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Trebas v. Ally Bank, A Utah Corp.

United States District Court, D. Montana, Missoula Division

January 18, 2019

WILLIAM F. TREBAS, JR., Plaintiff,
v.
ALLY BANK, A UTAH CORPORATION, Defendant.

          FINDINGS AND RECOMMENDATION

          Jeremiah C. Lynch, United States Magistrate Judge

         I. Background

         Plaintiff William F. Trebas, Jr., appearing pro se, commenced this action against Defendant Ally Bank asserting it lacked both the factual and legal authority to foreclose on real property Trebas owns. The property was the subject of a deed of trust Trebas granted in 2012 to secure a loan he had obtained. He contends the deed of trust, the promissory note, and documents assigning the note and beneficial interests in the deed of trust were fraudulently executed, or unlawfully relied upon to ultimately support Ally Bank's foreclosure on the property. He asserts Ally Bank is liable for fraud, alleged violations of the Fair Debt Collection Practices Act, and the intentional infliction of emotional distress.

         Trebas asserts the Court has jurisdiction over his claim pursuant to 28 U.S.C. § 1331 on the basis that his claim arises under laws of the United States. (Doc. 1 at 1.) The Court also has supplemental jurisdiction over Trebas's claims advanced under Montana law as provided in 28 U.S.C. § 1367.

         III. Discussion

         Because Trebas is proceeding pro se the Court must construe his pleading liberally, and the pleading is held “to less stringent standards than formal pleadings drafted by lawyers[.]” Haines v. Kerner, 404 U.S. 519, 520 (1972). See also Neitzke v. Williams, 490 U.S. 319, 330 n.9 (1989). In view of the required liberal construction,

a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.

Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (emphasis added) (quoting Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995)).

         But even with liberal construction of Trebas's pleading, for the reasons discussed the Court concludes this action is barred under the doctrine of res judicata. Although a federal court must be cautious in raising a preclusion bar sua sponte, it is appropriate to do so in special circumstances. Arizona v. California, 530 U.S. 392, 412 (2000).

[I]f a court is on notice that it has previously decided the issue presented, the court may dismiss the action sua sponte, even though the defense has not been raised. This result is fully consistent with the policies underlying res judicata: it is not based solely on the defendant's interest in avoiding the burdens of twice defending a suit, but is also based on the avoidance of unnecessary judicial waste.

Arizona, at 412 (quoting United States v. Sioux Nation, 448 U.S. 371, 432 (1980) (Rehnquist, J., dissenting)). “As a general matter, a court may, sua sponte, dismiss a case on preclusion grounds ‘where the records of that court show that a previous action covering the same subject matter and parties had been dismissed.'” Headwaters, Inc. v. United States Forest Service, 399 F.3d 1047, 1054-55 (9th Cir. 2005) (quoting Evarts v. W. Metal Finishing Co., 253 F.2d 637, 639 n.1 (9th Cir. 1958)). Thus, where judicial resources have previously been spent on the resolution of a particular prior case, special circumstances can be found warranting the court's sua sponte application of res judicata to a subsequent attempt to relitigate the same case. Cf. Arizona, at 412-413, and Headwaters, Inc. at 1056-57.

         This Court has notice of the facts and circumstances of Trebas's prior civil action filed in this Court, captioned as Trebas v. Ally Bank, CV 17-113-M-DLC-JCL (Trebas I). This Court expended significant judicial resources addressing the merits of Trebas's legal claims pled against Ally Bank in Trebas I, and on August 22, 2018, the Court entered an order and a judgment dismissing that case. Nonetheless, Trebas now seeks to commence a new lawsuit which presents claims predicated upon the same nucleus of operative facts he presented in Trebas I. Thus, any relitigation of Trebas's dispute with Ally Bank would be inconsistent with the prior dismissal in Trebas I, and it would be a waste of judicial resources to again adjudicate claims stemming from the same predicate facts as were presented in Trebas I. Therefore, the Court finds it is appropriate to raise the doctrine of res judicata sua sponte.

         Res judicata, or claim preclusion, provides that “a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.” Allen v. McCurry, 449 U.S. 90, 94 (1980). Res judicata is applicable when (1) the prior litigation and the present action involve the same claims, or when the two cases have an “identity of claims;” (2) a final judgment on the merits was entered in the prior litigation; and (3) there exists privity ...


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