Loughran v. Wells Fargo Bank, N.A.

Dist. Ct. did not abuse its discretion under Colorado River abstention principles in staying instant action, where plaintiffs-debtors filed action alleging that defendants-bank and certain bank officials committed fraud during pending state foreclosure action against plaintiffs. Instant federal court action and state-court foreclosure action are sufficiently parallel, even though one bank is not in instant federal action, and another bank and certain individuals are not in state foreclosure action, where parties have similar interests and goals. Also, plaintiffs’ main contention in both lawsuits is that U.S. Bank lacked standing to bring foreclosure action because different bank had physical possession of plaintiff’s mortgage note. Fact that state court might determine that U.S. Bank is not legal holder of plaintiffs’ note, such that resolution of aspects of instant federal action might be needed does not require different result. Moreover, other factors under Colorado River also favored instant issuance of stay order, where: (1) state and federal forums are in close geographical proximity; (2) state foreclosure action would likely dispose of majority of factual and legal issues in federal case; (3) state foreclosure action began in 2011, and instant federal action began in 2019; (4) instant stay (as opposed to dismissal) will protect federal rights of plaintiffs; (5) state court’s proceedings are well-advanced; and (6) there is vexatious nature in instant lawsuit, since it was filed only after state court denied plaintiff’s motion to remove trial judge.