Lett v. Bank of America, NA et al
Filing
17
ORDER granting Plaintiff's 9 Motion to Remand. The Clerk is DIRECTED to REMAND the case to the Superior Court of Cobb County. Signed by Judge Richard W. Story on 2/27/2014. (cem)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
SHIRLEY D. LETT,
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Plaintiff,
v.
BANK OF AMERICA, N.A., et
al.,
Defendants.
CIVIL ACTION NO.
1:13-CV-2055-RWS
ORDER
This case comes before the Court on Defendant Shuping, Morse & Ross,
L.L.P.’s Motion to Dismiss [3], Defendant Bank of America, N.A.’s Motion to
Dismiss [7], and Plaintiff’s Motion to Remand [9]. After reviewing the record,
the Court enters the following Order.
Background
On May 17, 2005, Plaintiff Shirley D. Lett obtained a mortgage loan
from Aegis Mortgage Company (“Aegis”) in the amount of $636,000.00.
(Compl., Dkt. [1-1] ¶ 2.) To secure the loan, Plaintiff granted her property
located at 456 North Saint Mary’s Lane, Marietta, Georgia, to Mortgage
Electronic Registration Systems, Inc. (“MERS”), and its successors and assigns,
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as nominee for Aegis. (Security Deed, Dkt. [1-1] at 38.) MERS subsequently
assigned the Security Deed to Bank of New York Mellon, as Trustee for the
Certificate Holders of CWALT, Inc., Alternative Loan Trust 2005-27,
Mortgage Pass-Through Certificates Series 2005-27 (“BONY”). (Compl., Dkt.
[1-1] ¶ 16.) In the meantime, Aegis had filed for bankruptcy. (Id. ¶ 17.)
Plaintiff contends that MERS never had authority to assign the Security Deed
because it was acting solely as nominee for Aegis. (Id. ¶¶ 16-17.) Furthermore,
she alleges that BONY was never assigned the Note and thus has no rights
under the Note or Security Deed.
Defendant Shuping, Morse & Ross, L.L.P. (“Shuping”) sent Plaintiff a
Notice of Sale Under Power on May 1, 2013, on behalf of Defendant Bank of
America, N.A. (“BANA”), BONY’s loan servicer. (Id. ¶ 33.) Plaintiff alleges
that she “was not in default in her payments at the time she was sent the Notice
of Sale initiating foreclosure.” (Id. ¶ 37.) Rather, she contends that BANA
“misplaced” her payments, “creating and inducing a delinquency and default.”
(Id. ¶ 44.) Plaintiff accuses BANA of “abusive and fraudulent servicing
practices” because it imposed fraudulent servicing fees and late charges even
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though she made her monthly payments. (Id.) No foreclosure sale has yet
taken place. (Pl.’s Resp., Dkt. [8] at 20.)
On May 17, 2013, Plaintiff filed this action against Defendants for
various claims based on their conspiracy to attempt to foreclose on her property.
(Id. ¶ 65.) She claims that Shuping, as foreclosure counsel, was aware that
there were no valid assignments to BONY of Plaintiff’s Note or Security Deed,
and yet Shuping sent her a Notice of Sale that falsely informed her that BANA
was the entity with full authority to amend or modify the terms of her loan. (Id.
¶ 48.) She alleges that Shuping also knew or should have known that she was
not in default when it prepared the Notice and sent it to the Marietta Daily
Journal for publication. (Id.; Notice, Dkt. [1-1] at 58.)
Defendants removed this action to federal court on June 19, 2013, on the
basis of diversity jurisdiction. Defendant Shuping filed its Motion to Dismiss
[3] on June 25, 2013, and all other Defendants filed their Motion to Dismiss [7]
the following day. Plaintiff then filed a Motion to Remand [9] on July 9, 2013,
contending that the Court lacks subject matter jurisdiction over this action
because the parties are not completely diverse.
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Discussion
The Court first addresses Plaintiff’s Motion to Remand [9] because it
implicates the Court’s subject matter jurisdiction. “A removing defendant bears
the burden of proving proper federal jurisdiction.” Adventure Outdoors, Inc. v.
Bloomberg, 552 F.3d 1290, 1294 (11th Cir. 2008) (internal quotations and
citations omitted). The removal statute provides that “any civil action brought
in a State court of which the district courts of the United States have original
jurisdiction . . . may be removed by the defendant or the defendants . . . to the
district court . . . where such action is pending.” 28 U.S.C. § 1441(a). Thus,
“[o]nly state-court actions that originally could have been filed in federal court
may be removed by the defendant.” Caterpillar, Inc. v. Williams, 482 U.S. 386,
392 (1987). “Federal jurisdiction can be based on either: (1) a federal question
or (2) diversity of citizenship and an amount in controversy exceeding
$75,000.00.” Ayers ex rel. Strugnell v. Beaver, 48 F. Supp. 2d 1335, 1338
(M.D. Fla. 1999); see also 28 U.S.C. § 1332(a).
Here, Plaintiff argues that subject matter jurisdiction based on diversity is
lacking because there is both a Georgia defendant and a Georgia plaintiff in the
case. Defendants counter that Shuping, the sole Georgia defendant, is
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fraudulently joined and should be disregarded for purposes of diversity
jurisdiction.
“Diversity jurisdiction, as a general rule, requires complete diversity—
every plaintiff must be diverse from every defendant.” Palmer v. Hosp. Auth.
of Randolph Cnty., 22 F.3d 1559, 1564 (11th Cir. 1994) (citations omitted). As
master of her own complaint, a plaintiff may join such claims and parties in a
single suit as are permitted under the law and the Federal Rules of Civil
Procedure. Of course, a plaintiff’s decision to join a non-diverse party has
repercussions for purposes of removal jurisdiction. However, a defendant’s
“right of removal cannot be defeated by a fraudulent joinder of a resident
defendant having no real connection with the controversy.” Wilson v. Republic
Iron & Steel Co., 257 U.S. 92, 97 (1921).
“The burden of establishing fraudulent joinder is a heavy one.” Pacheco
de Perez v. AT&T Co., 139 F.3d 1368, 1380 (11th Cir. 1998). “[T]he removing
party has the burden of proving that either: (1) there is no possibility the
plaintiff can establish a cause of action against the resident defendant; or (2) the
plaintiff has fraudulently pled jurisdictional facts to bring the resident defendant
into state court.” Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir. 1997)
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(citation omitted). “If there is even a possibility that a state court would find
that the complaint states a cause of action against any one of the resident
defendants, the federal court must find that joinder was proper and remand the
case to state court.” Id. (citation omitted). The remand question thus turns on
whether there is any possibility that Plaintiff could state a claim against
Shuping under Georgia law.
Plaintiff alleges that Shuping knew, among other things, that she was not
in default at the time Defendants commenced foreclosure proceedings. She
explains that BANA “misplaced” her monthly payments when it cashed her
checks and then notified her months later that it had not received her full
payments. (Compl., Dkt. [1-1] ¶¶ 37-44.) Defendants contend that Plaintiff’s
Complaint “shows that she is truly challenging the fact that late fees, interest,
and other servicing charges were applied to her account.” (Defs.’ Br., Dkt. [31] at 7.) The Court declines to infer from these allegations that she was in fact
in default. Accepting Plaintiff’s allegations as true, and in light of the leniency
afforded pro se litigants’ pleadings, the Court infers that she made all her
monthly payments but that BANA misapplied her payments by imposing
fraudulent fees, as she repeatedly alleges, and that she was not in default.
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Attempting foreclosure in the absence of default creates a cause of action
against the holder of the Security Deed exercising the power of sale. Generally,
however, a law firm retained as foreclosure counsel owes no duty to a
mortgagor. See Vieira v. Citigroup, Inc., No. 1:12-CV-1636-TWT, 2012 WL
6194350, at *5 (N.G. Ga. 2012) (citing McKenna Long & Aldridge, LLP v.
Keller, 598 S.E.2d 892, 894-95 (Ga. Ct. App. 2004))). Absent any showing of
independent tortious conduct on the part of a law firm, a plaintiff cannot hold a
law firm liable for the client’s alleged wrongful foreclosure. See McCarter v.
Bankers Trust Co., 543 S.E.2d 755, 757 (Ga. Ct. App. 2000) (noting that an
agent may be liable “for his own tortious act, whether acting by command of his
principal or not, he shall be responsible” (quoting O.C.G.A. § 10-6-85)).
In this case, however, Plaintiff alleges that Shuping knew she was not in
default yet proceeded to initiate foreclosure proceedings by preparing a Notice
of Sale. (Compl., Dkt. [1-1] ¶ 48.) Plaintiff attached the Notice to her
Complaint, which includes a copy of a letter from Shuping to the Marietta Daily
Journal requesting publication of the Notice of Sale. (Notice, Dkt. [1-1] at 58.)
Liberally construing Plaintiff’s Complaint, a Georgia court could find that
Plaintiff has stated a slander of title claim, under which “the plaintiff must
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allege and prove the uttering and publishing of the slanderous words; that they
were false; that they were malicious; that [she] sustained special damage
thereby; and that [she] possessed an estate in the property slandered.” Latson v.
Boaz, 598 S.E.2d 485, 487 (Ga. 2004) (citing Amador v. Thomas, 578 S.E.2d
537, 540 (Ga. Ct. App. 2003)); see also O.C.G.A. § 51-9-11 (creating a cause of
action for slander of title).
In her Complaint and attachments, Plaintiff contends that Shuping falsely
published that she was in default, that Defendants conspired to wrongfully
foreclose on her property, that she was not in default and thus still had an estate
in the property, and that she incurred damages. Plaintiff’s allegations arguably
show that Shuping committed independent tortious conduct. On these facts,
Defendants fail to carry their heavy burden of showing no possibility that a state
court could find that Plaintiff has stated a viable claim. But whether she has in
fact adequately stated a claim under Georgia’s pleading standards is a question
for a Georgia state court. See Stillwell v. Allstate Ins. Co., 663 F.3d 1329, 1333
(11th Cir. 2011) (stating that “federal courts are not to weigh the merits of a
plaintiff’s claim beyond determining whether it is an arguable one under state
law” (quoting Crowe, 113 F.3d at 1538)). Therefore, Shuping has not been
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fraudulently joined, and the Court lacks subject matter jurisdiction.
Accordingly, Plaintiff’s Motion to Remand [9] is due to be GRANTED.
Conclusion
For the foregoing reasons, Plaintiff’s Motion to Remand [9] is
GRANTED. The Clerk is DIRECTED to REMAND the case to the Superior
Court of Cobb County.
SO ORDERED, this 27th
day of February, 2014.
________________________________
RICHARD W. STORY
United States District Judge
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