LWL Construction, LLC v. Countrywide Home Loans, Inc. et al

Filing 9

MEMORANDUM OPINION and ORDER denying 5 First MOTION to Remand. It is further Ordered that Ditech file an amended notice of removal within thirty (30) days of this Memorandum Opinion and Order. (Signed by Judge Sim Lake) Parties notified. (cfelchak, 4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
LWL CONSTRUCTION, LLC d/b/a
THE LESTER GROUP,

§
§
§
§
§
§
§

Plaintiffs,

v.
COUNTRYWIDE HOME LOANS, INC.,
and DITECH FINANCIAL, LLC,

February 02, 2016
David J. Bradley, Clerk

CIVIL ACTION NO. H-15-3379

§
§
§
§

Defendants.

MEMORANDUM OPINION AND ORDER

Pending before
(Docket Entry No.

the

court

is

Plaintiff's Motion

to

Remand

5), asking that this action be remanded to the

85th Judicial District Court of Brazos County,

Texas.

For the

reasons explained below, the motion to remand will be denied, and
defendant

Ditech will be ordered to file

an amended notice of

removal that identifies LWL's members and their respective states
of citizenship.

I.

Factual and Procedural Background

This action concerns the validity of a lien on real property
located in Brazos County, Texas.

On October 13, 2015, plaintiff,

LWL Construction, LLC d/b/a The Lester Group ("LWL") filed suit in
the 85th Judicial District Court of Brazos County, Texas, against
defendants,

Countrywide

Home

Loans,

1

Inc.

("Countrywide") ,

and

Ditech Financial, LLC ("Ditech") seeking declaratory judgment that
the lien is unenforceable. 1
On

October

13,

2015,

LWL' s

attorney,

Marys sa

J.

Simpson

("Simpson"), filed two forms requesting issuance of two citations,
one

for

Countrywide

and

one

for

Di tech,

asking

that

the

two

citations be "Mail[ed] to Attorney's Office/Requesting Party." 2
On

November

17,

2015,

Ditech

filed

a

Notice

of

Removal

pursuant to 28 U.S.C. § 1332(a) asserting that "there is complete
diversity

between

Plaintiff

and

Defendant

and

the

amount

in

controversy exceeds $75,000.00." 3
On November 20, 2015, Simpson drafted a letter to the Brazos
County District Clerk stating: "Enclosed please find the Return of
Citation and signed green card for service on Countrywide Home
Loans,

Inc.,

through

its

registered

agent.

original among the other papers in this case." 4

Please

file

the

Attached thereto

is a signed green card showing receipt on October 21, 2015. 5
On January 4, 2016, LWL filed Plaintiff's Motion to Remand. 6

1

Plaintiff's Original Petition,
Removal, Docket Entry No. 1-2.

Exhibit

B-1

to

Notice

of

2

Issuance of Process Instructions, Exhibit B-1 to Notice of
Removal, Docket Entry No. 1-2.
3

Notice of Removal, Docket Entry No. 1, p. 1.

4

Exhibi t A to Plaintiff's Brief in Support of
Motion to Remand, Docket Entry No. 6-1, p. 1.

Plaintiff's

5

Id. at p. 3.

6

Plaintiff's Motion to Remand, Docket Entry No. 5.
2

II.

LWL's Motion to Remand

Asserting that all defendants were served on the same date,
October 21, 2015, LWL argues that this action should be remanded
because Ditech's Notice of Removal is defective since Countrywide
neither consented to nor joined in the notice of removal. 7

Ditech

responds that LWL's motion to remand should be denied because it
was not timely filed,

and because Countrywide was not properly

served, Ditech was not required to obtain Countrywide's consent to
removal. 8

A.

Standard of Review

28 U.S.C.

§

1441(a) provides that "any civil action brought in

a State court of which the district courts of the United States
have original jurisdiction, may be removed by the defendant or the
defendants,

to the district court of the United States for the

district and division embracing the place where such action is
pending."

Original federal

jurisdiction exists where the civil

action arises "under the Constitution,
United States."

28 U.S.C.

§

1331.

laws,

or treaties of the

In addition, "[t]he district

courts shall have original jurisdiction of all civil actions where
the matter in controversy exceeds the sum or value of $75,000,
7

Plaintiff's Brief in Support of Plaintiff's Motion to Remand,
Docket Entry No. 6, p. 3.
8

Defendant Ditech Financial LLC's Response in Opposition to
Plaintiff's Motion to Remand, Docket Entry No. 7.
3

exclusive of interest and costs, and is between different States."

28 U.S.C.

§

1332.

(1) citizens of

The notice of removal "shall

be filed within 30 days after the receipt by the defendant, through
service or otherwise, of a copy of the initial pleading . . . "

u.s.c.

1446(b).

§

28

"When a civil action is removed solely under

section 1441(a), all defendants who have been properly joined and
served must join in or consent to the removal of the action."
U.S. C.

§

14 4 6 (b) ( 2) (A) .

28

After removal of a case, the plaintiff may

move for remand and "[if] it appears that the district court lacks
subject matter

jurisdiction,

U.S.C. § 1447(c).

the

case

shall be

remanded."

28

"A motion to remand the case on the basis of any

defect other than lack of subject matter jurisdiction must be made
within 30 days after the filing of the notice of removal under
section 1446 (a)."

Id.

The Fifth Circuit has held that the removal

statutes are to be construed "strictly against removal and for
remand."

Eastus v. Blue Bell Creameries, L.P.,

(5th Cir.

1996)

(citing Shamrock Oil

&

97 F.3d 100, 106

Gas Corp.

v.

Sheets,

61

S.Ct. 868, 872 (1941)).

B.

Analysis

LWL

argues

that

this

action

should

be

remanded

because

Countrywide failed either to consent to or to join in the notice of
removal within thirty days of being served on October 21,
This argument has no merit because 28 U.S.C.

4

§

2015.

1447(c) states in

pertinent part: "A motion to remand the case on the basis of any
defect other than lack of subject matter jurisdiction must be made
within 30 days after the filing of the notice of removal under
section 1446(a) ."

The failure to obtain consent to removal or to

join all served defendants in the notice of removal as required by
28 U.S.C.
instead,

§

1446(b) (2) (A)

is not a jurisdictional defect but is,

a waivable procedural defect.

Division of Texaco,

Inc.

v.

See Getty Oil Corp.,

Insurance Co.

of North America,

a

841

F.2d 1254, 1263 (5th Cir. 1988).

See also See In re Shell Oil Co.,

932

1991)

§

F.2d

1518,

1523

(5th

Cir.

("Improper

1441(b) is [] a waivable removal defect.").

removal

under

Because the defect

in removal on which LWL bases its motion to remand is a waivable
procedural defect, LWL was required to file its motion to remand
within 30 days after Ditech filed its Notice of Removal.
§

1447(c).

28 U.S.C.

Because Ditech filed its Notice of Removal on November

17, 2015, but LWL did not file its motion to remand until more than
30

days

later on

January

4,

2016,

LWL' s

motion to

remand was

untimely and LWL, therefore, waived the procedural defect in the
removal process on which its motion to remand is based.

See In re

Shell Oil Co., 932 F.2d at 1523 ("(P]laintiffs have waived any nonjurisdictional grounds for remand existing at the time of removal
by not moving to remand within 30 days of the notice of removal.").
Accordingly,

LWL' s

motion

to

remand

for

a

wai vable

defect in the removal procedure will be denied.

5

procedural

to

~lege

III. Order to Amend Notice of Removal
Facts Establishing Subject Matter Jurisdiction

Notwithstanding the untimeliness of LWL's motion to remand, 28
U.S.C.

1447(c)

§

provides

for

remand at any time before

final

judgment where it appears that the district court lacks subject
matter

jurisdiction.

A

federal

court

has

subject-matter

jurisdiction based on diversity of citizenship "where the matter in
controversy exceeds

the

interest and costs,

and is between .

States."

§

exist

28 U.S.C.

there

must

sum or value of $75,000,

1332(a) (1).

be

"complete

exclusive of

citizens of different

For diversity jurisdiction to
diversity

between

all

named

plaintiffs and all named defendants, and no defendant is a citizen
of the forum State."
(2005).

Lincoln Property Co. v. Roche, 126 S.Ct. 606

Although the parties do not dispute the existence of

complete diversity or that the matter in controversy exceeds the
value

of

$75,000,

litigants

cannot

bestow

subject-matter

jurisdiction on federal courts by waiver or consent.
v.

Maurer,

55

S.Ct.

162,

165

(1934)

("[L]ack

See Mitchell
of

federal

jurisdiction cannot be waived or be overcome by an agreement of the
parties.").
919

See also Howery v. Allstate Ins. Co., 243 F.3d 912,

(5th Cir.),

cert. denied,

122 S.Ct.

459

(2001)

("It is true

that subject-matter jurisdiction cannot be created by waiver or
consent.

It

is equally true that

federal

courts must address

jurisdictional questions whenever they are raised and must consider
jurisdiction sua sponte if not raised by the parties.").
6

On November 17,
Citing

28

U.S.C.

§

2015,

Ditech filed its Notice of Removal.

1332 (a),

and asserting

that

the

amount

controversy exceeds $75,000.00, Ditech asserted:
5.
There is diversity jurisdiction in this Court
because there is complete diversity of citizenship
between
Plaintiff
and
Defendants,
and more
than
$75,000.00 is in controversy, exclusive of interest and
costs.
See 28 U.S.C. § 1332.
1.

Citizenship of Plaintiff

6.
Plaintiff is a citizen of Texas.
Specifically,
Plaintiff states that it is a Texas corporation with its
principal place of business at 2801 Earl Rudder Freeway
South, College Station, Texas 77845.
(P.'s Pet. <[ 2).
Plaintiff is therefore citizens of the State of Texas for
diversity purposes.
28 U.S.C. 1332 (c) (1).
2.

Citizenship of Ditech Financial LLC's Members

7.
Ditech Financial LLC is a Delaware limited liability
company with its principal office located in Tampa,
Florida.
For diversity purposes, the citizenship of a
limited
liability
company
is
determined
by
the
citizenship of its members.
Harvey v. Grey Wolf
Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008).
8.
The members of Ditech Financial LLC are Green Tree
Licensing, LLC, a Delaware limited liability company with
its principal office located in Minnesota and Green Tree
Servicing Corp. a Delaware Corporation with its principal
office in Minnesota.
9.
The sole member of Green Tree Licensing, LLC is
Green Tree Investment Holdings II LLC, a Delaware limited
liability company with its principal office located in
Minnesota.
10. The sole member of Green Tree Investment Holdings II
LLC is Green Tree Credit Solutions LLC, a Delaware
limited liability company with its principal office
located in Minnesota.
11. The sole member of Green Tree Credit Solutions LLC
is Walter Investment Holding Company, LLC, a Delaware
7

in

limited liability company
located in Florida.

with

its

principal

office

12. The sole member of Walter Investment Holding Company
LLC is Walter Investment Management Corp., a Maryland
corporation with its principal office located in Florida.
13.
Ditech is not and never has been a citizen of the
State of Texas nor was it organized in the State of
Texas.
Accordingly, Ditech is a citizen of Delaware,
Minnesota, Maryland, and Florida.

3.

Citizenship of Countrywide Home Loans, Inc.

14. Countrywide Home Loans,
Inc.
is a
New York
Corporation with its principal place of business in
California.
Therefore Countrywide is a citizen of New
York and California for diversity purposes.
15.
Because Plaintiff is a citizen of Texas; Defendant
Ditech and its members are citizens of Delaware,
Minnesota,
Maryland,
and
Florida;
and
Defendant
Countrywide is a citizen of New York and California there
is complete diversity between Plaintiff and Defendants
for purposes of 28 U.S.C. § 1332. 9
As

stated

in

~

7

of

Ditech's

Notice

of

Removal,

the

citizenship of a limited liability company is determined by the
citizenship

of

its

members.

Harvey,

542

F.3d

at

1079-80.

Plaintiff's Original Petition states that "LWL Construction, LLC,
d/b/a The Lester Group[,] is a Texas corporation with a principal
College Station, Texas. " 10

place of business located [in] .
neither

plaintiff's

petition

nor

Ditech's

Notice

of

But

Removal

contains any mention of LWL's members, let alone their respective

9

Notice of Removal, Docket Entry No. 1, pp. 2-4 ~~ 5-15.

10

~

Plaintiff' s Original Petition,

2.
8

Docket Entry No.

1-1,

p.

1

states

of

citizenship.

Under

Harvey

these

allegations

insufficient to establish diversity jurisdiction.

are

Accordingly,

Ditech will be ordered to file an amended notice of removal that
identifies

LWL' s

members

and

their

respective

states

of

citizenship.

IV.

Conclusions and Order

For the reasons stated in§ II above, Plaintiff's Motion to
Remand, Docket Entry No. 5, is DENIED.
For the reasons stated in § III above, Ditech is ORDERED to
file an amended notice of removal within thirty (30) days from the
date of this Memorandum Opinion and Order that identifies LWL's
members and their respective states of citizenship.

Should Ditech

fail to file an amended notice of removal within thirty (30) days
that

adequately

alleges

matter jurisdiction,

facts

sufficient

to

establish

subject

this action will be dismissed for lack of

jurisdiction.
SIGNED at Houston, Texas, on

ebruary, 2015.

SIM LAKE
UNITED STATES DISTRICT JUDGE

9