Henry v. Bank of America, N.A. et al, No. 4:2012cv00786 - Document 18 (N.D. Tex. 2012)

Court Description: Memorandum Opinion and Order: The court ORDERS that plaintiff's motion to remand be, and is hereby, granted. The court further ORDERS that the above-captioned action be, and is hereby, remanded to the state court from which it was removed. The court further ORDERS that any other motions pending in the above-captioned action be, and are hereby, denied as moot. (See order for specifics) (Ordered by Judge John McBryde on 12/28/2012) (ewd)

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Henry v. Bank of America, N.A. et al Doc. 18 U. DI S. STRI COURT CT NORTHERN DI 1 OF ''. VS STR CT fFXZ IN THE UN ITED STATES DIST ICT . C '. NORTHER DISTRICT OF EXAS N FORT WORTH DIVISI N FI=' '. JEP , , j 2 g2 8ggg ï E j h 7 t . ' C1ERK , ' - Pi 7. C' C f L,)j U S. ' .. 7 -7 '-. S RI -' C' xJ 8 . # ' Bh r --- - --'. - - TA SHA H EN RY , J fzky Jv ri )- ' tl - Plaintiff , NO . 4 :12-CV -786-A VS . BANK OF AMERICA , N .A ., ET AL ., Defendants . MEMORQNDUM OPINION and ORDER Now before the court is the motion to remand filed in the above-captioned action by plaintiff, Tasha Henry , after defendant Bank of America, N. . (' A ' BANA' removed the action to this courtx ') Having considered plaintiff's motion to remand and BANA 'S response , BANA 'S orig inal notice of removal and accompanying documents, plaintiff's original petition , and applicable legal z authorities, the court concludes that p laintiff's motion should be granted , and this action should be remanded to the state court from which it was removed . 1Pl ntf alo s NTFN l . (I ai if s ued nc E NTFN' a ( kn dee a t . Pe . t12.De e da t ' nd d own f nd n s' t a ) un ' fn n BANA ha alg dt tNTFN wa i r pe l oi d, ndBANA fld t no ieo r mo ls ey o s le e ha s mp o ryj ne a ie he tc f e va oll n isown be f t hal. 2Pl ntf fied an amended compl nti t sacton;howeve , s h ani ai if l ai n hi i r uc ended compl nti neary ai s l i i t t orgi pe ii a c ai no r e ntdif encesf om t orgi petton t coul dentcal o he i nal tton, nd ont ns elva fer r he i nal ii hat d af e t cour' anal s f ct he ts ysi. Dockets.Justia.com Backqround and Grounds for the Motion Plaintiff initiated this action by filing her orig inal petition against BANA apd NTFN , Inc. I' ' NTFN/ in the District 'I Court of Tarrant County, Texas, 342nd Judicial District, as Cause No . 342-262146-12 . BANA removed the action to this court , alleging that NTFN, a Texas citizen, was improperly joined in order to defeat diversity jurisdiction under 28 U. C. 5 1332, S. and that the requirements for diversity jurisdiction would be met if NTFN had not been named as a defendant . In its notice of removal, BANA also asserts that federal question jurisdiction pursuant to 28 U .S .C . 5 1331 exists because p laintiff's claims are based on or relate to the Fair Housing Act ('FHA/ ' '), United States Department of Housing and Urban Development ('HUD' ' ') régulations, #air Credit Reporting Act (UFCRA/ '), and the Real Estate Settlement and Procedures Act ('RESPA' ' '). Plaintiff filed a lotion to remand the action pursuant to 28 U .S .C . 1 447( c), clai ming that NTF was pro N perl joined, but y failing to address BANA 'S argument that federal question jurisdiction exists. BANA filed a response, arguing only that fedéral question jurisdiction exists,3 and failing to address any issues involving diversity jurisdiction. II. Analysis A. Basic Principles of Removal Pursuant to 28 U . S.C. 5 1441( a), a defendant may remove to federal court any state court action over which the federal district court would have original jurisdiction. nThe removing party bears the burden of showing that federal subject matter jurisdiction exists and that removal was proper.' Manguno v. ' Prudential Prop . Cas. Ins. Co ., 276 F.3d 720, 723 ( 5th Cir. 2001). nMoreover, because the effect of removal is to deprive the state court of an action properly before it , removal raises significant federalism concerns, which mandate strict construction of the removal statute .' Carpenter v . Wichita Falls ' Indep . Sch . Distw 44 F.3d 362, 365-66 ( 5th Cir. 1995) ( Citation omitted). Any doubts about whether removal jurisdiction is proper must therefore be resolved against the exercise of federal jurisdiction. Acunà v. Brown & Root Incw 200 F. 335, 339 ( 3d 5th Cir. 2000). 3l BANA ' r pons , i r n S es e t enewed t c e i f om isnotce ofr ovalt f al he ont ntons r t i em hat eder qu sinj rs cin e se be a eofHUD a FHA rgultons bu f ie t dic sisc n e to e to u idito xitd c us nd e a i , t ald o s us t o t n ins t tRESPA a FCRA as c e t df d r lq sinj idc i ha nd lo r ae e e a ueto urs iton. 3 Diversitv Ju risdictioh Pursuant to 2 8 U . . . 5 1332 S C - To establish jurisdiction pursuant to 28 U. . . 5 1332, BANA SC must establish complete diversity between the parties and an amount in controversy exceeding the sum or value of $75,O00 .00, exclusive of interest and costs . Assuming for the sake of argument that NTFN was improperly joined and the parties are therefore completely diverse , BANA has still not sufficiently alleged that the amount in cohtroversy exceeds $75,000.00. To determine the amount in controversy for the purpose of establishing diversity jurisdiction, the court ordinarily looks to the plaintiff 's state court petition . Manquno , 276 F . at 3d 723 . ' ' If it is not faciàlly apparent from the petition that the ) . amount in controversy is greater than $75,000. 00, the rèmoving party must set forth summary judgment-type evidënce, either in the notice of removal or in an affidav it , showing by a preponderance of the evidence that the amount in controversy exceeds that amount . Id .; A llen v . R & H Oi1 & Gas Co ., 63 F .3d 1326, 1335 ( 5ti Cir . 1995). The amount in controversy is measured trom the perspective of the plaintiff. Vraney v. Cnty. of Pinellas, 250 F.2d 617, 618 ( 5th Cir. 1958) ( per curiam) In an action for declaratory or injunctive relief, the amount in controversy is the n value of the object of the litigation,' or ' nthe value of the right to be protected gr the extent of the 4 injury to be preventedo' Leininger v. Leininqer, 705 F.2d 727, ' 729 ( 5th Cir. 1983). BANA contends that because plaintiff seeks injunctive relief to bar any foreclosure proceedings on the property , the minimum amount in controversy should be based on the fair . market value of the property, which BANA claims is 'at least $132,500. ' 00.' / Notice of Removal at 3 . Plaintiff's petition does not make a demand for a specific amount of damages, does not specify a dollar amount of recovery sought that is at least $75,000.00, and does not define with specificity the value of the right plaintiff seeks to protect or the extent of the injury plaintiff seeks to prevent . As a result , the court evaluates the true nature of plaintiff's èlaims to determine the amount actually in controversy between the partieà . The true nature of this àètion is to prevent BANA lrom taking possession of the propetty pursuant to its foreclosure proceedings , and to require BANA to set aside thë acceleration of note and reinstate the note without charges, penalties, or interest . A s the petition alleges, plaintiff pursues these goals by seeking ( a judgment preventing BANA from foreclosing on the 1) property; ( an accountiùg of transactions related to her loan; 2) ( an order setting aside the acceleration of the note and 3) reinstating the note without late charges, penalties, or 5 . ' . . % . interest; and an award of unspecified damages and attorney 's fees related to the foreclosure procçedings. Pet. at 22-23. BANA contends that the fair market value of the property should serve as the amount in controversy because plaintiff requests equitable relief to enjoin defendant from foreclosing on the property . Notice of Removal at 3c4 . BANA relies on the oft- cited argument that when equitable relief is sought, ' tlhe 'E amo unt in controversy is meas ured by t val of the object of he ue the litigation' and that when a mortgagor is attempting to ' protect his or her property , the fair market value of the property creates the amount in controversy . Id . The court is not persuaded by the argument that this figure supp lies the basis for p laintiff's interest in the property , especially given that plaintiff has noE pléaded how much equity she has in the pro/erty. BANA does not cite to, nor can the èourt discern, any such statement in the petiti6n to support a finding that the value of the property is the amount in controversy . That is, BANA's attribution of the $235,200 . figure as damages is an act 00 of its own doing--not plaintiff 's. T6 the extent that these statements suggest that the property value is the proper measure of the aiount controversy in this action, the court rejects that argumeni. * Plainly, the sole goal of plaintiff's action is to avoid or delay a foreclosure sale and to be able to retain possession of the property . Nothing is alleged that would assign a monetary value to plaintiff's accomplishment of those goals . While plaintiff appears to request equitable relief based on a claim that she is entitled to hold legal title in the property , she does not assert that such relief is based on a claim that she has outright ownership of the property , free from any indebtedness . ' . Indeed , plaintiff makes statements to suggest that her oknership of the property i. encumbered by a debt, as the amended complaint states that plaintiff contacted BANA and negotiated with BANA regarding a possible loan modification , and plaintiff also prays for the note to u be reinstated according to law without applicable late charges, penalties, and interest .' ' Pet . at 3-6, 23 . The value to plaintiff of her rights in the litigation is , at most, the value of her interest in the property , not the value 4The cour i f ii wih t unpubls Fit Cicui opi on, Natons a M ort LLC v. t s am lar t he ihed fh r t ni i tr g. Kn x,351F. p' 8 ( t Ci. 9) Thepe tn n po to ofNa i tr i t n r le o W alrv. o Ap x 44 5h r 200 . rie t rin tonsa ,n ur , eis n le Pr fl ns Co p.2 F.d 5 ,5 - (t Ci.1 ) Thsc ur h sprviusy e an d isras nig o I . r , 96 2 45 47 48 5h r 961 . i o t a e o l xplie t e o n f fndi W ale i pposiet det m i ngt amounti contovery i casess ast i t or i ng lr na t o er ni he n r s n uch he nsant a to Se Balw v. rc ' Sevii Co.No. 1lCV- 30A, lW L 88 35( D. x. a . c in. e le Ame ias r cng , 4: - 0 - 201 01 N. Te M r l 20ll . 4, ) . . ' of the property itself. Considering plaintiff's original petition and BANA 'S assertions , the court has not been provided with any infob mation fro which lt can deter m mine that the value to plaintiff of such relief is greater than $75,000.00. Thus, BANA has not established the value of plaintiff's interest in the property . Thus , after having evaluated the pleadings, and after reviewing applicable legal authorities, the court remains unpersuaded that the amount in controversy in this action meets or exceeds the amount required for diversity jurisdiction to exist . C. Federal Question Jurisdiction Pursuant to 28 U . . . 5 1331 S C A lederal court has federal question jurisdiction over an action only if na federal question appears on the face of the plaintiff 's wellpleaded complaint .' Elam v . Kan . City S. Ry . ' Co ., 635 F.3d 796, 803 ( 5th Cir . 2011). The complaint must establish that ufederal 1aw creates the cause of action or that the p laintiff's right to relief necessarily depends on resolution of a substantial question of federal law .' Empirë Healthchoice ' Assurance, Inc. v . Mcv+iqh, 547 U . 677, 690 ( S. 2006); Borden v . Allstate Ins. Co ., 589 F. 168, 172 ( 3d 5th Cir. 2009). Federal question jurisdiction does hot arise from the 'mere presence of a ' federal issue in a state càùse of action . ' Merrell Dow Pharms ., ' b Inc. v . Thompson , Duane Morris, LLP, (1986). See also Sinqh v . 804 , F . 334, 338 ( 3d 5th Cir . 2008). The Supreme Court has not ntreated 'federal issue ' as a password opening federal courts to any state action embracing a point federal law .' Grable & Sons Metal Prods ., Inc . v . Darue Enq 'q & ' Mfq., 545 U . 308, 314 ( S. 2005). While the Supreme Court has not provided a nsingle , precise definition of statutory narising under' jurisdiction, Merrell ' Dow , 478 U .S . at 808, has stated that uthe question is, does a state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain w ithout disturbing any congressionally approved balance of f ederal aéd state judicial responsi bilities.' Grable, 545 ' U. at S. Based on Gra ble, the Fifth Circult has set forth four fact6rs that must be present to establish federal question jurisdiction when there is a federal issue present in a state law claim : ( the resolution of the federal issue is necessary for 1) the resolution of the state issue; the federal issue is actually disputed; ( the federal issue is substantial; and 3) federal jurisdiction will not disturb the balance of federal and state judicial respoùsibilities. singh, 538 F. at 338. 3d 9 Alleqed Failure to Comply with HUD and FHA Regulations l. - Within Plaintiff 's Contract Claims BANA contends that federal question jurisdiction exists because plaintiff includes in her breach of contract claim that BANA violated provisions of HUD and FHA that regulate the note and deed of trust. Notice of Removal at 4. BANA also claims that jurisdiction exists because plaintiff requests an accounting of transactions related to her loan , pursuant to RESPA . Id . Finally , BANA claims that because plaintiff seeks damages related to her credit status, such 'damages are preempted by E ' FCRkI.' ' Id . Specifically , BANA in its response refers to plaintiff's allegations that BANA 'is not authorized to accelerate or ' foreclose if not so permitted by HUD regulétions' and that ' ' ' HUD regulations were and aré part of an integrated contract to which E BANAI is bound to comply .' Resp . at 1; Pet. at 8. BANA then ' cites plaintiff 's allegations surrounding BANA 'S alleged failure to èomply w ith FHA regulatibns by failihg to c6nduct a face-toface interv iew w ith plaintiff, failing to inform plaintiff of available assistànce , and refusing to accept partial paymehts . Notice of Removal at 2 7 Pet . at 9. BANA , however, provides little , if any , support or authority for its contentions that federal question jurisdiction exists in this action. 10 . ' . . . , ' . This court has found that federal question jurisdiction does not exist in cases very similar to this action , either because the federal issue was not substantial or actually disputed, or because exercising federal jurisdiction would disturb the balance between state and federal judicial responsibilities. Legqette v. Wash . Mut . Bank , F .A ., No . 3 :03-CV -2909-D , 2005 WL 2679699, at *4 ( D. Tex. Oct. N. 2005) ( nExercising federal jurisdiction over home foreclosure disputes typically governed by private contract RLd Stzte 1aW portends a Significant transfer Of judicial responsibilities from state to federal courts.o ; Buis v . Wells ' Farqo, N . ., 401 F . Supp . 612 ( . . Tex . 2005); Goffney v . Bank A zd N D of Am ., F . Supp . zd 2012 WL 4127952 ( D. Tex. Sept. 17, S. 2012). Both Buis and Leqqette are factually similar to this action . In Buis , the plaintiff asserted a wrongful foreclosure claim , alleg ing that the defendant breached a note and deed of trust by failing to comply with certain HUD regulations, such as fàiling to conduct a face-to-face interview and failing fo make a reasonable effort to conduct such an interv iew . Bu is, 401 F . s supp. at 614. The defendaht contended that jurisdiction was zd proper because the application and interpretation of the federal 5pl ntf i t sadi made asi iar i noti i ,a l ton.Pet a 9. ai if n hi on m l ,f dentcal lega i .t regul atiozs were a us ubstantial and necessar ele y ment of Plaintiff's àtate law claim .' Id . In Leqqette , the plaintiff ' alleged that the defendant breached the note and deed of trust by failing to comply with HUD regulations in failing to condùct a face-to-face interview, failing to inform the plaintiff of available assistance , and failing to conduct a loss mitigation . Legqette, 2005 WL 2679699 , at In Leqqette , the court found that each ground of the plaintiff's claim for wrong ful foreclosure and breach of contract nnecessarily ' turned on defendant 's obligations under federal ' law , specifically HUD and the National Housing Act ( k uuua, , and o that the parties had na genuine and reasonable disagreement over the ' validity , construction , or effect ' of the relevant HUD regulations .' Leqqette , 2005 WL 2679699, at *3 . The court thus ' determined that the federal issue was sufficiently substantial and disputed to satisfy the first two prongs of the Sinqh factors. The Buis court, quoting Leqgette, made the same determinàtion. Buisr F. Supp.zd at 6l7 C' F/om what the court can àscertaih, each basis for Buis's wbonéful foteclosure claim necessaril tur on Wèlls Far s obli y ns go' gations under f ederal law .'). ' Wh ile Leqqette and Buià note that the sole b asis for the plaintiffs' claims was the violation of federal regulations, such 12 is not the case in this action . While plaintiff refers to the regulations in her petition and bases some of her allegations for breach of contract, she also refers to violations of Texas law , and violations of the note and deed of trust itself . Plaintiff is clearly attempting to stop foreclosure proceedings by asserting a state law cause of action based on a note and deed of trust related to real property , which note and deed contain some provisions relating to federal regulations . In her breach of contract claim , she refers to specific terms of the note and deed of trust she contends BANA has breached, including terms stating that certain HUD regulations applied and may limit BANA 'S rights in some instances. Pet . at 7-8 . she also refers to FHA pr6visions regarding what àctions BANA may have been obligated to take prior to foreclosing on plaintiff's property . Id . at 9 . Plaintiff then goes on to allege various breaches of the note and deed of trust based on Texas law , and she challenges BANA 'S authority to accelerate the loan and foreclose under Texas law , all within her breach of contract claim . Though she has certainly referenced federal regulations as part of her state contract claim , they are not substantial federal issues sufficient to invoke federal jurisdiction over her claims. See Goffnev, 2012 WL 4127952, at *3 ( finding that even though defendants ' duties undér federal regulations may have been 13 disputed, the federal issues uare neither ' necessary ' nor 'substantialz' and that state contract 1aw controlled whether ' defendants' actions viôlatèd the note or deed of trùst at issue); Bovle v . Wells Farqo Bank , N . ., No . 4 : A 11-CV -4006, 2012 WL 289881 at *1-2, ( D . Tex. Jan. S. 2012) ( concluding that defendant Vailed tö show that state law claims based in part on violations of Home A ffordable Modification Program , Home Affordable Foreclosure Alternative, and Making Homes Affordable were sufficiently substantial or actually disputed to permit the court to exercise jurisdiction). Still, even if the court were to find that the federal issues in the complaint àrè sufficiently substantial and are disputed, E Tihe exercise of federal jurisdiction is subject to a possible veto . For the fçderal issue will ultimately qualify for a federal forum'only if federal jurisdiction is consistent with congressional judgment about the sound division of labor between the state and federal courts governing the application of 5 1331. Grable , 545 U .S . at 313-14 . Courts have recogpized that uforeclosure by private power E is! a traditional çreditor's remedy under state law .' Leqqette, 2005 WL 2679699, at *3 ' ( quoting Roberts v . Cameron-Brown Co., 556 F.2d 356, ( 5th Cir. 1977)). The regulation of foreclosure of real property 'has ' traditionally been the prov ince of states, despite federal 14 regulation of some sectors of the lending industry , and there are state law remedies available to protect mortgagors from unconscionable mortgages.' Buis, 401 F. Supp .zd at 617 ( ' quoting Leqgette, 2005 WL 2679699, at and Roberts, 566 F. at 361). 2d The Buis court went on to explain: E llt is quite conceivable that many persons . . . who seek to avoid foreclosure , or set aside foreclosure , would rely on alleged violations of HUD regulations to file actions in federal court ; or the financial institutions sued for wrongful foreclosure would rely on HUD regulations to remove state court actions to federal court . Such lawsuits necessarily could be tremendous in number . Nothing has been presented to the court by the parties that Congress has expressed an intent to have such foreclosure -related actions, which are ordinarily handled by state courts, transferred to or filed in federal court . Buis, Supp .zd at 617-18 . The Buis court determined that the defendant failed to meet its burden of establishing that the f . federal forum could entert:in the claim without disturbing the balance of federal and state judicial responsibilities. Id. ( Citing Roberts, 556 F. at 361 & n . which stated that HUD 2d 4, requirement: 'are not intended as legal prerequisites to ' foreclosure actions since foreclosures are governed by the terms of mortgage instructions and applicable state law') ' The Legqette court reached the same conclusion , noting that nwhether foreclosure is properly barred when a mortgagee fails to comply with federal loan serv icing regulations is a matter to be 15 determined by the terms of the mortgqge instructions an: applicable state law .' Legqette , 2005 WL 2679699, at *3 . ' also Myers v . Countrvwide Home Loans , Inc w See 368 F . Supp .zd 587 , 588-89 ( determining that a ucontractual incorporation of a federal standard E HUDI' involved only the state right of the ' performance of the contract, not a federal right). This action is extremely similar to b0th Buis and Legqette : allegations of breach of a note and deed of trust in the context of foreclosure ; references to the same HUD and FHA regulations ; and similar arguments from the parties as to whether federal question jurisdiction exists over the breach of contract claims because of the HUD and FHA regulations . The court thus concludes that the alleged violations of HUD and FHA regulations fall within plaintiff's state law breach of contract claim , an area of law traditionally handled by the states , and therefore , the court does not iave the jurisdi ction t entertai them. o n . 7 In its kotice of Removal, BANX claims thab because plaintiff see ks an accounting pursuant to RESPA , federal question jurisdiction exists. Plaintiff has not attempted to bring a ca use oj action allegi any vi ng olati ons of RESPA, and mentions RESPA only under her prayer: nDefendant E BANA) be ordered to render an accounting to Plaintiff of the amounts paid and owed 16 Pursuant to E RksPA).' pet. at 23 . certainly such a minbr ' reference cannot reach the level of usubstantial' and nactually ' disputed' required by Grable and Merrell Dow . Neither party is ' disputing the existence or meaning of RESPA, and BANX does not even address RESPA in its response to plaintiff 's motion to remand . Thus, plaintiff 's original petition does not nnecessarily turn on' or otherwise present a substantial federal ' issue . See Bass v . Am . Home Mortg . Serv icinq , Inc w No . 4 :11-CV - 633, 2012 WL 1142697, at *3 ( D . Tex . Apr. 4, 2012), adopted, E. 2012 WL 2565408 ( . Tex. July 2, 2012) ( E D. finding that where plaintiffs sought an accounting and made references to RESPA in their complaint, a federal cause of action was not raised). 3. FCRA Preemption In its notice of removal , BANA contends that because plaintiff refers to damages she has incurred or will incur from the uloss of creditworthiness' and her suffering credit ' reputation , that the FCRA preempts and creates a federal cause of action . Plaintiff hés not actually alleged any causes of action that relate to the FCRA . Generally , the FCRA preempts state law defamàtion or negligent reporting claims, neither of which were ' . . alleged here. See 15 U . C. 5 1681h ( S. e); Younq v . Ecuifax Credit Ihfo . Servsw 294 F. 631, 638 ( 3d 5th Cir. 2002). Thus, plaintiff's references to harm she may have suffered as a result 17 ' of foreclosure proceedings cannot create a substantial federal cause of action sufficient to invoke this court's jurisdiction under FCRA . BANA has failed to shpw that federal question jurisdiction exipts in this action, and has also failed to show that diversity jurisdiction exists. Consequently, the court is remanding this action to the state court from which it was removed . 11 1 . Order Therefore, The court ORDERS that plaintiff's motion to remand bè , and is hereby , granted . The court further ORDERS that the above -captioned action be , and is hereby , remanded to the state court from which it was removed . The court further ORDERX that any other motiöns pending in the above -captioned action be , and are e a' . reby , nied s moot . za z' ? '' . SIGNED Decee er 2 8 , 20 12 . JO ' . . ; * / y ? : ? C ; / i ' , . ' z , , 18 MC BRY ' v/ z ,, / . . . '' ' ' .' ed States Distr ' / Judg

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