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Vargas v. Martin

United States District Court, S.D. Texas, Brownsville Division

July 6, 2017

JULIE MARTIN, et al, Defendants.



         I. Procedural and Factual Background

         The matter before the Court in this diversity action is Defendant's Motion for Summary Judgment. [Doc. No. 14]. This lawsuit concerns the real property known as 1274 Alta Mesa Blvd, Brownsville, Texas 78526 (“Property”) located in Cameron County, Texas. The Plaintiff claims to be the owner of the property after purchasing the property from a third-party in 2015. At the time this suit was filed, Plaintiff pleaded that the property had been his residential homestead since May 11, 2015. The Defendants are Bank of America, N.A. (“BOA”) and Julie Martin (“Martin”) in her capacity as substitute trustee.

         Defendant BOA alleges that non-parties to the suit (“Borrowers”) obtained a loan to purchase the Property on August 27, 2002 by virtue of a promissory note in the original amount of $61, 509 secured by a Deed of Trust recorded on September 9, 2002. [Ex. A‒3; Ex. A‒4]. The Borrowers defaulted on their loan, and BOA sent the Borrowers a Notice of Default and Intent to Accelerate on September 15, 2015, threatening to initiate foreclosure proceedings if the borrowers did not cure their default before October 25, 2015. [Ex. A‒5]. After the Borrowers defaulted on their loan, BOA sent the Borrowers a Notice of Foreclosure Sale on June 9, 2016, notifying the Borrowers that the Property would be sold at a foreclosure sale scheduled for July 5, 2016. [Ex. A‒6]. On July 4, 2016, BOA sent the Borrowers a Notice of Recession of Acceleration of Loan Maturity rescinding the acceleration of the debt and maturity of the note. [Ex. A‒7]. Thus, the foreclosure sale was cancelled and has not been subsequently held.

         The Plaintiff subsequently filed this lawsuit against Defendant BOA and Defendant Martin on June 29, 2016 in Texas state court, alleging a wrongful foreclosure claim, an action to quiet title, and a request for injunctive relief. Per 28 U.S.C. § 1441, Defendant BOA removed this lawsuit from state court on diversity grounds.

         II. Legal Standard

         Summary judgment is warranted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “The movant bears the burden of identifying those portions of the record it believes demonstrate the absence of a genuine issue of material fact.” Triple Tee Golf, Inc. v. Nike, Inc., 485 F.3d 253, 261 (5th Cir. 2007) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-25 (1986)). Once a movant submits a properly supported motion, the burden shifts to the non-movant to show that the court should not grant the motion. Celotex Corp., 477 U.S. at 321-25.

         The non-movant then must provide specific facts showing that there is a genuine dispute. Id. at 324; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A dispute about a material fact is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The court must draw all reasonable inferences in the light most favorable to the nonmoving party in deciding a summary judgment motion. Id. at 255. The key question on summary judgment is whether a hypothetical, reasonable factfinder could find in favor of the nonmoving party. Id. at 248.

         III. Analysis

         1. Whether Subject Matter Jurisdiction is Proper

         Federal courts are duty-bound to examine the basis of subject matter jurisdiction. Union Planters Bank Nat. Ass'n v. Salih, 369 F.3d 457, 460 (5th Cir. 2004). Jurisdiction is a threshold matter, and without jurisdiction the court cannot proceed in any cause. Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94 (1998) (citing Ex parte McCardle, 74 U.S. 506, 514 (1868)). The Plaintiff has pleaded that he is a Texas resident and that the amount in controversy exceeds $75, 000. Bank of America is a national banking association with its main office in North Carolina and is therefore a citizen of North Carolina. See Wachovia v. Schmidt, 546 U.S. 303, 318 (2006) (holding that pursuant to 28 U.S.C. § 1348, a national bank is a citizen of the state in which its main office is located). Defendant Martin is a resident of Texas.

         Defendant BOA removed this matter from state court based upon diversity between it and the Plaintiff. Defendant BOA argues that Defendant Martin is improperly joined. A “district court is prohibited by statute from exercising jurisdiction over a suit in which any party, by assignment or otherwise, has been improperly or collusively joined to manufacture federal diversity jurisdiction.” Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004) (emphasis deleted). Improper joinder occurs when the plaintiff is unable to establish a cause of action against the non-diverse defendant. Id. The court may conduct a 12(b)(6)-type analysis to determine whether the complaint states a claim under state law against the in-state defendant. Id. The court must be satisfied that there is “no reasonable basis . . . to predict that the plaintiff might be able to recover against an in-state defendant.” Id. The citizenship of a defendant who is improperly joined need not be considered when determining whether there is complete diversity. Cook v. Wells Fargo Bank, N.A., 3:10-CV-0592-D, 2010 WL 2772445, at *4 (N.D. Tex. July 12, 2010).

         In the instant case, the Plaintiff makes no claims against Defendant Martin, nor does Plaintiff allege any facts that suggest that any claim is being asserted against Defendant Martin. Furthermore, under Texas law, a trustee under a deed of trust is not a necessary party in a suit to prevent a foreclosure. See Tex. Prop. Code ยง 51.007. There is no reasonable basis for predicting that Plaintiff might be able to recover against this in-state defendant. Defendant Martin is improperly joined. Finally, Plaintiff has not even responded to this argument or filed a motion to remand. In essence, Plaintiff has conceded that Defendant BOA's position on this argument is correct. ...

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