Gardner v. Tbo Capital LLC

• Decision Date: 04 December 2013
• Docket Number: No. 1:13–cv–2491–WSD.,1:13–cv–2491–WSD.
• Citation: 986 F.Supp.2d 1324
• Parties: Heather J. GARDNER and Cyril M. Gardner, Plaintiffs, v. TBO CAPITAL LLC; Almand & Cohen, LLC; Landmark Financial Solutions, LLC; Residential Fund 76, LLC; FCI Lender Services, Inc.; and Act Lending Corporation d/b/a Act Mortgage Capital, Defendants.
• Court: U.S. District Court — Northern District of Georgia

986 F.Supp.2d 1324

Heather J. GARDNER and Cyril M. Gardner, Plaintiffs,

v.TBO CAPITAL LLC; Almand & Cohen, LLC; Landmark Financial Solutions, LLC; Residential Fund 76, LLC; FCI Lender Services, Inc.; and Act Lending Corporation d/b/a Act Mortgage Capital, Defendants.

No. 1:13–cv–2491–WSD.

United States District Court,

N.D. Georgia,

Atlanta Division.

Dec. 4, 2013.

Deirdre M. Stephens—Johnson, The Law Office of Dierdre M. Stephens—Johnson, LLC, Pine Lake, GA, for Plaintiffs.

Paul Gerard Wersant, Sequoia Financial Solutions, Lawrenceville, GA, for Defendants.

OPINION AND ORDER

WILLIAM S. DUFFEY, JR., District Judge.

This matter is before the Court on TBO Capital, LLC (“TBO”) and Landmark Financial Solutions, LLC's (“Landmark”) (together, the “Removing Defendants”) Motion for Judgment on the Pleadings [2]. Also before the Court is Plaintiffs Heather J. Gardner and Cyril M. Gardner's (together, the “Gardners” or “Plaintiffs”) Motion to Remand [5].

I. BACKGROUND

On November 17, 2006, Plaintiffs obtained a loan in the amount of $139,600 from ACT Lending Corporation d/b/a ACT Mortgage Capital (“ACT”). (Am. Compl. ¶ 12 & Ex. C [1.2 at 31–54] at 1). Repayment of the loan was secured by a deed (“Security Deed”) to real property located at 1683 S. Deshon Road, Lithonia, Georgia (the “Property”). ( Id. ¶¶ 10, 12 & Ex. C). Plaintiffs executed the Security Deed in favor of Mortgage Electronic Registration Systems, Inc. (“MERS”), as nominee for ACT and ACT's successors and assigns. ( Id. ¶ 12 & Ex. C at 1).

On December 29, 2006, the Gardners assigned their interest in the Property to Kingdom Restoration Ministries International Corporation (“Kingdom Restoration Ministries”). (Counterclaim [9] at ¶ 12 & Ex. 2; Pls' An. [13] at ¶ 12).

On May 16, 2008, ACT filed an Administrative Dissolution with the Georgia Secretary of State. ( Id. ¶ 17 & Ex. H [1.2 at 68–71] ).

On July 5, 2011, FCI Lender Services, Inc. (“FCI”), on behalf of Landmark, sent Plaintiffs a letter stating that, on July 15, 2011, Landmark would be purchasing Plaintiffs' loan and FCI would become Plaintiffs' loan servicer. ( Id. ¶ 14 & Ex. E [1.2 at 58] ).

On August 18, 2011, MERS, as nominee for ACT, assigned the Security Deed to Residential Fund 76, LLC (“Residential Fund”) (“First Assignment”). ( Id. ¶ 13 & Ex. D [1.2 at 56] ).

On September 8, 2011, Residential Fund assigned its interest in the Security Deed to Landmark (“Second Assignment”). ( Id. ¶ 15 & Ex. F [1.2 at 60] ).

On November 6, 2012, Landmark sent Plaintiffs a “Forbearance/Modification Agreement,” which states that Landmark is the current holder of Plaintiffs' loan, that FCI is Plaintiffs' loan servicer, that Plaintiffs had defaulted on their loan obligations on April 1, 2012, and that they owed $12,720.13 in arrears. ( Id. ¶ 16 & Ex. G [1.2 at 63–66] ).

On January 22, 2013, Landmark assigned its interest in the Security Deed to TBO (“Third Assignment”) (all together, the “Assignments”). ( Id. ¶ 21 & Ex. I [1.2 at 73] ).

On February 28, 2013, Almand & Cohen, LLC (“A & C”) sent Plaintiffs a “Notice of Default, Attorney Fee [sic], Demand for Payment and Sale Under Power” (“February 28th Notice”) stating that Plaintiffs' loan and Security Deed had been assigned to TBO, that Plaintiffs had failed to comply with their loan obligations, including by defaulting on their loan payments, that the entire amount of outstanding principal balance and accrued interest under the loan was due immediately, and that, as of January 3, 2013, the outstanding amount due was $161,783.05. ( Id. ¶ 23 & Ex. J [1.2 at 75–79] ). The February 28th Notice also states that a foreclosure sale of the Property is scheduled for April 2, 2013, that the sale is being conducted by TBO, and that the entity with the full authority to negotiate, amend and modify all terms of the mortgage is A & C. ( Id.).

On March 1, 2013, FCI sent Plaintiffs a letter stating that, effective March 16, 2013, servicing of Plaintiffs' loan would be transferred from FCI to TBO. ( Id. ¶ 24 & Ex. K [1.2 at 81–82] ).

On May 9, 16, 23 and 30, 2013, A & C, on behalf of TBO, published in The Champion a Notice of Sale Under Power (“NSUP”), which states that the Property will be sold at foreclosure on June 4, 2013, that the sale is being conducted by TBO, and that the entity with full authority to negotiate, amend and modify all terms of the mortgage is A & C. ( Id. ¶ 25 & Ex. L [1.2 at 84–85] ).

On May 29, 2013, Plaintiffs filed their Complaint [1.1 at 2–17] in the Superior Court of DeKalb County, Georgia, against TBO and A & C (the “DeKalb County Action”). Plaintiffs sought a declaration that TBO and A & C lack standing to foreclose on the Property, that the NSUP is defective, and that Plaintiffs are the sole owners of the Property. Plaintiffs also sought to enjoin the foreclosure sale.

On May 31, 2013, Plaintiffs filed their Amended Complaint, adding Landmark, Residential Fund, FCI and ACT as Defendants and asserting additional claims for wrongful foreclosure, breach of the duty of good faith and fair dealing, invasion of privacy and violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”). In their Amended Complaint, Plaintiffs seek compensatory, statutory and punitive damages, equitable and injunctive relief, and attorneys' fees and costs.

On June 4, 2013, A & C, on behalf of TBO, sold the Property at foreclosure. (Deed Under Power of Sale [9.3] ).

On June 3 and 6, 2013, respectively, Plaintiffs personally served copies of the Complaint and Summons on A & C and FCI by serving their respective registered agents. (Returns of Service [1.3] at 1–2, 11–12). Also on June 6, 2013, Plaintiffs sought to serve Residential Fund, ACT, Landmark and TBO by delivering to the Georgia Secretary of State copies of the Complaint and Summons. ( Id. at 3–10).¹

On July 29, 2013, Landmark and TBO removed the DeKalb County Action to this Court based on federal question and diversity jurisdiction. (Notice of Removal [1] ). The Removing Defendants assert that the amount-in-controversy exceeds $75,000 and that complete diversity exists among the parties because A & C, the only in-state defendant, was fraudulently joined to defeat federal subject-matter jurisdiction.² A & C and FCI consented to removal. ( Id.)

On August 3, 2013, Landmark and TBO moved for judgment on the pleadings [2].

On August 20, 2013, Plaintiffs moved to remand this action to state court [5]. Plaintiffs argue that removal was untimely, that all Defendants were required to join in removal, and that complete diversity does not exist because Plaintiffs assert various claims against in-state defendant A & C.

On September 24, 2013, TBO filed its Counterclaim [9] against the Gardners and Kingdom Restoration Ministries, which, TBO alleges, is operated on the Property and pays rent to the Gardners. TBO seeks to recover the difference between the amounts due on the Gardners' loan and the proceeds of the foreclosure sale of the Property, and any rents or revenue the Gardners received from Kingdom Restoration Ministries after they defaulted on their loan payments. TBO also seeks a declaration that TBO is the owner of the Property and that the Gardners and Kingdom Restoration Ministries lack any ownership interest in the Property. It also seeks equitable relief by ejecting them from the Property.

On September 25, 2013, TBO moved for a preliminary and permanent injunction “to obtain possession of and/or enforce its rights to the Property,” or, in the alternative, to require the Gardners and Kingdom Restoration Ministries to pay rent into the court registry while this action is pending [10].

On October 18, 2013, TBO moved for entry of default against the Gardners for failure to timely file their answer to TBO's Counterclaim [12].

On October 18, 2013, the Gardners filed their Answer to TBO's Counterclaim [13] and their Response [14] to TBO's motion for default, asserting that their answer was due on or before October 18th.

The Court first considers Plaintiffs' Motion to Remand.

II. DISCUSSIONA. Whether Removal Was Proper

It is undisputed that the Court has federal question subject-matter jurisdiction over Plaintiffs' FDCPA claim. Plaintiffs argue, however, that this action must be remanded because removal was untimely and because not all Defendants consented to removal.

“[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant ... to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a). Removal must comply with 28 U.S.C. § 1446, which provides:

The notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based ....28 U.S.C. § 1446(b)(1). The 30–day period for removal begins to run when the defendant is formally served with the summons and complaint. See Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 119 S.Ct. 1322, 143 L.Ed.2d 448 (1999); Bailey v. Janssen Pharmaceutica, Inc., 536 F.3d 1202, 1205 (11th Cir.2008) (citing Murphy ). “Each defendant shall have 30 days after receipt by or service on that defendant of the initial pleading or summons ... to file the notice of removal.” 28 U.S.C. § 1446(b)(2)(B). “If defendants are served at different times, and a later-served defendant files a notice of removal, any earlier-served defendant may consent to the removal, despite its previous failure to initiate or consent to removal.” 14C Wright et al., Federal Practice and Procedure § 3731 (4th ed.2009). A defendant may remove an action before it is served with process. Whitehurst v. Wal–Mart, 306 Fed.Appx. 446, 448 (11th Cir.2008) (“[N]othing in the removal statute, or any other legal provision,...