Strangis v. First Horizon Bank

Filing 48

Judge Patti B. Saris: MEMORANDUM AND ORDER entered. Strangis's motion to remand (Dkt. 10 ) is ALLOWED as to the request to remand the case and DENIED as to the request for attorney's fees and costs. This case is REMANDED to the Massachusetts Land Court. First Horizon's motion to dismiss (Dkt. 16 ) is DENIED as moot.(Geraldino-Karasek, Clarilde)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
___________________________________
)
ALEXANDER STRANGIS,
)
)
Plaintiff,
)
)
Civil Action
v.
)
No. 24-cv-10343-PBS
)
FIRST HORIZON BANK f/k/a First
)
Tennessee Bank National
)
Association f/k/a First Horizon
)
Home Loan Corporation,
)
)
Defendant.
)
)
MEMORANDUM AND ORDER
November 22, 2024
Saris, D.J.
INTRODUCTION
Plaintiff Alexander Strangis brings this lawsuit to challenge
the foreclosure on his home by Defendant First Horizon Bank (“First
Horizon”).
postpone

Strangis

the

alleges

foreclosure

that

auction

First
and

Horizon

give

him

promised

notice

of

to
the

rescheduled date but then held the auction without providing him
with the promised notice. After Strangis filed this lawsuit in the
Massachusetts Land Court, First Horizon removed it to federal court
on the basis of diversity jurisdiction. Strangis now moves to
remand the case, arguing that First Horizon has not proven that
the amount-in-controversy requirement is satisfied.
1

After hearing, the Court ALLOWS Strangis’s motion to remand
(Dkt. 10) as to the request to remand the case and DENIES the
motion as to the request for attorney’s fees and costs. The Court
DENIES First Horizon’s motion to dismiss (Dkt. 16) as moot.
BACKGROUND
The following background is taken from the allegations in
Strangis’s complaint. In May 2005, Strangis took out a $250,000
home equity line of credit with a predecessor of First Horizon.
The line of credit was secured by a mortgage on Strangis’s home in
Brockton, Massachusetts. Strangis started to fall behind on his
loan payments in 2015.
Strangis

eventually

received

notice

that

a

foreclosure

auction was scheduled for February 8, 2021. At the time, Strangis
was

seeking

a

means

to

pay

off

the

loan

and

was

exploring

reorganizing his debt via bankruptcy. He informed First Horizon of
his efforts to avoid foreclosure, and First Horizon agreed to
reschedule the auction for April 9, 2021. As Strangis continued to
try to avoid foreclosure, his attorney negotiated a further 30day

postponement

of

the

auction.

First

Horizon’s

counsel

acknowledged the postponement in an email and promised to follow
up with a rescheduled date. Yet Strangis never received notice of
either a new date for the auction or a foreclosure sale. He
therefore believed that First Horizon had chosen not to reschedule
the auction.
2

Years later, a real estate agent approached Strangis on behalf
of First Horizon to propose a “cash for keys” agreement for his
home. After inquiring, Strangis learned that, despite the promise
of

a

second

postponement

by

First

Horizon’s

counsel,

the

foreclosure auction did in fact go forward in April 2021 and that
First Horizon purchased the property after other higher bidders
failed to perform.
On January 10, 2024, Strangis filed suit against First Horizon
in the Massachusetts Land Court. His amended complaint asserts ten
causes of action that he characterizes as seeking “virtually the
same relief -- an Order from the Court that the foreclosure that
occurred on [his] property be deemed VOID.” Dkt. 11 at 7.
First Horizon removed the case to federal court on the basis
of diversity jurisdiction. In its notice of removal, First Horizon
asserted that the amount in controversy is either the appraised
value of the property ($322,100) or the face value of the mortgage
loan ($250,000). Strangis then moved to remand the case to state
court, arguing that his lawsuit does not satisfy the amount-incontroversy requirement.
LEGAL STANDARD
A defendant generally may remove to federal court “any civil
action brought in a State court of which the district courts of
the

United

States

have

original

jurisdiction.”

28

U.S.C.

§ 1441(a). The removing party bears the burden of demonstrating
3

federal subject matter jurisdiction over the case. See Amoche v.
Guar. Tr. Life Ins. Co., 556 F.3d 41, 48 (1st Cir. 2009). Because
removal

statutes

are

construed

“strictly

and

against

removal[,] . . . if federal jurisdiction is doubtful, a federal
court must remand to state court.” Rhode Island v. Shell Oil Prods.
Co., 35 F.4th 44, 52 (1st Cir. 2022).
Federal district courts have original jurisdiction over civil
actions “when the amount in controversy exceeds $75,000 and the
parties are completely diverse.” Berkley Nat’l Ins. Co. v. Atl.Newport Realty LLC, 93 F.4th 543, 548 (1st Cir. 2024); see 28
U.S.C. § 1332(a). When, as here, “the plaintiff’s complaint does
not state the amount in controversy, the defendant’s notice of
removal may do so.” Dart Cherokee Basin Operating Co. v. Owens,
574 U.S. 81, 84 (2014) (citing 28 U.S.C. § 1446(c)(2)(A)). If the
“defendant’s

assertion

of

the

amount

in

controversy

is

challenged,” the court must “decide[], by a preponderance of the
evidence, whether the amount-in-controversy requirement has been
satisfied.” Id. at 88; see 28 U.S.C. § 1446(c)(2)(B).
DISCUSSION
There

is

no

dispute

that

the

parties

to

this

suit

are

completely diverse. Strangis is domiciled in Massachusetts and is
therefore a citizen of that state. See BRT Mgmt. LLC v. Malden
Storage LLC, 68 F.4th 691, 695 (1st Cir. 2023). First Horizon, a

4

corporation, is a citizen of Tennessee because it is incorporated
and has its principal place of business there. See id. at 696.
The parties disagree, however, over whether the amount in
controversy in this suit exceeds $75,000. First Horizon argues
that the amount in controversy is either the appraised value of
the property ($322,100) or the face value of the mortgage loan
($250,000) because Strangis seeks both to enjoin its ability to
foreclose and to quiet title to the property. Strangis disputes
that either figure is an apt measure of the amount in controversy,
as, in his view, he does not challenge First Horizon’s general
right to foreclose or the validity of the mortgage. He asserts
that he is instead challenging the validity of the particular
foreclosure sale that occurred without the notice that First
Horizon allegedly promised him.
When a plaintiff seeks declaratory or injunctive relief, “the
amount in controversy is measured by the value of the object of
the litigation.” Hunt v. Wash. State Apple Advert. Comm’n, 432
U.S. 333, 347 (1977); see Mojtabai v. Mojtabai, 4 F.4th 77, 84
(1st Cir. 2021). This value includes “the judgment’s pecuniary
consequences to those involved in the litigation.” Richard C. Young
& Co. v. Leventhal, 389 F.3d 1, 3 (1st Cir. 2004).
“[W]here a complaint seeks to invalidate a loan secured by a
deed of trust,” courts normally use the face value of the mortgage
loan, the unpaid balance on the loan, or the fair market value of
5

the property to measure the amount in controversy. McKenna v. Wells
Fargo

Bank,

N.A.,

693

F.3d

207,

212

&

n.4

(1st

Cir.

2012)

(acknowledging the advantages of the face-value-of-the-loan rule
but declining to decide among these options). These measures also
apply in cases where “a plaintiff seeks to quiet title to a
property

or

permanently

enjoin

foreclosure.”

Corral v.

Select

Portfolio Servicing, Inc., 878 F.3d 770, 776 (9th Cir. 2017); see
Andrews v. HSBC Bank USA, N.A., 264 F. Supp. 3d 346, 349 (D. Mass.
2017) (using the face value of the loan where “the allegations in
the complaint [went] to the essence of the validity of the mortgage
and [the mortgagee’s] right to foreclose”); Larace v. Wells Fargo
Bank, N.A., 972 F. Supp. 2d 147, 151 (D. Mass. 2013) (same where
“Defendants’ mortgage interest would be extinguished if Plaintiffs
were ultimately successful”). In such cases, “it is the property
itself that is the object of the litigation.” Farkas v. GMAC
Mortg., LLC, 737 F.3d 338, 341 (5th Cir. 2013) (per curiam); see
Corral, 878 F.3d at 776. By contrast, courts decline to treat the
face value of the loan or the fair market value of the property as
the

amount

in

controversy

when

the

plaintiff

seeks

only

to

temporarily enjoin foreclosure and “would not be able to retain
possession and ownership of [his] [p]roperty without paying off

6

[his] debt.” Corral, 878 F.3d at 776; see Hernandez v. US Bank,
N.A., 318 F. Supp. 3d 558, 559-60 (D.R.I. 2018).
The object of this lawsuit is not full title to Strangis’s
home or the full value of the mortgage loan. The crux of the
complaint alleges that First Horizon held a foreclosure auction on
Strangis’s

home

without

giving

him

notice

of

the

auction

as

promised. Strangis seeks an order “that due to lack of notice, the
foreclosure that [First Horizon] attempted to complete is void and
of no effect.” Dkt. 11 at 9. These allegations do not concern the
validity of the mortgage loan, First Horizon’s general right to
foreclose,

or

its

interest

in

the

property

in

its

entirety.

Although the complaint muddies the waters by requesting certain
forms of relief that imply the mortgage’s invalidity, Dkt. 1-9 at
15 (seeking a “Permanent Injunction prohibiting [First Horizon]
from continuing any foreclosure” and an order “[q]uiet[ing] title
to the Property” in Strangis’s favor), Strangis disavowed any such
reading of his complaint in his motion to remand and at the hearing
on

the

motion.

Thus,

the

proper

measure

of

the

amount

in

controversy in this suit is not the face value of Strangis’s
mortgage loan or the fair market value of his home.
In Hernandez, the district court addressed a motion to remand
under

analogous

circumstances.

As

here,

the

plaintiffs

in

Hernandez sought to rescind an allegedly faulty foreclosure sale
but did not challenge the validity of the mortgage or the note or
7

the mortgagee’s general ability to foreclose. See 318 F. Supp. 3d
at 559. The court rejected the defendants’ argument that the amount
in controversy was the face value of the mortgage loan or the value
of the property. See id. at 559, 561. The court explained that the
plaintiffs simply “ask[ed] . . . to return the parties to the
positions they occupied before the sale -- when [the bank and loan
servicer], as mortgagee and note-holder, held legal title to the
[p]roperty and [the plaintiffs], as mortgagors, equitable title.”
Id. at 560. And because the defendants had not endeavored to value
the restoration of the plaintiffs’ equitable title, the court
concluded that they had not shown that the amount-in-controversy
requirement for diversity jurisdiction was satisfied. See id. at
561.
The same logic applies here. Strangis would not win the value
of either the mortgage loan or the property if he were to prevail
in this lawsuit. Rather, he effectively seeks restoration of his
equitable title in the home so that he has an opportunity to pay
off the mortgage loan before a properly noticed foreclosure auction
takes

place.

First

Horizon

pecuniary

consequences

therefore

failed

to

of

meet

has

made

this

outcome.

its

burden

no

of

effort
First

to

value

the

Horizon

has

demonstrating

by

a

preponderance of the evidence that the amount in controversy
exceeds $75,000.

8

Finally, I deny Strangis’s request for attorney’s fees and
costs. 28 U.S.C. § 1447(c) authorizes a court ordering a remand to
“require payment of just costs and any actual expenses, including
attorney fees, incurred as a result of the removal.” “Absent
unusual circumstances, courts may award attorney’s fees under
§ 1447(c) only where the removing party lacked an objectively
reasonable basis for seeking removal.” Martin v. Franklin Cap.
Corp., 546 U.S. 132, 141 (2005). As previously noted, Strangis’s
complaint requests certain forms of relief -- such as a permanent
injunction against foreclosure -- that imply the invalidity of
First Horizon’s interest in the property in its entirety. Although
Strangis has since disavowed this reading of his complaint, First
Horizon could have reasonably believed that these requests for
relief put the face value of the mortgage loan or the value of the
property

at

issue

in

the

litigation.

First

Horizon

had

an

objectively reasonable basis for removing this lawsuit, so an award
of attorney’s fees and costs is not warranted.
ORDER
Accordingly, Strangis’s motion to remand (Dkt. 10) is ALLOWED
as to the request to remand the case and DENIED as to the request
for attorney’s fees and costs. This case is REMANDED to the
Massachusetts Land Court. First Horizon’s motion to dismiss (Dkt.
16) is DENIED as moot.

9

SO ORDERED.
/s/ PATTI B. SARIS
Hon. Patti B. Saris
United States District Judge

10