Spiegel et al v. The Bank of New York Mellon et al

Filing 23

MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that Plaintiffs Motion for Remand (ECF No. 16 ) is GRANTED, and that this case is REMANDED to the Circuit Court of the St. Louis County, Missouri. A separate Order of Remand will accompany this Order. Signed by District Judge Jean C. Hamilton on 4/5/16. (KJS)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

LAVINA AND TERRY SPIEGEL,
Plaintiffs,
v.
THE BANK OF NEW YORK MELLON
f/k/a THE BANK OF NEW YORK, AS
TRUSTEE FOR CWABS, INC.
ASSET-BACKED CERTIFICATES,
SERIES 2006-9, et al.,
Defendants.

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Case No. 4:16-cv-00225-JCH

MEMORANDUM AND ORDER
This matter is before the Court on Plaintiffs’ Motion for Remand, filed March 17, 2016.
(ECF No. 16.) The Motion has been fully briefed and is ready for disposition.
BACKGROUND
On January 19, 2016, Plaintiffs Lavina and Terry Spiegel, citizens of Missouri, filed
their Complaint for wrongful foreclosure in the Circuit Court of St. Louis County against
Defendants The Bank of New York Mellon, formerly known as The Bank of New York, as
Trustee for CWABS, Inc. Asset-Backed Certificates, Series 2006-9 (“BONY”); OCWEN Loan
Servicing, LLC (“Ocwen”); The Boyd Law Group, LC (“Boyd”), “in its capacity as successor
trustee, only”; and New Penn Financial, doing business as Shellpoint Mortgage Servicing
(“Shellpoint”).

(ECF No. 1.1)

In their Complaint, Plaintiffs assert claims of Wrongful

Foreclosure, Quiet Title, and Slander of Title against Boyd. Id. As relevant, Boyd is a Missouri
Limited Liability Company, with its primary offices in St. Charles County, Missouri. Id. ¶ 5.

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On February 18, 2016, Defendants BONY and Shellpoint (hereinafter, “Defendants”)
filed a Notice of Removal, asserting diversity jurisdiction on the basis that Boyd, the only
nondiverse defendant, was fraudulently joined. (ECF No. 1.) Plaintiffs now move for remand,
arguing that Boyd is a proper party. (ECF No. 16.)
DISCUSSION
“Federal courts are courts of limited jurisdiction.” See Myers v. Richland Cnty., 429 F.3d
740, 745 (8th Cir. 2005). “Defendants may remove civil actions to federal court only if the
claims could have been originally filed in federal court.” Cent. Iowa Power Coop. v. Midwest
Indep. Transmission Sys. Operator, Inc., 561 F.3d 904, 912 (8th Cir. 2009).

Diversity

jurisdiction “requires an amount in controversy greater than $75,000 and complete diversity of
citizenship among the litigants.” OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th
Cir. 2007) (citing 28 U.S.C. § 1332(a)). “Complete diversity of citizenship exists where no
defendant holds citizenship in the same state where any plaintiff holds citizenship.” Id.
The Court must “be attentive to a satisfaction of jurisdictional requirements in all cases.”
Sanders v. Clemco Indus., 823 F.2d 214, 216 (8th Cir. 1987) (citation omitted). “The defendant
bears the burden of establishing federal jurisdiction by a preponderance of the evidence.” In re
Prempro Prods. Liab. Litig., 591 F.3d 613, 620 (8th Cir. 2010) (citation omitted). “All doubts
about federal jurisdiction should be resolved in favor of remand to state court.” Id.
As mentioned above, Defendants removed this case to federal court based on the alleged
fraudulent joinder of Boyd. “The doctrine of fraudulent joinder allows a district court to assume
jurisdiction over a facially nondiverse case temporarily and, if there is no reasonable basis for the
imposition of liability under state law, dismiss the nondiverse party from the case and retain
subject matter jurisdiction over the remaining claims.” Wivell v. Wells Fargo Bank, N.A., 773

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F.3d 887, 893 (8th Cir. 2014) (quoting Murphy v. Aurora Loan Servs., LLC, 669 F.3d 1027, 1031
(8th Cir. 2012)). A defendant “has been fraudulently joined if there is no reasonable basis in fact
and law for the claim brought against it,” and where “the applicable state precedent precludes the
existence of a cause of action against [the] defendant.” Id. (quotations and citations omitted).
Upon consideration of the Parties’ arguments, the Court concludes that Boyd was not
fraudulently joined and is a proper party to this action, as Plaintiffs have asserted a claim for
slander of title against Boyd.
To establish a claim for slander of title under Missouri law, a plaintiff must prove: “‘(1)
some interest in the property, (2) that the words published were false, (3) that the words were
maliciously published, and (4) that he suffered pecuniary loss or injury as a result of the false
statement.’” Augustine v. Bank of Am., N.A., No. 4:11CV2251 CDP, 2012 WL 1379654, at *4
(E.D. Mo. Apr. 20, 2012) (quoting Lau v. Pugh, 299 S.W.3d 740, 748–49 (Mo. Ct. App. 2009)).
In their Complaint, Plaintiffs generally allege that they were not in default on their loan
payments, and that Defendants wrongfully foreclosed on their properties. As to Boyd, Plaintiffs
specifically allege that Boyd’s appointment as successor trustee, which Boyd recorded, was
defective and void; that Boyd knew the appointment was defective at the time Boyd recorded it;
and that Boyd nevertheless continued with the foreclosures. (Compl. ¶¶ 13, 25, 32, 33-36, 47,
56.) Plaintiffs further allege that Boyd “published or caused to be published” in the St. Louis
Countian statements to the effect that Plaintiffs were in default on their properties, that Boyd
knew the statements were false and maliciously published them, and that Plaintiffs have suffered
pecuniary loss as a result of the false statements. Id. ¶¶ 59-62.
In view of the foregoing, the Court finds that there is a reasonable basis in fact and law
for Plaintiffs’ claim of slander of title against Boyd. See Wivell, 773 F.3d at 893; Lukefahr v.

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United States Bank, No. 1:13-CV-151 JAR, 2014 WL 1648819, at *4-5 (E.D. Mo. Apr. 23,
2014) (holding that plaintiffs stated required elements for slander of title claim against successor
trustee, where plaintiffs alleged that they had interest in property, that trustee’s deed falsely
conveyed ownership in property, that property was wrongfully sold, and that trustee acted with
malice); Timber Point Props. III, LLC v. Bank of Am., N.A., No. 13-3449-CV-S-DGK, 2014 WL
7005195, at *8 (W.D. Mo. Dec. 10, 2014) (finding that complaint stated claim for slander of title
against successor trustee, where plaintiff alleged trustee knew recorded instrument was false but
had no legal justification to record it nonetheless); see also Euge v. Golden, 551 S.W.2d 928, 932
(Mo. Ct. App. 1977) (“Recordation of a false instrument does state a claim under slander of
title.”).
Defendants also argue, in the alternative, that Boyd is a nominal party and its citizenship
should be disregarded. (ECF No. 18 at 6 (citing Navarro Sav. Ass’n v. Lee, 446 U.S. 458, 46061 (1980) (in determining whether complete diversity of citizenship exists, federal court “must
disregard nominal or formal parties and rest jurisdiction only upon the citizenship of real parties
to the controversy”)).) Specifically, Defendants assert that “[u]nder Missouri law, a trustee is not
an indispensable party to an action affecting a deed of trust because a deed of trust does not vest
title in the trustee.” Id. at 7. However, Defendants make no assertion that a trustee is not an
indispensable party to an action for slander of title under Missouri law, and none of the cases
cited by Defendants include a count for slander of title. Id. (citing Caranchini v. Kozeny &
McCubbin, LLC, No. 4:11-CV-0464-DGK, 2011 WL 5921364, at *3 (W.D. Mo. Nov. 28, 2011);
Wyatt v. Liberty Mortg. Corp., No. 4:13-cv-00317-DGK, 2013 WL 6730298, at *3-5 (W.D. Mo.
Dec. 19, 2013); Simms v. Nationstar Mortg., LLC, No. 4:14-CV-243 CAS, 2014 WL 1515881, at
*3-5 (E.D. Mo. Apr. 18, 2014); Hammond v. First Magnus Corp., No. 14-0032-CV-W-ODS,

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2014 WL 1374826, at *2 (W.D. Mo. Apr. 8, 2014); Reinerio v. Bank of New York Mellon, No.
15-CV-161-FJG, 2015 WL 4425856, at *5-6 (W.D. Mo. July 20, 2015)).
Therefore, the Court finds that Boyd is a proper party to this action, and that this matter
must be remanded to the Circuit Court of St. Louis County.
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Plaintiffs’ Motion for Remand (ECF No. 16) is
GRANTED, and that this case is REMANDED to the Circuit Court of the St. Louis County,
Missouri. A separate Order of Remand will accompany this Order.

Dated this 5th day of April, 2016.

/s/ Jean C. Hamilton
UNITED STATES DISTRICT JUDGE

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