United States District Court, D. Nebraska
JOHN M. CARTER, and KRISTINA M. CARTER, Plaintiffs,
DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE FOR MORGAN STANLEY ABS CAPITAL I INC. TRUST 2004-HE4, MORTGAGE PASS THROUGH CERTIFICATES SERIES 2004-HE4, SELECT PORTFOLIO SERVICING, INC., J.P. MORGAN CHASE BANK, N.A., and DOES 1-10, INCLUSIVE, Defendants.
FINDINGS AND RECOMMENDATION
GOSSETT, Magistrate Judge.
matter is before the court on Plaintiffs' Motion to
Remand (Filing No. 14) and the Defendants' Joint Motion
for More Definite Statement (Filing No. 15). For the reasons
explained below, the undersigned will recommend to Chief
United States Judge Laurie Smith Camp that Plaintiffs'
motion be denied and that Defendants' motion for more
definite statement be granted as to Plaintiffs'
allegations of fraud.
filed this action in Nebraska state court on December 21,
2015, alleging that Defendants and their agents engaged in a
pattern of unlawful, fraudulent, or predatory real estate
lending practices, causing the Plaintiffs and other
individuals to lose their homes through foreclosure. (Filing
No. 1-1 at p. 2). Plaintiffs allege Defendants directed
borrowers into adjustable rate and negative amortization
loans with excessively high interest rates and fees, failed
to make material disclosures at the time of the loan
processing and closing, and failed to follow proper statutory
procedures in the foreclosure process. (Filing No. 1-1 at p.
to the Plaintiffs' complaint, on July 20, 2005, they
executed and delivered a written promissory note in the
amount of $220, 000 to "Long Beach Mortgage
Corporation." Plaintiffs allege they "paid
off" the promissory note, but defendants Morgan Stanley
ABS Capital 1 Inc. ("Morgan Stanley") and/or
Deutsche Bank National Trust Company ("Deutsche
Bank") seek payment from Plaintiffs for amounts
allegedly due under the promissory note. (Filing No. 1-1 at
p. 2). Deutsche Bank and/or Morgan Stanley have initiated
foreclosure proceedings against real property owned by
Plaintiffs. (Filing No. 1-1 at pp. 3-4, Â¶Â¶ 18-19). Plaintiffs
allege Deutsche Bank and Morgan Stanley are not the holders
of the note and therefore are improperly attempting to
foreclose on Plaintiffs' real property. (Filing No. 1-1
at pp. 2-3). Plaintiffs allege foreclosure is also improper
because Deutsche Bank and Morgan Stanley failed to provide
proper debt validation after Plaintiffs' written requests
pursuant to the Fair Debt Collection Practices Act
("FDCPA"), 15 U.S.C. Â§ 1692 et seq. (Filing No. 1-1
at p. 4 Â¶ 19). Plaintiffs seek "statutory damages"
of $1, 000 for failure to comply with the FDCPA. (Filing No.
1-1 at p. 7, Â¶ 40). Plaintiffs also allege they
"requested copies of their entire file" from the
defendants pursuant to the Real Estate Settlement Procedures
Act ("RESPA"), 12 U.S.C. Â§ 2601 et seq., but the
defendants failed to respond. Plaintiffs seek $1, 000 in
statutory damages for the violation. (Filing No. 1-1 at pp.
4-5). Plaintiffs generally allege that the
"actions" of Deutsche Bank, Chase Bank (not a named
party), Portfolio Loan Servicing, Inc., and Morgan Stanley
"are unlawful, deceitful, and unfair" and violate
"state and federal fraud statutes." (Filing No. 1-1
at p. 7).
seek to rescind the promissory note due to fraud, breach of
fiduciary duty, and "unfair and unlawful business
practice[s]." (Filing No. 1-1 at pp. 5-6). Plaintiffs
allege Deutsche Bank, Morgan Stanley, and Chase Bank have a
"pattern and practice in the home loan industry" of
using "deceit and misrepresentation to lull borrowers
into real estate loans... that have low teaser rates and
negative amortization rates with immediate provisions for
interest rate adjustment that quickly raise the monthly
payments to an amount higher than the borrower is able to
pay." (Filing No. 1-1 at p. 5). Plaintiffs allege
defendants "deceitfully and fraudulent[ly] placed
plaintiffs in such a position as those thousands of borrowers
for which Deutsche Bank..., Chase Bank and other loan
entities are now being sued throughout the country."
(Filing No. 1-1 at p. 5). Plaintiffs allege that they
"had no reason to know of such fraud and deceitful acts
and justifiably relied upon said defendants to comply with
the law and to be fair with plaintiff[s]." (Filing No.
1-1 at p. 6).
complaint sets forth seven "causes of action"
generally arising out of the above facts: (1) declaratory
determination of the rights of the parties, namely, the
identity of the holder of the promissory note and whether
defendants failed to meet statutory requirements for
conducting a foreclosure sale; (2) injunctive relief
preventing the foreclosure; (3) an accounting of the
"true amount of money, if any, owed to defendants by
plaintiff[s];" (4) "Rescission" of the
promissory note due to fraud; (5) wrongful foreclosure; (6)
"Unfair and Unlawful Business Practice[s];" and (7)
removed the case to this court on January 27, 2016, on the
bases of diversity jurisdiction and federal question
jurisdiction. Plaintiffs filed the instant motion to remand
on February 27, 216. (Filing No. 14). Defendants filed a
joint motion for more definite statement on March 4, 2016.
(Filing No. 15).
Motion to Remand
assert this court has both diversity jurisdiction and federal
question jurisdiction. "A defendant may remove a state
law claim to federal court only if the action originally
could have been filed there." Baker v. Martin
Marietta Materials, Inc., 745 F.3d 919, 923 (8th Cir.
2014). "The burden of establishing that a cause of
action lies within the limited jurisdiction of the federal
courts is on the party asserting jurisdiction."
Arkansas Blue Cross & Blue Shield v. Little Rock
Cardiology Clinic, P.A., 551 F.3d 812, 816 (8th Cir.
2009). Federal courts are to resolve all doubts as to the
propriety of exercising federal jurisdiction in favor of
remand. Dahl v. R.J. Reynolds Tobacco Co., 478 F.3d
965, 968 (8th Cir. 2007). The Eighth Circuit has admonished
district courts "to be attentive to a satisfaction of
jurisdictional requirements in all cases." Reece v.
Bank of New York Mellon, 760 F.3d 771, 777 (8th Cir.
jurisdiction exists when an action is between citizens of
different states and the amount in controversy exceeds the
sum of $75, 000. 28 U.S.C. Â§ 1332(a)(1). To invoke the
Court's jurisdiction under Â§ 1332, there must be
allegations of each party's place of citizenship,
including allegations of any corporate party's state of
incorporation and principal place of business. Dale v.
Weller, 956 F.2d 813, 815 (8th Cir. 1992). Where the
pleadings fail to state the place of incorporation or the
principal place of business of a corporate party, the
pleadings are inadequate to establish diversity.
Id.; see Sanders v. Clemco Indus., 823 F.2d
214, 216 (8th Cir. 1987).
pleadings before the court at this time are insufficient to
establish diversity jurisdiction because Defendants failed to
plead or establish the corporate defendants' principal
places of business. Defendants' notice of removal asserts
Select Portfolio Servicing, Inc. "is an entity organized
under the laws of the State of Utah and is a citizen of Utah
for purposes of diversity jurisdiction" and Morgan
Stanley "[t]o the extent it exists... is a citizen of
the State of New York." (Filing No. 1 at p. 3). However,
without allegations of the corporate defendants'
principal places of business, this court is unable to
determine whether complete diversity of citizenship exists.
The court recommends granting Defendants seven days to file
an amended notice of removal alleging the existence of the
requisite diversity of citizenship of the parties. See 28
U.S.C. Â§ 1653 (defective allegations of jurisdiction may be
the court finds removal was proper based on federal question
jurisdiction. "Removal based on federal question
jurisdiction is usually governed by the well-pleaded
complaint rule." Phipps v. F.D.I.C., 417 F.3d
1006, 1010 (8th Cir. 2005) (internal quotation omitted). The
well-pleaded complaint rule "provides that federal
jurisdiction may be invoked only where a federal question is
presented on the face of the plaintiff's properly pleaded
complaint." Id. This rule "makes the
plaintiff the ...