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Mack v. Plaza Home Mortgage, Inc.

United States District Court, N.D. Texas, Dallas Division

November 17, 2017

BYRON MACK, Plaintiff,
v.
PLAZA HOME MORTGAGE, INC., and TUESDAY REAL ESTATE, LLC, Defendants.

          MEMORANDUM OPINION ORDER

          JANE J. BOYLE UNITED STATES DISTRICT JUDGE

         Before the Court is Plaintiff's Motion to Remand. Doc. 10. For the reasons that follow, the Court GRANTS the motion.

         I.

         BACKGROUND[1]

         This case arises out of a foreclosure dispute. Plaintiff Byron Mack defaulted on his mortgage, resulting in foreclosure by his lender, Defendant Plaza Home Mortgage, Inc. (Plaza). Defendant Tuesday Real Estate, LLC (TRE) purchased Mack's home at the foreclosure sale. In August 2017, Mack filed this wrongful-foreclosure suit in Dallas County Court at Law No. 5. About a month later, Plaza removed the case to this Court based on diversity jurisdiction. Doc. 1, Notice of Removal. There is no dispute concerning the parties' state citizenship: Mack and TRE are Texas citizens and Plaza is a California citizen. The parties are not completely diverse as presently constituted because Mack, the plaintiff, and TRE, a defendant, are both Texas citizens. Plaza recognizes this, but argues TRE was improperly joined, so it should not count as a party in the Court's diversity-jurisdiction analysis. Id. at 3-4. And without TRE, Mack and Plaza are completely diverse, meaning Plaza would be entitled to remove the case to this Court. Id.

         The Court ordered the parties to show cause “why this case should not be dismissed for lack of subject matter jurisdiction.” Doc. 5, Order. Specifically, the Court asked the parties to address whether TRE was improperly joined. Id. The parties responded. Docs. 7-9. Mack then filed a motion to remand the case, Doc. 10, which is now ripe for resolution.

         II.

         LEGAL STANDARD

         “Federal courts are courts of limited jurisdiction.” Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). District courts “must presume that a suit lies outside this limited jurisdiction, and the burden of establishing federal jurisdiction rests on the party seeking the federal forum.” Id. Plaza is that party here.

         A. Removal Jurisdiction

         The federal removal statute, 28 U.S.C. § 1441(a), allows a defendant to remove any civil action to federal court if that action falls within the district court's original jurisdiction. This case was removed on the basis of diversity jurisdiction under 28 U.S.C. § 1332. A district court has diversity jurisdiction over “all civil actions where the matter in controversy exceeds the sum or value of $75, 000 . . . and is between . . . citizens of different States.” 28 U.S.C. § 1332(a)(1). But to invoke the statute, the parties must be completely diverse, meaning “each plaintiff must be of a different citizenship than each defendant.” Lowe v. Ingalls Shipbuilding, A Div. of Litton Sys., Inc., 723 F.2d 1173, 1177 (5th Cir. 1984).

         B. Improper Joinder

         If an in-state defendant is improperly joined, a court may disregard the in-state defendant's citizenship for the purpose of determining whether there is complete diversity. Cuevas v. BAC Home Loans Serv., LP, 648 F.3d 242, 249 (5th Cir. 2011). The burden to establish improper joinder is on the removing party, and it is a heavy one. Id.

         To establish improper joinder, the removing party must demonstrate “(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.” Smallwood v. Ill. Cent. Ry. Co., 385 F.3d 568, 573 (5th Cir. 2004). Plaza asserts only the second method, under which the removing party meets its burden by showing that ‚Äúthere is no reasonable basis ...


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