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Lynch v. JPMorgan Chase Bank

United States District Court, Fifth Circuit

December 3, 2013

MICHAEL T. LYNCH AND VICKI LYNCH, Plaintiffs,
v.
JPMORGAN CHASE BANK, ET AL., Defendants.

MEMORANDUM OPINION and ORDER

JOHN McBRYDE, District Judge.

The court has not been persuaded that it has subject matter jurisdiction over the above-captioned action. Therefore, the court is ordering the action remanded to the state court from which it was removed.

I.

Background

Plaintiffs, Michael T. Lynch and Vicki Lynch, initiated this action by filing their original petition in the District Court of Tarrant County, Texas, 48th Judicial District, naming as defendants JP Morgan Chase Bank, N.A., ("Chase") and American Homes 4 Rent Two, LLC ("AH4R"). AH4R removed the action, with Chase's consent, alleging that this court has subject matter jurisdiction by reason of diversity of citizenship, and that the amount in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, as contemplated by 28 U.S.C. ยง 1332.[1]

The allegations in the state court pleadings pertain to plaintiffs' property on Douglas Drive in Mansfield, Texas. Plaintiffs assert that Choice Homes, Inc., transferred the subject property to them on or about September 27, 2001, through a warranty deed and that plaintiffs executed a promissory note in favor of Mortgage Edge Corporation and also delivered a deed of trust. On February 2, 2009, an assignment of note and deed of trust was filed with the Tarrant County Clerk, which purported to assign the note and deed of trust for the subject property from Mortgage Electronic Registration System ("MERS") to Chase. The assignment indicated that MERS held the note as nominee for Mortgage Edge Corporation.

On or about April 2, 2013, Chase conducted a foreclosure sale of the subject property, and AH4R purchased the property. A substitute trustee's deed was filed with the Tarrant County Clerk, purportedly transferring the property from plaintiffs to AH4R. Plaintiffs assert that MERS did not own or hold the note on the subject property and that the Tarrant County records do not show the mortgage and note were ever assigned to MERS. Plaintiffs contend that because there was a break in the chain of title, Chase had no interest in the note or deed of trust and could not foreclose on the property, and therefore AH4R cannot evict plaintiffs. Plaintiffs assert that the assignment from MERS to Chase was void and that only Mortgage Edge Corporation, as "lender, " may invoke the power of sale under the deed of trust.

Plaintiffs assert claims against defendants to quiet title and for trespass to try title, and seek unspecified damages, attorney's fees, and a declaratory judgment that (1) Chase had no right to invoke the power of sale and (2) AH4R lacks any interest in the subject property.

II.

Basic Principles

The court starts with a statement of basic principles announced by the Fifth Circuit:

"The 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. 2002). "Moreover, 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."[2] Carpenter v. Wichita Falls Indep. Sch. Dist. , 44 F.3d 362, 365-66 (5th Cir. 1995). Any doubts about whether removal jurisdiction is proper must therefore be resolved against the exercise of federal jurisdiction. Acuna v. Brown & Root Inc. , 200 F.3d 335, 339 (5th Cir. 2000).

To determine the amount in controversy, the court ordinarily looks to the plaintiff's state court petition. Manguno , 276 F.3d at 723. If it is not facially apparent from the petition that the amount in controversy exceeds the required amount, the removing party must set forth summary judgment-type evidence, either in the notice of removal or in an affidavit, showing that the amount in controversy is, more likely than not, greater than $75, 000. Id .; Allen v. R & H Oil & Gas Co. , 63 F.3d 1326, 1335 (5th Cir. 1995). The amount in ...


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