Fed. Nat'l Mortg. Ass'n v. Preston
| Decision Date | 05 November 2015 |
| Docket Number | No. 4:15-cv-01739,4:15-cv-01739 |
| Parties | FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiff, v. CHAD W. PRESTON AND CHRISTINA N. JAMES, Defendants. |
| Court | U.S. District Court — Middle District of Pennsylvania |
(Judge Brann)
This case involves a real property dispute between a bank and two Pennsylvania landowners over a parcel of land situated on Hillcrest Lane in rural Osceola Township, Tioga County, Pennsylvania. Because the Defendants, husband and wife Chad W. Preston and Christina N. James, have failed to demonstrate that their dispute belongs in federal court, Plaintiff Federal National Mortgage Association's Motion to Remand the case to the Court of Common Pleas of Tioga County is granted.
On July 21, 2015, Plaintiff filed a residential mortgage foreclosure Complaint against Defendants in the Court of Common Pleas of Tioga County, Pennsylvania.1 That state foreclosure Complaint sought in rem judgment in the form of Defendants' property, a residence located at 97 Hillcrest Lane, Osceola Township, Tioga County, Pennsylvania, which serves as the home of Defendants and their three minor children.2 Plaintiff served its state foreclosure Complaint on August 7, 2015 using officers from the Tioga County Sheriff's Department.3
Twenty-eight days later, Defendants filed a Notice of Removal on September 4, 2015 pursuant to 28 U.S.C. §§ 1441 and 1446.4 In their brief, Defendants claim that their own Notice of Removal was "in-artfully drafted."5 A key term of that Notice is paragraph four, which states:
4. This Court has Jurisdiction over this proceeding in that the Plaintiff is a United States Corporation having its principal place of business in the District of Columbia, Defendants are residents of the Commonwealth of Pennsylvania, and the amount in controversy, representing both the value of the real estate for which the Plaintiff is seeking an in rem Judgment of Foreclosure, as well as the claims of the Defendants, exceed $75,000.00. 28 U.S.C. § 1332.6
Plaintiff responded by filing a Motion to Remand the proceeding back to the Court of Common Pleas of Tioga County.7 In its brief, Plaintiff argues that the case ought to be remanded because removal would violate 28 U.S.C. § 1441(b)(2)'s"forum defendant" rule since Defendants are both Pennsylvania citizens.8
Eleven days after filing their Notice of Removal, Defendants filed a Complaint against Plaintiff in federal court.9 Defendants' Complaint alleges violations of both state and federal law, including the Real Estate Settlement Procedures Act, 12 U.S.C. § 2605; the Fair Debt Collection Practices Act, 15 U.S.C. § 1692; the Pennsylvania Unfair Trade Practices Act and Consumer Protection Law, 73 P.S. § 201-2; Pennsylvania Act 6 of 1974, 41 P.S. § 101-605; the Pennsylvania Fair Credit Extension Uniformity Act, 73 P.S. § 2270.3; state contract law; and state negligence law.10
"[T]he party asserting federal jurisdiction in a removal case bears the burden of showing, at all stages of the litigation, that the case is properly before the federal court,"11 and "any doubt about the right of removal requires resolution in favor of remand."12 "It remains the defendant's burden to show the existence and continuance of federal jurisdiction."13
Under 28 U.S.C. § 1441(a), "any civil action brought in a State court ofwhich the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants." The two primary types of "original jurisdiction" that §1441(a) contemplates are diversity jurisdiction and federal question jurisdiction.
With regard to diversity jurisdiction, 28 U.S.C. § 1441(b)(2)—known informally as the "forum defendant" bar to removal jurisdiction—provides that "[a] civil action otherwise removable solely on the basis of [diversity jurisdiction] may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." Thus, the forum defendant rule precludes removal based on diversity where a defendant is a citizen of the the state in which the plaintiff originally filed the case.14 Moreover, "federal removal jurisdiction . . . is determined (and must exist) as of the time the complaint is filed and removal is effected."15
With regard to federal question jurisdiction, the Supreme Court of the United States "has repeatedly held that, in order for a claim to arise 'under the Constitution, laws, or treaties of the United States,' a right or immunity created by the Constitution or laws of the United States must be an element, and an essentialone, of the plaintiff's cause of action."16 As such, "federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint."17 "The rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law."18 "Federal jurisdiction cannot be predicated on an actual or anticipated defense: It is not enough that the plaintiff alleges some anticipated defense to his cause of action and asserts that the defense is invalidated by some provision of [federal law]."19 "Nor can federal jurisdiction rest upon an actual or anticipated counterclaim."20
There is little question that this state-centric foreclosure action does not belong in federal court. First, Plaintiff correctly points out that removal from Pennsylvania state court by two Pennsylvania defendants runs afoul of 28 U.S.C. § 1441(b)(2)'s "forum defendant" rule. 28 U.S.C. § 1441(b)(2) states:
A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.
As written, the forum defendant rule applies to all civil actions "removable solelyon the basis of the jurisdiction under section 1332(a)."21 Section 1332(a) grants federal courts original jurisdiction over 22
There is no dispute that Defendants here are both Pennsylvania citizens. Accordingly, if Defendants' claims were removable solely on the basis of diversity jurisdiction, then removal would unquestionably violate the forum defendant rule. The Court must therefore determine whether there is any alternative basis for jurisdiction other than diversity—namely, whether Defendant's claims adequately invoke federal question jurisdiction.23 It is evident that they do not.
As a threshold matter, Defendants' own Notice of Removal appeals only to diversity jurisdiction. In that Notice, Defendants devote one paragraph to establishing this Court's original jurisdiction over their claims, and according to their own arguments, the sole potential jurisdictional ground is diversity. That paragraph reads as follows:
4. This Court has Jurisdiction over this proceeding in that the Plaintiff is a United States Corporation having its principal place of business in the District of Columbia, Defendants are residents of the Commonwealth of Pennsylvania, and the amount in controversy, representing both the value of the real estate for which the Plaintiff isseeking an in rem Judgment of Foreclosure, as well as the claims of the Defendants, exceed $75,000.00. 28 U.S.C. § 1332.24
Defendants clearly cite to and rely only upon 28 U.S.C. § 1332, a federal court's statutory basis for diversity jurisdiction. They do not cite to 28 U.S.C § 1331, the parallel statute granting federal courts original jurisdiction over federal questions. Nor is the reasoning in Paragraph 4 in any way meant to demonstrate a cause of action "arising under the Constitution, laws, or treaties of the United States."25 Rather, its sole appeal to original federal jurisdiction is that the parties are citizens of diverse states and the claims at issue exceed the $75,000 statutory minimum—the two hallmark features of diversity jurisdiction.
The clear text of the Notice of Removal reveals that Defendants' sole reason for mentioning its claims was to ensure that the amount in controversy surpassed the $75,000 statutory minimum required to achieve diversity jurisdiction. Yet, in a do-or-die fashion, Defendants contend that removal is appropriate because jurisdiction is not based "solely upon" diversity jurisdiction.26 This is the case, they contend, because "[t]he subject Notice of Removal, while albeit in-artfully drafted, refers to diversity of Citizenship, as well as the claims of the Defendants."27
Although Paragraph 4 refers to "the claims of the Defendants," it very apparently does so only to aggregate "the claims of the Defendants" withPlaintiff's "in rem Judgment" so as to ensure that the amount in controversy surpasses the $75,000 statutory minimum. It does not refer to "the claims of the Defendants" in any way that would suggest those claims give rise to federal question jurisdiction. In fact, as the Court will later explain, those claims cannot give rise to federal question jurisdiction because they are the claims "of the Defendants" and not "of the Plaintiff." Needless to say, this Court is not taken in by Defendants' attempted linguistic contortion, a verbal sleight of hand that I perceive as straining credulity at best but potentially disingenuous at worst.
Moreover, Defendants did not even file their federal claims until after they had filed their Notice of Removal. That sequence alone calls into question any contention that the attempted removal could be based on those claims—claims, which at that the time of the removal, were admittedly non-existent. Defendants suggest that "because of the 30 day requirement for the Notice of Removal, the related proceeding was unable to be filed at the time of the Notice of Removal as the Complaint was not yet...
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