Fed. Nat'l Mortg. Ass'n v. Morse

• Decision Date: 22 November 2016
• Docket Number: Civil Action No. 4:16-CV-396
• Parties: FEDERAL NATIONAL MORTGAGE ASSOCIATION, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE UNITED STATE OF AMERICA, v. GREGORY C MORSE.
• Court: U.S. District Court — Eastern District of Texas

FEDERAL NATIONAL MORTGAGE ASSOCIATION, A CORPORATION ORGANIZEDAND EXISTING UNDER THE LAWS OF THE UNITED STATE OF AMERICA, v. GREGORY C MORSE.

Civil Action No. 4:16-CV-396

United States District Court EASTERN DISTRICT OF TEXAS SHERMAN DIVISION

November 22, 2016

(Judge Mazzant/Judge Nowak)

MEMORANDUM ADOPTING REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

Came on for consideration the report of the United States Magistrate Judge in this action, this matter having been heretofore referred to the Magistrate Judge pursuant to 28 U.S.C. § 636. On September 29, 2016, the report of the Magistrate Judge (Dkt. #10) was entered containing proposed findings of fact and recommendations that Plaintiff Federal National Mortgage Association's ("Plaintiff") Motion to Remand (Dkt. #7) be granted. Having received the report of the Magistrate Judge (Dkt. #10), having considered Defendant Gregory C. Morse's ("Defendant") timely filed objections (Dkt. #12), Defendant's Motion for Leave to File an Amended Notice of Removal (Dkt. #11), Defendant's Motion for Leave to Exceed Page Limitation in Objection to Magistrate Judge's Report and Recommendation (Dkt. #13), Plaintiff's Objection to Defendant's Motion for Leave to File an Amended Notice of Removal (Dkt. #15), Defendant's Reply to Plaintiff's Objection to Defendant's Motion for Leave to File an Amended Notice of Removal (Dkt. #16), and having conducted a de novo review, the Court is of the opinion that the findings and conclusions of the Magistrate Judge are correct, and the Court hereby adopts the Magistrate Judge's report (Dkt. #10) as the findings and conclusions of the Court.

BACKGROUND

This suit concerns the foreclosure of a property in which Defendant Gregory C. Morse resides, located at 223 High Point Dr., Murphy, Texas 75094 (the "Property"). On May 3, 2016, the Property was sold in a non-judicial foreclosure sale. Following foreclosure, Plaintiff submitted a written demand to Defendant, requesting that he vacate the Property. Defendant did not vacate the Property. On June 10, 2016, Defendant filed a Sworn Complaint for Forcible Detainer in the Justice Court of Precinct 3 of Collin County, Texas. No other claims are asserted.

On June 15, 2016, Defendant filed a Notice of Removal alleging jurisdiction based on diversity. Defendant now also asserts the existence of federal question jurisdiction on the basis that this action involves "several Federal questions to be answered due to violations of Titles 11, 15, and 18 of the United States Code." Defendant argues remand is warranted because Plaintiff has failed to show the requisite amount in controversy, and in any event, forcible detainer actions are governed by the Texas Property Code and are questions of state rather than federal law.

The Magistrate Judge, after a full hearing and review of all relevant pleadings, entered a report and recommendation on September 29, 2016, recommending Plaintiff's Motion to Remand be granted (Dkt. #10). Specifically, the Magistrate Judge made the following conclusions: (1) Defendant's Notice of Removal did not establish the requisite amount in controversy; and (2) Defendant's purported counterclaims could not be considered in determining the existence of removal jurisdiction. Subsequent to the report and recommendation, on October 11, 2016, Defendant filed objections (Dkt. #12), as well as aMotion for Leave to Exceed Page Limitation in Objection to Magistrate Judge's Report and Recommendation (Dkt. #13), and a Motion for Leave to File an Amended Notice of Removal (Dkt. #11). On October 24, 2016, Plaintiff filed its Objection to Defendant's Motion for Leave to File an Amended Notice of Removal (Dkt. #15). On October 28, 2016, Defendant filed his Reply to Plaintiff's Objection to Defendant's Motion for Leave to File an Amended Notice of Removal (Dkt. #16).

MOTIONS FOR LEAVE

Before turning to Plaintiff's objections, the Court first addresses Defendant's Motion for Leave to File an Amended Notice of Removal (Dkt. #11) and Motion for Leave to Exceed Page Limitation in Objection to Magistrate Judge's Report and Recommendation (Dkt. #13) (collectively, the "Motions for Leave").

Here, Defendant seeks leave to file an amended notice of removal; however, Defendant has not provided the Court with the proposed amendment to his notice of removal.¹ Moreover, even if the Court were to ignore this failure, the Motion itself merely contains the conclusory statement "I am ready to proceed in amending my defective 'Notice of Removal' asserting the federal questions which invoke the jurisdiction of this Court to entertain my corrected motion" (Dkt. #11 at 2). To the extent Defendant seeks to assert new bases for federal question jurisdiction through this statement,² 28 U.S.C. § 1653 does not permit amendment to add new bases for federal question jurisdiction and/or to furnish missing allegations to support a new basis of jurisdiction.

The instant Motion was filed four months after Defendant's notice of removal—and thus, must comply with 28 U.S.C. § 1653. Fantroy v. Dall. Area Rapid Transit, No. 3:13-CV-0345-K, 2013 WL 2284879, at *7 (N.D. Tex. May 23, 2013). Here, Defendant's stated reason for amending is to assert "the federal questions" (Dkt. #11 at 2) (discussed supra); Defendant does not state he seeks to correct a technical error regarding the purported diversity jurisdiction. Again, under section 1653, the Court cannot consider new bases for federal question jurisdiction. See Fantroy, 2013 WL 2284879, at *7 ("Section 1653 permits amendments to cure technical defects in the jurisdictional allegations; it does not permit an amendment which adds an entirely different jurisdictional basis for the removal."); Iwag v. Geisel Compania Maritima, S.A., 882 F. Supp. 597, 601 (S.D. Tex. 1995) (holding Supplementary Notice of Removal did not fall within the scope of amendments allowed under section 1653 when the original notice of removal asserting federal question jurisdiction referenced the plaintiff's 18 U.S.C. §§ 1961-68 claims and not the plaintiff's 46 U.S.C. §10313 claim, which defendant attempted to raise as separate grounds for federal question jurisdiction in its Supplementary Notice of Removal). And the Court can only consider amendment of defective jurisdictional allegations where there has been no undue delay. Getty Oil Corp., v. Ins. Co. of N. Am., 841 F.2d 1254, 1258 n.5 (5th Cir. 1988). Defendant's Motion for Leave to File an Amended Notice of Removal was filed in the present case four months after removal, and only after the Magistrate Judge's recommendation at Hearing to grant the Motion to Remand, which is indicative of undue delay. For the foregoing reasons, Defendant's Motion for Leave to File an Amended Notice of Removal (Dkt. #11) must be DENIED. Notwithstanding denial of Defendant's Motion for Leave to File an Amended Notice of Removal, the Court has considered all bases for jurisdiction raised by Defendant in his objections (discussed more fully infra).

With respect to Defendant's second motion for leave, Defendant seeks leave to exceed the page limitation for objections to a magistrate judge's recommendation, pursuant to Local Rule CV-72(c). Defendant has filed the subject objections (Dkt. #13); and to date Plaintiff has not opposed such request. The Court therefore assumes Plaintiff is unopposed and in light of Defendant's pro se status, the Court will allow the additional pages and consider same. Accordingly, Defendant's Motion for Leave to Exceed Page Limitation in Objection to Magistrate Judge's Report and Recommendation (Dkt. #13) is GRANTED, and the Court will consider the entirety of Defendant's Objection to Report and Recommendation of United States Magistrate Judge (Dkt. #12).

ANALYSIS

Under the law, a party who files timely written objections to a magistrate judge's report and recommendation is entitled to a de novo determination of those findings or recommendations to which the party specifically objects. 28 U.S.C. § 636(b)(1)(c); Fed. R. Civ. P. 72(b)(2)-(3). Defendant has timely and specifically objected that (1) the amount-in-controversy requirement is met because the amount-in-controversy is equal to the purchase price of his homestead; and/or (2) Plaintiff "artfully pleaded" its forcible detainer action "in order to avoid injecting federal questions in the complaint." Defendant articulated each of these arguments in his previous papers and also at Hearing before the Magistrate Judge.

I. Removal Jurisdiction

To reiterate, "Federal courts are courts of limited jurisdiction." Gunn v. Minton, 133 S. Ct. 1059, 1064 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)); accord Halmekangas v. State Farm Fire & Cas. Co., 603 F.3d 290, 292 (5th Cir. 2010); Johnson v. United States, 460 F.3d 616, 621 n.6 (5th Cir. 2006); McKee v. Kan. City S. Ry. Co.,358 F.3d 329, 337 (5th Cir. 2004). The Court "must presume that a suit lies outside this limited jurisdiction, and the burden of establishing federal jurisdiction rests on the party seeking the federal forum." Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001), cert. denied, 534 U.S. 993 (2001) (citing Kokkonen, 511 U.S. at 377); see also Hertz Corp. v. Friend, 559 U.S. 77, 96 (2010); Boone v. Citigroup, Inc., 416 F.3d 382, 388 (5th Cir. 2005). In an action that has been removed to federal court, a district court is required to remand the case to state court if, at any time before final judgment, it determines that it lacks subject matter jurisdiction. 28 U.S.C. § 1447(c); Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 571 (2004); In re 1994 Exxon Chem. Fire, 558 F.3d 378, 392 (5th Cir. 2009); McDonal v. Abbott Labs., 408 F.3d 177, 182 (5th Cir. 2005). Federal courts have subject matter jurisdiction and are authorized to entertain causes of action only where a question of federal law is involved or where there is diversity of citizenship between the parties and the amount in...