704 F.3d 545 (8th Cir. 2013), 12-2375, Karnatcheva v. JPMorgan Chase Bank, N.A.

Docket Nº:12-2375.
Citation:704 F.3d 545
Opinion Judge:ARNOLD, Circuit Judge.
Party Name:Natalia KARNATCHEVA and Kevin R. Gurule, Appellants, v. JPMORGAN CHASE BANK, N.A., Chase Home Finance LLC, Mortgage Electronic Registration Systems, Inc., Federal National Mortgage Association, MERSCORP, Inc., and Usset, Weingarden and Liebo, P.L.L.P., Appellees.
Attorney:William Bernard Butler, Minneapolis, MN, for Appellants. Bryant D. Tchida, Peter Joseph Schwingler, Gerald G. Workinger, Benjamin Pulitzer Freedland, Minneapolis, MN, for Appellees.
Judge Panel:Before MURPHY, ARNOLD and COLLOTON, Circuit Judges.
Case Date:January 28, 2013
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 545

704 F.3d 545 (8th Cir. 2013)

Natalia KARNATCHEVA and Kevin R. Gurule, Appellants,

v.

JPMORGAN CHASE BANK, N.A., Chase Home Finance LLC, Mortgage Electronic Registration Systems, Inc., Federal National Mortgage Association, MERSCORP, Inc., and Usset, Weingarden and Liebo, P.L.L.P., Appellees.

No. 12-2375.

United States Court of Appeals, Eighth Circuit.

January 28, 2013

Submitted: Jan. 14, 2013.

Rehearing and Rehearing En Banc Denied March 12, 2013.[*]

Page 546

William Bernard Butler, Minneapolis, MN, for Appellants.

Bryant D. Tchida, Peter Joseph Schwingler, Gerald G. Workinger, Benjamin Pulitzer Freedland, Minneapolis, MN, for Appellees.

Before MURPHY, ARNOLD and COLLOTON, Circuit Judges.

ARNOLD, Circuit Judge.

Mortgagors filed suit in Minnesota state court against Fannie Mae; MERSCORP, Inc., and its subsidiary, Mortgage Electronic Registration Systems, Inc.; two financial institutions; and one non-diverse party (a law firm), alleging numerous deficiencies in the assignment of their mortgages and in their foreclosures. Asserting that the plaintiffs had fraudulently joined the law firm, the defendants removed the case to federal court. After moving to remand, the plaintiffs filed an amended complaint seeking to quiet title under Minn.Stat. § 559.01, asserting a claim for slander of title, and requesting declaratory judgments as to whether the defendants had a " true interest in or right to foreclose on their properties" and whether the notes were properly accelerated by the correct party; the defendants moved to dismiss for failure to state a claim, see Fed.R.Civ.P. 12(b)(6). The district court 1 denied the motion to remand because it concluded that the plaintiffs had fraudulently joined the non-diverse law firm, and it granted the motion to dismiss all claims against the remaining defendants under Rule 12(b)(6). See Karnatcheva v. JPMorgan Chase Bank, N.A., 871 F.Supp.2d 834 (D.Minn.2012).

The plaintiffs appeal, asserting that the district court erred in denying their motion to remand, in concluding that they failed to make out claims for slander of title, declaratory judgment, and quiet title, and in mistakenly relying on Jackson v. Mortgage Electronic Registration Sys., 770 N.W.2d 487, 500-501 (Minn.2009), which rejected the so-called " show-me-the-note" theory under which an entity seeking foreclosure must present the original promissory note.

We must first determine whether the district court erred in denying the motion to remand to the state court since that issue relates to jurisdiction. The district court denied remand, concluding that it had jurisdiction over the case based on the diversity of the parties, see 28 U.S.C. § 1332(a), because...

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