Araya v. Jpmorgan Chase Bank, N.A.
| Decision Date | 30 December 2014 |
| Docket Number | No. 13–7036.,13–7036. |
| Citation | 775 F.3d 409 |
| Parties | Henok ARAYA, Appellant v. JPMORGAN CHASE BANK, N.A., et al., Appellees. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
OPINION TEXT STARTS HERE
Appeal from the United States District Court for the District of Columbia (No. 1:12–cv–00335).
Henok Araya, pro se, argued the cause and filed the briefs for appellant.
Jason C. Hicks argued the cause for appellees. On the brief were Bizhan Beiramee and Jeffrey L. Tarkenton.
Before: BROWN, MILLETT and WILKINS, Circuit Judges.
Opinion for the Court filed by Circuit Judge WILKINS.
Henok Araya owned and operated a rental property in the District of Columbia, which he leased to tenants. After several years, the bank foreclosed on his mortgage and sold the property to the highest bidder. Araya sued in D.C. Superior Court challenging the foreclosure proceedings that ultimately resulted in the sale of his property. After defendants removed to federal court and moved for judgment on the pleadings, the District Court rejected Araya's challenges. Because the D.C. statutory and common law claims against the bank and its foreclosing agent should have been decided by the local courts, we vacate the District Court's opinions and orders relating to claims against those parties.
In October 2005, Henok Araya 1 purchased property located at 2630 Myrtle Avenue NE in Washington, D.C. The purchase was financed by Chase Home Finance LLC (“Chase”) 2 and the property was encumbered by a security instrument consisting of a note and a deed of trust. Araya purchased the property as an investment property in which tenants would live, and a rider to that effect was attached to the deed of trust. J.A. 240.
On December 1, 2008, Araya sent Chase a letter indicating that he had been unable to “communicate and solve the issues” with several accounts. He asked that all correspondence be directed to 1800 New Jersey Ave NW. J.A. 69. The next day, Chase sent Araya an acceleration warning at that address, alerting Araya that his loan on the Myrtle Avenue property was in default. The letter told Araya that he owed $5,814.28 and had 32 days to cure the default. J.A. 71. Chase sent similar acceleration warnings on March 4, 2009; April 4, 2009; May 2, 2009; and June 2, 2009. J.A. 75–93.
On September 21, 2009, Araya sent Chase a letter claiming that his mortgage payment was not behind and “requesting a payment research.” He provided a phone number that Chase should call with questions and again used the New Jersey Avenue address. J.A. 95.
On November 18, 2009, Chase sent another acceleration warning, this time to 908 New Hampshire Ave NW.
According to Araya, he mailed Chase a certified letter on January 20, 2010, requesting the correct amount to bring his account current. In that letter, he asked that Chase reply by email and by mail to 908 New Hampshire Ave NW # 400. He sent identical letters on February 2, 2010, and March 17, 2010. Around February 18, 2010, Araya received a notice from Shapiro & Burson, LLP, that his property was to be sold at a foreclosure sale.
On March 24, 2010, the property was sold at public auction. J.A. 104–05. The Federal Home Loan Mortgage Corporation (“Freddie Mac”) purchased the home and sold it in turn to Dorothy Ihuoma. Id.; J.A. 46.
On February 2, 2012, Araya filed a complaint in the Superior Court of the District of Columbia against Chase and Shapiro & Burson asserting numerous claims including breach of contract, fraud, illegal foreclosure, breach of fiduciary duty, forgery, misrepresentation, negligence, statutory violations, and violation of the takings clause of the Fifth Amendment. The gravamen of Araya's complaint was that Chase and Shapiro & Burson had not provided the proper notice before foreclosure and had not given him a meaningful opportunity to cure. Citing D.C. Sup.Ct. Civ. R. 19,3 Araya joined Ihuoma and Fannie Mae 4 as defendants on the theory that they were persons with an “interest in the property.” J.A. 289–295.
On March 1, 2012, the defendants removed to the United States District Court for the District of Columbia on the basis of federal question jurisdiction. Notice of Removal p. 3 (March 1, 2012). On March 5, 2012, Ihuoma filed a motion to dismiss, arguing that she was protected from suit as a bona fide purchaser; the motion was granted over Araya's opposition on September 11, 2012. Order on Motion to Dismiss p. 1 (Sept. 11, 2012). Araya did not designate the order granting Ihuoma's dismissal in his notice of appeal or in any other way demonstrate intent to appeal that judgment of dismissal, and therefore this order is final and not before us. SeeFed. R.App. P. 3(c)(1)(B); see also Brookens v. White, 795 F.2d 178, 180 (D.C.Cir.1986) (). Ihuoma appears before this Court solely to contest Araya's appeal of the District Court's denial of the motions to amend his complaint.
On March 7, 2012, Araya filed a document entitled “Plaintiff's opposition to removal of case.” Response to Document (March 7, 2012). In this document, Araya argued that his complaint raised no federal questions and was entirely based on D.C. law. Id. at p. 2. He also asserted that the parties were not diverse. Id. at p. 1.
On March 20, 2012, Chase and Fannie Mae filed a memorandum in opposition to Araya's document, which they had construed as a remand motion. Response to Document p. 1 (March 20, 2012). Chase and Fannie Mae argued that federal jurisdiction was appropriate because Araya raised constitutional claims and because Fannie Mae's “sue and be sued” clause, 12 U.S.C. § 1723a(a), created federal subject matter jurisdiction under Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Raines, 534 F.3d 779 (D.C.Cir.2008).
On May 11, 2012, the District Court denied Araya's remand motion on the grounds that “[t]he D.C. Circuit has held that § 1723a(a) is a grant of subject matter jurisdiction.” Order p. 2 (May 11, 2012).
On May 25, 2012, Chase and Fannie Mae filed a joint motion for judgment on the pleadings. Motion for Judgment on the Pleadings (May 25, 2012). Shapiro & Burson filed a similar motion on June 19, 2012. Motion for Judgment on the Pleadings (June 19, 2012). On July 5, 2012, Araya filed a motion for partial summary judgment. Motion for Partial Summary Judgment (July 5, 2012). Araya also filed two motions for leave to file an amended complaint, the first on July 26, 2012, and the second on October 24, 2012. Motion for Leave to File (July 26, 2012); Motion for Leave to File (Oct. 24, 2012). The proposed amended complaints eliminated the Fifth Amendment takings claim and added two new counts: a claim under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2605, and a statutory claim for wrongful foreclosure under D.C.Code § 42–815. The only difference in the two proposed complaints is that the second complaint replaces references to Fannie Mae with references to Freddie Mac.
On February 13, 2013, the District Court issued an order and opinion. Henok v. Chase Home Finance, LLC, 922 F.Supp.2d 110 (D.D.C.2013). The District Court dismissed Fannie Mae and denied leave to add Freddie Mac on the grounds that “the second amended complaint fails to state a claim for relief on any ground.” Id. at 124–25. Although Fannie Mae's presence in the suit was the perceived linchpin of federal subject matter jurisdiction, the District Court did not consider whether it should proceed to the other claims or remand them to the Superior Court. The District Court instead ruled against Araya on all of his state-law claims, construing D.C. law to do so. Araya filed a timely appeal.
On appeal, Araya challenges (1) the District Court's grant of partial summary judgment to Chase, (2) the District Court's denial of his motions for leave to amend, and (3) the District Court's grant of judgment on the pleadings. After oral argument, we asked the parties for supplemental briefing on subject matter jurisdiction. We do not address the merits of Araya's challenges because we conclude that the predicate for supplemental jurisdiction evaporated once Fannie Mae was dismissed and the District Court denied leave to amend to add any new federal claims.
Ordinarily, the plaintiff is entitled to select the forum in which he wishes to proceed. See, e.g., Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 436, 127 S.Ct. 1184, 167 L.Ed.2d 15 (2007) (); Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc., 535 U.S. 826, 831–32, 122 S.Ct. 1889, 153 L.Ed.2d 13 (2002) (). Congress has provided, however, 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 defendants to the federal courts. 28 U.S.C. § 1441(a) (2012). The removal notice must contain “a short and plain statement of the grounds for removal,” id. § 1446(a).
Even if a claim raising a federal question is properly removed from state court to federal court, the district court has an obligation to employ its discretion to determine whether to exercise supplemental jurisdiction over the ancillary state-law claims. City of Chicago v. Int'l Coll. of Surgeons, 522 U.S. 156, 167, 172–73, 118 S.Ct. 523, 139 L.Ed.2d 525 (1997). In doing so, the district court should consider “a host of factors, ... including the circumstances of the particular case, the nature of the state law claims, the character of the governing state law, and the relationship between the state and federal claims.” Id. at 173, 118 S.Ct. 523. In addition, “[i]f the federal question is eliminated relatively soon after...
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Pollard v. Dist. of Columbia, 12-cv-1010 (KBJ)
...like Elvis, ha[s] left the building.’ " Kyle , 177 F.Supp.3d at 400, 2016 WL 1301043, at *12 (quoting Araya v. JPMorgan Chase Bank, N.A. , 775 F.3d 409, 417 (D.C.Cir.2014) ).In the instant case, the Court has determined that these factors weigh in favor of declining to exercise jurisdiction......