Federal National Mortgage Association v. Colton

Filing 9

Memorandum Opinion and Order granting 5 Plaintiff's Motion to Remand and remands this action to the County Court at Law Number 4, Dallas County, Texas. (Ordered by Judge Sam A Lindsay on 2/28/2013) (axm)

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
FEDERAL NATIONAL MORTGAGE
ASSOCIATION,
Plaintiff,
v.
DERSHERA COLTON, and All Other
Occupants,
Defendants.

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Civil Action No. 3:12-CV-5094-L

MEMORANDUAM OPINION AND ORDER
Before the court is Plaintiff’s Motion to Remand, filed January 11, 2013. Defendant
Dershera Colton (“Defendant” or “Colton”) did not file a response to the motion. After careful
consideration of the motion, record, and applicable law, the court grants Plaintiff’s Motion to
Remand.
I.

Background
Federal National Mortgage Association (“Plaintiff” or “FNMA”) original filed its

Complaint for Forcible Detainer and Original Petition against Colton and all other occupants of
the real property located at 905 Grinnell Avenue, Dallas, Texas (the “Property”). Colton, a
citizen of Texas, removed this action to federal court on December 13, 2012, contending that
diversity of citizenship exists between the parties and that the amount in controversy, exclusive
of interest and costs, exceeds $75,000. FNMA disagrees and contends that the court lacks
subject matter jurisdiction because Colton is a citizen of Texas and that she has not established
that the amount in controversy exceeds $75,000.

Memorandum Opinion and Order – Page 1

II.

Subject Matter Jurisdiction
A.

The General Standard

A federal court has subject matter jurisdiction over civil cases “arising under the
Constitution, laws, or treaties of the United States,” or over civil cases in which the amount in
controversy exceeds $75,000, exclusive of interest and costs, and in which diversity of
citizenship exists between the parties. 28 U.S.C. §§ 1331, 1332. Federal courts are courts of
limited jurisdiction and must have statutory or constitutional power to adjudicate a claim. See
Home Builders Ass’n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir. 1998).
Absent jurisdiction conferred by statute or the Constitution, they lack the power to adjudicate
claims and must dismiss an action if subject matter jurisdiction is lacking. Id.; Stockman v.
Federal Election Comm’n, 138 F.3d 144, 151 (5th Cir. 1998) (citing Veldhoen v. United States
Coast Guard, 35 F.3d 222, 225 (5th Cir. 1994)). “[S]ubject-matter jurisdiction cannot be created
by waiver or consent.” Howery v. Allstate Ins. Co., 243 F.3d 912, 919 (5th Cir. 2001). A federal
court has an independent duty, at any level of the proceedings, to determine whether it properly
has subject matter jurisdiction over a case. Ruhgras AG v. Marathon Oil Co., 526 U.S. 574, 583
(1999) (“[S]ubject-matter delineations must be policed by the courts on their own initiative even
at the highest level.”); McDonal v. Abbott Labs., 408 F.3d 177, 182 n.5 (5th Cir. 2005) (A
“federal court may raise subject matter jurisdiction sua sponte.”). As Colton removed on the
basis of diversity of citizenship and the amount in controversy, the court will not address federal
question jurisdiction.
B.

Diversity and Amount in Controversy

Diversity of citizenship exists between the parties only if each plaintiff has a different
citizenship from each defendant. Getty Oil Corp. v. Insurance Co. of North America, 841 F.2d
Memorandum Opinion and Order – Page 2

1254, 1258 (5th Cir. 1988). Otherwise stated, 28 U.S.C. § 1332 requires complete diversity of
citizenship; that is, a district court cannot exercise jurisdiction if any plaintiff shares the same
citizenship as any defendant. See Corfield v. Dallas Glen Hills LP, 355 F.3d 853, 857 (5th Cir.
2003) (citation omitted). A natural person is considered a citizen of the state where that person is
domiciled, that is, where the person has a fixed residence with the intent to remain there
indefinitely. See Freeman v. Northwest Acceptance Corp., 754 F.2d 553, 555-56 (5th Cir. 1985).
A national bank, for diversity purposes, “is a citizen of the State in which its main office, as set
forth in its articles of association, is located.” Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303,
307 (2006).
For diversity purposes, the amount in controversy normally is determined by the amount
sought on the face of the plaintiff’s pleadings, so long as the plaintiff’s claim is made in good
faith. 28 U.S.C. § 1446(c)(2); St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 (5th
Cir. 1998); De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995). Removal is thus
proper if it is “facially apparent” from the complaint that the claim or claims asserted exceed the
jurisdictional amount. Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir.), reh’g
denied, 70 F.3d 26 (5th Cir. 1995). In a removal case, when the complaint does not state a
specific amount of damages, the defendant must establish by a preponderance of the evidence
that “the amount in controversy exceeds the [$75,000] jurisdictional amount.”

St. Paul

Reinsurance, 134 F.3d at 1253. “The preponderance burden forces the defendant to do more
than point to a state law that might allow the plaintiff to recover more than what is pled. The
defendant must produce evidence that establishes that the actual amount of the claim will exceed
[the jurisdictional amount].” De Aguilar, 47 F.3d at 1412 (footnotes omitted). The test to be
used by the district court is “whether it is more likely than not that the amount of the claim will
Memorandum Opinion and Order – Page 3

exceed [the jurisdictional amount].” St. Paul Reinsurance, 134 F.3d at 1253 n.13. As the Fifth
Circuit has stated, “[t]he district court must first examine the complaint to determine whether it is
‘facially apparent’ that the claims exceed the jurisdictional amount. If it is not thus apparent, the
court may rely on ‘summary judgment-type’ evidence to ascertain the amount in controversy.”
Id. at 1253. If a defendant fails to establish the requisite jurisdictional amount, the court must
remand the case to state court. If a defendant establishes that the jurisdictional amount has been
met, remand is appropriate only if a plaintiff can establish “to a legal certainty” that his recovery
will not exceed the jurisdictional threshold. In re 1994 Exxon Chemical Fire, 558 F.3d 378, 38788 (5th Cir. 2009).
Any doubts as to the propriety of the removal should be construed strictly in favor of
remand. Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). “The
burden of establishing subject matter jurisdiction in federal court rests on the party seeking to
invoke it.” St. Paul Reinsurance, 134 F.3d at 1253 (footnote omitted). Accordingly, Colton has
the burden of establishing subject matter jurisdiction.
III.

Discussion
A.

Lack of Jurisdiction

The court agrees that it lacks subject matter jurisdiction because Colton has not
established that the amount in controversy exceeds $75,000. Defendant contends that the fair
market value of the Property in question exceeds $75,000. This, however, is not the test or
measure to be used to determine the amount in controversy. Prior to removal, this action was an
appeal to a state county court at law of a forcible detainer, and the sole issue “in a forcible
detainer action is the right to actual possession of the premises.” Marshall v. Housing Auth. of
the City of San Antonio, 198 S.W.3d 782, 785 (Tex. 2006) (citations omitted). Accordingly, the
Memorandum Opinion and Order – Page 4

amount in controversy in this case is not the value of the Property itself, but rather the value of
the right to occupy the Property. See Ezon v. Cornwall Equities Ltd., 540 F. Supp. 885, 889
(S.D. Tex. 1982) (citing Battle v. Atkinson, 115 F. 384, 389 (W.D. Ark. 1902), aff’d, 191 U.S.
559 (1903)). Colton, at the relevant time, is or was a tenant at sufferance in wrongful possession
of the Property, and she has provided no evidence to establish the value of the right to occupy or
possess the Property. The court determines that Colton has failed to satisfy her burden and show
that the amount in controversy, exclusive of interest and costs, exceeds $75,000. Accordingly,
Colton fails to establish that diversity jurisdiction exists under 28 U.S.C. § 1332(a)(1).
B.

Presence of Nondiverse Defendant

FNMA contends that this court lacks subject matter jurisdiction because Colton is a
citizen of Texas. This is incorrect. The presence of a defendant who is a citizen of the forum
state is not a jurisdictional defect; it “is a procedural defect that is waived unless raised within
thirty days of removal.” Denman v. Snapper Div., 131 F.3d 546, 548 (5th Cir. 1998) (citations
omitted). “[A]” motion for remand based on procedural defects that is brought more than 30
days after the removal of the action[] is outside of the district court’s power to grant.”
Schexnayder v. Entergy Louisiana, Inc., 394 F.3d 280, 284 (5th Cir. 2004) (citation omitted).
This means that if an in-state defendant is sued and a plaintiff fails to move to remand within
thirty days after removal, the court cannot remand the action, and the in-state defendant remains
a party to the case in federal court; however, as FNMA has filed its motion to remand within
thirty days of removal, the court must remand because the case was defectively removed in that a
defendant who is a citizen of the state where the action is brought may not remove it to federal
court. 28 U.S.C. § 1441(b)(2); Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68 (1996). Accordingly,

Memorandum Opinion and Order – Page 5

the procedural defect pointed out by FNMA serves as an alternative basis for remand, even if
Colton could meet the $75,000 minimum threshold requirement.
C.

Timeliness of Removal

FNMA contends that Colton’s removal was untimely because she did not remove the
case within thirty days after receiving notice of the lawsuit when it was filed in the Justice Court.
As the court has already set forth two grounds to remand this action, it declines to address this
argument.
IV.

Conclusion
For the reasons herein stated, the court lacks subject matter jurisdiction over the action.

Alternatively, the removal for the reasons stated, was procedurally defective. The court grants
Plaintiff’s Motion to Remand and remands this action, pursuant to 28 U.S.C. § 1447(c), to the
County Court at Law Number 4, Dallas County, Texas. The court directs the clerk of the court
to remand this action in accordance with the usual procedure.
It is so ordered this 28th day of February, 2013.

_________________________________
Sam A. Lindsay
United States District Judge

Memorandum Opinion and Order – Page 6