Estate of Jerry Malloy, Deceased v. PNC Bank, Successor to Commonwealth United Mortgage a Division of National City Bank of Indiana et al

Filing 20

ORDER denying 14 Motion to Remand and cancelling hearing. Signed by District Judge Nancy G. Edmunds. (CHem)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

ESTATE OF JERRY MALLOY, ET AL,
Case No. 11-12922
Plaintiffs,
Honorable Nancy G. Edmunds
v.
PNC BANK, ET AL,
Defendants.
/

ORDER DENYING PLAINTIFFS’ MOTION TO REMAND [14] AND CANCELLING
HEARING SCHEDULED FOR OCTOBER 19, 2011

This matter comes before the Court on Plaintiffs’ motion to remand, arguing that this
Court lacks subject matter jurisdiction because the only federal claim in Plaintiffs’ original
complaint is omitted from its amended complaint. Plaintiffs further assert that remand is
proper because Defendant Trott & Trott, P.C. is a Michigan citizen and thus diversity
jurisdiction cannot be established. See 28 U.S.C. § 1447(c)1, 28 U.S.C. § 1367(c).
Defendants PNC Bank and U.S. Bank National Association oppose Plaintiffs’ motion. They
argue that federal question jurisdiction existed at the time of removal and, despite the
omission of the sole federal claim from Plaintiffs' amended complaint, diversity jurisdiction
now exists because Defendant Trott & Trott, P.C. is fraudulently joined.

1

Section 1447(c) provides, in pertinent part, that:
If 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) (emphasis added).

The Court finds that the facts and legal arguments are adequately presented in the
parties’ pleadings and that the decision process would not be significantly aided by oral
argument. Therefore, pursuant to Eastern District of Michigan Local Rule 7.1(f)(2), it is
hereby ORDERED that this motion will be resolved as submitted, and the hearing
previously scheduled for October 19, 2011 is hereby CANCELLED.
The issue presented here is whether Defendants can defeat a motion to remand
when, after removal on grounds of subject matter jurisdiction, Plaintiffs have amended their
complaint and eliminated the sole federal claim and the only claim that arguably stated a
cause of action against the only non-diverse Defendant. The answer is yes. Plaintiffs’
motion to remand is DENIED. Because Defendant Trott & Trott, P.C. was fraudulently
joined in Plaintiffs' amended complaint, diversity jurisdiction exists.
I.

Analysis
It is Defendants' burden, as the removing party, "to present sufficient evidence" that

Plaintiffs "could not have established a cause of action" against Trott & Trott, P.C., the nondiverse Defendant "under state law." Coyne v. Am. Tobacco Co., 183 F.3d 488, 493 (6th
Cir. 1999). Defendants have met their burden here. This case involves a mortgage-related
dispute arising from a foreclosure by advertisement of Plaintiffs' real property. Defendants
present evidence establishing that Trott & Trott is a professional corporation of attorneys
that acted as counsel at the direction of its client, BAC Home Loan Servicing, L.P. ("BAC"),
the servicing agent on the challenged mortgage/note. Trott & Trott did not lend Plaintiffs
money, it is not the servicer of Plaintiffs' loan, and it did not make the decisions that led to
the commencement of the foreclosure that Plaintiffs challenge in this lawsuit. It did not take
any independent actions on which the propriety of the foreclosure will be determined for
2

purposes of adjudicating Plaintiffs' claims. There are no allegations in Plaintiffs' amended
complaint that Trott & Trott acted in any capacity other than as an agent for BAC.
Because Plaintiffs' state-law causes of action, if any, are against the principal, not the
agent, joinder of Trott & Trott is fraudulent and properly disregarded when determining
whether diversity jurisdiction exists. See Yuille v. Trott & Trott, P.C., No. 11-10584, at 2-3
(E.D. Mich. March 30, 2011) (Friedman, J.) (citing Casey v. Auto Owners Ins. Co., 273
Mich. App. 388, 402-403 (2006), and observing, in a similar case with similar relevant facts,
that "Trott's citizenship is properly disregarded for purposes of determining whether the
parties citizenships are diverse because Trott was fraudulently joined."). See also Edwards
v. Std. Fed. Bank, N.A., No. 08-12146, 2009 WL 92157, at **3-4 (E.D. Mich. Jan. 14, 2009)
(Cook, J.) (observing that, under Michigan law, there is no cognizable cause of action
against an adversary's counsel).
II.

Conclusion
For the above-stated reasons, Plaintiffs' motion to remand is DENIED.

s/Nancy G. Edmunds
Nancy G. Edmunds
United States District Judge
Dated: September 27, 2011
I hereby certify that a copy of the foregoing document was served upon counsel of record
on September 27, 2011, by electronic and/or ordinary mail.
s/Carol A. Hemeyer
Case Manager

3