Halley et al v. Deutsche Bank National Trust Company, as Trustee for Morgan Stanley ABS Capital I Inc. Trust 2004-HE3, Mortgage Pass-Through Certificates, Series 2004-HE3 et al

Filing 29

MEMORANDUM AND ORDER. It is ORDERED that the deadlines in the Docket Control Order [Doc. # 23] are revised as follows: expert witnesses for Counter-Defendant shall be identified on or before August 5, 2016; discovery must be completed by August 31, 2 016; dispositive motions and all other pretrial motions must be filed by September 30, 2016; the Joint Pretrial Order must be filed by November 30, 2016; and Docket Call is set for Wednesday, December 7, 2016 at 4:00 p.m. (Signed by Judge Nancy F Atlas) Parties notified. (wbostic, 4)

United States District Court
Southern District of Texas

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

BARRY K. HALLEY, et al.,
Plaintiffs/Counter-Defendants,
v.
DEUSTCHE BANK NATIONAL
TRUST COMPANY, AS TRUSTEE
FOR MORGAN STANLEY ABS
CAPITAL I INC., TRUST 2004-HE3,
MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 2004-HE3,
et al.,
Defendants/Counter-Plaintiffs.

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July 15, 2016
David J. Bradley, Clerk

CIVIL ACTION NO. H-15-1174

MEMORANDUM AND ORDER
Counter-Defendants Barry K. Halley and Blanca E. Olvera originally brought
this suit challenging a foreclosure sale at 10223 Metronome Drive in Houston (the
“Property”), but have voluntarily dismissed their claims against the original
Defendants. The original Defendants, who no w are only Counter-Plaintiffs, are
Deutsche Bank National Trust Company, as Trustee for Morgan Stanley ABS Capital
I Inc., Trust 2004-HE3, Mortgage Pass-Through Certificates, Series 2004-HE3
(“Deutsche Bank”) and Ocwen Loan Servicing, L.L.C. (“Ocwen”). Counter-Plaintiffs
bring claims for declaratory judgment regarding the Property. As instructed by the
Court, the parties have briefed the issue of this Court’s subject matter jurisdiction in
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light of the Supreme Court’s decision in Americold Realty Trust v. Conagra Foods,
Inc., 136 S. Ct. 1012 (2016). See Counter-Plaintiffs’ Brief in Support of Jurisdiction
[Doc. # 27]; Counter-Defendants’ Response [Doc. # 28]. Having considered the
parties’ submissions, all matters of record, and applicable legal authorities, the Court
determines that it has subject matter jurisdiction over this case.
I.

BACKGROUND
Deutsche Bank and Ocwen removed this action from state court on May 4,

2015. Notice of Removal [Doc. # 1]. In their original pleadings in state court, Halley
and Olvera alleged that the foreclosure sale of the Property on April 7, 2015, should
be enjoined due to violations of the Real Estate Settlement Procedures Act. However,
on May 19, 2015, Halley and Olvera voluntarily dismissed all of their claims against
Deutsche Bank and Ocwen. See Notice of Dismissal of Defendants Without Prejudice
[Doc. # 9]; Hearing Minutes and Order, dated July 16, 2015 [Doc. # 22]. The only
claims remaining in this suit are Counterclaims [Doc. # 5] by Deutsche Bank and
Ocwen seeking a declaratory judgment that they are entitled to foreclose on the
Property.
On December 23, 2015, this Court stayed and administratively closed the case
pending the Supreme Court’s decision in a case that potentially implicated this Court’s
subject matter jurisdiction. See Order [Doc. # 25]. On March 7, 2016, after the

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Supreme Court’s decision in Americold, the Court reinstated the instant action on its
active docket and ordered briefing on the jurisdictional issue. See Order [Doc. # 26].
The parties now have filed timely briefs and both take the position that this Court has
subject matter jurisdiction over their dispute. See Docs. # 27, # 28.
II.

SUBJECT MATTER JURISDICTION
The Counterclaims filed by Deutsche Bank and Ocwen invoke this Court’s

diversity jurisdiction under 28 U.S.C. § 1332. Counter-Defendants Halley and Olvera
are citizens of Texas.
Counter-Plaintiff Deutsche Bank is a trustee. The Supreme Court’s recent
Americold holding reaffirmed the holding in Navarro Savings Ass’n v. Lee, 446 U.S.
458 (1980), stating that “when a trustee files a lawsuit or is sued in her own name, her
citizenship is all that matters for diversity purposes.” Americold, 136 S. Ct. at 1016.
See Navarro, 446 U.S. at 465-66 (a trustee who is the real party in interest can invoke
diversity jurisdiction based on its own citizenship rather than that of the trust’s
beneficial shareholders). As a national bank association, Deutsche Bank is considered
a citizen of the state in which its main office is located. See Wachovia Bank, N.A. v.
Schmidt, 546 U.S. 303, 318 (2006). Because Deutsche Bank has its main office in
California, as specified in its articles of association, see Notice of Removal [Doc. #
1], at 3, Deutsche Bank is a citizen of California for purposes of diversity jurisdiction.

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Counter-Plaintiff Ocwen is a limited liability company whose sole member is
Ocwen Mortgage Servicing, Inc. The citizenship of a limited liability company is
determined by the citizenship of its members. Harvey v. Grey Wolf Drilling, 542 F.3d
1077, 1080 (5th Cir. 2008). Ocwen Mortgage Servicing, Inc., is a citizen of the U.S.
Virgin Islands, the territory in which it is incorporated. See Notice of Removal, at 4.
Counter-Plaintiff Ocwen therefore is a citizen of the U.S. Virgin Islands for purposes
of diversity jurisdiction.
Complete diversity of citizenship is present in this case. In addition, the amount
in controversy exceeds $75,000, and thus satisfies the requirements of 28 U.S.C. §
1332(a). See Counterclaims [Doc. # 5], at 5 (alleging that Counter-Defendants owe
“at least $148,650.33 as unpaid principal, interest, fees, and escrow advances”).1 This
Court has diversity jurisdiction over the parties’ dispute under 28 U.S.C. § 1332(a).
III.

CONCLUSION
For the reasons stated above, this Court has subject matter jurisdiction. The

Court’s previous Docket Control Order [Doc. # 23], entered on July 16, 2015, set

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The appraised value of the Property was $136,019 on January 1, 2015. Harris County
Appraisal District Real Property Account Information [Doc. # 1-6]. See Farkas v.
GMAC Mortgage, L.L.C., 737 F.3d 338, 341 (5th Cir. 2013) (“In actions enjoining a
lender from transferring property and preserving an individual’s ownership interest,
it is the property itself that is the object of the litigation; the value of that property
represents the amount in controversy.”)

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multiple deadlines that expired during the stay pending the Americold decision.
Therefore it is hereby
ORDERED that the deadlines in the Docket Control Order [Doc. # 23] are
revised as follows: expert witnesses for Counter-Defendant shall be identified on or
before August 5, 2016; discovery must be completed by August 31, 2016; dispositive
motions and all other pretrial motions must be filed by September 30, 2016; the Joint
Pretrial Order must be filed by November 30, 2016; and Docket Call is set for
Wednesday, December 7, 2016 at 4:00 p.m.
SIGNED at Houston, Texas, this 15th day of July, 2016.

NAN Y F. ATLAS
SENIOR UNI
STATES DISTRICT JUDGE

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