4 Suns Ranch, LLC v. Buckeye Oil Producing Company et al
Filing
115
MEMORANDUM OPINION AND ORDER CONFIRMING THE PRONOUNCED ORDER OF THIS COURT DENYING 93 MOTION TO REMAND, DENYING 96 MOTION FOR RECONSIDERATION, AND GRANTING 106 MOTION TO DISMISS P. NATHAN BOWLES, JR. AND DEUTSCHE BANK TRUST COMPANY AMERICAS. Signed by Senior Judge Frederick P. Stamp, Jr. on 3/17/2014. (copy to counsel of record via CM/ECF) (nmm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
4 SUNS RANCH, LLC,
Plaintiff,
v.
Civil Action No. 5:12CV110
(STAMP)
BUCKEYE OIL PRODUCING COMPANY,
BAKERWELL INC.,
BANDS INC.,
DAVID R. HILL INC.,
M & J OIL COMPANY,
NATIONAL MINERALS CORP.,
PRECISION GEOPHYSICAL,
JR SMAIL INC.,
CHESAPEAKE APPALACHIA, LLC,
CHK UTICA, L.L.C.,
P. NATHAN BOWLES, JR. and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Defendants.
MEMORANDUM OPINION AND ORDER
CONFIRMING THE PRONOUNCED ORDER OF THIS COURT
DENYING MOTION TO REMAND,
DENYING MOTION FOR RECONSIDERATION,
AND GRANTING MOTION TO DISMISS P. NATHAN BOWLES, JR.
AND DEUTSCHE BANK TRUST COMPANY AMERICAS
I.
Background
The plaintiff, 4 Suns Ranch, LLC (“4 Suns”), filed the abovestyled civil action in the Circuit Court of Hancock County, West
Virginia,
against
defendants
Buckeye
Oil
Producing
Company
(“Buckeye”) and Chesapeake Appalachia, LLC (“Chesapeake”) alleging
claims arising from an oil and gas lease related to real property
owned by the plaintiff. The plaintiff asserts that the defendants,
their successors and assigns, failed to develop the plaintiff’s oil
and gas in good faith and with reasonable diligence by taking no
action to further develop and market the oil and gas since drilling
a poorly producing vertical well in 2006.
The plaintiff asserts
that due to the defendants’ inaction, the defendants breached the
implied covenants to further explore and develop.
The plaintiff
asserts that such covenants apply to every oil and gas lease in
West Virginia.
The defendants removed this action to this Court on the basis
of diversity jurisdiction pursuant to 28 U.S.C. § 1332.
thereafter, proceeded through discovery.
The case
Prior to the amended
discovery deadline expiring, the plaintiff filed a motion for leave
to file an amended complaint to add additional parties that it
believed may have an interest in the well associated with the oil
and gas lease.
The defendants responded by stating that they did
not object to this Court granting the plaintiff’s motion.
Thus,
this Court granted the plaintiff’s motion as unopposed, entered a
revised scheduling order, and denied the pending summary judgment
motions without prejudice to refiling in accordance with the
revised scheduling order.
Again, discovery proceeded and the plaintiff filed a second
motion to amend the complaint to add additional parties.
The
plaintiff asserted that it had learned of additional parties who
may have an interest in the oil and gas lease.
Specifically, the
plaintiff asserted that it learned that Chesapeake had previously
2
assigned the lease to CHK Utica, LLC (“CHK Utica”) and that it had
discovered a deed of trust between CHK Utica, as mortgagor, P.
Nathan Bowles, Jr. (“Bowles”), as trustee, and Deutsche Bank Trust
Company Americas (“DBTCA”), as mortgagee.
Such deed of trust
purported to place the lease in trust as collateral for a loan of
$5 million dollars. The plaintiff did not inform this Court in its
motion to amend that the addition of Bowles would divest this Court
of subject matter jurisdiction.1
This Court awaited a response
from the defendants, but this Court did not receive any such
response.
Accordingly, this Court, believing that such motion was
unopposed, granted the plaintiff’s motion to amend the complaint.
The plaintiff then filed its second amended complaint and
promptly filed a motion to remand this action to state court,
asserting that this Court no longer has subject matter jurisdiction
over the case due to the plaintiff and Bowles both being citizens
of West Virginia.
The plaintiff also asserts that Bowles is an
indispensable party, which this Court cannot now dismiss.
The
defendants responded in opposition arguing that this Court should
deny the motion to remand and dismiss Bowles, as the factors to be
evaluated weigh in favor of such a ruling. The plaintiff disagrees
and argues that Bowles is necessary and indispensable, and further
1
This Court notes that Bowles’s citizenship was listed on the
amended complaint attached to the motion to amend, but was never
discussed in the motion itself.
3
that the other factors to be evaluated also weigh in favor of
denying the dismissal of Bowles and remanding this action.
The
defendants
then
filed
a
motion
for
reconsideration,
arguing that this Court should reconsider its order granting the
plaintiff’s motion to amend the complaint.
The defendants state
that they, in good faith, believed that the parties had reached an
agreement on how to proceed concerning the additional parties. The
defendants allege that they believed such agreement would obviate
the issues raised in the second amended complaint and as such
believed it was unnecessary to file opposition.
The plaintiff
responded in opposition to such motion, arguing that the defendants
have
failed
to
establish
grounds
for
reconsideration
and
reconsideration would be futile, as the additional parties remain
necessary and indispensable.
The defendants next filed a motion to dismiss, requesting that
this Court dismiss all claims against Bowles and DBTCA. In support
of the motion, the defendants assert that the plaintiff has failed
to state a claim against both DBTCA and Bowles, because they are
not necessary or indispensable parties, the claim for slander of
title is not facially plausible, and any plausible claim against
Bowles or DBTCA has been rendered moot. The plaintiff responded in
opposition, arguing first that this Court lacks jurisdiction to
decide defendants’ motion to dismiss and in the alternative, the
4
plaintiff has adequately pled its claims against both DBTCA and
Bowles.
All of the above mentioned motions are fully briefed and ripe
for review.
This memorandum opinion and order confirms, in more
detail, the rulings provided to the parties in this Court’s letter
dated February 28, 2014.
Accordingly, for the reasons set forth
below, this Court denies the plaintiff’s motion to remand, grants
the defendants’ motion to dismiss, and denies the defendants’
motion for reconsideration.
II.
A.
Applicable Law
Motion to Remand
A defendant may remove a case from state court to federal
court in instances where the federal court is able to exercise
original jurisdiction over the matter.
28 U.S.C. § 1441.
Federal
courts have original jurisdiction over primarily two types of
cases: (1) those involving federal questions under 28 U.S.C.
§ 1331, and (2) those involving citizens of different states where
the
amount
in
controversy
exceeds
$75,000.00,
exclusive
interests and costs pursuant to 28 U.S.C. § 1332(a).
seeking
removal
jurisdiction.
bears
the
burden
of
establishing
of
The party
federal
See Mulcahey v. Columbia Organic Chems. Co., Inc.,
29 F.3d 148, 151 (4th Cir. 1994). Removal jurisdiction is strictly
construed, and if federal jurisdiction is doubtful, the federal
court must remand.
Id.
5
The doctrine of fraudulent joinder creates an exception to the
requirement of complete diversity. See Mayes v. Rapoport, 198 F.3d
457,
461
(4th
Cir.
1999).
Under
this
doctrine,
removal
is
permitted even if a non-diverse party has been named as a defendant
at the time the case is removed if the non-diverse defendant has
been fraudulently joined.
Id.
“This doctrine effectively permits
a district court to disregard, for jurisdictional purposes, the
citizenship of certain non-diverse defendants, assume jurisdiction
over a case, dismiss the non-diverse defendants, and thereby retain
jurisdiction.” Id. When fraudulent joinder is alleged, a court is
permitted to examine the entire record by any means available in
order to determine the propriety of such joinder.
See Rinehart v.
Consolidation Coal Co., 660 F. Supp. 1140, 1141 (N.D. W. Va. 1987).
B.
Motion to Dismiss
In assessing a motion to dismiss for failure to state a claim
under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a
court must accept all well-pled facts contained in the complaint as
true.
Nemet Chevrolet, Ltd v. Consumeraffairs.com, Inc, 591 F.3d
250, 255 (4th Cir. 2009). However, “legal conclusions, elements of
a cause of action, and bare assertions devoid of further factual
enhancement fail to constitute well-pled facts for Rule 12(b)(6)
purposes.”
(2009)).
Id. (citing Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949
This
Court
also
declines
to
consider
“unwarranted
inferences, unreasonable conclusions, or arguments.”
6
Wahi v.
Charleston Area Med. Ctr., Inc., 562 F.3d 599, 615 n.26 (4th Cir.
2009).
It has often been said that the purpose of a motion under Rule
12(b)(6) is to test the formal sufficiency of the statement of the
claim for relief; it is not a procedure for resolving a contest
about the facts or the merits of the case.
5B Charles Alan Wright
& Arthur R. Miller, Federal Practice and Procedure § 1356 (3d ed.
1998).
The Rule 12(b)(6) motion also must be distinguished from a
motion for summary judgment under Federal Rule of Civil Procedure
56, which goes to the merits of the claim and is designed to test
whether there is a genuine issue of material fact.
Id.
For
purposes of the motion to dismiss, the complaint is construed in
the
light
essentially
most
the
favorable
court’s
to
the
inquiry
party
is
making
directed
the
to
claim
and
whether
the
allegations constitute a statement of a claim under Federal Rule of
Civil Procedure 8(a).
Id. § 1357.
A complaint should be dismissed “if it does not allege ‘enough
facts to state a claim to relief that is plausible on is face.’”
Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
“Facial
plausibility is established once the factual content of a complaint
‘allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.’” Nemet Chevrolet,
591 F.3d at 256 (quoting Iqbal, 129 S. Ct. at 1949).
7
Detailed
factual allegations are not required, but the facts alleged must be
sufficient “to raise a right to relief above the speculative
level.”
C.
Twombly, 550 U.S. at 555.
Motion for Reconsideration Under Rule 54(b)
Federal Rule of Civil Procedure 54(b) states that “any order
or other decision, however designated, that adjudicates fewer than
all the claims or the rights and liabilities of fewer than all the
parties does not end the action as to any of the claims or parties
and may be revised at any time before the entry of a judgment
adjudicating all the claims and all the parties’ rights and
liabilities.”
A district judge has discretion to reconsider and
modify its interlocutory judgments at any time prior to final
judgment when warranted.
Am. Canoe Ass’n v. Murphy Farms, Inc.,
326 F.3d 505, 514–15 (4th Cir. 2003). Such decisions, however, are
not subject to the strict standards applicable to motions for
reconsideration of a final judgment, because the district courts
retain
the
judgments.
power
Id.
to
reconsider
and
modify
its
interlocutory
What is of importance, is that the courts “reach
the correct judgment under law[,]” keeping in mind “concerns of
finality and judicial economy.”
III.
A.
Id. at 515.
Discussion
Motion to Remand
The plaintiff argues that this Court must remand this matter
to state court, because diversity was destroyed when this Court
8
granted the plaintiff’s motion to amend its complaint.
The
plaintiff asserts that both it and defendant Bowles are citizens of
West Virginia.
The defendants do not deny that Bowles is a West
Virginia citizen, but instead urge this Court to assess whether
joinder of Bowles was appropriate under 28 U.S.C. § 1447(e) and the
decision of the United States Court of Appeals for the Fourth
Circuit in Mayes v. Rapoport, 198 F.3d 457 (4th Cir. 1999).
Section 1447(e) provides as follows: “If after removal the
plaintiff seeks to join additional defendants whose joinder would
destroy subject matter jurisdiction, the court may deny joinder, or
permit joinder and remand the action to the State court.”
The
determination as to whether to permit the joinder of a non-diverse
defendant “is committed to the sound discretion of the district
court . . . and is not controlled by a Rule 19 analysis.”
198 F.3d at 462.
Mayes,
In making such determination, the Court should
consider all relevant factors, including: “[1] the extent to which
the purpose of the amendment is to defeat federal jurisdiction, [2]
whether the plaintiff has been dilatory in asking for amendment,
[3]
whether
the
plaintiff
will
be
significantly
injured
if
amendment is not allowed, and [4] any other factors bearing on the
equities.”
Gum v. General Elec. Co., 5 F. Supp. 2d 412, 414 (S.D.
W. Va. 1998).
not
directly
Further, while the fraudulent joinder doctrine does
apply
after
removal,
as
courts
already
have
jurisdiction, “if the defendants can carry the heavy burden of
9
proving fraudulent joinder, that fact should be a factor—and
perhaps the dispositive factor—that the court considers in deciding
whether a plaintiff may join a non-diverse defendant.”
F.3d at 463.
Mayes, 198
“If, as here, a district court did not conduct this
analysis at the time it permitted a plaintiff to join a non-diverse
defendant, it may retroactively do so under these standards.”
Ronald Lane, Inc. v. Antero Resources Appalachian Corp., No.
1:10CV137, 2011 WL 3102116, at *6 (N.D. W. Va. July 25, 2011)
(citing Mayes, 198 F.3d at 462 and Schur v. L.A. Weight Loss
Centers, Inc., 577 F.3d 752, 761–62 (7th Cir. 2009)).
As this Court did not conduct the above analysis pursuant to
§ 1447(e) prior to granting the motion to amend the complaint, this
Court must now conduct such analysis.
Id.
As to the first factor,
concerning whether the purpose of the amendment is to defeat
federal jurisdiction, the defendants argue that based on the facts,
there is no possible relief that the plaintiff could presently seek
from Bowles.
The defendants state that Bowles has no interest,
rights, responsibilities or obligations pursuant to the lease,
because the lease is no longer subject to the deed of trust.
The
plaintiff, however, argues that it did not join Bowles simply to
defeat jurisdiction.
Instead, the plaintiff argues that it joined
Bowles because it could not clear title to its property and obtain
complete relief unless all parties who claimed an interest in the
lease were parties to the lawsuit.
10
Upon a review of the evidence, which includes affidavits from
the parties’ counsel and emails between counsel concerning the
amendment
to
the
complaint
and
the
potential
non-judicial
resolution of such issues, this Court finds that it cannot say with
certainty that Bowles was added with the sole purpose of defeating
diversity.
It does appear that the defendants notified the
plaintiff that they were working to have the lease released from
the deed of trust, of which Bowles was the trustee.
Further, it is
obvious that conversations did take place concerning whether the
motion to amend was actually avoidable prior to it being filed and
concerning its possible withdrawal after the plaintiff did file it.
Finally, it is clear from the document entitled “Partial Release of
Deed of Trust and Open End Mortgage” that the lease is no longer
subject to such deed of trust.
See ECF No. 101 Ex. 1.
This Court,
however, is not convinced that such evidence provides enough
support for a finding that the plaintiff’s purpose in seeking to
add
Bowles
as
a
defendant
was
only
to
defeat
this
Court’s
jurisdiction.
As to the second factor, concerning whether the plaintiff was
dilatory in seeking an amendment, this Court finds that it was not.
The defendants argue that joinder of a defendant at this late stage
is belated and undercuts the principles of judicial economy and
efficiency.
While this may be a late stage in the litigation,
dilatory is defined as “[t]ending to cause delay or to gain time or
11
to put off a decision.”
Black Law Dictionary 522 (9th ed. 2009).
There is nothing in the facts that would cause this Court to
believe that the plaintiff’s actions were intended to cause delay.
Instead, it seems that the plaintiff did not discover Bowles’s
possible interest prior to September 26, 2013, after which it
promptly
filed
the
motion
to
amend
on
October
11,
2013.
Accordingly, this Court finds that such actions were not dilatory
in nature.
The third factor concerns whether the plaintiff will be
injured as a result of not allowing the joinder of the non-diverse
party. The defendants argue that the plaintiff will not be injured
at all if Bowles is not permitted to be joined as a defendant.
They assert that all of the relief the plaintiff seeks can be
sought from the diverse defendants that actually have a present
interest in the lease and further, all the relief against Bowles
has been mooted. The plaintiff asserts that it will be prejudiced,
as it will have to litigate its claims in two different courts at
once. The plaintiff argues that not all the relief sought has been
mooted, as the defendants failed to take into account plaintiff’s
claim for slander of title.
In defendants’ motion to dismiss
Bowles and DBTCA, the defendants respond to plaintiff’s allegation
concerning the slander of title claim and state that the plaintiff
cannot seek relief for its slander of title claim because such
claim is not facially plausible.
12
After reviewing the pleadings, this Court agrees with the
defendants that the plaintiff would not in fact be prejudiced by
disallowing the amendment of the complaint to add Bowles as a
defendant.
First, the plaintiff does not contest the defendants’
assertions concerning the fact that its claims against Bowles,
other than the slander of title claim, are now moot due to the
release of the lease from the deed of trust.
The only instance of
the plaintiff contesting such assertion is in its response to the
defendants’ motion for reconsideration, which was filed three days
before the release was executed.
See ECF Nos. 97 and 101 Ex. 1.
Accordingly, as to those claims to which the release moots the
requested relief, this Court finds that the plaintiff is certainly
not
prejudiced
by
the
non-joinder
of
Bowles.2
Further,
the
plaintiff’s claim for slander of title is not facially plausible
and as indicated below, is dismissed pursuant to the defendants’
motion to dismiss.
Accordingly, if all claims against Bowles are
either moot or subject to dismissal, it is not possible to find
that the plaintiff will be prejudiced by the non-joinder of Bowles.
As the whether or not Bowles was fraudulently joined, the
defendants argue that Bowles was fraudulently joined, as there is
no possibility that the plaintiff would be able to establish a
2
These claims are those seeking the declaration that the deed
of trust is void or invalid as to the lease, a declaration to
declare that the power of sale held by Bowles as trustee be voided,
and a declaration that Bowles be enjoined from foreclosing on the
lease.
13
cause of action against Bowles in state court. In the alternative,
the defendants argue that even if this Court were to disregard the
release of the lease, Bowles is a nominal party that is being
joined as a designated performer of a ministerial act, and his
citizenship should be disregarded for purposes of ruling on the
motion to remand.
In response, the plaintiff states that the
defendants have not carried their burden of showing that Bowles was
fraudulently joined, nor have they shown that Bowles is a nominal
party.
In order to establish diversity jurisdiction under 28 U.S.C.
§ 1332(a)(1), a party must demonstrate that the action is between
“citizens of different States.”
The Supreme Court of the United
States has further established that “the ‘citizens’ upon whose
diversity
a
plaintiff
grounds
jurisdiction
must
be
real
and
substantial parties to the controversy. Thus, a federal court must
disregard nominal or formal parties and rest jurisdiction only upon
the citizenship of real parties to the controversy.”
Navarro Sav.
Ass’n v. Lee, 446 U.S. 458, 460-61 (1980).
The United States Court of Appeals for the Fourth Circuit has
not provided a clear standard for determining who constitutes a
“nominal party” for removal purposes.
Creed v. Virginia, 596 F.
Supp. 2d 930 (E.D. Va. 2009). District courts within this Circuit,
therefore, have devised various tests.
See Allen v. Monsanto Co.,
396 F. Supp. 2d 728, 733 (S.D. W. Va. 2005) (deciding whether a
14
party is nominal turns on whether there is any “legal possibility
for predicting” that the party could be held liable); Mayes v.
Moore, 367 F. Supp. 2d 919, 922 (M.D.N.C. 2005) (holding that the
test for determining whether party is nominal is “whether in the
absence of the [defendant], the Court can enter a final judgment
consistent with equity and good conscience which would not be in
any way unfair or inequitable to plaintiff”); Owens v. Overstreet,
2010 WL 4721709, *3–4 (S.D. W. Va. Nov. 15, 2010) (describing
nominal
parties
as
those
without
“a
real
interest
in
the
litigation” or a “substantial stake in the outcome of the case”).
Combining such tests, this district has stated that the defendants
are required to establish that “(1) [the non-diverse defendant]
does
not
have
a
real
interest
in
this
litigation,
(2)
[the
plaintiff] does not have a possible claim against [the non-diverse
defendant], and (3) entry of a final judgment in the absence of
[the
non-diverse
defendant]
would
be
equitable.”
Heller
v.
TriEnergy, Inc., 877 F. Supp. 414, 424 (N.D. W. Va. 2012).
All of the above three factors apply to Bowles in this matter.
As illustrated by the release, Bowles can no longer be said to have
an interest in the lease as the trustee of the deed of trust,
because the lease is no longer subject to such deed of trust.
The
plaintiff does not contest this. Accordingly, Bowles no longer has
an interest in whether or not this Court determines that such lease
is void.
Further, as stated above, and more clearly explained
15
below, the plaintiff does not have a claim against Bowles for
slander of title, as based on the plaintiff’s amended complaint,
such claim is not facially plausible.
has
no
possible
claim
against
Thus, because the plaintiff
Bowles
based
on
the
amended
complaint, and because Bowles no longer has any type of interest in
the lease at issue in this matter, it would be more than equitable
to enter a judgment in Bowles’s absence.
Accordingly, after taking all of the above factors into
account, this Court finds that Bowles, the non-diverse defendant,
should be dismissed from this action.
This Court notes, however,
that it is not making a finding that Bowles was fraudulently joined
because at the time of his joinder, it appears that he did, as
trustee, have an interest in this action.
Transp.,
Inc.,
187
F.3d
422,
424
(4th
See Hartley v. CSX
Cir.
1999)
(“To
show
fraudulent joinder, the removing party must demonstrate either
‘outright fraud in the plaintiff’s pleading of jurisdictional
facts’ or that ‘there is no possibility that the plaintiff would be
able to establish a cause of action against the in-state defendant
in state court.’” (quoting Marshall v. Manville Sales Corp., 6 F.3d
229, 232 (4th Cir. 1993))). Taking all other factors into account,
however,
specifically
the
fact
that
plaintiff
will
not
be
prejudiced by the non-joinder of Bowles and that Bowles is a
nominal party to this action, this Court finds that Bowles should
not have been joined as a party.
16
Pursuant to Rule 21 of the
Federal Rules of Civil Procedure, which provides that “[o]n motion
or on its own, the court may at any time, on just terms, add or
drop a party[,]” this Court dismisses Bowles from this action.
Thus, this Court maintains subject-matter jurisdiction over this
matter, as all remaining parties are diverse for purposes of
§ 1332(a)(1).
B.
Motion to Dismiss
As the motion to remand is denied and this Court’s subject
matter jurisdiction is not longer in question, this Court must now
address the defendants’ motion to dismiss DBTCA and Bowles. First,
this Court notes that based on the above findings, Bowles is no
longer a defendant to this action. This Court, however, will still
address this motion as to both DBTCA and Bowles to illustrate that
the plaintiff has no possible claim against Bowles in accordance
with the above findings.
The defendants argue that Bowles and DBTCA should be dismissed
because
they
are
not
necessary
and
indispensable
parties,
plaintiff’s claim for slander of title is not facially plausible
and all other claims have been rendered moot due to the lease being
released from the deed of trust. The plaintiff, in response argued
that this Court lacks jurisdiction to decide the defendants’ motion
to dismiss, and in the alternative, the plaintiff has adequately
pled its claims against the defendant. This Court will address the
claims against DBTCA and Bowles in two categories, one being those
17
for
slander
of
title,
and
the
second
being
those
seeking
declaratory relief concerning Bowles’s and DBTCA’s rights as to the
lease.
1.
Slander of Title
Under West Virginia law, to state a claim for slander of title
a claimant must show the “(1) publication of (2) a false statement
(3) derogatory to plaintiff’s title (4) with malice (5) causing
special damages (6) as a result of diminished value in the eyes of
third parties.”
Syl. Pt. 3, TXO Production Corp. v. Alliance
Resources Corp., 419 S.E.2d 870 (1992).
The defendants attempt to
argue that CHK Utica had legal title to the rights associated with
the lease when it was mortgaged, and thus no false or derogatory
statement
was
published.
This
Court,
however,
finds
it
inappropriate at this time to delve into the issue of whether CHK
Utica had rights to the lease that it could convey through the
mortgage.
This Court does, however, find that the plaintiff has not
stated a facially plausible claim for slander of title, due to an
insufficient pleading of malice.
Malice requires “an intent to
injure through the publication of false or misleading defamatory
statements known by the publisher or its agents to be false, or an
intent to injure through publication of such defamatory statements
with reckless and willful disregard for their truth.”
Sprouse v.
Clay Communication, Inc., 211 S.E.2d 674, 681-82 (W. Va. 1975).
18
The plaintiff failed to plead any facts tending to show that either
Bowles or DTBCA intended to injure the plaintiff through recording
the deed of trust.
The plaintiff only states that the defendants’
conduct in recording a deed of trust that they allegedly knew was
false “constitutes a reckless disregard of the truth or falsity of
the
published
statements”
and
the
recording
was
“malicious,
willful, wanton, and intentional slander upon the plaintiffs’ [sic]
title to its property.”
ECF No. 92 *19.
These statements are
merely conclusory and do not tend to show that either defendant
subject to the motion to dismiss acted with an intent to injure the
plaintiff.
Further, no other facts are pled that would allow this
Court to find that the plaintiff’s claim for slander of title is
plausible, as such claim lacks a showing of malice.
2.
Declaratory Relief
The plaintiff’s remaining claims against Bowles and DBTCA are
for declaratory relief.
Specifically, the plaintiff seeks the
declaration that the deed of trust is void or invalid as to the
lease, a declaration to declare that the power of sale held by
Bowles as trustee be voided, and a declaration that Bowles be
enjoined from foreclosing on the lease.
The defendants argue that
such claims are now moot because the lease was released from the
deed of trust.
After the release was executed, the plaintiff has
not since argued that such claims are not moot.
19
“To qualify as a case fit for Federal-Court adjudication, an
actual controversy must be extant at all stages of review, not
merely at the time the Complaint is filed.”
Friedman’s Inc. v.
Dunlap, 290 F.3d 191, 197 (4th Cir. 2002) (citing Arizonians for
Official English v. Arizona, 520 U.S. 43, 67 (1997)).
A federal
court has no authority to “give opinions upon moot questions or
abstract propositions, or to declare principles or rules of law
which cannot affect the matter in issue in the case before it.”
Church of Scientology of California v. United States, 506 U.S. 9,
12 (1992) (quoting Mills v. Green, 159 U.S. 651, 653 (1895)).
A
case becomes moot when “the issues presented are no longer ‘live’
or the parties lack a legally cognizable interest in the outcome.”
Murphy v. Hunt, 455 U.S. 478, 481 (1982) (quoting United States
Parole
Comm’n
v.
Geraghty,
445
U.S.
388,
396
(1980)).
For
instance, a claim becomes moot when “the claimant receives the
relief he or she sought to obtain through the claim.”
Friedman’s
Inc. v. Dunlap, 290 F.3d 191, 197 (4th Cir. 2002).
In this case, pursuant to the release, the lease is no longer
subject to the deed of trust and Bowles, as trustee, and DBTCA, as
mortgagee,
have
no
interest
in
the
lease.
Accordingly,
a
declaration that the deed of trust is void as to the lease would
not provide any cognizable relief that has not previously been
provided by the release.
Further, Bowles has no power of sale
right or right to foreclose on the lease because the lease is no
20
longer part of the deed of trust for which Bowles acts as trustee.
A declaration that any such rights are void or that he be enjoined
from exercising such rights is unnecessary, as the plaintiff
received such relief when the lease was released from the deed of
trust.
C.
Motion for Reconsideration
In support of their motion for reconsideration, the defendants
argue that they believed they had an agreement with the plaintiff
concerning the motion to amend, and that a stipulation was to be
entered, which would render the motion to amend moot.
It appears
after reviewing the exhibits attached to the defendants’ motion for
reconsideration, that the parties were in negotiations concerning
the motion to amend.
In the exhibits, which are correspondence
between the parties, the defendants state that CHK Utica would
agree to be bound by any judgment entered by this Court and that
the lease would be released from the deed of trust, negating the
need to add Bowles and DBTCA as parties.
The plaintiff, in
response, argues that the parties never reached a final agreement
concerning the motion to amend, the defendants have not established
grounds for reconsideration, and even so, reconsideration would be
futile, because CHK Utica, Bowles, and DBTCA all remain necessary
and indispensable parties.
In response to whether the additional
defendants are necessary and indispensable, the defendants only
21
assert
an
argument
that
Bowles
is
not
an
necessary
and
indispensable party.
First, this Court notes that as to Bowles and DBTCA, this
motion is moot.
This Court has previously determined above, that
Bowles should not have been joined as a defendant, and that the
plaintiff failed to state a claim against both Bowles and DBTCA.
Accordingly, this motion is denied as moot as to Bowles and DBTCA.
As to the remaining additional defendant, CHK Utica, the
parties do not seem to dispute that CHK Utica has an interest in
the lease at issue.
After reviewing the parties’ correspondence,
this Court finds that there was no final agreement concerning a
stipulation as to CHK Utica.
Accordingly, it was the defendants’
responsibility to respond in a timely manner to the plaintiff’s
motion to amend, if it believed such response was proper. Further,
the defendants have not provided this Court with a valid argument
concerning the reconsideration of CHK Utica’s joinder, other than
that the defendants “believed” they had an agreement with the
plaintiff. After reviewing the record, this Court does not believe
that the defendants could have a valid argument for the non-joinder
of CHK Utica.
Based on CHK Utica’s interest in the lease, this
Court finds that it is a proper defendant to this action, and the
joinder of CHK Utica was proper.
Thus, this Court must deny the
defendants’ motion for reconsideration as to CHK Utica.
22
IV.
Conclusion
For the reasons stated above, plaintiff’s motion to remand
(ECF No. 93) is DENIED, defendants’ motion to dismiss (ECF No. 106)
is GRANTED, defendants’ motion for reconsideration as to Bowles and
DBTCA (ECF No. 96) is DENIED AS MOOT, and defendants’ motion for
reconsideration (ECF No. 96) as to CHK Utica is DENIED.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
DATED:
March 17, 2014
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
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