Update 31 Oct 2021: Motion for reconsideration denied for lack of jurisdiction.
An order by Judge Fred Biery is entered in record time in this removed case – “Wells Fargo has not met its heavy burden of proving that defendant [Mark] Cronenwett was improperly joined.”
ORDER OF REMAND FOR LACK OF JURISDICTION
Before the Court is the status of the above styled and cause. After careful consideration, the Court is of the opinion that this case should be remanded sua sponte to the state court from which it was removed for lack of subject matter jurisdiction.
Plaintiff filed this suit in Texas state court against defendants based on defendant Cronenwett’s representation of Ocwen Loan Servicing, LLC and Wells Fargo in previous lawsuits brought by plaintiff. Plaintiff alleges that defendant Cronenwett “schemed” with Wells Fargo Bank National Association (“Wells Fargo”) to obtain a March 3, 2016, foreclosure order in state court. Petition, ¶ 3.
Plaintiff further alleges that defendant Cronenwett “forged Alanis [plaintiff’s] mortgage records and fabricated declarations and affidavits to aid Wells Fargo” in obtaining the March 3, 2016, foreclosure order and that defendant Cronenwett “continued the scheme to use the March 3, 2016[,]
Order for Foreclosure to obtain eviction and writ of possession orders to steal the Alanis Property.” Petition, ¶ 14, 60-41.
Plaintiff and defendant Cronenwett are residents of Texas.
Wells Fargo is a citizen of South Dakota.
Wells Fargo removed this action to federal court alleging that diversity jurisdiction over this dispute exists because defendant Cronenwett was improperly joined.
Specifically, Wells Fargo argues the attorney immunity doctrine bars plaintiff’s suit against the resident defendant.
Standard of Review
This Court has a duty, sua sponte, to determine at the outset whether it has jurisdiction.
Smith v. Texas Children’s Hosp., 172 F.3d 923, 925 (5th Cir. 1999).
Because plaintiff and defendant Cronenwett are non-diverse, removal jurisdiction is proper only if defendant Cronenwett was improperly joined.
The federal removal statute, 28 U.S.C. § 1441(a), authorizes removal of “any civil action brought in a State court of which the district courts of the United States have original jurisdiction;” but subsection (b) specifies that suits not arising under federal law are removable “only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.”
Smallwood v. Illinois Cent. R.R. Co., 385 F.3d 568, 572 (5th Cir. 2004) (en banc) (quoting 28 U.S.C. § 1441(b)).
Removal statutes, moreover, are to be construed “strictly against removal and for remand.”
Eastus v. Blue Bell Creameries, L.P., 97 F.3d 100, 106 (5th Cir. 1996).
And the “focus of the inquiry must be on the joinder, not the merits of the plaintiff’s case.” Smallwood, 385 F.3d at 573; see also McDonal v. Abbott Labs, 408 F.3d 177, 183–84 (5th Cir. 2005).
An improper joinder occurs if a plaintiff is unable “to establish a cause of action against the non-diverse party in state court.”
Smallwood, 385 F.3d at 572 (quoting Travis v. Irby, 326 F.3d 644, 646–47 (5th Cir. 2003)).
The test is whether there is “no possibility of recovery by the plaintiff against an in-state defendant,” or put a different way, whether there is “no reasonable basis for [predicting recovery] against an in-state defendant.”
Id. at 573.
To resolve this inquiry, the district court may conduct a Rule 12(b)(6)-type analysis, “looking initially at the allegations of the complaint to determine whether the complaint states a claim under state law against the in-state defendant.
Ordinarily, if a plaintiff can survive a Rule 12(b)(6) challenge, there is no improper joinder.”
Id. at 573 (footnote omitted).
“To pass muster under Rule 12(b)(6), [a] complaint must have contained ‘enough facts to state a claim to relief that is plausible on its face.’”
International Energy Ventures Mgmt., 818 F.3d 193, 200 (5th Cir. 2016) (quoting Reece v. U.S. Bank Nat’l Ass’n, 762 F.3d 422, 424 (5th Cir. 2014)).
Wells Fargo cites Texas case law in support of the proposition that the attorney immunity doctrine is applicable in this case. As Wells Fargo suggests, there is a line of cases holding that an attorney cannot be liable for conduct relating to ongoing litigation.
See e.g., Brandt v. Sebek, 14 S.W.3d 756, 766 (Tex. App.–Houston [1st Dist.] 2001, pet denied); Chapman Children’s Trust v. Porter & Hedges, L.L.P., 32 S.W.3d 429, 441 (Tex. App.—Houston [14th Dist.] 2000, pet. denied); Renfroe v. Jones & Assocs., 947 S.W.2d 285, 288 (Tex. App.—Fort Worth 1997, writ denied); Bradt v. West, 892 S.W.2d 56, 71-74 (Tex. App.—Houston [1st Dist.] 1994, writ denied); Butler v. Lilly, 533 S.W.2d 130, 131-34 (Tex. Civ. App.—Houston [1st Dist.] 1976, writ, dism’d).
However, rather than preparing filings or pleadings or taking some similar action in the underlying case, the resident defendant allegedly conspired with Wells Fargo to forge documents and falsify records when appearing before state court judges in the foreclosure case.
There is a second line of cases holding that an attorney can be liable for conduct associated with litigation if it is wrongful and outside the work that call for an attorney’s skills, education, judgment, and zealous representation.
See e.g., Poole v. The H. & T.C. R.R., 58 Tex. 134, 137 (1882); Mendoza v. Fleming, 41 S.W.3d 781, 788 (Tex. App.—Corpus Christi 2001, no pet.); Likover v. Sunflower Terrace II, Ltd., 696 S.W.2d 468 (Tex. App.—Houston [1st Dist.] 1985, no pet.); Bourland v. State of Texas, 528 S.W.2d 350, 353–54 (Tex. Civ. App.—Austin 1975, writ ref’d); see also Miller v. Stonehenge/Fasa-Texas, JDC, L.P., 993 F. Supp. 461, 465 (N.D. Tex. 1998).
In a case similar to the instant matter, a federal district court, despite expressing skepticism as to whether plaintiff’s causes of action against an attorney defendant would ultimately succeed, nonetheless granted a motion to remand because “tenuous though it may be . . . the claim against [the resident attorney] has the ‘modicum of sturdiness’ sufficient to withstand a claim of fraudulent joinder.”
TransTexas Gas Corp. v. Stanley, 881 F. Supp. 268, 271-72 (S.D. Tex. 1994).
The plaintiffs in Stanley alleged a civil conspiracy against the defendants, one of whom was an attorney, for threatening to continue a campaign of fraud and other acts aimed at “destroying the plaintiff.”
Id. at 271.
The attorney in that case raised many of the same arguments made by Wells Fargo in the instant case.
The District Court reasoned that remand was proper because ‘Texas law will hold an attorney liable for conspiring with his client unlawfully.”
Id. at 272.
“Although [the] cases [cited by Wells Fargo] reflect a very strong public policy in favor of providing lawyers with significant leeway in the actions they may take in representing their clients, such cases are not absolutely controlling.”
Bagga v. Florida Receivables Trust 2002-A, Civ. No. B-04-167, 2005 WL 8168423, at *13 (S.D. Tex. Sept. 2, 2005).
Here, the specific allegations lodged by plaintiff against the resident attorney defendant involve a conspiracy to evict her from her home and steal her property using written documents containing false information that was provided in court proceedings.
“When reviewing the question of improper joinder, a federal court must view the allegations in the manner most favorable to plaintiff, even when it doubts the merits of his or her claim.”
Id. at *16.
“It must also view any ambiguities in controlling law in the light most favorable to the plaintiff despite the fact that the defendants might ultimately prevail as a matter of law in a later motion for summary judgment.”
This Court concludes, based on the record before it, that it cannot predict that there is no reasonable basis for recovery against the resident defendant.
Accordingly, Wells Fargo has not met its heavy burden of proving that defendant Cronenwett was improperly joined.
Because defendant Cronenwett and plaintiff are Texas residents, the Court lacks diversity jurisdiction over this case and it must be remanded to the state court from which it was removed.
IT IS THEREFORE ORDERED that the above-styled and numbered cause is REMANDED to the 150th Judicial District Court, Bexar County, Texas, for lack of subject matter jurisdiction.
IT IS FURTHER ORDERED that the Clerk of Court is directed to send a certified copy of this Order of Remand to the clerk of the state court.
IT IS FINALLY ORDERED that this case is CLOSED. It is so ORDERED.
SIGNED this 8th day of October, 2021.
Removal by Foreclosure Mill McGlinchey Stafford to W.D. Tex. Federal Court
DEFENDANT WELLS FARGO’S NOTICE OF REMOVAL
Defendant Wells Fargo Bank National Association, as Trustee for the Pooling and Servicing Agreement dated as of October 1, 2006 Securitized Asset Backed Receivables LLC Trust 2006-NC3 Mortgage Pass Through Certificates, Series 2006 NC3 (“Wells Fargo” or “Defendant”) hereby gives notice of the removal of the state court civil action described below on the basis of 28 U.S.C. § 1332 (diversity jurisdiction). As grounds for the removal, Defendant respectfully states the following:
1. On October 1, 2021, Plaintiff Nancy Alanis (“Plaintiff”) filed Plaintiff’s Verified Original Petition for Declaratory Judgment (Trespass to try Title, Vacate Void Judgment, Set Aside Sheriff’s Sale) and Application for Ex Parte Temporary Restraining Order and Temporary Injunction (“Petition”) numbered and styled as Cause No. 2021Cl20923, Nancy Alanis v. Wells Fargo Bank National Association, as Trustee for the Pooling and Servicing Agreement dated as of October 1, 2006 Securitized Asset Backed Receivables LLC Trust 2006-NC3 Mortgage Pass Through Certificates, Series 2006 NC3 and Mark Douglas Cronenwett, in the 150th Judicial District Court, Bexar County, Texas.
2. In her latest suit, Plaintiff challenges Wells Fargo’s standing to foreclose and asserts claims for quiet title, trespass to try title, tortious interference with a contract, adverse possession, fraud, violation of Tex. Civ. Prac. & Rem. Code § 134.002-134.003, and seeks exemplary damages and declaratory relief to set aside the foreclosure sale, the March 3, 2016 order for foreclosure, and the March 26, 2019 judgment for possession. See Pet.
3. In accordance with 28 U.S.C. § 1446(a), copies of all process, pleadings, orders, and other papers filed in the state court action and obtained by Wells Fargo are attached hereto and marked as composite Exhibit A and incorporated herein by reference.
Additional pleadings filed by Plaintiff in the state court action and not yet received by Wells Fargo, as identified in the Index to Exhibit A, will be supplemented upon receipt of the same from the Bexar County District Clerk.
II. TIMELINESS OF NOTICE OF REMOVAL
4. This removal is timely pursuant to 28 U.S.C. § 1446(b)(1) because Plaintiff’s Petition was filed on October 1, 2021, and removal is within 30 days of filing regardless of service on any party.
5. As explained more fully below, defendant Mark Douglas Cronenwett (“Cronenwett”) is improperly joined, and therefore, his consent is not necessary for removal.
See Rico v. Flores, 481 F.3d 234, 239 (5th Cir. 2007).
III. BASIS FOR REMOVAL- DIVERSITY JURISDICTION
6. This Court has original jurisdiction over this lawsuit pursuant to 28 U.S.C. § 1332 because it is between citizens of different states and the amount in controversy exceeds $75,000, exclusive of interest and costs.
A. Complete Diversity Exists between Plaintiff and Properly Joined Defendant Wells Fargo.
7. Upon information and belief, Plaintiff is a citizen and resident of Bexar County, Texas.1
8. Wells Fargo is a national banking association and trustee of a mortgage- securitization trust. When a trustee is the real party in interest to the suit, its citizenship controls for purposes of diversity jurisdiction.2
A trustee that possesses the “customary powers to hold, manage, and dispose of assets” is the real party in interest.3
That is, when the trustee has control of assets for the benefit of another and has the power to sue or be sued in its own name, the trustee’s citizenship is “all that matters for diversity purposes.”4
A national banking association is considered a citizen of the state in which it is located, as determined by the state of its main office in the articles of association.5
With its main office in South Dakota as designated in its articles of association, Defendant is a citizen of South Dakota.
B. Cronenwett Is Improperly Joined.
9. Upon information and belief, Cronenwett is a citizen of Texas, but his citizenship should be disregarded for the diversity analysis because he is improperly joined and only a nominal party.
A photo of the orbs containing ghosts that haunt Terror Mansion taken by owner Nancy Alanis.
“If you look closely you can see faces in the center of the orbs,” Alanis said Oct. 3 outside Terror Mansion.
10. While complete diversity is required for diversity jurisdiction, diversity cannot be destroyed by a plaintiff improperly joining a non-diverse defendant.
See, e.g., Cuevas v. BAC Home Loans Servicing, L.P., 648 F.3d 242, 249 (5th Cir. 2011);
Smallwood v. Illinois Central R.R. Co., 385 F.3d 568, 572 (5th Cir. 2004).
A finding of fraudulent or improper joinder is appropriate when “there is no possibility of recovery by the plaintiff against an in-state defendant, which stated differently means that there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against the in-state defendant.”
Smallwood, 385 F.3d at 573.
A “mere theoretical possibility of recovery under local law will not preclude a finding of improper joinder.”
Id., at 837 n. 9.
11. In deciding whether a defendant has been improperly joined, the Court should look to the allegations in the plaintiff’s pleading at the time of removal and conduct a Rule 12(b)(6)-type analysis to determine whether the plaintiff states a claim against the non-diverse defendant.6
12. In this case, Plaintiff’s entire case against Cronenwett is based on his representation of Ocwen Loan Servicing, LLC and Wells Fargo in previous lawsuits brought by Plaintiff.
For example, Plaintiff alleges that Cronenwett “schemed” with Wells Fargo to obtain the March 3, 2016 foreclosure order.
Pet. ¶ 3.
Plaintiff further alleges that Cronenwett
“forged Alanis mortgage records and fabricated declarations and affidavits to aid Wells Fargo” in obtaining the March 3, 2016 foreclosure order and that Cronenwett “continued the scheme to use the March 3, 2016 Order for Foreclosure to obtain eviction and writ of possession orders to steal the Alanis Property.”
Pet. ¶ 14, 60-41.
For this reason, Cronenwett is immune from this suit, and Plaintiff’s claims against Cronenwett fail as a matter of law and Cronenwett’s citizenship cannot destroy diversity.
13. Furthermore, Texas law discourages lawsuits against an opposing counsel if the lawsuit is based on the fact that counsel represented an opposing party in a judicial proceeding. Bradt v. Sebek, 14 S.W.3d 756, 766 (Tex.App.—Houston [1st Dist.] 2001, pet. denied). In fulfilling this duty, an attorney has the right to interpose defenses and pursue legal rights that he deems necessary and proper, without being subject to liability or damages. Id. In this respect, attorneys enjoy “qualified immunity” with respect to non-clients, for actions taken in connection with representing a client in litigation. See, e.g., Butler v. Lilly, 533 S.W.2d 130, 131-34 (Tex.Civ. App.—Houston [1st Dist.] 1976, writ, dism’d). This qualified immunity generally applies even if conduct is improper in the context of the underlying lawsuit. Renfroe v. Jones & Assocs., 947 S.W.2d 285, 288 (Tex.App.—Fort Worth 1997, writ denied)(“Under Texas law, attorneys cannot be held liable for wrongful litigation conduct.”). An attorney’s conduct, even if frivolous or without merit, while potentially sanctionable by the court, is not independently actionable if the conduct is party of the discharge of the lawyer’s duties in representing his client. Chapman Children’s Trust v. Porter & Hedges, L.L.P., 32 S.W.3d 429, 441 (Tex.App.— Houston [14th Dist.] 2000, pet. denied); Bradt v. West, 892 S.W.2d 56, 71-74 (Tex.App.— Houston [1st Dist.] 1994, writ denied.
14. Here, Cronenwett is immune from suit because he cannot be sued by Plaintiff for actions taken within the scope of his representation of Ocwen and Wells Fargo in previous lawsuits she has brought. Accordingly, Cronenwett is improperly joined and Plaintiff’s naming of him as a “defendant” does not defeat this Court’s diversity jurisdiction.
15. Accordingly, there is complete diversity between Plaintiff and the properly joined defendant, i.e. Wells Fargo. Because the citizenship of Cronenwett must be disregarded for jurisdictional purposes, complete diversity of citizenship exists, and removal is appropriate under 28 U.S. C. §§ 1332 and 1441.
C. The Amount in Controversy Exceeds $75,000.00.
16. In the Petition, Plaintiff expressly seeks damages of no less than $5.5 million dollars.
Pet. ¶¶ 175-182.
Thus, Plaintiff concedes that the amount of controversy exceeds the jurisdictional minimum required for diversity jurisdiction.
17. Plaintiff also seeks declaratory relief from the Court to set aside the foreclosure sale, the March 3, 2016 order for foreclosure, and the March 26, 2019 judgment for possession.
Pet. ¶¶ 148-157.
Where a plaintiff seeks equitable relief, “it is well established that the amount in controversy is measured by the value of the object of the litigation.”
Garcia v. Koch Oil Co. of Texas Inc., 351 F.3d 636, 640-41 (5th Cir. 2003) (quoting Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 347 (1977));
see also Leininger v. Leininger, 705 F.2d 727, 729 (5th Cir. 1983) (“In actions seeking declaratory or injunctive relief the amount in controversy is measured by the value of the object of the litigation.”).
Furthermore, “when the validity of a contract or a right to property is called into question in its entirety, the value of the property controls the amount in controversy.”
Nationstar Mortgage LLC v. Knox, 351 Fed. Appx. 844, 848 (5th Cir. 2009) (quoting Waller v. Prof’l Ins. Corp., 296 F.2d 545, 547-48 (5th Cir. 1961)); Martinez v. BAC Home Loans Servicing, LP, 777 F. Supp. 2d 1039, 1051 (W.D. Tex. 2010); Lemessa v. Wells Fargo Bank, N.A., No. G-10-0478, 2010 WL 5125956 (S.D. Tex., Dec. 9, 2010).
18. Here, the object of the litigation is the Property, which Plaintiff concedes.
In this instance, the assessed value of the Property for 2021 is $322,300.00.7
Thus, the value of the object of the litigation exceeds $75,000.00 under any measurement and the amount in controversy exceeds the federal jurisdictional minimum. See 28 U.S.C. § 1332(a).
IV. ADDITIONAL REQUIREMENTS
19. This action is properly removed to this Court, as cases arising from Bexar County, Texas are properly assigned to this Court. 28 U.S.C. § 124(c)(3).
20. In accordance with 28 U.S.C. §1441(d), Wells Fargo will promptly file a copy of this Notice of Removal with the Clerk of the 155th Judicial District Court for Bexar county, Texas.
17. Plaintiff did not make a jury demand in the Petition.
WHEREFORE, having satisfied the requirements for removal, Wells Fargo gives notice that Cause No. 2021Cl20923, originally filed in the 155th Judicial District Court, Bexar County, Texas, has been removed to this Court.
By: /s/ Kathryn B. Davis
R. Dwayne Danner
State Bar No. 00792443
MCGLINCHEY STAFFORD, PLLC
Three Energy Square
6688 North Central Expressway, Suite 400
Dallas, Texas 75206
Kathryn B. Davis
State Bar No. 24050364
MCGLINCHEY STAFFORD, PLLC
1001 McKinney, Suite 1500
Houston, Texas 77002
Telephone : (713) 520-1900
Facsimile: (713) 520-1025
ATTORNEY FOR DEFENDANT
WELLS FARGO BANK NATIONAL
ASSOCIATION, as Trustee
CERTIFICATE AND NOTICE OF FILING
I certify that on October 6, 2021, the foregoing Notice of Removal was filed with the District Clerk of Bexar County, Texas, and that written notice of filing of the Notice of Removal was served upon Plaintiff.
/s/ Kathryn B. Davis
KATHRYN B. DAVIS
CERTIFICATE OF SERVICE
I certify that a correct copy of the foregoing was filed with the U.S. District Clerk’s office by operation of the Court’s CM/EFC, and has been forwarded in accordance with the Federal Rules of Civil Procedure on October 6, 2021.
Via Email to: firstname.lastname@example.org Nancy Alanis
13210 Hunters View San Antonio, TX 78230
/s/ Kathryn Davis
U.S. District Court [LIVE]
Western District of Texas (San Antonio)
CIVIL DOCKET FOR CASE #: 5:21-cv-00952
|Alanis v. Wells Fargo Bank National Association, as Trustee et al
Cause: 28:1332 Diversity-(Citizenship)
|Date Filed: 10/06/2021
Jury Demand: None
Nature of Suit: 290 Real Property: Other
|Nancy Alanis||represented by||Nancy Alanis
|Wells Fargo Bank National Association, as Trustee||represented by||R. Dwayne Danner
McGlinchey Stafford, PLLC
6688 North Central Expressway, Suite 400
Dallas, TX 75206
ATTORNEY TO BE NOTICEDKathryn Buza Davis
McGlinchey Stafford PLLC
1001 McKinney St
Houston, TX 77002
Fax: (713) 520-1025
ATTORNEY TO BE NOTICED
|Mark Douglas Cronenwett|
|Date Filed||#||Docket Text|
|10/06/2021||1||NOTICE OF REMOVAL by Wells Fargo Bank National Association, as Trustee (Filing fee $402 receipt number 0542-15304543), filed by Wells Fargo Bank National Association, as Trustee. (Attachments: # 1 Exhibit A, # 2 Exhibit A-1, # 3 Exhibit A-2, # 4 Exhibit A-3, # 5 Exhibit A-4, # 6 Exhibit B, # 7 Civil Cover Sheet, # 8 Civil Cover Sheet – Supplemental)(Davis, Kathryn) (Entered: 10/06/2021)|
|10/06/2021||2||Certificate of Interested Parties by Wells Fargo Bank National Association, as Trustee. (Danner, R.) (Entered: 10/06/2021)|
|10/06/2021||3||RULE 7 DISCLOSURE STATEMENT filed by Wells Fargo Bank National Association, as Trustee identifying Corporate Parent Wells Fargo & Company for Wells Fargo Bank National Association, as Trustee. (Danner, R.) (Entered: 10/06/2021)|