Johnson v. Mortgage Factory Inc., D/B/A Mortgages Direct et al

Filing 10

Memorandum Opinion and Order: The court lacks subject matter jurisdiction over the action, and it should be remanded to the state court from which it was removed. The court ORDERS that this action be, and is hereby, remanded to the state court from which it was removed. (Ordered by Judge John McBryde on 4/9/2013) (mdf)

U. DI
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IN THE UNITED ST
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SEAWN W. JOHNS ,
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Plaintiff ,

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VS .

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: NO . 4 :13-CV -2l3-A
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MORTGAGE FACTORY INC., D/B/A

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MORTGAGES D IRECT , ET AL .,

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Defendants .

MEMORANDUM OPINION

and
ORDER

The court has not been persuaded that it has subject matter
jurisdiction over the above-captioned action. Therefore, the
court is ordering the action remanded to the state court from
which it was removed .
1.

Backqround

Plaintiff, Shawn Johnson, initiated this action by the
filing of his original petition , request for temporary

restraining order, and application for temporary injunction in
the District Court of Tarrant County , Texas, 48th Judicial

District, naming as defendants Mortgage Factory Inc., d/b/a
Mortgages Direct (nMortgage Factoryt and JpMorgan Chase Bank,
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National Association ('Chasef . By notice of removal filed
'
$ 1
March l4, 2013, Chase removed the action to this court, alleging

that this court had subject matter jurisdiction by reason of
diversity of citizenship , as contemplated by 28 U . . . 5 1332 ,
S C

and that the amount in controversy exceeds the sum or value of

$75,000, exclusive of interest and costs, as contemplated by 5
1332 (
a).

In the notice of removal, Chase alleged that ' iln actions
'l

seeking declaratory or injunctive relief the amount in

controversy is measured by the value of the object of the
litigation.' Notice of Removal at 3 (
'
citation omitted). Chase
further argued that because plaintiff in this case seeks to
prevent Chase from foreclosing on his property and also seeks a
declaration quieting title to the property in his name, the fair
market value of the property constitutes the amount in
controversy . Because the Tarrant County Appraisal District

showed the value of plaintiff's property at $96 ,900 .00, Chase
claimed it had established the amount in controversy .

l s al ge t tMorg g Fa tr wasi rpel oie a adee a a dt is
chae l d ha ta e coy
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mpo ryj n d s fnd nt n hus t
ctz ns ps ul no bec iee frdi riypup e .Mota Fa t ydi n tj ni t
iie hi ho d t onsd rd o vest ross rg ge cor d o oi n he

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emoval G i t court concl i t tChas hasf l t esabls t amounti contovery,t
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c r n e no ra ht qu to o i op rj nde.
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2

Because of a concern that Chase had not provided the court
with information that would enable the court to find the

existence of the requisite jurisdictional amount, the court
ordered Chase to file an amended notice of removal, together with

supporting documentation, showing that the amount in controversy

e
xceeds the jurisdictional amount. Chas ti
e mely complied wit
h
the court 's order .
II.

Basic Principles

The court starts with a statement of basic principles
announced by the Fifth Circuit :
nThe removing party bears the burden of showing that federal

subject matter jurisdiction exists and that removal was proper.'
'
Manquno v . Prudential Prop . & Cas . Ins . Co . , 276 F .3d 720, 723
-

(
5th Cir . 2002). n
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
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2 r mo l tt t,28U. C. 1 41a pr vie ,npe t n p r t t
The e va saue
S. j 4 ( ) o d s i ri t a q ha :
ne
( nycvi a to br ug ti aStt co r ofwhiht edititc urso t eUnie
Al i l c in o h n ae u t
c h src o t f h t d
St t ha e o i i a i idito m a b r mo d b t e de e a to t e d f nd n s t
a es v r z n l urs c i n, y e e ve y h f nd n r h e e a t , o

(
continued ...)
3

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

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. 335, 339 (
3d
5th
Cir . 2000).
To determine the amount in controversy, the court ordinarily
looks to the plaintiff' state court petition . Manquno, 276 F.3d
s
at 723. If it is not facially apparent from the petition that
the amount in controversy exceeds the required amount , the

removing party must set forth summary judgment-type evidence,
either in the notice of removal or in an affidavit, showing that
the amount in controversy is, more likely than not , greater than

$75,000. Id.; Allen v . R & H Oi1 & Gas Co ., 63 F.3d 1326, 1335
(
5th Cir. 1995). The amount in controversy is measured from the
perspective of the plaintiff . See Garcia v . Koch Oil Co . of

Texas Incw 351 F. 636, 640 n . (
3d
4 5th Cir. 2003).

zl.- continued)
t diti cour oft Unied St esf t diti and di son embr ng t pl
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(mp ssa e .
e ha i dd d)
4

1 11 .

The True Nature of Plaintiff ' Claim s
s

The petition by which plaintiff initiated this action in the
state court does not specify a dollar amount of recovery sought,

nor does it define in any way the value of the right sought to be

protected or the extent of the injury sought to be prevented.
Rather , the allegations of the petition are typical of many state

court petitions that are brought before this court by notices of
removal in which the plaintiff makes vague , general , and
obviou sly legally baseless allegations in an attempt to frustrate

the procedures a lender is pursuing, or has pursued, to regain
possession of residential property the plaintiff used as security
for the making of a loan .
As the court has been required to do in other cases of this
kind , the court has undertaken an evaluation of the true nature
of plaintiff ' claims . Having done so, and having considered the
s

authorities and arguments cited by Chase in the amended notice of
removal, the court remains unpersuaded that the amount in

controversy exceeds the required jurisdictional minimum.
In the case at bar, plaintiff alleged that in September 2001

5

he executed a series of documents , including a note and deed of
trust , to secure the purchase of his property . The original
benef iciary and nominee under the deed of trust Was Mortgage
Factory . Plaintiff contends that the loan was securitized , w ith

the note purportedly transferred into a securitized trust.
Plaintiff alleges that any purported transfer of the note and
deed of trust was invalid for various reasons, including that the
note and deed of trust were not properly assigned, the transfer

of the prom issory note into the trust was void and failed to
comply with the proper pooling and servicing agreement and New

York Law, so that any security interest in the property Was never
perfected. Accordingly, in plaintiff 's view, neither of the
defendants has a perfected claim in p laintiff ' property and they
s
are estopped from asserting such a claim .

In the amended notice of removal Chase reurged its argument
that because plaintiff challenges Chase ' right to enforce the
s
deed of trust and seeks to completely invalidate the deed of

trust , the value of the property constitutes the amount in
controversy . A careful reading of the state court petition shows

6

that plaintiff asks that the court afford plaintiff the right 'to
'
maintain the status cuo between the parties pending resolution of
the present dispute .' Notice of Removal , Ex . A -2 at 8 . The
'

petition further asks the court to enjoin foreclosure on the
property 'pending a trial on the merits .' Id . Thus, While
'
'
plaintiff in the petition disputes Chase ' claim to an ownership
s
interest or its right to foreclose on the property , he also

tacitly admits that the property may be subject to foreclosure by
whoever is the holder of the note and deed of trust . Such an

admission hardly can be construed as a claim to outright
ownership of the property .
Chase also relies in part on Waller v . Professional

Insurance Corporation, 296 F . 545, 547-48 (
2d
5th Cir . 1961), to
support its contentions as to the amount in controversy . This
court has previously explained its reasoning for f inding Waller

inapposite to determining the amount in controversy in cases such
as the instant action , see Ballew v . America ' Serv icinq Co ., No .
s

4:
ll-CV-030-A, 2011 WL 880135 ( D . Tex . Mar . 14, 2011), and
N.
Chase has failed to persuade the court otherwise .
Chase also argues that plaintif f ' contention that his
s

7

damages include 'costs of the loan' likely means the value of the
'

loan, which is in the amount of $106,657.00. The court finds
this argument speculative at best . The phrase 'costs of the
'
loan' is ambiguous, and nothing in the petition gives the court
'

an indication of what that amount might be. Had plaintiff
intended to seek damages equal to the value of the loan , he could

have easily said just that in the petition.
Although Chase has provided the court With documents showing
that the original amount of plaintiff ' note to purchase the
s
property and the appraised value of the property each exceeds

$75,000, it has failed to persuade the court that either amount
constitutes the amount in controversy . No other information has
been provided to the court that would enable the court to place a

value on the interest plaintiff seeks to protect by this action.
Thus , Chase has not shown by a preponderance of the evidence that

the amount in controversy in this action exceeds $75,000,
exclusive of interest and costs . Consequently , the court lacks

subject matter jurisdiction over the action, and it should be
remanded to the state court from which it Was removed .

8

IV .

Order

Therefore ,

The court ORDERS that this action be, and is hereby,

r m n e t t e s a e c u t f o w c i w s r m v d.
e a d d o h t t o r r m hih t a e4#
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SIGNED April 9, 2013 .

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N MCBRYDE

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Judge