United States District Court, N.D. Texas, Dallas Division
FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE
UNITED STATES MAGISTRATE JUDGE
L. HORAN UNITED STATES MAGISTRATE JUDGE
case has been referred to the undersigned United States
magistrate judge for pretrial management under 28 U.S.C.
JPMorgan Chase Bank, N.A. (“Chase”) removed this
action from County Court at Law Number Two, Dallas County,
Texas, to the United States District Court for the Northern
District of Texas, Dallas Division, under 28 U.S.C.
§§ 1332, 1441 and 1446 and asserts that
co-defendant NTNF, Inc.'s (“NTNF”)
citizenship should be disregarded for purposes of diversity
because it is merely a nominal party that has been improperly
Court's direction, see Dkt. No. 5, Plaintiff
Alma Cruz filed a brief explaining whether, as Chase argues
in its Notice of Removal, NTNF was improperly joined and, if
so, should be dismissed from this lawsuit and whether subject
matter jurisdiction therefore exists based on the complete
diversity between any remaining, properly joined parties,
see Dkt. No. 11. Chase did not file a reply and the
time to do so has passed.
undersigned concludes that, disregarding the improperly
joined defendant, complete diversity of citizenship exists
between all properly-joined parties, and the Court has
subject matter jurisdiction.
February 4, 2019, Plaintiff Alma Cruz filed her Original
Petition and Application for Temporary Restraining Order
(“the “Petition”) in County Court at Law
No. 2 in Dallas County, Texas, styled Alma Cruz v. NTNF,
Inc., Bank of America, N.A., and JPMorgan Chase Bank,
N.A., Cause No. CC-19-00737-B (the “State Court
Action). Plaintiff seeks to set aside the foreclosure of real
property located at 4400 Flamingo Way, Mesquite, Texas 75150.
She asserts claims for violations of the Texas Debt
Collection Act and Texas Property Code and for breach of
contract against Chase and Bank of America, N.A.
(“BofA”). See Dkt. No. 1-1.
also alleges a Breach of Fiduciary Duty Claim against NTFN.
See Dkt. No. 1-1 at 16. She alleges that,
[a]s an entity steering the financing of its newly
constructed homes to a mortgage banker, NTFN had a fiduciary
duty to bring a mortgage banker in to finance the transaction
(the Loan) who would obtain a mortgage loan for Plaintiff on
the best possible price and terms, and to fully disclose all
financial benefit to NTFN or other persons from such
financing arrangement. On information and belief, Plaintiff
would show that all such benefits to NTFN were not adequately
disclosed to Plaintiff, and that the cost of credit to
Plaintiff was higher than otherwise would have been necessary
had Plaintiff not been steered to dealing with NTFN and its
assignee(s) in regard to the Loan. As a mortgage banker, NTFN
had an ongoing fiduciary duty to Plaintiff to obtain a
mortgage loan on the best price and terms possible. If in
fact there was an assignment of the Loan to Chase Manhattan
Mortgage Corporation breached that duty, in part in the
apparent selection of Chase and/or BofA as a mortgagee and/or
mortgage servicer, and is liable to Plaintiff for the damages
incurred by Plaintiff in the acts and omissions of Chase
and/or BofA or other parties in relation to the Loan,
including the failure of Chase and/or BofA and/or such other
parties to deal in good faith in attempting to modify and
collect the Loan. At the time of the origination of the Loan
or within a reasonable time thereafter, NTFN was charged with
knowledge of the pattern and practice of Chase and BofA's
disregard (including their respective affiliate entities) of
applicable law in the servicing of mortgage loans, and should
not have attempted to assign ownership and/or servicing of
the Loan to Chase Manhattan Mortgage corporation, thus
jeopardizing Plaintiff's ownership and use of the
removed the case to federal court based solely on diversity
of citizenship under 28 U.S.C. § 1332(a). See
Dkt. No. 1 at 2. It contends that complete diversity exists
because Plaintiff is a citizen of Texas, Chase is a citizen
of Ohio, BofA is a citizen of North Carolina, and NTFN
“was improperly joined and, therefore, its citizenship
should be disregarded for diversity jurisdiction
purposes.” Id. at 4.
argues that NTFN was improperly joined to defeat jurisdiction
because Plaintiff cannot establish a claim against it. The
sole cause of action Plaintiff asserts against NTFN - the
original lender on Plaintiff's mortgage loan - is for
breach of fiduciary duty. Chase argues that Plaintiff cannot
establish a breach of fiduciary duty claim against NTFN
because, as a matter of law, there is no fiduciary duty
between a mortgage lender and a borrower. Chase also contends
that Plaintiff's claim against NTFN is barred by the
statute of limitations. See Id. at 4-8.
response is almost verbatim the same as the plaintiffs'
response quoted by this Court in Snowden v. Wells Fargo
Bank, N.A., No. 3:18-cv-1797-K-BN, 2018 WL 441794 (N.D.
Tex. Aug. 27, 2018). Compare Dkt. No. 11 at 1-7 to
Snowden, 2018 WL 441794, at *3 - 6. In short,
Plaintiff argues that she can establish a claim against NTFN
and, relying on Kelly v. Gaines, 181 S.W.3d 394
(Tex. App. - Waco 2005), rev'd by Gaines v.
Kelly, 235 S.W.3d 179 (Tex. 2007)), argues that there is
a fiduciary duty between a mortgage lender and borrower. She
also argues that her claim is not time barred because the
statute of limitations should be tolled under the discovery
rule. See Dkt. No. 11.
courts have an independent duty to examine their own subject
matter jurisdiction. See Ruhrgas AG v. Marathon Oil
Co., 526 U.S. 574, 583-84 (1999); McDonal v. Abbott
Labs., 408 F.3d 177, 182 n.5 (5th Cir. 2005)
(“[A]ny federal court may raise subject matter
jurisdiction sua sponte.”).
defendant may remove an action filed in state court to
federal court if the action is one that could have originally
been filed in federal court. See 28 U.S.C. §
1441(a). And a defendant may remove a case that includes a
claim arising under the Constitution, laws, or treaties of
the United States (within the meaning of 28 U.S.C. §
1331) and a claim not within the Court's original or
supplemental jurisdiction or that has been made nonremovable
by statute, so long as the action would be removable without
the inclusion of the nonremovable claim. See Id.
§ 1441(c)(1). Statutes that authorize removal are meant
to be strictly construed, and any doubt as to the propriety
of removal should be resolved in favor of remand. See
Hood ex rel. Miss. v. JP Morgan Chase & Co., 737
F.3d 78, 89 (5th Cir. 2013); In re Hot-Hed Inc., 477
F.3d 320, 323 (5th Cir. 2007).
removing party bears the burden of establishing jurisdiction.
See Miller v. Diamond Shamrock Co., 275 F.3d 414,
417 (5th Cir. 2001). A federal court's jurisdiction is
limited, and federal courts generally may hear a case of this
nature only if it involves a question of federal law or where
diversity of citizenship exists between the parties.
See 28 U.S.C. §§ 1331, 1332. “As a
general rule, absent diversity jurisdiction, a case will not
be removable if the complaint does not affirmatively allege a
federal claim.” Beneficial Nat'l Bank v.
Anderson, 539 U.S. 1, 6 (2003). “[T]he basis upon
which jurisdiction depends must be alleged affirmatively and
distinctly and cannot be established argumentatively or by
mere inference.” Ill. Cent. Gulf R. Co. v. Pargas,
Inc., 706 F.2d 633, 636 (5th Cir. 1983) (citation and
internal quotation marks omitted). “If at any time
before final judgment it appears that the district court
lacks subject matter jurisdiction, the case shall be
remanded.” 28 U.S.C. § 1447(c).
U.S.C. § 1332 creates federal subject matter
jurisdiction where diversity of citizenship exists between
the parties, where each plaintiff's citizenship is
diverse from each defendant's citizenship, and the amount
in controversy exceeds $75, 000. 28 U.S.C. §§
1332(a), (b). Failure to allege adequately the basis of
diversity requires remand. See Stafford v. Mobil Oil
Corp., 945 F.2d 803, 805 (5th Cir. 1991). If no amount
of damages has been alleged in the state court petition, the
defendant must prove by a preponderance of the evidence that
the amount in controversy exceeds the jurisdictional minimum.
See 28 U.S.C. § 1446(c)(2); De Aguilar v.
Boeing Co., 47 F.3d 1404, 1409 (5th Cir. 1995). And,
where diversity jurisdiction requires that the parties be
“citizens of different States, ” 28 U.S.C. §
1332(a)(1), the Court cannot exercise jurisdiction if any
plaintiff shares the same citizenship as any defendant,