United States District Court, E.D. Louisiana
ORDER AND REASONS
J. BARBIER UNITED STATES DISTRICT JUDGE.
the Court is a Motion to Dismiss (Rec. Doc. 17)
filed by Defendant Wells Fargo Bank, N.A., (“Wells
Fargo”), an opposition thereto (Rec. Doc. 18) filed by
Plaintiff Donna Williams (“Plaintiff”), and a
reply by Wells Fargo (Rec. Doc. 19). Having considered the
motion and legal memoranda, the record, and the applicable
law, the Court finds that the motion should be DENIED.
AND PROCEDURAL BACKGROUND
litigation derives from a 2009 fire that damaged
Plaintiff's residence in New Orleans, Louisiana. (Rec.
Doc. 1 at 2.) At the time of the fire, Plaintiff was married
to her now ex-husband, Freddie Williams. Plaintiff and
Freddie Williams were the mortgagors of the property and
Wells Fargo was the mortgagee. (Rec. Doc. 17-1 at 2.)
Plaintiff alleges that following the fire, she submitted a
claim to American Security Insurance Company (“American
Security”), which paid $165, 000 to settle the claim.
(Rec. Doc. 1 at 2.) Plaintiff contends that American Security
sent the settlement funds to Wells Fargo, whereupon a portion
of the funds were disbursed to Plaintiff and her then-husband
to make repairs. Id. Plaintiff states that she and
Freddie Williams divorced in 2010, with no partition of any
community property to date. Id. Plaintiff alleges
that in 2012, Wells Fargo applied the remainder of the
undistributed settlement funds, $100, 000, to the balance due
on the mortgage. Id. at 3.
alleges that in 2015 she discovered the property was in
foreclosure status, and was informed by Wells Fargo that the
$100, 000 credit applied to the mortgage balance had been
reversed and disbursed to Plaintiff's ex-husband. (Rec.
Doc. 1 at 3.) Plaintiff alleges that on August 14, 2015, she
mailed a letter to Wells Fargo requesting information
regarding the mortgage on the property and further alleges
that on October 20, 2015, she received a reply from Wells
Fargo denying her request for information regarding the loan.
Id. at 4. On July 18, 2016, Plaintiff filed a state
court petition in the Civil District Court for the Parish of
Orleans, naming Wells Fargo and ABC Insurance Company as
defendants. (Rec. Doc. 17-2 at 1.) Plaintiff claims that
Wells Fargo was negligent in its disbursement of the
remaining settlement funds and that she suffered financial
losses as a result. Id. at 3.
October 4, 2016, Plaintiff filed a lawsuit in this Court,
alleging that Wells Fargo violated the Real Estate Settlement
Procedures Act, 12 U.S.C. § 2601, et seq.
(“RESPA”), which requires servicers of federally
related mortgage loans to respond to a borrower's request
for information. On February 6, 2017, Wells Fargo filed the
instant Motion to Dismiss, alleging that Plaintiff
is engaging in improper claim splitting. (Rec. Doc. 17-1 at
Fargo argues that Plaintiff's federal lawsuit should be
dismissed under Rule 12(b)(6) of the Federal Rules of Civil
Procedure because it is duplicative of her state suit,
resulting in improper claim splitting. Wells Fargo asserts
that the factual basis for the suits is identical, since both
are premised on allegedly improper disbursements of money to
Plaintiff's ex-husband. Wells Fargo also claims that
Plaintiff is attempting to improperly expand upon the
procedural rights granted in Louisiana state court. In
particular, Wells Fargo argues that because Plaintiff omitted
her RESPA claim from her state court petition, Louisiana Code
of Civil Procedure Article 1151 would require her to obtain
leave of court before amending her pleadings to include the
RESPA claims advanced here. As a result, Wells Fargo argues
that Plaintiff should not be given the opportunity to
circumvent that requirement by filing the RESPA claim in
federal court. Finally, Wells Fargo asserts that Plaintiff
has filed the federal suit to gain otherwise unavailable
procedural advantages and to harass Wells Fargo.
opposition, Plaintiff asserts that the federal RESPA and
state law claims are separate and distinct, with differing
operative facts. Plaintiff avers that the state law suit
concerns the handling of fire insurance proceeds, while the
federal suit only requests relief on the RESPA claim.
Plaintiff argues that her filing of separate suits does not
constitute claim splitting and that there is no danger of
inconsistent judgments or res judicata if both suits
are allowed to proceed.
Courts have a “virtually unflagging obligation”
to exercise the jurisdiction given them. Black Sea
Investment, Ltd. v. United Heritage Corp., 204 F.3d 647,
650 (5th Cir. 2000) (quoting Colorado River Conservation
Dist. v. United States, 424 U.S. at 800, 817 (1976)).
Therefore, “the pendency of an action in the state
court is no bar to proceedings concerning the same matter in
the Federal court having jurisdiction.” Colorado
River, 424 U.S. at 817. A district court may only
abstain from exercising its jurisdiction under
“extraordinary and narrow” circumstances.
Superior Diving Co. v. Cortigene, 372 F. App'x.
496, 498 (5th Cir. 2010) (quoting Allegheny Cty. v. Frank
Mashuda Co., 360 U.S. 185, 188 (1959)). Thus,
“[a]bstention from the exercise of federal jurisdiction
is the exception, not the rule.” Colorado
River, 424 U.S. at 813.
threshold question under the Colorado River
abstention doctrine is whether the federal and the state
actions are parallel, meaning that the actions involve
“the same parties and the same issues.”
Stewart v. W. Heritage Ins. Co., 438 F.3d 488, 491
(5th Cir. 2006). If the Court determines that the federal and
state actions are parallel, it applies the following six
factors to determine whether “exceptional”
(1) assumption by either court of jurisdiction over a
res; (2) the relative inconvenience of the forums;
(3) the avoidance of piecemeal litigation; (4) the order in
which jurisdiction was obtained by the concurrent forums; (5)
whether and to what extent federal law provides the rules of
decision on the merits; and (6) the adequacy of the state