NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted March 26, 2008*
Decided March 31, 2008
Before
RICHARD A. POSNER, Circuit Judge
DIANE P. WOOD, Circuit Judge
TERENCE T. EVANS, Circuit Judge
No. 07‐3169
GORDON B. DEMPSEY and GORDON Appeal from the United States District
B. DEMPSEY, P.C., Court for the Southern District of Indiana,
Plaintiffs‐Appellants, Indianapolis Division.
v. No. 1:06‐cv‐0996‐JDT‐TAB
JP MORGAN CHASE BANK, N.A., John D. Tinder,
Defendant‐Appellee. Judge.
O R D E R
Gordon Dempsey filed this diversity suit based on Indiana law in Indiana state
court, claiming principally that JP Morgan Chase Bank violated his mortgage agreement
when it bought the mortgaged property at an execution sale and then evicted him. Chase
removed the case to federal district court. See 28 U.S.C. § 1446. The district court dismissed
*
After examining the briefs and the record, we have concluded that oral argument is
unnecessary. Thus, the appeal is submitted on the briefs and the record. See FED. R. APP. P.
34(a)(2).
No. 07‐3169 Page 2
all but one of Dempsey’s claims for failure to state a claim. See FED. R. CIV. P. 12(b)(6). The
district court remanded the remaining claim to the Indiana trial court because Dempsey
lacked standing to pursue it in federal court. See 28 U.S.C. § 1447(c). Dempsey appeals. We
conclude that the district court lacked jurisdiction to hear one of the claims that the court
dismissed on its merits, but otherwise we affirm.
This lawsuit comes on the heels of six years of litigation between Dempsey and
George and Oleva Carter, resulting in a six‐figure judgment for the Carters. After Dempsey
failed to satisfy that judgment, an Indiana court assessed a deficiency against Dempsey. To
satisfy that deficiency, the Carters obtained a writ of execution for a piece of property
owned by Dempsey on Kessler Boulevard in Indianapolis, Indiana (“the Kessler property”).
In May 2005 the Indiana trial court entered a judgment that calculated the final amount of
the deficiency, ordered the execution sale to proceed over Dempsey’s objections, and invited
any mortgagee to bid for the Kessler property at the sale, expressly authorizing such
mortgagees to bid an amount equal to the mortgage debt. At the time, Chase held a
mortgage interest in the Kessler property, and it bid the amount of the mortgage debt at the
execution sale. Chase was the highest bidder and therefore purchased the Kessler property
for the amount of its lien (thus resulting in no benefit to the Carters).
The Indiana court subsequently upheld the sale over Dempsey’s numerous attempts
to invalidate it. When Dempsey nonetheless refused to acquiesce to Chase’s demand to
move off the property, Chase obtained a writ of assistance to evict Dempsey. The Indiana
court upheld the issuance of the writ over Dempsey’s numerous attacks, and in July 2005
Chase executed the writ and evicted Dempsey from the Kessler property, along with his
two tenants. Dempsey appealed to the Indiana Court of Appeals, challenging, among other
things, the order and confirmation of the execution sale and the order issuing the writ of
assistance. The court upheld each of these rulings in January 2007. See Dempsey v. Carter,
No. 49A05‐0510‐CV‐603, 2007 WL 114086 (Ind. Ct. App. Jan. 18, 2007) (unpublished
decision). The Indiana Supreme Court denied transfer in June 2007.
In June 2006, while his appeal in the Carter lawsuit was pending, Dempsey filed this
lawsuit against Chase in Indiana state court. Chase removed the case to the district court
based on diversity jurisdiction, see 28 U.S.C. § 1446, and moved to dismiss the complaint for
failure to state a claim, see FED. R. CIV. P. 12(b)(6). Dempsey’s complaint and other filings
are confusing, but the district court understood Dempsey to be making three claims:
(1) breach of the mortgage agreement, (2) improper execution of the writ of assistance, and
(3) violation of Dempsey’s tenants’ due process rights.
As to the mortgage agreement, Dempsey claimed that Chase breached it in two
ways. First he claimed that Chase’s purchase of the Kessler property for merely the value of
No. 07‐3169 Page 3
its lien violated the agreement, because, he said, it required Chase to protect his purported
equity in the property in the event of an execution sale. Second Dempsey claimed that his
eviction from the Kessler property violated the agreement because, again in his view, it
required Chase to “keep the parties on track” with the loan—even in the event of a
completed sale—by assigning the property back to him after the sale. Concerned that it
lacked jurisdiction to hear these claims, the district court ordered supplemental briefing on
the Rooker‐Feldman doctrine. See D.C. Ct. App. v. Feldman, 460 U.S. 462, 476, 482‐83 (1983);
Rooker v. Fid. Trust Co., 263 U.S. 413, 415‐16 (1923). Chase responded that the Rooker‐
Feldman doctrine did not bar jurisdiction over the mortgage‐agreement claims because
Dempsey was taking issue with Chase’s conduct—its bidding and its seeking to evict
Dempsey—and not the sale itself. The district court concluded that the Rooker‐Feldman
doctrine presented no bar to the court’s jurisdiction because, in the court’s view, Dempsey’s
alleged injuries were based on his purported rights under the mortgage agreement and not
on the state court’s judgment ordering the sale. Instead, the district court determined that
Dempsey was collaterally estopped from pursuing the claim, and that, in any event, it
lacked merit.
The district court then easily disposed of Dempsey’s two remaining claims.
Dempsey claimed that Chase executed the writ of assistance in a commercially
unreasonable manner when it refused to delay executing the writ for a few days to allow
Dempsey to attend a family funeral. The district court dismissed this claim, concluding that
it lacked merit as a matter of law. And lastly, Dempsey claimed that Chase violated the due
process rights of his tenants by evicting them without a hearing. The district court
determined that Dempsey lacked standing to pursue this claim and thus remanded it to the
Indiana trial court. See 28 U.S.C. § 1447(c). Dempsey now appeals each of the district
court’s determinations.
We turn first to Dempsey’s claim that Chase breached the mortgage agreement.
Dempsey continues to assert that Chase’s purchase of the property for the value of its lien
violated the agreement, which, he says, required Chase to protect his purported equity in
the Kessler property in the event of an execution sale. The district court’s original
inclination to dismiss this claim under the Rooker‐Feldman doctrine for lack of jurisdiction
was correct. Under the Rooker‐Feldman doctrine, federal courts other than the Supreme
Court of the United States lack subject‐matter jurisdiction to review state court judgments.
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005); Feldman, 460 U.S. at
476, 482‐83; Rooker, 263 U.S. 413, 415‐16. Barred are federal lawsuits “brought by state‐court
losers complaining of injuries caused by state‐court judgments rendered before the district
court proceedings commence and inviting district court review and rejection of those
judgments.” Exxon Mobil, 544 U.S. at 284; see Holt v. Lake County Bd. of Commʹrs, 408 F.3d
335, 336 (7th Cir. 2005).
No. 07‐3169 Page 4
In attacking the price that Chase paid for the Kessler property, Dempsey is attacking
the state court’s order allowing the execution sale, which expressly authorized mortgagees
like Chase to bid the value of their liens. See generally IND. CODE § 34‐55‐6‐1 to 34‐55‐6‐21;
IND. TRIAL R. 69(A) (“Process to enforce a judgment or a decree for the payment of money
shall be by writ of execution . . .”). It makes no difference for purposes of the Rooker‐
Feldman doctrine that his basis for doing so is a mortgage agreement; it is not the case that
Dempsey was injured under the agreement prior to the sale and the state court simply failed
to redress that injury. See Holt, 408 F.3d at 336; Long v. Shorebank Dev. Corp., 182 F.3d 548,
557 (7th Cir. 1999); Gary v. Geils, 82 F.3d 1362, 1366‐69 (7th Cir. 1996); Ritter v. Ross, 992 F.3d
750, 754 (7th Cir. 1993); GASH Assocs. v. Vill. of. Rosemont, Ill., 995 F.2d 726, 728‐29 (7th Cir.
1993). Cf. Bolden v. City of Topeka, Kan., 441 F.3d 1129, 1132‐34, 1142‐45 (10th Cir. 2006)
(party’s claim that city violated his right to due process by ordering demolition of his
property was not barred under Rooker‐Feldman doctrine just because state court
subsequently refused to enjoin demolition). Thus, the district court did not have subject‐
matter jurisdiction over Dempsey’s mortgage‐agreement claim to the extent it takes issue
with Chase’s purchase of the Kessler property, and we must vacate the district court’s
dismissal on the merits and instruct the district court to remand the claim to the Indiana
court from which it was removed. See 28 U.S.C. § 1447(c).
Dempsey also presses his contention that the mortgage agreement required Chase to
“keep the parties on track” with the loan by assigning the property back to him after the
sale was completed. He relies upon the following language in the agreement:
If any action or proceeding is commenced that would materially affect
Lender’s interests in the Property, then Lender on Grantor’s behalf may, but is
not required to, take any action Lender believes to be appropriate to protect
Lender’s interests. All expenses incurred or paid by Lender for such purposes
with then bear interest at the rate charged under the Note from the date
incurred or paid by the Lender to the date of repayment by Grantor.
We, like the district court, do not believe that the Rooker‐Feldman doctrine bars federal
jurisdiction over this claim because here Dempsey is not quarreling with the order of the
sale. See Exxon, 544 U.S. at 284. And we also agree with the district court that Dempsey is
collaterally estopped from pursuing the claim. Under Indiana law, which here, sitting in
diversity, we must apply, see State Farm Mut. Auto. Ins. Co. v. Pate, 275 F.3d 666, 669 (7th Cir.
2001), collateral estoppel precludes a party from relitigating those issues already litigated
and decided. Doe v. Tobias, 715 N.E.2d 829, 831 (Ind. 1999); Holtz v. J.J.B. Hilliard W.L. Lyons,
Inc., 185 F.3d 732, 739 (7th Cir. 1999). Courts must consider two factors in determining
whether to apply collateral estoppel: “whether the party against whom the judgment is pled
No. 07‐3169 Page 5
had a full and fair opportunity to litigate the issue, and whether it would be otherwise
unfair under the circumstances” of the particular case. Tofany v. NBS Imaging Sys., Inc., 616
N.E.2d 1034, 1037 (Ind. 1993). During the Carter lawsuit, Dempsey pressed his theory that
the mortgage agreement forbade Chase from evicting him at several stages during both the
Indiana trial court and appellate court proceedings. The Indiana trial court nonetheless
issued the writ of assistance authorizing Chase to evict Dempsey and refused to strike or
stay the writ, and the Indiana Court of Appeals declined to revisit the issue. Thus, the
requirements for precluding Dempsey from raising this claim have been met. Dempsey
argues that the issue was not “fully litigated” because the Indiana Court of Appeals
declined to address it on procedural grounds, namely his own failure to brief the issue
properly. But Dempsey’s own lack of diligence in prosecuting his appeal does not render
the judgment non‐final. In Indiana, a judgment is final even pending appeal, and retains its
preclusive effect until it is reversed. See Williams v. Maschmeyer, 870 N.E.2d 1069, 1070‐71
(Ind. Ct. App. 2007); In re Estate of Nye, 299 N.E.2d 854, 865‐66 & n.22 (Ind. Ct. App. 1973).
In any event, we also agree with the district court that the claim is wholly without
merit. Dempsey has provided no cogent reasoning or legal support for his belief that the
language he cites in the mortgage agreement required Chase to assign the Kessler property
back to him. That understanding makes no sense because it is tantamount to a requirement
that Chase shelter Dempsey’s assets from his judgment creditors. Contrary to Dempsey’s
nonsensical argument, the language Dempsey cites works in Chase’s favor—allowing it to
protect its interest in the event of an execution sale—not his.
We likewise agree with the district court that there is no merit to Dempsey’s claim
that the writ of assistance was executed unfairly because Chase refused to delay the eviction
to allow Dempsey to attend a funeral. Dempsey has provided no support whatsoever for
his contention that the writ must be executed in a commercially reasonable manner. “A
writ of assistance is an equitable remedy used to transfer real property, the title of which
has been previously adjudicated, as a means of enforcing the court’s own decree” where the
party that the writ is issued against has refused to obey that decree—like Dempsey did here.
See TeWalt v. TeWalt, 421 N.E.2d 415, 418 (Ind. Ct. App. 1981); see also IND. R. TRIAL P. 70(A).
Thus, it is not surprising that the sheriff has the “right and duty” to execute the writ
immediately upon receiving it. 7 C.J.S. Writ of Assistance § 14. As the district court noted,
“Dempsey could have avoided his trouble by moving out voluntarily and promptly when
Chase obtained title to the property as opposed to forcing Chase to utilize the sheriff’s
department to enforce the court’s decision.”
Lastly, Dempsey appeals the district court’s order remanding his claim that Chase
violated his tenants’ right to due process by evicting them without a hearing. But absent a
narrow exception not applicable here, we do not have jurisdiction to review a district court
No. 07‐3169 Page 6
order remanding a claim for lack of subject‐matter jurisdiction back to the state court from
which it was removed. See 28 U.S.C. § 1447(d); Powerex Corp. v. Reliant Energy Servs., Inc,
127 S. Ct. 2411, 2416 (2007); Foster v. Hill, 497 F.3d 695, 697 (7th Cir. 2007). Because standing
is a jurisdictional prerequisite, the district court’s dismissal for lack of standing falls within
§ 1447(d). See Lewis v. Casey, 518 U.S. 343, 349, n.1 (1996); Smith v. Wis. Dep’t of Agric.,Trade
and Consumer Prot., 23 F.3d 1134, 1142 (7th Cir. 1994). Thus, we dismiss Dempseyʹs appeal
of the order remanding this claim.
That brings us to the issue of Chase’s attorney’s fees. Chase moved for its fees under
Indiana Code § 34‐52‐1‐1(b), which provides, among other things, for the payment of
attorney’s fees when a litigant has pursued a claim or defense that is frivolous,
unreasonable, or groundless. See IND. CODE § 34‐52‐1‐1(b). The district court determined
that Dempsey failed to present a rational argument in support of either his mortgage‐
agreement claim or his execution‐of‐writ claim. The court thus awarded Chase the
attorney’s fees that it incurred defending these two claims, $30,562.
Dempsey does not challenge the amount of the fee award, but instead challenges
only the district court’s determination that his claims were in fact frivolous—a conclusion
that we must review de novo. See Lumbermens Mut. Cas. Co. v. Combs, 873 N.E.2d 692,
722 (Ind. Ct. App. 2007); Breining v. Harkness, 872 N.E.2d 155, 161 (Ind. Ct. App. 2007). A
claim may be deemed frivolous for purposes of IND. CODE § 34‐52‐1‐1(b) if its proponent
cannot make a good‐faith and rational argument in support. See Breining, 872 N.E.2d at 161.
Dempsey contends that the arguments he advanced on appeal demonstrate that the
mortgage‐agreement and execution‐of writ claims at least were not frivolous. But we have
already explained that Dempsey adduced no cogent reasoning or legal support for his claim
that his eviction violated the mortgage agreement or that the writ was executed
unreasonably. Thus, these claims fit squarely under Indiana’s definition of a frivolous
claim. But because we have concluded that the district court was without jurisdiction to
hear Dempsey’s claim that Chase’s purchase of the Kessler property violated the mortgage
agreement, the award of fees for defending this claim must be vacated.
Accordingly, the judgment dismissing Dempsey’s mortgage‐agreement claim, to the
extent it is based on his eviction, and his execution‐of‐writ claim under Rule 12(b)(6) is
AFFIRMED. We VACATE the district court’s dismissal under Rule 12(b)(6) of Dempsey’s
mortgage‐agreement claim to the extent it takes issue with Chase’s purchase of the Kessler
property, and REMAND the case to the district court so that it can remand this claim to the
Indiana court from which it was removed. On remand the district court must recalculate
the award of attorney’s fees to Chase to reflect only its defense of the eviction and
execution‐of‐writ claims. Dempsey’s appeal of the order remanding his due process claim
No. 07‐3169 Page 7
to the Indiana court is DISMISSED. Finally, Chase’s motion under Federal Rule of
Appellate Procedure 38 for its appellate attorney’s fees is DENIED.