Sandlin v. Citibank, N.A. et al

Filing 20

ORDER adopting Report and Recommendations re 12 Report and Recommendations. Signed by Judge John T. Fowlkes, Jr. on 3/31/16. (Fowlkes, John)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE,
MEMPHIS DIVISION
JESSE SANDLIN,
PLAINTIFF,
v.
CITIBANK, N.A.,
CITIMORTGAGE, INC.,
DEFENDANTS.

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CASE NO. 2:15-cv-02768

ORDER ADOPTING THE MAGISTRATE JUDGE’S REPORT AND
RECCOMENDATIONS DENYING PLAINTIFF MOTION TO AMEND

Before the Court is the Plaintiff’s Motion to Remand, filed on December 3, 2015. (ECF
No. 9.) The Defendants filed a response to the motion on December 17, 2015. (ECF No. 17.)
This Court referred the matter to the United States Magistrate Judge for the management of all
pretrial matters pursuant to 28 U.S.C. § 636(b)(1)(B)-(C) and Fed. R. Civ. P. 1. Accordingly, the
Magistrate Judge issued her Report and Recommendations on December 18, 2015. (ECF No.
12.). On January 7, 2016, the Plaintiff filed objections to the Magistrate Judge’s Report and
Recommendations. (ECF No. 13.) The Plaintiff also filed a Motion to Amend Complaint to Add
Parties on January 8, 2016 (ECF No. 14), to which the defendant replied on January 22, 2016.
(ECF No. 17.) For the following reasons the Plaintiff’s objections are overruled and the
Magistrate Judge’s Report and Recommendations are fully adopted.
I.

Factual History

The Court has reviewed both Plaintiff’s Complaint and Objections, taking into account
that Plaintiff is a pro se litigant without the advantage of legal advice. With that in mind, the

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Court adopts the Magistrate Judge’s proposed findings of fact as the factual history. (ECF No.
12.)
II.

Standard of Review
A. Review of a Magistrate Judge’s Determination

The district court has the authority to “designate a magistrate judge to conduct hearings,
including evidentiary hearings, and to submit to a judge of the court proposed findings of fact
and recommendations for the disposition, by a judge of the court, of any motion.” 28 U.S.C. §
636(b)(1)(B). “The district judge may accept, reject, or modify the recommended disposition;
receive further evidence; or return the matter to the magistrate judge with instructions.” Fed. R.
Civ. P. 72(b)(3).
The district court has appellate jurisdiction over any decisions the magistrate judge issues
pursuant to such a referral. 28 U.S.C. § 636(b); Fed. R. Civ. P. 72. The standard of review that
is applied by the district court depends on the nature of the matter considered by the magistrate
judge. See Fed R. Civ. P. 72(b)(3) (“The district judge must determine de novo any part of the
magistrate judge’s disposition that has been properly objected to.”); Baker v. Peterson, 67 Fed.
App’x 308, 310 (6th Cir. 2003) (“A district court normally applies a ‘clearly erroneous or
contrary to law’ standard of review for nondispositive preliminary measures. A district court
must review dispositive motions under the de novo standard.” (internal citations omitted)).
III.

Analysis of The Magistrate Judge’s Report and Recommendations

In her Report and Recommendations, the Magistrate Judge examined whether the
Plaintiff’s Motion to Remand should be granted, and ultimately found that the Motion should be
denied. Specifically, the Magistrate Judge conclusions of law are as follows:

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A. The Defendant Did Not Waive Their Right to Remove
The Magistrate Judge concluded that, “It is clear here that the Defendants have not
waived the right to remove.” When determining whether a defensive action constitutes a waiver,
Courts look to the Defendant’s intent in filing the motion. See Bolivar Sand Co. v. Allied Equip.,
631 F. Supp. 171, 172 (W.D. Tenn. 1986). The Sixth Circuit only recognizes a waiver if the
intent to waive is “clear and unequivocal.” See Regis Assocs. v. Rank Hotels (Mgmt.) Ltd., 894
F.2d 193, 195 (6th Cir. 1990); Bolivar 631 F. Supp. at 172 (“[T]he general rule is that the
[defendants] actions must evidence a ‘clear and unequivocal’ intent to waive the right to
remove.”) When a defendant files a motion disposing of a case on the merits, in whole or in part,
courts will find the Defendant intended to waive their right to remove. See Bolivar, 631 F. Supp.
at 173. However, preliminary matters not decided on the merits, such as a motion for extension
or filing an answer to a complaint will not be found as intent to waive. See id; Ellora’s Cave
Publishing, Inc. v. Dear Author Media Network, LLC, 2015 WL 106062 *1 (N.D. Ohio 2015).
After reviewing the record, the Magistrate found that the actions taken by the Defendants
did not indicate an intent to waive their right to remove. (ECF No. 12 p. 4.) Specifically, the
Magistrate disagreed with the Plaintiff’s assertion that the Defendant waived his right by
accepting service of the complaint and appearing at the Circuit Court’s preliminary injunction
hearing. (ECF No. 12 p. 4.) Accepting service and appearing in a hearing before the court does
not convey an intent to dispose a case on the merits. Thus, the Magistrate Judge recommended
that Plaintiffs Motion to Remand be denied.
The Plaintiff filed objections to the Magistrate Judges Report and Recommendations on
January 7, 2016. (ECF No. 13). Specifically, the Plaintiff claims the Defendant’s preliminary
actions conveyed a ‘clear and unequivocal’ intent to waive their right to remove.

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The Sixth Circuit has emphasized that objections are to be specific in order to narrowly focus
the district court’s attention on the dispositive and contentious issues. Howard v. Sec’y of Health
and Human Servs., 932 F.2d 505, 509 (6th Cir. 1991) (citing Thomas v. Arn, 474 U.S. 140, 14748 (1985)) ([O]bjections were to address specific concerns[,which is] . . . ‘supported by sound
considerations of judicial economy. . . . [This] thereby prevent[s] the district court from being
‘sandbagged’ [on appellate review] by a failure to object.”). Without a specific objection, it is
difficult for the Court to construe how the Magistrate Judge’s Report and Recommendation
misrepresented the facts of this case or what cause or issue the Plaintiff could find objection.
The failure to identify specific concerns with a Magistrate Judge’s report and recommendation
allows the party’s objection to be deemed a general objection, or a failure to object entirely.
McCready v. Kamminga, 113 F. App’x 47, 49 (6th Cir. 2004) (citing Howard, 932 F.2d at 509).
Plaintiff asserts the Defendant waived his right to remove by accepting service of the
complaint, and appearing at the preliminary injunction hearing before the Circuit Court. (ECF
No. 13 p. 6.) In this objection, Plaintiff argues that service was properly executed pursuant to the
Tennessee Rules of Civil Procedure. Plaintiff also submits the Defense counsel’s appearance at
the injunction hearing indicated they were properly served. While the Plaintiff’s factual claims
may be true, his legal conclusions are not. Proper service or appearance at a preliminary hearing
does not evidence an intent to dispose of a case on the merits.
After a de novo review, the Court overrules the Plaintiff’s objection to the Magistrate Judge’s
Report and Recommendation on this issue.
B. Defendants Have Established the Amount in Controversy Exceeds $75,000
The Magistrate Judge found that the Defendants properly established that the amount in
controversy exceeded $75,000. While the complaint did not allege monetary damages, “[I]t is

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well established that the amount in controversy is measured by the value of the object of the
litigation.” Cleveland Housing Renewal Project v. Deutsche Bank Trust Co., 621 F.3d 554, 560
(6th Cir. 2010). To determine the amount in controversy in foreclosure actions, Courts must look
to the fair market value of the property or the amount owed on the mortgage. See Muheljic v.
Bank of America, N.A., 2014 WL 6085869, at *2. A majority of courts prefer the ‘fair market
value’ approach because it conforms with the Court’s requirement to consider the amount in
controversy from the Plaintiffs perspective. See Smith v. Nationwide Prop. & Cas. Inc. Co., 505
F.3d 401, 407 (6th Cir. 2007); Muheljic, 2014 WL 6085869 at *2. The burden is on the removing
party to prove by a ‘preponderance of the evidence’ that the amount in controversy exceeds the
jurisdictional threshold. See Gafford v. General Electric Co. 997 F.2d 150, 158 (6th Cir. 1993).
The Magistrate Judge found that the amount in controversy satisfied the jurisdictional
amount under either approach. (ECF No. 12 p. 6.) According to a valuation of the property by
CitiMortgage, the property had a market value of $108,000.00 as of October 5, 2015. (ECF No.
1-3.) Moreover, the Magistrate Judge found that a 2014 Modification of Deed of Trust reflected
a total amount owed of $144,385.99. Therefore, under both tests the Defendant has proven by a
preponderance of the evidence that the amount in controversy exceeds the jurisdictional
requirement.
The Plaintiff filed objections, arguing that the Defendants failed to properly establish the
amount in controversy. Specifically, the Plaintiff claims that no foreclosure proceedings were
taking place, and the complaint only seeks injunctive relief. Thus, the fair market value is
irrelevant for determining the amount in controversy. (ECF No. 9 p. 4.) Plaintiff also provided a
list of houses comparable to the subject property. The purpose of the list was to show that the
value of the house is considerably less than $75,000. (ECF No. 13 p. 3.) Evidence of comparable

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housing to the subject property being sold for less than $75,000 is irrelevant, and does not
preclude the Defendant from meeting their evidentiary burden. Moreover, the Defendant’s
proposition that the value of property is irrelevant because they are solely seeking injunctive
relief lacks legal merit. Plaintiff’s argument is devoid of case law and legal authority. The Court
finds that the Defendants have properly established that the amount in controversy exceeds
$75,000.
After de novo review, the Court overrules the Plaintiff’s objections to the Magistrate Judge’s
Report and Recommendation on this issue.

IV.

Motion to Amend

Plaintiff filed his motion to amend for the purpose of joining Shapiro, Ingle and Kirsh
(“Shapiro & Ingle”) as Defendants to this action. Specifically, plaintiff submits joinder is
warranted for Shapiro & Ingle for their roles as substitute trustees for the Defendants. In
opposition, the Defendants claim the Plaintiff’s motive to join Shapiro & Ingle is solely to
subvert diversity jurisdiction.
If a plaintiff seeks to join additional defendants whose joinder would destroy diversity
jurisdiction after removal, the court may deny joinder, or permit joinder and remand the case
back to state court. 28 U.S.C. § 1447 (e). It is within the Court’s discretion whether to grant a
Plaintiff ‘s motion to amend post removal if the motion would destroy diversity jurisdiction. See
Christian v. Works, 2010 WL 1427299; City of Cleveland v. Deutsche Bank Trust Co., 571
F.Supp.2d 807, 823 (6th Cir. 2008). Courts generally employ four factors when determining
whether to permit joinder that would destroy diversity: (1) the extent to which the purpose of the
amendment is to defeat federal jurisdiction; (2) whether the plaintiff has been dilatory in seeking

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amendment; (3) whether the plaintiff will be significantly prejudiced if amendment is not
allowed; and (4) any other equitable factors. See City of Cleveland, 571 F.Supp.2d at 823;
Smokey Mountain Knife Works, Inc. v. Forward Motion Media, LLC, 2015 WL 1608785, at *3
(E.D. Tenn. 2015). Court have found the most important inquiry under 28 U.S.C. § 1447(e), to
be whether the plaintiff’s motivation is to defeat diversity jurisdiction. See Smokey Mountain,
2015 WL 1608785 at *3; City of Cleveland, 571 F.Supp.2d at 823.
Here, based on the record,1 and Tennessee Law regarding the liability of trustees, it is
appears the prime motivation for plaintiffs motion is to destroy diversity jurisdiction. Denial of
the amendment would not prejudice the Plaintiff, because under T.C.A. § 35-5-116 (f)2, trustees
cannot be held liable for errors resulting from reliance on information gathered from the secured
party. Moreover, Plaintiff is seeking injunctive relief, making the necessity of joining Shapiro &
Ingle a dubious proposition. Even if joinder of Shapiro & Ingle was statutorily permissible, it
still would not enhance or ensure Plaintiffs’ remedies. Additionally, Plaintiff concludes his
motion to amend by stating, “Therefore, as a matter of law, this matter must be remanded to the
Circuit Court of Shelby County as there exists no diversity of citizenship. . .” (ECF No. 14 p. 6.)
Thus, the Court finds that the Plaintiff’s Motion to Amend was filed with the intent to destroy
diversity jurisdiction. Accordingly, the Motion to Amend is DENIED.

1

Plaintiff filed his Motion to Amend on January 8, 2016 (ECF No. 14), one day after filing objections to
the Magistrate Judge’s Report and Recommendation that found diversity jurisdiction to be valid (ECF No. 12). It is
dubious the filings were coincidental; thus, the record supports a finding that the Plaintiff intended to subvert
diversity jurisdiction with their Motion to Amend.
2

T.C.A. §35-5-116(f):

A trustee shall not be liable for any good faith error resulting from reliance on any
information in law or fact provided by the borrower or secured party or their respective
attorney, agent, or representative or other third party.

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V.

Conclusion

For the reasons set forth above, the Court ADOPTS the Magistrate Judge’s Report and
Recommendation. (ECF No. 12.) Therefore, the Plaintiff’s Motion to Remand, (ECF No. 9), is
DENIED. Additionally, the Plaintiff’s Motion to Amend is DENIED.
IT IS SO ORDERED on this 31st day of March, 2016.

s/John T. Fowlkes, Jr.
JOHN T. FOWLKES, JR.
United States District Judge

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