Parker et al v. Citimortgage, Inc. et al
ORDER striking Plaintiffs' First Amended Complaint 4 ; denying Plaintiff's 5 Motion to Remand and finding as moot CitiMortgage, Inc.'s 8 Motion to Dismiss Plaintiff's First Amended Complaint. Defendant shall file its answer or other responsive pleading to the original Complaint within fourteen (14) days of the entry of this Order. Signed by District Judge Keith Starrett on May 20, 2015 (dsl)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
WILLIE E. PARKER, JR., and
LEE ANN PARKER
CIVIL ACTION NO. 2:14cv173-KS-MTP
CITIMORTGAGE, INC., et al.
MEMORANDUM OPINION AND ORDER
This matter is before the Court on the Plaintiffs Willie E. Parker, Jr. and Lee Ann
Parker’s Motion for Remand . Having considered the submissions of the parties, the
record, and the applicable law, the Court finds that the motion should be denied. The
Court also finds that the Plaintiffs’ First Amended Complaint  should be stricken. This
pleading purports to add a non-diverse Defendant, Bradley P. Jones, to the proceeding,
which would destroy subject matter jurisdiction under Title 28 U.S.C. § 1332. The Court
exercises its discretion to deny joinder of Jones pursuant to 28 U.S.C. § 1447(e) and
the balance of the factors set forth by the United States Court of Appeals for the Fifth
Circuit in Hensgens v. Deere & Co., 833 F.2d 1179, 1182 (5th Cir. 1987). In addition,
Defendant CitiMortgage, Inc.’s Motion to Dismiss Plaintiffs’ First Amended Complaint 
will be denied as moot.
On August 8, 2014, Plaintiffs filed their “Complaint seeking relief from a wrongful
foreclosure action” in the Chancery Court of Covington County, Mississippi. (Compl. [12 at ECF p. 5].) Plaintiffs name CitiMortgage, Inc. (“CitiMortgage”) and ABN AMRO
Mortgage Group, Inc. (“ABN”) as Defendants, and claim that Defendants initiated
foreclosure proceedings against certain residential property owned by the Plaintiffs in
fee simple (the “Subject Property”) in violation of law and equity. The Complaint asserts
five counts in support of liability. Although the legal grounds asserted under each count
are not entirely clear, it appears that the Complaint at least alleges wrongful foreclosure
based on the Defendants’ purported failure to provide proper notice in seeking
foreclosure and lack of legal standing to foreclose on the Subject Property. Plaintiffs
also claim that the Defendants’ foreclosure efforts have placed a cloud on their title to
the Subject Property. Plaintiffs seek a judgment voiding the Substituted Trustee’s
Deed, preliminary injunctive relief precluding any further foreclosure proceedings until
the merits of the Plaintiffs’ claims are resolved, compensatory damages, punitive
damages, and attorneys’ fees.
On October 22, 2014, CitiMortgage, individually and as successor in interest to
ABN, removed the proceeding to this Court on the basis of diversity of citizenship
jurisdiction under 28 U.S.C. § 1332. (See Notice of Removal .) The Notice of
Removal asserts that the Plaintiffs are citizens of Mississippi; that CitiMortgage was
incorporated in New York and maintains its principal place of business in Missouri; and,
that ABN was incorporated in Delaware and maintained its principal place of business in
Michigan prior to its merger with CitiMortgage in 2007. The Notice of Removal further
provides that the amount in controversy exceeds $75,000 based on the nature of the
damages sought by the Plaintiffs and the value of the Subject Property.
On November 12, 2014, Plaintiffs filed their First Amended Complaint  without
leave of court. This pleading adds a count against Bradley P. Jones. Plaintiffs claim
that “the Substituted Trustee [Jones] violated a duty owed to Parker in attempting to
strike and sell the Real Property at public outcry to CitiMortgage, Inc. and then
attempting to convey the Real Property to Federal Home Loan Mortgage Corporation by
Substitute Trustee’s Deed of December 22, 2011.” (1st Am. Compl.  at ¶ 62.)
On November 21, 2014, Plaintiffs filed their Motion for Remand . Plaintiffs
primarily seek remand on the basis that Jones is a Mississippi resident and complete
diversity of citizenship is lacking due to the presence of Jones in the lawsuit.
On November 26, 2014, CitiMortgage filed its Motion to Dismiss Plaintiffs’ First
Amended Complaint . Proceedings on the dismissal motion have been stayed
pending the Court’s ruling on the Plaintiffs’ Motion for Remand. (See Order Imposing
Stay of Proceedings .)
As a general rule, “jurisdictional facts are determined at the time of removal, and
. . . post-removal events do not affect that properly established jurisdiction.” Louisiana
v. Am. Nat’l Prop. & Cas. Co., 746 F.3d 633, 636 (5th Cir. 2014) (citations omitted). The
facts before the Court lead to the conclusion that diversity jurisdiction existed at the time
of CitiMortgage’s removal. An exercise of diversity jurisdiction under § 1332 depends
upon two basic requirements: 1) the parties must be citizens of different states; and 2)
the amount in controversy, exclusive of interest and costs, must exceed the sum or
value of $75,000. 28 U.S.C. § 1332. The first requirement is met since the Complaint,
Notice of Removal, and records on file with the Mississippi Secretary of State’s office1
evidence that the Plaintiffs are citizens of Mississippi, while CitiMortgage is a corporate
citizen of New York and Missouri and ABN was a corporate citizen of Delaware and
The Court is authorized to take judicial notice of matters of public record. See Funk
v. Stryker Corp., 631 F.3d 777, 783 (5th Cir. 2011).
Michigan prior to its merger with CitiMortgage.2 Section 1332(a)’s amount in
controversy requirement is met given: (i) Plaintiffs’ plea for punitive damages;3 (ii)
Plaintiffs’ assertion that they executed a Promissory Note in the amount of $301,500,
which was secured by a Deed of Trust encumbering the Subject Property; and (iii) the
Covington County Tax Assessor’s office appraising the value of the Subject Property in
excess of $200,000. See Farkas v. GMAC Mortgage, L.L.C., 737 F.3d 338, 341 (5th
Cir. 2013) (considering the value of property in determining the amount in controversy in
an action challenging the validity of foreclosure proceedings), cert. denied, 135 S. Ct.
281 (2014). In sum, “it is more likely than not that” CitiMortgage was authorized to
remove this case to federal court based on the existence of diversity jurisdiction under §
1332. St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 n.13 (5th Cir.
1998) (citation omitted).
A statutory exception to the above-referenced rule operates when a plaintiff
seeks to add a non-diverse defendant following removal. “If after removal the plaintiff
seeks to join additional defendants whose joinder would destroy subject matter
jurisdiction, the court may deny joinder, or permit joinder and remand the action to the
A corporation is deemed to be a citizen of the state of its incorporation and the
state where it maintains its principal place of business for purposes of diversity
jurisdiction. See 28 U.S.C. § 1332(c)(1).
“[F]ederal courts in Mississippi have consistently held that a claim for an
unspecified amount of punitive damages is deemed to exceed the federal jurisdictional
minimum.” Sun Life Assurance Co. of Can. (U.S.) v. Fairley, 485 F. Supp. 2d 731, 735
(S.D. Miss. 2007) (citing Brasell v. Unumprovident Corp., 2001 WL 1530342, at *2 (N.D.
Miss. Oct. 25, 2001)); see also Cartwright v. State Farm Mut. Auto. Ins. Co., No.
4:14cv57, 2014 WL 6959045, at *4 (N.D. Miss. Dec. 8, 2014) (citing Walker v. Scales,
No. 1:13cv227, 2014 WL 670216, at *3 (N.D. Miss. Feb. 20, 2014)).
State court.” 28 U.S.C. § 1447(e). Plaintiffs’ remand motion is primarily based on this
exception. “The addition of Jones in the First Amended Complaint destroyed this
Court’s diversity jurisdiction.” (Pls.’ Rebuttal  at ¶ 6.) However, Plaintiffs initially
look past the Court’s discretion to permit or deny joinder under § 1447(e), and contend
that the filing of their amended pleading as a matter of course pursuant to Federal Rule
of Civil Procedure 15(a)(1) necessitates remand. Plaintiffs’ reliance on Rule 15 is
unavailing. When a plaintiff files an amended pleading that would destroy the court’s
jurisdiction, “§ 1447(e) requires the court to scrutinize the attempted amendment.”
Albritton v. W.S. Badcock Corp., No. 1:02cv378, 2003 WL 21018636, at *2 (N.D. Miss.
Apr. 7, 2003) (citations omitted).4 Courts within the Fifth Circuit scrutinize the joinder of
non-diverse defendants following removal pursuant to the factors set forth in Hensgens
v. Deere & Co., 833 F.2d 1179. See, e.g., Wein, 2015 WL 1275915, at *5; McKnight,
2009 WL 2367499, at *2. This Court’s application of those factors to the Plaintiffs’
See also Moore v. Manns, 732 F.3d 454, 456 (5th Cir. 2013) (“The district court
should scrutinize an amended pleading naming a new nondiverse defendant in a
removed case ‘more closely than an ordinary amendment.’”) (quoting Hensgens, 833
F.2d at 1182); Priester v. JP Morgan Chase Bank, N.A., 708 F.3d 667, 679 (5th Cir.
2013) (holding that the district court properly struck the plaintiffs’ amended complaints
naming non-diverse parties since the pleadings were filed for the purpose of defeating
jurisdiction); Wein v. Liberty Lloyds of Tex. Ins. Co., No. A-15-CA-19-SS, 2015 WL
1275915, at *4-5, 7 (W.D. Tex. Mar. 19, 2015) (striking an amended complaint that
added non-diverse defendants and denying the plaintiff’s motion to remand); Anzures v.
Prologis Tex. I LLC, 886 F. Supp. 2d 555, 562 (W.D. Tex. 2012) (providing that §
1447(e), as opposed to Rule 15(a), governs a plaintiff’s ability to file an amended
pleading that would divest the court of jurisdiction) (citations omitted); McKnight v.
Orkin, Inc., No. 5:09cv17, 2009 WL 2367499, at *2 (S.D. Miss. July 30, 2009) (rejecting
the plaintiff’s argument that the court need not scrutinize her amended complaint filed in
accordance with Rule 15 because “§ 1447(e) trumps Rule 15(a)”) (quoting Ascension
Enters., Inc. v. Allied Signal, Inc., 969 F. Supp. 359, 360 (M.D. La. 1997)).
attempted joinder of Jones leads to the conclusion that the First Amended Complaint 
was improperly filed and should be stricken.
The Hensgens Factors
In Hensgens, the Fifth Circuit recognized that an amended pleading naming a
non-diverse defendant in a removed action gives rise to competing interests. See 833
F.2d at 1182. On the one hand, permitting amendment would require remand and
deprive the diverse defendant of its interest in maintaining the federal venue. See id.
On the other, denying amendment would give rise to the risk of parallel federal/state
litigation and potentially result in a waste of judicial resources. See id. The Fifth Circuit
provided that a district court should balance the equities and determine whether
amendment should be allowed pursuant to the following factors: “[T]he court should
consider the extent to which the purpose of the amendment is to defeat federal
jurisdiction, whether plaintiff has been dilatory in asking for amendment, whether plaintiff
will be significantly injured if amendment is not allowed, and any other factors bearing
on the equities.” Id.
In analyzing the first Hensgens factor, district courts often consider whether the
plaintiff knew or should have known of the identity of the non-diverse defendant when
the original complaint was filed. See, e.g., Shelley v. Colo. State Univ., No. A-14-CA516, 2015 WL 1004292, at *7 (W.D. Tex. Mar. 6, 2015); Anzures, 886 F. Supp. 2d at
562; Weathersby v. Gen. Motors Corp., No. 4:04cv298, 2006 WL 1487025, at *3 (N.D.
Miss. 2006). If the plaintiff knew about the non-diverse party when he filed suit but
omitted “that party as an original defendant, ‘courts have viewed any later attempt to
add the nondiverse party as a defendant as nothing more than an attempt to destroy
diversity.” Wein, 2015 WL 1275915, at *5 (quoting In re Norplant Contraceptive Prods.
Liab. Litig., 898 F. Supp. 433, 435 (E.D. Tex. 1995)). Plaintiffs clearly knew of the
identity of Defendant Jones at the initiation of this litigation. The original Complaint
specifically identifies “Bradley P. Jones as Substitute Trustee” and alleges certain
conduct by Jones in connection with the attempted foreclosure on the Subject Property.
(Compl. [1-2 at ECF p. 8].)
Several courts have also considered the viability of plaintiffs’ claims against
proposed defendants under the first Hensgens factor. See, e.g., Anzures, 886 F. Supp.
2d at 564; McKnight, 2009 WL 2367499, at *3. The Mississippi Supreme Court has
held that a trustee under a deed of trust “is little more than an agent, albeit for both
parties, and the . . . [deed of trust] prescribes his duties.” Wansley v. First Nat’l Bank of
Vicksburg, 566 So. 2d 1218, 1223 (Miss. 1990) (citations omitted).5 In accordance with
this view, U.S. District Courts for both the Northern and Southern Districts of Mississippi
have found substituted trustees to be nominal parties having no real interest in wrongful
foreclosure actions. See, e.g., Taylor v. Ocwen Loan Servicing, LLC, No. 2:12cv107,
2014 WL 280399, *2 (N.D. Miss. Jan. 24, 2014); Hawkins v. Wells Fargo Bank, N.A.,
No. 1:07cv399, 2008 WL 216529, at *1 (S.D. Miss. Jan. 23, 2008); Sones v. Simmons,
No. 1:05cv424, 2006 WL 2805325, at *1-2 (S.D. Miss. Sept. 25, 2006). Whether the
First Amended Complaint states viable claims against Jones, as “the Substitute
Trustee,” is not clear for several reasons. (1st Am. Compl.  at ¶ 4.) First, almost all
The substantive law of Mississippi applies in this diversity action concerning real
property located in Mississippi. See Grenada Ready-Mix Concrete, Inc. v. Watkins, 453
F. Supp. 1298, 1308 (N.D. Miss. 1978).
of the counts in the amended pleading assert liability against “the Defendants”
collectively. “[C]onclusory allegations against all ‘defendants’” fail to state a claim upon
which relief can be granted. Bunton v. Corr. Corp. of Am., No. 4:04cv354, 2007 WL
2077690, at *3 (N.D. Miss. July 11, 2007); cf. Rogers v. Nationwide Prop. & Cas. Ins.
Co., 433 F. Supp. 2d 772, 776 (S.D. Miss. 2006) (holding that the plaintiffs’ non-fact
specific assertions of wrongdoing as to all defendants failed to establish a possibility of
recovery against a non-diverse defendant in determining fraudulent joinder).6 Second,
Plaintiffs contend that certain of Jones’s foreclosure-related actions were carried out “at
the direction of CitiMortgage.” (1st Am. Compl.  at ¶¶ 16, 20.) The general rule in
Mississippi is that “an agent for a disclosed principal incurs no liability for a breach of
duty or a contract perpetrated by its disclosed principal and a third party.” James v.
Chase Manhattan Bank, 173 F. Supp. 2d 544, 550 (N.D. Miss. 2001) (citation omitted).7
Third, the only count in the First Amended Complaint specifically pertaining to Jones
chiefly requests declaratory relief (the “Court should enter a Declaratory Judgment that
the Substitute Trustee’s Deed is void”) and equitable relief (an accounting of all fees
paid to Jones in connection with the foreclosure and assessed against the Plaintiffs’
balance under their mortgage loan). (1st Am. Compl.  at ¶¶ 63, 65.) It appears that
A fraudulent joinder analysis, where a court considers whether plaintiffs have any
possibility of recovery against a non-diverse defendant under state law, is technically
inapplicable here because Jones was not initially joined by the Plaintiffs in state court.
See Cobb v. Delta Exports, Inc., 186 F.3d 675, 677 (5th Cir. 1999).
An exception exists if the agent’s conduct rises to the level of malice, gross
negligence, or a reckless disregard for the rights of others. See id. The First Amended
Complaint is lacking in specific factual content leading to the plausible invocation of this
exception as to Jones.
the availability of this relief does not turn on Jones’s party status since CitiMortgage
purportedly directed his activities and Plaintiffs do not claim that Jones is their mortgage
lender. Cf. Taylor, 2014 WL 280399, at *2 (finding the substitute trustee defendant to
be an unnecessary party where the complaint sought an injunction prohibiting
Even assuming that Plaintiffs have stated viable claims against Jones, the Court
finds the first Hensgens factor to weigh against amendment. Plaintiffs’ original
Complaint establishes that they knew of Jones’s identity and his alleged involvement in
the subject foreclosure at the initiation of this lawsuit. Yet, Plaintiffs only sought to make
Jones a party after CitiMortgage removed the proceeding to this federal venue. In
addition, the linchpin to Plaintiffs’ remand request is Jones’s status as a party. This
strongly “suggests that the purpose of . . . [Jones’s attempted joinder] is to defeat
jurisdiction.” Roof Toppers of El Paso, Inc. v. Weatherproofing Techs., Inc., 949 F.
Supp. 2d 669, 673 (W.D. Tex. 2012) (denying leave to add non-diverse defendants in
part because the plaintiff knew of its claims against the defendants prior to removal);
see also G & C Land v. Farmland Mgmt. Servs., 587 Fed. Appx. 99, 103 (5th Cir. 2014)
(affirming the denial of leave to amend where the district court held that the plaintiff “was
aware of the identities and activities of the non-diverse defendants before it filed suit . . .
and only chose to add them as parties” after removal), cert. denied, 135 S. Ct. 1439
(2015); Anzures, 886 F. Supp. 2d at 564 (“Plaintiff’s clear desire to litigate this case in
state court, coupled with the fact that Plaintiff has known of Empire Roofing’s identity
and role in this case since the beginning . . ., all would trump the fact that the Proposed
Amended Complaint asserts cognizable claims against Empire Roof.”); Albritton, 2003
WL 21018636, at *2 (noting that the plaintiff filed his motion to remand attacking
diversity and amended complaint naming a non-diverse party on the same date, and
striking the amended complaint).
As to the next Hensgens factor, delays of two months following the filing of the
original complaint and thirty days after the notice of removal have “been found dilatory,
especially when a plaintiff knew of the potential defendant’s role in the dispute when he
filed the case in state court.” Anzures, 886 F. Supp. 2d at 565 (citations and internal
quotation marks omitted). Still, some courts find this factor to favor amendment when
leave is sought prior to the initiation of discovery and the scheduling of case
management deadlines. See Martinez v. Holzknecht, 701 F. Supp. 2d 886, 891 (S.D.
Tex. 2010) (citations omitted). Plaintiffs’ First Amended Complaint , naming Jones as
a party, was filed approximately three months after their original Complaint was filed in
state court, and Plaintiffs were aware of Jones’s involvement in the foreclosure
proceeding at that earlier time. However, no trial date has been set in this cause and it
does not appear that the parties have engaged in any discovery. The Court thus
determines that the second Hensgens factor is neutral.
Plaintiffs “will [not] be significantly injured if amendment is . . . [dis]allowed.”
Hensgens, 833 F.2d at 1182. No showing has been made that CitiMortgage, against
whom the majority of Plaintiffs’ claims are asserted, would be unable to satisfy a
judgment. See Wein, 2015 WL 1275915, at *6 (finding the third Hensgens factor to
weigh against amendment in the absence of a showing that the original defendants
could not satisfy a judgment); Albritton, 2003 WL 21018636, at *2 (denying joinder
where the amended complaint only asserted one count against the non-diverse party).
Further, the denial of Jones’s joinder will not preclude the Plaintiffs from proceeding
against him in state court. See G & C Land, 587 Fed. Appx. at 103-04 (finding no
abuse of discretion in the district court’s denial of leave to amend, including the
underlying determination that the plaintiff could pursue the non-diverse defendants in
state court). The additional expense of maintaining “parallel proceedings . . . does not
constitute significant prejudice.” Martinez, 701 F. Supp. 2d at 892 (citation omitted).
The Court discerns no other equitable considerations bearing upon Jones’s
joinder. Therefore, the balance of the Hensgens factors necessitates a denial of joinder
and the striking of the Plaintiffs’ First Amended Complaint . Cf. Priester, 708 F.3d at
679; Wein, 2015 WL 1275915, at *7; Albritton, 2003 WL 21018636, at *2. Plaintiffs’
remand request based on the existence of Jones as a party fails as a result.
CitiMortgage’s Purported Failure to File the State Court Record
Plaintiffs further argue that the “removal was procedurally improper because
CitiMortgage failed to file the State Court record as required.” (Pls.’ Mot. for Remand 
at ¶ 8.) Title 28 U.S.C. § 1446 requires the defendant removing a civil action to file in
the district court its notice of removal “together with a copy of all process, pleadings,
and orders served upon such defendant . . . .” 28 U.S.C. § 1446(a). This Court’s Local
Uniform Civil Rules additionally require a defendant to file “the entire state court record”
no later than fourteen (14) days after the date of removal. L.U.Civ.R. 5(b). The Court’s
review of the docket does not identify any failure by CitiMortgage to comply with these
procedural requirements. Therefore, this basis for remand is rejected.
CitiMortgage’s Separate Action Against the Plaintiffs
Plaintiffs also contend that CitiMortgage has waived its removal rights and should
be estopped from litigating in this federal forum since it filed a separate action for
unlawful entry and detainer against them in the Justice Court of Covington County,
Mississippi. Plaintiffs cite no authority supporting the position that a litigant’s conduct in
one state court action will deprive it of the right to remove a separate action to federal
court. Furthermore, “[s]ubject matter jurisdiction can neither be conferred nor destroyed
by the parties’ agreement or waiver.” Buchner v. FDIC, 981 F.2d 816, 821 (5th Cir.
1993); see also Doty Props., LLC v. APC Partners II, LLC, No. 3:06cv62, 2006 WL
1580000, at *2 (N.D. Miss. June 2, 2006) (rejecting the plaintiffs’ argument that the
defendant waived diversity jurisdiction by filing and voluntarily dismissing a separate
state court action). Plaintiffs’ final ground for remand is without merit and their Motion
for Remand  is due to be denied.
CitiMortgage’s Motion to Dismiss
This motion is aimed at the Plaintiffs’ First Amended Complaint . In
accordance with the preceding rulings, Plaintiffs’ First Amended Complaint is no longer
the operative pleading. Therefore, CitiMortgage’s dismissal motion is moot.
For the foregoing reasons:
IT IS ORDERED AND ADJUDGED that the Plaintiffs’ First Amended Complaint
 is stricken.
IT IS FURTHER ORDERED AND ADJUDGED that the Plaintiffs’ Motion for
Remand  is denied.
IT IS FURTHER ORDERED AND ADJUDGED that CitiMortgage, Inc.’s Motion to
Dismiss Plaintiffs’ First Amended Complaint  is denied as moot. Defendant shall file
its answer or other responsive pleading to the original Complaint within fourteen (14)
days of the entry of this Order.
SO ORDERED AND ADJUDGED this the 20th day of May, 2015.
UNITED STATES DISTRICT JUDGE
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