Huff et al v. Countrywide Home Loans, Inc.
MEMORANDUM OPINION AND ORDER GRANTING 2 MOTION to Dismiss, DENYING Plaintiff's 9 Motion to Remand. The Huffs' Declaratory Judgment claim[s] are hereby DISMISSED without prejudice for lack of subject matter jurisdiction. In lieu of dismi ssing this action in its entirety, the Court grants the Huffs' request for leave to amend their complaint on or before June 12, 2013, to afford them an opportunity to correct the enumerated defects. Signed by Judge Virginia Emerson Hopkins on 5/22/2013. (JLC)
2013 May-22 PM 12:44
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
WALTER R. HUFF,
MARTHA J. HUFF,
COUNTRYWIDE HOME LOANS,
) Case No.: 4:13-CV-495-VEH
MEMORANDUM OPINION AND ORDER
Procedural History and Background.
This action was commenced on by Plaintiffs, Walter R. Huff and Martha J.
Huff (collectively, the “Huffs”), who are proceeding pro se, on or about February 8,
2012, against Countrywide Home Loans, Inc. (“Countrywide”), in the Circuit Court
of Etowah County, Alabama, Case No. CV-2013-000012 (Verified Complaint To
Quiet Title, doc. 1-1). On March 13, 2013, Countrywide removed the case to this
court based on diversity citizenship. (Notice of Removal, doc. 1). Countrywide
was served with the Summons and Complaint on February 12, 2013. (Doc. 1 ¶ 4).
Thus, removal was timely.
Also on March 13, 2013, Countrywide filed a Motion To Dismiss the Huffs’
Complaint. (Motion To Dismiss, doc. 2). By Order entered March 18, 2013, the
court explicitly advised the Huffs that they must respond to the Motion To Dismiss
no later than May 13, 2013, and set a May 28, 2013, deadline for Countrywide to
The Huffs timely responded on May 9, 2013. (Doc. 9). In their response, the
Huffs: (1) opposed Countrywide’s Motion To Dismiss; (2) asked this court to
remand this action to state court; (3) clarified that their only claim is for quiet title;
and (4) sought leave of court to amend if the court found their Complaint to be
The deadline for Countrywide to reply to this response has not yet passed.
However, the court finds that such reply is not needed in order for the court to rule
on the pending motions.
Because the Huffs have challenged the court’s subject matter jurisdiction, the
court will take up that issue first. The court will then address the motion to dismiss.
Finally, the court will address the Huffs’ request for leave to amend.
Diversity Jurisdiction Exists.
In the Notice of Removal, Countrywide asserts that the Huffs are citizens of
the State of Alabama. The Huffs do not dispute this fact. Countrywide also asserts
that the amount in controversy exceeds $75,000, and the Huffs also do not dispute
The Huffs do dispute, however, that diversity of citizenship exists.
Specifically, the Huffs “seek an order from this Court that this was NOT the court
of proper jurisdiction, [and] that the Court remand the matter to State Court ....”
(Doc. 9 at p. 5) (emphasis by capitalization in original). “The face of the complaint
clearly shows that COUNTRYWIDE ... is registered to do business and doing
business in ALABAMA, simply has is [sic] no diversity of jurisdiction [sic] from the
plaintiffs, both residents of ALABAMA, which would entitle the Defendants [sic] to
removal.” (Id. at pp. 5-6) (capitalization in original). Thus, the Huffs do not dispute
that “Countrywide is a corporation that is now, and was at the time of the
commencement of this action, a company organized and existing under the laws of
New York with its principal place of business in California.” (Doc. 1 ¶ 8). Rather,
they argue that because Countrywide is “registered to do business and doing
business in ALABAMA,” diversity jurisdiction is lacking.
However, the Huffs are simply wrong. It is the parties’ citizenship, and not
mere presence in a state, that controls whether or not the diversity that is required
for federal jurisdiction exists. The federal diversity jurisdiction statute requires that
the controversy must be “between-citizens of different states.” 28 U.S.C. §
Venue is not contested, and the court explicitly finds that venue is appropriate.
1332(a)(1). The diversity statute further provides that “a corporation shall be
deemed to be a citizen of any State by which it has been incorporated and of the
State where it has its principal place of business.” 28 U.S.C. § 1332(c)(1). The
Supreme Court has recently confirmed that “the phrase ‘principal place of business'
refers to the place where the corporation's high level officers direct, control, and
coordinate the corporation's activities ... [often called] the corporation's ‘nerve
center’.” Hertz Corp. v. Friend, 559 U.S. 77, 130 S. Ct. 1181, 1186, 175 L. Ed. 2d
1029 (2010). “The burden of persuasion for establishing diversity jurisdiction, of
course, remains on the party asserting it.” (Id. at 1194) (citing, inter alia, Kokkonen
v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377, 114 S. Ct. 1673, 128 L.
Ed. 2d 391 (1994); McNutt v. General Motors Acceptance Corp., 298 U.S. 178,
189, 56 S. Ct. 780, 80 L. Ed. 1135 (1936)). The Huffs have failed to challenge
Countrywide’s allegation of the location of either Countrywide’s state of
incorporation (New York) or principal place of business (California). Consequently,
diversity jurisdiction has been sufficiently shown at this time, and the Huffs’ motion
to remand, contained within their opposition, doc. 9, accordingly is due to be
Subject Matter Jurisdiction.
Subject Matter Jurisdiction Generally.
This court's judicial authority is limited by the Constitution to resolution of
"cases" and "controversies." U.S. Const. Art. III, § 2. Moreover, the court has an
ongoing obligation to, sua sponte, analyze and determine whether it has before it a
justiciable case or controversy. See Fitzgerald v. Seaboard System R.R., 760 F.2d
1249, 1251 (11th Cir. 1985) (“We always must investigate questions of subject
matter jurisdiction, whether or not they are raised by the parties to the case.”).
Whether a case or controversy exists turns on "'whether the facts alleged, under all
the circumstances, show that there is a substantial controversy, between parties
having adverse legal interests, of sufficient immediacy and reality to warrant the
issuance of a declaratory judgment.'" Wendy's Intern, Inc. v. City of Birmingham,
868 F.2d 433, 436 (11th Cir. 1989) (quoting Maryland Casualty Co. v. Pacific Oil
Co., 312 U.S. 270, 273 (1941)).
The Huffs’ Declaratory Judgment Claim Does Not Present a Case or
“A quiet title action determines the rights and interests in land as between
plaintiffs and defendants. § 6-6-540, Code 1975.” Holcomb v. Morris, 57 So. 2d
973, 976 (Ala. Civ. App. 1984). However, in order for this court (or any Alabama
state court) to have jurisdiction over such an action, it first must state a justiciable
controversy. “All that is required for a declaratory judgment action is a bona fide
justiciable controversy.” Gulf South Conference v. Boyd, 369 So. 2d 553, 557 (Ala.
1979). A controversy is justiciable where present “legal rights are thwarted or
affected [so as] to warrant proceedings under the Declaratory Judgment statutes.”
Town of Warrior v. Blaylock, 275 Ala. 113, 114, 152 So. 2d 661, 662 (1963)
(alteration added). Thus, “[d]eclaratory judgment proceedings will not lie for an
‘anticipated controversy.’ ” City of Dothan v. Eighty-Four West, Inc., 738 So. 2d
903, 908 (Ala. Civ. App. 1999) (alteration added). “However, the parties should not
be compelled to wait until the events giving rise to liability have occurred before
having a determination of their rights and obligations.” Id.; see Morton v. Allstate
Ins. Co., 486 So. 2d 1263, 1269 (Ala. 1986).
The complaint alleges that a cloud on the title to property owned by the Huffs
currently exists as the result of an invalid mortgage encumbrance. The complaint
does not allege that Countrywide, the mortgagee, has sought to foreclose on the
mortgage by selling the Huffs’ property. Even accepting the Huffs’ allegations as
true, the court concludes that no substantial rights of the parties are currently
affected and that the complaint fails to invoke jurisdiction under the Alabama
Declaratory Judgment Act. Therefore, to the extent that the Huffs assert a claim for
declaratory relief, this action is due to be dismissed sua sponte for lack of a
justiciable case or controversy. Cf. Creola Land Development, Inc. v. Bentbrooke
Housing, L.L.C., 828 So. 2d 285, 288 (Ala. 2002) (justiciable case or controversy
existed to invoke Declaratory Judgment Act where plaintiff alleged both an invalid
mortgage and that the mortgagee had attempted to foreclose).
The Complaint Fails To State a Claim upon which Relief Can Be
Even if the court were to consider the Huffs’ complaint as seeking more than
declaratory judgment, the court still would find that the Huffs have failed to state
any claim with the factual specificity required by FED.R.CIV.P. 12(b)(6).
“[A] court should only grant a motion to dismiss [under Rule 12(b)(6)] where
the defendant demonstrates that the plaintiff cannot prove any set of facts in support
of his claim which would entitle him to relief.” Am. United Life Ins. Co. v.
Martinez, 480 F.3d 1043, 1057 (11th Cir. 2007). “Moreover, when ruling on a
motion to dismiss, a court must view the complaint in the light most favorable to the
plaintiff and accept all of the plaintiff's well-pleaded facts [and reasonable
inferences drawn from those facts] as true.” Id. (emphasis added). A court looks to
the facts alleged in the plaintiff’s complaint, and not its merely conclusory
statements, when ruling on a motion to dismiss. Thus, to survive a motion to
dismiss for failure to state a claim, “a plaintiff's obligation to provide the grounds of
his entitlement to relief requires more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1964–65, 167 L. Ed. 2d 929 (2007)
(quotations omitted). “Factual allegations must be enough to raise a right to relief
above the speculative level.” Id. at 1965. Mere conclusory statements in support of
a threadbare recital of the elements of a cause of action will not suffice. Ashcroft v.
Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009).
Here, the Huffs have alleged that Countrywide recorded a mortgage on
property owned by them. However, they have alleged no facts which show that
such recordation violated any law or any duty owed by Countrywide to the Huffs.
They have further alleged that Countrywide “securitized” the loan and mortgage and
that this securitization causes the loan and mortgage to be paid in full. However, as
explained by Countrywide in its initial brief, the transfer of a negotiable instrument,
such as the promissory note secured by the Huffs’ mortgage, is expressly permitted
under the Alabama Commercial Code. The Huffs have further alleged that
Countrywide committed “bank fraud, mail fraud, wire fraud, deception and
conspiracy in their operation and handling of the Plaintiffs[’] and other loans; that
Plaintiffs and others detrimentally and justifiably relied on the conduct and
representations of the Defendants; and in so doing Plaintiffs were irreparably
harmed.” (Doc. 1-1 ¶ 8). However, the Huffs have no standing to assert complaints
about how “others” were treated, and they have not alleged any facts as to the
“time, place, and substance of [Countrywide’s] alleged fraud.” Hopper v. Solvay
Pharms., Inc., 588 F.3d 1318, 1324 (11th Cir. 2009). The Huffs further allege that
“MERS and Countrywide conspired to commit the acts complained of herein, and in
so doing, acted to further the conspiracy by means of interstate commerce and by
use of interstate mail or other means of public mail.” (Id. ¶ 9). However, they have
not alleged any facts as to the time, place, and substance of this conspiracy either.
In any event, an allegation of a conspiracy, standing alone, that is, without alleging a
wrongful act, fails to state a cause of action.2
In sum, the Huffs have entirely failed to allege acts or omissions by
Countrywide (or non-party MERS) which, taken as true, state a cause of action
against Countrywide. Therefore, the motion to dismiss is due to be GRANTED as
to all of the Huffs’ claims.
[U]nder Alabama law, a civil conspiracy claim is cognizable only
insofar as the underlying ... cause of action is actionable. See, e.g.,
Prill, 23 So. 3d at 11 (“A plaintiff alleging a conspiracy must have a
valid underlying cause of action.”) (citation omitted); Hooper v.
Columbus Regional Healthcare System, Inc., 956 So. 2d 1135,
1141 (Ala. 2006) (“The gist of an action alleging civil conspiracy is
not the conspiracy itself but, rather, the wrong committed,” and “if
the underlying wrong provides no cause of action, then neither does
the conspiracy.”) (citations omitted).
Ford v. Central Loan Admin., No. 11-0017-WS-C, 2011 WL 4702912 at *7 (S.D.Ala. Oct. 5,
Finally, to the extent that the Huffs are asserting a claim in fraud, they have
failed to comply with the requirements of FED. R. CIV. P. 9(b), which requires that
claims for fraud be stated “with particularity.” Id.3 Particularity means that “a
plaintiff must plead ‘facts as to time, place, and substance of the defendant's alleged
fraud,’ specifically ‘the details of the defendant['s] allegedly fraudulent acts, when
they occurred, and who engaged in them.” U.S. ex rel. Clausen v. Laboratory
Corp. of America, Inc., 290 F.3d 1301, 1310 (11th Cir. 2002) (quoting Cooper v.
Blue Cross & Blue Shield of Fla., Inc., 19 F.3d 562, 567-68 (11th Cir. 1994) (citing
Durham v. Bus. Mgmt. Assoc., 847 F. 2d 1505 (11th Cir. 1988))). Therefore, the
Motion To Dismiss is due to be GRANTED as to the Huffs’ fraud claims on this
additional alternative basis.
Leave To Amend.
The Huffs are proceeding pro se. Further, they have specifically sought leave
to amend, in the event that the court found their pleadings deficient. (Doc. 9 at p.
13). Therefore, the court will dismiss this action, subject to the Huffs’ right to file
Rule 9(b) states, in its entirety:
(b) Fraud or Mistake; Conditions of Mind. In alleging fraud or mistake, a
party must state with particularity the circumstances constituting fraud or mistake.
Malice, intent, knowledge, and other conditions of a person's mind may be alleged
FED. R. CIV. P. 9(b).
an amended complaint that fully complies with the requirements of the Federal
Rules of Civil Procedure. The court specifically calls to the Huffs’ attention the
deficiencies in their pleadings as pointed out in this Memorandum Opinion and as
previously set out in the court’s Order dated March 18, 2013, doc. 6 in the court
For all of the foregoing reasons, the court hereby orders as follows:
The Huffs’ motion to remand is hereby DENIED.
The Huffs’ declaratory judgment claim[s] are hereby DISMISSED
without prejudice for lack of subject matter jurisdiction;
Countrywide’s Motion To Dismiss is GRANTED, and all of the
Huffs’ claims are dismissed without prejudice for failure to state a
In lieu of dismissing this action in its entirety, the Court grants the
Huffs’ request for leave to amend their complaint to afford them an
opportunity to correct the enumerated defects;
On or before June 12, 2013, the Huffs must file their Amended
Complaint, failing which this action will be dismissed in its
Countrywide’s Rule 12(b) motion or responsive pleading must be filed
not later than 14 days after the filing of the Huffs’ Amended
DONE and ORDERED this the 22nd day of May, 2013.
VIRGINIA EMERSON HOPKINS
United States District Judge
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