Walker v. Caliber Home Loans, Inc. et al
Filing
8
OPINION and ORDER DIRECTING that this action is REMANDED to the Superior Court of Gwinnett County, Georgia. Signed by Judge William S. Duffey, Jr. on 6/13/2016. (bdb)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
ROBERT WALKER,
Plaintiff,
v.
1:15-cv-4383-WSD
BARRETT DAFFIN FRAPPIER
LEVINE & BLOCK, LLP,
CALIBER HOME LOANS, INC.,
U.S. BANK, N.A., AS TRUSTEE
FOR LSF8 MASTER
PARTICIPATION TRUST,
Defendants.
OPINION AND ORDER
This matter is before the Court on U.S. Bank, N.A., as Trustee for LSF8
Master Participation Trust (“U.S. Bank”) and Caliber Home Loans, Inc.’s
(“Caliber”) (together, “Removing Defendants”) Notice of Removal [1].
I.
BACKGROUND
On October 30, 2015, Plaintiff Robert Walker (“Plaintiff”), a citizen of
Georgia, filed his Complaint [5.1] in the Superior Court of Gwinnett County,
Georgia.1 On November 12, 2015, Plaintiff filed his “Motion to Amend Statement
of Claim” (“Amended Complaint”) to add additional information he omitted from
his Complaint. (Am. Compl. [1.1 at 3-19]). In his Amended Complaint, Plaintiff
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No. 15-A-11186-2.
asserts the following state-law claims against the Removing Defendants and
Barrett Daffin Frappier Levine & Bock, LLP (“Barrett Daffin”), a Georgia law
firm: “attempted illegal foreclosure,” “attempted illegal sale of residential
property,” gross negligence, and punitive damages. Plaintiff’s claims are based on
his mortgage servicer’s alleged failure to properly apply Plaintiff’s mortgage
payments and claimed defects in the foreclosure proceedings initiated by
Defendants. Plaintiff seeks compensatory damages in the amount of $499,999.99,
punitive damages in the same amount, and injunctive relief.
On December 16, 2015, the Removing Defendants removed the Gwinnett
County action to this Court based on diversity jurisdiction. (Notice of Removal
[1]).2 The Removing Defendants assert that complete diversity exists among the
parties because Barrett Daffin, the only in-state defendant, was fraudulently joined
to defeat federal subject matter jurisdiction.
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To the extent the Removing Defendants argue that this Court has subject
matter jurisdiction based on the existence of a federal question, Plaintiff’s mere
reference to federal laws in his “Motion for Temporary Restraining Order and/or
Preliminary Injunction” is not sufficient to establish federal question jurisdiction.
Although Plaintiff references generally violations of the Fair Debt Collection
Practices Act, the Due Process Clause and the Constitution, Plaintiff fails to allege
any facts to support these assertions. (See [1.1] at 13, 15). This action is based on
Defendants’ allegedly wrongful foreclosure of Plaintiff’s home. Despite Plaintiff’s
citations to federal laws, Plaintiff has not asserted a claim arising under federal
law, and the Court’s subject matter jurisdiction over this case cannot be based on
federal question jurisdiction.
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II.
DISCUSSION
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
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 Amended 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
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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 Barrett Daffin, even though it shares Georgia citizenship
with Plaintiff, was fraudulently joined to defeat federal subject matter jurisdiction
because “Plaintiff’s cause of action to enjoin foreclosure proceedings only pertains
to the Lender, U.S. Bank, and potentially Caliber, as the Loan Servicer,” and “there
are no allegations that Barrett Daffin ever serviced or owned Plaintiff’s loan or
owed Plaintiff any third-party duties.” (Notice of Removal at 10).
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.
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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
Barrett Daffin because “Barrett Daffin operates primarily as a foreclosure law
firm” and “at most, only occupies an auxiliary role and violated no duty to the
Plaintiff.” (Notice of Removal at 9, 10). 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.”).
To the extent the Removing Defendants argue that Barrett Daffin was
fraudulently joined because Plaintiff’s Amended Complaint does not allege a
separate claim against Barrett Daffin and generally does not 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
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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 viable claim against Barrett Daffin. Complete
diversity does not exist among the parties and the Court lacks subject matter
jurisdiction over Plaintiff’s Amended Complaint. This action is required to be
remanded to the Superior Court of Gwinnett 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 Gwinnett County, Georgia.
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SO ORDERED this 13th day of June, 2016.
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