Jennifer Belter Formichella, PLLC et al v. Fisher et al
Filing
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ORDER OF REMAND each of the two state court foreclosure proceedings are hereby REMANDED to the Superior Court of Transylvania County and this action is therefore DISMISSED with prejudice. Signed by District Judge Martin Reidinger on 6/26/12. (Pro se litigant served by US Mail.) (ejb)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
CIVIL CASE NO. 1:12cv85
JENNIFER BELTER FORMICHELLA, PLLC,
JENNIFER BELTER FORMICHELLA, ESQ.,
as Substitute Trustee,
HOMETRUST BANK, as Beneficiary &
Lender,
Petitioners,
vs.
JOHN ANTHONY FISHER, III, as Grantor,
and RICHARD-ALLEN:SHIARLA,
Respondents.
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ORDER OF REMAND
THIS MATTER is before the Court on the Order to Show Cause issued
by Magistrate Judge Dennis L. Howell on June 1, 2012 [Doc. 8] and the
Response to Order to Show Cause of Richard-Allen:Shiarla [Doc. 9].
PROCEDURAL HISTORY
On April 27, 2012, the Respondents filed a Notice of Removal in this
Court. [Doc. 1]. Although the Respondents failed to attach a copy of the state
court complaints which they sought to remove, each of them signed the Notice
of Removal. [Id. at 3]. On May 3, 2012, however, Respondent John Anthony
Fisher, III (Fisher) filed a notice that he was withdrawing as a party to this
action. [Doc. 4]. Respondent Richard-Allen:Shiarla (Shiarla) subsequently
filed voluminous state court records. [Doc. 6; Doc. 7].
The two removed state court actions are foreclosure proceedings
pertaining to two parcels of real estate. [Doc. 1; Doc. 6]. The first state court
action, which is captioned “In the Matter of the Foreclosure of a Deed of Trust
executed by John A. Fisher, III and Jeanette K. Fisher, collectively Grantor,
dated July 9, 2010, securing a note in the original amount of $75,000.00 in
favor of HomeTrust Bank, Beneficiary, recorded in Book 543, at Page 4 of the
Transylvania County Registry, Case No. 11SP168,” was initiated on October
3, 2011. [Doc. 6-3 at 126-29]. Shiarla was named as a respondent due to his
purported status as trustee of the Toxawa [sic] Land Trust #45. [Id. at 122,
126]. As noted in the caption, the promissory note at issue was executed by
Fisher and his wife.
The second state court action, which is captioned “In the Matter of the
Foreclosure of a Deed of Trust executed by The Gorges at Lake Toxaway,
LLC, Grantor, dated April 10, 2008, securing a note in the original amount of
$1,000,000.00 in favor of HomeTrust Bank, Beneficiary, recorded in Book
454, at Page 345 of the Transylvania County Registry, Case No. 11SP169,”
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was also initiated on October 3, 2011. [Doc. 7-2 at 144-50]. Shiarla, again,
was named as a respondent due to his purported status as trustee of the
Toxawa [sic] Land Trust #45. [Id. at 149].1
The foreclosure sales of each parcel occurred on January 30, 2012.
[Doc. 6-1 at 5-6, 101-105; Doc. 6-4 at 6-8].
The Trustee’s Deeds were
executed on February 9, 2012 to HomeTrust Bank as the highest bidder for
each parcel; and the Trustee’s Deeds were recorded on the same date in the
Transylvania County Registry. [Doc. 6-1 at 5-6, 101-105; Doc. 6-4 at 6-8].
On June 1, 2012, the Magistrate Judge issued an Order to Show Cause
requiring the parties to respond in writing as to why this case should not be
remanded to state court. [Doc. 8]. Shiarla was the only party to file response.
[Doc. 9].
STANDARD OF REVIEW
Section 1441 of Title 28 of the United States Code provides that any civil
action brought in a state court of which United States district courts have
original jurisdiction may be removed to the appropriate federal court. The
procedure for such removal requires that it be accomplished only by the
1
Despite the fact that Respondents seek to remove two judicial proceedings to
this Court, they attempted to do so by filing only one notice of removal, and purported to
open only one action in this Court. Respondents offer no legal precedent for the
propriety of such forced consolidation.
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consent of all defendants on or before thirty days after service of the initial
pleading. 28 U.S.C. §1446(b). “If at any time before final judgment it appears
that the district court [to which the case was removed] lacks subject matter
jurisdiction, the case shall be remanded.” 28 U.S.C. §1447(c). “An order
remanding a case to the State court from which it was removed is not
reviewable on appeal or otherwise[.]” 28 U.S.C. §1447(d).
DISCUSSION
The propriety of removal is determined at the time the notice of removal
is filed. Gould v. Artisoft, Inc., 1 F.3d 544, 547 (7 th Cir. 1993); Wickline v.
Dutch Run-Mays Draft, LLC, 606 F.Supp.2d 633, 635 (S.D.W.Va. 2009). As
a result, Fisher’s withdrawal of his position as a party in this action and, thus,
his consent to removal, is not a sufficient ground on which to remand this
action. Roche Constructors, Inc. v. One Beacon America Ins. Co., 2012 WL
1060000 (D.Colo. 2012).
There is nonetheless another ground for remand. “Pursuant to North
Carolina law, a foreclosure action is initiated by the filing of a notice of hearing
rather than a complaint and summons.” In re Naef, 2010 WL 5058383 **2
(E.D.N.C. 2010) (citing N.C. Gen. Stat. §45-21.16). Documents filed in the
state court record show that the Respondents were served with the Notices
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of Hearing on October 4 and 11, 2011. [Doc. 6-3 at 31-36; Doc. 7-2 at 8-9, 1474]. “Failure to file a notice of removal within thirty (30) days of receipt of the
notice of foreclosure hearing is grounds for remand.” In re Foreclosure of a
Deed of Trust Executed by Pordev, XI, LLC, 2008 WL 5234301 **2 (E.D.N.C.
2008). These two foreclosure actions were not removed within thirty days of
receipt of the notices, a procedural requirement for proper removal. Music v.
Arrowood Indem. Co., 632 F.3d 284, 287 (6 th Cir. 2011). This time limit is
“mandatory and is strictly construed in favor of state court jurisdiction.”
Lovins-Kapler v. Teva Pharmaceuticals, USA, Inc., 2012 WL 208321 **2
(W.D.Mo. 2012).
Shiarla’s argument in support of timely removal is that he was actually
the highest bidder at the foreclosure sales which were conducted on January
30, 2012. [Doc. 9 at 7]. He does not dispute, however, that he was served
with the foreclosure actions in October 2011.
Indeed, he has attached
voluminous documents showing the same. [Doc. 6; Doc. 7]. The state court
foreclosure proceedings were therefore not removed within the statutory thirty
day period and the cases must be remanded to state court. Trustee Services
of Carolina, LLC v. Rivera, 2012 WL 1645454 (W.D.N.C. 2012) (citing Lovern
v. General Motors Corp., 121 F.3d 160, 161-62 (4 th Cir. 1997) (other citations
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omitted). “Federal courts construe removal statutes strictly, guarding against
expansion of removal jurisdiction by judicial interpretation, and resolving all
doubts about the propriety of removal in favor of retaining state court
jurisdiction.”
CAP of MB, Inc. v. Champion Rock Products, Inc., 111
F.Supp.2d 728, 731 (D.S.C. 2000). Shiarla offers no authority or argument
to counter these well settled principles of jurisdictional law. Based on the
facts presented and the procedural posture of this case, precedent dictates
that it must be remanded.
There are grounds for remand in addition to those related to the failure
to remove the actions in a timely fashion. Removal is inappropriate unless the
state court complaint, or notice of hearing in this foreclosure, presents a
federal question.2 Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct.
2425, 96 L.Ed.2d 318 (1987). Since district courts have an independent
obligation to address subject matter jurisdiction sua sponte, it was appropriate
for the Magistrate Judge to require the parties to address this issue.
Ellenburg v. Spartan Motors Chassis, Inc., 519 F.3d 192, 196 (4 th Cir. 2008).
Shiarla has presented a very novel theory of federal question jurisdiction
based on HomeTrust’s status as a federally insured bank and his purported
2
There is no claim that diversity jurisdiction is stated in those actions.
[Doc. 9 at 3].
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tender of promissory notes and other forms of payment subsequent to the
foreclosure sale. [Doc. 9]. The presence of federal question jurisdiction,
however, is determined from the state court complaint (the notice of hearing
in this case). Caterpillar, 481 U.S. at 392; McNeely v. Moab Tiara Cherokee
Kituwah Nation Chief, 2008 WL 4166328 (W.D.N.C. 2008) (nothing in a state
foreclosure action of real property suggests a federal question). “No question
of federal law is implicated by the properly pleaded notice of foreclosure.
Thus, federal jurisdiction does not exist.” In re Naef, 2010 WL 5058383 **3;
City of Durham v. Wadsworth, 2009 W L 186174 (M.D.N.C.), affirmed 2009 WL
5647194 (M.D.N.C.), appeal dismissed 362 F. App’x. 369 (4 th Cir. 2010)
(foreclosure actions brought pursuant to state law do not give rise to federal
question subject matter jurisdiction); McNeely, 2008 WL 4166328.
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“foreclosure action and later eviction proceedings could not have been
brought in this court.” Cranberry Financial, LLC v. Center of Love Mission
Church, 2010 WL 5353361 **2 (E.D.N.C. 2011). Notwithstanding Shiarla’s
theories, “actions in which defendants merely claim a substantive federal
defense to a state-law claim do not raise a federal question.” In re Blackwater
Sec. Consulting, LLC, 460 F.3d 576, 584 (4 th Cir.), cert. denied 549 U.S. 1260,
127 S.Ct. 1381, 167 L.Ed.2d 174 (2007). Shiarla offers no authorities, or even
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any argument to counter these well settled points of law.
Federal courts simply do not interfere in state court foreclosure
proceedings. MacFadyen v. Smith, 2011 WL 1740583 (D.Md. 2011); Brumby
v. Deutsche Bank Nat. Trust Co., 2010 WL 617368 (M.D.N.C. 2010) (declining
to issue restraining order regarding state foreclosure action);
Arnold v.
Waterfield Mortgage Co., 966 F.Supp. 387, 389 (D.Md.), affirmed 116 F.3d
472 (4 th Cir. 1997) (federal courts should refrain from interfering in state court
foreclosure proceedings).
Moreover, Chapter 45 of the North Carolina
General Statutes provides for an appeal process in foreclosure proceedings
and the Respondents have not shown that they availed themselves of those
procedures. N.C. Gen. Stat. §45-21.16. By failing to do so, each of them has
waived his right to contest any issue adjudicated by the Clerk in the state
court foreclosure proceedings. Vogler v. Countrywide Home Loans, Inc.,
2010 WL 3394034 (M.D.N.C. 2010).
The doctrine of collateral estoppel
therefore precludes relitigation of issues determined in the state court
foreclosure. Kalos v. Greenwich Ins. Co., 404 F. App’x. 792 (4 th Cir.), cert.
denied
U.S.
, 132 S.Ct. 119, 181 L.Ed.2d 43 (2011).
For all of these reasons, there is no Federal Question properly before
this Court and this action must be remanded to state court.
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ORDER
IT IS, THEREFORE, ORDERED that each of the two state court
foreclosure proceedings are hereby REMANDED to the Superior Court of
Transylvania County and this action is therefore DISMISSED with prejudice.
Signed: June 26, 2012
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