Alanis v. Wells Fargo National Association et al

Filing 7

ORDER GRANTING 3 Motion to Remand to State Court. Signed by Judge Xavier Rodriguez. (tm)

UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
NANCY ALANIS,
Plaintiff,
v.
WELLS FARGO NATIONAL
ASSOCIATION, as Trustee for the Pooling
& Servicing Agreement Dated as of October
1, 2006 Securitized Asset Backed
Receivables LLC Trust 2006-NC3 Mortgage
Pass-Through Certificates Series 2006 NC3,
ET AL.,

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Civil Action No. SA-11-CV-800-XR

Defendants,

REMAND ORDER
On this date, the Court considered Plaintiff Nancy Alanis’s motion to remand (docket no. 3),
and the response thereto. After careful consideration, the Court will grant the motion.
Defendants Wells Fargo National Association and Ocwen Loan Servicing, LLC removed this
case to this Court on September 28, 2011 on the basis of federal question jurisdiction Plaintiff
originally filed this lawsuit in state court on February 22, 2011 to stop a threatened foreclosure. The
original petition asserted state-law claims for breach of contract, violations of the Texas Finance Code
and the DTPA, and violations of the Texas Property Code. Plaintiff served Wells Fargo, Ocwen, and
HomEq Servicing Corporation. HomEq failed to answer, and a default judgment was taken against
it, while Ocwen and Wells Fargo appeared and filed answers. Plaintiff did not serve the other
defendants, who are various substitute trustees.

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On August 31, 2011, Plaintiff filed a First Amended Original Petition and Application for
Injunctive Relief. Defendants assert that this was the first time the case became removable, because
Plaintiff first included federal claims under the Federal Debt Collection Practices Act and RESPA.
On September 27, 2011, Plaintiff filed a Second Amended Petition that also included these claims.
Defendants assert that removal is timely because they filed their Notice of Removal within thirty days
of receipt of Plaintiff’s First Amended Petition.
On October 14, 2011, Plaintiff timely filed her motion to remand. Plaintiff asserts that this
case should be remanded because: “(A) Notice To Transfer is improper, (B) Lack ‘standing’ to
transfer this claim to federal court, (C) Failed to timely file their Notice of Transfer and concealed
litigation history from the Court, (D) Failed to comply with procedural rules for state law claims, and
(E) There was no [u]nanimous consent to the removal.”
In support of the first ground, Plaintiff cites to § 1446(a), which states that the notice of
removal must be signed by the attorney subject to the certification requirements of Rule 11, and then
cites the requirements of Rule 11. It is unclear what Plaintiff intends by this argument. The notice
of removal is signed by Jeffrey Hiller, attorney for Defendants. To the extent that Plaintiff asserts that
the Mr. Hiller has violated Rule 11, Plaintiff has failed to demonstrate any facts in support of this
argument. Accordingly, the Court declines to find that Mr. Hiller has violated Rule 11.
The Court further rejects Plaintiff’s argument that Defendants lack standing to remove.
Plaintiff argues that “Wells Fargo had no standing to pursue an action for foreclosure” and presents
various arguments concerning why Wells Fargo is not entitled to foreclose. However, none of this
affects whether Wells Fargo has standing to remove. Plaintiff does not dispute that she sued Wells
Fargo in state court. Wells Fargo, as a defendant, may remove the case to this Court if this Court
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would have had original jurisdiction over the claims. This depends on whether Plaintiff asserts
federal claims in the lawsuit, not whether Wells Fargo has standing to foreclose. Thus, this argument
lacks merit.
Plaintiff does assert other various procedural defects, however. The Court need not address
Plaintiff’s argument that the removal is untimely or that Defendants have waived the right to remove
by proceeding to defend the action in state court, because the Court finds that Plaintiff’s argument that
Defendants failed to obtain unanimous consent has merit.
Plaintiff contends that removal was procedurally defective because Wells Fargo failed to
obtain the consent of all defendants. Plaintiff argues that “Defendants failed to unanimously file a
Notice of Transfer within the requisite 30 days.” Defendant responds that the only Defendants that
were served were Wells Fargo, Ocwen, and HomEq. Those Defendants who were formally served
with process are required to consent to the removal; those defendants who were not formally served
(i.e., the substitute trustees) were not required to consent.
The record indicates that Wells Fargo, Ocwen, and HomEq were served. HomEq defaulted,
and default judgment was entered. Plaintiff moved to sever HomEq based on the default judgment,
but Defendant moved for a continuance of the motion to sever. There is no indication in the record
that the severance was ever granted. Accordingly, HomEq remains a party to his lawsuit, even though
in default. The Court must thus determine whether its consent was required for removal.1

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Although Plaintiff complains of the lack of unanimous consent because the un-served
parties did not join in the removal, and she does not complain specifically about HomEq’s lack of
consent, she has raised a valid procedural defect to the removal. Further, because a motion to
remand has been filed, the Court may remand on any appropriate basis, even though not raised by
the motion for remand. Shexnayder v. Entergy Louisiana, Inc., 394 F.3d 280, 285 (5th Cir. 2004).
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“The rule of unanimity requires that in order for a notice of removal to be properly before the
court, all defendants who have been served or otherwise properly joined in the action must either join
in the removal, or file a written consent to the removal.” Brierly v. Alusuisse Flexible Packaging,
Inc., 184 F.3d 527, 533 n.3 (6th Cir.1999). Defendants do not expressly address whether HomEq’s
consent was required by the rule of unanimity, apparently assuming that HomEq, as a party in default,
is not required to consent. However, that assumption is not supported by the case law.
In Carr v. Mesquite Indep. Sch. Dist., Civ. A. No. 3:04-CV-0239, 2004 WL 1335827 (N.D.
Tex. June 14, 2004), the defendants removed without obtaining the consent of a party against whom
plaintiff had taken an interlocutory default judgment. Judge Fitzwater concluded that the notice of
removal was procedurally defective for lack of unanimity, and that the defect could not be cured by
a post-removal severance. Accordingly, he granted the plaintiff’s motion to remand.
In American Asset Finance LLC v. Corea Firm, Civ. A. No. 2:11-CV-4417, __ F. Supp. 2d
___, 2011 WL 5190043 (D.N.J. Oct. 27, 2011), the court also remanded a case that had been removed
without the consent of a defaulting party. The court rejected the argument that a defaulting party was
a “nominal party” without a real interest in the litigation. Rather, the court noted that entry of a
default judgment demonstrates that real claims were asserted against the party. In rejecting the
defendants’ argument that “[t]he notion that Defendant should be required to track down and obtain
the consent of parties who have failed to appear in an action, and have had final judgment entered
against them[,] is absurd,” the court reasoned that “removal statutes are strictly construed against
removal in part as a gatekeeping function for the federal courts, and remand has been granted in cases
where the removing defendant was in all likelihood unable to obtain the co-defendant's consent.”
Corea Firm, __ F. Supp. 2d at ___. As an example, it cited a federal court that found that remand
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is proper for failure of some defendants to join in the notice of removal even where the non-joining
defendants were served by publication because they could not be found. Id. (citing GMFS, L.L.C. v.
Bounds, 275 F. Supp. 2d 1350, 1353 (S.D. Ala. 2003)).2
In White v. Bombardier Corp., 313 F. Supp. 2d 1295, 1298 (N.D. Fla. 2004), the court
concluded that “it is possible under some circumstances for the unanimity requirement to be excused
with respect to a defaulted defendant who has not appeared.” However, it held,
in order to excuse such consent, the removing defendant must allege with specificity
in its petition for removal, and prove upon challenge by a timely motion to remand,
that the removing defendant has unsuccessfully exhausted all reasonable efforts to
locate the defaulted defendant to obtain its consent. Conclusory allegations in an
affidavit are insufficient. Instead, to sustain its burden on removal, the removing
defendant must describe what efforts it took and those efforts must be consistent with
the exercise of reasonable diligence, similar to that necessary for a plaintiff to
establish a basis for substitute service.
In First Independence Bank v. Trendventures, L.L.C., 2008 WL 253045 (E.D. Mich. Jan. 30,
2008), the court declined to recognize the White court’s exception to the unanimity rule because it
failed to city any federal law in support of the exception, nor had it been recognized by any federal
appellate court. And recently, in Office Building LLC v. Castlerock Sec., Civ. A. No. 10-61582, 2011
WL 1674963 (S.D. Fla. May 3, 2011), the court held that as long as the defaulted party remains part
of the lawsuit, even after final default judgment was entered against it, failure to obtain its consent
renders removal defective.
The court has located only decision in which a court has denied a motion to remand based on

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The Corea Firm court cited to another district court case that considered whether the
presence of a non-diverse defaulting party would destroy diversity jurisdiction – Schlegle & Sons
Printing v. United English Breeders & Fanciers Assoc., Inc., 682 F. Supp. 36, 37 (C.D. Ill.1988).
The court in that case concluded that the defaulting party was not nominal because it would have to
enforce the default judgment against the party.
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the failure to obtain consent of defaulting defendants. In Cuen v. Tucker, Civ. A. No. 09-CV-1904,
2009 WL 4049151 (S.D. Cal. Nov. 20, 2009), Plaintiffs did not serve the defaulting defendants with
the Third Amended Complaint, upon which removal was based. The court held that the removing
defendants were not required to obtain the defaulting defendants consent because the Plaintiffs
intended “to rely on the defaults rather than litigate their claims against these Defendants.” However,
pursuant to Rule 5(a)(2), the plaintiffs would not have been required to serve copies of any amended
pleadings on the defaulting parties unless they asserted a new claim against the defaulting parties.
FED . R. CIV . P. 5(a)(2). Thus, failure to serve the defaulting parties with an amended pleading does
not speak to the issue of whether the consent of such parties is required for removal.
Accordingly, the Court finds that Plaintiff’s assertion that the removal was procedurally
defective has merit, and that it requires this case to be remanded. The motion to remand (docket no.
3) is GRANTED. This case is remanded pursuant to 28 U.S.C. §§ 1447(c), (d).
It is so ORDERED.
SIGNED this 12th day of January, 2012.

_________________________________
XAVIER RODRIGUEZ
UNITED STATES DISTRICT JUDGE

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