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Snellgrove v. Common Bond Title, LLC

United States District Court, M.D. Alabama, Southern Division

February 22, 2018

COMMON BOND TITLE, LLC, et al., Defendants.



         By order entered on August 31, 2017, the District Judge referred this case to the Magistrate Judge for action or recommendation on all pretrial matters.[1] See Doc. 14. This matter is before the court on the following motions: (1) a motion to dismiss by defendant Common Bond Title, LLC; (2) a motion to dismiss by defendant Preferred Title Agency, Inc.; (3) a motion to transfer venue to the United States District Court for the Northern District of Alabama filed by the defendants; and (4) a motion to strike paragraph three of the plaintiff's declaration filed by the defendants. See Doc. 4; Doc. 6; Doc. 8; Doc. 18. The motions have been fully briefed and are ripe for decision. For the reasons discussed herein, the motion to strike and the motion to transfer venue are due to be granted, and the motions to dismiss are due to be held in abeyance for resolution by the transferee court.

         I. Introduction

         Plaintiff James Snellgrove, through his attorney of record, filed this lawsuit against defendants Common Bond Title, LLC, and Preferred Title Agency, Inc., in the Circuit Court of Houston County, Alabama, on June 21, 2017. See Doc. 1-2. According to the plaintiff's allegations, on February 26, 2010, he purchased a home in Dothan, Alabama, and he financed the purchase with a mortgage. He closed on the purchase with defendant Preferred Title Agency, Inc. - a predecessor corporate entity to defendant Common Bond Title, LLC - which “issued … an Owner's Policy of Title Insurance” and “represented to [plaintiff] that the ownership and title to his new home was clear, except for [his] mortgage[.]” Id. at 2. Plaintiff refinanced the mortgage on the property in 2012 through Common Bond Title, LLC.

         In November 2016, the plaintiff applied to refinance the property through MidSouth Bank. The loan application was denied because of a judgment lien against the property that was recorded after the plaintiff closed on February 26, 2010, but before the deed was recorded on March 16, 2010. Plaintiff asserts that the first notice he received of the judgment lien was in 2016. He sues under the theory that the lien should have been discovered and disclosed to him by the defendants in 2012, and he asserts that he has suffered significant financial loss as a result of the defendants' failure to discover or disclose the judgment lien. Plaintiff brings claims under the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601 et seq., and asserts various state law causes of action under Alabama law for breach of contract, fraud, negligence, wantonness, and unjust enrichment.

         On July 25, 2017, the defendants filed a notice of removal on the basis that this court has federal question jurisdiction due to plaintiff's RESPA claim. See 28 U.S.C. § 1331. Plaintiff did not challenge the removal, and the court finds that there is subject matter jurisdiction over this dispute. See Univ. of S. Alabama v. Am. Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999) (“[A] court should inquire into whether it has subject matter jurisdiction at the earliest possible stage in the proceedings. Indeed, it is well settled that a federal court is obligated to inquire into subject matter jurisdiction sua sponte[.]”). Shortly after the notice of removal, the defendants filed the instant motions.

         The court must first reach the merits of the motion to transfer venue because a ruling on that motion determines whether the court should decide the motions to dismiss. If, as here, transfer of venue is appropriate, a transferring court will hold in abeyance pending dispositive motions for disposition by the transferee court. See, e.g., Bell v. Rosen, 2015 WL 5595806, at *16 (S.D. Ga. Sept. 22, 2015) (“Based on the Court's decision to transfer this case to another venue, the Court declines to consider the portion of Defendants' Motion calling for an evaluation of Plaintiffs' claims on the merits.”). First, however, the court will rule on defendants' motion to strike a portion of the plaintiff's affidavit, which is submitted as evidence in opposition to the motion to transfer venue.

         II. Discussion

         A. Defendants' Motion to Strike

         In opposition to the motion to transfer venue, the plaintiff filed an affidavit, signed under penalty of perjury and based on his “personal knowledge, ” in which he testified, in relevant part, that “[a]ll closing and transactions with both Preferred Title Agency, Inc. and Common Bond Title, LLC associated with [the] property occurred in Houston County.” Doc. 16-1 at 1, Para. 3. Houston County, Alabama, is in the Southern Division of the Middle District of Alabama. Plaintiff seeks to use his affidavit testimony to support his argument that venue is proper exclusively in the Middle District of Alabama because, according to plaintiff, all events related to this litigation occurred in this district. See Doc. 16 at 2 (“Everything happened in Houston County.”). The plaintiff relies solely on his affidavit testimony that “all” closing and transaction events happened in this judicial district to support that argument.

         The defendants move to strike Paragraph 3 of the plaintiff's affidavit on the ground that the plaintiff lacks personal knowledge to testify that “all” closing events and transactions took place in Houston County, Alabama. Doc. 18 at 1-2 (citing Fed.R.Evid. 602 (“A witness may testify to a matter only if evidence is introduced sufficient to support a finding that the witness has personal knowledge of the matter. Evidence to prove personal knowledge may consist of the witness's own testimony.”)). “For a matter to be considered within a witness's personal knowledge, it must be ‘derived from the exercise of his own senses, not from the reports of others - in other words, [it] must be founded on personal observation[.]'” Poitevint v. United Recovery Sys., LP, 899 F.Supp.2d 1230, 1235 (N.D. Fla. 2012) (quoting U.S. v. Evans, 484 F.2d 1178, 1181 (2nd Cir. 1973)) (striking paragraphs of an affidavit that are not based on the affiant's personal knowledge); see also New York ex rel. Spitzer v. Saint Francis Hosp., 94 F.Supp.2d 423, 427 (S.D. N.Y. 2000) (test for admissibility under Rule 602 is “whether a reasonable trier of fact could believe the witness had personal knowledge of the facts to which he is testifying”).[2]

         Defendants contend that “all closing and transactions” means exactly that, and that the plaintiff has not shown a foundation of personal knowledge to testify about matters related to the closing and transactions insofar as the defendants' business operations are concerned - specifically, and material to plaintiff's RESPA claim, where defendants accepted payment and perform title search work. Id. at 2. In opposition to the motion to strike, the plaintiff argues that “all” does not really mean “all.” Doc. 23 at 1-2 (“If the Defendants seriously contend that Mr. Snellgrove is claiming “All” closings and transactions for all places and all times occurred in Houston County, he obviously is not.”) (emphasis in original). Plaintiff's counsel asserts that the plaintiff's affidavit “establishes that all closings and transactions he had with [defendants] associated with the property that is related to this claim occurred in Houston County.” Doc. 23 at 2. However, plaintiff's counsel cannot amend or clarify the plaintiff's affidavit through arguments in a brief. See, e.g., Johnson v. Nagle, 58 F.Supp.2d 1303, 1351 (N.D. Ala. 1999), aff'd sub nom. Johnson v. Alabama, 256 F.3d 1156 (11th Cir. 2001) (“ … statements and arguments of counsel are not evidence …”) (quoting United States v. Smith, 918 F.2d 1551, 1561 (11th Cir. 1990)); Sharp Realty & Mgmt., LLC v. Capitol Specialty Ins. Corp., 2012 WL 2049817, at *12 (N.D. Ala. May 31, 2012), aff'd, 503 Fed.Appx. 704 (11th Cir. 2013) (“There is no question that ‘[u]nadorned representations of counsel in a summary judgment brief are not a substitute for appropriate record evidence.'”) (quoting Taylor v. Holiday Isle, LLC, 561 F.Supp.2d 1269, 1275 n. 11 (S.D. Ala. 2008)) (bracketed text in original). The plaintiff's sworn testimony can only be clarified or amended through other sworn testimony, and such testimony is not before the court.

         In an effort to demonstrate that the plaintiff has personal knowledge, the plaintiff argues that a HUD-1 form in the court's record lends evidentiary support for the plaintiff's affidavit testimony in Paragraph 3. The HUD-1, which is not signed or dated, indicates that the “Place of Settlement” for the property at issue is 2220 Montgomery Highway, Dothan, Alabama. Doc. 3 at 35-36. The plaintiff does not make any arguments about the legal or factual significance of the words “Place of Settlement” on the unsigned, undated HUD-1 form except to note that the document indicates that the defendants are to be paid from the settlement funds. See Doc. 16 at 2. According to the HUD-1, Common Bond Title, LLC and the plaintiff's mortgagor are located in the Northern District of Alabama. The HUD-1 does not address the material fact at issue for purposes of venue - the place where defendants accepted payment. See Section II.B.1, infra. Insofar as the plaintiff contends that the HUD-1 provides a basis for the plaintiff's personal knowledge that all closing and transactions occurred in Houston County, the plaintiff has not provided any testimony that he saw or read the HUD-1. Based on the evidence of record, the court finds that the HUD-1 does not demonstrate the plaintiff's personal knowledge to testify that all closing and transactions with regard to the 2012 refinancing took place in Houston County, Alabama.

         Finally, the court must address the effect of plaintiff's testimony that his affidavit is based on “personal knowledge.” Doc. 16-1 at 1. “[D]istrict courts are ‘bound to accept as true' statements in the affidavit or declaration that it is made on personal knowledge, ‘unless the context demonstrate[s] otherwise.'” Murphy-Brown v. Adtran, Inc., 2015 WL 4931500, at *2 (N.D. Ala. 2015) (quoting Martin v. Rumsfeld, 137 F. App'x. 324, 326 (11th Cir. 2005)). The plaintiff does not offer evidence to demonstrate that he has personal knowledge of the place where defendants accepted payment for services and performed title search and services work, which are relevant facts regarding plaintiff's RESPA claim. See Section II.B.1., infra. In contrast, the defendants filed affidavit evidence offered by the former registered agent and shareholder of Preferred Title Agency, Inc., [3] and current managing member of Common Bond Title, LLC. That affiant testifies that he has personal knowledge that the defendants accepted payment and performed work for the 2012 closing in Mountain Brook, Alabama, which is in the Northern District of Alabama. See Doc. 8-1 (Affidavit of James P. Harris, III). Thus, the context of the plaintiff's affidavit, standing alone, or in comparison with the other evidence of record, does not demonstrate that he has personal knowledge of all closing activities and transactions.

         In short, defendants are correct that the plaintiff's affidavit and the evidence of record do not provide a basis for his personal knowledge to testify about “all” closing related matters and transactions. Thus, Federal Rule of Evidence 602 is not satisfied. The motion to strike is due to be granted, and the court will not consider plaintiff's testimony in Paragraph Three of his affidavit that “[a]ll closing and transactions with both Preferred Title Agency, Inc. and Common Bond Title, LLC associated with [the] property occurred in Houston County.” Doc. 16-1 at 1.[4]

         B. This Cause is Due to be Transferred to the Northern ...

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