Pollard et al v. Citifinancial Mortgage Company, Inc. et al
MEMORANDUM OPINION re 44 Order on Motion to Remand to State Court. Signed by District Judge Sharion Aycock on 2/3/2017. (psk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
HOWARD DEWAYNE POLLARD and
BETTY JANE POLLARD
CAUSE NO.: 1:16CV073-SA-DAS
CITIFINANCIAL MORTGAGE COMPANY, INC.,
CALIBER HOME LOANS, INC., FIDELITY NATIONAL
LOANS, INC., JOHN DOES 1-10, and HSBC
MORTGAGE SERVICES, INC.
Defendants Citifinancial Mortgage Company, Inc., HSBC Mortgage Services, Inc., and
Caliber Home Loans, Inc., (“the Removing Defendants”) removed this case from the Prentiss
County Chancery Court on April 29, 2016. Plaintiffs Howard Dewayne Pollard and Betty Jane
Pollard timely filed this Motion to Remand to State Court  on the basis that Fidelity National
Loans, Inc., is a non-diverse defendant as it is considered a citizen of Mississippi, same as
Plaintiffs. The Removing Defendants insist that Fidelity National Loans, Inc., is improperly
joined, thus making jurisdiction in this Court appropriate.
Factual and Procedural Background
Plaintiffs contend that they borrowed $37,500 from Fidelity to build an addition onto
their home in 1998. Unbeknownst to Plaintiff, however, Fidelity recorded the loan to be for
$246,932.68 in 2000. Some months later the debt was reduced to $79,685.58.
refinanced in 2003, with Citifinancial being paid $81,880.01. Plaintiffs claim the loan is now
owned by Caliber for an amount approximately three times what the initial loan was for – over
$100,000. Caliber sought to foreclose Plaintiffs’ home in March of 2016.
Plaintiffs bring this suit alleging fraudulent misrepresentations by Fidelity as to the
amount of money Plaintiffs are indebted. They assert the fraudulent loan balance was concealed
from Plaintiffs until after Caliber attempted to foreclose on the property in question. Plaintiffs
also assert a claim for fraudulent inducement for misleadingly instructing Plaintiffs to sign
refinancing paperwork in order to keep their home. Their third claim is for fraudulent
concealment based on their assertion that Fidelity kept the initial paperwork thereby concealing
that they were holding a loan for more than they should. Plaintiffs further claim the Defendants
were negligent, unjustly enriched, and negligently or intentionally inflicted emotional distress.
Plaintiffs seek to quiet and confirm title due to the fraud allegedly perpetuated on Plaintiffs.
Removing Defendants seek dismissal of Fidelity as a defendant under the theory that
Fidelity was improperly joined as the statute of limitations against that entity has expired.
Improper Joinder Standard
“[F]ederal courts are courts of limited jurisdiction, having only the authority endowed by
the Constitution and that conferred by Congress.” Halmekangas v. State Farm, 603 F.3d 290,
292 (5th Cir. 2010) (citation and quotation marks omitted). District courts have original
jurisdiction over civil actions where the amount in controversy exceeds $75,000, exclusive of
costs and interest, and the matter is between citizens of different states. Cuevas v. BAC Home
Loans Servicing, LP, 648 F.3d 242, 248 (5th Cir. 2011) (citing 28 U.S.C. § 1332). “[A]ny civil
action brought in a State court of which the district courts of the United States have original
jurisdiction, may be removed . . . to the district court of the United States for the district and
division embracing the place where such action is pending.” 28 U.S.C. § 1441(a).
However, “because removal raises significant federalism concerns, the removal statute is
strictly construed and any doubt as to the propriety of removal should be resolved in favor of
remand.” Church v. Nationwide Ins. Co., No. 3:10-cv-636, 2011 WL 2112416, at *2 (S.D. Miss.
May 26, 2011) (quoting Guiterrez v. Flores, 543 F.3d 248, 251 (5th Cir. 2008)); see Williams v.
Brown, No. 3:11-cv-273, 2011 WL 3290394, *3 (S.D. Miss. July 28, 2011) (“Doubts about
whether federal jurisdiction exists following removal must be resolved against finding
jurisdiction.”). Defendants are entitled to remove to a federal forum unless an in-state defendant
has been properly joined. Smallwood v. Illinois Cen. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004).
Where the Court finds that a defendant has been improperly joined, it “may disregard the
citizenship of that defendant [for diversity purposes], dismiss the non-diverse defendant from the
case, and exercise subject matter jurisdiction over the remaining diverse defendant.” Flagg v.
Stryker Corp. 819 F.3d 132, 136 (5th Cir. 2016) (citation omitted).
To establish a claim for improper joinder, the party seeking removal must demonstrate
either “(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to
establish a cause of action against the non-diverse party in state court.” Travis v. Irby, 326 F.3d
644, 647 (5th Cir. 2003) (citing Griggs v. State Farm Lloyds, 181 F.3d 694, 699 (5th Cir. 1999)).
At issue here is the second prong, wherein the court must evaluate “whether the defendant has
demonstrated that there is no possibility of recovery by the plaintiff against an in-state defendant,
which stated differently means that there is no reasonable basis for the district court to predict
that the plaintiff might be able to recover against an in-state defendant.” McDonal, 408 F.3d
at183 (quoting Smallwood, 385 F.3d at 573). “If no reasonable basis of recovery exists, a
conclusion can be drawn that the plaintiff’s decision to join the local defendant was indeed
fraudulent, unless that showing compels dismissal of all defendants.” Id.
Improper joinder issues are ordinarily resolved by conducting a Rule 12(b)(6)-type
analysis. Alternatively, at its discretion and in “hopefully few” cases, the court may opt to pierce
the pleadings and conduct a summary inquiry where the plaintiff has stated a claim, but omitted
or misstated discrete facts. McDonal, 408 F.3d at 183; see also Boone v. Citigroup Inc., 416 F.3d
382, 388 (5th Cir. 2005) (“A motion to remand is normally analyzed with reference to the wellpleaded allegations of the complaint, which is read leniently in favor of remand under a standard
similar to Rule 12(b)(6)”).
In the present case, the Court finds no justification for converting the inquiry into a
summary review and therefore analyzes the Plaintiffs’ complaint under the more lenient Rule
12(b)(6) framework. Smallwood, 385 F.3d at 574 (noting that the court’s inquiry at this stage
should be guided by “simple and quick exposure of the chances of the claim against the in-state
defendant”). Thus, the Court asks whether there is any reasonable, opposed to merely theoretical,
basis to predict that state law might impose liability on the facts involved. Travis v. Irby, 326
F.3d 644, 649 (5th Cir. 2003); Smith, 278 F. App’x at 379.
A plaintiff fails to state a claim for relief under Rule 12(b)(6) when the complaint does
not contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). Such analysis must be
done in the context of Rule 8’s notice pleading standard, which requires only “a short and plain
statement of the claim showing that the pleader is entitled to relief in order to ‘give defendant
fair notice of what the . . . claim is and the grounds upon which it rests.’” Twombly, 550 U.S. at
554–55, 127 S. Ct. 1955 (quoting FED. R. CIV. P. 8). “Ordinarily, if a plaintiff can survive a Rule
12(b)(6) challenge, there is no improper joinder.” Smallwood, 385 F.3d at 573. “As a practical
matter, the negative corollary of this statement will often hold true: if a plaintiff’s claims against
in-state defendants cannot survive a Rule 12(b)(6) analysis, the finding of improper joinder
follows.” Druker v. Fortis Health, Civil Action No. 5:06–cv–00052, 2007 WL 38322, *7 (S.D.
Tex. Jan. 4, 2007); Powell v. Target Corp., Civil Action No. 3:16cv127-CWR-LRA, 2016 WL
4573974, *3 (S.D. Miss. Sept. 1, 2016). “After all disputed questions of fact and all ambiguity in
the controlling state law are resolved in favor of the non-removing party, the court determines
whether that party has any possibility of recovery against the party whose joinder is questioned.”
Kling Realty Co. Inc. v. Chevron USA Inc., 306 F. App’x 24, 27 (5th Cir. 2008) (quoting
Carriere v. Sears Roebuck & Co., 893 F.2d 98, 100 (5th Cir. 1990)).
Discussion and Analysis
The Removing Defendants insist that the claims against Fidelity are time-barred by the
applicable statute of limitations. Plaintiffs counters that they are protected by statutory equitable
tolling under Mississippi Code Section 15-1-67. Plaintiffs claim that this Court’s inquiry into
equitable tolling would require a merits-based determination, which Smallwood prohibits.
Plaintiffs’ Complaint alleges that Fidelity maintained all paperwork regarding the initial loan
with Plaintiffs even though Plaintiffs requested that documentation from Fidelity. Therefore,
Plaintiffs assert that the statute of limitations should be equitably tolled due to Fidelity’s
fraudulent concealment. The Removing Defendants counter by arguing that the Plaintiffs’
recitation of their loan history is erroneous.
Because issues of fact must be resolved in the non-removing parties favor, Cuevas, 648
F.3d at 249, the Court finds that Plaintiffs’ claims against Fidelity may be equitably tolled, and
as such, are plausible claims. Accordingly, Fidelity was not improperly joined, and there is no
diversity. This Court, therefore, has no jurisdiction, and the case is remanded back to the
Prentiss County Chancery Court.
Plaintiffs have additionally requested attorneys’ fees to compensate them for fees
incurred to respond to the removal. The decision to grant or deny attorney’s fees is within the
discretion of the court and an award of such fees and costs is not automatic under 28 U.S.C. §
1447(c). Valdes v. Wal–Mart Stores, Inc., 199 F.3d 290, 292 (5th Cir. 2000). The Fifth Circuit
has stated that attorney’s fees “should only be awarded if the removing defendant lacked
‘objectively reasonable grounds to believe the removal was legally improper.’” Hornbuckle v.
State Farm Lloyds, 385 F.3d 538 (5th Cir. 2004) (citing Valdes, 199 F.3d at 293). Because there
was an objectively reasonable basis for seeking removal, Plaintiffs’ request for attorney’s fees is
SO ORDERED, this the 3rd day of February, 2017.
/s/ Sharion Aycock_________
U.S. DISTRICT JUDGE
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