Shearin et al v. Wells Fargo Bank N.A. et al

Filing 30

REPORT AND RECOMMENDATIONS OF UNITED STATES MAGISTRATE JUDGE re 14 Amended MOTION to Remand to State Court filed by Christopher Shearin, Dana Shearin. Signed by Magistrate Judge Don D. Bush on 8/18/2015. (baf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
DANA L. SHEARIN AND
CHRISTOPHER M. SHEARIN,

§
§
§
§
§
§
§
§

Plaintiffs,
v.
WELLS FARGO BANK, N.A., et al.
Defendants.

Case No. 4:14CV723

REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Now before the Court is Plaintiffs’ Corrected Motion to Remand (Dkt. 14). Having
considered the parties’ briefing and the record before the Court, the Court finds that the motion
should be DENIED.
Plaintiffs Dana L. Shearin and Christopher M. Shearin filed their Original Petition in state
court on October 6, 2014. Plaintiffs named the following as Defendants: Wells Fargo Bank, N.A.,
Bank of America, NA, BAC Home Loans Servicing, L.P., Wilshire Credit Corporation, First
Franklin Financial Corporation, First Franklin, a Division of National City Bank of Indiana,
N.A,,The MHMI Trust Series 2-5-FFHI, Mackie Wolf & Zientz, P.C., Wes Webb, Michael W.
Zientz, L. Keller Mackie, Carl Niendorff, Ron Bedford, and AVT Title Services. Dkt. 2 at ¶¶ 1-11.
In addition to challenging Defendants’ authority and standing to foreclose, Plaintiffs bring claims
for breach of contract, anticipatory breach of contract, violations of the Texas Consumer Credit
Code/Debt Collection Practices Act, breach of tort of unreasonable collection efforts, and quiet title.
Plaintiffs also seek declaratory judgment and an accounting. See Dkt. 2 at ¶¶ 29-Z.38.

1

On November 13, 2014, Defendant Wells Fargo, N.A. removed the case to this Court, on the
basis of diversity jurisdiction. On December 16, 2014, Plaintiffs filed their motion to remand
arguing that this case should be remanded back to state court because they properly joined as
Defendants Mackie, Wolf & Zientz, PC, Wes Webb, Michael W. Zientz, L. Keller Mackie, Carl
Niendorff, Ron Bedford and AVT Title Services. These Defendants (“the Texas Defendants”) are
all Texas citizens. In its notice of removal, Defendant argued that the Texas Defendants were
improperly joined and that their citizenship should be disregarded for jurisdictional purposes.
STANDARD
A court may remand a case on the basis of any valid defect identified in a motion to remand
as long as it is made within 30 days of removal, and 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). In this case, Defendant Wells Fargo removed on the basis of diversity
jurisdiction. Suits are removed on the basis of diversity jurisdiction “only 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) (emphasis added).
“To establish that a non-diverse defendant has been improperly joined, the removing party
must prove (1) actual fraud in the pleading of jurisdictional facts, or (2) the plaintiffs’ inability to
establish a cause of action against the non-diverse party in state court.” Rico v. Flores, 481 F.3d 234,
238-39 (5th Cir. 2007); Holder v. Abbott Labs., Inc., 444 F.3d 383, 387 (5th Cir. 2006). The second
prong only is at issue here, and its test is “‘whether the defendant has demonstrated that there is no

2

possibility of recovery by the plaintiff against an in-state defendant, which stated differently means
that there is no reasonable basis for the district court to predict that the plaintiff might be able to
recover against an in-state defendant.’” Rico, 481 F.3d at 239. This Court must decide whether
“there is any reasonable basis for predicting that [Plaintiffs] might be able to establish [Defendants’]
liability on the pleaded claims in state court.” Griggs v. State Farm Lloyds, 181 F.3d 694, 699 (5th
Cir. 1999). In that determination, this court is also required to resolve any issues of material fact or
ambiguity in the state law in the Plaintiffs’ favor. Rico, 481 F.3d at 239.
As explained by the Fifth Circuit:
To determine such possibility of state-court recovery, a court may analyze the
sufficiency of a plaintiff’s pleadings alone; or, in its discretion, pierce the pleadings
and conduct a summary inquiry. The focus is on plaintiff’s pleadings at the time of
removal; post-removal filings may be considered only to the extent they amplify or
clarify facts alleged in the state-court complaint, with new claims or theories of
recovery disregarded.
Akerblom v. Ezra Holdings Ltd., 509 Fed. App’x 340, 344-45 (5th Cir. 2013) (internal citations and
quotations omitted). The petition as filed in state court controls a court’s inquiry. See Cavallini v.
State Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th Cir.1995); see also Griggs v. State Farm
Lloyds, 181 F.3d 694, 699 (5th Cir.1999) (stating that the court must determine if there could
possibly be liability “on the pleaded claims in state court.”).
ANALYSIS
This suit involves an apparent foreclosure on Plaintiffs’ property. Although many of
Plaintiffs’ allegations in the more than 70-page complaint are rather convoluted, repetitive and
confusing, they appear to challenge various Defendants’ actions regarding the foreclosure – or

3

attempted foreclosure – on their property located at 3920 Pilot Drive, Plano, Texas. In evaluating
Defendants’ claims that the Texas Defendants were fraudulently joined to defeat jurisdiction here,
the Court thus reviews the state court petition for the claims made against those Defendants.
Critically, the Court notes that in the “Causes of Action” portion of Plaintiffs’ petition, the
Court can identify only one instance where a Texas Defendant, Mackie Wolf, is referred to by name
and even then no clear cause of action is alleged against that Defendant; rather, Plaintiffs allege there
was a conflict of interest between creditors and investors who jointly employed Mackie Wolf. See
Dkt. 2 at 58. Plaintiffs do not allege any wrongdoing by Mackie Wolf in this regard.
As to the remainder of the “Causes of Action,” Plaintiffs generally refer to Defendants as
“BAC/Wells Fargo/FFFC/First Franklin/Wilshire Credit, etc., et. al.” No Texas Defendant is named
specifically, and the reference to “etc., et al.” is insufficient to state a claim against the non-diverse
Defendants.
More importantly, no facts are stated specifically as to any of the Texas Defendants which
would, if taken as true and viewed in a light most favorable to Plaintiffs, state any theories of
recovery against them. In the portions of their complaint identifying the parties and describing the
factual background to their allegations, Plaintiffs do make some reference to some of the Texas
Defendants, arguing that they were “robo-signers” or otherwise challenged their authority to
foreclose. The Fifth Circuit has consistently rejected based on the arguments asserted by Plaintiffs
as to the Texas Defendants. See, e.g., Martins v. BAC Home Loans Serv., L.P., 722 F.3d 249, 253
(5th Cir. 2013); Miller v. BAC Home Loans Serv., L.P., 726 F.3d 717, 723 (5th Cir. 2013); Reinagel

4

v. Deutsche Bank Nat. Trust Co., 735 F.3d 220 (5th Cir. 2013). Having reviewed the state court
pleading in a light most favorable to Plaintiffs, the Court finds that Plaintiffs’ complaint does not set
forth facts that would show the reasonable possibility of imposing liability against the Texas
Defendants. Smallwood, 385 F.3d 568, 573 n. 9 (5th Cir. 2004); Great Plains Trust Co. v. Stanley
Dean Witter & Co., 313 F.3d 305, 312 (5th Cir. 2002); Badon v. RJR Nabisco, Inc., 236 F.3d 282,
286 n.4 (5th Cir. 2000).
Because there is no reasonable basis for the Court to predict that Plaintiffs might be able to
recover against the non-diverse Defendants, the Court finds that Defendants have sustained their
burden in showing that the Texas Defendants were fraudulently joined. Removal was proper, and
the claims against the Texas Defendants should be dismissed.
RECOMMENDATION
Because the Court finds that there is no reasonable basis for the Court to predict that Plaintiff
might be able to recover against the non-diverse Defendants and that they were fraudulently joined,
the Court finds that Plaintiffs’ Corrected Motion to Remand (Dkt. 14) should be DENIED and the
.

claims against the Texas Defendants should be dismissed.
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).
SIGNED this 18th day of August, 2015.
.

____________________________________
DON D. BUSH
5
UNITED STATES MAGISTRATE JUDGE

A party is entitled to a de novo review by the district court of the findings and conclusions
contained in this report only if specific objections are made, and failure to timely file written
objections to any proposed findings, conclusions, and recommendations contained in this report shall
bar an aggrieved party from appellate review of those factual findings and legal conclusions accepted
by the district court, except on grounds of plain error, provided that the party has been served with
notice that such consequences will result from a failure to object. Id.; Thomas v. Arn, 474 U.S. 140,
148 (1985); Douglass v. United Servs. Auto Ass’n, 79 F.3d 1415, 1417 (5th Cir. 1996) (en banc),
superseded by statute on other grounds, 28 U.S.C. § 636(b)(1) (extending the time to file objections
from ten to fourteen days).

6