White v. The Bank of New York Mellon

Filing 10

MEMORANDUM and ORDER denying 7 plaintiff's Motion to Remand Signed by Honorable James M. Munley on 8/19/10 (sm, )

White v. The Bank of New York Mellon

Doc. 10

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF PENNSYLVANIA S C O T T A. WHITE P la in t if f : N o . 3:10cv1426 : : (J u d g e Munley) : v. : : J P MORGAN CHASE BANK, N.A., : a s Indenture Trustee on behalf of the : N o te h o ld e r s and the Note Insurer of : A B F S Mortgage Loan Trust 2000-4, : M o r tg a g e Backed Notes, : D e fe n d a n t : ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
MEMORANDUM B e fo re the court is plaintiff's motion to remand the case to the Court of Common Pleas of Schuylkill County, Pennsylvania (Doc. 7). B a c k g ro u n d T h is case arises out of a real-estate dispute over plaintiff's home in Pottsville, P e n n s y lv a n ia . Plaintiff alleges that on January 24, 2008, Defendant J.P. Morgan C h a s e Bank ("Morgan") filed an action in the Court of Common Pleas of Schuylkill C o u n ty seeking foreclosure on the property in question. (See Complaint (hereinafter "C o m p lt."), exh. 1 to Notice of Removal (Doc. 1) at ¶ 4). Defendant Morgan asserted th a t the bank was the foreclosure trustee under the plaintiff's mortgage, and thus the p ro p e r party to assert rights under the mortgage against the plaintiff. (Id. at ¶ 5). Plaintiff alleges that Morgan had no such right, and was so informed by a preliminary o b je c tio n . (Id. at ¶ 6). Despite this information, Morgan filed an amended complaint

Dockets.Justia.com

which again asserted a right to foreclosure. (Id. at ¶ 7). Plaintiff again filed o b je c tio n s , and Morgan filed a second amended complaint. (Id. at ¶ 8-9). Morgan's a c tio n again forced plaintiff to file objections. (Id. at ¶ 9). Defendant then d is c o n tin u e d the foreclosure action, which plaintiff alleges was filed without probable c a u s e and in an effort to obtain money to which defendant was not entitled. (Id. at ¶ ¶ 10-11. Plaintiff filed a complaint in the Schulykill Common Pleas Court. The c o m p la in t alleged that defendant's foreclosure action was the result of gross n e g lig e n c e and sought damages in the form of attorney's fees and emotional d is tre s s . On July 9, 2010, Bank of New York Mellon ("Bank of New York" or "the B a n k "), representing itself as the successor in interest to Defendant Morgan, filed a n o tic e of removal in this court. (Doc. 1). The Bank alleged that there was diversity b e tw e e n the parties and the amount in controversy exceeded $75,000, meaning that th is court had jurisdiction over the matter and removal was appropriate. On July 13, 2 0 1 0 , the Bank filed an answer to the complaint, as well as a counterclaim and a th ird party complaint. (Doc. 3). On August 6, 2010, plaintiff filed a motion to remand the case to the Common P le a s Court in Schulykill County, bringing the case to its present posture. L e g a l Standard T h is case is before the court because defendant removed it from state court p u rs u a n t to 28 U.S.C. § 1441(a), which gives a defendant the right to remove "any

2

civil action brought in a State court of which the district courts of the United States h a v e original jurisdiction." 28 U.S.C. § 1441(a). Accordingly, "[t]he propriety of re m o v a l thus depends on whether the case originally could have been filed in federal c o u rt." City of Chicago v. Int'l College of Surgeons, 522 U.S. 156, 162 (1997). D is c u s s io n P la in tiff argues that he brought the lawsuit against J.P. Morgan Chase Bank, N .A , not the Bank of New York. The complaint alleged that Morgan was a c o rp o ra tio n with a place of business in Florida, but did not state where the c o rp o ra tio n was a citizen. Plaintiff argues that the Bank has improperly inserted its e lf into the case when it was never named as a defendant. Moreover, the Bank c o u ld not have been a defendant in state court, since the Bank did not play any role in the actions that injured him. Plaintiff does not dispute that diversity of citizenship m a y exist between himself and the Bank, but argues that this fact is immaterial, s in c e JP Morgan is the named defendant. T h e Bank is a New York corporation with its principal place of business in New Y o rk . (Notice of Removal at ¶ 7). The parties apparently agree that the amount in c o n tro v e rs y exceeds $75,000. At issue, then, is whether the Bank is the proper p a rty to the action, since plaintiff did not name the Bank in the state-court complaint. The notice of removal contends that the Bank of New York Mellon is "successor in in te re s t" to the named defendant, and that the defendant is therefore "misnamed in th e Complaint." (Id.). Plaintiff apparently feels that this representation is insufficient

3

to establish that the Bank is the proper defendant in this case. With reference to c o rp o ra tio n s , however, a "successor" is "generally . . . another corporation which, th ro u g h amalgamation, consolidation, or other legal succession, becomes invested w ith rights and assumes burdens of [the] first corporation." BLACKS LAW DICTIONARY (4th Ed.). In Pennsylvania, "successor corporations must be prepared to answer for th e acts of their predecessors. A successor which through a merger, consolidation o r de facto merger is the corporate embodiment of its predecessor must not be p e rm itte d to immunize itself in a specific jurisdiction from the liabilities of its p re d e c e s s o r." Simmers v. American Cyanamid Corp., 576 A.2d 376, 390 (Pa. S u p e r. Ct. 1990). As such, "when the successor is subject to the liabilities of its p re d e c e s s o r, the acts of a predecessor corporation may be attributed to its s u c c e s s o r for the purposes of determining whether jurisdiction is proper." Id. The Bank represents that it has stepped into JP Morgan's place, and has a s s u m e d its assets and liabilities. Indeed, the Bank has accepted service of the c o m p la in t and entered an appearance. Since the Bank admits that it will be liable for a n y judgment in this matter, the Bank is the proper defendant in this case and any a c tio n s of the predecessor corporation are attributed to the bank. As explained a b o v e , complete diversity exists between the parties. The amount in controversy e x c e e d s the statutory threshold. The jurisdiction of this court is therefore proper, a n d the court will deny the motion to remand. An appropriate order follows.

4

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF PENNSYLVANIA S C O T T A. WHITE P la in t if f : N o . 3:10cv1426 : : (J u d g e Munley) : v. : : J P MORGAN CHASE BANK, N.A., : a s Indenture Trustee on behalf of the : N o te h o ld e r s and the Note Insurer of : A B F S Mortgage Loan Trust 2000-4, : M o r tg a g e Backed Notes, : D e fe n d a n t : ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
ORDER AND NOW, to wit, this 19th day of August 2010, the plaintiff's motion to remand (Doc. 7) is hereby DENIED. BY THE COURT:

s/ James M. Munley JUDGE JAMES M. MUNLEY United States District Court

5