 2024, plaintiffs Keri
L. Viegas and James Viegas filed a reply. Docket No. 19.
1 As explained in the Court’s November 12 Order, Docket No. 13, in light of the
ambiguity about whether plaintiffs seek a temporary restraining order (“TRO”) or a
preliminary injunction, the Court construes plaintiffs’ motion as one for a preliminary
injunction since plaintiffs have not alleged the existence of any exigency that would
warrant a TRO pursuant to Federal Rule of Civil Procedure 65(b). Further, at the time
that plaintiffs filed the instant motion, there was no evidence that plaintiffs properly
served LoanDepot Inc. and the Sayer Law Group. Therefore, the Court construes the
instant motion as one seeking a preliminary injunction against Roundpoint.
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I. 	BACKGROUND
On October 11, 2024, plaintiffs filed the instant case against Roundpoint, a
mortgage servicer. Docket No. 1. The complaint asserts claims under the Fourth, Fifth,
and Seventh Amendments of the U.S. Constitution. Id. at 5. Plaintiffs claim that they
have suffered “reputation harm, negative credit reporting and mental anguish injuries
due to threats of seizing private land patented property” from a state foreclosure
proceeding on plaintiffs’ residential property. Id. at 4. Plaintiffs seek $8 million in
“compensatory relief” for “violations of due process causing harm and monetary loss
totaling $8,000,000.” Id. at 5. On November 8, 2024, Roundpoint filed a motion to
dismiss, arguing that res judicata bars plaintiffs from filing the instant suit. Docket No. 8
at 10–13. In 2023, plaintiffs filed suit and asserted claims against Roundpoint that
Roundpoint argues are “duplicative” of those in the instant suit. Id. at 10. Plaintiffs
argue that their claims in the instant suit are “NOT about a past Foreclosure and was
filed under 28 USC § 1331 Violation of Civil Rights – 42 USC § 1983 and § 1988 and
includes violations of due process of law.” Docket No. 15 at 4.
II. 	LEGAL STANDARD
To succeed on a motion for a preliminary injunction, the moving party must show
(1) a likelihood of success on the merits; (2) a likelihood that the movant will suffer
irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips
in the movant's favor; and (4) that the injunction is in the public interest. RoDa Drilling
Co. v. Siegal, 552 F.3d 1203, 1208 (10th Cir. 2009) (citing Winter v. Natural Res. Def.
Council, Inc., 555 U.S. 7, 20 (2008)); Little v. Jones, 607 F.3d 1245, 1251 (10th Cir.
2010)). “[B]ecause a preliminary injunction is an extraordinary remedy, the right to relief
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must be clear and unequivocal.” Beltronics USA, Inc. v. Midwest Inventory Distrib.,
LLC, 562 F.3d 1067, 1070 (10th Cir. 2009) (quoting Greater Yellowstone Coal. v.
Flowers, 321 F.3d 1250, 1256 (10th Cir. 2003)) (internal quotation marks omitted).
Granting such “drastic relief,” United States ex rel. Citizen Band Potawatomi Indian
Tribe of Oklahoma v. Enter. Mgmt. Consultants, Inc., 883 F.2d 886, 888-89 (10th Cir.
1989), “is the exception rather than the rule.” GTE Corp. v. Williams, 731 F.2d 676, 678
(10th Cir. 1984).
III. 	ANALYSIS
Plaintiffs’ motion for preliminary injunction seeks to bar “the El Paso County
Trustee from the sale of private land patented property located at 17 S. Sherwood Glen
Monument Colorado 80132.” Docket No. 10 at 1. More particularly, plaintiffs want to
enjoin a foreclosure sale scheduled for March 12, 2025. Id. at 4. In response,
Roundpoint argues that all of plaintiffs’ claims are barred by res judicata, and thus, for
purposes of plaintiffs’ preliminary injunction motion, plaintiffs cannot show a substantial
likelihood of success on the merits. Docket No. 16 at 7. Plaintiffs reply that “the claims
brought by the Plaintiffs have nothing to do with the 2023 case which is still open under
Appeal.” Docket No. 19 at 5.
“Res judicata requires the satisfaction of four elements: (1) the prior suit must
have ended with a judgment on the merits; (2) the parties must be identical or in privity;
(3) the suit must be based on the same cause of action; and (4) the party must have
had a full and fair opportunity to litigate the claim in the prior suit.” In re Mersmann, 505
F.3d 1033, 1049 (10th Cir. 2007). The purpose of res judicata is to “preclude[] the
parties or their privies from relitigating issues that were or could have been raised in the
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prior action.” Wilkes v. Wyo. Dep’t of Emp. Div. of Lab. Standards, 314 F.3d 501, 503–
04 (10th Cir. 2002) (citation omitted).
A. Plaintiffs’ 2023 Lawsuit Against Roundpoint
On December 14, 2023, plaintiffs filed their first case against Roundpoint (the
“2023 Case”). Viegas v. Kane, Case No. 23-cv-03291-PAB-MDB, Docket No. 1. In that
case, plaintiffs asserted claims under the Fourth and Fifth Amendments of the U.S.
Constitution against all defendants, including Roundpoint as the mortgage servicer, for
claims arising out of a state foreclosure action regarding plaintiffs’ residential property
located at 17 S. Sherwood Glen, Monument, Colorado 80132. 2 Id. at 3–5. Plaintiffs
claimed that Roundpoint violated criminal statutes 18 U.S.C. §§ 241, 242, 474, and
1341 “by colluding to obtain property with a false claim and a security instrument.” Id. at
5. Furthermore, plaintiffs claimed that Roundpoint violated the Truth in Lending Act, 15
U.S.C. § 1641(g), and a criminal statute, 18 U.S.C. § 1021, because “[a] Chain of Title
Analysis was performed by a licensed private investigator proving defendants had no
claim to file a foreclosure action.” Id. at 5–6. On September 10, 2024, the Court
accepted the magistrate judge’s recommendation that Roundpoint’s motion to dismiss
be granted and overruled plaintiffs’ objections. Id., Docket No. 42 at 20–21. The Court
dismissed, with prejudice, all of plaintiffs’ claims against Roundpoint and entered final
2 The Court takes judicial notice of the docket in Matrix Fin. Servs. Corp. v.
Viegas, No. 2023CV031029 (El Paso Cnty., Colo. Ct. 2023) (“AUTHORIZING SALE”), a
case where the plaintiffs in this case were parties and where the court identified the
Viegases’ residence as being located at 17 S. Sherwood Glen, Monument, CO 80132.
See Stan Lee Media, Inc. v. Walt Disney Co., 774 F.3d 1292, 1298 n.2 (10th Cir. 2014)
(noting that a court may “take judicial notice of documents and docket materials filed in
other courts”).
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judgment on September 10, 2024. Id., Docket No. 42 at 21; Docket No. 43. On
September 17, 2024, plaintiffs filed a notice of appeal of the Court’s September 10
Order. Id., Docket No. 44. The appeal is pending. See Viegas v. Kane, Case No. 24-
1368 (10th Cir. Sept. 18, 2024).
B. Whether Res Judicata Bars Plaintiffs’ Claims
Construing plaintiffs’ filings liberally, see Hall v. Bellmon, 935 F.2d 1106, 1110
(10th Cir. 1991) (“A pro se litigant’s pleadings are to be construed liberally and held to a
less stringent standard than formal pleadings drafted by lawyers.”), plaintiffs have failed
to show a likelihood of success on the merits. Specifically, plaintiffs have failed to show
that res judicata does not apply to their claims based on the 2023 Case.
The Court finds that Roundpoint has shown that the first element of res judicata
has been satisfied. The 2023 Case constitutes a final judgment on the merits of the
2023 claims against Roundpoint. In that case, the Court dismissed, with prejudice, all of
plaintiffs’ claims against Roundpoint and entered final judgment. Viegas v. Kane, Case
No. 23-cv-03291-PAB-MDB, Docket No. 43. Plaintiffs’ pending appeal of the final
judgment in that case does not affect the judgment’s finality. “It is well settled that ‘a
final judgment retains all of its res judicata consequences pending decision of the
appeal.’” Wexler v. United States, 961 F.2d 221, 1992 WL 74167, at *1 (10th Cir. Apr. 7
1992) (quoting 18 Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal
Practice & Procedure, § 4433, at 308 (1981)). As to the second element, the Court
finds that parties in the instant case and the 2023 Case – plaintiffs and Roundpoint –
are identical.
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Regarding the third element, the Court finds that the instant suit is based on the
same cause of action as the 2023 Case. In re Mersmann, 505 F.3d at 1049. Where a
plaintiff brings two suits related to a foreclosure proceeding and where the two suits
“concern the same claims or claims that could have been brought about the same loan
and subject real estate,” the suits constitute the “same cause of action” for res judicata
purposes. See Knowles v. Bank of New York Mellon, No. 13-cv-01974-PAB-MJW,
2013 WL 5399371, at *4–5 (D. Colo. Sept. 26, 2013). In Knowles, the plaintiffs brought
an action against the defendant for “quiet title and wrongful foreclosure” regarding the
same loan and real property that was at issue in a 2012 federal case that the plaintiffs
filed against the same defendant. Id. at *4. In the 2012 case, plaintiffs challenged the
defendant’s foreclosure action regarding their property, bringing claims “for lack of
standing to foreclose, wrongful foreclosure, breach of contract, breach of the implied
covenant of good faith and fair dealing, unjust enrichment, intent to defraud and
deceive, quit title, and slander of title.” Id. The court dismissed the 2012 case and
entered final judgment. Id. In the 2013 case, the Court held that res judicata barred
plaintiffs’ claims because the 2012 case “concern[ed] the same claims or claims that
could have been brought about the same loan and subject real estate.” Id. at *5.
Likewise, here, plaintiffs’ claims in the 2023 Case relate to the “same loan and
subject real estate.” Id. In the 2023 Case, plaintiffs alleged that Roundpoint violated
their 4th and 5th Amendment rights by “collud[ing] to take private land patented freehold
property with a fraudulent security instrument forcing plaintiff’s mental anguish and
distress thus violating several Title 15 and 18 US Codes.” Viegas v. Kane, Case No.
23-cv-03291-PAB-MDB, Docket No. 1 at 4–5. Plaintiffs were challenging a state
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foreclosure proceeding on 17 S. Sherwood Glen, Monument, Colorado 80132. Matrix
Fin. Servs. Corp., 2023CV031029 (“AUTHORIZING SALE”). In the instant case,
plaintiffs’ claims relate to state foreclosure proceedings on the same property and
regarding the same mortgage. Docket No. 1-2 at 12. Plaintiffs again claim that
Roundpoint violated their “4th, 5th, and 7th Amendments by threats to extort funds and
seize private land patented property without due process” through Roundpoint’s role in
the foreclosure proceedings as the mortgage servicer. Docket No. 1 at 5. Although
plaintiffs bring a Seventh Amendment claim in the instant case based on deprivation of
“a trial by a jury of peers regarding claims accused against the Plaintiffs,” id. at 4, which
they did not assert in the 2023 Case, plaintiffs do not explain why they could not have
bought this Seventh Amendment claim in the 2023 Case. The Court does not find any
reason that plaintiffs could not have done so. See Driskell v. Thompson, 971 F. Supp.
2d 1050, 1069 (D. Colo. 2013). Therefore, the instant case is based on the same
claims that could have been brought in the 2023 Case.
Fourth, plaintiffs had the full and fair opportunity to litigate their claims in the 2023
Case. A court will find that parties were deprived of a “full and fair opportunity” to litigate
their claims if “there is reason to doubt the quality, extensiveness, or fairness of
procedures followed in prior litigation.” Kremer v. Chem. Const. Corp., 456 U.S. 461,
480–81 (1982). Plaintiffs have provided no indication that they did not have a full and
fair opportunity in the 2023 Case to litigate their claims, and plaintiffs were not
prevented from filing an appeal. See Knowles, 2013 WL 5399371, at *4.
Roundpoint has shown that that the four elements of res judicata are satisfied.
The 2023 Case ended in a judgment on the merits, the parties are identical, the two
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suits are based on the same cause of action, regarding the same property and
mortgage, and plaintiffs had a full and fair opportunity to litigate their claims in the 2023
Case. In re Mersmann, 505 F.3d at 1049. Res judicata applies to plaintiffs’ claims
against Roundpoint in the instant suit based on the 2023 Case. Accordingly, plaintiffs
have not demonstrated that they are likely to succeed on the merits of their claims, and
the Court will deny their motion for a preliminary injunction. See Okla. v. United States
Dep’t of Health & Hum. Servs., 107 F.4th 1209, 1228 n.19 (10th Cir. 2024) (citing
Warner v. Gross, 776 F.3d 721, 736 (10th Cir. 2015)) (where the movant fails to show a
likelihood of success on the merits, the court “need not consider the other elements of a
preliminary injunction”).
IV. 	CONCLUSION
Therefore, it is
ORDERED that Plaintiffs Request for Emergency Injunction to Halt Nonjudicial
Foreclosure by Affidavit of Truth and Fact [Docket No. 10] is DENIED.
DATED December 17, 2024.
BY THE COURT:
___________________________
PHILIP A. BRIMMER
Chief United States District Judge
____	______________ ______	_ _________________________________
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