Opinion
Case No. 2:17-cv-2444-PMD-MGB
10-20-2017
U.S. Bank National Association, Plaintiff, v. Lawrence V. Micari, Defendant.
REPORT AND RECOMMENDATION
This case is before the Magistrate Judge for initial review because Defendant Lawrence Micari has filed a "Notice of Removal" of a state court civil action. The state action, U.S. Bank National Association v. Micari, Berkeley County Court of Common Pleas Case No. 2017-CP-08-1093, is a mortgage foreclosure action on the real property located at 423 Judy Drive, Goose Creek, South Carolina 29445. The removing party ("Defendant Micari") is proceeding pro se. Pursuant to Local Civil Rule 73.02(B)(2)(e)(D.S.C.), pretrial matters have been referred to the United States Magistrate Judge. Plaintiff U.S. Bank National Association ("Plaintiff Bank") has timely moved for remand, asserting that there is no legal basis for federal jurisdiction and that the underlying state foreclosure action was improperly removed. (DE# 7). Having carefully reviewed the record, the Magistrate Judge agrees and recommends that this case should be remanded to state court, for the following reasons:
I. Background
In its motion to remand, the Plaintiff Bank asserts the following facts:
On or about July 28, 2006, Defendant executed and delivered to Mortgage Electronic Registration Systems, Inc. ["MERS"] as a nominee for Wachovia Mortgage Corporation, its successors and assigns, a certain Promissory Note in writing wherein and whereby Defendant promised to
pay the principal sum of $119,800.00 together with interest on the unpaid balance. In order to secure the payment of said Note, Defendants, on the same date, to wit, July 28, 2006, did make, execute, and deliver to [MERS] as nominee for Wachovia Mortgage Corporation, its successors and assigns, a certain real estate Mortgage covering real property located in Berkeley County, South Carolina. The Mortgage was recorded August 1, 2006 in the Register of Deed's Office (hereinafter "ROD's") for Berkeley County in Book 5835 at Page 285.(DE# 7-1 at 1-2). Plaintiff Bank also indicates that the Note and Mortgage were modified by a Loan Modification Agreement on September 28, 2011. (Id.).
Thereafter, the Mortgage was assigned to Wachovia Mortgage Corporation by assignment instrument dated April 14, 2008 and recorded May 8, 2008 in the ROD's office for Berkeley County in Book 7336 at Page 186.
Thereafter, the Mortgage was assigned to [MERS], as nominee for Wells Fargo Bank, N.A. by assignment instrument dated June 19, 2013 and recorded September 3, 2013 in the ROD's office for Berkeley County in Book 10350 at Page 157.
Thereafter the Mortgage was assigned to Wells Fargo Bank, N.A., successor by merger to Wachovia Bank, N.A. by assignment instrument dated July 16, 2013 and recorded September 3, 2013 in Book 10350 at Page 159. Thereafter the Mortage was assigned to Wells Fargo, N.A., Successor by Merger to Wachovia Bank, N.A. by assignment instrument dated September 6, 2011 and recorded September 9, 2011 in Book 9090 at Page 324.
Thereafter the Mortgage was assigned to Plaintiff [U.S. Bank National Association] by assignment instrument dated March 15, 2016 and recorded March 28, 2016 in the ROD's office for Berkeley County in Book 2137 at Page 619.
Plaintiff Bank indicates that Defendant Micari has been in default on his Note and Mortgage since February 1, 2015, and therefore, the Plaintiff Bank proceeded with a foreclosure action in state court on the subject real property. Plaintiff Bank filed its Lis Pendens, Summons, and Complaint for Foreclosure on June 28, 2017 in the Berkeley County Court of Common Pleas, Case No. 2017-CP-08-1093.
On September 13, 2017, Defendant Micari filed for removal to federal court. (DE# 1, Notice of Removal). He also filed an application to proceed in forma pauperis ("IFP"). (DE# 3, Form AO 240). The motion to proceed IFP was incomplete. (See Questions 2, 3, 8). The Court gave Defendant Micari an opportunity to supplement his answers on the Form AO 240. (DE# 8, Order of 9/26/2017). Defendant Micari did not respond within the 21-day time provided by the Order of 9/26/2017 and has not provided timely answers to certain questions in the application to proceed IFP. In any event, as this Court lacks subject matter jurisdiction over the state foreclosure action, Defendant Micari's motion to proceed IFP in federal court may be denied as moot.
On September 19, 2017, Plaintiff Bank filed a motion to remand this foreclosure action back to state court because the action was improperly removed. (DE# 7, Motion to Remand to State Court). Such motion was timely filed. See 28 U.S.C.A. § 1447(c) (after removal, any "motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days"). Defendant Micari did not timely respond to the motion to remand. II. Relevant Law
A. Liberal Construction
This Court must liberally construe pro se documents, see Estelle v. Gamble, 429 U.S. 97 (1976), and hold them to a less stringent standard than those drafted by attorneys, see Hughes v. Rowe, 449 U.S. 5 (1980) (per curiam). This means that if the court can reasonably read the pro se litigant's pleadings to state a valid claim, it should do so, but a district court may not rewrite a pleading to "conjure up questions never squarely presented" to the court. Beaudett v. City of Hampton, 775 F.2d 1274, 1278 (4th Cir. 1985), cert. denied, 475 U.S. 1088 (1986). "Liberal construction" does not mean that the court can ignore a clear failure in the pleading to allege facts which set forth a claim cognizable in federal court. Weller v. Department of Social Services, 901 F.2d 387 (4th Cir. 1990).
B. Consideration of Subject Matter Jurisdiction
A district court must ensure that it has subject matter jurisdiction in all actions pending before it. In re Bulldog Trucking, Inc., 147 F.3d 347, 352 (4th Cir. 1998). A district court may consider sua sponte whether it has subject matter jurisdiction over a case and must remand the case to state court if it determines that it lacks jurisdiction. See 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."); Ellenburg v. Spartan Motors Chassis, Inc., 519 F.3d 192, 196 (4th Cir. 2008) ("where remand is based on a lack of subject matter jurisdiction, the remand order may be entered at any time"). A party may bring such matter to the Court's attention and assert the defense of a lack of subject matter jurisdiction by motion. Fed.R.Civ.P. 12(h)(3).
III. Discussion
A. Lack of Federal Subject Matter Jurisdiction
Federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994). A case may be filed in federal district court only if federal question jurisdiction exists under 28 U.S.C. § 1331, or if the parties have diverse citizenship under 28 U.S.C. § 1332. A civil action may be removed from state court only if the case involves matters over which "the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441; Darcangelo v. Verizon Comm., Inc., 292 F.3d 181, 186 (4th Cir. 2002). "The presence or absence of federal-question jurisdiction is governed by the 'well-pleaded complaint rule,' which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint. Harless v. CSX Hotels, Inc., 389 F.3d 444, 450 (4th Cir. 2004). Potential defenses and counterclaims involving the Constitution or federal laws do not establish removal jurisdiction and are not considered in determining subject matter jurisdiction. Vaden v. Discover Bank, 556 U.S. 49, 60 (2009); Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 808 (1986); Cook v. Georgetown Steel Corp, 770 F.2d 1272, 1275 (4th Cir. 1985) ("A federal defense to a state cause of action is not sufficient to invoke federal jurisdiction.").
The removing party bears the burden of establishing subject matter jurisdiction. Ellenburg, 519 F.3d at 200 (holding that the removing party "bears the burden of demonstrating that removal jurisdiction is proper"); Mulcahey v. Columbia Organic Chem. Co., Inc., 29 F.3d 148, 151 (4th Cir. 1994) ("The burden of establishing federal jurisdiction is placed upon the party seeking removal."); Hartford Fire Ins. Co. v. Harleysville Mut. Ins. Co., 736 F.3d 255, 259 (4th Cir. 2013); Palmetto Automatic Sprinkler Co., Inc. v. Smith Cooper Int'l., Inc., 995 F.Supp.2d 492, 495 (D.S.C. 2014) (same).
When considering removal, federal courts must "scrupulously confine their own jurisdiction to the precise limits which the statute has defined." Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 109 (1941). A federal court must "resolve all doubts about the propriety of removal in favor of retained state court jurisdiction." Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993) (remanding case that had been wrongfully removed). Removal statues must be strictly construed against removal and in favor of remand. Palisades Collections LLC v. Shorts, 552 F.3d 327, 333-34 (4th Cir. 2008), cert. denied, 557 U.S. 919 (2009); Mulcahey, 29 F.3d at 151 ("If federal jurisdiction is doubtful, a remand is necessary."); Cheshire v. Coca-Cola Bottling Affil., Inc., 758 F. Supp. 1098, 1102 (D.S.C. 1990) (same, collecting cases).
Plaintiff Bank asserts that the complaint filed in the state action is solely based on state law. (DE# 7-1, Memorandum). Plaintiff Bank points out that the State Complaint asserted its right "to enforce the instrument pursuant to S.C. Code Ann. §§ 36-3-309 or 36-3-418(d)." Plaintiff Bank points out that the state-court action is a routine state law-based mortgage foreclosure action, and presents no claim that could have been originally brought in federal court under federal question or diversity jurisdiction. In its memorandum, Plaintiff Bank correctly asserts that Defendant Micari cannot properly remove the state foreclosure action to federal court because the Plaintiff Bank's state foreclosure complaint relied exclusively on state law. (DE# 7-1). No federal question is presented on the face of Plaintiff's properly-pleaded complaint.
Federal courts lack jurisdiction over a complaint which "merely states a cause of action for enforcement of a promissory note and foreclosure of the associated security interest in real property." Burbage v. Richburg, 417 F. Supp.2d 746, 749 (D.S.C. 2006); see also Deutsche Bank Nat'l Trust Co. v. Lovett, Case No. 3:12-1819-JFA, 2013 WL 528759, *2 (D.S.C. Feb. 11, 2013); Deutsche Bank Nat'l Trust Co. v. Elmore, Case No. 2:15-cv-4560-DCN-BM (DE# 13, Order of January 20, 2016, remanding case for lack of subject matter jurisdiction); Pettis v. Law Office of Hutchens, Senter, Kellam and Pettit, Case No. 3:13-147-FDW, 2014 WL 526105, *2 (W.D.N.C. Feb. 7, 2014) (same, collecting cases).
Although Defendant Micari generally refers to the Truth in Lending Act ("TILA") in his petition for removal, it is readily apparent that the true purpose of his allegations is to challenge the pending state foreclosure action on his real property, i.e. he alleges that the Bank was not a proper holder of the Mortgage and lacks any right to foreclose. The United States Supreme Court has held that potential defenses and counterclaims involving the Constitution or federal laws do not establish removal jurisdiction and are not considered in determining subject matter jurisdiction. Vaden, 556 U.S. at 60; see also Cook, 770 F.2d at 1275 (holding that "a federal defense to a state cause of action is not sufficient to invoke federal jurisdiction").
Defendant Micari also refers to diversity jurisdiction in his Notice of Removal as an alleged basis for removal, but indicates he is a citizen of South Carolina. Therefore, he is precluded as a matter of statutory law from removing the case. See 28 U.S.C. §1441(b)("...[a]ny other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought."). Removal statutes must be strictly construed against removal. Palisades Collections LLC, 552 F.3d at 333-34. A federal court must "resolve all doubts about the propriety of removal in favor of retained state court jurisdiction." Marshall., 6 F.3d at 232 (remanding case that had been improperly removed to federal court).
Defendant Micari has not shown that this federal court has subject matter jurisdiction in this case. He has not sustained his burden, as the removing party, of showing that removal was proper on the basis of either federal question or diversity jurisdiction. The face of the state complaint does not indicate any basis for federal jurisdiction. Plaintiff Bank correctly asserts that Defendant Micari is precluded as a matter of law from removing the case on the basis of diversity of citizenship because he is a citizen of South Carolina. See 28 U.S.C. § 1441(b) ("A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought."). Therefore, this case should be remanded back to state court for lack of subject matter jurisdiction.
IV. Conclusion
In conclusion, Defendant Micari has removed this state foreclosure action to federal court, but has failed to show any proper basis for federal subject matter jurisdiction. Defendant Micari has not sustained his burden, as the removing party, of showing that removal was proper on the basis of either federal question or diversity jurisdiction. As this Court lacks federal subject matter jurisdiction over this state foreclosure action, this action must be remanded to state court.
Accordingly, the Magistrate Judge recommends that the "Motion to Remand" (DE# 7) by the Plaintiff Bank be granted ; this case should be remanded for lack of subject matter jurisdiction; the pro se Defendant's pending motion to proceed IFP (DE# 3) should be dismissed as moot.
IT IS SO RECOMMENDED.
/s/_________
MARY GORDON BAKER
UNITED STATES MAGISTRATE JUDGE October 20, 2017
Charleston, South Carolina The pro se litigant's attention is directed to the following important notice :
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. "[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must 'only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'" Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed. R. Civ. P. 72 advisory committee's note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); see Fed. R. Civ. P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk
United States District Court
Post Office Box 835
Charleston, South Carolina 29402
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).