Moreno v. The Bank of New York Mellon fka The Bank of New York, as Trustee for the Certificate of Holders CWABS, Inc., Asset-Backed Certificates, Series 2006-3 et al DO NOT DOCKET. CASE HAS BEEN REMANDED

Filing 11

MEMORANDUM AND ORDER.Plaintiffs Motion to Remand [Doc. # 9] is GRANTED. It isfurtherORDERED that Defendants Motion to Dismiss [Doc. # 6] is DENIEDWITHOUT PREJUDICE to being reurged in state court.The Court will issue a separate Remand Order.(Signed by Judge Nancy F. Atlas) Parties notified.(sashabranner, )

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

MARY MORENO,
Plaintiff,
v.
THE BANK OF NEW YORK
MELLON, et al.,
Defendants.

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CIVIL ACTION NO. H-12-0200

MEMORANDUM AND ORDER
Defendants The Bank of New York Mellon (“BONY”) and Bank of America,
N.A. (“BOA”) removed this case to federal court, asserting jurisdiction based on
diversity of citizenship, 28 U.S.C. § 1332. The case is now before the Court on
Plaintiff Mary Moreno’s Motion to Remand [Doc. # 9], to which Defendants BONY
and BOA filed a Response [Doc. # 10].1 Having considered the full record and the
governing legal authorities, the Court concludes that non-diverse Defendant Brice
Vander Linden & Wernick, P.C. (“BVLW”) was not improperly joined. As a result,

1

Also pending is the Motion for Dismissal [Doc. # 6] filed by Defendants BONY and
BOA. Because the Court lacks subject matter jurisdiction, this motion is denied
without prejudice to being reurged following remand to state court.

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the Court lacks subject matter jurisdiction over this dispute, and the Court grants the
Motion to Remand.
I.

BACKGROUND
Plaintiff filed this lawsuit in Texas state court alleging that Defendants

improperly foreclosed on her property. Plaintiff alleged specifically that BVLW is a
“debt collector” within the meaning of the Texas Finance Code’s Debt Collection
Practices Act (“DCPA”).
On January 20, 2012, BONY and BOA removed this case alleging federal
subject matter jurisdiction on the basis of diversity of citizenship pursuant to
28 U.S.C. § 1332. BONY and BOA argued that non-diverse Defendant BVLW had
been improperly joined and, as a result, its Texas citizenship should not be considered
for diversity jurisdiction purposes. Plaintiff filed a timely Motion to Remand, which
has been fully briefed and is now ripe for decision.
II.

LEGAL STANDARDS
“‘Federal courts are courts of limited jurisdiction.’” Rasul v. Bush, 542 U.S.

466, 489 (2004) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375,
377 (1994)); McKee v. Kansas City S. Ry. Co., 358 F.3d 329, 337 (5th Cir. 2004);
Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). “‘They possess only
that power authorized by Constitution and statute, which is not to be expanded by

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judicial decree.’” Rasul, 542 U.S. at 489 (quoting Kokkonen, 511 U.S. at 377
(citations omitted)). The court “must presume that a suit lies outside this limited
jurisdiction, and the burden of establishing federal jurisdiction rests on the party
seeking the federal forum.” Howery, 243 F.3d at 916 (citing Kokkonen, 511 U.S. at
377); see also Boone v. Citigroup, Inc., 416 F.3d 382, 388 (5th Cir. 2005).
Defendants assert that BVLW was improperly joined and, as a result, the Court
should disregard its Texas citizenship for purposes of diversity jurisdiction. A nondiverse defendant may be found to be improperly joined if either there is “actual fraud
in the plaintiff’s pleading of jurisdictional facts” or if the removing defendant
demonstrates that the plaintiff cannot establish a cause of action against the nondiverse defendant. See Kling Realty Co., Inc. v. Chevron USA, Inc., 575 F.3d 510, 513
(5th Cir. 2009) (citing Campbell v. Stone Ins., Inc., 509 F.3d 665, 669 (5th Cir.
2007)).

There is no allegation of actual fraud in Plaintiff’s pleading of the

jurisdictional facts in this case.
The test under the second prong “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 district court
to predict that the plaintiff might be able to recover against an in-state defendant.” Id.
(quoting Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004) (en

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banc)). The party asserting improper joinder bears a heavy burden of persuasion. Id.
at 514. “[A]ny doubt about the propriety of removal must be resolved in favor of
remand.” Gasch v. Hartford Acc. & Indem. Co., 491 F.3d 278, 281-82 (5th Cir.
2007).
III.

ANALYSIS
In response to Plaintiff’s Motion to Remand, Defendants argue that BVLW was

improperly joined because Plaintiff has failed to allege any causes of action against
BVLW. Plaintiff alleges that BVLW served as a debt collector in connection with her
mortgage loan, noting that BVLW identifies itself as a debt collector when answering
telephone calls to its office. Defendants do not appear to argue that BVLW is not a
debt collector.
The DCPA provides that “a debt collector may not use a fraudulent, deceptive,
or misleading representation that . . . misrepresent[s] the character, extent, or amount
of a consumer debt.” See TEX. FIN. CODE § 392.304(a)(8). A debt collector is also
prohibited from “threatening to take an action prohibited by law.”

See id.,

§ 392.301(a)(8). Plaintiff alleges that BVLW, as a debt collector, violated the Texas
DCPA by improperly threatening to move forward with the foreclosure knowing it
could not legally do so, and by misrepresenting the extent and amount of the debt by
refusing to provide the true amount due. See Original Petition [Doc. # 1-2], ¶¶ 43-45.

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These allegations could state a claim against BVLW under Texas law for violation of
the DCPA. See Harding v. Regent, 347 F. Supp. 2d 334, 337 (N.D. Tex. 2004). This
is true particularly in light of the liberal pleading and amendment rules in Texas state
court.
Defendants argue also that Plaintiff’s claim under the Texas Finance Code
regarding BVLW’s alleged threat to move forward with the foreclosure knowing it
could not legally do so is actually a claim under the federal Home Affordable
Modification Program (“HAMP”) and Home Affordable Foreclosure Alternative
Program (“HAFA”), for which there is no private right of action. Plaintiff, however,
alleges only that BVLW violated the Texas Finance Code by threatening foreclosure
knowing that it could not legally foreclose.2 That BVLW knew foreclosure was not
legally available because BOA had not complied with the requirements of HAMP and
HAFA neither precludes the state law claim nor converts it into a federal claim.
Defendants have not satisfied their heavy burden to demonstrate that there is
no possibility Plaintiff could recover against BVLW in state court. As a result, this
Court lacks subject matter jurisdiction.

2

Plaintiff has abandoned her quiet title claim against BVLW and is now asserting only
the Texas Debt Collection Act claim against the non-diverse Defendant. See Motion
to Remand, p. 7, n.1.

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IV.

CONCLUSION AND ORDER
Based on the foregoing, Defendants have failed to establish that there is no

possibility that Plaintiff could recover in state court against non-diverse Defendant
BVLW. As a result, BVLW was not improperly joined and the Court must consider
BVLW’s Texas citizenship. Because Plaintiff and BVLW are Texas citizens, the
Court concludes there is not complete diversity in this case. Accordingly, the Court
lacks subject matter jurisdiction, and it is hereby
ORDERED that Plaintiff’s Motion to Remand [Doc. # 9] is GRANTED. It is
further
ORDERED that Defendants’ Motion to Dismiss [Doc. # 6] is DENIED
WITHOUT PREJUDICE to being reurged in state court.
The Court will issue a separate Remand Order.
SIGNED at Houston, Texas, this 22nd day of March, 2012.

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