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U.S. Bank National Association v. Sanders

United States District Court, N.D. Georgia, Atlanta Division

April 7, 2015

U.S. BANK NATIONAL ASSOCIATION, Plaintiff,
v.
TINA M. SANDERS, Defendant.

OPINION AND ORDER

WILLIAM S. DUFFEY, Jr., District Judge.

This matter is before the Court on Defendant Tina M. Sanders's ("Defendant" or "Sanders") Objections [8] to Magistrate Judge Walter E. Johnson's Report and Recommendation ("R&R") [3]. The R&R recommends remanding this dispossessory action to the Magistrate Court of Gwinnett County, Georgia. Also before the Court is Defendant's "Ammendment [sic] of Complaint for Emergency Action of Removal of State Action to Federal Court, " which the Court construes as Defendant's Amended Notice of Removal [5], and Defendant's "Emergency Motion to Stay State Court. Proceedings" ("Motion to Stay") [10].[1]

I. BACKGROUND

Defendant has a lengthy history of challenging the validity of her mortgage debt and seeking to delay foreclosure of, and dispossession from, her home, located at 2540 Sable Ridge Court, Buford, Georgia (the "Property"), following her default on her loan obligations.[2]

On April 30, 2014, U.S. Bank National Association ("Plaintiff' or "U.S. Bank") filed, in the Magistrate Court of Gwinnett County, Georgia, a dispossessory action (the "Dispossessory Action") against Defendant.[3] (Complaint [2 at 2]). The Complaint in the Dispossessory Action asserts that Defendant is a tenant at sufferance following an April 1, 2014, foreclosure sale of the Property.

On May 20, 2014, Defendant, proceeding pro se, removed the Dispossessory Action to this Court on the basis of diversity of citizenship. See U.S. Bank Nat'l Assoc. v. Sanders, No. 1:14-cv-1534, Doc. 1 (N.D.Ga.). Defendant also filed a counterclaim for violation of the False Claims Act, alleging that she did not receive proper notice of the foreclosure sale and that "her Note is paid in full and there is not [sic] default" because "[t]he United States of American [sic] [p]aid [her mortgage] via the Pooling and Service [sic] Agreement." Id.

On September 30, 2014, the Court, having found that it lacked subject matter jurisdiction, remanded the Dispossessory Action to the Magistrate Court of Gwinnett County. Id. at Doc. 15.

On October 22, 2014, the Magistrate Court of Gwinnett County granted Plaintiff a Writ of Possession for the Property.

On October 24, 2014, Defendant filed her Notice of Appeal to the Superior Court of Gwinnett County, Georgia.[4]

On January 26, 2015, the Superior Court of Gwinnett County granted U.S. Bank's motion for summary judgment on Sanders's counterclaims and issued a Writ of Possession for the Property in favor of U.S. Bank.

Also on January 26, 2015, Defendant moved for reconsideration of the Superior Court's January 26th Order, which the Superior Court denied on January 27, 2015.

On February 4, 2015, Defendant removed the Dispossessory Action to this Court and filed an application to proceed in forma pauperis ("IFP"). Defendant asserts that she "has exhausted the state remedies and that the ruling of the state court violates the Constitutional rites [sic] of the plaintiff [sic]." (Notice of Removal [2] at 1). Defendant asserts that her "rites [sic] of liberty to [her] place of residency are being violated by the unlawful ruling of the State Court and the State Courts [sic] refusal to hear the appeal." (Id.).

On February 13, 2015, the Magistrate Judge Johnson granted Defendant's IFP application and issued his R&R. The Magistrate Judge considered, sua sponte, whether the Court has subject-matter jurisdiction over this action. He concluded that the Court's jurisdiction cannot be based on diversity of citizenship. He also found that the Dispossessory Action is based on state law, and because federal jurisdiction cannot be based on a defendant's answer or notice of removal, the Magistrate Judge concluded that the Court does not have federal question jurisdiction over this matter. Because the Court lacks subject-matter jurisdiction, the Magistrate Judge recommended that this action be remanded to state court.

Also on February 13, 2015, Defendant filed her Amended Notice of Removal, asserting that she "has been the victim of fraud by [U.S. Bank] through the use of fraudulent documents and fraud perpetrated on the state court by [U.S. Bank] in its filing of the state complaint and use of same during the state court process." (Amended Notice of Removal [5] at 1). Defendant argues that U.S. Bank "initiated the foreclosure action based upon and through the use of fraudulent documents, " and that "[t]he assignment upon which foreclosure and all subsequent proceedings of foreclosure was based is fraudulent" because the assignment was executed by a purported "robo-signer." (Id. at 2).

On February 27, 2015, Defendant filed her Objections to the R&R, arguing that the Magistrate Judge failed to consider her Amended Notice of Removal, which, Defendant contends, "ma[kes] clear that what [she] addresses is the fraudulent state court foreclosure proceedings not the state court [D]ispossessory [A]ction." (Objs. at 1).

On April 3, 2015, the Superior Court of Gwinnett County issued an order ("April 3rd Order") granting summary judgment and a writ of possession for the Property to Plaintiff. (Pl's Notice of Filing [11]).

On April 7, 2015, Defendant filed her "Emergency Motion to Stay State Court Proceedings" ("Motion to Stay") [10]. Defendant contends that, because she removed the Dispossessory Action to this Court, the Superior Court lacked authority to issue its April 3rd Order.

The Court first considers whether it has subject matter jurisdiction over this action.

II. DISCUSSION

The Eleventh Circuit has consistently held that "a court should inquire into whether it has subject matter jurisdiction at the earliest possible stage in the proceedings. It is well-settled that a federal court is obligated to inquire into subject matter jurisdiction sua sponte whenever it may be lacking." Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999). "[O]nce a federal court determines that it is without subject matter jurisdiction, the court is powerless to continue." Id.

Congress has provided that "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant." 28 U.S.C. § 1441(a). Removal in this case appears to be based on federal-question jurisdiction, which extends to "all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. "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 plaintiffs properly pleaded complaint." Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). Thus, a federal cause of action within a counterclaim or a federal defense is not a basis for removal jurisdiction. Vaden v. Discover Bank, 556 U.S. 49, 59-61 (2009).

Plaintiff's Complaint is a dispossessory action which is based solely on state law. See O.C.G.A. § 44-7-50; Steed v. Fed. Nat'l Mortg. Corp., 689 S.E.2d 843 (Ga.Ct.App. 2009) (when former owner of real property remain in possession after foreclosure sale, she becomes "tenant at sufferance, " and thus landlord-tenant relationship exists and dispossessory procedure in O.C.G.A. § 44-7-50 applies). No federal question is presented on the face of Plaintiff's Complaint. That Defendant asserts defenses or counterclaims based on federal law-including that Georgia's foreclosure and dispossessory process violates her rights under the United States Constitution-cannot confer federal subject-matter jurisdiction over this action. See Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 6 (2003); Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 830-32 (2002); Caterpillar Inc. v. Williams, 482 U.S. 386, 392-93 (1987) ("The presence of a federal defense does not make the case removable...."). Removal is not proper based on federal question jurisdiction.

Although not alleged in her Notice of Removal, or Amended Notice of Removal, because of Defendant's pro se status, the Court also considers whether it has subject-matter jurisdiction based on diversity of citizenship. Diversity jurisdiction exists over suits between citizens of different states where the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332(a). Here, the record does not show the citizenship of the parties, and, even if there is complete diversity between the parties, the amount-in-controversy requirement cannot be satisfied because this is a dispossessory action. The Court must look only to Plaintiffs claim to determine if the amount-in-controversy requirement is satisfied. See, e.g., Novastar Mortg. Inc. v. Bennett, 173 F.Supp.2d 1358, 1361 (N.D.Ga. 2001), aff'd, 35 F.Appx. 585 (11th Cir. 2002). "[A] claim seeking only ejectment in a dispossessory action cannot be reduced to a monetary sum for the purposes of determining the amount in controversy." Citimortgage, Inc. v. Dhinoja, 705 F.Supp.2d 1378, 1382 (N.D.Ga. 2010); Fed. Home Loan Mortg. Corp. v. Williams, Nos. 1:07-cv-2864-RWS, 1:07-cv-2865-RWS, 2008 WL 115096, at *2 (N.D.Ga. Jan 29, 2008) ("[A] dispossessory proceeding under Georgia law is not an ownership dispute, but rather only a dispute over the limited right to possession, title to property is not at issue and, accordingly, the removing Defendant may not rely on the value of the property as a whole to satisfy the amount in controversy requirement."). The amount-in-controversy requirement is not satisfied and removal is not proper based on diversity of citizenship.

Because the Court lacks both federal question and diversity jurisdiction, this action is required to be remanded to the Superior Court of Gwinnett County, Georgia. 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.").[5], [6] Because this action is required to be remanded, Defendant's Emergency Motion to Stay State Court Proceedings pending resolution of whether the Court has subject matter jurisdiction, is denied.

III. CONCLUSION

For the foregoing reasons,

IT IS HEREBY ORDERED that Magistrate Judge Walter E. Johnson's Report and Recommendation [3], and Defendant Objections [8] to the R&R, are deemed MOOT.

IT IS FURTHER ORDERED that this action is REMANDED to the Superior Court of Gwinnett County, Georgia.

IT IS FURTHER ORDERED that Defendant's Emergency Motion to Stay State Court Proceedings [10] is DENIED.

SO ORDERED.


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