Deutsche Bank National Trust Company v. Diamond et al

Filing 23

ORDER REMANDING the case to the Circuit Court of the Eighteenth Judicial Circuit in and for Brevard County, Florida Signed by Judge Roy B. Dalton, Jr. on 2/14/2017. (VMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
DEUTSCHE BANK NATIONAL TRUST
COMPANY,
Plaintiff,
v.

Case No. 6:16-cv-2234-Orl-37DCI

DAVID M. DIAMOND; JANET M.
DIAMOND; SUNSET LAKE
HOMEOWNERS ASSOCIATION, INC.;
SUNTRUST BANK; UKNOWN
OCCUPANT(S);
Defendants.

DAVID M. DIAMOND,
Third Party Plaintiff,
v.
SELECT PORTFOLIO SERVICING,
LLC,
Third Party
Defendant.
ORDER
This cause is before the Court on its own motion.
On August 4, 2004, Defendants David Diamond (“Mr. Diamond”) and Janet
Diamond (“Mrs. Diamond”) obtained a loan to purchase their home (See Doc. 2
(“Foreclosure Complaint”).) In doing so, Mr. and Mrs. Diamond executed a promissory
note (“Note”) secured by a mortgage (“Mortgage”). (Id. ¶ 3.) When Mr. and Mrs. Diamond
defaulted on the Note and Mortgage, Plaintiff Deutsche Bank National Trust Company

(“Deutsche Bank”) filed the Foreclosure Complaint in state court (“Foreclosure Action”).
In a single responsive pleading filed in state court: (1) Mr. and Mrs. Diamond filed
an answer to the Foreclosure Complaint, asserting four affirmative defenses (Doc. 3,
pp. 1–4); (2) Mr. and Mrs. Diamond alleged six counterclaims (“Counterclaims”) against
Deutsche Bank for violations of the Florida Consumer Collection Practices Act (“FCCPA”)
and seek declaratory judgment (id. at 5–11); and (3) Mr. Diamond filed a third-party
complaint (“TP Complaint”) against Select Portfolio Servicing, Inc. (“Select”), the loan
mortgage servicer, alleging five nearly identical violations of the FCCPA (“FCCPA
Claims”) and two violations of the Fair Debt Collection Practices Act (“FDCPA Claims”)
(id. at 12–20). 1 In his TP Complaint, Mr. Diamond alleges that Select violated both federal
and state law by: (1) sending a notice of default (Doc. 3-1 (“Default Notice”)) and two
Mortgage statements (Doc. 3-3 and Doc. 3-4, collectively “Mortgage Statements”) in
attempt to collect a debt; and (2) directly contacting him when Select knew Mr. Diamond
was represented by counsel. (Doc. 3, pp. 13–19.)
On December 28, 2016, Select removed only the TP Complaint to this Court (see
Doc. 1 (“Notice”)), alleging that the Court had federal question jurisdiction in light of the
FDCPA Claims asserted against it. (Id. at 3.) In its Notice, Select: (1) represents that the
Court may consider the FCCPA Claims under its supplemental jurisdiction; and
(2) attaches a copy of the Foreclosure Complaint for informational purposes only. (Id. at
4.) Nonetheless, the Foreclosure Complaint was docketed separately (Doc. 2) and is
presently pending along with the Counterclaims and the TP Complaint. (See Doc. 3,

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The TP Complaint appears to identify eight counts; however, it begins with
Count II, thus, there are only seven claims in total. (See Doc. 3, pp. 12–20.)

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pp. 1–11.)
STANDARDS
Federal courts have limited subject matter jurisdiction, or in other words, they have
the power to decide only certain types of cases. Morrison v. Allstate Indem. Co., 228 F.3d
1255, 1260-61 (11th Cir. 2000). The types of cases include: (1) “all civil actions arising
under the Constitution, laws, or treaties of the United States” (28 U.S.C. § 1331 (“Federal
Question Jurisdiction”)); and (2) “all civil actions where the matter in controversy
exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . .
. citizens of different States” (28 U.S.C. § 1331 (“Diversity Jurisdiction”)). Where
Diversity or Federal Question Jurisdiction is established, the Court also may exercise
“supplemental jurisdiction over all other claims that are so related to claims” within the
Court’s Diversity or Federal Question Jurisdiction “that they form part of the same case
or controversy under Article III of the United States Constitution. See 28 U.S.C. § 1367.
In every case, this Court has a duty to “zealously insure that jurisdiction exists.” See Smith
v. GTE Corp., 236 F.3d 1292, 1299 (11th Cir. 2001).
Under the supplemental jurisdiction statute, a district court has jurisdiction “over all
state claims which arise out of a common nucleus of operative fact with a substantial
federal claim.” Parker v. Scrap Metal Processors, Inc., 468 F.3d 733, 743 (11th Cir. 2006).
Claims arising from a “common nucleus of operative facts” necessarily involve “the same
witnesses, presentation of the same evidence, and determination of the same, or very
similar facts.” Palmer v Hosp. Auth. of Randolph Cty., 22 F.3d 1559, 1563–64 (11th Cir.
1994).
Removal jurisdiction exists where the Court would have had original jurisdiction

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over the action filed in state court. 28 U.S.C. § 1441(a). Only the claims asserted in a
plaintiff’s complaint, determine whether a case “arises under” federal law for purposes of
Federal Question Jurisdiction. See Vaden v. Discover Bank, 556 U.S. 49, 60, 66 (2009).
And federal jurisdiction exists only when the federal question is presented on face of the
complaint. See Caterpillar, Inc. v. Williams, 482 U.S. 386, 391 (1987); see also Lindley v.
Fed. Deposit Ins. Corp., 733 F.3d 1043, 1050 (11th Cir. 2013). If an action includes a
federal claim and a state law claim that is “not within the original or supplemental
jurisdiction of the district court . . . then the entire action may be removed if the action
would be removable without the inclusion of the [state law] claim.” 28 U.S.C. § 1441(c)(1).
DISCUSSION
The Court has Federal Question Jurisdiction over the FDCPA Claims. As such,
Select contends that the Court may exercise supplemental jurisdiction over the FCCPA
Claims under “§ 1367(a) and/or § 1441(c)” because the FCCPA Claims: (1) relate to the
same set of facts as the FDCPA Claims; and (2) arise out of the same communications
and concern overlapping subject matter. (See Doc. 1, ¶ 11.) But Select’s contention fails
to appreciate that § 1441(c) cannot apply if the FCCPA Claims are within the Court’s
supplemental jurisdiction. This is so because § 1441(c)’s utility is limited and “only comes
into play when liberal state joinder rules permit a state court plaintiff to file unrelated state
claims together with federal claims.” Fed. Nat’l Mortg. Ass’n v. Morris, 118 F. Supp. 3d
1288, 1297 (N.D. Ala. 2015) (emphasis added).
Here, both the federal and state claims targeted the same individuals, the same
debt, and the same property. (See Doc. 3-1; Doc. 3-3; Doc. 3-4.) Further, the Default
Notice and the Mortgage Statements form the basis for both the FCCPA Claims and the

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FDCPA Claims. Therefore, the FCCPA Claims are within the Court’s supplemental
jurisdiction under § 1367(a) because they arise out of the same nucleus of operative facts.
See, e.g., Jean-Baptiste v. Bus. Law Group, P.A., No. 8:16-cv-2027-T-33AEP,
2016 WL 4163574, at *5 (M.D. Fla. Aug. 4, 2016); see also Leblanc v. Advanced Credit
Corp., No. 8:06-CV-7747T-27EAJ, 2007 WL 141173, at *4 (M.D. Fla. Jan. 16, 2007)
(finding FCCPA claims and FDCPA claims to be part of a common nucleus of operative
facts). 2 Thus, § 1441(c) is inapplicable here.
In contrast to § 1441(c), § 1441(a) provides the mechanism to remove related
federal and state law claims. See Morris, 118 F. Supp. 3d at 1297. “[T]he federal claim
[provides] a foothold in the district court, and supplemental jurisdiction [provides] the basis
for subject matter jurisdiction over the state law claims.” Id. (citing 16 J. Moore et al.,
Moore’s Fed. Practice § 107.14[6][c] (3d ed. 2015)). As noted above, the FCCPA Claims
and the FDCPA Claims are related, and removal of the TP Complaint is proper under
§ 1441(a).
Unfortunately for Select, a third-party defendant is not a “defendant” under
§ 1441(a); thus, it may not remove this action under that section. 3 Hernando Pasco
2

Bentley v. Bank of Am., 733 F. Supp. 2d. 1367, 1369 (S.D. Fla. 2011) (exercising
supplemental jurisdiction over plaintiff’s FCCPA claims under § 1367); Reynolds v.
Gables Residential Servs., 428 F. Supp. 2d 1260, 1264–65 (M.D. Fla. 2006) (recognizing
that it could exercise supplemental jurisdiction over the plaintiff’s FCCPA claims but
declined to do so).
3 Stevenson v. Mullinax, No. 4:15-CV-0007-HLM, 2015 WL 1252051, at *3
(N.D. Ga. Feb. 25, 2015) (“The majority of courts addressing the question of whether a
third-party defendant is a ‘defendant’ within the meaning of [§ 1441(a)] . . . have
overwhelmingly concluded that such third party defendants are not defendants entitled to
remove under” that section); Roberson v. Ala. Trucking Assoc. Workers’ Compensation
Fund, No. 3:11CV933-SRW, 2012 WL 4477648, at *2 (M.D. Ala. 2012) (explaining that a
third-party defendant was not entitled to remove an action under § 1441(a)); Persoff v.
Aran, 792 F. Supp. 803, 804–05 (S.D. Fla. 1992) (“There is no reference to third-party

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Hospice, Inc. v. Meritain Health, Inc., No. 8:13-cv-353-T-33AEP, 2013 WL 3350886, at *3
(M.D. Fla. Jul. 2, 2013) (noting that, Ҥ 1441(a), by its terms, does not allow removal by a
third-party defendant.”); see also Hayduk v. United Parcel Serv., 930 F. Supp. 584, 590
(S.D. Fla. 1996) (noting that § 1441(a) is restricted to the original defendant as joined by
the plaintiff and declining to permit a third-party defendant to remove under § 1441(a)).
Because Select was not entitled to remove the TP Complaint, remand is required. See
Fla. Dep’t of Ins. ex rel W. Star Ins. Co. v. Chase Bank of Tex. Nat’l Assoc.,
243 F. Supp. 2d 1293, 1296 (N.D. Fla. 2002) (“[W]hen a third-party complaint is filed as
part of a larger case that is not itself removable, the third-party complaint also is not
removable, even if it arises under federal law . . . and thus would be have been removable
standing alone.”) Because the TP Complaint is due to be remanded, the Court finds it
appropriate to also remand the Foreclosure Complaint and the Counterclaims.
CONCLUSION
Accordingly, the Clerk is DIRECTED to REMAND the following to the Circuit Court
of the Eighteenth Judicial Circuit in and for Brevard County, Florida and CLOSE the case:
1.

Plaintiff Deutsche Bank National Trust Company’s Verified Mortgage
Foreclosure Complaint (Doc. 2).

2.

Defendants David Diamond and Janet Diamond’s Counterclaims against
Counter-Defendant Deutsche Bank National Trust Company (Doc. 3, pp. 5–
11).

3.

Third Party-Plaintiff David Diamond’s Third Party Complaint against ThirdParty Defendant Select Portfolio Servicing, Inc. (Doc. 3, pp. 12–20).

defendants in § 1441(a)” but recognizing the authority to do so under § 1441(c)).

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DONE AND ORDERED in Chambers in Orlando, Florida, on February 14, 2017.

Copies:
Circuit Court of the Eighteenth Judicial
Circuit in and for Brevard County,
Florida
Counsel of Record

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