United States District Court, E.D. Virginia, Richmond Division
NORMA J. GIBBS, Plaintiff,
FEDERAL NATIONAL MORTGAGE ASSOCIATION, et al., Defendants.
MEMORANDUM OPINION (GRANTING PLAINTIFF'S MOTION
E. HUDSON UNITED STATES DISTRICT JUDGE
MATTER is before the Court on Plaintiff Norma J. Gibbs's
("Plaintiff) Motion to Remand to State Court (ECF No.
8), filed on March 7, 2018. Defendants Federal National
Mortgage Association ("FNMA") and PHH Mortgage
Association ("PHH") removed this action to this
Court on February 5, 2018, alleging that the relevant parties
in this action are diverse and that the amount in controversy
exceeds $ 75, 000. (Notice of Removal ¶ 9, ECF No. 1.)
Defendants PHH and FNMA are citizens of New Jersey and the
District of Columbia, respectively (Id. ¶
11-12), and Plaintiff is a citizen of Virginia. (Compl.¶
1, ECF No. 1-1.) Defendant Professional Foreclosure
Corporation of Virginia ("PFC") is also a citizen
of Virginia (Id. ¶ 1), but Defendants FNMA and
PHH claim that PFC's citizenship can be disregarded
because it was fraudulently joined. (Notice of Removal ¶
side has filed memoranda supporting their respective
positions. The Court will dispense with oral argument because
the facts and legal contentions are adequately presented in
the materials before the Court, and oral argument would not
aid in the decisional process.
reasons that follow, the Court will grant Plaintiffs Motion
(ECF No. 8), and the action will be remanded to the Circuit
Court of Spotsylvania County.
initially filed this action in the Circuit Court of
Spotsylvania County on December 18, 2017 against Defendant
FNMA, PHH and PFC. (Compl. 1.) Plaintiffs claims stem from
the foreclosure sale of a home, located at 11802 Berwick
Court, Fredericksburg, Virginia 22408 ("Property").
(Id. ¶ 1.)
E. Gibbs purchased the Property in 2005 and financed the
transaction through a loan and deed of trust ("DOT')
with Defendant PHH. (Id. ¶ 6-7.) Plaintiff
married Wallace Gibbs in 2013, and he executed a quitclaim
deed conveying his ownership interest in the Property to
Plaintiff in 2015. (Id. ¶ 8-9.) Wallace Gibbs
died intestate on July 18, 2015, and Plaintiff qualified as
the administrator of his estate. (Id. ¶ 11-12.)
At some point in early 2016, Plaintiff defaulted on the loan
with Defendant PHH. (Id. at Ex. E.)
contains a provision that allows PHH to accelerate the full
balance of the loan in the event of default. (Id. at
Ex. B.) However, prior to accelerating the balance due, PHH
was required to provide notice that states "(a) the
default; (b) the action required to cure the default; (c) a
date, not less than 30 days from the date of notice is given
to the Borrower, by which the default must be cured."
(Id.) Additionally, the notice must inform Plaintiff
that failure to cure may result in acceleration.
(Id.) Plaintiff claims that PHH provided a notice to
cure "not sooner than February 24, 2016" and the
notice provided a deadline of March 24, 2016. (Compl. ¶
15-17.) PFC conducted a foreclosure sale of the Property on
July 12, 2016. (Id. ¶ 23.)
alleges that PHH breached the deed of trust by providing a
notice that "gave a deadline, at the most, of 29 days
rather than 30 days" and further alleges that PFC
breached a fiduciary duty owed to her by failing to use due
diligence to ensure that it was not wrongfully foreclosing on
the Property. (Id. ¶¶ 17, 41.)
STANDARD OF REVIEW
removing parties, Defendants bear the burden of demonstrating
that this Court has subject-matter jurisdiction. Press!
v. Appalachian Power Co., 842 F.3d 299, 302 (4th Cir.
2016). Additionally, Defendants must satisfy the requirements
of 28 U.S.C. § 1446, which outlines the procedures for
removal. See Marler v. Amoco Oil Co., 793 F.Supp.
656, 658-59 (E.D. N.C. 1992) ("Defendant bears the
burden of establishing the right to removal, including
compliance with the requirements of [28 U.S.C] §
1446(b)."). Removing proceedings from state court raises
significant federalism concerns; accordingly, "[i]f
federal jurisdiction is doubtful, a remand is
necessary." Mulcahey v. Columbia Organic Chems.
Co., 29 F.3d 148, 151 (4th Cir. 1994).
Court has "original jurisdiction of all civil actions
where the matter in controversy exceeds the sum or value of
$75, 000, exclusive of interest and costs, and is between ...
Citizens of different States" 28 U.S.C. §
1332(a)(1). Diversity must be complete "such that the
state of citizenship of each plaintiff must be different from
that of each defendant" at the time an action commences.
Athena Auto., Inc. v. DiGregorio, 166 F.3d 288, 290
(4th Cir. 1999).
"[t]he fraudulent joinder doctrine provides an exception
to the complete diversity requirement." E.D. ex rel.
Darcy v. Pfizer, Inc., 722 F.3d 574, 578 (4th Cir.
2013). The doctrine "permits a federal court to
disregard, for jurisdictional purposes, the citizenship of
non-diverse defendants." McFadden v. Fannie
Mae, 525 Fed.App'x 223, 227 (4th Cir. 2013)
(citations and quotation marks omitted).
term "fraudulent joinder" is, in many ways, a
misnomer. See Id. More accurately characterized, it
is "a term of art, [which] does not reflect on the
integrity of plaintiff or counsel, but is merely the rubric
applied when a court finds either that no cause of action is
stated against the non diverse defendant, or in fact
no cause of action exists." AIDS Counseling &
Testing Ctrs. v. Group WTelevision, Inc.,903 F.2d 1000,
1003 (4th Cir. 1990) (citations and quotation marks omitted).
"The removing party must establish that there is no
possibility the plaintiff could establish a cause of action
against the in-state defendant in state court, or that there
has been outright fraud in the plaintiffs pleading of
jurisdictional facts. A claim need not succeed to ...