Peeples v. Ditech Financial LLC et al
MEMORANDUM OPINION AND ORDER DENYING 8 MOTION to Remand. Plaintiff has fourteen (14) days from the date of this Order to comply with the Order Requiring Repleader. Failure to comply may result in dismissal of this action for lack of prosecution. Signed by Judge Virginia Emerson Hopkins on 11/7/2017. (JLC)
2017 Nov-07 PM 01:54
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
NICKELS BOWEN PEEPLES,
) Case No.: 4:17-CV-1311-VEH
DITECH FINANCIAL LLC and
REGISTRATION SYSTEMS, INC., )
MEMORANDUM OPINION AND ORDER
On August 4, 2017, Defendants Ditech Financial LLC (“Ditech”) and Mortgage
Electronic Registration Systems, Inc. (“MERS”) (collectively “Defendants”) removed
this case to the Northern District of Alabama. (Doc. 1). On that day, Defendants also
filed a Motion To Dismiss. (Doc. 3). In response, the Court, on September 6, 2017,
took two actions. First, the Court stayed the case until ruling on the pending Motion
To Remand. (Doc. 10). Second, the Court issued an Order Requiring Repleader
within 14 days because Plaintiff’s Complaint was a “shotgun pleading.” (Doc. 11).
Now before the Court is Plaintiff Peeples’s Motion To Remand (the “Remand
Motion”) filed on September 5, 2017. (Doc. 8). Defendants responded on September
15, 2017. (Doc. 12). In Defendants’ response, they moved to stay ruling on the
Remand Motion until after Plaintiff files an amended complaint, and they also argued
their opposition to the Motion. (Id. at 1). To date, Plaintiff has neither filed a new
complaint, nor has he replied to Defendants’ response. Accordingly, this Motion is
ripe for review.
The issue presented is whether this case meets the amount in controversy
requirement needed to confer federal jurisdiction. For the reasons herein stated, this
Court determines that it does. Accordingly, the Remand Motion is DENIED.
RELEVANT FACTUAL AND PROCEDURAL BACKGROUND
This case arises from a dispute over a home foreclosure. (Doc. 1-2 at 4-7). The
Complaint states nine counts for relief. (Id. at 7-14). It does not explicitly state a
specific dollar amount in controversy. (See generally id.). The case was originally
filed in the Circuit Court of St. Clair County, Alabama, on July 5, 2017. (Id. at 3). The
complaint states multiple counts. (Id. at 7-14). Among those claims are quiet title,
negligence, wantonness, wrongful foreclosure, slander of title, placed in a false light,
defamation/libel/slander, and declaratory relief. (Id.).
Defendants Ditech and MERS removed this case to the Northern District of
Alabama on August 4, 2017. (Doc. 1 at 1). The basis for removal was diversity
jurisdiction. (Id. at 2-6). Although the Defendants do not state as much in their Notice
of Removal, this case was removed under 28 U.S.C. § 1446(b)(1). That statute states:
(b) Requirements; generally.--(1) The notice of removal of a
civil action or proceeding shall be filed within 30 days after the receipt
by the defendant, through service or otherwise, of a copy of the initial
pleading setting forth the claim for relief upon which such action or
proceeding is based, or within 30 days after the service of summons
upon the defendant if such initial pleading has then been filed in court
and is not required to be served on the defendant, whichever period is
(2)(A) When a civil action is removed solely under section
1441(a), all defendants who have been properly joined and served must
join in or consent to the removal of the action.
(B) Each defendant shall have 30 days after receipt by or service
on that defendant of the initial pleading or summons described in
paragraph (1) to file the notice of removal.
(C) If defendants are served at different times, and a later-served
defendant files a notice of removal, any earlier-served defendant may
consent to the removal even though that earlier-served defendant did not
previously initiate or consent to removal.
(3) Except as provided in subsection (c), if the case stated by the
initial pleading is not removable, a notice of removal may be filed
within 30 days after receipt by the defendant, through service or
otherwise, of a copy of an amended pleading, motion, order or other
paper from which it may first be ascertained that the case is one which
is or has become removable.
28 U.S.C. § 1446(b). Defendants filed the Notice of Removal within 30 days after
being served. (Doc. 1 at 7); (see also Doc. 1-2 at 21-22). They base their removal on
the complaint filed in state court, not a later “pleading, motion, order or other paper
from which it may be first ascertained that the case is one which is or has become
removable.” (See generally Doc. 1-2); see 28 U.S.C. § 1446(b)(3). This means that
it is a “first paragraph removal case.” See Smith v. Family Dollar Stores, Inc., No.
7:14-cv-161-SLB, 2014 WL 4793445 at *2 (N.D. Ala. Sept. 25, 2014).1,2
Defendants allege complete diversity of citizenship. (Doc. 1 at 3-4). Defendants
also allege that this case meets the amount in controversy requirement. (Id. at 4).
However, Plaintiff argues that this case does not meet the amount in controversy
The court in Smith explained the difference:
28 U.S.C. § 1446(b) makes removal proper in two instances. In the first instance,
which is delineated in section 1446(b)(1) (formerly referred to as “first paragraph
removal”), removal is based upon the plaintiff's initial pleading. Under section
1446(b)(1), the notice of removal must be filed “within 30 days after the receipt
by the defendant, through service or otherwise, of a copy of the initial pleading
setting forth the claim for relief upon which such action or proceeding is based.”
Cases may also be removed under section 1446(b)(3) (formerly referred to as
“second paragraph removal”). A case not initially removable under section
1446(b)(1) may be removed under section 1446(b)(3) if the defendant receives “a
copy of an amended pleading, motion, order or other paper from which it may first
be ascertained that the case is one which is or has become removable.”
Smith, 2014 WL 4793445 at *2 (internal footnote omitted). This matters because whether it is a
“first paragraph removal” or a “second paragraph removal” determines whether this Court
applies Roe or Lowery. See Roe v. Michelin North America, Inc., 613 F.3d 1058, 1061 n.3,4
(11th Cir. 2010) (noting that Roe deals with first paragraph removal cases and Lowery deals with
second paragraph removal cases). Here, both parties erroneously cite to Lowery. (See Doc. 8 at
3); (see Doc. 1 at 5); (see Doc. 12 at 3). They should be citing to Roe. See Roe, 613 F.3d at 1061,
While Defendants mention they removed the case under 28 U.S.C. § 1446, they do not
state which provision of § 1446. (Doc. 1 at 1). Defendants did mention the date of service as the
time that triggered the time limits of § 1446. (Doc. 1 at 7) (“This matter became removable on or
about July 13, 2017, the date Ditech was served.”). This is consistent with a § 1446(b)(1)
removal, meaning that Roe, not Lowery, should be used. See Roe, 613 F.3d at 1061 n.3,4.
requirement. (Doc. 8 at 5-7).
Subject Matter Jurisdiction Generally
“It is by now axiomatic that the inferior courts are courts of limited jurisdiction.
They are ‘empowered to hear only those cases within the judicial power of the United
States as defined by Article III of the Constitution,’ and which have been entrusted
to them by a jurisdictional grant authorized by Congress.” Univ. of S. Ala. v. Am.
Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999) (quoting Taylor v. Appleton, 30
F.3d 1365, 1367 (11th Cir. 1994)). “Accordingly, ‘[w]hen a federal court acts outside
its statutory subject-matter jurisdiction, it violates the fundamental constitutional
precept of limited federal power.’” Univ. of S. Ala., 168 F.3d at 409 (quoting Victory
Carriers, Inc. v. Law, 404 U.S. 202, 212, 92 S. Ct. 418, 425, 30 L. Ed. 2d 383
(1971)). “Simply put, once a federal court determines that it is without subject matter
jurisdiction, the court is powerless to continue.” Univ. of S. Ala., 168 F.3d at 410.
“A necessary corollary to the concept that a federal court is powerless to act
without jurisdiction is the equally unremarkable principle that a court should inquire
into whether it has subject matter jurisdiction at the earliest possible stage in the
proceedings.” Id. “Indeed, it is well settled that a federal court is obligated to inquire
into subject matter jurisdiction sua sponte whenever it may be lacking.” Id. (citing
Fitzgerald v. Seaboard Sys. R.R., 760 F.2d 1249, 1251 (11th Cir. 1985) (per curiam)).
Moreover, “[t]he jurisdiction of a court over the subject matter of a claim
involves the court’s competency to consider a given type of case, and cannot be
waived or otherwise conferred upon the court by the parties. Otherwise, a party could
‘work a wrongful extension of federal jurisdiction and give district courts power the
Congress denied them.’” Jackson v. Seaboard Coast Line R.R., 678 F.2d 992, 100001 (11th Cir. 1982) (quoting American Fire & Cas. Co. v. Finn, 341 U.S. 6, 18
(1951)) (footnote omitted) (citation omitted). Furthermore, “[b]ecause removal
jurisdiction raises significant federalism concerns, federal courts are directed to
construe removal statutes strictly.” Univ. of S. Ala., 168 F.3d at 411 (citing Shamrock
Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941)).
Lastly, Congress has decreed and the Supreme Court has confirmed that - with
the express exception of civil rights cases that have been removed - orders of remand
by district courts based upon certain grounds, including in particular those premised
upon lack of subject matter jurisdiction, are entirely insulated from review. More
specifically, § 1447(d) provides:
An order remanding a case to the State court from which it was removed
is not reviewable on appeal or otherwise, except that an order remanding
a case to the State court from which it was removed pursuant to section
1443 of this title shall be reviewable by appeal or otherwise.
28 U.S.C. § 1447(d) (emphasis added); see also Kirchner v. Putnam Funds Trust, 547
U.S. 633, 642 (2006) (recognizing that “‘[w]here the [remand] order is based on one
of the grounds enumerated in 28 U.S.C. § 1447(c), review is unavailable no matter
how plain the legal error in ordering the remand’”) (citing Briscoe v. Bell, 432 U.S.
404, 413 n.13 (1977)); Milton I. Shadur, Traps for the Unwary in Removal and
Remand, 33 no. 3 Litigation 43 (2007); Powerex Corp. v. Reliant Energy Servs., Inc.,
127 S. Ct. 2411, 2418 (2007) (holding that when “the District Court relied upon a
ground that is colorably characterized as subject-matter jurisdiction, appellate review
is barred by § 1447(d)”).
Defendant’s Burden on Removal
The burden of establishing subject matter jurisdiction for the purposes of
removal to this court is on the removing defendant. See Williams v. Best Buy Co., 269
F.3d 1316, 1319 (11th Cir. 2001) (“Because this case was originally filed in state
court and removed to federal court by Best Buy, Best Buy bears the burden of proving
that federal jurisdiction exists.”). “The court should determine its jurisdiction over
the case ‘based upon the plaintiff’s pleadings at the time of removal.’” Fowler v.
Provident Life & Accident Ins. Co., 256 F. Supp. 2d 1243, 1246 (N.D. Ala. 2003).
“[B]ecause the jurisdiction of federal courts is limited, the Eleventh Circuit
Court of Appeals favors remand of cases that have been removed where federal
jurisdiction is not absolutely clear.” Lowe’s OK’d Used Cars, Inc. v. Acceptance Ins.
Co., 995 F. Supp. 1388, 1389 (M.D. Ala. 1998) (citing Burns v. Windsor, 31 F.3d
1092, 1095 (11th Cir. 1994)). “In fact, removal statutes are to be strictly construed,
with all doubts resolved in favor of remand.” Lowe’s, 995 F. Supp. at 1389 (emphasis
added) (citing Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir.1996)).
Unspecified Amount in Controversy
The Eleventh Circuit stated the following regarding situations where the
Plaintiff alleges unspecified damages:
If a plaintiff makes “an unspecified demand for damages in state
court, a removing defendant must prove by a preponderance of the
evidence that the amount in controversy more likely than not exceeds
the ... jurisdictional requirement.” Tapscott v. MS Dealer Service Corp.,
77 F.3d 1353, 1357 (11th Cir.1996), abrogated on other grounds by
Cohen v. Office Depot, Inc., 204 F.3d 1069 (11th Cir.2000). In some
cases, this burden requires the removing defendant to provide additional
evidence demonstrating that removal is proper. See, e.g., Pretka v.
Kolter City Plaza II, Inc., 608 F.3d 744 (11th Cir.2010). In other cases,
however, it may be “facially apparent” from the pleading itself that the
amount in controversy exceeds the jurisdictional minimum, even when
“the complaint does not claim a specific amount of damages.” See id. at
754 (quoting Williams v. Best Buy Co., Inc., 269 F.3d 1316, 1319 (11th
If a defendant alleges that removability is apparent from the face
of the complaint, the district court must evaluate whether the complaint
itself satisfies the defendant's jurisdictional burden. In making this
determination, the district court is not bound by the plaintiff's
representations regarding its claim, nor must it assume that the plaintiff
is in the best position to evaluate the amount of damages sought. Id. at
771. Indeed, in some cases, the defendant or the court itself may be
better-situated to accurately assess the amount in controversy. See id.
(explaining that “sometimes the defendant's evidence on the value of the
claims will be even better than the plaintiff's evidence,” and that a court
may use its judgment to determine “which party has better access to the
Eleventh Circuit precedent permits district courts to make
“reasonable deductions, reasonable inferences, or other reasonable
extrapolations” from the pleadings to determine whether it is facially
apparent that a case is removable. See id. at 754. Put simply, a district
court need not “suspend reality or shelve common sense in determining
whether the face of a complaint ... establishes the jurisdictional amount.”
See id. at 770 (quoting Roe v. Michelin N. Am., Inc., 637 F.Supp.2d 995,
999 (M.D.Ala.2009)); see also Williams, 269 F.3d at 1319 (11th
Cir.2001) (allowing district courts to consider whether it is “facially
apparent” from a complaint that the amount in controversy is met).
Instead, courts may use their judicial experience and common sense in
determining whether the case stated in a complaint meets federal
Roe v. Michelin North America, Inc., 613 F.3d 1058, 1061-62 (11th Cir. 2010)
(internal footnotes omitted).
Plaintiff alleges that “Defendants completely rely on speculation and conjecture
in its removal notice regarding the amount in controversy.” (Doc. 8 at 6). Plaintiff
also implies that Defendant Ditech does not have “a legitimate interest in the debt”
and so the amount in controversy is not met. (Id.). However, whether Defendant
Ditech has an interest in the debt is not the relevant question here; the relevant
question here is whether the parties have a controversy that exceeds $75,000. For the
reasons stated below, they do. The Court will analyze two of the claims to show that
they exceed $75,000.3
“In a quiet title action, the amount in controversy for determining subject
matter jurisdiction is the value of the property.” Orton v. Matthews, 572 F. App’x
830, 831 (11th Cir. 2014) (citing Frontera Transp. Co. v. Abaunza, 271 F. 199, 201
(5th Cir. 1921)). “The note and mortgage at issue between the parties . . . . are
contracts that establish the fair market value of [plaintiff’s] property interest.” Mapp
v. Deutsche Bank Nat. Trust Co., No. 3:08-CV-695-WKW[WO], 2009 WL 3664118
at *4 (M.D. Ala. Oct. 28, 2009).4
Count 1 of Plaintiff’s Complaint is for quiet title. (Doc. 1-2 at 7-9). When
Defendants removed the case, they attached a copy of the mortgage on Plaintiff’s
home. (Doc. 12 at 3); (Doc. 1-1). That mortgage states that it is for $220,000. (Doc.
1-1 at 3). Further, in Plaintiff’s complaint, he asks “that he [be] awarded the property
and the Defendants be declared to have no valid interest in said property.” (Doc. 1-2
Just because the Court is only analyzing two of the claims to show that they exceed
$75,000 does not mean that the other claims do not exceed $75,000. They may well exceed
$75,000, but regardless they would come in at least under supplemental jurisdiction (if not
diversity) for the reasons stated later in this Memorandum Opinion and Order.
Plaintiff makes an argument along the lines that the amount of the mortgage “may not
even be relevant.” (See doc. 8 at 6). This argument is wrong, as the Mapp case shows. See Mapp,
2009 WL 3664118 at *4.
at 15). A property interest worth $220,000 is clearly far more than the jurisdictional
minimum of $75,000.
“In actions seeking declaratory or injunctive relief, it is well established that
the amount in controversy is measured by the value of the object of the litigation.”
Hunt v. Washington State Apple Advertising Comm’n, 432 U.S. 333, 347 (1977)
(citing other sources). “‘In other words, the value of the requested injunctive relief
is the monetary value of the benefit that would flow to the plaintiff if the injunction
were granted.’” Mapp, 2009 WL 3664118 at *2 (quoting Cohen, 204 F.3d at 1077).
Count 9 is for declaratory relief. (Doc. 1-2 at 14). Plaintiff wants the Court to
“declar[e] that he is the rightful owner of the property in question.” (Id.). As stated
above, the mortgage shows the value of the property to be $220,000, an amount
exceeding $75,000. If the Court ruled in Plaintiff’s favor, he would potentially have
a judgment declaring him to be the owner of a parcel of property worth $220,000.
Again, this sum exceeds the jurisdictional minimum.
“[D]istrict courts shall have supplemental jurisdiction over all other claims that
are so related to claims in the action within such original jurisdiction that they form
part of the same case or controversy.” 28 U.S.C. § 1367(a). There must be a
“common nucleus of operative fact.” See United Mine Workers of America v. Gibbs,
383 U.S. 715, 725 (1966). In this case, it is clear that all of Plaintiff’s claims “derive
from a common nucleus of operative fact.” See id. They all stem from the foreclosure
of and disputes over title to the subject property. (See Doc. 1-2 at 4). To the extent
any claim the Court did not analyze does not meet the amount in controversy
requirement, it certainly meets the requirement for supplemental jurisdiction under
For the aforementioned reasons, it is clear that the amount in controversy is met
by a preponderance of the evidence.
In conclusion, the Motion To Remand is DENIED. Additionally, the Court
recognizes the potential for confusion given that it issued a stay on the same day that
it issued its Order Requiring Repleader. (Doc. 11). Accordingly, Plaintiff has fourteen
(14) days from the date of this order to comply with the Order Requiring Repleader.
Failure to comply may result in dismissal of this action for lack of prosecution.
DONE and ORDERED this the 7th day of November, 2017.
VIRGINIA EMERSON HOPKINS
United States District Judge
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