Lee v. Select Portfolio Servicing, Inc.

• Decision Date: 05 August 2020
• Docket Number: CV 2:19-140
• Parties: RUTHIE LEE, Plaintiff, v. SELECT PORTFOLIO SERVICING, INC., Defendant.
• Court: U.S. District Court — Southern District of Georgia

RUTHIE LEE, Plaintiff, v. SELECT PORTFOLIO SERVICING, INC., Defendant.

CV 2:19-140

United States District Court for the Southern District of Georgia Brunswick Division

August 5, 2020

ORDER

Before the Court are Defendant Select Portfolio Servicing, Inc.'s ("SPS") renewed motion to dismiss, dkt. no. 13, and Plaintiff Ruthie Lee's ("Plaintiff" or "Lee") motion to remand, dkt. no. 12. The motions have been fully briefed and are ripe for review.

BACKGROUND

Lee is the owner of an undivided interest in a house located at 124 Wasp Drive in Brunswick, Georgia ("the Property"). Dkt. No. 10 ¶ 2. Recorded in the county records is a deed to secure debt on the Property which purports to bear Lee's signature as one of the grantors thereto ("Security Deed"). Id. ¶ 3. Lee alleges that she did not sign the Security Deed and that SPS, the servicer for the loan, "or its predecessors," caused the forged deed to be recorded. See id. ¶¶ 3-4; Dkt. No. 15-1. SPS has threatened to foreclose upon the Property. Id. ¶ 7.

On July 23, 2019, Lee filed a complaint in the Superior Court of Glynn County seeking cancellation of the Security Deed. Dkt. No. 1-1. The complaint contained two claims: first, the removal of a cloud from title pursuant to O.C.G.A. §§ 23-3-40 et seq.; second, a fraud claim. The Property at issue in this case is also at issue in a parallel bankruptcy proceeding wherein Lee and SPS are parties. See No. 17-20316 (Bankr. S.D. Ga.).

On November 13, 2019, SPS removed this action to federal court, basing jurisdiction upon diversity of citizenship, 28 U.S.C. § 1441, and timely moved to dismiss the complaint. Dkt. Nos. 1, 4. The Court deferred ruling on that motion and allowed Lee seven days to amend the complaint. Dkt. No. 9. Lee did so, but her amended complaint did not set forth a basis for diversity jurisdiction. Dkt. No. 10. Questioning whether subject matter jurisdiction exists, the Court ordered Lee to set forth the basis of federal jurisdiction of her claims. Dkt. No. 11. Lee responded, stating that while the parties were diverse, she did not believe the $75,000 amount-in-controversy requirement for diversity jurisdiction had been met. Dkt. No. 12. As such, Lee requested that this case be remanded to state court. Id. at 2. Thereafter, SPS renewed its motion to dismiss, raising the same arguments that it raised in its initial motion. Dkt. No. 13.Since then, the parties have exchanged briefs regarding whether the value of the Property at the heart of this lawsuit, or more specifically Lee's interest therein, meets the $75,000 jurisdictional requirement. Dkt. Nos. 14—17.

LEGAL STANDARD

A motion to dismiss does not test whether the plaintiff will ultimately prevail on the merits of the case. Rather, it tests the legal sufficiency of the complaint. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 511 (2002) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). Therefore, the Court must accept as true all facts alleged in the complaint and construe all reasonable inferences in the light most favorable to the plaintiff. See Hoffman-Pugh v. Ramsey, 312 F.3d 1222, 1225 (11th Cir. 2002).

Federal Rule of Civil Procedure 8(a) requires that a plaintiff's complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a). Claims of fraud are subject to the heightened pleading standard of Rule 9(b), which requires the pleader to "state with particularity the circumstances constituting" same. Although a complaint need not contain detailed factual allegations, it must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).

"A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court accepts the allegations in the complaint as true and draws all reasonable inferences in favor of the plaintiff. Ray v. Spirit Airlines, Inc., 836 F.3d 1340, 1347 (11th Cir. 2016). However, the Court does not accept as true threadbare recitations of the elements of the claim and disregards legal conclusions unsupported by factual allegations. Iqbal, 556 U.S. at 678-79. At a minimum, a complaint should "contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory." Fin. Sec. Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276, 1282-83 (11th Cir. 2007) (per curiam) (quoting Roe v. Aware Woman Ctr. for Choice, Inc., 253 F.3d 678, 683 (11th Cir. 2001)).

DISCUSSION

I. Subject Matter Jurisdiction and Plaintiff's Motion to Remand

Before the Court can reach the merits of this case, it must determine that it has subject matter jurisdiction thereof. SPS based removal upon diversity jurisdiction. 28 U.S.C. § 1332. The parties appear to agree that diversity of citizenship exists;therefore, the question is whether the $75,000 amount in controversy requirement is met.

Lee and her husband, Charlie Lee, own the Property as joint tenants with right of survivorship. Dkt. No. 10 at 5. When SPS removed this action, it alleged the amount-in-controversy requirement had been met by pointing to the Property's county tax assessment for 2019. The tax assessment values the property at $203,900.¹ Lee does not contest the tax assessment itself but states that SPS's valuation is "contradicted by the previous representations made by Select Portfolio in the United States Bankruptcy Court." Dkt. No. 15 at 1-2.

Lee states "it is unknown if [her] claims against the Defendant will exceed $75,000.00 or not" and requests that the Court remand this action to state court. Dkt. No. 12 at 2. Plaintiff's husband, Charlie Lee, signed an affidavit stating that, due to hurricane damage, he "believe[s] it would be veryhard to sell the [Property] for more than $80,000 in its current condition." Dkt. No. 17 at 4 ¶ 3. Mr. Lee also states he "do[es] not believe that any houses [in the neighborhood] have sold for over $100,000.00." Id. Furthermore, Plaintiff Lee argues that because she and her husband are joint tenants with a right of survivorship, her interest in the Property is "less than one half of the market value," because "it is difficult to borrow money against an undivided interest, and because . . . both of the joint owners have the right to own and possess the property." Dkt. No. 17 at 2. Finally, Lee argues that, contrary to SPS's contention, her interest is not 100 percent of the Property's fair market value because her husband could sell his interest in the Property to someone else. Dkt. No. 17 at 1-2. In summary, Lee assesses her interest in the Property to be less than $40,000, which is below the $75,000 jurisdictional requirement.

SPS argues that since Lee and her husband are joint tenants, both have a "100 percent interest" in the property. Dkt. No. 16 at 2. As such, SPS argues, "even if the property value was $100,000.00, then the amount in controversy is that amount, since the Plaintiff has a 100% interest." Id.

The Eleventh Circuit has held that, "in the removal context where damages are unspecified, the removing party bears the burden of establishing the jurisdictional amount by a preponderance of the evidence." Lowery v. Ala. Power Co., 483 F.3d 1184, 1208 (11thCir. 2007). In a case where the plaintiff, the master of the complaint, does not want to be in federal court and provides little information about the value of her claims, "a good-faith estimate of the stakes is acceptable if it is plausible and supported by a preponderance of the evidence." Oshana v. Coca-Cola Co., 472 F.3d 506, 511 (7th Cir. 2006). "Once the defendant in a removal case has established the requisite amount in controversy, the plaintiff can defeat jurisdiction only if 'it appears to a legal certainty that the claim is really for less than the jurisdictional amount.'" Id. (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938)).

While the parties have cited and the Court has found no cases directly on point, i.e. in the joint tenancy context, the Court concludes that SPS, as the removing party, has shown by a preponderance of the evidence that the amount in controversy requirement is met. The Court finds instructive Georgia Farm Bureau Mutual Insurance Co. v. Franks, 739 S.E.2d 427, 431 (Ga. Ct. App. 2013). There, the Georgia Court of Appeals rejected an insurer's argument that its insured, a joint tenant with right of survivorship, had a fifty-percent ownership interest such that his recovery was limited to a fraction of the policy limits.

Although one who owns property with another as joint tenants with right of survivorship is commonly (and confusingly) referred to as having a "one-half undivided interest," this is not in all ways the equivalent of each having a 50 percent ownership interest. SeeSams v.McDonald, 117 Ga. App. 336, 340-341(1)(b), 160 S.E.2d 594 (1968).

The properties of a joint estate are derived from its unity, which is fourfold: the unity of interest, the unity of title, the unity of time, and the unity of possession; or, in other words, joint-tenants have one and the same interest, accruing by one and the same conveyance, commencing at one and the same time, and held by one and the same undivided possession.... The principal distinguishing characteristic of estates in joint-tenancy is, that on the death of one the right in the estate survives to the other to the exclusion of the heirs and representatives of the deceased joint-tenant.

(Citations and punctuation omitted.) Id. Thus, although ownership is shared, the title and interest are not divided into fractional shares. Id. It follows that, although [the first joint tenant with right of survivorship] also had the same rights as [the second joint tenant with right of survivorship] to use and possess the property, [the second

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