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Davis v. Franklin American Mortgage Co.

United States District Court, M.D. Tennessee, Nashville Division

July 26, 2017

SAMUEL DAVIS, Plaintiff,
v.
FRANKLIN AMERICAN MORTGAGE COMPANY and J.P. MORGAN CHASE, N.A., Defendants.

          CRENSHAW JUDGE

          REPORT AND RECOMMENDATION

          JEFFERY S. FRENSLEY United States Magistrate Judge

         This matter is before the Court upon several motions by the Parties. Defendant J.P. Morgan Chase, N.A. (“Chase”) has filed a Motion to Dismiss and Supporting Memorandum of Law. Docket Nos. 4, 5. Although the pro se Plaintiff did not respond to that Motion within the time allotted for response, Plaintiff has subsequently filed a document that appears to respond to Chase's Motion: “Memorandum in Support of Plaintiff's Motion in Opposition.” Docket No. 30. Chase has also filed a “Motion to Dismiss for Failure to Prosecute and Incorporated Memorandum of Law.” Docket No. 14. Plaintiff has filed a Response in Opposition. Docket No. 16. Chase has filed a Reply. Docket No. 19. Plaintiff has filed a document that appears to be related to Chase's Motion to Dismiss for Failure to Prosecute: “Plaintiff's Reply to Chase Bank's Response.” Docket No. 29.

         Plaintiff has filed a “Motion to Recind [sic] Notice and Order of Removal.” Docket No. 22. Explaining that this document appears to seek remand to state court, Chase filed a “Response in Opposition to Motion to Remand.” Docket No. 24. Plaintiff then filed “Plaintiff's Reply to Defendant Chase Bank's Response [RE24] to Motion Concerning Removal Jurisdiction.” Docket No. 27.

         Defendant Franklin American Mortgage Company (“FAMC”) has filed a Motion to Dismiss pursuant to Fed.R.Civ.P. 12(b)(6), in which it specifically joins in the Motions to Dismiss filed by Chase. Docket No. 31. FAMC has also filed a Supporting Memorandum of Law. Docket No. 32. Apparently in response, Plaintiff has filed a “Memorandum in Support of Plaintiff's Motion in Opposition to Defendant's Motion to Dismiss as Time Barred” (Docket No. 33) and a “Motion in Opposition to Defendant Franklin American's Motion to Dismiss as Time Barred” (Docket No. 34).

         I. Background

         Plaintiff filed this cause in Davidson County Chancery Court on September 30, 2016. Docket 1-2. Chase removed it to this Court on October 31, 2016, citing 28 U.S.C. § 1331 (diversity jurisdiction) and § 1332 (federal question jurisdiction). Docket No. 1 (Notice of Removal). Specifically, Chase states that it is a citizen of Ohio, and that while Plaintiff is a citizen of Tennessee and FAMC is “a Tennessee corporation with its principal office in Tennessee, ” FAMC's citizenship “may be disregarded because it has been fraudulently joined by Plaintiff in effort [sic] to defeat diversity jurisdiction.” Id. at 3. Chase argues that Plaintiff's claim against FAMC is one of fraud, that Plaintiff's Complaint does not properly plead fraud, and that Plaintiff therefore “fails to plead a colorable claim against [FAMC] under Tennessee law, and [FAMC's] citizenship may be disregard [sic] for purposes of diversity jurisdiction.” Id. at 3-4. Chase further contends that the Court has federal question jurisdiction because Plaintiff's claims “appear to be based on issues related to the FHA insured mortgage loan program. Plaintiff must necessarily prove a violation of federal law in order to prevail on his claims.” Id. at 5.

         Plaintiff did not respond to the assertion of diversity in the Notice of Removal until filing his “Motion to Recind [sic] Notice and Order of Removal” on February 21, 2017. Docket No. 22. In this document, Plaintiff maintains that:

Plaintiff did not add [FAMC] fraudulently nor as an attempt to defeat diversity jurisdiction. Plaintiff actually believes, as his complaint alleges, that but for the fraudulent acts of [FAMC] the chain of events that resulted in [Chase] claims upon his real property would have never begun.
Plaintiff further asserts that he seeks no monetary damages from Chase. From it he seeks only injunctive relief and for such time as to fully litigate his claims against [FAMC], from which any and all monetary damages are sought.
Plaintiff finally asserts that he need not prove that federal law violation(s) are at issue in this cause. Proving that [FAMC] committed fraud in this cause is a matter of Tennessee [sic] and does not raise a “federal question” as contemplated by 28 U.S.C. § 1332 and as conceded by Chase in its Notice of Removal ¶10.
. . .
Plaintiff now sues [FAMC], not to defeat the diversity requirement pursuant to the F.R.C.P, [sic] but because it was the fraudulent acts of [FAMC] that are the beginnings of the Daisy Chain that introduces to defendant Chase and that has resulted in the outcomes plaintiff has faced hear [sic] to date. In fact [FAMC] is an essential actor in this melodrama such the [sic] compulsory joinder provisions of the F.R.C.P. should apply here.

Id. at 1-2.

         Chase responds that “Plaintiff's Motion to Remand is, in reality, a desperate effort to evade dismissal, ” and reiterates its arguments regarding federal question and diversity jurisdiction. Docket No. 24, p. 1-4.

         II. Law and Analysis

         A. Applicable Law of Jurisdiction and Fraudulent Joinder

         This Court has original jurisdiction over all civil actions in which the matter in controversy exceeds $75, 000 and is between citizens of different states. 28 U.S.C. § 1332(a)(1). Diversity jurisdiction requires complete diversity: the citizenship of each plaintiff must be diverse from the citizenship of each defendant. Caterpillar Inc. v. Lewis, 519 U.S. 61, 68, 117 S.Ct. 467 (1996); Coyne ex rel. Ohio v. American Tobacco Co., 183 F.3d 488, 492 (6th Cir. 1999). The party “seeking to bring a case into federal court carries the burden of establishing diversity jurisdiction.” Coyne, 183 F.3d at 493 (internal quotation marks and citation omitted). Further, the issue of subject matter jurisdiction may be raised “at any time, by any party or even sua sponte by the court itself.” Franzel v. Kerr Mfg. Co., 959 F.2d 628, 629 (6th Cir. 1992).

         “Fraudulent joinder is a judicially created doctrine that provides a limited exception to the requirement of complete diversity.” Garner v. SDH Servs. East, LLC, 55 F.Supp.3d 1016, 1021 (M.D. Tenn. 2014). Under this doctrine, the court must determine whether the plaintiff has “at least a colorable cause of action under state law against the non-diverse defendant.” Id., citing Jerome-Duncan, Inc. v. Auto-By-Tel., L.L.C., 176 F.3d 904, 907 (6th Cir. 1999). Thus, this Court must look to Tennessee law to determine whether FAMC is a proper defendant, or whether, as argued by Chase, it was fraudulently joined. “The non-moving party's actual motive for joining a non-diverse party is immaterial to the court's determination regarding fraudulent joinder.” Id. “Therefore, the question is whether there is arguably a reasonable basis for predicting that the state law might impose liability on the facts involved.” Alexander v. Elec. Data Sys. Corp., 13 F.3d 940, 949 (6th Cir. 1994) (citation and internal ...


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