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Alley Brothers, LLC v. Krishnan

United States District Court, E.D. Texas, Sherman Division

April 16, 2019

ALLEY BROTHERS, LLC
v.
MURALIDHARAN KRISHNAN, ET AL.

          Nowak, Judge

          MEMORANDUM ADOPTING REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          MAZZANT, JUDGE

         Came on for consideration the report of the United States Magistrate Judge in this action, this matter having been heretofore referred to the Magistrate Judge pursuant to 28 U.S.C. § 636. On December 13, 2018, the report of the Magistrate Judge (Dkt. #26) was entered containing proposed findings of fact and recommendations that Plaintiff's Expedited Motion to Remand (Dkt. #9) be granted, and Plaintiff's Motion for Sanctions (Dkt. #10) and Defendants' Motions for Sanctions (Dkts. #15; #20) each be denied. Having received the report of the Magistrate Judge, having considered Defendants' Objections (Dkt. #30), Plaintiff's Application and Verified Proof of Reasonable and Necessary Fees (Dkt. #28), and having conducted a de novo review, the Court is of the opinion that the Magistrate Judge's report should be adopted as set forth herein. Furthermore, currently pending before the Court is Plaintiff's additional “Motion for Sanctions (Rule 11)” (Dkt. #27). Having considered the subsequent Motion for Sanctions, Defendants' Response (Dkt. #31), and all other relevant pleadings, the Court finds Plaintiff's additional Motion for Sanctions (Dkt. #27) should be denied.

         RELEVANT BACKGROUND

         The underlying facts of this case have been set forth previously; as such, the Court merely recaps Defendants' prior removal attempts and the motions being considered herein.

         The instant case is Defendants' third attempt to remove a post-foreclosure eviction proceeding from state court to the Eastern District of Texas. Plaintiff initiated an eviction proceeding on March 28, 2018, in Justice Court of Precinct 4 of Collin County, Texas, related to the property located at 8528 Maltby Court, Plano, Texas 75204 (the “Property”). On April 13, 2018, Defendants removed the state court case. Alley Brothers, LLC v. Krishnan, et al., No. 4:18-cv-258 (Dkt. #1) (E.D. Tex. Apr. 13, 2018). On July 27, 2018, the undersigned remanded the case to the Justice Court. Id. at (Dkt. #37). After the Court's first remand of the state court case, the state court set the eviction proceeding for a pretrial conference to take place on August 16, 2018. On August 14, 2018, Defendants once again attempted to remove the eviction proceeding. Alley Brothers, LLC v. Krishnan, et al., No. 4:18-cv-577 (Dkt. #1 at 1-2) (E.D. Tex. Aug. 14, 2018). The undersigned again remanded this matter on September 6, 2018. Id. at (Dkt. #10). On October 16, 2019, Defendants removed the eviction proceeding for a third time (Dkt. #1 at p. 1), alleging new developments justified the removal (Dkt. #1 at p. 3). Plaintiff once more moved for remand and also requested the imposition of sanctions on October 24, 2018 (Dkts. #9; #10). On November 13, 2018, Defendants filed responses to both motions (Dkts. #13; #14), and a separate Motion for Sanctions against Plaintiff (Dkt. #15). On November 26, 2018, Defendants filed an additional Motion for Sanctions (Dkt. #20), to which Plaintiff responded on November 28, 2018 (Dkt. #22), and on December 10, 2018, Defendants filed a reply (Dkt. #24). The Magistrate Judge entered a Report and Recommendation on December 13, 2018 (Dkt. #26). The Report recommended Plaintiff's Motion to Remand be granted because: (1) the Court has already twice determined that it lacks subject matter jurisdiction over this matter, and a subsequent removal cannot be based upon the same ground - that is, the same “pleading or event that made the case removable.” (2) Defendants' assertion that § 1443 is an appropriate vehicle for the removal of the instant action is meritless; (3) Defendants' (third) Notice of Removal is untimely because over thirty days have now passed from when Defendants were served, and Defendants' assertion that correspondence from the state court constituted “other paper” was meritless. The Report also found that Plaintiff's Motion for Sanctions should be denied because: (1) under Rule 11, Plaintiff did not provide notice to Defendants the required twenty-one (21) days prior to filing its Motion for Sanctions; and (2) section 1927 is not intended to apply to non-attorney pro se litigants. The Report did, however, find that a pre-filing injunction was warranted under 28 U.S.C. § 1651(a), and Plaintiff should receive from Defendants its just costs and any actual expenses incurred as a result of the instant (third) removal under section 1447(c). The Report finally recommended that Defendants' Motions for Sanctions should be denied for failure to enumerate any specific, sanctionable conduct.

         OBJECTIONS TO REPORT AND RECOMMENDATION

         A party who files timely written objections to a magistrate judge's report and recommendation is entitled to a de novo review of those findings or recommendations to which the party specifically objects. 28 U.S.C. § 636(b)(1)(C); Fed.R.Civ.P. 72(b)(2)-(3).

         At the outset, the Court overrules Defendants' “blanket” objections to the Report (Dkt. #30 at p. 1). “Parties filing objections must specifically identify those findings [to which they object]. Frivolous, conclusive or general objections need not be considered by the district court.” Nettles v. Wainwright, 677 F.2d 404, 410 n.8 (5th Cir. 1982) (en banc), overruled on other grounds by Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415 (5th Cir. 1996) (en banc); Chase Bank USA, N.A. v. McLain, No. 1:12-CV-353, 2013 WL 713404, at *1 (E.D. Tex. Feb. 26, 2012).

         Motion to Remand

         Defendants assert three objections to the recommendation that this matter be remanded: (1) “[t]his court is blindly ignoring and/or blind to the fraud of [Plaintiff and Plaintiff's counsel] and also the fraud of earlier case defendants JPMC et al [sic] (of 4:15-CV-632-RC-KPJ) and FRAUD by Treyson Brooks and/or Don Bush and the relevant case laws” (Dkt. #30 at p. 2) (emphasis in original); (2) “Motion to Remand should be denied based on Artful Pleading Doctrine” because “removal preempts their state claims since [Plaintiff] [is] covering up [its] fraud along with the earlier case defendants JPMC, BDFTE, others” (Dkt. #30 at pp. 4-5); and (3) “[a]ny paper (ATT-C) by lower court (JP Court) and which is result of the CONTINUOUS/Third attempt by Zaidis in CONTINUING the FRAUD (3rd attempt) which makes this other paper eligible for removing and Zaidis should have asked the JP Court to withdraw that letter or cancelled their lawsuit with prejudice” (Dkt. #30 at p. 6) (quotations removed).

         Defendants' fraud allegations are wholly unfounded in the record, and further are irrelevant to the findings in the Report. The Magistrate Judge recommended that this matter be remanded because the Court lacks subject matter jurisdiction, and further, because Defendants were untimely in seeking removal. Insofar as Defendants argue that their fraud claims allow the Court to exercise jurisdiction over this matter by virtue of the “Artful Pleading Doctrine, ” it is well established under existing law that Defendants' answer and any counterclaims asserted by Defendants cannot be considered in determining the existence of removal jurisdiction. Stump v. Potts, 322 Fed.Appx. 379, 380 (5th Cir. 2009); Tex. ex rel. Bd. of Regents of Univ. of Tex. Sys. v. Walker, 142 F.3d 813 n.2 (5th Cir. 1998). Defendants' continued assertion that correspondence from the Justice of the Peace constitutes “other paper” is also meritless (Dkt. #30 at p. 6). See also Chambers v. Bielss, CIV.A.3:08CV372KC, 2008 WL 5683483, at *4 (W.D. Tex. Dec. 8, 2008). Each of Defendants' objections related to the issue of remand are overruled.

         Defendants' Request for Sanctions

         Defendants argue that the Report's finding as to their request for sanctions is erroneous because Defendants “timely and properly filed their Notice of Service of Motion for Rule 11 Sanctions against Zaidis/Reeder indicating that they brought this entire lawsuit fraudulently after fraudulently buying the property of Krishnans['] using forged/fraudulent documents. . . . And Zaidi spoke with Krishnans within days of fraudulent foreclosure. . . they continued to move ahead with that fraud which was warned to them much in advance and also in the motion for sanctions” (Dkt. #30 at p. 6). The record demonstrates, as the Report found, that while Defendants' Motion details their alleged compliance with the notice requirements of Rule 11, Defendants raise ...


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