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Alverson v. Wells Fargo Bank, N.A.

United States District Court, D. New Mexico

May 16, 2018

STEVEN ALVERSON, Plaintiff,
v.
WELLS FARGO BANK, N.A., Defendant.

          PROPOSED FINDINGS AND RECOMMENDED DISPOSITION

         THIS MATTER comes before the Court on Defendant's Motion to Dismiss Plaintiff's Complaint (Doc. 3), filed February 9, 2018, Plaintiff's Motion to Strike Defendant's Motion to Dismiss (Doc. 7), filed February 15, 2018, and Plaintiff's Motion to Remand (Doc. 8), also filed February 15, 2018. Because Plaintiff's Motion to Strike seeks denial of Defendant's Motion to Dismiss, asserting that the Court is without subject matter jurisdiction to consider the motion, (Doc. 18), the Court construes it as a response to the Motion to Dismiss.[1] Pursuant to 28 U.S.C. § 636(b), this matter has been referred to me for a recommended disposition. Doc. 12. Having carefully reviewed the material portions of the record, the Court recommends that this case be remanded to the First Judicial District Court.

         I. Background and Procedural Posture

         On January 5, 2018, pro se Plaintiff Steven Alverson (“Plaintiff” or “Mr. Alverson”) filed a Complaint for Violations of the Unfair Practices Act in the First Judicial District Court, County of Santa Fe, State of New Mexico. Doc. 1-1. Defendant Wells Fargo Bank, N.A. (“Defendant” or “Wells Fargo”) removed the case to this Court on February 6, 2018, asserting diversity jurisdiction. Doc. 1 at ¶ 4. In his Complaint, Plaintiff alleges that Defendant engaged in “unfair or deceptive trade practices” or “unconscionable trade practice” in violation of NMSA § 57-12-2 while attempting to collect a debt. Doc. 1-1 at ¶ 2. More particularly, he contends that Defendant obtained a foreclosure judgment in a state court proceeding without informing that court that it “did not own or possess any pecuniary interest in the Note.” See, e.g., Doc. 1-1 at ¶ 9. In his prayer for relief, Plaintiff asks the Court to “permanently enjoin Defendant from enforcing the foreclosure judgment and or in the alternative vacate said judgment, and or in the alternative restitution, and any and all remedies available under the principles of law and equity.” Doc. 1-1 at 18. The foreclosure judgment to which Plaintiff refers was obtained in an earlier state court action in the First Judicial District Court, cause number D-101-CV-2011-03297 (“the underlying foreclosure action”). See Doc. 1-1, ¶ 13 & Ex. B. The Court will take judicial notice of the First Judicial District Court's records in the underlying foreclosure action, Wells Fargo Bank, N.A. v. Alverson, case number D-101-CV-2011-03297, which is referenced by Plaintiff in his Complaint. See St. Louis Baptist Temple, Inc. v. Fed. Deposit Ins. Corp., 605 F.2d 1169, 1172 (10th Cir. 1979) (“[F]ederal courts in appropriate circumstances, may take notice of proceedings in other courts, both within and without the federal judicial system, if those proceedings have a direct relation to matters at issue.”).

         On May 8, 2014, the First Judicial District Court entered its Judgment, Decree of Foreclosure, Appointment of Special Master, and Order of Sale in the underlying foreclosure action, which involved real property located at 1301 Bartlet Court, Santa Fe, New Mexico (“the subject property”). See Wells Fargo Bank, N.A. v. Alverson, First Judicial District, State of New Mexico, D-101-CV-2011-03297 (May 8, 2014). The court reasoned therein that because Mr. Alverson, Plaintiff here, had “repeated[ly] fail[ed] to comply with [the] Court's orders and repeated[ly] fail[ed] to appear for Court hearings, ” a judgment in favor of Wells Fargo was warranted. Doc. 3-1 at 6. The court also made findings that: (1) Mr. Alverson had executed and delivered to Wachovia Mortgage FSB a Fixed-Rate Mortgage Note, which was in default; (2) that Wells Fargo was “the successor in interest to Wachovia Mortgage FSB”; and (3) that Wells Fargo was “entitled to enforce all rights and remedies of the Lender and Mortgagee.” Id. at ¶ 13-16. The court entered judgment against Mr. Alverson in favor of Wells Fargo for $745, 244.84[2] plus attorney fees, costs, and interest. Id. at ¶ 21(B). It also appointed a Special Master to advertise and sell the subject property. Id. at ¶ 21(D).

         Although Mr. Alverson did not appeal the foreclosure judgment, he moved the state court to vacate that judgment on April 8, 2015, pursuant to Rules 1-060(B) and 1-005, for failure to serve all parties and for lack of standing. Doc. 3-1 at 13. Additionally, he moved to dismiss the foreclosure complaint on June 16, 2015. See Wells Fargo Bank, N.A. v. Alverson, First Judicial District, State of New Mexico, D-101-CV-2011-03297 (June 16, 2015). The state court denied both post-judgment motions on December 2, 2016, and ordered that Wells Fargo “may immediately proceed with selecting and holding the foreclosure sale pursuant to the Judgment.” Doc. 3-1 at 25.

         Plaintiff appealed the denial of his Rule 1-060 motion, unsuccessfully, to the New Mexico Court of Appeals. Id. at 29. The New Mexico Court of Appeals concluded that “the prudential standing requirement was waived in this case by [Mr. Alverson's] failure to timely appeal from the foreclosure judgment” and, further, that “standing cannot be the basis for . . . collateral attack.” Id. at 30. The Court of Appeals also determined that the record did not support Mr. Alverson's contention that he did not receive notice of certain pleadings in the foreclosure action. Doc. 3-1 at 31. Mr. Alverson petitioned for a writ of certiorari with the New Mexico Supreme Court; however, his petition was denied on November 28, 2017. Id. at 35.

         Defendant now maintains in its Motion to Dismiss that the instant litigation is another “improper, continued attempt to re-litigate the State Court Action.” Doc. 3 at 3. It asks this Court to dismiss Plaintiff's Complaint on the following grounds: res judicata, collateral estoppel, the Rooker-Feldman doctrine, statute of limitation, and litigation privilege. Doc. 3 at 4-10. Plaintiff, on the other hand, contends that this Court lacks subject matter jurisdiction over the case and requests remand to the First Judicial District Court. Docs 7 & 8. Ultimately, the Court agrees that remand is required, but not for the reasons asserted by Plaintiff.

         II. Legal Standards A. Motion to Remand Standard

         Federal district courts have original jurisdiction over 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). When a plaintiff files in state court a civil action over which the federal district courts would have original jurisdiction based on diversity of citizenship, the defendant may remove that action to federal court, see 28 U.S.C. § 1441(a), provided no defendant is a citizen of the State in which such action is brought. § 1441(b).

         In order to achieve complete diversity of citizenship, as § 1332(a) requires, “the citizenship of all defendants must be different from the citizenship of all plaintiffs.” See McPhail v. Deere & Co., 529 F.3d 947, 951 (10th Cir. 2008). A person's domicile, the equivalent of state citizenship, is determined by their residence coupled with an intention to remain in the state indefinitely. See Crowley v. Glaze, 710 F.2d 676, 677-78 (10th Cir. 1983). “All national banking associations shall, for purposes of all other actions by or against them, be deemed citizens of the States in which they are respectively located.” 28 U.S.C. § 1348. For purposes of Section 1348, a national bank “is a citizen of the State in which its main office, as set forth in its articles of association, is located.” Wachovia Bank v. Schmidt, 546 U.S. 303, 307 (2006).

         “The amount in controversy is ordinarily determined by the allegations of the complaint, or, where they are not dispositive, by the allegations in the notice of removal.” Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir. 1995), abrogated on other grounds by Dart Cherokee Basin Operating Co., LLC v. Owen, 135 S.Ct. 547 (2014). A removal notice must plausibly allege on its face that the amount-in-controversy requirement is met. Dart Cherokee Basin Operating Co., 135 S.Ct. at 550. These allegations should be accepted when not contested by the plaintiff or questioned by the court. Id. However, when the plaintiff does contest the defendant's allegations upon removal, the defendant must prove its factual assertions as to the amount in controversy by a preponderance of the evidence. Id.

         B. Motion to Dismiss Standard

         In a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court accepts as true “all well-pleaded factual allegations in a complaint and views these allegations in the light most favorable to the plaintiff.” Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009); Morris v. City of Colorado Springs, 666 F.3d 654, 660 (10th Cir. 2012). Plaintiff must provide “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). In order to survive a motion to dismiss brought under Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         Federal Rule of Civil Procedure 12(b)(1) also allows a party to raise the defense of the court's “lack of jurisdiction over the subject matter” by motion. Fed.R.Civ.P. 12(b)(1). “Federal courts are courts of limited jurisdiction; they are empowered to hear only those cases authorized and defined in the Constitution which have been entrusted to them under a jurisdictional grant by Congress.” Henry v. Office of Thrift Supervision, 43 F.3d 507, 511 (10th Cir. 1994) (citations omitted).

         C. Pr ...


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