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U.S. Bank National Association v. First Morgan

United States District Court, D. New Mexico

October 31, 2017

U.S. BANK NATIONAL ASSOCIATION, as Trustee for CHASE MORTGAGE FINANCE CORPORATION MULTICLASS MORTGAGE PASS-THROUGH CERTIFICATES CHASEFLEX TRUST SERIES 2006-1, Plaintiff,
v.
FIRST MORGAN and UNKNOWN TENANTS, Defendants.

          M. Dylan O'Reilly Holly Agajanian Miller Stratvert, P.A. Santa Fe, New Mexico Attorneys for the Plaintiff

          ORDER OF REMAND

         THIS MATTER comes before the Court on the Magistrate Judge's Order to Show Cause, filed September 20, 2017 (Doc. 13)(“Show Cause Order”). On March 27, 2017, Plaintiff U.S. Bank National Association, as Trustee for Chase Mortgage Finance Corporation Multiclass Mortgage Pass-Through Certificates Chaseflex Trust Series 2006-1 (“U.S. Bank”) filed its Complaint for Quiet Title to Real Property, filed March 27, 2017, in U.S. Bank Nat'l Ass'n v. First Morgan, D-101-CV-2017-99837 (First Judicial District Court, County of Santa Fe, State of New Mexico), in file at July 28, 2017 (Doc. 1 at 5-8)(“Complaint”). The Complaint seeks to quiet U.S. Bank's title to property “commonly described as 830 Paseo de Don Carlos, Santa Fe, NM 87501.” Complaint at 2. On July 28, 2017, “J Brown Successor to First Morgan” removed the case to federal court. Notice for Removal, filed July 28, 2017 (Doc. 1 at 1-3)(“Notice of Removal”).

         Noting that the Notice of Removal is insufficient to demonstrate that the Court has subject-matter jurisdiction, the Honorable Kirtan Khalsa, United States Magistrate Judge, issued the Show Cause Order on September 20, 2017, which directs First Morgan, if it is a business entity, to obtain counsel authorized to practice law before the Court, to cause such counsel to formally enter an appearance, and to show cause in writing why the Court should not remand the Case for lack of subject-matter jurisdiction. See Show Cause Order at 4. In the alternative where First Morgan is a natural person asserting his or her own legal rights pro se, the Show Cause Order directs First Morgan to enter an appearance pro se and to respond to the Show Cause Order. See Show Cause Order at 4. In either alternative, the Show Cause Order required First Morgan to respond by October 3, 2017. See Show Cause Order at 4.

         On October 2, 2017, Defendant filed a Notice of Affidavit by James Brown, filed October 2, 2017 (Doc. 15)(“Brown Aff.”). The Court liberally construes it as First Morgan's response to the Show Cause Order. For the reasons that follow, the Brown Aff. does not demonstrate that the Court has subject-matter jurisdiction. Accordingly, the Court will remand the case to the state court in which U.S Bank originally filed its Complaint.

         LAW REGARDING SUBJECT-MATTER JURISDICTION

         It is a well-known principle that courts may examine their subject-matter jurisdiction at any time in the proceedings. See Tuck v. United Services Auto Ass'n, 859 F.2d 842, 844 (10th Cir. 1988). See also 28 U.S.C. § 1447(c)(“If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.”). Federal removal jurisdiction is statutory in nature and must be strictly construed. See Shamrock Oil & Gas v. Sheets, 313 U.S. 100, 108 (1941). A removing party has the burden of demonstrating the existence of federal jurisdiction by a preponderance of the evidence. See Karnes v. Boeing Co., 335 F.3d 1189, 1193-94 (10th Cir. 2003).

         “J Brown successor to First Morgan” removed this case to federal court on the basis of diversity jurisdiction. See Notice of Removal at 3. 28 U.S.C. § 1332 sets forth the statutory authority for diversity jurisdiction in federal court, and provides, in relevant part, that “[t]he district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between . . . citizens of different States.” 28 U.S.C. § 1332(a)(1)-(2).

         Regarding the amount in controversy, a defendant's notice of removal must include a good-faith, plausible allegation that the amount in controversy exceeds the jurisdictional threshold. See Dart Cherokee Basin Operating Co. v. Owens, 135 S.Ct. 547, 553-54 (2014). In other words, the “defendant must affirmatively establish jurisdiction by proving jurisdictional facts that ma[k]e it possible that $75, 000 [is] in play.” McPhail v. Deere & Co., 529 F.3d 947, 955 (10th Cir. 2008)(emphasis in original). In considering whether the amount-in-controversy requirement has been satisfied, courts may rely on their “judicial experience and common sense[.]” Roe v. Michelin N.A., Inc., 613 F.3d 1058, 1062 (11th Cir. 2010). In regard to the diversity-of-citizenship requirement, plaintiffs must, as a general rule, specifically allege the citizenship of each defendant. See 13B Charles A. Wright, Arthur R. Miller, Edward H. Cooper, Federal Practice and Procedure § 3611, at 517-18 (2d ed. 1984). A negative statement that a party is not a citizen of a particular state is not sufficient. See Wright & Miller, supra § 3611, at 517-18.

         ANALYSIS

         The Court is uncertain what to make of Brown's assertion that he is the “Successor to First Morgan, ” Notice of Removal at 1, but the Court construes it as an assertion that Brown somehow acquired First Morgan's property interest such that First Morgan is only a nominal defendant while Brown is “the real party defendant in interest.” La Russo v. St. George's University School of Medicine, 747 F.3d 90, 96-97 (2d Cir. 2014)(holding that a real party defendant in interest is entitled to remove a case to federal court). Under this construction, Brown represents himself pro se, so the Court need not determine whether Brown is eligible to represent First Morgan. The Court concludes that Brown has failed to demonstrate that the Court has subject-matter jurisdiction, so the Court will remand the case.

         I. THE COURT DOES NOT HAVE DIVERSITY JURISDICTION.

         In the Notice of Removal, Brown asserts, without more, an amount in controversy of $54, 058, 180.00. See Notice of Removal at 3. Brown also asserts that the “Defendants are not a resident of New Mexico” and that the “Defendants are diverse, ” see Notice of Removal at 3, because none of the “‘parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought, '” Notice of Removal at 3 n.2 (quoting 28 U.S.C. § 1441(b)(2)). Because $54, 058, 180.00, in the context of this action to quiet title to a single lot in a subdivision in Santa Fe, New Mexico, did not, in Magistrate Judge Khalsa's judicial experience and common sense, appear to be a good-faith, plausible estimate of the amount in controversy, and she gave Brown the opportunity to provide evidence establishing his estimate's validity. See Show Cause Order at 2-3. See also Dart Cherokee Basin Operating Co. v. Owens, 135 S.Ct. at 554 (“Evidence establishing the amount is required by § 1446(c)(2)(B) only when the plaintiff contests, or the court questions, the defendant's allegation.”). Because Brown's assertions regarding diversity are legally insufficient, Magistrate Judge Khalsa gave Brown an opportunity to remediate that deficiency by responding to the Show Cause Order. See Show Cause Order at 3.

         The Brown Aff. does not address Magistrate Judge Khalsa's jurisdictional concerns. Instead, it contains a number of queries and statements that are irrelevant to the Court's subject- matter jurisdiction, see, e.g., Brown Aff. at 2 (“is it not true, i believe, whomever has a vested interest in said case should reply post haste so it can be determined who or what is before this Court?”); id. at 3 (“i James, a man, believe my claim is before the Court. i James, a man, intend to do no harm. i James, a man, intend not to trespass. i James, a man, take said Order [to Show Cause] under advisement.”), and a “verified” statement that “James” “intend[s] to amend, ” Brown Aff. at 1. Consequently, the Court agrees with Magistrate Judge Khalsa and concludes that Brown's assertion that his claim is worth $54, 058, 180.00 is implausible such that Brown has not included a good-faith, plausible allegation that the case satisfies diversity-jurisdiction's amount-in-controversy requirement.

         In addition to not properly alleging the requisite amount in controversy, Brown does not properly allege diversity of citizenship. Brown and U.S. Bank may well be “citizens of different States, ” 28 U.S.C. § 1332(a)(1), but nothing in the record indicates that is so. The information in the Complaint does not allow the Court to determine the citizenship of either U.S. Bank or First Morgan, and the Complaint does not mention Brown at all. The Notice of Removal contains only an allegation that “Defendants are not a resident of New Mexico, ” Notice of Removal at 3, and an allegation that __ because 28 U.S.C. § 1441's in-state-defendant rule is satisfied __ the parties are diverse, see Notice of Removal at 3 & n.2. The Brown Aff. provides no relevant information regarding Brown's, U.S. ...


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