Nationwide Trustee Services, Inc. v. Rivera

Filing 20

ORDER granting 8 Motion to Remand to State Court; denying as moot 9 Motion to Dismiss for Failure to State a Claim; granting in part and denying in part 10 Motion to Dismiss; adopting 16 Memorandum and Recommendations.; denying 18 Motion for Order to Show Cause. This matter is REMANDED to Mecklenburg County Superior Court. Signed by Chief Judge Robert J. Conrad, Jr on 4/20/2012. (Pro se litigant served by US Mail.) (tmg)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
3:11-cv-528-RJC-DSC
NATIONWIDE TRUSTEE
SERVICES, INC.,

)
)
)
Plaintiff,
)
)
v.
)
)
ANGEL L. RIVERA,
)
)
Defendant/Cross Claimant,
)
)
v.
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BANK OF AMERICA, N.A.,
)
)
Cross Defendant,
)
____________________________________)

ORDER

THIS MATTER comes before the Court on Third Party Defendant Bank of America,
N.A.’s (“Bank of America”) Motion to Remand, (Doc. No. 8), and Plaintiff Nationwide Trustee
Services, Inc.’s (“Nationwide”) Motion to Dismiss and Remand, (Doc. No. 10), both filed on
November 21, 2011, and the Magistrate Judge’s January 19, 2012 Memorandum and
Recommendation (“M&R”), recommending that this matter be remanded to Mecklenburg
County Superior Court, (Doc. No. 16).
I.

BACKGROUND
On June 14, 2011, Plaintiff Nationwide commenced a special proceeding in Mecklenburg

County Superior Court seeking foreclosure on a deed of trust on real property located at 16042
Stuarts Draft Court in Charlotte, North Carolina. On June 26, 2011, Defendant Angel L. Rivera
(“Rivera”) was served a copy of the Notice of Hearing of Foreclosure. The hearing was initially
scheduled for August 19, 2011, but was continued upon Nationwide’s request.

On October 21, 2011, more than thirty days after his receipt of the initial foreclosure
notice, Rivera filed a Notice of Removal of Action, (Doc. No. 1), alleging federal question
jurisdiction under 28 U.S.C. § 1331. On the same day, Rivera also filed counterclaims against
Nationwide and a third party complaint against Bank of America, (Doc. No. 3), asserting state
law claims for breach of contract and wrongful foreclosure.
On November 21, 2011, Bank of America and Nationwide each filed Motions to
Remand, (Doc. Nos. 8; 10), and Motions to Dismiss, (Doc. Nos. 9; 10). On January 19, 2012,
the Magistrate Judge entered an M&R, recommending that this matter be remanded to
Mecklenburg County Superior Court, (Doc. No. 16). Rivera filed an Objection to the M&R on
February 7, 2012, (Doc. No. 17), arguing that his Notice of Removal was timely filed and that
this Court has federal question jurisdiction.
On March 8, 2012, Rivera discovered that Nationwide had voluntarily dismissed the state
court foreclosure action on November 6, 2011. (Doc. No. 18 at 3). Rivera filed a Motion for
Order to Show Cause on March 16, 2012, seeking an Order requiring Nationwide and Bank of
America to show cause why, inter alia, they failed to timely serve Rivera and this Court with a
copy of the dismissal and why they moved this Court for an order to remand. (Id.). Nationwide
responded to the Motion for Order to Show Cause on April 2, 2012, (Doc. No. 19), indicating
that the dismissal had been filed by mistake. This matter is now ripe for adjudication.
II.

STANDARD OF REVIEW
The district court has authority to assign non-dispositive pretrial matters pending before

the court to a magistrate judge to “hear and determine.” 28 U.S.C. § 636(b)(1)(A). When
reviewing an objection to a magistrate judge’s order on a non-dispositive matter, the district
court must set aside or modify any portion of that order which is clearly erroneous or contrary to
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law. FED . R. CIV . P. 72(a). A motion for remand is generally viewed as a non-dispositive
motion, and thus is reviewed under Rule 72(a). See Wachovia Bank, N.A. v. Deutsche Bank
Trust Co. Americas, 397 F. Supp. 2d 698, 702 (W.D.N.C. 2005) (“[A]s a remand order does not
resolve or dispose of the case, the judge need only determine if the magistrate's order is clearly
erroneous or contrary to law.”) (quotation omitted).
III.

DISCUSSION
A.

Motion to Remand

Bank of America and Nationwide contend that this action should be remanded to the
Mecklenburg County Superior Court because the Notice of Removal is procedurally improper
and because this court lacks subject matter jurisdiction. The Magistrate Judge agreed. Rivera
objected, arguing that his Notice of Removal was timely filed and that this Court has federal
question jurisdiction.
Under 28 U.S.C. § 1446(b), a defendant must file a notice of removal “within thirty days
after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading
setting forth the claim for relief upon which such action or proceeding is based.” The record
indicates that Rivera received the Notice of Hearing on June 26, 2011.1 The Petition for
Removal was filed by Rivera on October 21, 2011, more than thirty days after he received the
Notice of Hearing. Under the terms of § 1446(b), the filing of the Petition of Removal was
untimely, and therefore procedurally defective. Because the removal was procedurally

1

N.C. Gen.Stat. § 45-21.1 et seq. sets out the procedure for foreclosure by power of sale under
North Carolina law. Foreclosures by power of sale are “special proceedings” under North
Carolina, see Phil Mech. Constr. Co., Inc. v. Haywood, 325 S.E.2d 1, 3 (N.C. Ct. App. 1985),
which are initiated by the filing of a notice of hearing instead of a complaint and summons. N.C.
GEN . STAT . § 45-21.16.
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improper, the court need not consider whether it has subject matter jurisdiction over this case.
See In re Foreclosure of a Deed of Trust Executed by Prodev, No. 5:08-CV-569-F, 2008 WL
5234301, at * 2 (E.D.N.C. Dec. 15, 2008). The Magistrate Judge’s recommendation of remand
is ADOPTED and the Motions to Remand are GRANTED.
B.

Motion for Order to Show Cause

On March 16, 2012, Rivera filed a Motion for Order to Show Cause, (Doc. No. 18),
asking this Court for an Order to Show Cause why the motions to remand “should not be
dismissed with prejudice, and why sanctions should not issue.” (Doc. No. 18 at 2) (emphasis in
original). Rivera indicates that on March 8, 2012, “acting on a hunch,” Rivera’s agent2 reviewed
the state court file and discovered that Nationwide had voluntarily dismissed the foreclosure
action on November 6, 2011. (Id. at 3). Rivera requests an order requiring Nationwide and
Bank of America to show cause why, inter alia, they failed to timely serve Rivera and this Court
with a copy of the dismissal and why they moved this Court for an order to remand. (Id.).
In response, Nationwide states that the dismissal was “filed by mistake.” (Doc. No. 19 at

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According to the Docket Report, Rivera is proceeding pro se. However, Bank of America
states in its Motion to Remand: “Rivera, through his efforts and the efforts of his alleged
attorney, Jennifer L. Wilson, who is not a North Carolina licensed attorney, filed for improper
removal of this action.” (Doc. No. 8 at 7). To the extent that Rivera’s “agent” is an attorney
who is ghostwriting his filings, this Court admonishes Rivera that this court condemns the
ghostwriting of pleadings for parties purporting to appear pro se. “Ghostwriting legal documents
‘(1) unfairly exploits the Fourth Circuit's mandate that the pleadings of pro se parties be held to a
less stringent standard than pleadings drafted by lawyers, (2) effectively nullifies the
certification requirement of Rule 11 of the Federal Rules of Civil Procedure,’” and (3)
circumvents the appearance and withdrawal requirements of Local Rule 83.1 of the Western
District of North Carolina. Bittle v. Elec. Ry. Imp. Co., 576 F. Supp. 2d 744, 755 n.9 (M.D.N.C.
2008) (quoting Laremont-Lopez v. Se. Tidewater Opportunity Project, 968 F.Supp. 1075, 1078
(E.D. Va.1997)). The Court further warns any attorney providing ghostwriting assistance that he
or she is behaving unethically. Davis v. Back, No. 3:09-cv-557, 2010 WL 1779982, at *13 (E.D.
Va. Apr. 29, 2010); see also Anderson v. Duke Energy Corp., No. 3:06-cv-399, 2007 WL
4284904, at *1 n.1 (W.D.N.C. Dec. 4, 2007) (Reidinger, J.).
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2). Nationwide further argues that the state court action was stayed on October 21, 2011, when
Rivera filed his Motion for Removal, thereby rendering the November 2011 dismissal
ineffective. (Id.). In support, Nationwide cites North Carolina Rule of Civil Procedure 12(a)(2):
Upon the filing in a district court of the United States of a petition for the removal
of a civil action or proceeding from a court in this State and the filing of a copy of
the petition in the State court, the State court shall proceed no further therein
unless and until the case is remanded.
Similarly, by entry of this Order remanding the action to state court, the jurisdiction of this Court
ends and the Court has no power to decide whether the purported dismissal was effective. Thus,
Rivera and Nationwide will need to resolve this issue in state court. Rivera’s Motion for Order
to Show Cause is DENIED.
C.

Motion for Costs and Expenses

Bank of America also seeks an award of just costs and actual expenses, including
attorneys fees, incurred as a result of the removal of this action. (Doc. No. 8 at 6). In support of
this request, Bank of America cites Martin v. Franklin Capital Corp., 546 U.S. 132 (2005) and
argues that Rivera’s removal was “unreasonable and unfounded.” (Id.).
Pursuant to 28 U.S.C. § 1447(c), “[a]n order remanding the case may require payment of
just costs and any actual expenses, including attorney fees, incurred as a result of the removal.”
28 U.S.C. § 1447(c). Bank of America cites Martin, 546 U.S. at 132, in support of such award.
This Court interprets Martin, however, as supporting the opposite conclusion. The Martin Court
explained:
[T]he removal statute grants defendants a right to a federal forum. See 28 U.S.C.
§ 1441 (2000 ed. and Supp. II). A remand is necessary if a defendant improperly
asserts this right, but incorrectly invoking a federal right is not comparable to
violating substantive federal law. The reasons for adopting a strong presumption
in favor of awarding fees that were present in Piggie Park are accordingly absent
here. In the absence of such reasons, we are left with no sound basis for a similar
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presumption. Instead, had Congress intended to award fees as a matter of course
to a party that successfully obtains a remand, we think that “[s]uch a bold
departure from traditional practice would have surely drawn more explicit
statutory language and legislative comment.” Fogerty v. Fantasy, Inc., 510 U.S.
517, 533 (1994).
Id. (citing Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402 (1968) (per curiam)). As
the Supreme Court stated in Fogerty, 510 U.S. 517 at 533, “[t]he word ‘may’ clearly connotes
discretion. The automatic awarding of attorney's fees to the prevailing party would pretermit the
exercise of that discretion.” Indeed, “Congress used the word ‘shall’ often enough in § 1447(c) as when it specified that removed cases apparently outside federal jurisdiction ‘shall be
remanded’ - to dissuade us from the conclusion that it meant ‘shall’ when it used ‘may’ in
authorizing an award of fees.” Martin, 546 U.S. at 136.
Bank of America argues that this case is similar to Prodev, 2008 WL 5234301, where the
Eastern District of North Carolina found that the party seeking remand, FMV, was entitled to an
award of the costs and expenses incurred as a result of the removal of the action by Hood. The
Eastern District stated:
Here, Hood received the Notice of Hearing on September 29, 2008. The record
indicates that Hood filed no objections prior to the hearing. FMV represents that
Hood was present for hearing, and again raised no objections to the foreclosure.
Consequently, on October 13, 2008, the Clerk of Court for the Superior Court
signed and entered an order allowing the foreclosure. Under North Carolina law,
Hood had ten days to file an appeal of the Foreclosure Order, but chose not to do
so. See N.C. Gen.Stat. § 45-21.16(d1). Instead, he waited almost a month to file
the “Petition for Removal” on Friday, November 14, 2008 - the last business day
before the scheduled foreclosure sale on Monday, November 17, 2008.
Prodev, 2008 WL 5234301, at *2. The court found that the “Petition for Removal was filed for
the purposes of delaying the foreclosure sale and prolonging the foreclosure proceedings. The
court concludes that this falls within the “unusual circumstances” warranting a departure from
the general rule espoused in Martin and is faithful to the purposes of awarding fees under §
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1447(c).” Id. at *3.
Here, Rivera states that he contested the continuance of the foreclosure hearing, made
objections at the foreclosure hearing and moved for reconsideration after judgment was entered.
See (Doc. No. 17 at 2). Rivera sought removal based on federal question jurisdiction, stating as
his grounds for removal that Nationwide and/or Bank of America violated Article III of the U.S.
Constitution, 28 U.S.C. § 17(a), Federal Rule of Civil Procedure 17(a), the National Banking Act
and Due Process of Law. (Doc. No. 1 at 3). The Court finds that Rivera’s Motion for Removal,
albeit procedurally defective, does not appear to have been filed in bad faith or with the intention
of purposefully delaying the foreclosure sale. Therefore, the Court finds that the “unusual
circumstances” warranting a departure from the general rule stated in Martin are not present here
and Bank of America’s request for fees and costs is DENIED.
IV.

CONCLUSION
IT IS, THEREFORE, ORDERED that:
1.

Bank of America’s Motion to Remand, (Doc. No. 8), is GRANTED;

2.

Bank of America’s Motion to Dismiss, (Doc. No. 9), is DENIED as moot;

3.

Nationwide’s Motion to Dismiss and Motion to Remand, (Doc. No. 10), is
GRANTED in part and DENIED in part. That is, the portion of Nationwide’s
Motion seeking remand is GRANTED and the portion seeking dismissal is
DENIED as moot;

4.

The Magistrate Judge’s M&R is ADOPTED;

5.

Rivera’s Motion for Order to Show Cause, (Doc. No. 18), is DENIED; and

6.

This matter is REMANDED to Mecklenburg County Superior Court.

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Signed: April 20, 2012

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