Summary
holding that amount in controversy is the value of a delay in foreclosure
Summary of this case from Brown v. Ocwen Loan Servicing, LLCOpinion
CIVIL ACTION NO. 2:10cv357-MHT (WO).
July 23, 2010
OPINION AND ORDER
Plaintiffs James and Lisa Macks brought this lawsuit in state court seeking damages arising out of an attempted foreclosure on their home by defendants U.S. Bank National Association and Wells Fargo Bank. The banks removed this lawsuit under 28 U.S.C. §§ 1332, 1441, 1446 (diversity). The Mackses now move for remand to state court because the banks have failed to demonstrate that the $75,000 amount in controversy required for diversity jurisdiction has been met in this case. For the reasons that follow, the Mackses' remand motion will be granted.
I.
For purposes of removal pursuant to diversity-of-citizenship jurisdiction, where damages have not been specified by the plaintiff, a removing defendant has the burden of proving by a preponderance of the evidence that the $75,000 amount-in-controversy requirement is met. Leonard v. Enterprise Rent-a-Car, 279 F.3d 967, 972 (11th Cir. 2002). The court may not "speculate in an attempt to make up for the notice's failings."Lowery v. Alabama Power Co., 483 F.3d 1184, 1211 n. 63 (11th Cir. 2007).
In Pretka v. Kolter City Plaza II, Inc., ___ F.3d ___, ___, 2010 WL 2278358, at *1 (11th Cir. 2010) the Eleventh Circuit Court of Appeals explained that "Lowery was a case that involved removal procedures in the second paragraph of 28 U.S.C. § 1446(b), and the decision must be read in that context." Pretka rejected as dicta the Lowery court's statement that "the `receipt from the plaintiff' rule is not limited to removals made under the second paragraph of § 1446(b) but applies to first paragraph removals as well." Id. at *15. The Pretka court explained that, "The substantive jurisdictional requirements of removal do not limit the types of evidence that may be used to satisfy the preponderance-of-evidence standard." Id. at *8 (emphasis added). Accordingly, this court has placed no such limitation upon the types of evidence that may be utilized by the defendants in order to satisfy the preponderance-of-evidence standard.
Finally, "[r]emoval statutes are construed narrowly; where plaintiff and defendant clash about jurisdiction, uncertainties are to be resolved in favor of remand." Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994).
II.
In February 2007, the Mackses executed a promissory note and a mortgage with GMFS, LLC (the original lender), with Wells Fargo Bank instituted as the loan servicer. The mortgage was then sold to Mortgage Electronic Registrations Systems, Inc. In June 2008, Mortgage Electronic assigned the mortgage to U.S. Bank.
In 2009, the Mackses filed for Chapter 13 Bankruptcy. After that claim was denied, the Mackses' attorney contacted Wells Fargo to request that it allow them to make an effort to modify their loan and stay foreclosure proceedings under the Home Affordable Modification Program, a federal program designed to help financially struggling homeowners avoid foreclosure. The request was denied, and the Mackses were informed that only payment in full would stop foreclosure.
In January 2010, Wells Fargo notified the Mackses that it was increasing the interest rate on their loan and that a loan modification was not possible for them. Later that month, the Mackses received a notice from Wells Fargo asserting that they had defaulted on their loan, the entire balance of the mortgage and note was due, and foreclosure was to begin immediately. At the same time, U.S. Bank asserted that they own the mortgage and also attempted to foreclose upon the Mackses' home. Before either bank could foreclose, however, the Mackses filed this action in state court, seeking damages and requesting a temporary restraining order. After the state court granted the temporary order, the banks removed this case to federal court.
The Mackses argue that Wells Fargo and U.S. Bank have no right to pursue foreclosure at this time because the banks have failed to provide the mandatory pre-foreclosure default servicing required of companies that received funds under the Troubled Asset Relief Plan, a federal program that purchases assets and equity from financial institutions following the subprime mortgage crisis. The Mackses further argue that the banks have no right to pursue foreclosure at this time because they have failed to provide the mandatory pre-foreclosure default servicing required by the loan agreement. Additionally, the Mackses allege that the assignment between Mortgage Electronic and U.S. Bank is defective, void, or otherwise unenforceable and that the banks lack standing to foreclose.
The Mackses seek injunctive relief as well as damages stemming from wrongful foreclosure, malicious prosecution, and abuse of process. They also ask the court to continue a state-court temporary restraining order, thereby preventing foreclosure until their case might be heard.
III.
The Mackses do not specify the damages sought for any of their claims. U.S. Bank and Wells Fargo, nevertheless, contend that this case belongs in federal court. The banks argue that the opposing parties are from different States and the $75,000 amount-in-controversy requirement is met because "this case involves the acceleration by Defendants of a $90,250 promissory note secured by the mortgage against real property that Plaintiffs themselves recently valued at $135,000." Def.'s Resp. in Opp. to Remand at 1 (Doc. No. 17); see 28 U.S.C. § 1332. In making this argument, the banks focus on the value of injunctive relief, not the damages stemming from the Mackes' tort claims. The banks' argument does not persuade the court.
All parties concede that the "plaintiff-viewpoint rule" is the proper method for determining the amount in controversy when injunctive relief is sought. See Ericsson GE Mobile Commc'ns v. Motorola Commc'ns Elecs., Inc., 120 F.3d 216, 218-19 (11th Cir. 1997) (courts are "requir[ed] . . . to measure the object of the litigation solely from the plaintiff's perspective."). "[T]he value of the requested injunctive relief is the monetary value of the benefit that would flow to the plaintiff if the injunction were granted." Morrison v. Allstate Indemnity Co., 228 F.3d 1255, 1268 (11th Cir. 2000). The banks argue, however, that even from the Mackses' viewpoint the amount in controversy exceeds $75,000. They assert that the Mackses seek injunctive relief barring foreclosure on the property at issue and that, therefore, the value of the property determines the financial value at stake. To support this proposition, they citeWaller v. Professional Ins. Corp., 296 F.2d 545, 547 (5th Cir. 1961) ("when the validity of a contract or a right to property is called into question in its entirety, the value of the property controls the amount in controversy.") (emphasis added).
In Bonner v. City of Prichard, Ala., 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the Eleventh Circuit Court of Appeals adopted as binding precedent all of the decisions of the former Fifth Circuit handed down prior to the close of business on September 30, 1981.
Crucially, however, the Mackses do not challenge the validity of the mortgage in its entirety; they simply assert that "[o]ne of the defendants should prove ownership of the mortgage and debt prior to [the] foreclosure." Pl.'s Mot. to Remand at 3 (Doc. No. 12). As such, the Mackses seek a temporary restraining order until a final determination of the allegations within their complaint have been made on the merits. From the plaintiffs' perspective, then, the monetary value of the injunctive relief is not the entire value of the property; rather, it is the value of a delay in foreclosure. See James v. U.S. Bank Nat. Ass'n, 2009 WL 2170045, at *4-5 (M.D. Ala. July 17, 2009) (Thompson, J.) (holding that amount in controversy is the value of a delay in foreclosure); see also Carstarphen v. Deutsche Bank Nat'l Trust Co., 2009 WL 1537861, at *5 (S.D. Ala. June 01, 2009) (Steele, J.) (same). While delay may be very important to the Mackses, it is certainly worth much less than the property itself, and the court cannot simply rely on the value of the mortgage or the property to determine that amount.See James, 2009 WL 2170045, at *5; see also Carstarphen, 2009 WL 1537861, at *5 (determining that the court had "no basis" for valuating temporary restraining order above $75,000).
Therefore, U.S. Bank and Wells Fargo have failed to present any evidence that clearly establishes that the amount in controversy in this case exceeds the jurisdictional threshold of $75,000.
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Accordingly, it is the ORDER, JUDGMENT, and DECREE of the court that plaintiffs James Macks and Lisa Macks's motion to remand (Doc. No. 12) is granted and that, pursuant to 28 U.S.C. § 1447(c), this cause is remanded to the Circuit Court of Covington County, Alabama for want of jurisdiction.The clerk of the court is DIRECTED to take appropriate steps to effect the remand.
A copy of this checklist is available at the website for the USCA, 11th Circuit at www.cal 11.uscourts.gov Effective on April 9, 2006, the new fee to file an appeal will increase from $255.00 to $455.00. CIVIL APPEALS JURISDICTION CHECKLIST1. Appealable Orders: Appeals from final orders pursuant to 28 U.S.C. § 1291: 28 U.S.C. § 158Pitney Bowes, Inc. v. Mestre, 701 F.2d 1 365 1 28 U.S.C. § 636 In cases involving multiple parties or multiple claims, 54Williams v. Bishop, 732 F.2d 885 885-86 Budinich v. Becton Dickinson Co., 108 S.Ct. 1717 1721-22 100 L.Ed.2d 178LaChance v. Duffy's Draft House, Inc., 146 F.3d 832 837 Appeals pursuant to 28 U.S.C. § 1292(a): Appeals pursuant to 28 U.S.C. § 1292(b) and Fed.R.App.P. 5: 28 U.S.C. § 1292 Appeals pursuant to judicially created exceptions to the finality rule: Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 546 93 L.Ed. 1528Atlantic Fed. Say. Loan Ass'n v. Blythe Eastman Paine Webber, Inc., Gillespie v. United States Steel Corp., 379 U.S. 148 157 85 S.Ct. 308 312 13 L.Ed.2d 199 2. Time for Filing: Rinaldo v. Corbett, 256 F.3d 1276 1278 4 Fed.R.App.P. 4(a)(1): 3 THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD — no additional days are provided for mailing. Fed.R.App.P. 4(a)(3): Fed.R.App.P. 4(a)(4): Fed.R.App.P. 4(a)(5) and 4(a)(6): Fed.R.App.P. 4(c): 28 U.S.C. § 1746 3. Format of the notice of appeal: See also 3pro se 4. Effect of a notice of appeal: 4
Courts of Appeals have jurisdiction conferred and strictly limited by statute: (a) Only final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under , generally are appealable. A final decision is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." , 368 (11th Ci r. 1 983). A magistrate judge's report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. (c). (b) a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. (b). , (11th Cir. 1984). A judg ment which resolves all issues except matters, such as attorneys' fees and costs, that are collateral to the merits, is immediately appealable. 486 U.S. 196, 201, , , (1988); , (11th Cir. 1998). (c) Appeals are permitted from orders "granting, continuing, modifying, refusing or dissolving injunctions or refusing to dissolve or modify injunctions . . ." and from "[i]nterlocutory decrees . . . determining the rights and liabilities of parties to admiralty cases in which appeals from final decrees are allowed." Interlocutory appeals from orders denying temporary restraining orders are not permitted. (d) The certification specified in (b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court's denial of a motion for certification is not itself appealable. (e) Limited exceptions are discussed in cases including, but not limited to: , , 69S.Ct. 1221, 1225-26, (1949); 890 F.2d 371, 376 (11th Cir. 1989); , , , , (1964). The timely filing of a notice of appeal is mandatory and jurisdictional. , (11th Cir. 2001). In civil cases, Fed.R.App.P. (a) and (c) set the following time limits: (a) A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. must be filed in the district court within 30 days after the entry of the order or judgment appealed from. However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. Special filing provisions for inmates are discussed below. (b) "If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later." (c) If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion. (d) Under certain limited circumstances, the district court may extend the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time may be extended if the district court finds upon motion that a party did not timely receive notice of the entry of the judgment or order, and that no party would be prejudiced by an extension. (e) If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution's internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid. Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. Fed.R.App.P. (c). A notice of appeal must be signed by the appellant. A district court loses jurisdiction (authority) to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. (a)(4).