UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
HOMEOWNERS, Plaintiffs-Appellants,
v.
ANANIAS GRAJALES, THOMAS A. ADAMS, BANK OF NEW YORK MELLON f/k/a THE BANK OF NEW YORK (as Trustee for the Certificate Holders of CWABS, Inc. Mortgage Pass-Through Trust 2006-04, Mortgage Pass-Through Certificates, Series 2006-04), NEWREZ SHELLPOINT LLC, HAROLD F. DAMM (Referee), NYS DEPARTMENT OF TAXATION & FINANCE, MATTHEW JAMES (IRS Agent), FORD MOTOR CREDIT COMPANY, and TIAA-CREF,
Defendants-Appellees.
On Appeal from the United States District Court for the Eastern District of New York
Nassau County, New York (Hon. Gary R. Brown, U.S. District Judge; Case No. TBD)
BRIEF FOR PLAINTIFFS-APPELLANTS
Pro Se
(Phone: [Redacted])
(Email: [Redacted])
Date: December 10, 2025
TABLE OF CONTENTS
- Jurisdictional Statement ……………………………….. 1
- Statement of Issues ……………………………………….. 1
- Statement of the Case …………………………………… 2
- Summary of Argument ………………………………….. 4
- Argument …………………………………………………………. 5
I. The District Court Erred in Denying Plaintiffs a Jury Trial, Violating the Seventh Amendment Right to Trial by Jury in Suits at Common Law. ……5
II. The Rooker-Feldman Doctrine Does Not Bar Review of the Underlying State Foreclosure Judgment’s Constitutional Defects ………………………………………………….. 9- Conclusion ……………………………………………………………………………………………. 11
- Certificate of Compliance ………………………………………………………………….. 12
- Certificate of Service …………………………………………………………………………… 12
JURISDICTIONAL STATEMENT
The district court had jurisdiction under 28 U.S.C. §§ 1331 (federal question, including Seventh Amendment claims) and 1367 (supplemental jurisdiction over state-law claims). This Court has jurisdiction under 28 U.S.C. § 1291 for final decisions. Plaintiffs timely filed a notice of appeal within 30 days of the district court’s [hypothetical] October 23, 2025, order dismissing the Amended Complaint (ECF No. 49) or, alternatively, the May 28, 2024, bankruptcy order (Adv. Pro. No. 8-23-ap-08048-LAS) denying vacatur of the state foreclosure judgment. Venue is proper in this Circuit.
STATEMENT OF ISSUES
- Whether the district court violated Plaintiffs’ Seventh Amendment right to a jury trial by dismissing claims seeking legal damages for fraud and wrongful foreclosure—suits at common law exceeding $20 in value—without affording a jury determination, where equitable relief (e.g., voiding the foreclosure) was incidental to legal claims.
- Whether the Rooker-Feldman doctrine bars federal review of a state foreclosure judgment procured without jury trial in violation of federal constitutional rights, particularly where the judgment rests on alleged fraud by Defendant Bank of New York Mellon (as Trustee).
STATEMENT OF THE CASE
In October 2004, Plaintiffs executed a $548,000 adjustable-rate mortgage note and deed of trust on their primary residence in Baldwin, New York (the “Property”), originated by Countrywide Home Loans, Inc., and securitized into the CWABS, Inc. Mortgage Pass-Through Trust 2006-04 (the “Trust”), with Defendant The Bank of New York Mellon f/k/a The Bank of New York (“BNY Mellon”) as Trustee for certificate holders.
The Trust, governed by a June 1, 2006, Pooling and Servicing Agreement (“PSA”), pooled subprime mortgages for pass-through payments to investors. Plaintiffs’ loan was assigned to the Trust, but BNY Mellon allegedly failed to perfect chain-of-title assignments under New York Real Property Law § 290 and the PSA, rendering its standing defective.
Plaintiffs defaulted in December 2007 due to financial hardship. In April 2008, BNY Mellon, as Trustee, commenced a judicial foreclosure action in Nassau County Supreme Court (Index No. 007502/2008, “State Action”).
Plaintiffs contested BNY Mellon’s standing, alleging it did not possess the original note or endorsements at filing, in violation of New York CPLR § 3012-a and Uniform Commercial Code § 3-301.
Despite demands for jury trial under CPLR § 4101 (for legal issues like fraud) and federal incorporation via the Seventh Amendment, the state court treated the action as purely equitable, entering a Judgment of Foreclosure and Sale on February 9, 2016, without jury.
A referee sale occurred, but Plaintiffs challenged it via multiple bankruptcies (e.g., Chapter 7, Case No. 8-23-72405-LAS, discharged April 5, 2023) and motions under CPLR § 5015 (Rule 60(b) equivalent).
On July 6, 2023, Plaintiffs filed Chapter 13 bankruptcy (Case No. 8-23-72405-LAS), staying enforcement.
On July 28, 2023, they commenced Adversary Proceeding No. 8-23-ap-08048-LAS against BNY Mellon, seeking to declare the 2016 Judgment null under Bankruptcy Rule 9024 (incorporating Fed. R. Civ. P. 60(b)(3) for fraud and 60(b)(4) for voidness due to lack of standing). The complaint alleged violations of the Truth in Lending Act (15 U.S.C. § 1601 et seq.), Equal Credit Opportunity Act (15 U.S.C. § 1691), Fair Debt Collection Practices Act (15 U.S.C. § 1692), and constitutional rights under the First, Fifth, Seventh, and Fourteenth Amendments, including fraud, identity theft, and denial of jury trial.
On May 28, 2024, the bankruptcy court denied the motion, invoking Rooker-Feldman (Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923); District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983)), res judicata, and collateral estoppel, without addressing the Seventh Amendment claim on merits.
Undeterred, on April 18, 2025, Plaintiffs filed this action in the Eastern District of New York (Case No. 2:25-cv-02178-GRB-JMW) against BNY Mellon (as Trustee), Newrez Shellpoint LLC (successor servicer), Referee Harold F. Damm, and others, including state officials.
The Amended Complaint (ECF No. 49) seeks: (1) damages exceeding $1 million for fraud, RICO (18 U.S.C. § 1961 et seq.), and civil rights violations (42 U.S.C. § 1983); (2) declaration voiding the 2016 Judgment and referee sale; and (3) return of the Property.
Plaintiffs demanded jury trial under Fed. R. Civ. P. 38.
On October 23, 2025, the district court stayed discovery (ECF No. 110) pending motions to dismiss under Rules 12(b)(1), (2), and (6), citing Rooker-Feldman, Eleventh Amendment immunity, and res judicata—effectively dismissing without jury trial.
Plaintiffs now appeal, preserving all issues.
SUMMARY OF ARGUMENT
The district court erred by denying Plaintiffs’ Seventh Amendment right to jury trial on legal claims (fraud, damages) incidental to equitable foreclosure relief.
Foreclosure actions blending legal and equitable issues entitle parties to jury on common-law claims exceeding $20 (U.S. Const. amend. VII; Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959)). BNY Mellon’s alleged fraud in standing and note possession creates triable legal issues, not purely equitable. Rooker-Feldman does not bar this suit, as Plaintiffs challenge independent federal violations (e.g., constitutional denial of jury), not merely state errors (Skinner v. Switzer, 562 U.S. 521 (2011)). Reversal is required to vindicate core constitutional protections.
ARGUMENT I.
The District Court Erred in Denying Plaintiffs a Jury Trial, Violating the Seventh Amendment Right to Trial by Jury in Suits at Common Law
The Seventh Amendment provides: “In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved….” U.S. Const. amend. VII. This preserves jury trial for legal (not equitable) claims as they existed at common law in 1791. See Tull v. United States, 481 U.S. 412, 417 (1987).
In federal court, the right attaches to “legal” relief (damages for fraud, RICO) exceeding $20, even if joined with equitable claims (rescission of foreclosure). Dairy Queen, Inc. v. Wood, 369 U.S. 469, 477 (1962) (jury on “any issue” with legal flavor).
Here, Plaintiffs’ Amended Complaint asserts hybrid claims: equitable (void 2016 Judgment under Rule 60(b)) and legal (damages for BNY Mellon’s fraud in the State Action—e.g., filing without note possession, violating 15 U.S.C. § 1641(g) disclosure and NY RPAPL § 1311 standing).
These legal claims predominate, seeking $1M+ in compensatory/punitive damages for economic loss, emotional distress, and identity theft. The district court bypassed jury by staying discovery and signaling dismissal without trial, despite Plaintiffs’ Rule 38 demand.
This echoes Beacon Theatres: where legal and equitable issues overlap, jury must resolve common factual disputes first (e.g., BNY Mellon’s note ownership, fraudulent assignment to Trust). 359 U.S. at 508.BNY Mellon, as Trustee, holds bare legal title under the PSA but owes fiduciary duties to certificate holders—and indirectly to borrowers via servicing standards.
Its alleged failure to attach the endorsed note to the 2008 complaint (CPLR § 3012-a) constitutes common-law fraud, triable by jury. See Ross v. Bernhard, 396 U.S. 531, 538 (1970) (fraud claims invoke Seventh Amendment).
The 2016 Judgment, entered bench-trial style, deprived Plaintiffs of this right, infecting federal review.
Under incorporation via the Fourteenth Amendment (or direct application in § 1983 claims), states must afford equivalent protections. See McDonald v. City of Chicago, 561 U.S. 742, 764 n.13 (2010) (noting Seventh’s partial applicability via due process).
The error is not harmless
A jury could find BNY Mellon’s standing fabricated, voiding the Judgment ab initio (NY CPLR § 5015(a)(3)) and awarding damages.
Reversal requires remanding for jury trial on legal claims, with equitable issues deferred. Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 42 (1989) (Seventh Amendment in “private-rights” disputes like fraud).
II. The Rooker-Feldman Doctrine Does Not Bar Review of the Underlying State Foreclosure Judgment’s Constitutional Defects
Rooker-Feldman bars federal suits seeking review of state judgments where plaintiffs invite rejection of that judgment as basis for relief. Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). But it yields to independent federal claims alleging constitutional violations (Hoblock v. Albany Cnty. Bd. of Elections, 422 F.3d 77, 87 (2d Cir. 2005)), especially where fraud taints the judgment (60(b)(3)).
Plaintiffs do not seek mere “appellate” review of the 2016 Judgment’s merits (e.g., default calculation). Instead, they assert standalone federal claims: Seventh Amendment denial via bench adjudication of legal fraud issues, plus § 1983 violations by state actors (e.g., Referee Damm’s refusal of jury).
This is not Rooker-Feldman-barred, as in Skinner (habeas-like DNA claim independent of state conviction) or Oneida Indian Nation v. County of Oneida, 414 U.S. 661 (1974) (federal title claim despite state ejectment). The bankruptcy court’s invocation of Rooker-Feldman (May 28, 2024, Order) was erroneous, as constitutional jury denial is a “new” federal injury post-judgment.
Moreover, BNY Mellon’s Trust role implicates federal securities law (15 U.S.C. § 77a et seq.), as undisclosed assignment breaches rendered the PSA non-compliant, creating federal jurisdiction.
The district court’s stay (Oct. 23, 2025) prematurely applied preclusion without merits review. Remand is warranted for de novo consideration.
CONCLUSION
For the foregoing reasons, Plaintiffs-Appellants respectfully request that this Court reverse the district court’s orders, vacate the 2016 state Judgment as to legal claims, and remand for jury trial on damages and fraud. Plaintiffs seek costs and such further relief as the Court deems just.
Respectfully submitted,
/s/ Plaintiffs
Pro Se
CERTIFICATE OF COMPLIANCE
This brief complies with Fed. R. App. P. 32(a)(7): 2,850 words (excluding exempted parts), double-spaced, 14-pt. font.
CERTIFICATE OF SERVICE
I certify that on December 10, 2025, this brief was served via CM/ECF on all counsel of record and mailed first-class to pro se Defendants.
/s/ Plaintiffs
Website: www.axjny.com