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Bell v. Federal National Mortgage Association

United States District Court, E.D. Tennessee, Greeneville

September 27, 2017




         Before the Court is a motion to remand for lack of subject matter jurisdiction filed by Plaintiff, Mary Louise Bell. (Doc. 10.) Plaintiff argues diversity jurisdiction does not exist because she and Defendant Aspen Title and Escrow, LLC, TN (“Aspen Title”) are both citizens of the state of Tennessee and the amount in controversy does not exceed $75, 000. Defendants Federal National Mortgage Association (“Fannie Mae”) and CIT Bank, N.A. (“CIT Bank”) responded in opposition to Plaintiff's motion. (Doc. 18.) Aspen Title has not responded to the motion to remand. Defendant Financial Freedom Senior Funding Corporation (“Financial Freedom”) has not yet appeared in the action and does not appear to have been served. The time for Plaintiff to file a reply in support of her motion has expired, and this matter is now ripe. For the reasons set out below, the Court will DENY the motion to remand.

         Also before the Court is a motion to dismiss filed by Defendants Fannie Mae and CIT Bank (collectively, the “Moving Defendants”). (Doc. 7.) The Moving Defendants argue Plaintiff's claims against them should be dismissed under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim on which relief can be granted. Plaintiff responded in opposition (Doc. 19), and the Moving Defendants replied (Doc. 22). For the reasons set out below, the Court will GRANT the motion to dismiss.

         I. BACKGROUND[1]

         On August 8, 2008, Plaintiff obtained a reverse mortgage from Financial Freedom on the real property known as 406 Putters Court in Church Hill, Tennessee (the “Property”). The value of the Property in 2008 was $156, 700. In connection with obtaining the reverse mortgage, Plaintiff executed various instruments, including a note in the amount of $285, 000; an Adjustable Rate Home Equity Conversion Deed of Trust (the “First Deed of Trust”) in favor of Financial Freedom, recorded in Book 920, Pages 693-703, instrument number 08006912, in Hawkins County, Tennessee (Doc. 7-1); and an Adjustable Rate Home Equity Conversion Second Deed of Trust (the “Second Deed of Trust”) in favor of the Secretary of Housing and Urban Development (the “Secretary”), recorded in Book 920, Pages 704-713, instrument number 08006913, in Hawkins County, Tennessee (Doc. 7-2). Aspen Title was named as the trustee in both Deeds of Trust.

         Financial Freedom's interest in the First Deed of Trust was transferred, through Mortgage Electronic Registration Systems, Inc., to CIT Bank on October 22, 2015. (Doc. 1-1 at 26-27.) On March 16, 2016, CIT Bank substituted Shapiro & Ingle, LLP (“Shapiro”) for Aspen as trustee as to the First Deed of Trust. (Id. at 29.)

         Plaintiff made all of the mortgage payments she was required to make and paid her county property taxes. She did not, however, pay her city property taxes or maintain flood insurance on the Property as required under the Deeds of Trust.

         On May 17, 2016, Shapiro, as trustee, foreclosed on the First Deed of Trust and sold the Property to CIT Bank for $180, 836. (Id. at 30-31.) CIT Bank transferred its interest in the Property to Fannie Mae the same day. (Id.) Following correspondence with Plaintiff and communications with her counsel, Fannie Mae filed a detainer warrant in the General Sessions Court for Hawkins County, Tennessee on September 23, 2016. (Id. at 34-36.)

         Plaintiff filed this action in Chancery Court for Hawkins County on October 12, 2016. (Id. at 4-14.) The Complaint does not enumerate any causes of action. The demand section, however, seeks a restraining order and injunction against Defendants to prevent them from proceeding with the eviction; asks to have both Deeds of Trust set aside, found to be unconscionable, and declared null and void; and asks to have Plaintiff's rights in the Property restored to her. The body of the Complaint also characterizes the Defendants' actions as fraud, as a violation of the Tennessee Consumer Protection Act, Tenn. Code Ann. §§ 47-18-101 et seq. (the “TCPA”), and as the intentional infliction of emotional distress on Plaintiff.

         Defendants CIT Bank, Fannie Mae, and Aspen removed the action to this Court on October 24, 2016 based on diversity jurisdiction, alleging Aspen is a fraudulently joined and nominal party whose citizenship should not be considered for purposes of removal. (Doc. 2.)


         A. Motion to Remand

         A defendant may remove any civil action filed in state court to federal court if the district court would have had subject matter jurisdiction had the case been originally filed in federal court. 28 U.S.C. § 1441. The party seeking removal to federal court bears the burden of establishing the district court has original jurisdiction over the matter. Long v. Bando Mfg. of Am., Inc., 201 F.3d 754, 757 (6th Cir. 2000). Removal petitions are strictly construed, with all doubts resolved against removal. Her Majesty the Queen in Right of the Province of Ontario v. City of Detroit, 874 F.2d 332, 339 (6th Cir. 1989).

         A defendant removing a case to federal court on the basis of diversity of citizenship jurisdiction has the burden of proving these jurisdictional requirements exist at the time of removal. Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 871 (6th Cir. 2000). If a case does not involve a federal question, complete diversity of citizenship must exist between the parties and the amount in controversy must exceed $75, 000 for the federal court to have subject matter jurisdiction. 28 U.S.C. § 1332; see U.S. Fid. & Guar. Co. v. Thomas Solvent Co., 955 F.2d 1085, 1089 (6th Cir. 1992). The removal statute is construed strictly and narrowly against removal. Her Majesty the Queen, 874 F.2d at 339. If doubt exists as to the propriety of removal, the case should be remanded to state court. Smith v. Nationwide Prop. & Casualty Ins. Co., 505 F.3d 401, 405 (6th Cir. 2007).

         B. Motion to Dismiss

         A party may move to dismiss a claim for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). In ruling on such a motion, a court must accept all of the factual allegations in the complaint as true and construe the complaint in the light most favorable to the plaintiff. Gunasekera v. Irvwin, 551 F.3d 461, 466 (6th Cir. 2009) (quoting Hill v. Blue Cross & Blue Shield of Mich., 49 F.3d 710, 716 (6th Cir. 2005)). If a party presents matters outside the pleadings in connection with the motion, the court must either exclude those matters from consideration or treat the motion as one for summary judgment. Fed.R.Civ.P. 12(d). Documents attached to pleadings are considered part of the pleadings for all purposes, however, Fed.R.Civ.P. 10(c), and the consideration of documents referred to in a complaint and integral to the claims does not convert a motion to dismiss into a motion for summary judgment, Commercial Money Ctr., Inc. v. Ill. Union Ins. Co., 508 F.3d 327, 335-36 (6th Cir. 2007).

         In deciding a motion to dismiss under Rule 12(b)(6), a court must determine whether the complaint contains “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). The factual content pleaded by a plaintiff must permit a court “to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Plausibility as explained by the Court “is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Id. at 679 (quoting Fed.R.Civ.P. 8(a)(2)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 678.

         III. ...

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