United States District Court, N.D. Alabama, Southern Division
For Federal National Mortgage Association, Plaintiff: Catherine C Long, D Keith Andress, LEAD ATTORNEYS, Jade E Sipes, BAKER DONELSON BEARMAN CALDWELL & BERKOWITZ PC, Birmingham, AL; Greggory M Deitsch, SIROTE & PERMUTT PC, Birmingham, AL.
For Penny Lynn Morris, Tyler Morris, Defendants: Kenneth J Lay, LEAD ATTORNEY, HOOD & LAY LLC, Birmingham, AL.
For Penny Lynn Morris, Counter Claimant: Kenneth J Lay, LEAD ATTORNEY, HOOD & LAY LLC, Birmingham, AL.
For Wells Fargo Bank NA, Counter Defendant: Catherine C Long, D Keith Andress, LEAD ATTORNEYS, Jade E Sipes, BAKER DONELSON BEARMAN CALDWELL & BERKOWITZ PC, Birmingham, AL.
JOHN E. OTT, Chief United States Magistrate Judge.
This action originally filed in the Circuit Court of Jefferson County, Alabama, Bessemer Division, was removed to this court pursuant to 28 U.S.C. § § 1441 and 1446 by Wells Fargo Bank, N.A. (" Wells Fargo" ), which the parties dispute to be either a " counter-defendant" or a " third-party defendant." (Doc. 1). The case was assigned to the undersigned United States Magistrate Judge pursuant to the court's General Order of Reference dated January 1, 2015. The parties have consented to an exercise of plenary jurisdiction pursuant to 28 U.S.C. § 636(c), Fed.R.Civ.P. 73, and LR 73.2. The cause now comes to be heard on a motion to remand filed by Defendants Penny Lynn Morris (" Penny" ) and Tyler Morris (" Tyler" ) (collectively the " Morrises" ). (Doc. 7). Upon consideration, the court concludes that the motion to remand is due to be granted.
This action was initiated on November 13, 2014, when Federal National Mortgage Association (" Fannie Mae" ) filed a complaint against Penny in the state court. (Doc. 1-1 at 2-11). In its pleading, Fannie Mae pursued an ejectment cause of action under Alabama law, asserting a right to take possession of certain real property from the defaulting borrower, Penny, after Fannie Mae had purchased the property on October 22, 2014, at a foreclosure sale from Wells Fargo, the owner of the mortgage. ( Id. at 2-3); see also generally ALA. CODE § 6-6-280. Fannie Mae also sought damages for the wrongful retention of the property and an order declaring that Penny had forfeited the right to redeem. ( Id. at 3). Shortly thereafter, Fannie Mae filed an amended complaint that named Tyler as an additional defendant, alleging that he too was unlawfully occupying the premises. (Doc. 1-1 at 13).
The Morrises, acting through counsel, filed an Answer. (Doc. 1-2 at 33-35). Later, on May 10, 2015, the Morrises' counsel filed a pleading styled as an " Amended Answer and Counterclaim," on behalf of either Penny alone or perhaps both Morrises. (Doc. 1-2 at 114-133). It was acknowledged therein that Penny had executed a mortgage on the property in May 2004, but she claimed that at the time of the foreclosure sale in October 2014, Fannie Mae was already the owner of the mortgage and that Wells Fargo was merely the loan servicer. ( See id. at 119, ¶ ¶ 5-7).
Penny further claimed that the foreclosure proceedings were actually initiated by Wells Fargo and that because it did not itself own the mortgage, Wells lacked legal authority to foreclose, thereby rendering wrongful both the foreclosure itself and any ostensible purchase of the property by Fannie Mae at the foreclosure sale. ( Id. at 119-20, ¶ ¶ 8-10, 13-16).
In the " Counterclaim" section of the pleading, under the heading of " Parties," Penny is identified as the sole " Defendant/Counter-Plaintiff." ( Id. at 118, ¶ 1). Also, while the pleading is styled as including a " Counterclaim," it does not formally name the plaintiff to the original suit, Fannie Mae, as a defendant to any claim or counterclaim. Rather, the pleading identifies Wells Fargo as the only " Plaintiff/Counter-Defendant" ( id. at 118, ¶ 2), notwithstanding that Wells Fargo was not previously a party to the litigation. ( See also id. at 119, ¶ 10 (stating that " Plaintiffs filed an ejectment suit against Morris," apparently referencing both Fannie Mae and Wells Fargo (emphasis added)); id. at 1-2, ¶ 3 (" Defendants plead that any recovery that might be available to the plaintiff must be offset by any recovery the Defendants might be entitled as a result of her counter-claim." (emphasis added)).
As to the substance of her " Counterclaim," Penny seeks to recover against Wells Fargo under both Alabama law and federal law. Her state law claims raise a host of theories: negligence, wantonness, unjust enrichment, wrongful foreclosure, slander of title, breach of contract, fraud, false light, defamation, unfair and deceptive trade practices, and breach of the covenant of good faith and fair dealing. These claims are all based upon allegations that Wells Fargo engaged in malfeasance in connection with its servicing the mortgage loan as it related to the collection and application of payments and fees, the giving of required notices, making misstatements regarding the status of the loan, declaring a default, conducting the foreclosure, and disseminating false or misleading of information to credit bureaus and others about the default and foreclosure. ( See Doc. 1-2, " Counterclaim" ¶ ¶ 19, 32, 38, 42-43, 46, 50-55, 58, 68, 74). Penny also raises claims against Wells Fargo arising uder federal law for alleged violations of the Fair Debt Collection Practices Act (" FDCPA" ), 15 U.S.C. § 1692 et seq.; the Truth in Lending Act (" TILA" ), 15 U.S.C. § 1601 et seq.; and the Real Estate Settlement Procedures Act (" RESPA" ), 12 U.S.C. § 2601 et seq. Penny's FDCPA count cites 15 U.S.C. § § 1692e(2) and (8) and 1692f(1) as its statutory basis. (Doc. 1-2, " Counterclaim" ¶ ¶ 62-64). While the shotgun nature of the pleading, see generally Wagner v. First Horizon Pharm. Corp., 464 F.3d 1273, 1279 (11th Cir. 2006), makes it difficult to identify the specific theory underlying those claims, they seem to be based upon incorporated allegations that Wells Fargo made misstatements to Penny about the status of the loan, wrongfully foreclosed, and/or wrongfully reported the foreclosure sale to national credit bureaus. ( See id. ¶ ¶ 11, 19, 32, 58, 62). Her RESPA claim, by contrast, is based expressly upon an alleged failure by Wells Fargo to acknowledge or respond to her " qualified written request" regarding the status of her loan, sent by certified mail on October 15, 2014. ( See Doc. 1-2, " Counterclaim" ¶ ¶ 91-92); see also 12 U.S.C. § 2605(e). Finally, Penny claims that Wells Fargo is liable under TILA for violating 15 U.S.C. § § 1632(a), 1632(b), 1638(a), and 1605, for allegedly failing to provide proper notices and disclosures and for allegedly charging fees not authorized by the mortgage contract. (Doc. 1-2 at 128-30). On her various state and federal claims, Penny seeks compensatory and punitive damages; a declaratory judgment setting aside the foreclosure sale, voiding
the foreclosure deed, and declaring her the rightful owner of the property; as well as an award of court costs and attorney fees. ( Id. at 131-32; see also id. at 118, ¶ 3).
On May 15, 2015, Wells Fargo removed the action to this court citing 28 U.S.C. § § 1441(a) and (c), invoking this court's jurisdiction under 28 U.S.C. § 1331 based on the federal claims Penny raised against Wells Fargo in her " Counterclaim." (Doc. 1). Fannie Mae consented to the removal. ( Id. at 2; Doc. 1-3). On June 11, 2015, the Morrises filed their instant motion to remand pursuant to 28 U.S.C. § 1447(c), arguing that Wells Fargo is not a " defendant" authorized to remove under § 1441. (Doc. 7). Wells Fargo filed a ...