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UNITED STA TES DISTRICT COU RT

SOU THE RN DISTRICT OF FLO RID A

CAS E NO: 17-80728-CV-MIDDLEBROOKS

LAURENCE SCHNEIDER,

Plaintiff,

v.
FIRST AMERICAN BANK, as successor
by merger to Bank of Coral Gables, LLC,

_______________
Defendant.
/

ORD ER GRA NTI NG DEFENDANT'S MOT

ION FOR ABS TEN TIO N
THJS CAUSE comes before the Court on Defe
ndant First American Bank 's ("First
American") Motion Asking the Court to Abstain
from Exercising Jurisdiction ("Motion"), filed
September 6, 2017. (DE 34). Plaintiff Laur
ence Schneider ("Schneider") responded on
September 20, 2017, (DE 38), to which First Ame
rican replied on September 27, 2017 (DE 41).
For the following reasons, the Motion is granted.

I. BAC KGR OUN D

This case arises out of First American's alleged

mishandling of Schneider's mortgage
loan, and Defendant's ultimate foreclosure on
Schneider's home which secured the loan.
(Federal Docket Entry ("FDE") 26). Schneider
alleges he and the Bank of Coral Gables
executed a HELOC loan ("the loan"), the proceeds
from which Schneider used to purchase a
home ("the Property"). Schneider alleges that in
2014, First American merged with the Bank of
Coral Gables, acquiring its assets, including the bank
's rights in Schneider's loan. The terms of
the loan required Schneider to make recurring mon
thly payments, however the Parties did not
specify a date upon which payment was due each
month. Instead, the agreement stated that

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payment was due every month by "the payment

due date" and payments not received within 15
days of the payment due date were deemed late.
(FOE 26 at 6).
Schneider alleges that his first contact with First
American was in May of 2015 when a
First American representative called to inform him
that he was late in his payments and that if he
did not pay the past-due amounts, First American
would foreclose on the mortgage. (FOE 26 at
7). Schneider alleges that he was current in his
payments at the time of this phone call. He
alleges that a First American representative later
admitted that Schneider was not late on his
payments and that the confusion was due to
First American's own clerical mistakes. The
representative allegedly assured Schneider that
First American would immediately correct any
delinquencies reported to the credit bureaus.
(FOE 26 at 8). Schneider alleges that First
American made many other mistakes in hand
ling his loan, including telling him on other
occasions that he was late in making payments when
he was not. He alleges that First American
representatives consistently assured him that their
own mistakes caused him to appear late in
their system, however, they recognized that he
was not late in his payments. Schneider alleges
that First American repeatedly assured him that
they would correct any delinquency reported to
the credit agencies. Schneider alleges that desp
ite First American's assurances, First American
misrepresented to credit bureaus that Schneider
was late in his payments and did not cure these
misrepresentations.

a. Federal Complaint

Schneider alleges that First American violated

12 U.S.C. §§ 2601 et seq. (Real Estate
Settlement Procedures Act ("RESPA")) (Count
I); and 15 U.S.C. § 1601 et seq. (Truth in
Lending Act ("TILA")) (Count II); Schneider also
alleges that First American breached the terms
of the Parties' loan agreement (Count III); and defam
ed Schneider (Count IV).

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a. State Court Complaint

First American initiated foreclosure proceedings on the Prope

rty on August 17, 2016 in
the Fifteenth Judicial Circuit in and for Palm Beach
County Florida in case no.
5020 l 6CA009292. (the "State Court proceedings"). Schne
ider, as Defendant in the foreclosure
action, filed an Answer, Affirmative Defenses and Coun
terclaim ("Counterclaim"). The
Counterclaim alleged the Affirmative Defense of Uncle
an Hands, and in support recited a
summarized account of the allegations contained in the
instant federal Complaint. Further,
Schneider alleged the following counterclaims: Violation
of the Fair Credit Reporting Act (15
U.S.C. § 1681) (Count I); Negligent and/or Fraudulent
Misrepresentation (Count II); and
Conversion (Count III). Schneider's Counterclaim supports
both Counts I and II with allegations
similar to those alleged in the instant Complaint. On June
27, 2017, the State Court entered a
Final Judgment of Foreclosure against Schneider and
Granted First American's Motion for
Summary Judgment. (State Docket Entry (hereinafter "SDE
" 125, 126). Schneider appealed the
State Cour t's entry of judgment and that appeal is curren
tly pending in the Fourth District Court
of Appeals. See Schneider v. First American Bank, et al,
4D17-2239 (Fla. 4th DCA 2017).
II. DISCUSSION

Defendant argues that I should abstain under the doctri

ne enunciated by the Supreme
Court in Colorado River. In Colorado River, the Supre
me Court recognized that, in certain
"exceptiona l" circumstances, abstention may be appropriate
"due to the presence of a concurrent
state proceeding." Colorado River Water Conservation Dist.
v. United States, 424 U.S. 800, 818
(1976). As a threshold matter, for Colorado River to apply
, there must be "federal and state
proceedings involv[ing] substantially the same parties
and substantially the same issues."
Ambrosia Coal & Const. Co. v. Pages Morales, 368 F.3d 1320,
1330 (11th Cir. 2004). Once the
threshold has been met, there are six factors a court consid
ers in detennining abstention:

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(I) whether one of the courts has assumed jurisdiction

over property, (2) the
inconvenience of the federal forum, (3) the potential
for piecemeal litigation, (4)
the order in which the fora obtained jurisdiction, (5)
whether state or federal law
will be applied, and (6) the adequacy of the state
court to protect the parties'
rights.

Id. at 1331. In addition to the six factors, "'the

vexatious or reactive nature of either the federal
or the state litigation may influence the decision whet
her to defer to a parallel state litigation
under Colorado River."' Id. (quoting Moses H Cone
Memorial Hosp. v. Mercury Constr. Corp.,
460 U.S. 1, 17 n.20 (1983)). Finally, "whether the concu
rrent cases involve a federal statute that
evinces a policy favoring abstention" is considered as
well. Id.
"[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." Moses H. Cone, 460 U.S. at 16. "One
factor alone can be the sole motivating
reason for the abstention." Moorer v. Demopolis Wate
rworks & Sewer Bd., 374 F.3d 994, 997
(11th Cir. 2004).

A. Threshold Issue: Concurrent State Litigation

Involving the Same Parties and
Substantially the Same Issues.

As noted above, Schneider appealed the state Cour t's

entry of judgm ent in favor of First
American and that appeal remains pending in the
Fourth District Court of Appeals. First
American argues that the state court proceeding invol
ves substantially the same issue as those
presented here, notin g that "they [both] relate to
the validity of the [loan] and the Parties'
performance of their obligations under the loan." (DE
34 at 6).
Without specifically distinguishing the two proceeding
s, Schneider argues that they are
neither related nor parallel. (FDE 38). I find that the
two proceedings involve substantially the
same issues. In essence, Schneider's state Counter-C
laim and his federal Complaint raise the

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same issues but seek different relief. Schneider's

Counter-claim alleges that First American
improperly serviced the Loan, and therefore, any non-p
ayment or late payment did not constitute
a default on the Loan. (DE 35-1 ,i 14). Thus, Schneider
alleged, foreclosure was inappropriate.
Schneider's federal Complaint alleges that First Ame
rican improperly serviced the loan and
therefore Schneider is entitled to damages. Both proce
edings relate to First American's handling
of Schneider's loan with First American and First
American's foreclosure on the Property
securing that loan.

While Schneider's state Counter-Claim and federal Com

plaint allege somewhat different
causes of action, the allegations giving rise to each
cause of action are substantially the same.
For instance, the Counter-Claim alleges that First Ame
rican violated the Fair Credit Reporting
Act in part by "fumish[ing] information, which in many
instances was inaccurate, to the three
major credit bureaus, about Schneider's credit worth
iness." (DE 35-1 at 6). In the federal
Complaint, Schneider argues that First American Bank
defamed him in part by "disseminating
erroneous, false, and misleading information abou
t the HELOC loan to the credit reporting
agencies." (DE 26 at 30). Both the state and federal
pleadings raise the substantially the same
issues regarding whether First American improperly
servi ced Schneider's loan, and therefore, the
two proceedings involve substantially the same Partie
s and issues. Accordingly, I find that the
threshold issue is satisfied, and I will therefore consider
the six factors.
D. Bala ncing the Factors

i. Jurisdiction over property.

The first factor the court must consider is "whether

one of the courts has assumed
jurisdiction over property." Ambrosia, 368 F.3d at
I 332. This factor weighs against abstention
when "neither the district court nor the state circu
it court assumed jurisdiction over any
prope rty." Jackson-Plaffs v. Gen. Elec. Capital
Corp., 727 F.3d 1127, 1141 (11th Cir. 2013).

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Where the state court has asserted jurisdiction over

real property, this factor weighs in favor of
abstention. Beepot v. JP. Morgan Chase Nat. Co,p
. Servs., Inc., No. 3:10-CV-423-J-34, 2011
WL 4529604, at *8 (M.O. Fla. Sept. 30, 2011) ("Most
significantly, the Florida court in the State
Court Foreclosure Proceeding has assumed jurisdiction
of the Florida property, satisfying the
first, and in this case, the most important factor."). 1
Here, the State Court assumed jurisdiction
over the Property. (FOE 34 at 7). This factor, therefore,
weighs in favor of abstention.
ii. Convenience of the federal forum.

The Parties agree that "the convenience of the feder

al fornm is neutral." (FOE 34 at 7;
FDE 38 at 6).

iii. Potential for piecemeal litigation.

First American argues "there is a potential for piecemeal

litigation because there is a risk
of inconsistent results." (FOE 34 at 7). Schneider responds that there is no potential for
piecemeal litigation "as any ruling from either court
will not affect nor impact the litigation in
the other venue." (FOE 38 at 6). "Run of the mill
piecemeal litigation will not do: this factor
does not favor abstention unless the circumstances
enveloping those cases will likely lead to
piecemeal litigation that is abnonnally excessive or
deleterious." Jackson-Platts, 727 F.3d at
1142 (internal quotations omitted). Here, altho
ugh exercising jurisdiction may lead to
inconsistent results, any piecemeal litigation is not
abnormally excessive. Accordingly, this
factor weighs against abstention.

1
Some district courts have found this factor weighs again
st abstention unless the federal court
asserts jurisdiction over the property. See e.g., Burd
ick v. Bank of Am., N.A., 99 F. Supp. 3d
1372, 1377 (S.D. Fla. 2015). However, the language
from the Eleventh Circuit in Ambr osia and
Jackson-Platts indicates that either court 's assertion
of jurisdiction over the property weighs in
favor of abstention.

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iv. The order in which jurisdiction was obtained.

Here, the State action was filed on August 17, 2016, while the Federa
l Action was
initiated on June 13, 2017. However, the fourth factor "should not be
measured exclusively by
which complaint was filed first, but rather in tenns of how much progre
ss has been made in the
two actions." Ambrosia, 368 F.3d at 1333 (quoting Moses H. Cone,
460 U.S. at 21). First
American argues that the State foreclosure proceeding was filed
10 months before this
proceeding and notes that the State Court has already entered Final
Judgment, whereas the
Parties in this action have not yet begun discovery. (FOE 34 at
8). Schneider apparently
concedes that this factor weighs in favor of abstention as he does not
address it in his Response.
Given the entry of Final Judgment in the State case and the fact that
the Parties have not yet
begun discovery in this proceeding, this factor weighs in favor of absten
tion.
v. State versus federal law.

First American argues that both proceedings are "at their cores,
disputes over [the
Property] and the validity, and enforceability of the loan instruments secured
by the Property ...
[which are] signall y[] state law concem[s]." (FOE 34 at 8) (citation omitte
d). Schneider argues
that in this case, "the principal law at issue to be applied to the facts
is federal law, unlike the
purely state law based claims raised in the state court foreclosure procee
dings." (FDE 38 at 7).
The federal Complaint alleges causes of action under both federal and
state Jaw. However, it
does not present any "complex questions of state law that a state court
might be best suited to
resolve" and therefore, I find that this factor is neutral. Noonan South,
Inc. v. Volusia County,
84 l F.2d 380, 382 (11th Cir. I 988).

vi. Adequ acy of the state court.

First American argues that Florida State Court is best suited to protect
the Parties' rights
as this is fundamentally a dispute relating to real property in Florida,
citing Preston v. Fishman,

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2011 WL 129843 (M.D. Fla. 2011) ("[t]he state forum enjoys a surpass
ing advantage in
experience in, and knowledge of, foreclosure and pertinent state property law.").
Schneider
responds that "the state court proceedings will not adequately protect [his] rights
under federal
law" without providing any reasons why he believes that to be the case.
(FOE 38 at 7).
Schneider' s contention is especially unpersuasive in light of the fact that
Schneider's state
Counter-claim in the state proceedings seeks relief under federal law.2 (FOE
35-1). Further,
"Florida state courts routinely entertain federal statutory TILA, RESPA and FDCPA
claims, and
common law claims, as counterclaims or affirmative defenses in state foreclos
ure actions."
Beepot v. JP. Morgan Chase Nat. Corp. Servs., Inc., No. 3: 10-CV-423-J-34,
2011 WL 4529604,
at *8 (M.D. Fla. Sept. 30, 2011) ("citing Harper v. Chase Manhattan Bank, 138
Fed. Appx., 130,
133 n.2). Accordingly, the state court can protect Schneider's rights. The "fact
that both forums
are adequate to protect the parties' rights merely renders this factor neutral." Jackson
-Platls, 727
F.3d at 1143 (internal quotations omitted).

C. Reactive nature of the instant litigation.

A court should consider the "sequence of events," in determining whether

a case is
vexatious and reactive. Lops v. Lops, 140 F.3d 927, 964 (11th Cir. 1998) (citing Allen v.

Louisiana State Bd. of Dentistry, 835 F.2d 100, 105 (5th Cir. 1988)). The sequenc
e of events
here suggests that Schneider's choice to file this action was at least in part reactive
to the state
court proceedings. It appears that on June 12, 2017, the Parties attended a hearing
before Judge
Ferrara in the State Foreclosure proceeding. (SOE 105, I06). The very next
day, on June 13,
2017, Schneider filed this action. (FOE 1). Two weeks later, on June 27, 2017,
the State Court
entered a Final Judgment of Foreclosure against Schneider and.Grunted First Americ
an's Motion

2
As noted above, Count I of Schneider's state Counter-claim alleges that Defend
ant violated the
Fair Credit Reporting Act (15 U.S.C. § 1681).

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for Summary Judgment. (SOE 125, 126). To the extent a timeline can shed light on whether
a
party's filing a federal complaint was "vexatious or reactive" to a pending state court proceedi
ng,
J find that the timeline here suggests that Schneider's choice to file the federal complaint may

have been, in part, reactive to the state court proceedings. Schneider fails to address this
policy
consideration in his response and provides no explanation as to why he filed the federal
action
when he did. Accordingly, the reactive nature of this suit weighs in favor of abstention.

D. Policy in favor of abstention.

Defendant argues that because RESPA provides concurrent jurisdiction in stale and

federal courts, the statute evinces a policy favoring abstention. (FDE 34 at 8). The fact
that a
statute provides concurrent jurisdiction in both state and federal courts is insufficient by itself
to
demonstrate a policy favoring abstention. See Willson v. Bank ofAmerica, NA., 684 Fed.
Appx.
897 (11th Cir. 2017) ("Although it is true that the statute at issue in Colorado River granted

concurrent state and federal jurisdiction, ... it was 'the clear federal policy for the avoidanc
e of
piecemeal adjudication of water rights in a river system; that evinced a policy favoring

abstention."'). Finding no other evidence indicating a policy favoring abstention, l find that
this
factor is neutral.

Ill. CONCL USION

Having reviewed the Colorado River factors- noting that the jurisdiction over property,

the order in which jurisdiction was obtained, and the reactive nature of this action each weigh
in
favor of abstenti on-I find abstention is warranted under these circumstances. This conclusi
on
is in line with other cases similarly finding that Colorado River abstention is appropriate
where
there is an ongoing foreclosure action. See e.g., Willson v. Bank of America, N.A. , 684
Fed.
Appx. 897 (11th Cir. 2017) (affirming district court's choice to abstain from exercisin
g
jurisdiction over a case involving RESPA claims where a concurrent state foreclosure action
was

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pending in state appellate court under Colorado River

); Delaney v. Specialized Loan Servicing,
LLC, No. 15 C 5260, 2015 WL 7776902,
at *4 (N.D. Ill. Dec. 3, 2015) (abstaining under
Colorado River from adjudicating RESPA claim
s in light of ongoing foreclosure action and
compiling cases finding the same); Shedd v. Bank of
Am., N.A., No. 4:13-CV-18 CDL, 2013 WL
4056359, at *7 (M.D . Ga. 2013 ) (abstaining unde
r Colorado River based on concurrent
foreclosure action).

"[A] stay, not a dismissal, is the proper procedur

al mechanism for a district court to
employ when deferring to a parallel state-court proc
eeding under the Colorado River doctrine."
Moorer, 374 F.3d at 998. A stay is, therefore, appro
priate. Accordingly, it is hereby
ORDERED AND ADJUDGED that Defendant First
American Bank's Motion Asking
the Court Abstain from Exercising _Jurisdiction (DE
34) is GRANTED. This case is STAYED
pending final resolution of the foreclosure action.
All pending motions are DENIED without
prejudice subject to refiling if and when
the stay is lifted. The Clerk of Court shall
administratively CLOSE this case. All deadlines,
including the trial date, are TERMINATED.
Any motion to lift the stay must be filed within 20
days of the resolution of the state foreclosure
action.

DON E AND ORD ERE D in Chambers in West

Palm Beach, Fl
of January, 2018.

D ALD M. MIDDLEBROOKS
Copies to: Counsel of Record
UNITED STATES DISTRICT JUDGE