Parr v. Deutsche Bank National Trust Company, et al,
ORDER DISMISSING 4 Motion to Dismiss. Signed by Judge Xavier Rodriguez. (rf)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
DEUTSCHE BANK NATIONAL TRUST
COMPANY F/K/A BANKERS TRUST
COMPNAY OF CALIFORNIA N.A., AS
TRUSTEE FOR THE HOLDERS OF THE
VENDEE MORTGAGE TRUST 1999-1
Civil Action No. SA-13-CV-930-XR
On this date, the Court considers its jurisdiction over this removed case.
following reasons, the Court determines that Defendants W.A. Marty LaCouture and Wes Hiatt
were improperly joined to Plaintiff’s state-court petition. Accordingly, the Court DISMISSES
WITHOUT PREJUDICE Plaintiff’s claims against Mr. LaCouture and Mr. Hiatt pursuant to
Federal Rule of Civil Procedure 21. Mr. LaCouture’s and Mr. Hiatt’s motion to dismiss without
prejudice pursuant to Texas Property code section 51.007 (docket no. 4) is, therefore,
DISMISSED AS MOOT.
On August 30, 2013, Plaintiff Bonnie Parr filed her lawsuit in the 224th Judicial District
Court of Bexar County, Texas. Docket No. 1-1. Plaintiff styled her suit, “Bonnie Parr, Plaintiff,
v. Deutsche Bank National Trust Company f/k/a Bankers Trust Company of California N.A., as
trustee for the holders of the Vendee Mortgage Trust 1999-1, Defendant(s).” Notwithstanding
this caption, Plaintiff names Mr. LaCouture and Mr. Hiatt as additional defendants within the
body of her petition. Id. ¶ 3. Both Mr. LaCouture and Mr. Hiatt are described as “Substitute
Trustee [sic] under a Notice of Trustees [sic] Sale scheduled for September 3, 2013 filed with the
real property records of Bexar County, Texas.” Id.
Plaintiff’s petition alleges that Plaintiff is the owner of real property located at 1751
Copperfield, San Antonio, Texas 78251. Id ¶ 1. Defendant Deutsche Bank National Trust
Company f/k/a Bankers Trust Company of California N.A., as trustee for the holders of the
Vendee Mortgage Trust 1999-1 (“Deutsche Bank”) is the alleged owner of a promissory note
secured by Plaintiff’s property. Id. ¶ 4. Deutsche Bank allegedly requested Mr. LaCouture
and/or Mr. Hiatt to sell the property at a foreclosure sale on September 3, 2013, pursuant to their
capacity as substitute trustees. Id. Plaintiff’s lawsuit, filed four days before the scheduled
foreclosure sale, seeks to enjoin Defendants from conducting the sale. Plaintiff alleges that there
are “impediments to the sale.” Id. ¶ 7. Plaintiff elaborates:
Plaintiff was offered an opportunity for [a] mortgage modification and  Plaintiff
has not had enough time to respond. Further,  Plaintiff is exploring other
options under state and federal law to which she may be entitled in order to
reform, modify, or qualify for alternative programs designed to aid [P]laintiff on a
Id. Plaintiff’s lawsuit asserts claims solely against Deutsche Bank for breach of contract;
violations of sections 51.002, 51.0074, and/or 51.0075 of the Texas Property Code; violations of
the Texas Debt Collection Practices Act; trespass to try title; and reformation. Id. ¶ 10.
On August 30, 2013, the state court issued a temporary restraining order, enjoining the
scheduled foreclosure sale. Docket No. 1-1. On September 30, 2013, Mr. Hiatt filed an answer
with the state court. Docket No. 1-1 In his answer, he included a verified denial stating that he
believed he was named as a party to the lawsuit solely in his capacity as a trustee under a deed of
trust. Likewise, Ms. LaCouture filed an answer on October 2, 2013 with substantially the same
verified denial. Docket No. 1-1. On October 4, 2013, Deutsche Bank answered Plaintiff’s
petition. Docket No. 1-1. On October 10, 2013, Deutsche Bank removed the action to this Court.
Docket No. 1.
In its notice of removal, Deutsche Bank argues that the Court has subject-matter
jurisdiction over Plaintiff’s claims pursuant to diversity jurisdiction. Deutsche Bank asserts that
Plaintiff is a citizen of Texas, that Deutsche Bank is a citizen of California, and that the amount
in controversy is, at a minimum, the fair market value of the property. This value, according to
the Bexar County, Texas Tax Appraisal District, is $127,950. Docket No. 1-1, Ex. C. Further,
Deutsche Bank asserts that it believes Mr. LaCouture and Mr. Hiatt are citizens of Texas.
Nevertheless, Deutsche Bank believes that Mr. LaCouture and Mr. Hiatt were improperly joined
to Plaintiff’s lawsuit because Plaintiff does not assert causes of action against Mr. LaCouture or
Mr. Hiatt, and Plaintiff names Mr. LaCouture and Mr. Hiatt solely as substitute trustees.
On November 1, 2013, Mr. LaCouture and Mr. Hiatt moved to be dismissed from this
lawsuit pursuant to Texas Property code section 51.007. Docket No. 4.
Plaintiff has not
II. Legal Standard
A state-court civil action may only be removed to federal court if the federal court would
have had original jurisdiction had the case been filed in federal court. 28 U.S.C. § 1441(a).
Federal courts have original jurisdiction over “all civil actions where the matter in controversy
exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens
of different States.” 28 U.S.C. § 1332(a)(1). Diversity jurisdiction requires complete diversity—
that is, the citizenship of each plaintiff must be diverse from the citizenship of each defendant.
Caterpillar Inc. v. Lewis, 519 U.S. 61, 66 (1996).
Not all named defendants are considered for diversity analysis. Salazar v. Allstate Texas
Lloyd’s, Inc., 455 F.3d 571, 574 (5th Cir. 2006). A court may ignore improperly joined, nondiverse defendants. Id. To establish improper joinder, the removing party must show “(1) actual
fraud in the pleading of jurisdictional facts, or (2) [the] inability of the plaintiff to establish a
cause of action against the non-diverse party in state court.” Smallwood v. Ill. Cent. R.R. Co., 385
F.3d 568, 573 (5th Cir. 2004) (en banc). Once a court determines a defendant to be improperly
joined, the defendant is effectively dismissed from the action. Akerblom v. Ezra Holdings Ltd.,
509 F. App’x. 340, 347 (5th Cir. 2013) (per curiam). An improperly joined defendant may be
dismissed under Federal Rule of Civil Procedure 21. Id.1
Although Plaintiff has not contested jurisdiction or filed a motion to remand, the Court
has “a continuing obligation to examine the basis for [its] jurisdiction” and may raise the issue
sua sponte at any time. MCG, Inc. v. Great W. Energy Corp., 896 F.2d 170, 173 (5th Cir. 1990).
Here, Deutsche Bank removed the case based on diversity jurisdiction. Plaintiff is
undisputedly a citizen of Texas. Deutsche Bank is a national banking association with its main
office, as designated in its articles of association, in California. Docket No. 1, at 2. Therefore,
Deutsche Bank is a citizen of California. See 28 U.S.C. § 1348; Wachovia Bank v. Schmidt, 546
U.S. 303, 318 (2006) (stating that a national bank is a citizen of the State designated in its
articles of association as its main office). Since Plaintiff seeks to enjoin a foreclosure sale, the
Federal Rule of Civil Procedure 21 provides: “Misjoinder of parties is not a ground for dismissing an action. On
motion or on its own, the court may at any time, on just terms, add or drop a party. The court may also sever any
claim against a party.”
amount in controversy is the value of Plaintiff’s property. See Farkas v. GMAC Mortg., L.L.C.,
No. 12-20668, 2013 WL 6231114, at *2 (5th Cir. Dec. 2, 2013) (explaining that for those cases
in which a plaintiff seeks to enjoin a foreclosure sale, the value of the property represents the
amount in controversy). Plaintiff’s property has a fair market value of approximately $127,950.
Docket No. 1-1, Ex. C. Thus, the Court has subject-matter jurisdiction, pursuant to diversity
jurisdiction, if Defendants Mr. LaCouture and Mr. Hiatt are either non-citizens of Texas or if
they were improperly joined. See 28 U.S.C. § 1332(a)(1).2 Since Deutsche Bank admits that Mr.
LaCouture and Mr. Hiatt are citizens of Texas, the only issue to be decided is whether Mr.
LaCouture and Mr. Hiatt were improperly joined. Docket No. 1-1 at 1.
Improper joinder can be shown by “(1) actual fraud in the pleading of jurisdictional facts,
or (2) [the] inability of the plaintiff to establish a cause of action against the non-diverse party in
state court.” Smallwood, 385 F.3d at 573. Wells Fargo has not alleged actual fraud; thus, the
only relevant inquiry is whether Plaintiff can establish a cause of action against Mr. LaCouture
or Mr. Hiatt. Alternatively, this inquiry can be stated as whether “there is no reasonable basis for
the district court to predict that [P]laintiff might be able to recover against [Mr. LaCouture or Mr.
Hiatt].” Id. To make this prediction, the Court may “conduct a Rule 12(b)(6)-type analysis.” Id.
Here, the Rule 12(b)(6)-type improper joinder analysis conclusively shows that Plaintiff
has not stated—or even attempted to state—a cause of action against either Mr. LaCouture or
Mr. Hiatt; therefore, Mr. LaCouture and Mr. Hiatt should be dismissed. Plaintiff’s allegations of
wrongdoing concern solely Deutsche Bank. Likewise, her causes of action are asserted solely
Diversity jurisdiction is also available if Mr. LaCouture and Mr. Hiatt are nominal parties. See Farias v. Bexar
County Bd. of Trustees, 925 F.2d 866, 871 (5th Cir. 1991). Since nominal party analysis is substantially identical to
improper joinder analysis, the Court will only analyze whether Mr. LaCourture and Mr. Hiatt were improperly
joined. See S. Lavon Evans, Jr. Drilling Venture v. Laredo Energy Holdings, 2:11-CV-12, 2011 WL 1104150 at *4
n.2 (S.D. Miss. March 23, 2011) (noting that the “two analyses appear to be substantially identical”).
against Deutsche Bank. Furthermore, Plaintiff has not listed either Mr. LaCouture or Mr. Hiatt
as defendants in the style of the case. Therefore, the Court finds that Plaintiff is not pursuing
claims—and cannot establish causes of action—against either Mr. LaCouture or Mr. Hiatt. See
FED. R. CIV. P. 8(a) (“[A] claim for relief must contain . . . a short and plain statement of the
claim showing that the pleader is entitled to relief  and  a demand for the relief sought.”).
Accordingly, Mr. LaCouture and Mr. Hiatt were improperly joined. Smallwood, 385 F.3d at
Since Mr. LaCouture and Mr. Hiatt were improperly joined, the Court dismisses Mr.
LaCouture and Mr. Hiatt from the lawsuit pursuant to Federal Rule of Civil Procedure 21. See
Akerblom, 509 F. App’x at 347.
The Court finds that Defendants W.A. Marty LaCouture and Wes Hiatt were improperly
joined to this action. Accordingly, Mr. LaCouture and Mr. Hiatt are DISMISSED WITHOUT
PREJUDICE pursuant to Federal Rule of Civil Procedure 21. Mr. LaCouture’s and Mr. Hiatt’s
motion to dismiss without prejudice pursuant to Texas Property Code section 51.007 (Doc. No.
4) is, therefore, DISMISSED AS MOOT.4
Additionally, the Court notes that a foreclosure trustee is not a necessary party to an action to enjoin a foreclosure
sale. See TEX. PROP. CODE § 51.007(e) (“A dismissal of the trustee . . . shall not prejudice a party’s right to seek
injunctive relief to prevent the trustee from proceeding with a foreclosure sale.”).
In their motion to dismiss, Mr. LaCouture and Mr. Hiatt argue that Texas Property Code section 51.007 mandates
that they be dismissed without prejudice because each filed a verified denial in state court asserting that they had
been named solely in their capacities as foreclosure trustees and because Plaintiff did not timely file a response
rebutting the verified denial.
All claims against Defendant Deutsche Bank remain active. Accordingly, the Clerk is
instructed not to close this matter.
It is so ORDERED.
SIGNED this 30th day of January, 2014.
UNITED STATES DISTRICT JUDGE
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