Yusufzai v. Wells Fargo Bank, N.A., as Trustee for the MLMI Trust Series 2005-WMC2 et al
REPORT AND RECOMMENDATIONS OF UNITED STATES MAGISTRATE JUDGE re 9 MOTION to Remand to State Court filed by Afrah Yusufzai.. Signed by Magistrate Judge Don D. Bush on 1/25/2013. (pad, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
§ Case No. 4:12CV669
WELLS FARGO BANK, N.A.,
TRUSTEE FOR THE MLMI TRUST
SERIES 2005-WMC2 and
JOHN DOES 1-XX, et al.
REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Now before the Court is “Plaintiff’s Reply and Objection to Defendants’ Motion for
Removal” in which Plaintiff seeks remand of this case to state Court (see Dkt. 9). Although pro se
Plaintiff’s grounds for remand are not wholly clear to the Court, it briefly addresses Defendant’s
removal and the Court’s jurisdiction here.
Defendant Wells Fargo Bank, N.A. removed this action to this Court from the 431st District
Court of Denton County on October 19, 2012. See Dkt. 1. Defendant removed this action based on
federal question jurisdiction, 28 U.S.C. § 1331, and diversity jurisdiction, 28 U.S.C. § 1332. Id.
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 Hot-
Hed 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). 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).
According to the record here, Defendant was served with citation in the state court action on
September 25, 2012. See Dkt. 1-7 at 2. The case was removed within thirty days of that; therefore,
removal was timely. The state court docket sheet also does not reflect any substantive activity by
Defendant in the state court action such that waiver of the right to remove would be an issue. See
Thus, the Court looks at the substantive grounds for removal to determine whether the Court
has jurisdiction over Plaintiff’s claims. Defendant claims diversity jurisdiction as one grounds for
removal. 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 Defendant’s 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).
Defendant’s notice of removal states that Wells Fargo is a citizen of the State of South
Dakota, see Dkt. 1 at 3, and it appears undisputed based on the allegations here that Plaintiff is a
citizen of Texas. Thus, this case involves a controversy between citizens of different states.
As to the amount in controversy, Plaintiff’s state court complaint seeks, among other things
to vacate the foreclosure sale of Plaintiff’s Property, to award Plaintiff “just compensation” for
wrongful foreclosure, civil penalties and restitution. Dkt. 1-3 at 46-47.
When, as here, a petition does not allege a specific amount of damages, the removing
defendant must prove by preponderance of that evidence that the amount in controversy exceeds
$75,000. Garcia, 351 F.3d at 639-40. The removing defendant can satisfy its burden by showing
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. Id. at 640; 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, Defendant has alleged that the subject property is currently appraised at $333,693
according to the Denton Central Appraisal District. See Dkt. 12 at 4. This alone likely satisfies the
amount in controversy requirement. 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”).
Moreover, assuming Plaintiff is arguing that the only relief requested here is the injunctive relief of
recision and reinstatement, the pleadings also seek “just compensation” and penalties. Having
considered the value of Plaintiff’s Property – in conjunction with the request for other compensation
and penalties – the Court finds that Defendant has shown by a preponderance of the evidence that
the amount in controversy here exceeds $75,000.
The Court also finds federal question jurisdiction here. A defendant may remove to federal
district court under federal question jurisdiction “only when a federal question is presented on the
face of the plaintiff’s properly pleaded complaint.” Rivet v. Regions Bank of Louisiana, 522 U.S.
470, 118 S. Ct. 921, 924, 139 L. Ed.2d 912 (1998). See 28 U.S.C. § 1441(a). “The court must
presume that a suit lies outside this limited jurisdiction, and the burden of establishing federal
jurisdiction rests on the party seeking the federal forum.” Moore v. Bis Salamis, Inc., 748 F. Supp.2d
598, 601 (E.D. Tex. 2010) (internal quotations omitted).
Here, Plaintiff’s Complaint for Fraud specifically brings claims under the Real Estate
Settlement Procedures Act and Fair Debt Collection Practices Act and even asserts jurisdiction under
28 U.S.C. §1331. Dkt. 1-3 at 45. Even if there were no diversity jurisdiction, sufficient facts are
alleged for federal question jurisdiction.
Plaintiff’s Construed Motion to Remand (Dkt. 9) should be DENIED.
Finally it is unclear to the Court whether Plaintiff’s Complaint for Fraud, filed on September
17, 2012 in state court is intended to replace or supplement Plaintiff’s Proposed Temporary
Restraining Order, filed as the initial pleading in the state court matter on September 13, 2012, and
listed currently on this Court’s docket as Plaintiff’s live complaint. Therefore, on or before
February 15, 2013, Plaintiff shall file an amended complaint setting forth all Plaintiff’s claims
herein in a single document.
The Court recommends that the motion to remand (Dkt. 9) be DENIED and the case proceed
in this Court. 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 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
SIGNED this 25th day of January, 2013.
DON D. BUSH
UNITED STATES MAGISTRATE JUDGE
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