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MTGLQ Investors, LP v. Wellington

United States District Court, D. New Mexico

June 5, 2019

MTGLQ INVESTORS, LP, Plaintiff,
v.
MONICA L. WELLINGTON; THE MONICA L. WELLINGTON DECLARATION OF TRUST DATED DECEMBER 28, 2007; and ALTURA VILLAGE HOMEOWNERS' ASSOCIATION, INC. Defendants.

          MEMORANDUM OPINION AND ORDER

         This matter comes before the Court upon pro se Defendant Monica L. Wellington's (Wellington) “Notice of Probable Lack of Diversity & Jurisdiction” (Notice), filed November 19, 2018. (Doc. 122). The Court construes the Notice as a motion to (1) order Plaintiff and JP Morgan Chase Bank, N.A. (JP Morgan) “to disclose their citizenship” so the Court can decide whether it has diversity jurisdiction, and (2), in the alternative, to vacate rulings related to the Complaint for Debt and Money Due and for Foreclosure (Complaint) (Doc. 1-1) for lack of diversity jurisdiction. (Doc. 122) at 4-5. Also, before the Court is “Plaintiff's Motion to Strike Defendant Wellington's Notice of Probable Lack of Diversity & Jurisdiction and Plaintiff's Motion for Sanctions” (Motion to Strike), filed December 3, 2018. (Doc. 125). Wellington filed a response to the Motion to Strike on December 18, 2018. (Doc. 137). Having considered the Notice, the Motion to Strike, and Wellington's response, the Court denies the Motion to Strike, grants Wellington's request for information on the citizenship of Plaintiff and JP Morgan, stays the case pending resolution of the diversity issue, and denies Wellington's request to vacate rulings as premature.

         A. Plaintiff's Motion to Strike

         Plaintiff brings its Motion to Strike pursuant to Fed.R.Civ.P. 12(f). Rule 12(f) provides that a court may strike an insufficient defense or certain matters “from a pleading….” A Colorado district court explained that

[o]nly material included in a ‘pleading' may be the subject of a motion to strike, and courts have been unwilling to construe the term broadly. Motions, briefs, memoranda, objections, or affidavits may not be attacked by the motion to strike.

Dubrovin v. The Ball Corp. Consol. Welfare Ben. Plan for Emloyees, 2009 WL 5210498, at *1 (D. Colo.) (citation omitted). Accord Ysais v. New Mexico Judicial Standard Comm'n, 616 F.Supp.2d 1176, 1184 (D.N.M. 2009), aff'd sub nom. Ysais v. New Mexico, 373 Fed.Appx. 863 (10th Cir. 2010) (observing that “[g]enerally ... motions, briefs, and memoranda may not be attacked by a motion to strike”). “The Federal Rules of Civil Procedure define ‘pleadings' as a complaint or third-party complaint; an answer to a complaint, a third-party complaint, a counterclaim, or a crossclaim; and, ‘if the court orders one, a reply to an answer.'” Id. (quoting Fed.R.Civ.P. 7(a)(1-7)). Wellington's Notice is not a “pleading” as defined above and is, in effect, a motion. Consequently, the Court cannot strike the Notice under Rule 12(f).

         Plaintiff contends that the Court should also strike the Notice because Wellington failed to comply with the following motion requirements under Local Rule 7.1(a): to “state with particularity the grounds and the relief sought, ” and to determine if “a motion is opposed….” Local Rule 7.1(a) further provides that “a motion that omits recitation of a good-faith request for concurrence may be summarily denied.”

         Although a court cannot strike a “motion” under Rule 12(f), a court has the discretion to strike a filing, including a motion, when it does not comply with local rules. Ysais, 616 F.Supp.2d at 1184 (observing that court can “choose to strike a filing that is not allowed by local rule, such as a surreply filed without leave of court” (citation omitted)). See also Hernandez v. George, 793 F.2d 264, 266 (10th Cir.1986) (recognizing “that district courts have discretion in applying local rules.”). Even so, Local Rule 1.7 provides that “[t]hese rules may be waived by a Judge to avoid injustice.”

         Wellington argues that she did not need to follow the Local Rules because they pertain to motions and not to notices like the one she filed. The Court, however, construes the Notice as a “motion” because Wellington raises particular grounds to support specific relief, i.e., Wellington argues that potential lack of diversity jurisdiction requires jurisdictional discovery or, in the alternative, vacating rulings. Because Wellington's Notice is effectively a motion, she must follow the Local Rules related to motions. See Murray v. City of Tahlequah, Okl., 312 F.3d 1196, 1199 n. 3 (10th Cir. 2002) (noting that although courts “liberally construe pro se pleadings, ” a “pro se status does not relieve [the pro se litigant] of the obligation to comply with procedural rules”).

         The Court acknowledges that it must consider the issue of federal jurisdiction at any time. See Fed. R. Civ. P. 12(h)(3) (stating that “[i]f the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action”). Accordingly, justice requires that the Court waive the Local Rules to address the jurisdictional issues raised in the Notice. The Court, therefore, will not strike the Notice based on Wellington's failure to comply with the Local Rules.

         For the above reasons, the Court will deny Plaintiff's request to strike the Notice. The Court, however, will address the Motion to Strike to the extent it substantively responds to the Notice. The Court will also address Plaintiff's request that the Court sanction Wellington.

         B. Wellington's Notice

         Wellington argues first that “[d]iversity of citizenship is questionable as between plaintiff MTGLQ Investors, LP, and co-defendant JP Morgan Chase Bank, N.A.” (Doc. 122) at 1. In October 2018, Plaintiff responded to an interrogatory asking to identify its partners and the percentage of ownership of each partner by stating that it is a Delaware limited partnership comprised of a limited partner, Goldman Sachs Group, Inc., which holds a 99% interest in the partnership, and a general partner, MLQ, LLC, which holds a 1% interest in the partnership. (Doc. 122-2) at 3-4. Wellington contends that Goldman Sachs Group, Inc. is a New York company but that the membership of MLQ, LLC “is unknown at this time.” (Doc. 122) at 2-3. Wellington believes that JP Morgan “is either a citizen of New York, Ohio, or both.” Id. at 3. Wellington asserts that without diversity of citizenship between Plaintiff and JP Morgan, a jurisdictional defect, the Court did not have diversity jurisdiction at the time of removal and that the Court, thus, lacks subject matter jurisdiction over this lawsuit. See 28 U.S.C. § 1332(a) (diversity jurisdiction requires action “between … citizens of different States” as well as an amount in controversy exceeding $75, 000).[1]

         Second, Wellington argues that removal was improper or procedurally defective for two reasons. Under 28 U.S.C. § 1441(b)(2), the forum defendant rule, an action otherwise removable on the basis of diversity jurisdiction may not be removed if a defendant “is a citizen of the State in which such action is brought.” In this case, Defendant Altura Village Homeowners' Association, Inc. (Altura) is a citizen of New Mexico, the forum state, a violation of the forum defendant rule. See (Doc. 122-3). Under Section 1446(b)(2)(A), the unanimity rule, “[w]hen a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action.” Here, not all Defendants joined in or consented to the removal proceeding, a violation of the unanimity rule.

         C. Plaintiff's Response to Wellington's Notice

         Plaintiff argues first that, as a removing Defendant, Wellington cannot now raise “probable” jurisdictional issues, especially since the Court has already entered a judgment as to JP Morgan on August 21, 2018. See (Doc. 100). The judgment against JP Morgan specifically states that “[t]his Court has jurisdiction over the parties and the subject matter of this action.” Id. at 1, ¶ 1. Moreover, Plaintiff cites Lockwood Corp. v. Black for the proposition that a court cannot address a subject matter jurisdiction question once a court has entered a judgment. See669 F.2d 324 (5th Cir. 1982). In Lockwood, the plaintiff, instead of the defendants, removed the case to federal court and the trial court subsequently entered judgment in favor of the plaintiff. Id. at 325. On appeal, the Fifth Circuit observed two jurisdictional issues: (1) improper removal by a plaintiff, see 28 U.S.C. ยง 1441(a) (defendant may remove), a procedural defect in the removal procedure, and (2) lack of amount in controversy ...


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