Conrad et al v. SIB Mortgage Corp. et al
Filing
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Memorandum Opinion and Order: The court ORDERS that all claims and causes of action asserted by plaintiffs, David and Diane L. Conrad, against Fowler be, and are hereby, dismissed. The court further ORDERS that: (1) plaintiffs by December 1, 2014 , file an amended complaint and, (2) each defendant that has appeared in this action file by December 15, 2014, an answer or other response to the amended complaint. (see order for further specifics) (Ordered by Judge John McBryde on 11/13/2014) (mpw)
IN THE UNITED STATES DISTRICT'
NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
DAVID & DIANE L. CONRAD,
§
§
Plaintiffs,
§
§
vs.
§
NO. 4:14-CV-915-A
§
SIB MORTGAGE CORP., ET AL.,
§
§
§
Defendants.
MEMORANDUM OPINION
and
ORDER,
The above-captioned action is before the court by notice of
removal filed by defendants Bank of America, N.A., Mortgage
Electronic Registration Systems, Inc.
Company, N.A.
Defendants.")
("ReconTrust")
("MERS") , 1 and ReconTrust
(collectively, "Removing
Also named as defendants are SIB Mortgage Corp.
("SIB") , "Ginnie Mae, " 2 and William T. Fowler ("Fowler") . 3
se plaintiffs, David and Diane L. Conrad,
in~tiated
Pro
this action
by the filing of their initial pleading in the District Court of
1
Defendant Mortgage Electronic Registration Systems, Inc., indicated in the notice of removal
that it was improperly named in plaintiffs' state court pleadings as Mortgage Electronic Registration
Services, Inc.
2
"Ginnie Mae" is the colloquial term for the entity known as Government National Mortgage
Association.
3
Piaintiffs' state court pleading also names as defendants "Does 1-X." The court is disregarding
the Doe defendants for purposes of this memorandum opinion and order.
Tarrant County, Texas, 352nd Judicial District.
Plaintiffs in
the state court also sought and obtained a temporary restraining
order, enjoining foreclosure proceedings against their property.
I .
Background and Plaintiffs' State Court Pleading
The notice of removal invoked the court's diversity
jurisdiction as the basis for removal.
While complete diversity
is alleged as between plaintiffs and defendants Bank of America,
MERS, ReconTrust, SIB, and Ginnie Mae, Fowler is alleged to be a•
citizen of Texas.
Hence, Fowler's presence in this action would
ordinarily destroy complete diversity and divest the court of
jurisdiction.
Removing Defendants maintain, however, that Fowler
has been improperly joined, such that his citizenship should be
disregarded for purposes of determining the court's diversity
jurisdiction.
Plaintiffs appear to have filed this action in response to
attempts to initiate foreclosure proceedings on their property in
Arlington, Texas.
The gist of the pleading appears to be that
plaintiffs' promissory note and deed of trust have never been
properly assigned, so that none of the defendants has any
authority to foreclose on plaintiffs' property.
Plaintiffs
requested relief in the form of various declarations pertaining
to the property, including that they own the subject property.
2
II.
Improper Joinder
The burden of establishing federal jurisdiction is on the
party seeking removal.
Gasch v. Hartford Accident & Indem. Co.,
491 F.3d 278, 281 (5th Cir. 2007).
"The removal statute is
therefore to be strictly construed, and any doubt about the
propriety of removal must be resolved in favor of remand."
at 281-82.
Id.
When, as here, federal jurisdiction is based on
diversity, an action "may not be removed if
~ny
of the parties in
interest properly joined and served as defendants is a citizen of
the State in which such action is brought."
1441(b) (2).
28 U.S.C.
§
When removal is premised on the alleged improper
joinder of an in-state defendant, the removing party must show
that joinder of the in-state party was improper.
Smallwood v.
Ill. Cent. R.R. Co., 385 F.3d 568, 574 (5th Cir. 2004).
The Fifth Circuit recognizes two ways to establish improper
joinder: "(1) actual fraud in the pleading of jurisdictional
facts, or (2) inability of the plaintiff to establish a cause of
action against the non-diverse party in state court."
(internal citation omitted) .
Id. at 573
Because Removing Defendants have
not alleged actual fraud in the pleadings, the test for improper
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joinder is:
whether the defendant has demonstrated that there is no
possibility of recovery by the plaintiff against an
in-state defendant, which stated differently means that
there is no reasonable basis for the di~trict court to
predict that the plaintiff might be able to recover
against an in-state defendant.
Id.
To answer this question, the court may either:
(1) conduct a
Rule 12(b) (6)-type analysis or (2) in rare cases, make a summary
inquiry "to identify the presence of discrete and undisputed
facts that would preclude plaintiff's recovery against the instate defendant."
Id. at 573-74.
As Removing Defendants have
not alleged fraud in the pleading of jurisdictional facts, the
court must consider whether there exists a reasonable basis that
plaintiffs might be able to recover against Fowler.
In conducting a Rule 12(b) (6)-type analysis of plaintiffs'
claims, the court ''look[s] initially at the allegations of the
complaint to determine whether the complaint,states a claim under
state law against the in-state defendant."
at 573.
Smallwood, 385 F.3d
Taking into account that Texas follows a "fair notice"
standard for pleading and that "[p]leadings are to be construed
liberally in favor of the pleader," Horizon/CMS Healthcare Corp.
v. Auld, 34 S.W.3d 887, 896 (Tex. 2000), the court has concluded
that there is no reasonable basis to predict that plaintiffs
might be able to recover against Fowler.
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Even the most generous reading of the state court pleading
shows an absence of any facts alleging that Fowler engaged in any
unlawful conduct, or conduct of any kind, against plaintiffs.
The state court pleading fails to describe with particularity
anything that Fowler has done with regard to plaintiffs.
Indeed,
the court found no mention of Fowler in the state court pleading,
aside from his identification as a defendant.
The allegations in
the pleading also fail to distinguish one defendant from another,
Although a complaint need not contain detailed factual
allegations, plaintiffs must provide a defendant fair notice of
their claims and the grounds on which they rest.
v. Twombly, 550 U.S. 544, 555 (2007).
do so with regard to Fowler.
Bell Atl. Corp.
Plaintiffs have failed to,
No facts are alleged in the state
court pleading that would alert Fowler as to the nature or basis
of plaintiffs' claims against him.
The state court pleading
provides no reasonable basis for predicting that plaintiffs would
be able to recover against Fowler.
Accordingly, the court
concludes that all claims against Fowler should be dismissed.
III.
Filing an Amended Complaint
Following the court's determination that Fowler should be
dismissed as a defendant, this action is now properly before the
court on the basis of the court's diversity jurisdiction.
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Accordingly, the court now concludes that plaintiffs should file
an amended complaint consistent with the Federal Rules of Civil
Procedure.
The filing of an amended complaint is not a trivial matter.
Rule Bl(c) of the Federal Rules of Civil Procedure provides that
following removal, "repleading is unnecessary unless the court
orders it."
However, the rules of pleading differ from Texas
state court to federal court.
While Texas "follows a 'fair
notice' standard for pleading," Auld, 34 S. W. 3d at 896, 4 a
complaint in federal court must plead facts that show the
plaintiff's right to relief is plausible.
U.S. 662, 679 (2009).
Ashcroft v. Igbal, 556
Further, the court does not accept
conclusory allegations or unwarranted deductions of fact in a
federal court complaint as true.
Twombly, 550 U.S. at 555.
Rule
9 of the Federal Rules of Civil Procedure also imposes additional
pleading requirements on a party alleging fraud or mistake.
Thus, the court finds it beneficial to its adjudication of the
case to have a plaintiff in a removed action replead consistent
with the Federal Rules of Civil Procedure.
Bearing in mind the aforementioned principles, the court now
concludes that plaintiffs should file an amended complaint that
4
The court recognizes that the Texas "fair notice" standard must'be considered in context with
Rule 91a ofthe Texas Rules of Civil Procedure.
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complies with the requirements of Rule 8(a), Rule 10, and, if
applicable, Rule 9, of the Federal Rules of Civil Procedure, and
with the Local Civil Rules of this court.
Upon receipt of the
amended complaint, each defendant that has appeared in this
action must file an answer or other response thereto.
Therefore,
The court ORDERS that all claims and causes of action
asserted by plaintiffs, David and Diane L. Conrad, against Fowler
be, and are hereby, dismissed.
The court determines that there is no just reason for delay
in, and hereby directs, entry of final judgment as to such
dismissal.
The court further ORDERS that the caption of this action be,
modified by the removal of "William T. Fowler" from the title, so
that from this point forward the title shall read "David and
Diane L. Conrad, Plaintiffs, v. SIB Mortgage Corp., Mortgage
Electronic Registration systems, Inc., Bank of America, N.A.,
Ginnie Mae, and ReconTrust Company, N.A., Defendants." 5
The court further ORDERS that:
(1) plaintiffs by December 1,
2014, file an amended complaint that complies with the Federal
5
The court is not including "Does 1-X" as defendants in the title of the amended complaint. If
during discovery plaintiffs identify additional parties that should be included as defendants, plaintiffs
may file an appropriate motion to add such parties at that time.
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Rules of Civil Procedure and the Local Civil Rules of this court;
and,
(2) each defendant that has appeared in this action file by
December 15, 2014, an answer or other response to the amended
complaint.
The court further ORDERS that failure of any party to comply
with this order may result in the imposition of sanctions, up to
and including dismissal of plaintiffs' claims or granting of a
default judgment, as appropriate.
SIGNED November 13, 2014.
District
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