Nembhard v. JPMorgan Chase Bank, National Association et al
Filing
18
OPINION AND ORDER that JPMorgan Chase Bank, N.A.'s Motion to Dismiss 3 is GRANTED IN PART. Plaintiff's claim for violation of 42 U.S.C. § 1983 is DISMISSED. IT IS FURTHER ORDERED that this action is REMANDED to the Superior Court of Gwinnett County, Georgia. Signed by Judge William S. Duffey, Jr on 4/29/2014. (anc)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
LORNA NEMBHARD,
Plaintiff,
v.
1:13-cv-3957-WSD
JPMORGAN CHASE BANK, N.A.,
and MARTIN & BRUNAVS,
Defendants.
OPINION AND ORDER
This matter is before the Court on JP Morgan Chase Bank, N.A.’s
(“JPMorgan”) Motion to Dismiss [3] Lorna Nembhard’s (“Nembhard” or
“Plaintiff”) Complaint [1.2].
I.
BACKGROUND
On October 29, 2013, Plaintiff, proceeding pro se, filed her Complaint in the
Superior Court of Gwinnett County, Georgia against JPMorgan and Martin &
Brunavs (“M&B”) (together with JPMorgan, “Defendants”), a Georgia law firm.
Plaintiff asserts claims for violation of 42 U.S.C. § 1983 and various state laws
based on perceived defects in the assignment of her mortgage and in the
foreclosure proceedings initiated by Defendants, Defendants’ alleged lack of
authority to foreclose on Plaintiff’s home, and Defendants’ submission of “false
and fraudulent” information during Plaintiff’s bankruptcy proceeding. Plaintiff
seeks compensatory and punitive damages.
On November 27, 2013, JPMorgan removed the Gwinnett County action to
this Court based on federal question and diversity jurisdiction. (Notice of Removal
[1]). JPMorgan asserts that complete diversity exists among the parties because
M&B, the only in-state defendant, was fraudulently joined to defeat federal
subject-matter jurisdiction. M&B consented to removal. (Id.).
On December 4, 2013, JPMorgan moved to dismiss Plaintiff’s Complaint for
failure to state a claim.
II.
DISCUSSION
A.
Motion to Dismiss
1.
Legal Standard
The law governing motions to dismiss pursuant to Rule 12(b)(6) is wellsettled. Dismissal of a complaint is appropriate “when, on the basis of a
dispositive issue of law, no construction of the factual allegations will support the
cause of action.” Marshall Cnty. Bd. of Educ. v. Marshall Cnty. Gas Dist.,
992 F.2d 1171, 1174 (11th Cir. 1993).
In considering a motion to dismiss, the Court accepts the plaintiff’s
allegations as true and considers the allegations in the complaint in the light most
2
favorable to the plaintiff. See Hishon v. King & Spalding, 467 U.S. 69, 73 (1984);
Watts v. Fla. Int’l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007); see also Bryant v.
Avado Brands, Inc., 187 F.3d 1271, 1273 n.1 (11th Cir. 1999) (“At the motion to
dismiss stage, all well-pleaded facts are accepted as true, and the reasonable
inferences therefrom are construed in the light most favorable to the plaintiff.”).
The Court, however, is not required to accept a plaintiff’s legal conclusions. See
Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1260 (11th Cir. 2009) (citing
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)), abrogated on other grounds by
Mohamad v. Palestinian Auth., 132 S. Ct. 1702 (2012). Nor will the Court “accept
as true a legal conclusion couched as a factual allegation.” See Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). Ultimately, the complaint is required to
contain “enough facts to state a claim to relief that is plausible on its face.”
Twombly, 550 U.S. at 570.1
To state a claim to relief that is plausible, the plaintiff must plead factual
content that “allows the Court to draw the reasonable inference that the defendant
1
The Supreme Court explicitly rejected its earlier formulation for the Rule
12(b)(6) pleading standard: “‘[T]he accepted rule [is] that a complaint should not
be dismissed for failure to state a claim unless it appears beyond doubt that the
plaintiff can prove no set of facts in support of his claim which would entitle him
to relief.’” Twombly, 550 U.S. at 577 (quoting Conley v. Gibson, 355 U.S. 41,
45-46 (1957)). The Court decided that “this famous observation has earned its
retirement.” Id. at 563.
3
is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “Plausibility”
requires more than a “sheer possibility that a defendant has acted unlawfully,” and
a complaint that alleges facts that are “merely consistent with” liability “stops
short of the line between possibility and plausibility of ‘entitlement to relief.’” Id.
(citing Twombly, 550 U.S. at 557). “To survive a motion to dismiss, plaintiffs
must do more than merely state legal conclusions; they are required to allege some
specific factual bases for those conclusions or face dismissal of their claims.”
Jackson v. BellSouth Telecomms., 372 F.3d 1250, 1263 (11th Cir. 2004)
(“[C]onclusory allegations, unwarranted deductions of facts or legal conclusions
masquerading as facts will not prevent dismissal.”) (citations omitted).2
Complaints filed pro se are to be liberally construed and are “held to less
stringent standards than formal pleadings drafted by lawyers.” Erickson v. Pardus,
551 U.S. 89, 94 (2007) (citations and internal quotation marks omitted).
Nevertheless, a pro se plaintiff must comply with the threshold requirements of the
Federal Rules of Civil Procedure. “Even though a pro se complaint should be
construed liberally, a pro se complaint still must state a claim upon which the
2
Federal Rule of Civil Procedure 8(a)(2) requires the plaintiff to state “a short
and plain statement of the claim showing that the pleader is entitled to relief.” Fed.
R. Civ. P. 8(a)(2). In Twombly, the Supreme Court recognized the liberal minimal
standards imposed by Federal Rule 8(a)(2) but also acknowledged that “[f]actual
allegations must be enough to raise a right to relief above the speculative
level . . . .” Twombly, 550 U.S. at 555.
4
Court can grant relief.” Grigsby v. Thomas, 506 F. Supp. 2d 26, 28 (D.D.C. 2007).
“[A] district court does not have license to rewrite a deficient pleading.” Osahar v.
U.S. Postal Serv., 297 F. App’x 863, 864 (11th Cir. 2008).
2.
Analysis
a.
Violation of 42 U.S.C. § 1983
Plaintiff asserts a claim for “Violations of Plaintiff’s civil rights: Depriving a
right of Property Fourteenth Amendments [sic] pursuant to 42 U.S.C. § 1983.”
(Compl. at 10). Section 1983 provides:
Every person who, under color of any statute . . . of any State . . .
subjects . . . any citizen of the United States . . . to the deprivation of
any rights, privileges, or immunities secured by the Constitution and
laws, shall be liable to the party injured in any action at law . . . .
42 U.S.C. § 1983 (emphasis added). As the Supreme Court has explained, “the
under-color-of-state-law element of § 1983 excludes from its reach merely private
conduct, no matter how discriminatory or wrongful.” American Mfrs. Mut. Ins.
Co. v. Sullivan, 526 U.S. 40, 49-50 (1999); accord United States v. Morrison,
529 U.S. 598, 620-21 (2000). Section 1983’s state action requirement requires
“both an alleged constitutional deprivation caused by the exercise of some right or
privilege created by the State or by a rule of conduct imposed by the State or by a
person for whom the State is responsible, and that the party charged with the
deprivation must be a person who may fairly be said to be a state actor.” Sullivan,
5
526 U.S. at 50 (citations and quotation marks omitted, emphasis in original).
“State action” may be found only if there is such a “close nexus between the State
and the challenged action that seemingly private behavior may be fairly treated as
that of the State itself.” Brentwood Academy v. Tenn. Secondary School Athletic
Ass’n, 531 U.S. 288, 295 (2001) (quotations omitted).
Plaintiff fails to allege any facts to support that JPMorgan or M&B are state
actors. “Although national banks are heavily regulated by federal statutes and
regulations . . . national banks are not so much the ‘instrumentalities’ of the federal
government that its officers are agents of the federal government.” Morast v.
Lance, 807 F.2d 926, 931 (11th Cir. 1987). A nonjudicial foreclosure sale, even of
a mortgage financed in part by the Federal Housing Agency, does not involve
“state action” as required to assert a claim under Section 1983 for a constitutional
rights violation. Crooked Creek Props., Inc. v. Hutchinson, 432 F. App’x 948,
948-950 (11th Cir. 2011) (“The due process claim . . . is meritless because a
foreclosure sale by a private mortgagee does not involve state action.”) (citing
Roberts v. Cameron-Brown Co., 556 F.2d 356, 358-60 (5th Cir. 1977)); see also
Earnest v. Lowentritt, 690 F.2d 1198, 1201-02 (11th Cir. 1982) (nonjudicial
foreclosure sale not state action); Tonea v. Bank of Am., N.A., No. 1:13-cv-1435WSD, 2014 WL 1092348, at *3 (N.D. Ga. Mar. 18, 2014). Plaintiff has not, and
6
cannot, allege facts sufficient to support that Defendants were acting under color of
state law in foreclosing on Plaintiff’s property. Plaintiff fails to state a claim for
relief under 42 U.S.C. § 1983 and this claim is required to be dismissed.3, 4
3
To the extent Plaintiff in her Complaint references 42 U.S.C. § 1981, she
does not allege that she was racially discriminated against with respect to property
rights and her Complaint fails to state a claim for violation of Section 1981. See,
e.g., Anderson v. Dunbar Armored, Inc., 678 F. Supp. 2d 1280, 1316-1317 (N.D.
Ga. 2009) (Section 1981 provides rights and remedies only with respect to racial
discrimination).
4
Although only JPMorgan filed a motion to dismiss, the Court may dismiss
Plaintiff’s Section 1983 claim against M&B because her Section 1983 claim is
based on the same vague allegations of misconduct against “Defendants” generally
and because Plaintiff’s Section 1983 claim against M&B, who appears to have
represented JPMorgan in Plaintiff’s bankruptcy action and conducted foreclosure
proceedings on JPMorgan’s behalf, is integrally related to Plaintiff’s claim against
JPMorgan. “A District Court may properly on its own motion dismiss an action as
to defendants who have not moved to dismiss where such defendants are in a
position similar to that of moving defendants or where claims against such
defendants are integrally related.” Loman Dev. Co. v. Daytona Hotel & Motel
Suppliers, Inc., 817 F.2d 1533, 1537 (11th Cir. 1987) (quoting Silverton v. Dep’t
of Treasury, 644 F.2d 1341, 1344 (9th Cir.), cert. denied, 454 U.S. 895 (1981)); see
also Bonny v. Society of Lloyd’s, 3 F.3d 156, 162 (7th Cir. 1993) (same). While a
court generally must provide the plaintiff with notice of its intent to dismiss or an
opportunity to respond before dismissing the action sua sponte, “[t]here is an
exception to [the] general rule against dismissal without notice if the complaint is
patently frivolous” or if amendment of the complaint would be futile. Tazo v.
Airbus S.A.S., 631 F.3d 1321, 1336 (11th Cir. 2011) (citing Wyatt v. City of
Boston, 35 F.3d 13, 15 n.1 (1st Cir. 1994)). It is clear that Plaintiff has not, and
cannot, state a claim for violation of Section 1983 against M&B and notice is not
required.
7
B.
Plaintiff’s Remaining State Law Claims
1.
Original Subject-Matter Jurisdiction
JPMorgan argues that the Court has original subject matter jurisdiction over
Plaintiff’s state law claims based on diversity of citizenship. Diversity jurisdiction
requires complete diversity between Plaintiff and Defendants, and the amount in
controversy must exceed $75,000. 28 U.S.C. § 1332. JPMorgan asserts that there
is complete diversity in this action because M&B, even though it shares Georgia
citizenship with Plaintiff, was fraudulently joined to defeat federal subject-matter
jurisdiction because Plaintiff “does not set forth a viable claim or cause of action
against M&B.” (Notice of Removal ¶ 9).
The Court disagrees. The Eleventh Circuit has stated:
When alleging fraudulent joinder, the 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. We have emphasized that the burden on
the removing party is a heavy one. The determination of whether a
resident defendant has been fraudulently joined must be based upon
the plaintiff’s pleadings at the time of removal, supplemented by any
affidavits and deposition transcripts submitted by the parties. The
district court must evaluate the factual allegations in the light most
favorable to the plaintiff and must resolve any uncertainties in the
substantive law in favor of the plaintiff. 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 the state court. Thus,
when considering a motion for remand, federal courts are not to weigh
8
the merits of a plaintiff’s claim beyond determining whether it is an
arguable one under state law.
Taylor Newman Cabinetry, Inc. v. Classic Soft Trim, Inc., 436 F. App’x 888, 890
(11th Cir. 2011) (internal quotations and citations omitted).
In its Notice of Removal, JPMorgan asserts that M&B was fraudulently
joined because “Plaintiff names M&B as a defendant in the case, but does not set
forth a viable claim or cause of action against M&B.” (Notice of Removal ¶ 9).
JPMorgan’s single, conclusory sentence is wholly insufficient to support that there
is no possibility that Plaintiff can establish a cause of action against M&B.5
To the extent JPMorgan argues generally that Plaintiff’s Complaint fails to
meet the pleading standards of Rule 8 of the Federal Rules of Civil Procedure, in
determining whether there is no possibility that a plaintiff can establish a cause of
action against a resident defendant, a district court “must necessarily look to the
pleading standards applicable in state court, not the plausibility pleading standards
prevailing in federal court.” See Ullah v. BAC Home Loans Serv. LP,
538 F. App’x 844, 846 (11th Cir. 2013) (quoting Stillwell v. Allstate Ins. Co.,
5
The Court notes that, in Georgia, a law firm may be held liable, under
certain circumstances, for its misconduct in conducting or attempting to conduct a
wrongful foreclosure sale. See, e.g., Morgan v. Ocwen Loan Serv., LLC, 795
F. Supp. 2d 1370, 1376-77 (N.D. Ga. 2011); McCarter v. Bankers Trust Co., 543
S.E.2d 755, 756-57 (Ga. Ct. App. 2000); Ga. Real Estate Finance and Foreclosure
Law § 8:11 (“A law firm that conducts a wrongful foreclosure may be liable, in
certain circumstances, for damages.”).
9
663 F.3d 1329, 1332) (11th Cir. 2011)). “The pleading standard in Georgia is
lower than the standard applicable to a motion to dismiss under Federal Rule of
Civil Procedure 12(b)(6). Under Georgia law, fair notice of the nature of the claim
is all that is required, and the elements of most claims can be pled in general terms.
Pleading conclusions, rather than facts, may be sufficient to state a claim for
relief.” Id. (internal quotations and citations omitted); see also Stillwell, 663 F.3d
at 1334 n.3 (“Georgia has not chosen to adopt the heightened pleading
requirements imposed on federal plaintiffs . . . .”). JPMorgan fails to show that
there is no possibility that a Georgia state court could find that Plaintiff adequately
plead a viable claim against M&B. Complete diversity does not exist among the
parties and the Court thus lacks original subject-matter jurisdiction over Plaintiff’s
state law claims.
2.
Exercise of Supplemental Jurisdiction
Plaintiff’s Section 1983 claim, now dismissed, was the only claim in this
action over which the Court had original subject-matter jurisdiction. The
remaining claims in this action involve only state law causes of action, over which
the Court may, but is not required to, exercise supplemental jurisdiction. See
28 U.S.C. § 1367(a) (conferring district courts with supplemental jurisdiction over
10
“claims that are so related to claims in the action within [the court’s] original
jurisdiction that they form part of the same case or controversy”).
The exercise of supplemental jurisdiction is discretionary. See 28 U.S.C.
§ 1367(c); United Mines Workers of America v. Gibbs, 383 U.S. 715, 726 (1966).
A district court may decline to exercise supplemental jurisdiction over a claim if
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over
which the district court has original jurisdiction,
(3) the district court has dismissed all claims over which it has
original jurisdiction, or
(4) in exceptional circumstances, there are other compelling reasons
for declining jurisdiction.
28 U.S.C. § 1367(c). In making this determination, the district court should
consider the factors articulated by the Supreme Court in Gibbs: judicial economy,
convenience, fairness to the parties, and whether all the claims would be expected
to be tried together. Palmer v. Hosp. Auth., 22 F.3d 1559, 1569 (11th Cir. 1994)
(citing Gibbs, 383 U.S. at 725–26).
The Court has discretion to decline to exercise jurisdiction over this case
because, in dismissing Plaintiff’s Section 1983 claim, the Court “has dismissed all
claims over which it has original jurisdiction” and the remaining state law claims
“substantially predominate” over the now-dismissed federal claim. See 28 U.S.C.
11
§ 1367(c)(2)–(3); see also Parker v. Scrap Metal Processors, Inc., 468 F.3d 733,
744 (11th Cir. 2006) (explaining that a “federal court will find substantial
predominance when it appears that a state claim constitutes the real body of a case”
(internal quotation omitted)); Cook ex rel. Estate of Tessier v. Sheriff of Monroe
Cnty., 402 F.3d 1092, 1123 (11th Cir. 2005) (explaining that when “no basis for
original federal jurisdiction presently exists, the district court has the discretion to
decline to exercise supplemental jurisdiction”).
In considering the relevant Gibbs factors, the Court finds that judicial
economy favors declining to exercise supplemental jurisdiction. The Court has not
expended considerable resources at this stage of litigation. See Carnegie-Mellon
Univ. v. Cohill, 484 U.S. 343, 351 n.7 (1988) (“[I]n the usual case in which all
federal-law claims are eliminated before trial, the balance of factors to be
considered under the pendent jurisdiction doctrine—judicial economy,
convenience, fairness, and comity—will point toward declining to exercise
jurisdiction over the remaining state-law claims.”); Lake Cnty. v. NRG/Recovery
Grp., Inc., 144 F. Supp. 2d 1316, 1319 (M.D. Fla. 2001) (remanding where the
federal court had not expended a significant amount of judicial labor). Judicial
economy also favors the resolution in state court of state law disputes between instate defendants. See Gibbs, 383 U.S. at 726 (“Needless decisions of state law
12
should be avoided both as a matter of comity and to promote justice between
parties, by procuring for them a surer-footed reading of applicable law.”); see also
Baggett v. First Nat’l Bank, 117 F.3d 1342, 1353 (11th Cir. 1997) (“State courts,
not federal courts, should be the final arbiters of state law.”); Hudson v. Cent. Ga.
Health Servs., No. 5:04-cv-301, 2005 WL 4145745, at *10 (M.D. Ga. Jan. 13,
2005) (“[I]t is preferable for the courts of Georgia to make rulings on issues of
Georgia law rather than to have federal courts do so, even when those federal
courts are in Georgia.”).; cf. Pintando v. Miami-Dade Hous. Agency, 501 F.3d
1241, 1243-44 (11th Cir. 2007) (holding that, in non-removed cases, the district
court must dismiss a federal question case if the plaintiff later drops its federal
claims).
The convenience and fairness factors do not compel the Court to exercise its
supplemental jurisdiction. The parties are not inconvenienced by being required to
litigate in the Superior Court of Gwinnett County, and there is no indication that
requiring them to litigate in state court is unfair to either party. Applying the
factors in Gibbs, the Court declines to exercise supplemental jurisdiction over the
remaining state law claims, and remand is appropriate. See Cook, 402 F.3d at
1123 (“Because this case was originally filed in state court and removed to federal
court pursuant to 28 U.S.C. § 1441, if the district court declines to continue to
13
exercise supplemental jurisdiction, [the] remaining claim[s] should be remanded to
state court.”).
III.
CONCLUSION
For the foregoing reasons,
IT IS HEREBY ORDERED THAT JPMorgan Chase Bank, N.A.’s Motion
to Dismiss [3] is GRANTED IN PART. Plaintiff’s claim for violation of 42
U.S.C. § 1983 is DISMISSED.
IT IS FURTHER ORDERED that this action is REMANDED to the
Superior Court of Gwinnett County, Georgia.
SO ORDERED this 29th day of April, 2014.
14
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?