OAT Tr., LLC v. Elite Inv. Grp., LLC
| Decision Date | 08 September 2020 |
| Docket Number | CIVIL ACTION NO. 20-554-WBV-MBN SECTION: D (5) |
| Parties | OAT TRUSTEE, LLC v. ELITE INVESTMENT GROUP, LLC, ET AL. |
| Court | U.S. District Court — Eastern District of Louisiana |
Before the Court is a Motion to Remand, filed by OAT Trustee, LLC, in its capacity as trustee for Girod Titling Trust ("Plaintiff").1 The Motion is opposed,2 and Plaintiff has filed a Reply.3 After considering the briefs submitted by the parties and the applicable law, for the reasons expressed below, the Court concludes that Worley Claims Services, LLC has not met its burden of proving federal subject matter jurisdiction. As such, the Motion to Remand is GRANTED and this matter is REMANDED to the 21st Judicial District Court for the Parish of Tangipahoa, State of Louisiana.
This is the third case filed in this Court based upon a lease dispute between Elite Investment Group, LLC ("Elite") and Worley Claims Services, LLC ("Worley"). The instant case concerns Plaintiff's February 12, 2020 Verified Petition for Declaratory Judgment and Request for Writ of Sequestration, filed in Louisiana statecourt against Elite, Worley and Jason Adams.4 Plaintiff alleges that Girod Titling Trust ("Girod"), is the holder and owner of a September 24, 2015 promissory note in the original principal amount of $5.1 million (the "Note"), executed by Adams and Elite and made payable to First NBC Bank in New Orleans, Louisiana ("FNBC").5 To secure the indebtedness evidenced by the Note, Elite executed a mortgage (the "Mortgage") on September 24, 2015, over immovable property located at 303 Timber Creek in Hammond, Louisiana (the "Timber Creek property").6 Plaintiff alleges that on September 24, 2015, Elite executed an Assignment of Leases and Rents in favor of FNBC, assigning all of its present and future rights, title interest and remedies in, to and under any and all leases and rents of all or a portion of the Timber Creek property.7 Plaintiff asserts that the Assignment of Leases and Rents specifically prohibits Elite from cancelling, terminating, or accepting the surrender or substitution of any lease without prior written consent of the lender.8
Plaintiff further alleges that, by order dated April 28, 2017, the Federal Deposit Insurance Corporation ("FDIC") was appointed as Receiver for FNBC.9 Through several transfers, Girod became the current holder of the Note, the Mortgage, and the Assignment of Leases and Rents.10 Plaintiff claims that the Timber Creek property is subject to an Agreement for NNN Lease of Real Property (the "2015 Lease"), dated September 25, 2015, between Elite, as lessor, and Worley,as lessee.11 Plaintiff alleges that Worley paid the monthly rent for "the year of September 2017-2018," but has refused to make any monthly rent payments since October 2018.12 Plaintiff alleges that Worley continued to occupy the premises despite its refusal to pay the rent.13
On October 25, 2018, Elite filed a Complaint in this Court against Worley, seeking to accelerate the rent due under the 2015 Lease.14 Elite asserted that this Court had diversity subject matter jurisdiction over the case under 28 U.S.C. § 1332. Worley answered the suit and denied the existence of a valid lease, claiming that the 2015 Lease was executed without authority by Mike Worley, one of its former officers.15 Girod filed a Complaint in Intervention, asserting that it was the holder and owner of the Mortgage and that it had been assigned the Assignment of Leases and Rents.16 On August 1, 2019, Worley moved to deposit $600,290.41 into the registry of the Court, which was the amount of rent due under the 2015 Lease at that time.17 The Court granted the request, and ordered the Clerk of Court to accept Worley's deposit of $600,290.41, as well as any additional monthly rental deposits made by Worley.18 On October 3, 2019, the case was dismissed without prejudice for lack of subject matter jurisdiction based upon Elite's motion and "recent disclosures by Worley Claims Services, LLC, regarding the citizenship of its members."19
On September 16, 2019, shortly before the dismissal of Elite's case, Worley filed a Complaint in this Court against Elite, seeking a declaration that the 2015 Lease was null and seeking damages for unjust enrichment.20 Worley also alleged that this Court had diversity jurisdiction over the case under 28 U.S.C. § 1332. Elite answered the suit and filed a counterclaim against Worley, again seeking an acceleration of the rent owed under the 2015 Lease.21 On November 8, 2019, Plaintiff filed a Motion For Leave to File Complaint in Intervention, seeking to assert its right to all of the rents that Worley had deposited into the registry of the Court up to that time, which totaled $702,667.92.22 Plaintiff subsequently withdrew the Motion, in lieu of complying with the Court's December 11, 2019 Order requiring Plaintiff to substitute its proposed Complaint in Intervention with a pleading that adequately alleged the citizenship of the parties for purposes of diversity jurisdiction.23 On February 4, 2020, upon motion by Worley, the Court ordered that the funds deposited in the registry of the Court be transferred from Civ. A. No. 18-9985 to Civ. A. No. 19-12626.24
On February 10, 2020, Elite and Worley reached a resolution during a settlement conference with the Magistrate Judge.25 On February 11, 2020, Worley filed a Consent Motion to Approve Stipulated Final Judgment26 and a ConsentMotion to Refund Funds Deposited With the Court,27 both of which the Court granted.28 The Court issued a Stipulated Final Judgment, as provided by the parties, declaring that the 2015 Lease was unenforceable because Mike Worley did not have authority to enter into a lease with Elite on Worley's behalf, and denying Elite's motion for summary judgment.29 The Stipulated Final Judgment also dismissed with prejudice all other claims of the parties arising out of the cause of action.30 On February 11, 2020, the Court issued an Order directing the Clerk of Court to disburse the funds held in the registry of the Court to Worley via a check in the principal amount of $967,306.77.31
On February 12, 2020, Plaintiff filed the instant suit against Elite, Worley, and Adams in state court.32 Plaintiff asserts in the Petition that through the Assignment of Leases and Rents, Girod has a security interest in all rents to occupy the Timber Creek property, including the "back rent" that was deposited into the registry of this Court.33 Plaintiff seeks a writ of sequestration, ordering the Sheriff of Tangipahoa Parish to seize the back rent during the pendency of the action, which totals $967,306.77.34 Plaintiff also seeks a declaratory judgment that the back rent is due and payable to Girod as rent under the Assignment of Leases and Rents.35 Plaintiff asserts that Girod did not give Elite written approval to stipulate that the 2015 Leaseis invalid, which violates the terms of the Assignment of Leases and Rents.36 As such, Plaintiff seeks a declaratory judgment that any attempt by Elite to stipulate to the validity of the 2015 Lease was legally invalid and unenforceable.37
Worley removed the case to this Court on February 14, 2020, on the basis of federal question jurisdiction under 28 U.S.C. § 1331.38 Worley asserts that each of Plaintiff's claims implicate significant federal issues and, therefore, fall within the "arising under" federal question jurisdiction of this Court.39 Worley argues that, in order for state law claims to give rise to federal question jurisdiction, defendants must demonstrate: (1) resolving a federal issue is necessary to resolution of the state law claim; (2) the federal issue is actually disputed; (3) the federal issue is substantial; and (4) federal jurisdiction will not disturb the balance of federal and state judicial responsibilities.40 Worley asserts that Plaintiff's claim for sequestration implicates serious federal issues with federal implications, including: (1) whether the state court can exercise jurisdiction over the res of the funds held in the registry of this Court; and (2) whether the Tangipahoa Sheriff may seize property held in the registry of this Court, in potential violation of federal law, including 28 U.S.C. §§ 2041 & 2042.41 Alternatively, Worley asserts that this Court should exercise supplemental jurisdiction over this claim under 28 U.S.C. § 1367 because it relates to the settlement in Civ. A. No. 19-12626, Worley Claims Services, LLC v. Elite Investment Group, LLC,and this Court retained jurisdiction over the settlement and its implementation.42 Worley also argues that, in the alternative, the Court should exercise supplemental jurisdiction over this claim if the Court concludes that it has federal question jurisdiction over one of Plaintiff's claims for declaratory judgment.43
Worley asserts that Plaintiff's claim for a declaratory judgment that the $967,306.77 paid into the registry of this Court is back rent that is due and owing to Girod implicates the same federal issues with federalism implications as Plaintiff's claim for a writ of sequestration.44 Worley argues that Plaintiff's second claim for declaratory judgment, regarding Elite's attempt to stipulate to the invalidity of the 2015 Lease, also implicates serious federal issues because it is a collateral attack on the judgment issued by this Court and seeks to invalidate same.45 Alternatively, Worley asserts that this Court should exercise supplemental jurisdiction over the two claims for declaratory judgment because this Court retained jurisdiction over the prior settlement and the enforcement thereof.46 Worley also asserts that this Court should exercise supplemental jurisdiction over the declaratory judgment claims if the Court concludes that it has federal question jurisdiction over any of Plaintiff's other claims.47
Plaintiff filed the instant Motion to Remand on March 12, 2020, asserting that removal was improper because this Court lacks...
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