Brannigan v. Bank of Am. Corp.
| Decision Date | 12 December 2013 |
| Docket Number | CIVIL ACTION NO. 2:13-CV-00129-RWS |
| Parties | WADE BRANNIGAN and ANGELINA BRANNIGAN, Plaintiffs, v. BANK OF AMERICA CORP., THE ALBERTELLI FIRM, P.C.; U.S. BANK, N.A.; and JOHN DOES 1-5, Defendants. |
| Court | U.S. District Court — Northern District of Georgia |
This case comes before the Court on Defendants Bank of America Corporation and U.S. Bank's Consolidated Motion to Dismiss [3], Bank of America Corporation and U.S. Bank's Motion to Dismiss [7], and Plaintiffs' Motion to Remand to State Court [12]. After reviewing the record, the Court enters the following Order.
Plaintiffs Wade and Angelina Brannigan initiated this action in Jackson County Superior Court on October 12, 2011, requesting the Court to set aside a foreclosure sale on the grounds of wrongful foreclosure. (Compl., Dkt. [1-5].)Plaintiffs purchased real property located at 80 Raintree Court, Jefferson, Georgia ("Property") on July 13, 2007. (Am. Compl., Dkt. [5] ¶ 9.) That same day, Plaintiffs executed a promissory note to obtain a loan from First Franklin Corporation ("First Franklin") in the principal amount of $207,000. (Security Deed, Dkt. [7-2].)1 Plaintiffs contemporaneously executed a security deed in favor of Mortgage Electronic Registration Systems, Inc. ("MERS") as nominee and grantee for First Franklin. (Am. Compl., Dkt. [5] ¶ 11.) The security deed was then recorded in the Jackson County real property records. (Security Deed, Dkt. [7-2].) On September 15, 2010, Plaintiffs were informed that LaSalle Bank was their new creditor. (Am. Compl., Dkt. [5] ¶ 15.) MERS subsequently assigned the security deed to U.S. Bank, N.A. ("U.S. Bank") on September 28, 2010, and recorded the assignment in Jackson County on October 18, 2010. (Assignment of Security Deed, Dkt. [7-3].) Plaintiff asserts that U.S. Bank, Bank of America Corporation ("BAC"), the Albertelli Firm, and MERS conspired to file "an alleged 'Transfer and Assignment,' whereby MERS purported to transfer, sell, convey and assign to U.S. Bank all of its right, title and interest in and to the Security Deed."
(Am. Compl., Dkt. [5] ¶ 16.) But because Plaintiffs' mortgage loan had already been assigned to LaSalle Bank, Plaintiffs argue, "MERS retained no interest in Plaintiffs['] Security Deed to transfer, and said transfer and assignment is not only fraudulent but a legal nullity." (Id. ¶ 17.)
After Plaintiffs defaulted on their mortgage, U.S. Bank initiated non-judicial foreclosure proceedings, resulting in a foreclosure sale on October 4, 2011. (Id. ¶¶ 23, 26.) Plaintiffs then filed this action in Jackson County Superior Court on October 12, 2011, asserting several state-law claims related to wrongful foreclosure. Defendants BAC and U.S. Bank initially failed to answer Plaintiffs' Complaint, and on January 6, 2012, the Jackson County Superior Court entered an order of default judgment. (Pls.' Remand Br., Dkt. [12-1] at 4.) Defendants later filed a motion to open default and set aside the default judgment, which the Superior Court ultimately granted on March 5, 2013. (Id. at 4-6.) Defendants then filed a Consolidated Motion to Dismiss [3] on April 17, 2013, after which Plaintiffs amended their Complaint to include a Fair Credit Reporting Act claim on May 17. (Dkt. [1-1] at 4.) The claims against Defendants now include: fraud, intentional misrepresentation, and deceit (Count One); negligent misrepresentation(Count Two); negligence (Count Three); wrongful foreclosure (Count Four); and violations of the Fair Credit Reporting Act (Count Six).2
Asserting federal question jurisdiction, Defendants then removed the action to this Court on June 14. (Dkt. [1-7].) Defendants filed their new Motion to Dismiss [7] on June 21. Finally, Plaintiffs filed a Motion to Remand to State Court [12] on July 15.
Plaintiffs argue that the Court should remand this case because Defendants have (1) "fail[ed] to obtain the consent of U.S. Bankcorp Investments, Inc. to join removal," and (2) they "waived their removal rights by filing extensive pleadings and motions in the state court, by failing to answer Plaintiffs' state Complaint, and by entry of a default judgment by the state court." (Pl.'s Remand Br., Dkt. [12-1] at 2-3.) The Court disagrees for the following reasons.
28 U.S.C. § 1441(a) provides that "any civil action brought in a State court of which the district courts have original jurisdiction, may be removed by thedefendant or defendants," while § 1446 describes the removal procedure to invoke federal jurisdiction. Section 1446 requires, among other things, "the defendant seeking removal to file a timely notice of removal stating the grounds for removal with the appropriate federal district court." Bailey v. Janssen Pharmaceutica, Inc., 536 F.3d 1202, 1208 (11th Cir. 2008) (citing 28 U.S.C. § 1446(a)). Furthermore, the "rule of unanimity" requires that "[w]hen a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action." 28 U.S.C. § 1446(b)(2)(A).
First, Defendants argue that U.S. Bankcorp's consent is not required because it is a nominal defendant. A party is nominal when, "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." Tri-Cities Newspapers, Inc. v. Tri-Cities Printing Pressmen & Assistants Local 349, et al., 427 F.2d 325, 327 (5th Cir. 1970) (citation omitted).3 As Defendants point out,there are no allegations against or requests for relief from U.S. Bankcorp in the Amended Complaint [5]. As such, the Court can enter a judgment without prejudicing Plaintiffs. U.S. Bankcorp is thus a nominal party whose consent is not required for removal.
Further, Defendants did not violate the rule of unanimity because § 1446(b)(2)(A) requires consent from "all defendants who have been properly joined and served." (emphasis added). Here, there is no indication that U.S. Bankcorp was served with process. Therefore, Defendants' removal did not lack unanimity because "[a] defendant has no obligation to participate in any removal procedure prior to his receipt of formal service of judicial process." Bailey, 536 F.3d at 1208.
Once a notice of removal is filed, a plaintiff has thirty days to seek remand "on the basis of any defect other than lack of subject matter jurisdiction." 28 U.S.C. § 1447(c). "One such defect, commonly referred to as litigating on the merits, effectively waives the defendant's right to remove a state court action to federal court." Yusefzadeh v. Nelson, Mullins, Riley & Scarborough, LLP, 365F.3d 1244, 1246 (11th Cir. 2004). In Yusefzadeh, the Eleventh Circuit elaborated on this type of waiver:
A state court defendant may lose or waive the right to remove a case to a federal court by taking some substantial offensive or defensive action in the state court action indicating a willingness to litigate in that tribunal before filing a notice of removal with the federal court . . . . [W]aiver will not occur, however, when the defendant's participation in the state action has not been substantial or was dictated by the rules of that court . . . .
Id. (quoting CHARLES A. WRIGHT, ET. AL., 14B FEDERAL PRACTICE & PROCEDURE § 3721 (2003)). "Whether the state court defendant has waived his right to remove based on 'active participation must be made on a case-by-case basis.' " Id. (quoting Hill v. State Farm Mutual Auto. Ins. Co., 72 F. Supp. 2d 1353, 1354 (M.D. Fla. 1999)).
Plaintiffs cite Yusefzadeh v. Nelson, Mullins, Riley & Scarborough, LLP and Cogdell v. Wyeth for support. In each of those cases, the Eleventh Circuit held that "the removing defendant did not waive its right of removal by filing a motion to dismiss the plaintiff's complaint while the case was still pending in state court." Cogdell, 366 F.3d 1245, 1249 (11th Cir. 2004). Plaintiffs argue that in those cases the defendants had not taken substantial offensive or defensive actions in state court, whereas here Defendants filed "five separate motions and responses in addition to filing its Motion to Dismiss." (Pl.'s Remand Br., Dkt. [12-1] at 17.)But these five motions and responses, all related to setting aside default, were filed before Plaintiffs amended their Complaint to add their only federal claim under the Fair Credit Reporting Act. Because the parties are not completely diverse, only at that point could Defendants remove on the basis of federal question jurisdiction. After removal, Defendants filed their Motion to Dismiss [7] in this Court. Accordingly, Defendants took no substantial offensive or defensive measures in state court after the case became eligible for removal and therefore did not waive their right to remove. Accordingly, Plaintiffs' Motion to Remand [12] is DENIED.
As a preliminary matter, Defendants' Motion to Dismiss [3] is DENIED as moot because it is superseded by Plaintiffs' Amended Complaint [5] and Defendants' Motion to Dismiss [7].
Federal Rule of Civil Procedure 8(a)(2) requires that a pleading contain a "short and plain statement of the claim showing that the pleader is entitled to relief." While this pleading standard does not require "detailed factual allegations," mere labels and conclusions or "a formulaic recitation of the elementsof a cause of action will not do." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In order to withstand a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Id. (quoting Twombly, 550 U.S. at 570). A complaint is plausible on its face when ...
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