U.S. Bank National Association v. Sanders

Filing 12

OPINION AND ORDER that Magistrate Judge Walter E. Johnson's Report and Recommendation 3 , and Defendant Objections 8 to the R&R, are deemed MOOT. IT IS FURTHER ORDERED that this action is REMANDED to the Superior Court of Gwinnett County, Georgia. IT IS FURTHER ORDERED that Defendant's Emergency Motion to Stay State Court Proceedings 10 is DENIED. Signed by Judge William S. Duffey, Jr on 4/7/2015. (tcc)

I.

BACKGROUND
Defendant has a lengthy history of challenging the validity of her mortgage

debt and seeking to delay foreclosure of, and dispossession from, her home,
located at 2540 Sable Ridge Court, Buford, Georgia (the “Property”), following
her default on her loan obligations.2

2

Defendant has filed at least four bankruptcy cases in the Northern District of
Georgia since obtaining her mortgage: (i) No. 08-50078, filed October 6, 2008, and
discharged May 4, 2009; (ii) No. 10-89227, filed October 1, 2010, and dismissed
December 29, 2010, for failure to pay the filing fee; (iii) No. 11-55668, filed
February 25, 2011, and dismissed June 16, 2011, for failure to file required
financial information and failure to attend meeting of creditors;
and (iv) No. 12-55493, filed March 2, 2012, dismissed with prejudice August 16,
2012 for willful failure to prosecute, and appeal denied on July 9, 2013. In
connection with her third bankruptcy case, Sanders also filed an adversary action
against Chase and U.S. Bank challenging their standing to foreclose on the
Property and the validity of her mortgage debt. Sanders v. Chase, et al.,
No. 11-5321-JB (Bankr. N.D. Ga. 2011) (filed June 13, 2011, and dismissed
September 13, 2011, because underlying bankruptcy case was dismissed). In
appealing the dismissal of her most recent bankruptcy case, Sanders moved to stay
foreclosure pending the outcome of her appeal and stated that her petition “was
filed for protection from JPMorgan Chase to stop her [sic] foreclosure and to allow
a Modification to go thru [sic].” Sanders v. Townson, No. 1:12-cv-3304, Docs. 5,
15 at 3 (N.D. Ga. 2012). On July 9, 2013, the Court dismissed Sanders’s appeal
including because it found that her appeal and multiple bankruptcy cases were filed
for the purpose of delaying foreclosure and that her conduct constituted an abuse of
the bankruptcy system. Id. at Doc. 17.
On November 19, 2013, the Court dismissed as frivolous two identical
complaints, filed pro se and in forma pauperis, in which Sanders asserted claims
for, among others, breach of contract, negligence and “fraudulent assignments of
mortgage – void,” against U.S. Bank and its foreclosure counsel, McCalla Raymer,
and sought to enjoin them “from further dispersing and damaging [her] private
property,” rescission of her mortgage, quiet title to the Property and damages in the
2

On April 30, 2014, U.S. Bank National Association (“Plaintiff” or “U.S.
Bank”) filed, in the Magistrate Court of Gwinnett County, Georgia, a
dispossessory action (the “Dispossessory Action”) against Defendant.3 (Complaint
[2 at 2]). The Complaint in the Dispossessory Action asserts that Defendant is a
tenant at sufferance following an April 1, 2014, foreclosure sale of the Property.
On May 20, 2014, Defendant, proceeding pro se, removed the Dispossessory
Action to this Court on the basis of diversity of citizenship. See U.S. Bank Nat’l
Assoc. v. Sanders, No. 1:14-cv-1534, Doc. 1 (N.D. Ga.). Defendant also filed a
counterclaim for violation of the False Claims Act, alleging that she did not receive
proper notice of the foreclosure sale and that “her Note is paid in full and there is
not [sic] default” because “[t]he United States of American [sic] [p]aid [her
mortgage] via the Pooling and Service [sic] Agreement.” Id.
On September 30, 2014, the Court, having found that it lacked subject matter
jurisdiction, remanded the Dispossessory Action to the Magistrate Court of
Gwinnett County. Id. at Doc. 15.

amount of $14,000,000. See Sanders v. U.S. Bank, et al., Nos. 1:13-cv-3192,
1:13-cv-3315.
This is also Defendant’s second attempt to remove the Dispossessory Action
to this Court. See U.S. Bank Nat’l Assoc. v. Sanders, No. 1:14-cv-1534 (N.D. Ga.
May 20, 2014).
3
No. 14-M-14005, docket available at: www.gwinnettcourts.com.
3

On October 22, 2014, the Magistrate Court of Gwinnett County granted
Plaintiff a Writ of Possession for the Property.
On October 24, 2014, Defendant filed her Notice of Appeal to the Superior
Court of Gwinnett County, Georgia.4
On January 26, 2015, the Superior Court of Gwinnett County granted U.S.
Bank’s motion for summary judgment on Sanders’s counterclaims and issued a
Writ of Possession for the Property in favor of U.S. Bank.
Also on January 26, 2015, Defendant moved for reconsideration of the
Superior Court’s January 26th Order, which the Superior Court denied on
January 27, 2015.
On February 4, 2015, Defendant removed the Dispossessory Action to this
Court and filed an application to proceed in forma pauperis (“IFP”). Defendant
asserts that she “has exhausted the state remedies and that the ruling of the state
court violates the Constitutional rites [sic] of the plaintiff [sic].” (Notice of
Removal [2] at 1). Defendant asserts that her “rites [sic] of liberty to [her] place of
residency are being violated by the unlawful ruling of the State Court and the State
Courts [sic] refusal to hear the appeal.” (Id.).

4

No. 14-A-09883-4, docket available at: www.gwinnettcourts.com.
4

On February 13, 2015, the Magistrate Judge Johnson granted Defendant’s
IFP application and issued his R&R. The Magistrate Judge considered, sua sponte,
whether the Court has subject-matter jurisdiction over this action. He concluded
that the Court’s jurisdiction cannot be based on diversity of citizenship. He also
found that the Dispossessory Action is based on state law, and because federal
jurisdiction cannot be based on a defendant’s answer or notice of removal, the
Magistrate Judge concluded that the Court does not have federal question
jurisdiction over this matter. Because the Court lacks subject-matter jurisdiction,
the Magistrate Judge recommended that this action be remanded to state court.
Also on February 13, 2015, Defendant filed her Amended Notice of
Removal, asserting that she “has been the victim of fraud by [U.S. Bank] through
the use of fraudulent documents and fraud perpetrated on the state court by [U.S.
Bank] in its filing of the state complaint and use of same during the state court
process.” (Amended Notice of Removal [5] at 1). Defendant argues that U.S.
Bank “initiated the foreclosure action based upon and through the use of fraudulent
documents,” and that “[t]he assignment upon which foreclosure and all subsequent
proceedings of foreclosure was based is fraudulent” because the assignment was
executed by a purported “robo-signer.” (Id. at 2).

5

On February 27, 2015, Defendant filed her Objections to the R&R, arguing
that the Magistrate Judge failed to consider her Amended Notice of Removal,
which, Defendant contends, “ma[kes] clear that what [she] addresses is the
fraudulent state court foreclosure proceedings not the state court [D]ispossessory
[A]ction.” (Objs. at 1).
On April 3, 2015, the Superior Court of Gwinnett County issued an order
(“April 3rd Order”) granting summary judgment and a writ of possession for the
Property to Plaintiff. (Pl’s Notice of Filing [11]).
On April 7, 2015, Defendant filed her “Emergency Motion to Stay State
Court Proceedings” (“Motion to Stay”) [10]. Defendant contends that, because she
removed the Dispossessory Action to this Court, the Superior Court lacked
authority to issue its April 3rd Order.
The Court first considers whether it has subject matter jurisdiction over this
action.
II.

DISCUSSION
The Eleventh Circuit has consistently held that “a court should inquire into

whether it has subject matter jurisdiction at the earliest possible stage in the
proceedings. It is well-settled that a federal court is obligated to inquire into
subject matter jurisdiction sua sponte whenever it may be lacking.” Univ. of S.

6

Ala. v. Am. Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999). “[O]nce a federal
court determines that it is without subject matter jurisdiction, the court is powerless
to continue.” Id.
Congress has provided 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.” 28 U.S.C. § 1441(a). Removal in this case appears to
be based on federal-question jurisdiction, which extends to “all civil actions arising
under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331.
“The presence or absence of federal-question jurisdiction is governed by the
‘well-pleaded complaint rule,’ which provides that federal jurisdiction exists only
when a federal question is presented on the face of the plaintiff's properly pleaded
complaint.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). Thus, a
federal cause of action within a counterclaim or a federal defense is not a basis for
removal jurisdiction. Vaden v. Discover Bank, 556 U.S. 49, 59-61 (2009).
Plaintiff’s Complaint is a dispossessory action which is based solely on state
law. See O.C.G.A. § 44-7-50; Steed v. Fed. Nat’l Mortg. Corp., 689 S.E.2d 843
(Ga. Ct. App. 2009) (when former owner of real property remain in possession
after foreclosure sale, she becomes “tenant at sufferance,” and thus landlord-tenant
relationship exists and dispossessory procedure in O.C.G.A. § 44-7-50 applies).

7

No federal question is presented on the face of Plaintiff’s Complaint. That
Defendant asserts defenses or counterclaims based on federal law—including that
Georgia’s foreclosure and dispossessory process violates her rights under the
United States Constitution—cannot confer federal subject-matter jurisdiction over
this action. See Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 6 (2003); Holmes
Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 830-32 (2002);
Caterpillar Inc. v. Williams, 482 U.S. 386, 392-93 (1987) (“The presence of a
federal defense does not make the case removable . . . .”). Removal is not proper
based on federal question jurisdiction.
Although not alleged in her Notice of Removal, or Amended Notice of
Removal, because of Defendant’s pro se status, the Court also considers whether it
has subject-matter jurisdiction based on diversity of citizenship. Diversity
jurisdiction exists over suits between citizens of different states where the amount
in controversy exceeds $75,000. 28 U.S.C. § 1332(a). Here, the record does not
show the citizenship of the parties, and, even if there is complete diversity between
the parties, the amount-in-controversy requirement cannot be satisfied because this
is a dispossessory action. The Court must look only to Plaintiff’s claim to
determine if the amount-in-controversy requirement is satisfied. See, e.g.,
Novastar Mortg. Inc. v. Bennett, 173 F. Supp. 2d 1358, 1361 (N.D. Ga. 2001),

8

aff’d, 35 F. App’x 585 (11th Cir. 2002). “[A] claim seeking only ejectment in a
dispossessory action cannot be reduced to a monetary sum for the purposes of
determining the amount in controversy.” Citimortgage, Inc. v. Dhinoja, 705
F. Supp. 2d 1378, 1382 (N.D. Ga. 2010); Fed. Home Loan Mortg. Corp. v.
Williams, Nos. 1:07-cv-2864-RWS, 1:07-cv-2865-RWS, 2008 WL 115096, at *2
(N.D. Ga. Jan 29, 2008) (“[A] dispossessory proceeding under Georgia law is not
an ownership dispute, but rather only a dispute over the limited right to possession,
title to property is not at issue and, accordingly, the removing Defendant may not
rely on the value of the property as a whole to satisfy the amount in controversy
requirement.”). The amount-in-controversy requirement is not satisfied and
removal is not proper based on diversity of citizenship.
Because the Court lacks both federal question and diversity jurisdiction, this
action is required to be remanded to the Superior Court of Gwinnett County,
Georgia. See 28 U.S.C. § 1447(c) (“If at any time before final judgment it appears
that the district court lacks subject matter jurisdiction, the case shall be
remanded.”).5, 6 Because this action is required to be remanded, Defendant’s
5

Even if subject matter jurisdiction existed, the Court lacks jurisdiction under
the Rooker-Feldman doctrine to grant Defendant the relief she seeks—an order
finding that the completed Dispossessory Action was wrongful and overturning the
Writ of Possession issued by the state court. Federal district courts “generally lack
jurisdiction to review a final state court decision.” Doe v. Fla. Bar, 630 F.3d 1336,
9

Emergency Motion to Stay State Court Proceedings pending resolution of whether
the Court has subject matter jurisdiction, is denied.
III.

CONCLUSION
For the foregoing reasons,
IT IS HEREBY ORDERED that Magistrate Judge Walter E. Johnson’s

Report and Recommendation [3], and Defendant Objections [8] to the R&R, are
deemed MOOT.
IT IS FURTHER ORDERED that this action is REMANDED to the
Superior Court of Gwinnett County, Georgia.

1341 (11th Cir. 2011) (citing D.C. Court of Appeals v. Feldman, 460 U.S. 462
(1983) & Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923)).
6
The Court also notes that, even if it had subject matter jurisdiction,
Defendant cannot challenge the foreclosure sale of her Property based on perceived
defects in the assignment of her mortgage, and her assertions based on
“robo-signing” have been repeatedly rejected. See Montgomery v. Bank of Am.,
740 S.E.2d 434, 436 (Ga. Ct. App. 2013) (because assignment of security deed was
contractual, plaintiff lacked standing to contest its validity because he was not a
party to the assignment) (citing O.C.G.A. § 9-2-20(a), which provides that an
action based on a contract can be brought only by a party to the contract); Edward
v. BAC Home Loans Serv., L.P., 534 F. App’x 888, 891 (11th Cir. 2013) (citing
Montgomery); Wilson v. JP Morgan Chase Bank, N.A., No. 2:11-cv-00135-RWS,
2012 WL 603595, at *4 (N.D. Ga. Feb. 24, 2012) (rejecting argument that
assignment is “fraudulent” because it was executed by a known robo-signer);
Sutton v. Bank of Am., N.A., 2012 WL 2394533, at *5 (N.D. Ga. April 11, 2012)
(claim that signatures were fraudulent “is unsupported by facts sufficient under
Rule 8(a), and plaintiff has cited no legal authority for the proposition that the
assignment is somehow ineffective because of the allegiances or professional
responsibilities of the individuals who signed it”).
10

IT IS FURTHER ORDERED that Defendant’s Emergency Motion to Stay
State Court Proceedings [10] is DENIED.

SO ORDERED this 7th day of April, 2015.

_______________________________
WILLIAM S. DUFFEY, JR.
UNITED STATES DISTRICT JUDGE

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