WATERFALL VICTORIA MORTGAGE TRUST 2010-SBCI REO LLC v. ALBANES et al
OPINION. Signed by Judge John Michael Vazquez on 3/8/17. (sr, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
WATERFALL VICTORIA MORTGAGE
TRUST 201 0-SBCI REO LLC,
Civil Action No. 16-4751
YOLANDA ALBANES AND VICTOR
John Michael Vazguez, U.S.D.J.
This matter comes before the Court on the Motion to Dismiss the Notice of Removal, which
would result in a remand, filed by Plaintiff Waterfall Victoria Mortgage Trust 2010-SBCI REQ
LLC (“Waterfall”). D.E. 3. Defendants Yolanda and Victor Albanes filed a brief opposing the
motion to which Plaintiff replied. D.E. 6, 7. The Court reviewed the submissions in support and
in opposition, and considered the motion without oral argument pursuant to Fed. R. Civ. P. 78(b)
and L. Civ. R. 78.1(b). For the reasons that follow, Plaintiffs motion is GRANTED and this
matter is remanded to state court.
FACTS AND PROCEDURAL BACKGROUND
Plaintiff seeks to dismiss the notice of removal filed by pro se Defendants Victor and
Yolanda Albanes,1 thereby remanding the matter to state court.2 On August 27, 1998, Yolanda
Albanes obtained title to 12$ First Street in Elizabeth, New Jersey (the “property”). See Notice of
Removal App. A at 2, D.E. I. Defendants mortgaged the property but later defaulted on their
On May 22, 2015, the Superior Court of New Jersey issued a Writ of
Execution commanding the Sheriff of Union County to make a sale on the property and use the
proceeds to satisfy the principal and interest secured by the mortgage. Id. App. B at 14-18. On
May 18, 2016, Waterfall obtained title to the property pursuant to a deed from the Union County
Sheriffs Office. Id. at 12-13.
Waterfall filed a Verified Complaint (the “Complaint”) on July 25, 2016, which
commenced an ejectment proceeding in the Superior Court of New Jersey to remove Defendants
from the Property pursuant to N.J.S.A.
§ 2A:35-1 (the “State Court Ejectment Proceeding”).
at 4-11. Defendants failed to file any response to the Complaint. On August 8,2016, the Superior
Court of New Jersey entered an order granting Waterfall’s request for ejectment, ordering that
Waterfall immediately recover possession of the property from Defendants. Plfs Br. Ex. A.
The same day, Defendants filed their Notice of Removal, removing the State Court
Ejectment Proceeding to this Court based on an alleged violation of Section 3 of the Civil Rights
Defendants contend that as unrepresented litigants their pleadings should be construed by “less
stringent standards.” Defs’ Opp. Br. at 2, D.E. 6 (quoting Haines e. Kerner, 404 U.S. 519, 520
(1972)). Because Defendants are proceeding pro se, the Court will construe their pleadings
liberally. Homes, 404 U.S. at 520. “The Court need not, however, credit apro se [litigant’s] ‘bald
assertions’ or ‘legal conclusions.’” D ‘Agostino V. CECOM RDEC, No. 10-4558, 2010 WL
3719623, at *1 (D.N.J. Sept. 10, 2010) (citing Morse v. Lower Merion Sc/i. Dist., 132 F.3d 902,
906 (3d Cir. 1997)).
While not specifically stated, the Court considers Plaintiffs motion as one for remand pursuant
to 2$ U.S.C. § 1447, which provides that a court must remand a case when “it appears that the
district court lacks subject matter jurisdiction.” 28 U.S.C. § 1447(c).
Act of 1866. Defendants contend that due to an anticipated civil rights complaint, this Court has
federal question jurisdiction pursuant to 2$ U.S.C.
§ 1331. Notice of Removal at 1. On August
17, 2016, Waterfall filed this motion arguing that Defendants presented no basis for federal
question jurisdiction, and therefore, the notice of removal should be dismissed. D.E. 3. On
September 12, 2016, Defendants filed an opposition brief asserting that the motion should be
denied because (1) this Court has subject matter jurisdiction over the State Court Ejectment
Proceeding pursuant to an anticipated Civil Rights Act complaint, (2) there is diversity jurisdiction
over the State Court Ejectment Proceeding, (3) there is an unconditional right of removal under
the Civil Rights Act of 1866, and (4) Waterfall violated the Accardi Doctrine. See Defs’ Opp. Br.,
LAW AND ANALYSIS
“[A]ny civil action brought in a State court of which the district courts of the United States
have original jurisdiction, may be removed
pending.” 28 U.S.C.
to the district court
where such action is
§ 1441(a). Removal statutes, however, “are to be strictly construed against
removal and all doubts should be resolved in favor of remand.” Steel Valley Auth. v. Union Switch
& Signal Div., 809 F.2d 1006, 1010 (3d Cir. 1987) (citation omitted). Moreover, a defendant, as
the party asserting federal jurisdiction in a removal action, “carries a heavy burden of showing that
at all stages of litigation the case is properly before the federal court.”
v. Jevic, 575 F.3d
322, 326 (3d Cir. 2009) (citing Packard v. Provident Nat’l Bank, 994 F.2d 1039, 1045 (3d Cir.
A. Federal Question Jurisdiction
Waterfall argues that “Defendants have not presented any federal basis for [f]ederal
[q]uestion jurisdiction,” therefore, this case is not removable. Plfs Br. at 2. Defendants counter
that the Court has federal question jurisdiction, pursuant to 2$ U.S.C.
§ 1331, due to a third-party
federal civil rights complaint “in the process of being filed in this case.” Defs’
Opp. Br. at 3.
Federal district courts have “original jurisdiction of all civil actions arising under the
Constitution, laws, or treaties of the United States.” 28 U.S.C.
§ 1331. The existence of federal
question jurisdiction is governed by the “well-pleaded complaint” rule. “Under the ‘well-pleaded
complaint’ rule, federal jurisdiction is lacking unless a federal question appears on the face of a
properly pleaded complaint; a federal defense does not confer subject matter jurisdiction.” In re
US. Healthcare, Inc., 193 F.3d 151, 160 (3d Cir. 1999). Waterfall’s complaint establishes that
the State Court Ejectment Proceeding was brought under N.J.S.A.
§ 2A:35-1, et seq. Notice of
Removal App. B at 5. No federal question appears on the face of the complaint. The fact that
Defendants may seek to file a third-party complaint that will presumably assert an alleged violation
of the Civil Rights Act of 1866 is insufficient to bring this matter within the Court’s jurisdiction.
See, e.g., Monmouth-Ocean Collection Sen., Inc. v. Kior, 46 F. $upp. 2d 385, 395 (D.N.J. 1999)
(detennining that third-party could not remove matter based on federal question asserted in the
third-party complaint). Thus, the ‘well-pleaded complaint’ rule is not satisfied and this Court lacks
federal question jurisdiction.3
Defendants maintain that they have an “unconditional right to remove the action.
of 1866.” Defs.’ Opp Br. at 3. But as discussed, Defendants
to Section 3 of the Civil Rights Act
have not yet presented the Court with a civil rights claim. Even if there was a civil rights claim
before the Court, there is not an unconditional right to removal. 28 U.S.C. § 1443(1) “is a direct
descendant” of the removal provision of the Civil Rights Act of 1866. State of Georgia v. Rachel,
384 U.S. 780, 786 (1966). The language of the Civil Rights Act of 1866, however, has not been
interpreted to include an unconditional right to removal. Instead, a party removing an action
pursuant to this exception must satisfy the two-part test set forth in State of Georgia v. Rachel. See
Davis v. Glanton, 107 F.3d 1044, 1047 (3d Cir. 1997). A state court party must first establish that
he is being deprived of rights guaranteed by federal law providing for equal civil rights. Moreover,
the deprived rights must be “specific civil rights stated in terms of racial equality.” Id. Second,
the removal notice must demonstrate that defendant has been “denied or cannot enforce” his rights
in state court. Id. In this instance, the two-part test is not satisfied. While Defendants’ Notice of
Defendants further contend that Waterfall artfully pled a federal Civil Rights Act claim as
a state law claim. Notice of Removal at 4. Under the “artful pleading” doctrine, “a plaintiff may
not defeat removal by omitting to plead necessary federal questions.” Goepel i’. Nat ‘1 Postal Mail
Handlers Union, a Div. ofLIUNA, 36 F.3d 306, 310 (3d Cir. 1994) (quoting Franchise Tax 3d. of
Cal. v. Constr. Laborers Vacation Trust for S. cal., 463 U.S. 1, 22 (1983)). However, here,
Defendants seek to ‘justify removal on the basis of facts not alleged in the complaint,” making the
artful pleading doctrine inapplicable. Caterpillar Inc. v. Williams, 482 U.S. 386, 397 (1987).
Further, Waterfall brings a cause of action under New Jersey law, which entitles a person “claiming
the right of possession of real property in the possession of another.. to have his rights determined
in an action in the Superior Court.” N.J.S.A. 2A:35-l. Rightful possession of real property is akin
to a landlord-tenant issue, which has been deemed to be outside the scope of removal to district
courts. See Groves v. Wilson, 404 F. App’x 705, 707 (3d Cir. 2010) (stating that the district court
lacked subject matter jurisdiction over the substance of such landlord-tenant claims). The Court
does not find that Waterfall attempted to disguise any federal cause of action in its state complaint.
Instead, Waterfall brought a state law action in state court. Thus, the “artful pleading” doctrine is
not applicable to this case.
B. Diversity Jurisdiction
Defendants also argue that this Court has diversity jurisdiction. Defs’ Opp. Br. at 5.
federal courts have diversity jurisdiction over actions where the matter in controversy exceeds
$75,000 and is between citizens of different states. 28 U.S.C.
§ 1332(a)(1). Defendants are
Removal states that Waterfall violated the Civil Rights Act of 1866, they do not provide any facts
indicating that Defendants faced racial inequality during their eviction proceedings or that they
could not vindicate any deprivation of civil rights in the state court proceeding. See, e.g., D350
20]]-], 2016 WL 344525, at *4 (concluding that defendant failed to point to any civil rights
violation during eviction proceedings that would necessitate removal under § 1443(1)).
Consequently, § 1443(1) does not provide a basis upon which Defendants can remove this matter.
domiciled in New Jersey and Waterfall merely states that it is a Delaware entity. Plfs Reply at 2.
When a trust or limited liability company brings suit, a court looks to the citizenship of its members
to determine citizenship for diversity jurisdiction purposes. See Zambelli Fireworks Mfg. Co., Inc.
v. Wood, 592 f.3d 412, 420 (3d Cir. 2010) (“The citizenship of an LLC is determined by the
citizenship of its members”); Emerald mv ‘rs Trust v. Gaunt Parsippanv Partners, 492 f.3d 192,
201 (3d Cir. 2007) (“[B]ecause artificial entities, unlike corporations, are not citizens under 28
§ 1332, diversity jurisdiction by or against an artificial entity depends on the citizenship of
all the members.” (citation and internal quotation marks omitted). Defendants, however, fail to
establish the citizenship of any of Waterfall’s members such that the Court could ascertain whether
diversity jurisdiction exists. Defendants, therefore, cannot remove this matter on the basis of
diversity jurisdiction. See, e.g., Phillip v. Ad. City Med. Ctr., 861 F. Supp. 2d 459, 467 (D.N.J.
2012) (dismissing case for lack of subject matter jurisdiction due to insufficient information to
determine each party’s citizenship); DB5O 20]]-] Trttst v. Mastoris, No. 15-5726, 2016 WL
344525, at *5 (D.N.J. Jan. 27, 2016) (remanding matter because defendant failed to establish the
citizenship of plaintiff and that complete diversity existed between the parties).
C. The Accardi Doctrine
Finally, Defendants invoked the Accardi doctrine in response to Plaintiffs motion. Defs’
Br. at 1. The Accardi doctrine provides that agencies are bound by their regulations. See
C’hong v. Dist. Dir., LN.S., 264 F.3d 378, 389 (3d Cir. 2001) (citing United States ex rel Accardi
v. Shaughnessy, 347 U.S. 260 (1954)). Waterfall, however, is a private entity, not a federal
agency.4 Therefore, the Accardi doctrine is inapplicable.5
For the reasons set forth above, Plaintiffs Motion to Dismiss the Notice of Removal is
Because the Court lacks subject matter jurisdiction over this matter it will be
remanded to the Superior Court of New Jersey. An appropriate Order accompanies this Opinion.
Dated: March 8, 2017
“Federal agency” is defined as “a department or other instrumentality of the executive branch of
the federal government, including a government corporation and the Government Printing Office.”
Black?s Law Dictionary (10th ed. 2014).
Defendants also argue that they have an unconditional right to intervene under a federal statute
pursuant to fed. R. Civ. P. 24(a)(1). Defs’ Opp. at 4. Intervention provides a non-party with the
right to be involved in pending litigation. See, e.g., ShipyardAssocs., L.P. v. City ofHoboken, No.
14-1145, 2014 WL 6685467, at *2 (D.N.J. Nov. 26, 2014). Defendants are already a party to this
suit and cannot assert that they are now a third party seeking to intervene. Id. Thus, intervention
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