McDaniel v. JPMorgan Chase Bank, N.A.
| Decision Date | 07 December 2012 |
| Docket Number | CIVIL ACTION NO. 1:12-CV-392 |
| Court | U.S. District Court — Eastern District of Texas |
| Parties | DONALD MCDANIEL, Plaintiff, v. JPMORGAN CHASE BANK, N.A. and CODILIS & STAWIARSKI, P.C., Defendants. |
Pending before the court is Plaintiff Donald McDaniel's ("McDaniel") Opposed Motion to Remand (#7). McDaniel seeks remand to state court due to the lack of complete diversity of citizenship between the parties, rendering this court without subject matter jurisdiction. Having reviewed the pending motion, the submissions of the parties, the pleadings, and the applicable law, the court is of the opinion that remand is warranted.
On July 31, 2012, McDaniel filed his original petition in the 1st Judicial District Court of Newton County, Texas, asserting claims for violations of the Texas Debt Collection Act ("TDCA") and breach of contract and seeking a temporary restraining order, temporary injunction, and declaratory judgment against Defendant JPMorgan Chase Bank, N.A. ("JPMorgan Chase"). It is undisputed that Plaintiff McDaniel is a citizen and resident of Texas. JPMorgan Chase is a national association with its main office in Ohio. Defendant Codilis & Stawiarksi, P.C. ("C&S"), is also a citizen of Texas.
McDaniel alleges that on September 8, 2003, he obtained a home mortgage loan from Southtrust Mortgage Corporation ("Southtrust") by signing a promissory note (the "Note") in the amount of $152,250.00, which was secured by an FHA Deed of Trust (the "Deed"). McDaniel asserts that Southtrust assigned the Note to JPMorgan Chase without providing McDaniel documentation or indicating the assignment in the county records. McDaniel contends that he made the monthly mortgage payments and paid monthly FHA insurance premiums, and in early 2005, JPMorgan Chase made and collected on an insurance claim from FHA on McDaniel's mortgage in the amount of $156,492.66, which satisfied the sums secured by McDaniel's Deed. He further alleges that, despite this fact, JPMorgan Chase did not release the Deed or the Note, but continued to collect FHA premiums from McDaniel.
In 2012, McDaniel maintains that he was the victim of identity theft and his account with JPMorgan Chase was compromised, but that arrangements were made with JPMorgan Chase to bring his account current. JPMorgan Chase, however, allegedly refused to accept payments and initiated foreclosure proceedings. McDaniel was notified by C&S that a foreclosure sale on the property was to occur on August 7, 2012. On July 31, 2012, McDaniel filed the instant suit.
On August 10, 2012, JPMorgan Chase removed the case to this court on the basis of diversity of citizenship, alleging that complete diversity exists among the real parties in interest and that the amount in controversy exceeds $75,000.00, exclusive of interest and costs. JPMorgan Chase asserts that because C&S was fraudulently joined as a defendant to defeat diversity, it should be dismissed as a party to this action and its citizenship ignored for jurisdictional purposes. On September 7, 2012, McDaniel filed a motion to remand the case to state court, contending thatC&S was properly joined, and, therefore, because complete diversity does not exist among the parties, federal jurisdiction is lacking.
"'Federal courts are courts of limited jurisdiction.'" Rasul v. Bush, 542 U.S. 466, 489 (2004) (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). "'They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree.'" Rasul, 542 U.S. at 489 (quoting Kokkonen, 511 U.S. at 377 (citations omitted)). 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.), cert. denied, 534 U.S. 993 (2001) (citing Kokkonen, 511 U.S. at 377); see also Hertz Corp. v. Friend, __ U.S.__, __, 130 S. Ct. 1181, 1194 (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. See 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).
When considering a motion to remand, "[t]he removing party bears the burden of showing that federal jurisdiction exists and that removal was proper." Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002); accord DaimlerChrysler Corp. v. Cuno, 547U.S. 332, 342 n.3 (2006); Gutierrez v. Flores, 543 F.3d 248, 251 (5th Cir. 2008); In re Hot-Hed Inc., 477 F.3d 320, 323 (5th Cir. 2007); Guillory v. PPG Indus., Inc., 434 F.3d 303, 308 (5th Cir. 2005); Boone, 416 F.3d at 388. "'This extends not only to demonstrating a jurisdictional basis for removal, but also necessary compliance with the requirements of the removal statute.'" Roth v. Kiewit Offshore Servs., Ltd., 625 F. Supp. 2d 376, 382 (S.D. Tex. 2008) (quoting Albonetti v. GAF Corp. Chem. Grp., 520 F. Supp. 825, 827 (S.D. Tex. 1981)); accord Crossroads of Tex., L.L.C. v. Great-West Life & Annuity Ins. Co. , 467 F. Supp. 2d 705, 708 (S.D. Tex. 2006); Smith v. Baker Hughes Int'l Branches, Inc., 131 F. Supp. 2d 920, 921 (S.D. Tex. 2001). "Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant." Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) (citing 28 U.S.C. § 1441(a)); see Aetna Health Inc. v. Davila, 542 U.S. 200, 207 (2004); Halmekangas, 603 F.3d at 294; Gutierrez, 543 F.3d at 251. "The removal statute ties the propriety of removal to the original jurisdiction of the federal district courts." Frank v. Bear Stearns & Co., 128 F.3d 919, 922 (5th Cir. 1997); see 28 U.S.C. § 1441(a); Hoskins v. Bekins Van Lines, 343 F.3d 769, 772 n.2 (5th Cir. 2003). Because removal raises significant federalism concerns, the removal statutes are strictly and narrowly construed, with any doubt resolved against removal and in favor of remand. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941); Gutierrez, 543 F.3d at 251; Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281-82 (5th Cir. 2007); In re Hot-Hed Inc., 477 F.3d at 323.
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 controversy exceeds $75,000.00, exclusive of interest andcosts. See 28 U.S.C. §§ 1331, 1332; Arbaugh v. Y & H Corp., 546 U.S. 500, 513 (2006); Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89 (2005); Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005); Halmekangas, 603 F.3d at 294; McDonal, 408 F.3d at 181. In order to determine whether jurisdiction is present in a removed action, the claims set forth in the state court petition are considered as of the date of removal. See Wis. Dep't of Corr. v. Schacht, 524 U.S. 381, 391 (1998); Campbell v. Stone Ins., Inc., 509 F.3d 665, 669 n.2 (5th Cir. 2007); McGowin v. ManPower Int'l, Inc., 363 F.3d 556, 558 n.1 (5th Cir. 2004); Manguno, 276 F.3d at 723. In removed cases where, as here, there is no suggestion that a federal question is involved, subject matter jurisdiction exists only if there is complete diversity among the parties and the amount in controversy exceeds $75,000.00. See 28 U.S.C. § 1332; Lincoln Prop. Co., 546 U.S. at 89; Exxon Mobil Corp., 545 U.S. at 552; Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996); Halmekangas, 603 F.3d at 294; Heritage Bank v. Redcom Labs., Inc., 250 F.3d 319, 323 (5th Cir.), cert. denied, 534 U.S. 997 (2001). Complete diversity requires that no plaintiff be a citizen of the same state as any defendant. See Exxon Mobil Corp. , 545 U.S. at 552; Caterpillar Inc., 519 U.S. at 68; Wallace v. La. Citizens Prop. Ins. Corp., 444 F.3d 697, 702 (5th Cir. 2006); Heritage Bank, 250 F.3d at 323. Furthermore, removal is appropriate only if none of the parties properly joined and served as defendants are citizens of the state in which the action was brought. See 28 U.S.C. § 1441(b); Lincoln Prop. Co., 546 U.S. at 89; Gasch, 491 F.3d at 281; Crockett v. R.J. Reynolds Tobacco Co., 436 F.3d 529, 531-32 (5th Cir.), cert. denied, 548 U.S. 907 (2006).
In the case at bar, although there is no dispute that McDaniel and Defendant JPMorgan Chase are citizens of different states and that more than $75,000.00 is at issue, complete diversitymay be lacking in this case because Defendant C&S is a citizen of Texas. Therefore, to establish the existence of diversity jurisdiction, JPMorgan Chase must show that C&S was improperly or fraudulently joined as a defendant to this action. See Crockett, 436 F.3d at 532; Guillory, 434 F.3d at 307-08; Hawthorne Land Co. v. Occidental Chem. Corp., 431 F.3d 221, 224-25 (5th Cir. 2005), cert. denied, 549 U.S. 811 (2006); Heritage Bank, 250 F.3d at 323; Hart v. Bayer Corp., 199 F.3d 239, 246 (5th Cir. 2000). "The removing party bears the heavy burden of proving that non-diverse defendants have been fraudulently joined to defeat diversity, either by showing that (1) there has been outright fraud in the plaintiff's recitation of jurisdictional facts, or (2) there is no possibility that the plaintiff would be able to establish a cause of action against the non-diverse defendants in state court." Burden v. Gen. Dynamics Corp., 60 F.3d 213, 217 ...
To continue reading
Request your trial