Holdeman v. Homecomings Financial, LLC et al

Filing 12

ORDER OF REMAND GRANTING 5 Opposed MOTION to Remand to the 157th Judicial District Court in Harris County, Texas. Case terminated on 2/19/2015.(Signed by Judge Gray H. Miller) Parties notified.(rkonieczny, 4)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
RONALD E. HOLDEMAN ,
Plaintiff,
v.
HOMECOMINGS FINANCIAL, LLC, et al.,
Defendants.

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CIVIL ACTION H-14-3273

M EMORANDUM O PINION & O RDER TO R EMAND
Pending before the court is plaintiff’s motion to remand (Dkt. 5). After considering the
motion, response, and applicable law, the court is of the opinion that plaintiff’s motion to remand
should be GRANTED.
I. B ACKGROUND
In September 2014, plaintiff Ronald E. Holdeman (“Holdeman”) filed suit in state court
against defendant Homecomings Financial, LLC (“Homecomings”) to quiet title to a property that
Holdeman owns, but upon which he believes Homecomings holds one of two liens on the property.
Holdeman seeks declaratory and injunctive relief from this court stating that the defendant’s lien is
void and unenforceable, as well as attorney’s fees. Homecomings removed the case to federal court
on the basis of diversity jurisdiction in November 2014. Plaintiff filed a motion to remand the case,
arguing that the amount in controversy did not exceed $75,000, and defendant responded in
opposition. The motion is ripe for disposition.
II. L AW
A federal district court has original jurisdiction over all civil actions where the parties are
diverse and the amount in controversy is $75,000 or more. 28 U.S.C. § 1332. However, “[i]f at any

time before final judgment it appears that the district court lacks subject matter jurisdiction, the case
shall be remanded.” 28 U.S.C. 1447(c). “The removing party bears the burden of establishing that
federal jurisdiction exists.” De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995). Here,
the removing party is the defendant. The defendant can meet its burden if it is facially apparent that
the claims are likely to exceed $75,000, or if the defendant sets forth summary evidence of facts in
controversy that support a finding of the requisite amount. Manguno v. Prudential and Cas. Ins. Co.,
276 F.3d 720, 723 (5th Cir. 2002). Damages are calculated from the plaintiff’s perspective. See
Garcia v. Koch Oil Co. of Tex. Inc., 351 F.3d 636, 639–40, n.4 (5th Cir. 2004).
It can be facially apparent that a plaintiff’s damages exceed the jurisdictional amount in cases
involving death or severe physical injuries; multiple plaintiffs seeking punitive damages; or dollar
amounts that indicate, with a favorable verdict, the plaintiff’s damages would exceed $75,000.
Gilman v. Arthur J. Gallagher & Co., No. H-09-2355, 2009 WL 5195956, at *5 (S.D. Tex. Dec. 21,
2009). A defendant can also establish the amount in controversy by asserting facts to support a
finding of the requisite $75,000, but he must meet a preponderance of the evidence burden of proof.
Manguno, 276 F.3d at 723. This burden “forces the defendant to do more than point to a state law
that might allow the plaintiff to recover . . . .” De Aguilar, 47 F.3d at 1412. Conclusory allegations
will not suffice. Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir.1995). “Any
ambiguities are construed against removal because the removal statute should be strictly construed
in favor of remand.” Manguno, 276 F.3d at 723 (emphasis added). And, “under any manner of
proof, the jurisdictional facts that support removal must be judged at the time of removal . . . .”
Allen, 63 F.3d at 1335.

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In determining the amount in controversy for declaratory or injunctive relief, courts look at
the “value of the object of the litigation.” Farkas v. GMAC Mortg., L.L.C., 737 F.3d 338 (5th Cir.
2013). In other words, courts consider “the value of the right to be protected or the extent of the
injury to be prevented.” Id. at 341. Additionally, attorney’s fees are included when calculating the
amount in controversy if a statute provides for them. Manguno, 276 F.3d at 723. However, courts
determining whether attorney’s fees will exceed the jurisdictional amount may consider the number
of parties, the complexity of the issues to be litigated, and whether the issues turn on discrete
questions or law or not. Gilman, No. H-09-2355, at *8. For example, attorney’s fees in a class
action would be more likely to meet the amount in controversy than a simple contract dispute with
discrete questions of law and a small number of parties. Id.
III. A NALYSIS
In Holdeman’s original petition in state court, he explains that he has two separate notes on
a property and that he is bringing suit with regard to the “second note” he holds for $26,500. Dkt.
1-3 at 4. Holdeman wants to refinance the second note, but cannot because neither he, nor the title
company, has been able to ascertain what company is servicing the second note. Id. More
specifically, Holdeman believes that Homecomings has an adverse claim or interest in his property
in relation to the second note that operates as a cloud on Holdeman’s title to the property. Id.
Holdeman argues that the claim or interest of Homecomings is invalid, unenforceable or without
right against him because he has attempted to pay off the loan and Homecomings has refused to
provide Holdeman information on how to do so. Id. Holdeman argues that on the basis of his
claims, their value is just $26,500, the value of the note in controversy.

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Homecomings responds that the amount in controversy is established by the market value
of the property. Dkt. 10 at 1. Homecomings argues that the value of the property is $125,053, based
on Holdeman’s own filing of Harris County Appraisal District records with this court. Id. And even
if the court only considers the amount of the second note to be the amount of damages claimed,
Homecomings argues that the amount of the second note, plus attorney’s fees and costs, will more
than likely exceed the $75,000 threshold. Id.
In support of its arguments, Homecomings explains that courts in Texas use the market value
of the property to determine the amount in controversy where a party seeks to invalidate a mortgage
lien. Dkt. 10 at 2. However, the cases cited are distinguishable to the facts of this case. For
example, the Fifth Circuit case cited explains that “the value of the property controls the amount in
controversy,” “when the validity of . . . a right to property is called into question in its entirety.”
Nationstar Mortg. LLC v. Knox, 351 F. App’x 844, 848 (5th Cir. 2009). Here, Holdeman is clear
that the entire right to the property is not in question, just a distinct note. The value of the object of
the litigation is roughly $25,600, the amount of the lien that Holdeman seeks to refinance, but
cannot, because he does not have sufficient information about exactly what is owed on the lien. The
court points out that the note in question is worth just about twenty percent of the value of the
property. For all these reasons, the court is not persuaded that the entire value of the property
demonstrates the amount in controversy. And the remainder of federal district court cases
Homecomings cites are not sufficiently analogous to persuade the court otherwise. For example, the
case cited from the Southern District of Texas involved a denial of remand based on the amount in
controversy, despite the fact that the homeowner only owned a one-third interest in the property,
because the note he took out on the property —and which he sought to have invalidated— was for
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the entire value of the house (not just his one third interest), and that amount was nearly $75,000
before attorney’s fees. Tabaraz v. JP Morgan Chase Bank, N.A., No. H–12–1386, 2012 WL
3527081 (Aug. 14, 2012) (Harmon, J.). Here, Holdeman is dealing with a specific note worth about
twenty percent of the value of the home that he owns in entirety, not one-fifth interest in property
for a note that nearly equals the entire value of the home. Further, Holdeman is not seeking to void
both notes on the property, only the specific note worth $25,600, and for a reason not applicable to
the other note on the property.
Homecomings also argues that it has established the amount in controversy because the
second lien, though junior to the first lien, is secured by the entire value of the property at issue.
However, Homecomings provides no authority for that proposition upon which the court can base
a decision.
Finally, as to whether attorney’s fees or costs can be added to the lien amount to satisfy the
amount in controversy, Homecomings’ conclusions about attorney’s fees and costs do not meet its
burden of proof. On its face, the case appears straightforward: there are only two parties in the case,
and the specific lien and allegations are specific. And Homecomings merely lists examples of cases
where a court has found a large amount of attorney’s fees in cases with small amounts of damages
sought, but does not compare the facts of those cases to the case before the court. Homecomings
certainly provides no evidence upon which this court can conclude that the attorney’s fees and costs
would be worth about $50,000, double the amount of the lien at issue which is worth $25,600.

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IV. C ONCLUSION
The defendant has failed to assert sufficient facts that show, by a preponderance of the
evidence, that the amount in controversy is at least $75,000. For the foregoing reasons, and the law
dictating that any ambiguities are construed against removal, the court finds that the amount in
controversy has not been met. Plaintiffs’ motion to remand (Dkt. 22) is GRANTED, and this case
is REMANDED to the 157th Judicial District Court in Harris County, Texas.
It is so ORDERED.
Signed at Houston, Texas on February 19, 2015.

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Gray H. Miller
United States District Judge

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