Kondaur Capital Corp. v. Finley
| Decision Date | 22 October 2020 |
| Docket Number | No. 2:20-cv-02423-JTF-tmp,2:20-cv-02423-JTF-tmp |
| Parties | KONDAUR CAPITAL CORP., Plaintiff, v. KEITH T. FINLEY, Defendant. |
| Court | U.S. District Court — Western District of Tennessee |
Before the Court is Defendant Keith T. Finley's pro se Notice of Removal ("Notice"), filed on June 12, 2020, pursuant to 28 U.S.C. § 1331. (ECF No. 1.) Defendant also filed a Motion seeking leave to proceed in forma pauperis (ECF No. 6), which was granted on July 16, 2020. (ECF No. 7.) On September 10, 2020, the Magistrate Judge, upon screening Defendant's Notice, entered a Report and Recommendation suggesting dismissal and remand of the action for lack of subject matter jurisdiction. (ECF No. 8.) On September 22, 2020, Defendant timely filed Objections to the Report and Recommendation. (ECF No. 9.) For the reasons below, the Court ADOPTS the Magistrate Judge's Report and Recommendation to DISMISS this action and remand to the Circuit Court of Shelby County for the State of Tennessee.
At the outset, the Court notes that Defendant did not attach Plaintiff Kondaur Capital Corporation's initial complaint to his Notice. Accompanying Defendant's Notice are (1) a statement setting forth the alleged grounds for removal; (2) a Motion to Void and Dismiss Judgment Pursuant to Federal Rules of Civil Procedure 60(b)(4), 12(b)(1), and 12(h)(3), filed in the Circuit Court of Shelby County for the State of Tennessee ("Circuit Court") proceeding; (3) a withdrawal of Plaintiff's objection to Defendant's statement of evidence filed in the Circuit Court; (4) a Circuit Court order granting Plaintiff's motion for summary judgment; and (5) an email between Defendant and Plaintiff's counsel regarding the aforementioned statement of evidence. (ECF Nos. 1 & 1-4.)
The Court also notes that a federal proceeding related to this action occurred previously. On February 17, 2012, Defendant filed a wrongful foreclosure action against Plaintiff and four other defendants in the Chancery Court of Shelby County for the State of Tennessee. See Finley v. Kondaur Capital Corp., 909 F. Supp. 2d 969, 973 (W.D. Tenn. 2012). In Count VII of the wrongful foreclosure action, Defendant asserted a claim to quiet title under Tennessee state law. Id. at 982. The wrongful foreclosure action was removed to the Western District of Tennessee on March 9, 2012. Id. at 974. The federal district court in that case denied Plaintiff's motion to dismiss Defendant's quiet title claim because the Court "possesse[d] insufficient information" to warrant dismissal. Id. at 982. On January 25, 2013, the Court entered an Order and Judgment declaring Defendant as the "mortgagor-in-possession" and that "any present mortgage foreclosure proceeding now pending or initiated by Plaintiff but not yet filed in the courts of Tennessee is null and void and of no effect upon Finley's title to the premises." Order and Judgment, Finley v. Kondaur Capital Corp., No. 12-cv-02197-WGY-dkv (W.D. Tenn. Jan. 25, 2013), ECF No. 43. Importantly, however, the Court noted that this Order was "without prejudice to Kondaur—once its paperwork was in order—initiating a new foreclosure proceeding should Finley remain in default on the mortgage." (Id. at 1-2.)
Subsequently, on November 19, 2013, Plaintiff initiated the present foreclosure/eviction action against Defendant in the Circuit Court.1 (ECF No. 1-3, 2.) On July 17, 2014, the Circuit Court denied Plaintiff's first motion for summary judgment without prejudice for the purpose of permitting Defendant to produce certain evidence. (ECF No. 9-3, 1.) Following the Circuit Court's denial of the first summary judgment motion, Plaintiff filed a Motion for Reconsideration and to Alter or Amend Judgment. On August 29, 2014, the Circuit Court granted Plaintiff's Motion for Reconsideration and granted summary judgment in favor of Plaintiff, awarding to Plaintiff possession of the property and attorneys' fees in the amount of $14,430.00. (ECF No. 1-3, 1-2.) In his Notice, Defendant alleges that the Circuit Court's hearing on the summary judgment motion took place without notice to him. (ECF No. 1, 2.)
On February 6, 2015, the Circuit Court held an eviction hearing, which Defendant also alleges occurred without proper service or notice to him. (Id.) Ultimately, on March 3, 2015, Defendant was evicted from the property. (Id.)
On February 12, 2019, Defendant filed a Statement of Evidence in the Circuit Court, to which Plaintiff initially objected. (ECF No. 1-2, 1.) However, on May 7, 2019, Plaintiff withdrew its objections to Defendant's Statement. (Id.) Defendant has not provided this Statement of Evidence to this Court.
On June 12, 2020, Defendant filed his Notice of Removal. (ECF No. 1.) On September 10, 2020, the Magistrate Judge entered the Report and Recommendations. (ECF No. 8.) Thereafter, on September 22, 2020, Defendant filed his Objections to the Proposed Findings andRecommendations ("Objections"), attaching a Memorandum/Order and a Judgment entered by the district court in Defendant's 2012 wrongful foreclosure action, the Circuit Court's July 17, 2014 denial of Plaintiff's motion for summary judgment, and an assignment of a deed of trust filed with the Register of Shelby County, Tennessee. (ECF No. 9.)
Congress passed 28 U.S.C. § 636(b) "to relieve some of the burden on the federal courts by permitting the assignment of certain district court duties to magistrates." United States v. Curtis, 237 F.3d 598, 602 (6th Cir. 2001). Pursuant to the provision, magistrate judges may hear and determine any pretrial matter pending before the Court, except various dispositive motions. 28 U.S.C. § 636(b)(1)(A). Upon hearing a pending matter, "the magistrate judge must enter a recommended disposition, including, if appropriate, proposed findings of fact." Fed. R. Civ. P. 72(b)(1); see also Baker v. Peterson, 67 F. App'x 308, 310 (6th Cir. 2003). Any party who disagrees with a magistrate's proposed findings and recommendation may file written objections to the report and recommendation. Fed. R. Civ. P. 72(b)(2).
The district court reviews a magistrate judge's proposed findings and recommendation. The standard of review that is applied depends on the nature of the matter considered by the magistrate judge. See Baker v. Peterson, 67 F. App'x 308, 310 (6th Cir. 2003) (citations omitted) ( ). Upon review of the evidence, the district court may accept, reject, or modify the proposed findings or recommendations of the magistrate judge. Brown v. Board of Educ., 47 F. Supp. 3d 665, 674 (W.D. Tenn. 2014); see also 28 U.S.C. § 636(b)(1). The court "may also receive further evidence or recommit the matter to the [m]agistrate [j]udge with instructions."Moses v. Gardner, No. 2:14-cv-2706-SHL-dkv, 2015 U.S. Dist. LEXIS 29701, at *3 (W.D. Tenn. Mar. 11, 2015). A district judge should adopt the findings and rulings of the magistrate judge to which no specific objection is filed. Brown, 47 F. Supp. 3d at 674.
28 U.S.C. § 1915(e)(2) Screening
Pursuant to Local Rule 4.1, in cases where a pro se plaintiff has been granted leave to proceed in forma pauperis, the complaint must be screened under 28 U.S.C. § 1915(e)(2)(B). LR 4.1(b). Specifically, courts are required to screen in forma pauperis complaints and dismiss any complaint, or portion thereof, if the allegation of poverty is untrue or if the action (i) is frivolous or malicious, (ii) fails to state a claim on which relief may be granted, or (iii) seeks monetary relief against a defendant who is immune from such relief. 28 U.S.C. § 1915(e)(2).
While Kondaur has not challenged the removal of this case, "federal courts have a duty to consider their subject matter jurisdiction in regard to every case and may raise the issue sua sponte." Answers in Genesis of Ky., Inc. v. Creation Ministries Int'l, Ltd., 556 F.3d 459, 465 (6th Cir. 2009). When a court determines that it lacks subject matter jurisdiction, the court has an obligation to dismiss the case. Fed. R. Civ. P. 12(h)(3). The Sixth Circuit employs a presumption against federal subject matter jurisdiction, which must be overcome by the removing party. Farmer v. Fisher, 386 F. App'x 554, 557 (6th Cir. 2010); Egan v. Premier Scales & Sys., 237 F. Supp. 2d 774, 777 (W.D. Ky. 2002) (citing Her Majesty the Queen v. City of Detroit, 874 F.2d 332, 339 (6th Cir. 1989)).
Because Defendant has filed Objections to the Magistrate Judge's recommendation that this action be dismissed for lack of subject matter jurisdiction and remanded, the Court reviewsthe Magistrate Judge's Report and Recommendation de novo. See 28 U.S.C. § 636(b)(1). The Magistrate Judge concluded that because Defendant did not plead facts establishing the existence of subject matter jurisdiction, the Court lacks subject matter jurisdiction over this case. Accordingly, the Magistrate Judge recommended that this case be dismissed and remanded to the Circuit Court. (ECF No. 8, 4.)
Defendant's Notice set forth 28 U.S.C. § 1331—i.e., federal question jurisdiction—as the basis for federal subject matter jurisdiction. Defendant also alleges in his Objections that diversity jurisdiction is proper. (ECF No. 9, 1.)
For the reasons set forth below, the Court ADOPTS the Magistrate Judge's recommendation to dismiss and remand this action to the Shelby County Circuit Court. Neither Defendant's Notice nor his Objections adequately set forth any basis for federal subject matter jurisdiction, because diversity jurisdiction is unavailable in this case, and further, there is no federal question presented.
In his Notice, Defendant did not plead diversity...
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