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Champagne v. Cenlar FSB

United States District Court, E.D. Texas

June 17, 2019




         Pending before the court is Plaintiffs Jason Champagne and Brandy Champagne's (collectively, “Plaintiffs”) Opposed Motion to Remand (#5), wherein they request that the court remand this action to the 58th Judicial District Court of Jefferson County, Texas. Plaintiffs argue that Defendant Amerihome Mortgage Company, LLC (“Amerihome”), which removed this action to this court on January 14, 2019, not only failed to meet its burden of establishing complete diversity of the parties, but also that its Notice of Removal (#1) was untimely. After considering the motions, the submissions of the parties, the pleadings, and the applicable law, the court is of the opinion that Plaintiffs' Motion to Remand (#5) should be GRANTED.

         I. Background

         On November 30, 2018, Plaintiffs filed their original petition in the 58th Judicial District Court of Jefferson County, Texas, asserting claims for breach of contract, promissory estoppel, negligent misrepresentation, and violations of the Texas Deceptive Trade Practices Act and the Texas Debt Collection Act. It is undisputed that Plaintiffs are citizens and residents of the State of Texas. It is also undisputed that Defendant Amerihome is a Delaware limited liability company, the sole member of which is Aris Mortgage Hold Company, LLC, which is also a Delaware limited liability company with one member: A-A Mortgage Opportunities, LP, a Delaware limited partnership. Amerihome claims that none of A-A Mortgage Opportunities, LP's partners are citizens of Texas. Neither party identifies where Amerihome's principal place of business is located. Although Amerihome does not address the residency of Defendants Cenlar FSB (“Cenlar”) and Albertelli Law (“Albertelli”) in its Notice of Removal (#1), it claims in later filings that Cenlar, as a federal savings bank with its home office in New Jersey, is a citizen of New Jersey, and that Albertelli, as a professional association incorporated under Florida law with its principal place of business in Florida, is a resident of Florida. Plaintiffs argue that they pleaded in their original petition that Albertelli is a citizen of Texas. Plaintiffs do not contest Cenlar's New Jersey citizenship.

         The parties agree that Plaintiffs served their original petition on Amerihome by mail and that Amerihome received the petition on December 12, 2018. On January 14, 2019, Amerihome removed the case to this court on the basis of diversity of citizenship, alleging that complete diversity exists among the real parties in interest and that the amount in controversy exceeds $75, 000.00, exclusive of interest and costs. On January 24, 2019, Plaintiffs filed a motion to remand the case to state court, contending that Amerihome failed to address Albertelli's citizenship and, therefore, because complete diversity does not exist among the parties, federal jurisdiction is lacking. Plaintiffs also contend that Amerihome's Notice of Removal was untimely.

         II. Analysis

         A. Removal Jurisdiction

         “Federal courts are courts of limited jurisdiction.” Gunn v. Minton, 568 U.S. 251, 256 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)); accord Quinn v. Guerrero, 863 F.3d 353, 359 (5th Cir. 2017), cert. denied, 138 S.Ct. 682 (2018); Hotze v. Burwell, 784 F.3d 984, 999 (5th Cir. 2015), cert. denied, 136 S.Ct. 1165 (2016); Scarlott v. Nissan N. Am., Inc., 771 F.3d 883, 887 (5th Cir. 2014). “They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree.” Kokkonen, 511 U.S. at 377 (citations omitted). The court “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.” Settlement Funding, L.L.C. v. Rapid Settlements, Ltd., 851 F.3d 530, 537 (5th Cir. 2017) (citing Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir.), cert. denied, 534 U.S. 993 (2001)); accord Hertz Corp. v. Friend, 559 U.S. 77, 96 (2010); Clayton v. Conoco Phillips Co., 722 F.3d 279, 290 (5th Cir. 2013), cert. denied, 571 U.S. 1156 (2014). In an action that has been removed to federal court, a district court is required to remand the case to state court if, at any time before final judgment, it determines that it lacks subject matter jurisdiction. See 28 U.S.C. § 1447(c); Carlsbad Tech., Inc. v. HIF Bio, Inc., 556 U.S. 635, 638 (2009); Powerex Corp. v. Reliant Energy Servs., Inc., 551 U.S. 224, 231-32 (2007); Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567, 571 (2004); Spear Mktg., Inc. v. BancorpSouth Bank, 791 F.3d 586, 592 (5th Cir. 2015); African Methodist Episcopal Church v. Lucien, 756 F.3d 788, 793 (5th Cir. 2014).

         When considering a motion to remand, “[t]he removing party bears the burden of showing that federal jurisdiction exists and that removal was proper.” Barker v. Hercules Offshore Inc., 713 F.3d 208, 212 (5th Cir. 2013) (quoting Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002)); accord African Methodist Episcopal Church, 756 F.3d at 793; Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392, 397 (5th Cir. 2013); see 13E Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 3602.1 (3d ed. 2019). “This extends not only to demonstrating a jurisdictional basis for removal, but also necessary compliance with the requirements of the removal statute.” Roth v. Kiewit Offshore Servs., Ltd., 625 F.Supp.2d 376, 382 (S.D. Tex. 2008) (citing Albonetti v. GAF Corp. Chem. Grp., 520 F.Supp. 825, 827 (S.D. Tex. 1981)); accord Hernandez v. State Farm Lloyds, No. DR-16-CV-164-AM/CW, 2017 WL 8131570, at *2 (W.D. Tex. Sept. 19, 2017); Fort Worth & W. R.R. Co. v. Stevenson, No. 3:15-CV-0906-B, 2015 WL 3867906, at *1 (N.D. Tex. June 22, 2015). “Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) (citing 28 U.S.C. § 1441(a)); see Mumfrey, 719 F.3d at 397; In re 1994 Exxon Chem. Fire, 558 F.3d 378, 395 (5th Cir. 2009).

         “The removal statute ties the propriety of removal to the original jurisdiction of the federal district courts.” Frank v. Bear Stearns & Co., 128 F.3d 919, 922 (5th Cir. 1997); see 28 U.S.C. § 1441(a); Camsoft Data Sys., Inc. v. S. Elec. Supply, Inc., 756 F.3d 327, 333 (5th Cir. 2014), cert. denied, 135 S.Ct. 1162 (2015); Barker, 713 F.3d at 228. Because removal raises significant federalism concerns, the removal statutes are strictly and narrowly construed, with any doubt resolved against removal and in favor of remand. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941); Settlement Funding, L.L.C., 851 F.3d at 536; African Methodist Episcopal Church, 756 F.3d at 793; Barker, 713 F.3d at 212. In short, any “doubts regarding whether removal jurisdiction is proper should be resolved against federal jurisdiction.” Vantage Drilling Co. v. Hsin-Chi Su, 741 F.3d 535, 537 (5th Cir. 2014) (quoting Acuna v. Brown & Root Inc., 200 F.3d 335, 339 (5th Cir.), cert. denied, 530 U.S. 1229 (2000)); accord African Methodist Episcopal Church, 756 F.3d at 793; Barker, 713 F.3d at 212.

         B. Diversity Jurisdiction

         Federal courts have subject matter jurisdiction and are authorized to entertain causes of action only where a question of federal law is involved or where there is diversity of citizenship between the parties and the amount in controversy exceeds $75, 000.00, exclusive of interest and costs. 28 U.S.C. §§ 1331, 1332; Arbaugh v. Y & H Corp., 546 U.S. 500, 513 (2006); Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89 (2005); Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005); Energy Mgmt. Servs., LLC v. City of Alexandria, 739 F.3d 255, 258-59 (5th Cir. 2014). In order to determine whether jurisdiction is present in a removed action, the claims set forth in the state court petition are considered as of the date of removal. Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 594 (2013); Flagg v. Stryker Corp., 819 F.3d 132, 137 (5th Cir. 2016); Smith v. Bank of Am. Corp., 605 Fed.Appx. 311, 313-14 (5th Cir. 2015). In removed cases where, as here, there is no suggestion that a federal question is involved, subject matter jurisdiction exists only if there is complete diversity among the parties and the amount in controversy exceeds $75, 000.00. See 28 U.S.C. § 1332; Lincoln Prop. Co., 546 U.S. at 89; Exxon Mobil Corp., 545 U.S. at 552; Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996).

         Complete diversity requires that no plaintiff be a citizen of the same state as any defendant. Exxon Mobil Corp., 545 U.S. at 552; Lewis, 519 U.S. at 68; Vaillancourt v. PNC Bank Nat'l Ass'n, 771 F.3d 843, 847 (5th Cir. 2014). “In cases removed from state court, diversity of citizenship must exist both at the time of filing in state court and at the time of removal to federal court.” Uglunts v. Americare Servs., Inc., No. 3:12-CV-4388-D, 2013 WL 3809681, at *1 (N.D. Tex. July 23, 2013) (quoting Coury v. Prot, 85 F.3d 244, 249 (5th Cir. 1996)); see Borden v. Allstate Ins. Co., 589 F.3d 168, 171 (5th Cir. 2009). Furthermore, removal is appropriate only if none of the parties properly joined and served as a defendant is a citizen of the state in which the action was brought. African Methodist Episcopal Church, 756 F.3d at 793; In re 1994 Exxon Chem. Fire, 558 F.3d at 391; Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281 (5th Cir. 2007) (citing 28 U.S.C. § 1441(b)(2)).

         “When challenged on allegations of jurisdictional facts, the parties must support their allegations by competent proof.” Hertz Corp., 559 U.S. at 96-97 (citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936)). “The court has wide, but not unfettered, discretion to determine what evidence to use in making its determination of jurisdiction.” Hollinger v. Home State Mut. Ins. Co., 654 F.3d 564, 570-71 (5th Cir. 2011) (quoting Coury, 85 F.3d at 249); accord Preston v. Tenet Healthsys. Mem'l Med. Ctr., Inc. (“Preston II”), 485 F.3d 804, 817 (5th Cir. 2007). “In making a jurisdictional assessment, a federal court is not limited to the pleadings; it may look to any record evidence, and may receive affidavits, deposition testimony or live testimony concerning ...

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