Culbertson v. Select Portfolio Servicing, Inc. et al

Filing 14

Memorandum Opinion and Order: The court ORDERS that the above-captioned action be, and is hereby, remanded to the state court from which it was removed. (See opinion and order for specifics) (Ordered by Judge John McBryde on 7/25/2013) (ewd) (Main Document 14 replaced on 7/26/2013) (ewd).

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NORTIERN DI T' T OFTU Ag
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IN THE UNITED STATES DISTRIC '
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NORTHER DISTRICT OF TEX S ;y
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FORT WORTH DIVISION

SHELLY CULBERTSON,

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Plaintiff ,
VS .

SELECT PORTFOLIO SERVICING ,
INC ., ET M .,
Defendants .

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NO . 4 :13 -CV -2 68-A

MEMORANDUM OPINION
and
ORDER
1.

Backqround

The above-captioned action was removed to this court from
the D istrict Court of Tarrant County , Texas , 342nd Judicial

District, on April 2, 2013. Subject matter jurisdiction was
alleged to be based on the assertion by plaintiff, Shelly
Culbertson , of causes of action based on federal law , thus

invoking the federal question jurisdiction statute, 28 U.
S.C.
5 1331. Notice of Removal at 2-3 . Plaintiff's state law claim s

were alleged to be within the court's jurisdiction by reason of
the supplemental jurisdiction contemplated by 28 U. C.
S.
j 1367(
a). Id. at 4-5. Defendants, Select Portfolio Servicing,
Inc w and U .S . Bank National A ssociation , as Trustee for the
Holders of the First Franklin Mortgage Loan Trust Mortgage PassThrough Certificates , Series 2005-FF9, alleged , alternatively ,

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that this court has subject matter jurisdiction by reason of
diversity of citizenship and amount in controversy .

Id . at 5-10 .

On May 6, 2013, p laintiff filed her first amended complaint

in which she 'jettisoned' al1 of her claims based on any federal
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statute. Am. Co
mpl. at 2, ! 10. Thereafter, on May 20, 201
3,
defendants filed their motion to dism iss, which prompted the
court to fully evaluate the record in this action , including

whether the court has subject matter jurisdiction over the state
court claims .
II .

Analvsis

The court has concluded that it does not have subject matter
jurisdiction based on diversity of citizenship, and that, now
that the federal law claims are no longer in the case , it should
exercise its discretion to remand p laintiff 's state law claims to
the state court .

In paragraph 10 of her amended complaint , plaintiff makes
the following allegations :
Plaintif f originally f iled this case in the 342nd
Judicial District Court of Tarrant County , Texas . In
the orig inal filing , Plaintiff alleged claims for
violation of federal consumer protection statutes .

Plaintiff has jettisoned those claims and herein seeks
declaratory judgment as to the rights, title and
interest of the parties herein to the property subject
to this litigation . Consequently , Plaintiff contends

that this Court lacks subject matter jurisdiction over
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this lawsuit because the amount in controversy -- the

Plaintiff's equity in the subject property -- does not
meet the threshold requirement under 28 U .S .C . 1332 .
Am . Compl . at 2 -3 .

Defendants seem to accept those allegations of the amended
comp laint as remov ing from the case any federal question , thus

eliminating federal question subject matter jurisdiction. See
Mot . to Dismiss at 2-3 . Defendants are correct in their

assertion that subject matter jurisdiction is established by the
pleadings at the time of removal . Thus, federal question

jurisdiction did exist when this case was removed. However, when
the complaint was amended to eliminate the federal question ,

federal question jurisdiction did not exist. However, the
supplemental jurisdiction the court had over the state 1aw claims
by virtue of 28 U.S. 5 1367( continued to exist after the
C.
a)

basis for federal question jurisdiction was removed from the
case . But, 28 U . . 5 1367( authorizes the court to decline
S C.
c)

to exercise supplemental jurisdiction over a claim after the
underly ing basis for the court's exercise of supplemental

jurisdiction no longer exists. In other words, once the federal
question jurisdiction ground no longer existed, and if there is
no other basis for subject matter jurisdiction, the court is
authorized at this time to decline to exercise supplemental

jurisdiction over plaintiff's state law claims.

Defendants continue to maintain , apparently on an

alternative basis, that the court has diversity jurisdiction.
Defendants disagree w ith p laintiff's pleaded contention that the

court lacks subject matter jurisdiction because the amount in
controversy does not meet the threshold requirement under
28 U . . . 5 1332 . The court is inclined to agree with plaintiff .
S C
Plaintiff defines the nature of the controversy and the relief
she seeks in her amended complaint as follows :
20. An actual controversy has arisen and now
exists between Plaintiff and Defendants specified
hereinabove , regarding their respective rights and
duties, in that Plaintiff contends that Defendants do
not have the right to accept mortgage payments nor do
they have the right to foreclose on the Property
because Defendants have failed to perfect any security
interest in the Property . Thus , the purported power of
sale set forth in the original deed of trust no longer
applies . Plaintiff further contends that Defendants do
not have the right to foreclose on the Property because
said Defendants did not properly comply with the terms
of Defendants ' own securitization requirements.

21 . Plaintiff is informed and believes and there

upon allege (
sic) that the only individual with
standing to foreclose is the holder of the note because
they have a beneficial interest . The only individuals
who are the holder of the note are the certificate
holders of the Trust because they are the end users and
pay taxes on their interest gains ; furthermore , all of
the banks in the middle were paid in full .

22. Plaintiff therefore requests a judicial
determination of the rights, obligations and interest
of the parties with regard to the Property , and such
determination is necessary and appropriate at this time
under the circumstances so that all parties may

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ascertain and know their rights, obligations and
interest with regard to the Property .
Am . Compl . at 6. Plaintiff does not deny that she owes the
mortgage debt or that the true holder of the mortgage debt does

not have the right to foreclose . The declaration she seeks is

that defendants do not have that right.
As is so often true in cases of this sort, which are
frequently appearing before the court, the true nature of this
action is for some kind of ruling to be made that will enable
plaintiff to maintain , at least for the time being , possession of

residential property plaintiff used as security for making a
loan . Typically , the delaying action is in the form of a request

for a declaratory judgment, such as plaintiff seeks in this case.
Defendants have not suggested any value , measured from the

perspective of the plaintiff, that might be placed on the relief
plaintiff seeks in this action -- put another way , defendants

have not provided the court any proof of the nvalue of the object
of the litigation' or uthe value of the right to be protected or
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the extent of the injury to be prevented.' Leininqer v.
'
Leininqer, 705 F. 727, 729 (
2d
5th Cir. 1983). Thus, defendants
have provided no evidentiary basis for a determination by the
court that the amount in controversy exceeds the sum or value of

$75,000, exclusive of interest and costs.

Thus , there being no basis for exercise of federal or

diversity subject matter jurisdiction in this case as it now
exists, the court must determine whether it w ishes to continue to

exercise jurisdiction over the state law claims asserted by
plaintiff against defendants in her amended complaint . The court
has concluded that it should , and does hereby , decline to

exercise s
upple
mental jurisdiction over the state l cl ms.
aw ai
Therefore ,

The court ORDERS that the above-captioned action be , and is
hereby , remanded to the state court from which it was removed .
SIGNED July 25, 2013 .
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