Bank of America, National Association v. Sladek

Filing 14

ORDER for Summary Remand. ORDERED that this action is remanded summarily to the El Paso County District Court in Colorado Springs, Colorado. FURTHER ORDERED that the Clerk of this Court shall mail a certified copy of this Order to the Clerk of the El Paso County District Court. FURTHER ORDERED that the Motion and Affidavit for Leave to Proceed Pursuant to 28 U.S.C. § 1915 9 is denied as moot. FURTHER ORDERED that BOAs Motion to Remand or for an Order for Judgment and Restitution 10 is denied as moot, by Judge Lewis T. Babcock on 11/10/11.(lyg, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO

Civil Action No. 11-cv-02842-BNB
BANK OF AMERICA: National Association, As Successor by Merger to LaSalle Bank,
National Association, as Indenture Trustee, On Behalf of the Holders of the Accredited
Mortgage Loan Trust 2005-3 Asset Backed Notes,
Plaintiff, Counterclaim Defendant,
v.
DIANA SLADEK, and
DENNIS SLADEK,
Defendants/Counterclaim Plaintiffs/Third Party Plaintiffs,
v.
SELECT PORTFOLIO SERVICES, INC.,
Third Party Defendant.

ORDER FOR SUMMARY REMAND

Diana and Dennis Sladek have filed a Notice of Removal. Dennis Sladek alone
has filed a Motion and Affidavit for Leave to Proceed Pursuant to 28 U.S.C. § 1915.
The Sladeks have removed Cases 10CV5644 and 11CV0375 that were filed in the El
Paso County District Court, Colorado Springs, Colorado. These cases involve a
proceeding brought against them by Bank of America (BOA) pursuant to Colo. R. Civ.
P. 120 and Colo. Rev. Stat. 38-38-105. On September 28, 2010, BOA filed a motion for
an order authorizing sale pursuant to Rule 120. The state district court entered an order
authorizing the sale on April 16, 2011. Subsequent to the order of April 16, 2011, the
Sladeks filed three motions for reconsideration and to vacate the order. The state court

appears to have denied at least two of these requests. The final motion was scheduled
for review on November 4, 2011.
The Court must construe the Notice of Removal liberally because the Sladeks
are not represented by an attorney. See Haines v. Kerner, 404 U.S. 519, 520-21
(1972); Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). However, the Court
should not act as an advocate for a pro se litigant. See Hall, 935 F.2d at 1110. For the
reasons stated below, this action will be remanded to the state court.
The court in Beeler Properties, LLC v. Lowe Enterprises Residential Investors,
LLC, 2007 WL 1346591 at * 2 (D. Colo. May 7, 2007), described the Colorado real
estate foreclosure process as follows:
In Colorado, consensual liens against real property are created by
recordation of a deed of trust granted by the lender to the public trustee of
the count where the property is situate. Foreclosure of such liens is a
hybrid process governed by statute. The process involves issuance of
orders by the state district court authorizing and confirming the
[foreclosure] sale. C.R.C.P. 120; C.R .S. § 38-38-105. However, the
process of conducting the sale and parties' rights in such process are
largely administrative.
Upon default, if the deed of trust so authorizes, the lender or holder of the
note may direct the public trustee to sell the property at a foreclosure sale.
C.R.S. § 38-38-101(1). The lender must also seek an order from the state
district court authorizing the sale under Rule 120. Once a sale is
authorized, the public trustee advertises and conducts the sale. C.R.S. §
38-38-101(4). The property is sold to the highest bidder who receives a
Certificate of Purchase. Often, the purchaser is the holder of the deed of
trust who bids all or part of the debt owed by the borrower.
Prior to sale, the borrower may cure the default. After sale, the borrower
and any junior lienholders may redeem the title to the property by paying,
to the holder of the Certificate of Purchase, the sum for which the property
was sold with interest from the date of sale, together with any taxes paid
or other proper charges. See C.R.S. § 38-38-101 to § 38-38-103.
Redemption thus annuls the sale. If the redemption period passes, the
holder of the Certificate of Purchase may seek an order confirming the
2

sale and obtain a Trustee's Deed.
By filing their Notice of Removal, Defendants have attempted to remove the Rule
120 proceeding to this Court, together with the action they filed in El Paso County
District Court asserting claims for unlawful foreclosure, predatory lending, violations of
the federal Truth in Lending Act and of the Real Estate Settlement Procedures Act,
negligence, infliction of emotional distress, and for quiet title. The Sladeks assert
jurisdiction pursuant to 28 U.S.C. §§ 1332 and 1367. They also assert that the
company holding the mortgage on their property committed fraud, BOA is not the real
party in interest in the Rule 120 proceeding, and BOA and Select Portfolio Services,
Inc., violated both 15 U.S.C. § 1601 and 12 U.S.C. § 2601.
Counsel for BOA has filed a Motion to Remand to El Paso County District Court
or in the Alternative for an Order for Judgment for Possession and the Writ of
Restitution. In the Motion to Remand, BOA states that on June 1, 2011, the El Paso
County Public Trustee sold the property to BOA, who was the highest bidder. BOA
further asserts that a hearing has been set for November 10, 2011, for a ruling on the
demand for possession that BOA served on June 26, 2011.
“Under 28 U.S.C. § 1441 a defendant in state court may remove the case to
federal court when a federal court would have had jurisdiction if the case had been filed
there originally.” Topeka Housing Authority v. Johnson, 404 F.3d 1245, 1247 (10th Cir.
2005). A notice of removal must contain “a short and plain statement of the grounds for
removal, together with a copy of all process, pleadings, and orders served upon such
defendant or defendants in such action.” 28 U.S.C. § 1446(a). “The removing party
has the burden to demonstrate the appropriateness of removal from state to federal
3

court.” Baby C v. Price, 138 F. App’x 81, 83 (10th Cir. 2005).
The Court has reviewed the Notice of Removal and finds that it is deficient for the
following reasons. First, the underlying state court action is a Rule 120 proceeding that
involves the administrative process of authorizing and confirming a foreclosure sale.
Moreover, Rule 120 does not authorize the relief that the Sladeks request. Rule 120
expressly provides that a court’s order approving a sale is “without prejudice to the right
of any person aggrieved to seek injunctive or other relief in any court of competent
jurisdiction.” Rule 120(d); United Guar. Residential Ins. Co. v. Vanderlann, 819 P.2d
1103, 1105 (Colo. App. 1991). The Sladeks, therefore, cannot remove the Rule 120
proceeding to federal court.
The Sladeks rely on 28 U.S.C. § 1332, or diversity jurisdiction, for removing their
claim. It appears that the instant action is not removable based on diversity jurisdiction
because
[a]ny civil action of which the district courts have original jurisdiction
founded on a claim or right arising under the Constitution, treaties or laws
of the United States shall be removable without regard to the citizenship or
residence of the parties. Any other such action shall be removable only if
none of the parties in interest properly joined and served as defendants is
a citizen of the State in which such action is brought.
See 28 U.S.C. § 1441(b). The Sladeks allege that they are residents of the State of
Colorado and the instant action was filed originally in the El Paso County District Court
in Colorado Springs, Colorado. Therefore, it does not appear that the instant action
may be removed on the basis of diversity jurisdiction.
Even if the Court were to consider the Sladeks’ claims based on federal question,
or 28 U.S.C. § 1331, there still is no support for removal of this action. In order to
4

establish federal question jurisdiction, the federal question must be “presented on the
face of the plaintiff’s properly pleaded complaint.” Caterpillar Inc. v. Williams, 482 U.S.
386, 392 (1987). Except for narrow circumstances that do not appear to be present in
this action, “a case may not be removed to federal court solely because of a defense or
counterclaim arising under federal law.” See Johnson, 404 F.3d at 1247. Any claims
that the Sladeks raised in their separate state action against BOA or counterclaims
pursuant to the Constitution, law, or treaties of the United States, therefore, are not
removable.
Also, under 28 U.S.C. § 1446(b):
Notice of removal of any civil action or proceeding shall be filed within
thirty 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 thirty 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 shorter.
The motion for order authorizing sale was filed September 28, 2010. The Sladeks did
not submit the Notice of Removal to this Court until November 1, 2011. The Sladeks
also have not submitted the Notice of Removal in a timely manner with respect to the
separate state action they filed while the Rule 120 proceeding was pending.
For these reasons, the Court finds that the notice of removal is procedurally and
substantively deficient. As a result, the instant action will be remanded summarily to the
state court. Because the Court is remanding the case summarily to the state court, the
Court will refrain from determining Mr. Sladek’s proper status as a named party to the
original state action and as a proper party in this action. The Court also will disregard
Ms. Sladek’s failure to submit a motion to proceed pursuant to 28 U.S.C.
5

§ 1915. Furthermore, the validity of Mr. Sladek’s § 1915 motion is questionable
because his wife notarized the motion. Nonetheless, Mr. Sladek’s § 1915 motion will be
denied as moot. Accordingly, it is
ORDERED that this action is remanded summarily to the El Paso County District
Court in Colorado Springs, Colorado. It is
FURTHER ORDERED that the Clerk of this Court shall mail a certified copy of
this Order to the Clerk of the El Paso County District Court, 270 South Tejon Street,
Colorado Springs, CO 80903. It is
FURTHER ORDERED that the Motion and Affidavit for Leave to Proceed
Pursuant to 28 U.S.C. § 1915, Doc. No. 9, filed on November 1, 2011, is denied as
moot. It is
FURTHER ORDERED that BOA’s Motion to Remand or for an Order for
Judgment and Restitution, Doc. No. 10, is denied as moot.
DATED at Denver, Colorado, this 10th

day of

November

BY THE COURT:
s/Lewis T. Babcock
LEWIS T. BABCOCK, Senior Judge
United States District Court

6

, 2011.