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Everson v. Deutsche Bank National Trust Co.

United States District Court, D. Nebraska

March 17, 2017

DONALD K. EVERSON and KIMBERLY C. EVERSON; Plaintiffs,
v.
DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR CDC MORTGAGE CAPITAL TRUST 2002-HE1, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2002-HE1; OCWEN LOAN SERVICING, LLC; and EDWARD E. BRINK; Defendants.

          MEMORANDUM AND ORDER

          Robert F. Rossiter, Jr. United States District Judge.

         This matter is before the Court on defendant Edward E. Brink's (“Brink”) Motion to Dismiss Party (Filing No. 8) for failure to state a claim. For the reasons stated below, Brink's Motion is denied, and the case is remanded to the District Court of Sarpy County, Nebraska.

         I. BACKGROUND

         Plaintiff Kimberly C. Everson purchased a piece of real property located in Sarpy County, Nebraska, on January 7, 2002. To finance the property, she delivered a promissory note to HomeGold, Inc. and a deed of trust to General American Corp. as trustee and HomeGold, Inc. as beneficiary. HomeGold, Inc. later assigned all its interest in the property to Deutsche Bank National Trust Company (“Deutsche”). On October 18, 2016, Deutsche appointed Brink the successor trustee for the deed of trust, and on October 27, 2017, Brink filed a notice of default in the Sarpy County deed records.[1]Brink scheduled a trustee's sale of the property for January 27, 2017.

         On January 27, 2017, plaintiffs filed a complaint in the District Court of Sarpy County, Nebraska, alleging various wrongs committed in the servicing of the mortgage and attempted foreclosure. Plaintiffs requested damages and an injunction prohibiting the trustee's sale which has not yet taken place.

         On February 6, 2017, the defendants removed the case to this Court, alleging subject-matter jurisdiction based on diversity of citizenship. See 28 U.S.C. § 1332. Defendants declared (1) the plaintiffs were both citizens of Nebraska, (2) Deutsche was a citizen of New York, (3) Ocwen Loan Servicing, LLC, the loan servicer, was a citizen of both Florida and Georgia, and (4) Brink was a citizen of Nebraska. Defendants claimed Brink was fraudulently joined and should be ignored for purposes of diversity because there was no reasonable basis in law or fact to support a claim against Brink. See Wivell v. Wells Fargo Bank, N.A., 773 F.3d 887, 896 (8th Cir. 2014) (allowing the district court to assume temporary jurisdiction over facially non-diverse parties to determine if there was fraudulent joinder). After the removal, Brink filed his Motion to Dismiss Party (Filing No. 34).[2]

         II. DISCUSSION

         A. Fraudulent Joinder

         The Nebraska Trust Deeds Act (“Act”) governs deeds of trust in Nebraska. Neb. Rev. Stat. §§ 76-1001 to 76-1018. A trustee may exercise power of sale over the trust property in accordance with the Act. Id. at § 76-1005. To exercise the power of sale, a trustee must:

first file for record in the office of the register of deeds of each county wherein the trust property . . . is situated a notice of default identifying the trust deed by stating the name of the trustor named therein and . . . containing a statement that a breach of an obligation for which the trust property was conveyed as security has occurred[.]

Id. at § 76-1006. The trustee must also give written notice of the sale. Id. at § 76-1007. Once the trustee has performed the requisite duties under the Act, the trustee may sell the property at public auction. Id. at § 76-1009.

         Joinder is fraudulent if state law precludes any cause of action against a defendant. Filla v. Norfolk S. Ry. Co., 336 F.3d 806, 810 (8th Cir. 2003). Joinder is not fraudulent if there is any colorable cause of action against the defendant. Id.

         Brink, as trustee, is the individual with the power to sell plaintiffs' property. Id. at § 76-1005. He has already exercised some of his powers by filing a notice of default. Plaintiffs' first cause of action in their complaint requests “an order enjoining the Defendants from proceeding with the scheduled sale[.]” Any injunction issued by the Court to stop the sale could enjoin Brink. Thus, plaintiffs have alleged a colorable claim against Brink and his joinder is not improper.

         B. ...


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