Aurora Loan Services LLC v. Leitner et al

Filing 4

REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE re 3 Complaint filed by Aurora Loan Services LLC.. Signed by Magistrate Judge Don D. Bush on 4/13/2012. (baf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
AURORA LOAN SERVICES, LLC,
Plaintiff,

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V.
JANET S. LEITNER AND STAN LEITNER
AND/OR ALL OTHER OCCUPANTS,
Defendants.

CAUSE NO. 4:12cv202

REPORT AND RECOMMENDATIONS OF UNITED STATES MAGISTRATE JUDGE
Having reviewed the record in this case, the Court finds that this matter should be
REMANDED.
BACKGROUND
This is a removal filed by a pro se Defendant. While Defendant did not include all of the
records from state court in her removal paperwork, the following dates are clear from the materials
filed. This forcible detainer suit was originally filed by Plaintiff in the Justice of the Peace Court,
Precinct 3, Place 1, Denton County on March 1, 2012 (see Dkt. 1-3, Page ID # 7). According to the
Original Petition for Forcible Detainer, Plaintiff is the owner of Property located at 925 Ranch Road,
Copper Canyon, Texas, following a foreclosure, but Defendants Janet S. and Stan Leitner have failed
to vacate and surrender possession of it. It appears that Defendants were served with the forcible
detainer action on March 6, 2012 (see Dkt. 1-2 at Page ID #6). Sometime after that, prior to March
28, 2012, Defendants apparently appealed the Justice of the Peace Court’s rulings (a ruling which

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is not reflected in the record) to the County Court at Law 2 of Denton County (see Dkt. 1-4, Page
ID #11).1 Then, on April 9, 2012, Defendant Janet S. Leitner removed the matter to this Court,
arguing the Court has diversity jurisdiction over Plaintiff’s request for possession of the Property.
As set forth below, the Court finds that the case should be remanded.
STANDARD
A notice of removal “shall be filed 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....” 28 U.S.C. § 1446(b). A court is required to strictly
construe the removal statute in favor of remand and against removal. 28 U.S.C. § 1447; In re HotHed Inc., 477 F.3d 320, 323 (5th Cir. 2007). Federal district courts are of limited jurisdiction and
may hear only those cases authorized by a federal statute, the Constitution, or U.S. treaty. Kokkonen
v. Guardian Life Ins. Co., 511 U.S. 375, 377, 114 S. Ct. 1673, 1675, 128 L. Ed.2d 391 (1994);
Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). When there is no subject-matter
jurisdiction, remand is mandatory. 28 U.S.C. § 1447(c).
ANALYSIS
Defendant’s removal fails for various reasons, and remand is mandatory here. First, it
appears that Defendant’s removal was not made within 30 days of receipt by the Defendant of the

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The Court also notes that the publicly available docket sheet for the Justice of the Peace
Court indicates that Defendants were both served on March 6, 2012, that a trial by judge was
held on March 13, 2012, and that the appeal to county court was filed on March 23, 2012. See
http://justice1.dentoncounty.com/PublicAccess/CaseDetail.aspx?CaseID=2019462. See also
http://justice1.dentoncounty.com/PublicAccess/CaseDetail.aspx?CaseID=2025903

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initial pleading setting forth a claim for relief as required by 28 U.S.C. § 1446(b). The original
petition in the removed case was served on Defendant on March 6, 2012. Therefore, any removal
should have been made by April 5, 2012. It was not. The parties’ diversity was apparent on the face
of Plaintiff’s original petition. Even under Defendant’s theory of diversity jurisdiction, the removal
was not timely.
Also, Defendant’s removal is barred by 28 U.S.C. § 1441(b) and the “forum defendant rule.”
Section 1441(b) states, in part, that a case removed on diversity may only be removed “if none of
the parties in interest properly joined and served as defendants is a citizen of the State in which such
action is brought.” 28 U.S.C. § 1441(b). Defendant is a Texas resident.
The Court also notes that, by seeking an appeal to the Collin County Court at Law,
Defendants availed themselves of the mechanisms of the state courts and waived their right to
remove the action to federal court. Brown v. Demco, Inc., 792 F. 2d 478, 481 (5th Cir. 1986). They
cannot now come to this Court seeking a different result.
The Court also notes that the state suit names Janet S. Leitner, Stan Leitner and all other
occupants as Defendants and both Janet S. Leitner and Stan Leitner made appearances in the state
court matter but only Defendant Janet S. Leitner removed. The record contains no evidence that all
Defendants consented to her removal, as is required by 28 U.S.C. § 1446(b)(2)(A).
More importantly, even if the removal was timely or not waived or procedurally or otherwise
defective, there does not appear to be any valid basis for federal jurisdiction here. Defendant
removed this case based on diversity of the parties under 28 U.S.C. § 1332. Suits are removed on

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the basis of diversity jurisdiction when the suit involves a controversy between citizens of different
states and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332. While there may be
diversity of citizenship between the parties here, Defendant has not shown that the amount in
controversy exceeds $75,000, and it was Defendant’s burden to make such a showing. Garcia v.
Koch Oil Co. of Texas, Inc., 351 F.3d 636, 638-39 (5th Cir. 2003). Defendant argues that the amount
in controversy exceeds $75,000 because the fair market value of the Property is $650,000, however,
the forcible detainer action only seeks possession of the already foreclosed on property. Ownership
of the home is not a matter in controversy here. As one Texas Court of Appeals noted:
The primary object of a [forcible entry and detainer or forcible detainer] suit is a
recovery of possession. The primary issue is a right to possession. There may be
joined in said suit a cause of action to recover delinquent rents payable under the
contract if the amount is within the jurisdiction of the justice court. Rule 738,
Texas Rules of Civil Procedure. However, this is rent as such and not damages
for wrongful withholding of the premises or other benefits accruing to the
appellees under the contract.

Dews v. Floyd, 413 S.W.2d 800, 805, 413 S.W.2d 800 (Tex. Civ. App. 1967, writ dism’d); see also
Hart v. Keller Props., 567 S.W.2d 888, 889, 567 S.W.2d 888 (Tex. Civ. App. 1978) (“The rule is
settled that the measure of the lessor’s damages for withholding possession pending appeal of the
forcible detainer action is the reasonable rental value.”).
Finally, nothing about the state law action appears to raise issues of federal law, therefore,
there was no federal subject matter jurisdiction upon which to base removal under, and remand is
appropriate. Forcible detainer actions are governed by the Texas Property Code and are questions
of state, not federal, law. See TEX . PROP . CODE ANN . § 24.001, et seq.

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Defendant has the burden of proof in demonstrating that removal to federal court is proper.
Gasch v. Hartford Acc. & Indem. Co., 491 F.3d 278, 281 (5th Cir. 2007). She has not done so, and
given the record here, cannot do so. Removal was improper and the case must be remanded.
Recommendation
It is, therefore, recommended that this case be remanded to the County Court at Law #2,
Denton County, Texas for further proceedings.
Within fourteen (14) days after service of the magistrate judge’s report, any party may serve
and file written objections to the findings and recommendations of the magistrate judge. 28
U.S.C.A. § 636(b)(1)(c).
Failure to file written objections to the proposed findings and recommendations contained
in this report within fourteen days after service shall bar an aggrieved party from de novo review by
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the district court of the proposed findings and recommendations and from appellate review of factual
findings accepted or adopted by the district court except on grounds of plain error or manifest
injustice. Thomas v. Arn, 474 U.S. 140, 148 (1985); Rodriguez v. Bowen, 857 F.2d 275, 276-77 (5th
Cir. 1988).
SIGNED this 13th day of April, 2012.
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DON D. BUSH
UNITED STATES MAGISTRATE JUDGE

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