Arthur v. JP Morgan Chase Bank
| Decision Date | 13 June 2014 |
| Docket Number | D.C. Docket No. 9:11-cv-81106-DMM,No. 12-12317,12-12317 |
| Parties | VELDORA ARTHUR, et al., Plaintiffs/Appellants, v. JP MORGAN CHASE BANK, NA, et al., Defendants/Appellees. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
[DO NOT PUBLISH]
Appeal from the United States District Court
for the Southern District of Florida
Before MARCUS, Circuit Judge, and COOGLER* and BOWEN,** District Judges.
I. INTRODUCTION
Fifty-eight individuals (hereinafter, "Appellants") whose homes were in various stages of the foreclosure process brought this action against JP Morgan Chase Bank, N.A.1 (hereinafter, "JP Morgan"), seeking damages and injunctive relief based on alleged fraudulent and criminal activity surrounding their foreclosures. Appellants Magdalena Apostolova, Gracie Marla Buchwald, Johnny H. Le, Emil P. Milyakov, Hone Thach, and Linda Zimmerman have previously been dismissed from this appeal. The remaining Appellants challenge the district court's decision to dismiss many of the claims in this action with prejudice.
Before considering whether the district court properly dismissed any of the claims, we examine whether it had subject matter jurisdiction over the action. Concluding that it did, and after a thorough review, we affirm the judgment of the district court as modified below.
II. BACKGROUND
The Appellants hail from Arizona, California, Colorado, Florida, Hawaii, Massachusetts, Minnesota, New Jersey, New York, Oregon, Tennessee, Virginia, Washington, and Wisconsin. They are homeowners or former homeowners who are facing or have faced foreclosure by JP Morgan. The specific foreclosure processes vary from state to state, as some states employ a judicial process while others utilize non-judicial means to effect foreclosure. Even states that employ the same basic procedures have different specific requirements. For example, the Appellants pleaded that Florida and New Jersey, both judicial foreclosure states, have put in place specific safeguards to protect debtors from unfair foreclosures that differ from those in other judicial foreclosure states. Similarly, California and Colorado, both non-judicial foreclosure states, apparently have further requirements that foreclosing parties must satisfy. These measures typically require the foreclosing party to submit additional documentation evincing that the bank, prior to foreclosure, has made a thorough investigation into its right to foreclose.
According to the complaint, JP Morgan operated a facility (hereinafter, the "Baymeadows Hub") in Jacksonville, Florida, as a "nexus and control center" to institute and maintain foreclosure proceedings across the nation. Appellantscontend that employees at the Baymeadows Hub produced false or fraudulent documents, including declarations of compliance with California's foreclosure procedures, notices of default and elections to sell, collection letters, and pleadings. These documents allegedly contained misrepresentations that JP Morgan or Chase Home Finance was a successor in interest to loans originally made by Washington Mutual Bank, that the Mortgage Electronic Registration Systems, Inc. (also known as "MERS") had an interest in various mortgages, and that JP Morgan properly complied with the special safeguards for borrowers in various states.
After describing JP Morgan's general practices and misrepresentations, the Appellants set out specific facts in their complaint regarding each foreclosure. These facts amount to a summary of the allegedly fraudulent documents filed or used in each foreclosure. Although some of the paragraphs contained specific references connecting documents in a particular foreclosure to the Baymeadows Hub, many of them did not.
The Appellants filed this action in state court in Palm Beach County, Florida, on August 25, 2011. JP Morgan removed the case to the U.S. District Court for the Southern District of Florida on October 3, 2011, invoking both diversity and federal question jurisdiction. Subsequently, the Appellants filed an "Amended Complaint," a "Second Amended Complaint," and the "[Corrected]Second Amended Complaint."3 The Appellants pursued claims based on common law fraud and violations of the Florida Civil Remedies for Criminal Practices Act, Fla. Stat. §§ 772.101-772.19 (hereinafter, the "Florida RICO Act"). Additionally, the Appellants sought several types of injunctive relief, including a national suspension of JP Morgan's foreclosure activity and a declaration that any "illegal" foreclosure is "null and void."
After the complaint was filed, JP Morgan filed a motion to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure, or alternatively, a motion for a more definite statement pursuant to Rule 12(e). JP Morgan's motion challenged both the sufficiency of the pleading and the court's subject matter jurisdiction over some of the claims. In response, the Appellants moved to remand the entire case to state court based on lack of subject matter jurisdiction. Neither their motion to remand nor their "Preliminary Response" to the motion to dismiss addressed JP Morgan's arguments regarding the sufficiency of their pleading. The Appellants did, however, request in a sur-reply a stay of proceedings until the district court decided whether to grant their motion to remand.
Although the district court never expressly discussed the merits of the Appellants' motion to stay, it entered an order on April 11, 2012, denying theAppellants' motion to remand the case and granting JP Morgan's motion to dismiss. The district court first addressed the Appellants' demand for injunctive relief. It determined that certain of the Appellants with pending foreclosure proceedings were seeking to enjoin their own proceedings, and it dismissed these claims with prejudice because they failed to meet any of the exceptions to the Anti-Injunction Act, 28 U.S.C. § 2283. It read the complaint to also demand a nationwide stoppage of all JP Morgan's current and future foreclosures, and it dismissed this claim with prejudice for lack of standing.
Turning to the fraud and Florida RICO claims, the district court first grouped as "Adjudicated Plaintiffs" those individuals from judicial foreclosure states whose property had been the subject of a foreclosure judgment, dismissing all of their claims with prejudice based on the Rooker-Feldman doctrine. As to the remaining Appellants, the district court divided them into "Florida Plaintiffs" and "non-Florida Plaintiffs." The district court dismissed both the fraud and Florida RICO claims without prejudice as to the Florida Plaintiffs. Finally, the district court dismissed the fraud claims without prejudice as to the non-Florida Plaintiffs but dismissed their Florida RICO claims with prejudice.
The Appellants only appealed those dismissals entered with prejudice. However, the Appellants also contend that the entire case should be remanded tostate court because the district court concluded that it lacked subject matter jurisdiction over some of the claims in this action.
III. SUBJECT MATTER JURISDICTION
We review the existence of subject matter jurisdiction de novo. Weatherly v. Ala. State Univ., 728 F.3d 1263, 1269 (11th Cir. 2013). Subject matter jurisdiction is fundamental to our power to hear and decide cases, and we must raise questions about subject matter jurisdiction ourselves whenever a doubt regarding our jurisdiction arises. Smith v. GTE Corp., 236 F.3d 1292, 1299 (11th Cir. 2001).
JP Morgan removed this case based on 28 U.S.C. § 1441(a), which allows for removal of most civil actions where the district court would have original jurisdiction over the action. We find that we have diversity jurisdiction and thus need not consider whether federal question jurisdiction exists.
Diversity jurisdiction exists if the parties to the action are citizens of different states and the amount in controversy exceeds $75,000, exclusive of interests and costs. 28 U.S.C. § 1332(a)(1). The amount in controversy is not in question. Thus, each Appellant must be a citizen of a different state than JP Morgan. See Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998) ().
JP Morgan alleged in its notice of removal that it is a national banking association. A national banking association is a citizen of the state where it is "located." 28 U.S.C. § 1348. For purposes of section 1348, a national bank is located in the place where it is designated to have its main office. Wachovia Bank v. Schmidt, 546 U.S. 303, 318, 126 S.Ct. 941, 952, 163 L.Ed.2d 797 (2006). JP Morgan pleaded in its notice of removal that its principal office is located in Columbus, Ohio, and thus it is a citizen of Ohio for diversity purposes. Therefore, the Appellants must all be citizens of states other than Ohio.
Fifty-seven of the Appellants are natural persons, and as such are citizens of the states in which they are domiciled. Mas v. Perry, 489 F.2d 1396, 1399 (5th Cir. 1974).4 Thus, these Appellants are citizens of Arizona, California, Colorado, Florida, Hawaii, Massachusetts, Minnesota, New Jersey, New York, Oregon, Tennessee, Virginia, Washington, and Wisconsin.
However, Rena E. Johnston-Farrington is identified in the complaint as "an authorized agent of the Farrington Family Trust." From this statement it appears that Rena E. Johnston-Farrington is suing on behalf of the Farrington Family Trust. However, in some cases a trustee may sue in his or her own name. See Navarro Savings Assoc. v. Lee, 446 U.S. 458, 465, 100 S.Ct. 1779, 1784, 64 L.Ed.2d 425(1980) ().5 This Court ordered supplemental briefing on the citizenship of the Farrington Family Trust. In response, JP Morgan submitted documents indicating that Johnston-Farrington...
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