United States District Court, E.D. Virginia, Norfolk Division
MEMORANDUM OPINION AND ORDER
RAYMOND A. JACKSON UNITED STATES DISTRICT
the Court are Plaintiff Erin Howerton Dail's
("Dail") Motion to Remand and Defendant Bank of
America, N.A.'s ("BANA") Motion to Dismiss
under Federal Rule of Civil Procedure 12(b)(6). Based on the
reasoning below, Dail's Motion to Remand is
DENIED, BANA's Motion to Dismiss is
GRANTED, and the matter is
FACTUAL AND PROCEDURAL HISTORY
a citizen of Virginia. ECF No. 1-3 at ¶ 1. BANA is a
citizen of North Carolina. ECF No. 1 at 3. Co-Defendant
Equity Trustees ("Equity") is a citizen of
Virginia. Id. at 4. Dail owns the property located
at 2601 Sterling Point Drive in Portsmouth, Virginia. ECF No.
1-3 at ¶ 1. On December 30, 2005, Dail entered into a
mortgage loan contract as a borrower. Id. at ¶
5. The loan was evidenced by a note and secured by a Deed of
Trust. Id. The obligations of both parties under the
Deed "are subject to any requirements and limitations of
Applicable Law." Id. at 20. The Deed defines
"Applicable Law" as "all controlling federal,
state, and local statutes, regulations, ordinances, and
administrative rules and orders." Id. at 11.
"Applicable Law" includes the Real Estate
Settlement Procedures Act ("RESPA"), Regulation X,
as they may be amended, which the Deed defines as "all
requirements and restrictions that are imposed in regard to a
'federally related mortgage loan' even if the Loan
does not qualify as a 'federally related mortgage loan
under RESPA.'" Id.
2009, BAN A took over servicing Dail's mortgage.
Id. at ¶ 9. BANA did not provide Dail with any
mortgage servicing information at least five months after the
transfer. Id. at ¶ 10. As a result, Dail did
not pay her mortgage. Id. at ¶ 11. As a result,
in October 2010, BANA sent Dail a unilateral loan
modification. Id. at ¶ 12.
2011, Dail fell on hard times; she became unemployed and
began to pay increasingly higher medical expenses.
Id. at ¶ 13. She therefore fell behind on her
mortgage payments. Id. Dail and her husband, Thomas
Dail ("Thomas"), attempted to obtain a loan
modification but were denied. Id. at ¶ 15. In
2016, Thomas wrote to BANA and asked for an accurate payoff
and reinstatement of the loan; that letter was never
answered. Id. at ¶¶ 17-18. BANA planned to
use Equity as its trustee to sell Dail's property at a
foreclosure auction. See Id. at ¶ 19. Equity
originally had originally set the foreclosure for September
25, 2018 but that was changed to November 6, 2018.
Id. at ¶¶ 19, 30. However, the foreclosure
sale never occurred and has not been rescheduled. ECF No. 6
at 2; ECF No. 8 at 3.
November 1, 2018, Dail filed her Complaint in the Circuit
Court for the City of Portsmouth, Virginia. ECF No. 1-3 at 8.
Dail alleges a breach of contract claim based on BANA's
alleged violation of Regulation X; she also seeks an
injunction to prevent BANA and Equity from executing the
foreclosure sale. Id. at 5-7. Dail claims $423,
786.00 in compensatory damages. Id. at 7. Dail also
seeks to recover fees from Equity related to the foreclosure
sale that has not yet occurred. Id.
November 29, 2018, BANA removed the case to this Court on
diversity jurisdiction grounds. ECF No. 1 at 1. In support,
BANA alleges that Equity has been fraudulently joined or is a
nominal party, so its citizenship should be disregarded for
jurisdictional purposes. Id. at 4-6.
December 6, 2018, BANA filed its Motion to Dismiss and argues
that Dail fails to state a claim as to both of her counts.
ECF Nos. 5-6. Dail did not respond to this Motion. However,
on December 20, 2018, Dail did file a Motion to Remand and
argued that Equity is a legitimate defendant. ECF Nos. 7-8.
On January 16, 2019, BANA filed its response in opposition to
Dail's Motion. ECF No. 13. Dail did not file a reply.
Motion to Remand
courts are courts of limited jurisdiction and may not
exercise jurisdiction absent a statutory basis. Exxon
Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546,
552 (2005). "A court is to presume, therefore, that a
case lies outside its limited jurisdiction unless and until
jurisdiction has been shown to be proper." United
States v. Poole, 531 F.3d 263, 274 (4th Cir. 2008)
(citing Kokkonen v. Guardian Life Ins. Co. of Am.,
511 U.S. 375, 377 (1994)).
a matter involves an area over which federal courts have
exclusive jurisdiction, a district court has subject matter
jurisdiction over a case only where the matter involves a
federal question arising "under the Constitution, laws
or treaties of the United States," 28 U.S.C. §
1331, or if "the matter in controversy exceeds the sum
or value of $75, 000, exclusive of interests ...