Mason, Jr. et al v. Bank of America, National Association et al

Filing 38

REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE re 30 MOTION to Remand filed by Kenneth E. Mason, Jr., Kimberly G. Mason. Plaintiffs' Motion to Remand (Dkt. 30) should be DENIED, and the Court will proceed with evaluating the merits of Defendants' motions to dismiss. Signed by Magistrate Judge Don D. Bush on 2/14/2013. (kls, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
KENNETH E. MASON, JR. and
KIMBERLY G. MASON
Plaintiffs,
VS.
BANK OF AMERICA, NATIONAL
ASSOCIATION; MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC.; MERSCORP, INC.;
STEWART TITLE COMPANY; and
STEWART TITLE GUARANTY
COMPANY
Defendants.

§
§
§
§
§
§
§
§
§
§
§
§
§
§
§
§

Case No. 4:12cv400

REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
On October 26, 2012, Pro se Plaintiffs filed their Motion to Remand (Dkt. 30). As set forth
below, the motion should be DENIED.
Plaintiffs originally filed their Complaint and Request for Temporary Restraining Order and
Application for Permanent Injunction against Defendants Bank of America, National Association,
Mortgage Electronic Registration Systems, Inc., MERS Corp., Inc., and Stewart Title Company on
June 1, 2012 in the District Court of Denton County, Texas. See Dkt. 4. Plaintiffs’ original state
court complaint asserted the following causes of action: (1) violations of Section 12.002 of the Texas
Civil Practices and Remedies Code; (2) unjust enrichment; (3) negligent misrepresentation; and (4)

1

fraudulent misrepresentation for which Plaintiffs seek an award of damages and exemplary damages.
Plaintiffs also requested the entry of declaratory judgment that “the Deed of Trust and provisions
therein relating to enforcement of the Note through foreclosure” regarding their property located at
1110 Cogburn, Shady Shores, Texas, 76208 are null and void, declaratory judgment that Defendants’
claimed interest in the Property is unenforceable, and injunctive relief to restrain any foreclosure on
the Property.
On June 28, 2012, Plaintiffs’ filed their First Amended Complaint, Application for
Temporary Restraining Order and Jury Demand in the state court action, asserting the same causes
of action but adding claims for (5) slander of title/petition to quiet title; (6) violations of the Fair
Debt Collections Practices Act, 15 U.S.C. § 1692; (7) violations of RESPA, 12 U.S.C. § 2601; and
(8) negligent supervision and adding Stewart Title Guarantee Company as a defendant. See Dkt. 5-3.
Defendants Bank of America, N.A. (“BANA”), Mortgage Electronic Registration Systems,
Inc. (“MERS”) and MERSCORP, Inc. (“MERSCORP”) removed the case to this Court on July 2,
2012. Defendants’ Notice of Removal claims that the Court has diversity jurisdiction over Plaintiffs’
claims. See Dkt. 1. Almost three months after removal, Plaintiffs filed a motion to remand, arguing
that the Court has no subject matter jurisdiction over their claims.
STANDARD
Generally, motions to remand based on any defect other than lack of subject matter
jurisdiction must be made within 30 days after the filing of a notice of removal. 28 U.S.C. § 1447.
However, “[i]f at any time before final judgment it appears that the district court lacks subject matter

2

jurisdiction, the case shall be remanded.” Id. 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). 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). The removing party 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).
ANALYSIS
Defendants removed this case based on diversity jurisdiction. Suits are removed on the basis
of diversity jurisdiction when: (1) the suit involves a controversy between citizens of different states
and (2) the amount in controversy exceeds $75,000. 28 U.S.C. § 1332. It is Defendants’ burden
here to show that this Court has diversity jurisdiction. Garcia v. Koch Oil Co. of Texas, Inc., 351
F.3d 636, 638-39 (5th Cir. 2003).
Defendants’ notice of removal states that Bank of America is a citizen of the State of North
Carolina, that MERS and MERSCORP are citizens of Delaware and Virginia, and that Defendant
Stewart Title Company is a nominal party whose Texas citizenship should be disregarded. See Dkt.
1 at 2-3. And it appears undisputed based on the allegations here that Plaintiffs are citizens of Texas.
That this case involves a controversy between citizens of different states for purposes of removal
does not appear to be disputed.

3

The Court thus turns its focus to the amount in controversy. In addition to injunctive and
declaratory relief as to the parties’ interests in the Property, Plaintiff’s state court complaint seeks
damages and exemplary damages in an unspecified amount. When a petition does not allege a
specific amount of damages, a removing defendant can satisfy its burden by showing – by a
preponderance of the evidence – that it is facially apparent from the plaintiff’s complaint that the
claims are likely above jurisdictional amount, or, if the value of claim is not apparent, by setting
forth facts, either in the removal petition or by affidavit, that support a finding of requisite amount.
Garcia, 351 F.3d at 639-40; see also Corley v. Southwestern Bell Tel. Co., 924 F. Supp. 782, 786
(E.D. Tex. 1996) (citing Chapman v. Powermatic, Inc., 969 F.2d 160, 163, n.6 (5th Cir. 1992)
(noting that a federal district court may make an independent appraisal of the amount in
controversy)).
Here, Defendants have argued that the subject Property had an appraised value of
$475,710.00 according to the Denton Central Appraisal District, see Dkt. 32 at 6, and that such
Property is the object of the litigation that determines the amount in controversy. The Court agrees.
See, e.g., Martinez v. BAC Home Loans Servs., LP, 777 F. Supp.2d 1039, 1047-1048 (W.D. Tex.
2010) (“regardless of whether the property at issue has been sold in foreclosure or is still held by the
lender, the value of the property is the object of the litigation for the purposes of determining
whether the amount-in-controversy requirement has been met so long as the plaintiff is seeking
injunctive relief to prevent or undo the lender’s sale of the property”).

4

In this case, not only have Plaintiffs asserted four causes of action, seeking the recovery of
damages and exemplary damages, they request injunctive and declaratory relief as to the Property.
“In actions seeking declaratory or injunctive relief the amount in controversy is measured by the
value of the object of the litigation.” Leininger v. Leininger, 705 F.2d 727, 729 (5th Cir. 1983). As
the Fifth Circuit has noted, when “a right to property is called into question in its entirety, the value
of the property controls the amount in controversy.” Nationstar Mortgage, LLC v. Knox, 351 Fed.
App’x 844, 848 (5th Cir. 2009) (internal citation omitted) (finding that, although party sought below
jurisdictional limit in monetary damages, the amount in controversy exceeded $75,000 where party
also sought rescission and cancellation of the deed of trust and cancellation or removal of the clouds
on title regarding property with a mortgage that exceeded $107,000). Having considered the value
of Plaintiffs’ Property (which Plaintiffs have not disputed) – in conjunction with Plaintiffs’ demand
for actual and exemplary damages – the Court finds that Defendants have shown by a preponderance
of the evidence that the amount in controversy here exceeds $75,000.
In their motion to remand, Plaintiffs argue that his state court action should be construed as
a counterclaim brought by them to stop any foreclosure action by Defendants. As the Court has
noted in another case filed by Plaintiff Kenneth Mason, the Court is not convinced by this argument.
Plaintiffs initiated their claims in the state court and those claims were subject to removal, even if
their complaint was a reaction to non-judicial foreclosure proceedings by Defendants. The removal
statute is clear that “any civil action brought in a State court of which this district courts of the
United States have original jurisdiction, may be removed....” 28 U.S.C. § 1441(a). Defendants have

5

shown how this Court had original jurisdiction over Plaintiffs’ civil state court action, and there is
no authority to support Plaintiffs’ argument. This Court should not remand the suit on that basis.
The also notes that the live state court pleading at the time of removal – Plaintiffs’ First
Amended Complaint, Application for Temporary Restraining Order and Jury Demand – also asserts
claims arising under federal law. Plaintiffs claim that Defendants violated the Fair Debt Collection
Practices Act, 15 U.S.C. § 1692 and the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601.
See Dkt. 5-3. Such would also give rise to federal question jurisdiction, because whether there is
removal jurisdiction is determined by the “claims in the state court complaint as it exists at the time
of removal.” Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th Cir. 1995). The
Court notes, however, that Defendants referred to the original (not amended) state court complaint
in their initial notice of removal and only later supplemented the record with the amended complaint.
Such may be a procedural defect in removal. However, because Plaintiffs’ motion to remand was
filed more than 30 days after removal, any remand based on a potential defect in the removal
paperwork was waived. 28 U.S.C. § 1447(c); Pavone v. Mississippi Riverboat Amusement Corp.,
52 F.3d 560, 566 (5th Cir. 1995). Nonetheless, under either complaint, there were grounds to remove
based on the grounds asserted and Defendants have shown their assertion of diversity jurisdiction
by a preponderance of the evidence.
RECOMMENDATION
Plaintiffs’ Motion to Remand (Dkt. 30) should be DENIED, and the Court will proceed with
evaluating the merits of Defendants’ motions to dismiss. Within fourteen (14) days after service

6

of the magistrate judge’s report, any party may serve and file written objections to the findings and
recommendations of the magistrate judge that the motion to remand be denied.
28 U.S.C. § 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
.

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 14th day of February, 2013.
.

____________________________________
DON D. BUSH
UNITED STATES MAGISTRATE JUDGE

7