Brown et al v. Bank of America NA

Filing 15

MEMORANDUM OPINION AND ORDER denying Motion to Remand filed by Timothy Brown, Sherice L. Brown. (Ordered by Chief Judge Sidney A Fitzwater on 10/8/2013) (Chief Judge Sidney A Fitzwater)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
TIMOTHY BROWN, et al.,
Plaintiffs,
VS.
BANK OF AMERICA, N.A.,
Defendant.

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§ Civil Action No. 3:13-CV-2843-D
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MEMORANDUM OPINION
AND ORDER
Plaintiffs Timothy Brown and Sherice Brown (“the Browns”) move to remand this
removed action to Texas county court. The court denies the motion.
I
Defendant Bank of America, N.A. (“BOA”) entered into a consent judgment
(“Consent Judgment”) with the Department of Justice and 49 states, including the State of
Texas, on April 4, 2012. The Consent Judgment outlines procedures that BOA must follow
in handling homeowner bankruptcies and foreclosures in the wake of the 2008 financial
crisis. See United States v. Bank of Am. Corp., 2012 WL 1440437 (D.D.C. Apr. 4, 2012).
It appears that, sometime in 2012, BOA initiated a forcible detainer action against the
Browns in a Justice Court for Dallas County.1 In that proceeding, BOA sought possession

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The parties have not submitted documents that detail the state-court proceedings.
The court has taken judicial notice of the “Register of Actions.” See Register of Actions,
Bank of Am. v. Brown, No. CC-12-07369-D (County Ct. at Law No. 4, Dallas County, Tex.,
Jan. 4, 2013).

of the Browns’ residence in DeSoto, Texas. A final judgment was entered in the Justice
Court proceeding in December 2012, and appeal was taken to a Dallas County Court at Law
under Tex. R. Civ. P. 510.9(a). In January 2013 the County Court at Law entered a judgment
(the “Final Judgment”) for BOA, granting BOA possession of the Browns’ residence. The
County Court at Law issued a writ of possession in favor of BOA in June 2013.
The Browns later filed in the County Court at Law the instant petition for “Equitable
Bill of Review/Attack on Judgment” seeking relief from the Final Judgment. D. Not.
Removal, Ex. A-2, at 1. Shortly thereafter, they filed an amended petition, alleging that BOA
failed to abide by the terms of the Consent Judgment while negotiating a mortgage dispute
with them and wrongfully foreclosed on their property, in violation of the Consent Judgment.
The Browns request that the County Court at Law grant a temporary restraining order, that
the Final Judgment be set aside, and that a new trial be granted. The Browns also request a
permanent injunction hearing on the date of the hearing on the petition for a bill of review.
In support, the Browns assert that they thought their counsel had presented evidence
concerning BOA’s wrongdoing during the proceedings leading to the Final Judgment and
were “wholly unaware” that BOA had obtained the Final Judgment in January 2013. 1st Am.
Pet. 5. The Browns argue that their failure to present evidence or argument concerning
BOA’s alleged failure to comply with the Consent Judgment “was not due to any intentional
act of fault or the result of negligence,” id. at 4, but they do not allege that their failure was
caused by a procedural irregularity, like improper notice or an improper entry of default
judgment.
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After BOA removed the case based on diversity of citizenship, the Browns moved to
remand, contending that (1) “[t]his court does not have subject matter jurisdiction . . .
because the case does not involve any federal question”; (2) the judge in the state action has
ordered the parties to mediation and the Browns are willing to mediate their claims;2 (3)
“[e]ven though the parties are diverse, [BOA] is a local defendant”; and (4) “[t]his type of
suit (wrongful foreclosure, bill of review, temporary restraining order) cannot be removed
. . . . based on 28 U.S.C. § 1445(c).” Ps. Mot. Remand 3-4 (emphasis omitted).
II
“In general, defendants may remove a civil action if a federal court would have had
original jurisdiction.” De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir.1995) (citing
28 U.S.C. § 1441(a)). “The district courts shall have original jurisdiction of all civil actions
where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest
and costs, and is between citizens of different States[.]” 28 U.S.C. § 1332(a)(1). “The
removing party bears the burden of establishing that federal jurisdiction exists.” De Aguilar,
47 F.3d at 1408.
The are special considerations when a federal court is called upon to nullify the
judgment of a state court. See Barrow v. Hunton, 99 U.S. 80, 82-83 (1878) (holding that

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The Browns maintain that the court lacks subject matter jurisdiction because there
is no federal question presented. Their first argument also alleges that the court should
abstain from exercising jurisdiction because the state court has ordered mediation. The court
will separately address the Browns’ arguments concerning federal question jurisdiction and
the argument concerning mediation.
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federal court lacked jurisdiction to rule in “proceeding to procure nullity” of a state court
judgment); Wuxi Taihu Tractor Co. v. York Group, Inc., 460 Fed. Appx. 357, 359 (5th Cir.
2012) (per curiam) (applying Barrow to case in which plaintiff sought bill of review in
removed Texas court action). If the court is asked to overturn the prior state court judgment
on the basis of procedural irregularities, and the litigant presents no new, substantive
arguments, federal jurisdiction may be improper. But if a litigant posits new, substantive
arguments, the federal court can exercise jurisdiction. See Barrow, 99 U.S. at 85 (contrasting
“causes relat[ed] to form and those relat[ed] to the merits”); Wuxi Taihu, 460 Fed. Appx. at
359 (holding that case should be remanded because it dealt with procedural irregularities in
state proceeding). Courts must distinguish between cases seeking a “revision of errors and
irregularities, or of the legality and correctness of the judgments and decrees of the State
courts” and those that constitute “a new case arising upon new facts, [which] although having
relation to the validity of an actual judgment or decree, or of the party’s right to claim any
benefit by reason thereof,” are nevertheless independent of the previous judgment. “The
distinction between the two classes of cases may be somewhat nice, but it may be affirmed
to exist.” Barrow, 99 U.S. at 83.
III
A
BOA has demonstrated, and the Browns acknowledge, that they are citizens of Texas.
BOA is a citizen of North Carolina because it is a national banking association with its main
office located in that state. “[F]or purposes of federal-court diversity jurisdiction,” “a
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national bank . . . is a citizen of the State in which its main office, as set forth in its articles
of association, is located.” Wachovia Bank v. Schmidt, 546 U.S. 303, 306, 307 (2006). The
Supreme Court has expressly rejected the argument “that a national bank is . . . a citizen of
every State in which it has established a branch.” Id. at 307.
The Browns do not allege monetary damages. They do, however, assert that BOA has
“foreclosed on a $3.4 million property and purchased the property for $720,000[,]
significantly below its market value,” and that “[t]he current tax value of the property is $1.4
million.” 1st Am. Comp. 4. “In actions seeking . . . injunctive relief, it is well established
that the amount in controversy is measured by the value of the object of the litigation.”
Nationstar Mortg. LLC v. Knox, 351 Fed. Appx. 844, 848 (5th Cir. 2009) (per curiam)
(quoting Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 347 (1977)); Kew v. Bank
of Am., N.A., 2012 WL 1414978, at *3 (S.D. Tex. Apr. 23, 2012) (holding that amount in
controversy when plaintiffs sought temporary restraining order to halt foreclosure was value
of property in dispute); Hayward v. Chase Home Fin., LLC, 2011 WL 2881298, at *5 (N.D.
Tex. July 8, 2012) (Fish, J.) (holding same in suit to quiet title).
BOA removed this case based on diversity jurisdiction and has established that the
court has diversity jurisdiction. Because diversity jurisdiction is an independent basis for this
court to exercise subject matter jurisdiction, it does not matter that the court lacks (assuming
it does) federal question jurisdiction.
B
The Browns maintain that the court should remand the case because the county judge
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ordered mediation and the Browns are willing to mediate. They do not cite any authority that
warrants remanding the case on this basis.
C
The Browns posit that, although the parties are diverse, BOA is a local defendant.
The court disagrees. As explained above, BOA’s main office is in North Carolina. The fact
that it has established branches in Texas is not controlling for purposes of determining
diversity jurisdiction.
D
The Browns argue that 28 U.S.C. § 1445(c) forbids removal. This argument is
frivolous. Section 1445(c) forbids the removal of actions “arising under the workmen’s
compensation laws of [a] State.” Federal courts regularly exercise diversity jurisdiction over
claims like those that the Browns assert. See, e.g., Azzam v. Wells Fargo Bank, N.A., 2011
WL 149350 (S.D. Tex. Jan. 18, 2011).
IV
“A bill of review,” like the one presented by the Browns in this removed action, “is
an equitable proceeding brought by a party seeking to set aside a prior judgment that is no
longer subject to challenge by a motion for new trial or appeal.” Caldwell v. Barnes, 154
S.W.3d 93, 96 (Tex. 2004). In Wuxi Taihu the plaintiffs filed a bill of review in Texas state
court, which the defendants attempted to remove to federal court. The plaintiff’s arguments
were based on “procedural irregularities” and “allege[d] no claim or defense that was not
previously before the state court.” Wuxi Taihu, 460 Fed. Appx. at 359. The Fifth Circuit
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held that a bill of review alleging such irregularities could not be removed. See id. The
Browns neither allege procedural irregularities in the previous state proceedings nor do they
assert the same claims or defenses as before. The Browns do the opposite. They maintain
that they thought their counsel was going to present their arguments in the previous
proceeding, but because counsel failed to do so, they “[were] unable to present” them at that
time. 1st Am. Pet. 5. Because the Browns’ bill of review is not based on procedural
irregularities, and because it presents legal arguments not presented during the earlier
proceeding, the court holds that their bill of review is essentially “a new case arising upon
new facts.” Barrow, 99 U.S. at 83. “[A]lthough [it has] relation to the validity of an actual
judgment or decree,” id., it is a separate case suitable for removal to a federal court.
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The Browns’ motion to remand is denied.
SO ORDERED.
October 8, 2013.
_________________________________
SIDNEY A. FITZWATER
CHIEF JUDGE

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