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Wiendieck v. Wells Fargo Bank, N.A.

United States District Court, W.D. Virginia, Charlottesville Division

August 23, 2016

Lieselott E. Wiendieck, Plaintiff,
Wells Fargo Bank, N.A., Defendant.



         This matter is before the Court upon Defendant Wells Fargo Bank, N.A.’s (“Wells Fargo”) motion to dismiss (dkt. 4) and Plaintiff Lieselott Wiendieck’s motion to remand (dkt. 6).

         The Court has diversity jurisdiction over the subject matter. Wiendieck is a citizen of Virginia and Wells Fargo is a citizen of South Dakota, and the amount in controversy exceeds $75, 000.[1]

         Plaintiff alleges she has a lifetime lease on her residence and that she may, despite Wells Fargo’s foreclosure on the property, remain there pursuant to Va. Code § 55-225.10(C), which incorporates portions of The Protecting Tenants at Foreclosure Act. Section 55-225.10(C) requires the payment of rent, and because Wiendieck’s lease is “rent-free, ” see Compl. ¶ 9, the I find that she is not entitled to enforce her rent-free lease against Wells Fargo.

         Accordingly, Wiendieck’s motion to remand will be denied and Wells Fargo’s motion to dismiss will be granted.

         I. Facts as Alleged and Procedural History

         In 2004, Wiendieck sold her home in Greene County, Virginia, to Lawrence and Marlene Eagleburger, who financed the purchase price with a loan from Wells Fargo. The loan was secured by a deed of trust. In 2007, “[a]s part of the consideration for the purchase[, ]” the Eagleburger’s entered into a written, but unrecorded, “lifetime, rent-free lease” of the home. Compl. ¶ 9; see also Docket No. 1, Ex. D, at 10 (“No annual base rent shall be paid under this Lease.”). The Eagleburgers died and their heirs defaulted on the Wells Fargo loan. Wells Fargo foreclosed on the property and bought it at an auction on December 16, 2015.

         On May 13, 2016, Wells Fargo brought an unlawful detainer action against Wiendieck in the Greene County General District Court. On May 29, 2016, Wiendieck filed an action in the Greene County Circuit Court against Wells Fargo seeking specific performance and a permanent injunction preventing Wells Fargo from interfering with her rights under the lease. On June 3, 2016, Wells Fargo removed Wiendieck’s action to this court and filed a motion seeking to dismiss Wiendieck’s claim.

         II. Motion to Remand

         Wiendieck argues that this action should be remanded because: (1) the parties should be realigned such that Wells Fargo is the plaintiff; (2) the Anti-Injunction Act prevents removal; (3) the prior exclusive jurisdiction doctrine bars removal; and (4) Wells Fargo has waived its right to remove. All of these arguments fail.

         A. Realignment

         Wiendieck argues that the parties in this case should be realigned such that Wells Fargo is considered the plaintiff and Wiendieck the defendant. Accordingly, as a plaintiff, Wells Fargo would be unable to remove under Section 1441. See 28 U.S.C. § 1441(a) (“[A]ny civil action . . . may be removed by the defendant or the defendants . . . .”) (emphasis added).

         1. Applicable Law

         Federal law determines who is a defendant under Section 1441, see Chicago, R.I. & P.R. Co. v. Stude, 74 S.Ct. 290, 294 (1954), and so “the state court caption is not always determinative of which party is the plaintiff and which is the defendant for removal purposes.” Williamsburg Plantation, Inc. v. Bluegreen Corp., 478 F.Supp.2d 861, 864 (E.D. Va. 2006).

         A party is properly considered a plaintiff where “the institution and continuance of the proceedings depend upon [that party’s] will.” Mason City & Ft. D.R. Co. v. Boynton, 27 S.Ct. 321, 323 (1907). In determining whether to realign parties, the Fourth Circuit applies the “principal purpose” test, which requires courts to “determine the primary issue in controversy” and then “align the parties according to their positions with respect to the primary issue.” Palisades Collections LLC v. Shorts, 552 F.3d 327, 337 (4th Cir. 2008).

         The Supreme Court has generally confined realignment to contexts where a state statute designates a party as plaintiff or defendant irrespective of whether the party instituted the proceeding. For instance, in Stude, a railroad seeking to condemn property instituted proceedings in state court. The railroad was, pursuant to state statute, styled as the defendant, while the property owner was styled as the plaintiff, even though the railroad initiated the suit. 74 S.Ct. at 293. After commencing the suit, the railroad sought removal to the federal district court.

         The Court found removal improper. Though styled as the defendant, the railroad had instituted the proceedings and sought legal relief (condemnation). The Court therefore found that the railroad was more properly considered the plaintiff because “the institution and continuance of the proceedings depend[ed] upon its will.” Id. at 294; see also Mason City, 27 S.Ct. at 324 (“The intent of the railroad to get the land is the mainspring of the proceedings from beginning to end, and the persistence of that intent is the condition of their effect.”).

         2. Discussion

         Applying the principal purpose test, it is evident from Wiendieck’s complaint that the primary issue in controversy is whether Wiendieck may compel Wells Fargo to honor her lease. It is Wiendieck who seeks relief, and so the “mainspring” of this case is Wiendieck’s desire to obtain specific performance and an injunction. Accordingly, “the institution and continuance of the proceedings depend upon [her] will.” Stude, 74 S.Ct. at 294.

         Moreover, Wiendieck is most analogous to the railroads in Stude and Mason City. Like the railroads, she instituted this proceeding, and she is the party who seeks a legal award. Wells Fargo, like the landowners, seeks only to defend. The parties are, therefore, properly “align[ed] . . . according to ...

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