Scheuermann et al v. Ocwen Loan Servicing, LLC

Filing 27

ORDER and REASONS re: 11 Motion to Remand to State Court; 12 Motion to Dismiss for Failure to State a Claim. ORDERED that Plaintiffs Motion to Remand is GRANTED. Because this court lacks jurisdiction, Defendants Motion to Dismiss is DENIED as moot. Signed by Judge Eldon E. Fallon on 11/6/14. (cc: 24th JDC with remand letter)(plh)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

DAVID H. SCHEUERMANN, JR. AND
MARTINA T. SCHEUERMANN
VERSUS
OCWEN

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CIVIL ACTION

NUMBER: 14-1658
SECTION “L”

ORDER & REASONS
Before the Court is Plaintiffs’ Motion to Remand to State Court (Rec. Doc. 11) and
Defendant’s Motion to Dismiss the Complaint Pursuant to Rule 12(b)(6). (Rec. Doc. 12). The
Court has reviewed the briefs and the applicable law and now issues this Order & Reasons.
I. BACKGROUND
This case concerns a dispute over the mortgage and mortgage note affecting the piece of
property at 1 Monte Carlo Drive, Kenner, Louisiana 70065. The Plaintiffs in the case are David
Scheuermann, Jr. and Martina Scheuermann. The property was originally purchased by
Marguerite Links Scheuermann and David H. Scheuermann, Sr., parents of Plaintiff David
Scheuermann, Jr., in 1986. On the same day the property was originally purchased and before the
same notary, Plaintiff’s parents conveyed a one-half interest in the property via an Act of Sale
and Assumption, wherein they also assumed one-half of the debt on the promissory note secured
by a mortgage on the property. The Plaintiffs ultimately acquired full interest in the property via
a quitclaim from Marguerite Scheuermann following the death of David Scheuermann, Sr. Both
of the senior Scheuermanns are now deceased.
The note was originally held by First Federal Savings Bank of New Orleans. It was
subsequently transferred to Defendant Ocwen Loan Servicing, LLC. Ocwen contends that the

Act of Sale and Assumption violated the terms of the original mortgage agreement, as it was
done without the prior written consent of the Lender.
Plaintiffs filed this suit in the 24th Judicial district Court for the Parish of Jefferson on
June 10, 2014, seeking a declaratory judgment recognizing the validity of the Act of Sale and
Assumption, recognizing them as the primary obligors on the note. Defendant removed the case
to this Court on the basis of diversity on July 18, 2014.
II. MOTION TO REMAND
In their Motion to Remand, Plaintiffs content that diversity jurisdiction does not exist
under 28 U.S.C. §1332 because the $75,000 amount in controversy requirement is not met. They
first contend that there is no amount in controversy, as they are seeking declaratory relief, not a
money judgment. (Rec. Doc. 11-2). Alternatively, they argue that the amount in controversy
should be measured by the outstanding balance of the loan, which is approximately $21,930.92.
Defendants respond, alleging that the amount in controversy should be determined based
on the value of the property because the Plaintiffs ask for a declaratory judgment recognizing the
validity of the Act of Sale and Assumption. (Rec. Doc. 19). Because the property is valued at
$221,300, it argues that the amount in controversy is satisfied.
III. LAW AND ARGUMENT
28 U.S.C. § 1441 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 of the United States for the district and division embracing
the place where such action is pending.” Accordingly, a defendant may remove a case to federal
court if the federal court would have had original jurisdiction over the action. “Federal courts
are courts of limited jurisdiction,” possessing “only that power authorized by Constitution and

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statute.” Gunn v. Minton, 133 S.Ct. 1059, 1064 (2013). The Fifth Circuit has explained that the
removal statute should be strictly construed. Manguno v. Prudential Prop. & Cas. Ins. Co., 276
F.3d 720, 723 (5th Cir. 2002). Any doubt concerning the basis of jurisdiction should be resolved
in favor of remand. Acuna v. Brown & Root, 200 F.3d 335, 339 (5th Cir. 2000). Once a motion
to remand has been filed, the burden is on the defendant to prove, by a preponderance of the
evidence, that federal jurisdiction exists. De Aguilar v. Boeing Co., 47 F.3d 1404, 1412 (5th Cir.
1995).
Original federal diversity jurisdiction exists “where the matter in controversy exceeds the
sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different
States.” 28 U.S.C. § 1332(a). Here, the parties dispute whether the amount in controversy
requirement is met. When the relief requested is a declaratory judgment, the appropriate measure
of the amount in controversy is the object that is subject of the litigation. Farkas v. GMAC
Mortgage, L.L.C., 737 F.3d 338, 341 (5th Cir. 2013). Defendant attempts to argue that the
amount in controversy should be measured by the value of the property; however, this argument
fails. The Court is not convinced that the ownership of the underlying property is in fact in
dispute, as the original owners are deceased and the Plaintiffs are listed as the owners of the
property in the Jefferson Parish records. The Defendant does not itself assert any ownership
interest in the property, and the Plaintiffs do not dispute that the Defendant is the present holder
of the mortgage and note. Moreover, under the terms of the original Mortgage agreement, the
Defendant’s relief in the case of an unapproved transfer is acceleration of the note. (Rec. Doc.
12-3 at 6). It does not, however, have the power to stop or unwind the transfer of the property.
The Court is therefore convinced that the relief requested by the Plaintiffs is recognition as
primary obligors on the loan, and obligation they claim to have incurred as part of the Act of

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Sale and Assumption. At most, the amount in controversy is $21,930.92. Because the value of
the loan is currently less than the jurisdictional requirement, the Court is without jurisdiction in
this matter.
IV. CONCLUSION
For the foregoing reasons, IT IS ORDERED that Plaintiffs’ Motion to Remand is
GRANTED. Because this court lacks jurisdiction, Defendant’s Motion to Dismiss is DENIED as
moot.

New Orleans, Louisiana, this 6th day of November, 2014.
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UNITED STATES DISTRICT JUDGE

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