Deason v. U.S. Bank, National Association

Filing 8

Memorandum Opinion and Order: Defendant has not proven by a preponderance of the evidence that the amount actually in controversy in this action exceeds the sum or value of $75,000, excluding interest and costs. The court ORDERS that the above-captioned action is remanded to the state court from which it was removed. (Ordered by Judge John McBryde on 12/5/2012) (dnw)

u.s. DISTRICT COURT
NORTHERi~ DISTRICT

OF TEXAS

FILED
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXPS
FORT WORTH DIVISION

DEC - 5"2012

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CLERK, U.S. DISTRICT COUHT
By _ _~ _ ~
_

CALEB DEASON,

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Deputy

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Plaintiff,

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VS.

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U.S. BANK NATIONAL
ASSOCIATION, AS SUCCESSOR
TRUSTEE TO BANK OF AMERICA,
N.A. AS SUCCESSOR BY MERGER
TO LASALLE BANK, N.A., AS
TRUSTEE FOR MERRILL LYNCH
FIRST FRANKLIN MORTGAGE LOAN
TRUST, MORTGAGE LOAN ASSETBACKED CERTIFICATES, SERIES
2007-4,

NO. 4:12-CV-820-A

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Defendant.

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MEMORANDUM OPINION
and
ORDER
Now before the court is the amended notice of removal filed
in the above-captioned action by defendant, U.S. Bank National
Association, as Successor Trustee to Bank of America, N.A. as
Successor by Merger to Lasalle Bank N.A., as Trustee for Merrill
Lynch First Franklin Mortgage Loan Trust, Mortgage Loan AssetBacked Certificates, Series 2007-4.

Defendant has alleged

diversity of citizenship under 28 U.S.C.
for removal.

§

1332 as the sole basis

Having considered the first amended notice of

removal and the original state court petition of plaintiff, Caleb
Deason, attached thereto, the court concludes that defendant has

failed to sufficiently allege the required amount in controversy,
and that the case should be remanded to the state court from
which it was removed.
I .

Background
Plaintiff initiated this action by filing his original
petition against defendants on October 24, 2012, in the District
Court of Tarrant County, Texas, 141st Judicial District, as Cause
No. 141-262425-12.

Defendant filed a notice of removal on

November 16, 2012, to this court.

On December 4, 2012, pursuant

to this court's order, defendant filed its first amended notice
of removal.

Defendant alleges that the court has subject matter

jurisdiction because of complete diversity of citizenship between
plaintiff and defendant, and an amount in controversy exceeding
the sum or value of $75,000, exclusive of interest and costs.
See 28 U.S.C.

§

1332(a).

In the prayer of his petition, plaintiff does not state a
specific amount of damages.

Nor is there any other statement of

the amount of damages contained elsewhere in the petition.
However, defendant contends that because plaintiff "seeks
equitable relief in the form of rescission of the foreclosure
sale of [his] Property," the minimum amount in controversy should
be based on the fair market value of the property, which
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defendant contends is "at least $497,00.00."
Removal at 4.

Am. Notice of

In support of its position, defendant cites to

legal authority standing for the proposition that the right,
title, and interest plaintiff has in the property constitutes the
proper measure of the amount in controversy in an action such as
this one, where plaintiff could be divested of the property
entirely.

Id. at 4-5.

Defendant also contends that the alleged

amount of the promissory note executed by plaintiff, $522,500.00,
the alleged outstanding principal balance on the loan of
$565,621.53, or the alleged negative balance in plaintiff's
escrow account, could serve to establish the minimum amount in
controversy.

Id.

After having evaluated the pleadings, and after reviewing
applicable legal authorities, the court remains unpersuaded that
the amount in controversy in this action meets or exceeds the
required amount.
II.

Basic Principles
The court begins with a statement of basic principles
announced by the Fifth Circuit:
Pursuant to 28 U.S.C.

§

1441(a), a defendant may remove to

federal court any state court action over which the federal
district court would have original jurisdiction.
3

~The

removing

party bears the burden of showing that federal subject matter
jurisdiction exists and that removal was proper."
Prudential Prop. Cas. Ins. Co., 276 F.3d 720, 723
2001).

Manguno v.
(5th Cir.

"Moreover, because the effect of removal is to deprive

the state court of an action properly before it, removal raises
significant federalism concerns, which mandate strict
construction of the removal statute."

Carpenter v. Wichita Falls

Indep. Sch. Dist., 44 F.3d 362, 365-66 (5th Cir. 1995)
omitted).

(citation

Any doubts about whether removal jurisdiction is

proper must therefore be resolved against the exercise of federal
jurisdiction.

Acuna v. Brown & Root Inc., 200 F.3d 335, 339 (5th

Cir. 2000).
To determine the amount in controversy for the purpose of
establishing diversity jurisdiction, the court ordinarily looks
to the plaintiff's state court petition.
723.

Manguno, 276 F.3d at

If it is not facially apparent from the petition that the

amount in controversy is greater than $75,000, the removing party
must set forth summary judgment-type evidence, either in the
notice of removal or in an affidavit, showing by a preponderance
of the evidence that the amount in controversy exceeds that
amount.

Id.; Allen v. R & H oil & Gas Co., 63 F.3d 1326, 1335

(5th Cir. 1995).

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The amount in controversy is measured from the perspective
of the plaintiff.
(5th Cir. 1958)

Vraney v. Cnty. of Pinellas, 250 F.2d 617, 618

(per curiam).

In an action for declaratory or

injunctive relief, the amount in controversy is the "value of the
object of the litigation," or "the value of the right to be
protected or the extent of the injury to be prevented."
Leininger v. Leininger, 705 F.2d 727, 729 (5th Cir. 1983).
III.
Analysis
Plaintiff's petition does not make a demand for a specific
amount of damages, does not specify a dollar amount of recovery
sought that is at least $75,000, and does not define with
specificity the value of the right it seeks to protect or the
extent of the injury it seeks to prevent.

As a result, the court

evaluates the true nature of plaintiff's claims to determine the
amount actually in controversy between the parties.
The true nature of this action is to regain possession of
residential property plaintiff used as security for the making of
a loan.

As the petition alleges, plaintiff pursues these goals

by seeking an order (1) setting aside the foreclosure sale and
restoring title to plaintiff and (2) awarding unspecified actual
damages and attorney's fees.
4.

Am. Notice of Removal, Ex. A-2 at

Thus, considering plaintiff's original petition, the court
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has not been provided with any information from which it can
determine that the value to plaintiff of such relief is greater
than $75,000.00.
Defendant contends that the fair-market value of the
property should serve as the amount in controversy because
plaintiff requests equitable relief to enjoin defendant from
foreclosing on the property.

Am. Notice of Removal at 4 (citing

Garcia v. Koch Oil Co. of Tex., 351 F.3d 636, 640-41 (5th Cir.
2003)).

Defendant relies on the oft-cited argument that when

equitable relief is sought, the amount in controversy is measured
by the value of the object of the litigation, and when a
mortgagor is attempting to protect his property, the fair market
value of the property is the amount in controversy.
of Removal at 4.

Am. Notice

In its amended notice of removal, defendant

suggests that plaintiff's interest in the property is
approximately $497,000.00, which defendant describes as the value
of the property.

Am. Notice of Removal at 4.

Alternatively,

defendant asserts that the amount of the promissory note, amount
owed on the loan, or "negative escrow balance" can constitute the
minimum amount in controversy.
The court is not persuaded by the argument that any of the
above figures supplies the basis for plaintiff's interest in the
property, especially given that plaintiff has not pleaded how
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much equity he has in the property.

Defendant does not cite to,

nor can the court discern, any such statement in the petition to
support a finding that the value of the property is the amount in
controversy.

That is, for example, defendant's attribution of

the $497,000.00 figure as damages is an act of its own doing--not
plaintiff's.

To the extent that these statements suggest that

the property value is the proper measure of the amount in
controversy in this action, the court rejects that argument. 1
Plainly, the sole goal of plaintiff's action is to avoid or
delay a foreclosure sale and to be able to retain possession of
the property.

Nothing is alleged that would assign a monetary

value to plaintiff's accomplishment of those goals.

While

plaintiff appears to request equitable relief based on a claim
that he is entitled to hold legal title in the property, he does
not assert that such relief is based on a claim that he has
outright ownership of the property, free from any indebtedness.
Indeed, plaintiff makes statements to suggest that his ownership
of the property is encumbered by a debt, as the petition states,

1 The court is familiar with the unpublished Fifth Circuit opinion, Nationstar Mortg. LLC v.
Knox, 351 F. App'x 844 (5th Cir. 2009). The pertinent portion of Nationstar, in tum, relies on Waller v.
Profl Ins. Corp., 296 F.2d 545,547-48 (5th Cir. 1961). This court has previously explained its reasoning
for finding Waller inapposite to determining the amount in controversy in cases such as the instant
action. See Ballew v. America's Servicing Co., No. 4: 11-CV-030-A, 2011 WL 880135 (N.D. Tex. Mar.
14,2011).

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"Plaintiff attempted to communicate with Defendant to determine
whether Defendant had received all the mortgage payments that
Plaintiff had sent to Defendant and to discuss a modification of
the note pursuant to federally mandated guidelines."
of Removal, Ex. A-2, at 2.

Am. Notice

The value to plaintiff of his rights

in the litigation is, at most, the value of his interest in the
property, not the value of the property itself or the amount of
the loan.

Thus, defendant has not established the value of

plaintiff's interest in the property.
The court likewise rejects defendant's argument that the
negative balance in plaintiff's escrow account can constitute the
amount in controversy.

In support of its argument, defendant

alleges that it has paid $107,086.33 on plaintiff's behalf, and
"plaintiff expresses no intention to bring his account to current
or to pay back the negative balance."
5.

Am. Notice of Removal at

However, the amount in controversy must be determined by the

value of the relief sought by the plaintiff, not defendant's
speculations on what its future costs might be.

See Sims v. AT &

T Corp., No. 3:04-CV-1972-D, 2004 WL 2964983 at *3
Dec. 22, 2004)

(N.D. Tex.

(holding that the defendant "cannot establish that

the amount in controversy requirement is satisfied based on the
pecuniary consequence of its compliance with the requested
declaratory and injunctive relief" and reiterating that the
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"value to the plaintiff of the right to be enforced" was the
proper measure of the amount in controversy)
original).

(emphasis in

Plaintiff has not alleged, for example, that he does

not owe money on his loan, nor does the petition even allude to
the negative escrow balance that defendant alleges.

Simply

because defendant believes that plaintiff might attempt to avoid
repaying his debt does not establish the jurisdictional amount in
controversy.
Defendant has not proven by a preponderance of the evidence
that the amount actually in controversy in this action exceeds
the sum or value of $75,000, excluding interest and costs.
Consequently, the court is remanding the case to the state court
from which it was removed, because of the failure of defendant to
persuade the court that sUbject matter jurisdiction exists.
IV.
Order
For the reasons given above,
The court ORDERS that the above-captioned action be, and is
hereby, remanded

~o

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the state court

SIGNED Decembe+ 5, 2012 .

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