Clarke v. Bank of America, N.A. et al

Filing 10

OPINION AND ORDER that this action is REMANDED to the Superior Court of Rockdale County, Georgia. Signed by Judge William S. Duffey, Jr on 4/24/2014. (anc)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
NYSSA CLARKE,
Plaintiff,
v.

1:13-cv-4312-WSD

BANK OF AMERICA, N.A.,
MORTGAGE ELECTRONIC
REGISTRATION SYSTEM,
MERSCORP, and MCCURDY &
CANDLER, LLC,
Defendants.

OPINION AND ORDER
This matter is before the Court on Bank of America, N.A. (“BANA”),
Mortgage Electronic Registration System (“MERS”), and MERSCORP’s (all
together, “Removing Defendants”) Notice of Removal [1].
I.

BACKGROUND
On December 19, 2013, Nyssa Clarke (“Plaintiff” or “Clarke”), a citizen of

Georgia, filed her Complaint [1.1] in the Superior Court of Rockdale County,
Georgia, asserting the following state-law claims against the Removing Defendants
and McCurdy & Candler, LLC (“McCurdy”), a Georgia law firm: (1) “slander of
title, trespass to try title;” (2) quiet title; (3) violation of the duty of good faith and

fair dealing; (4) promissory estoppel; and (5) civil conspiracy. Plaintiff’s claims
are based on perceived defects in the assignment of her mortgage and in the
foreclosure proceedings initiated by Defendants, and Defendants’ alleged denial of
Plaintiff’s loan modification application. Plaintiff seeks declaratory, equitable and
injunctive relief, attorney’s fees, and “an award of actual, compensatory, and
punitive damages in an amount not less than $1,500,000.” (Compl. ¶ 86).
On December 31, 2013, BANA, MERS and MERSCORP removed the
Rockdale County action to this Court based on diversity jurisdiction. (Notice of
Removal [1]). The Removing Defendants assert that complete diversity exists
among the parties because McCurdy, the only in-state defendant, was fraudulently
joined to defeat federal subject-matter jurisdiction.
II.

DISCUSSION
A.

Subject-matter jurisdiction

Federal courts “have an independent obligation to determine whether
subject-matter jurisdiction exists, even in the absence of a challenge from any
party.” Arbaugh v. Y&H Corp., 546 U.S. 500, 501 (2006). The Eleventh Circuit
consistently has held that “a court should inquire into whether it has subject matter
jurisdiction at the earliest possible stage in the proceedings. Indeed, it is well
settled that a federal court is obligated to inquire into subject matter jurisdiction

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sua sponte whenever it may be lacking.” Univ. of S. Ala. v. Am. Tobacco Co.,
168 F.3d 405, 410 (11th Cir. 1999).
28 U.S.C. § 1441(a) 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” to federal court. 28 U.S.C. § 1441(a). Once a case is
removed, “[i]f at any time before final judgment it appears that the district court
lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C.
§ 1447(c).
Here, Plaintiff’s Complaint asserts only state law claims and the Court could
have only diversity jurisdiction over the action. Diversity jurisdiction exists where
the amount in controversy exceeds $75,000 and the suit is between citizens of
different states. 28 U.S.C § 1332(a). “Diversity jurisdiction, as a general rule,
requires complete diversity—every plaintiff must be diverse from every
defendant.” Palmer Hosp. Auth. of Randolph Cnty., 22 F.3d 1559, 1564 (11th Cir.
1994). The Removing Defendants assert that there is complete diversity in this
action because McCurdy, even though it shares Georgia citizenship with Plaintiff,
was fraudulently joined to defeat federal subject-matter jurisdiction because
Plaintiff does not allege a specific cause of action against McCurdy. (Notice of
Removal ¶¶ 20-24).

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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
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).
The Removing Defendants argue that Plaintiff cannot seek relief against
McCurdy because it was “merely a local agent” “retained with the sole purpose of
pursuit of foreclosure.” (Notice of Removal ¶ 23). 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
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Finance and Foreclosure Law § 8:11 (“A law firm that conducts a wrongful
foreclosure may be liable, in certain circumstances, for damages.”).
To the extent the Removing Defendants argue that McCurdy was
fraudulently joined because 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., 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 . . . .”). The Removing Defendants fail to show that there is no
possibility that a Georgia state court could find that Plaintiff adequately pleaded a

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viable claim against McCurdy. Complete diversity does not exist among the
parties and the Court lacks subject-matter jurisdiction over Plaintiff’s Complaint.
This action is required to be remanded to the Superior Court of Rockdale County.
See 28 U.S.C. § 1447(c).
III.

CONCLUSION
For the foregoing reasons,
IT IS HEREBY ORDERED that this action is REMANDED to the

Superior Court of Rockdale County, Georgia.

SO ORDERED this 24th day of April, 2014.

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