CLAYTON et al v. BRANCH BANKING AND TRUST et al
Filing
37
MEMORANDUM OPINION, ORDER, AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE signed by MAG/JUDGE JOI ELIZABETH PEAKE on 9/12/2012; RECOMMENDING that the Motion to Remand [Doc.# 10 ] filed by BB&T and David A. Simpson, P.C. be granted, and t hat this action be remanded to the Alamance County, North Carolina, Superior Court. FURTHER RECOMMENDING that the Motion to Dismiss filed by BB&T and David A. Simpson, P.C. [Doc. # 13 ] be denied as moot. FURTHER RECOMMENDING that the Claytons' Motion for Default Judgment [Doc. # 12 ] and Motion for Summary Judgment [Doc. # 21 ] be denied without prejudice in light of the remand. (Sheets, Jamie)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
IN RE: THE FORECLOSURE BY DAVID
A. SIMPSON, P.C., SUBSTITUTE TRUSTEE,
OF A DEED OF TRUST EXECUTED BY
THOMAS CLAYTON AND GAIL
CLAYTON, DATED APRIL 22, 2003 AND
RECORDED ON MAY 15, 2003, IN BOOK
NO. 1870, AT PAGE 513 OF THE
ALAMANCE COUNTY PUBLIC REGISTRY
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BRANCH BANKING AND TRUST,
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DAVID A. SIMPSON, P.C., and JOHN DOES )
1-10,
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Petitioners,
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v.
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GAIL CLAYTON and THOMAS CLAYTON, )
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Respondents.
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1:11CV783
MEMORANDUM OPINION, ORDER, AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
Thomas and Gail Clayton, proceeding pro se, removed this state court residential
foreclosure action from Alamance County Superior Court in Burlington, North Carolina, to this
Court on September 23, 2011. The holder of the note and deed of trust, Branch Banking and
Trust Co. (BB&T), and the Substitute Trustee, David A. Simpson, P.C., have filed a Motion to
Remand this action to state court [Doc. #10] and a Motion to Dismiss [Doc. #13].1 The
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The movants have noted that they were unsure whether to treat the Claytons’ filing in this Court [Doc.
#1] as a notice of removal or a civil complaint. The Court construes the filing as a Notice of Removal because
it was specifically captioned as a “Removal of Pending State Court Proceedings to Federal Court Pursuant to
U.S.C.A. § 1446(b),” with the state court documents attached. This Court will therefore address the Motion to
Remand.
Claytons have filed a Motion for Default Judgment [Doc. #12] and Motion for Summary
Judgment [Doc. #21]. For the reasons set forth below, this Court recommends that this action
be remanded to state court.
FACTS, CLAIMS, AND PROCEDURAL HISTORY
The state court action (No. 10-SP-894) was filed by the substitute trustee, David A.
Simpson, P.C., to foreclose upon a deed of trust and note executed by the Claytons and held by
BB&T and to sell the home and property securing the note. The property is located at 416
Benjamin Court, Burlington, N.C. The Claytons’ Petition for Removal is captioned as a
“Violation of the Fourteenth Amendment Right to Property, United States Constitution,” and
“Removal of Pending State Court Proceedings to Federal Court Pursuant to [sic]
U.S.C.A. § 1446(b).” (Pls.’ Pet. for Removal [Doc. #1] at 1.) The Claytons claim that removal
is appropriate because they are raising a constitutional issue. They argue that their Fourteenth
Amendment rights are being violated because “defendants,” apparently referring to BB&T,
Trustee Simpson, and John Does (holders of the original note), “refuse to hear and respond to
proof” that the Claytons were never in default on their loan. (Id. at 3.) The Claytons contend
that their property is being taken without due process. (Id. at 4.) They seek relief in the form
of injunctive and declaratory relief “directing the state superior court to adjudicate in fairness
and equity” if the case is remanded. (Id.)
The state court documents attached to the Petition for Removal show that by Order
dated September 13, 2011, ten days prior to the filing of the Petition in this Court, the state clerk
of court found that the substitute trustee could proceed with a sale of the property. The records
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also show that on that same day, Gail Clayton gave notice of appeal, and the matter was
transferred to the Superior Court. (Id. Ex. 16.) The foreclosure sale has apparently not yet
occurred. (Defs’. Mem. in Supp. of Mot. for Remand [Doc. #9] at 2.)
DISCUSSION
In their Motion to Remand, BB&T and Trustee Simpson argue that this action should
be remanded to state court pursuant to 28 U.S.C. § 1447. (Defs’. Mem. in Supp. of Mot. for
Remand [Doc. #9].) They contend that this Court lacks subject matter jurisdiction, and that the
removal was not timely. (Id.)
In general, civil actions may be removed only if the federal court has original jurisdiction
over the claims. 28 U.S.C. § 1441(a) (“[A]ny civil action . . . of which the district courts of the
United States have original jurisdiction, may be removed”). The burden of showing that the
Court possesses jurisdiction supporting removal is on the removing party. McPhatter v.
Sweitzer, 401 F. Supp. 2d 468, 472 (M.D.N.C. 2005). The Court strictly construes removal
jurisdiction, and Section 1447(c) states in part that if at any time it appears that the district court
lacks subject matter jurisdiction, “the case shall be remanded.” 28 U.S.C.A. § 1447(c) (West
2006 & Supp. 2012).
In this case, the Claytons contend that “federal question” jurisdiction exists because the
foreclosure proceedings violated their rights under the Fourteenth Amendment to the
Constitution. With respect to federal question jurisdiction under 28 U.S.C. § 1331 (2006),
“Congress has given the lower federal courts jurisdiction to hear, originally or by removal from
a state court, only those cases in which a well-pleaded complaint establishes either that federal
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law creates the cause of action or that the plaintiff’s right to relief necessarily depends on
resolution of a substantial question of federal law.” Franchise Tax Bd. v. Construction Laborers
Vacation Trust, 463 U.S. 1, 27-28 (1983).
Here, the action sought to be removed is a
foreclosure action which arises under state law, not federal law. See Rogers Townsend &
Thomas PC v. Boehm, No. 1:12CV163, 2012 WL 3155581 (W.D.N.C. August 2, 2012); City of
Durham v. Wadsworth, No. 1:08CV425, 2009 WL 186174 (M.D.N.C. Jan. 23, 2009). The
attempt by the Claytons to raise as a defense an alleged violation of their right to due process
under the Fourteenth Amendment is insufficient to confer federal question jurisdiction. In re
Blackwater Sec. Consulting, LLC, 460 F.3d 576, 584 (4th Cir. 2006) (“[A]ctions in which
defendants merely claim a substantive federal defense to a state-law claim do not raise a federal
question.”). Because the Court does not have subject matter jurisdiction, this action should be
remanded to the Alamance County Superior Court pursuant to 28 U.S.C. § 1447(c).
Having concluded that this Court lacks subject matter jurisdiction in this action and that
the case should be remanded to state court, all remaining pending motions should be denied.
CONCLUSION
For the foregoing reasons, IT IS RECOMMENDED that the Motion to Remand [Doc.
#10] filed by BB&T and David A. Simpson, P.C. be granted, and that this action be remanded
to the Alamance County, North Carolina, Superior Court.
IT IS FURTHER RECOMMENDED that the Motion to Dismiss filed by BB&T and
David A. Simpson, P.C. [Doc. #13] be denied as moot.
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IT IS FURTHER RECOMMENDED that the Claytons’ Motion for Default Judgment
[Doc. #12] and Motion for Summary Judgment [Doc. #21] be denied without prejudice in light
of the remand.
This, the 12th day of September, 2012.
/s/ Joi Elizabeth Peake
United States Magistrate Judge
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