Bauer v. Koester, No. 19-1786 (7th Cir. 2020)
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Donald and Lauretta Bauer purchased land from Donald’s parents and executed promissory notes and a mortgage. When Donald’s parents died, their interest in the notes transferred to Donald's siblings, who sought foreclosure. A state court entered a foreclosure judgment and a deficiency judgment. No judicial sale occurred. The Bauers tried to redeem the property by satisfying the judgment. The foreclosure plaintiffs issued citations to discover assets and sought additional interest. The state court found that the Bauers owed an additional $33,782.96 in interest. The Bauers paid; the plaintiffs filed a satisfaction of judgment. The Bauers then sued, alleging tampering with evidence and abuse of process by seeking to extort money through the issuance of citations to discover assets. The state appellate court upheld the dismissal of the case.
The Bauers filed a federal suit, 42 U.S.C. 1983, alleging that the defendants, including the state-court judge, conspired to introduce a forged document into evidence during the foreclosure trial and that the judge and the clerk allowed the plaintiffs to issue baseless citations to discover assets. The district court dismissed the case under the Rooker-Feldman doctrine, which precludes federal district-court jurisdiction “over cases brought by state-court losers challenging state-court judgments rendered before the district court proceedings commenced.” The Seventh Circuit affirmed, rejecting the Bauers’ argument that they did not seek to set aside the state court’s order or judgment but only mean to challenge the “collection practices” of the defendants and their collusion. Any finding in favor of the Bauers would require the federal court to contradict the state court’s orders.
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