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O'Carroll v. JPMorgan Chase Bank, N.A.

United States District Court, E.D. Virginia, Richmond Division

June 11, 2019



          The Honorable Henry E. Hudson, Senior United States District Judge.

         This matter is before the Court on Plaintiff Joseph O'Carroll, Ill's ("Plaintiff) Motion to Remand (the "Motion") (ECF No. 14), filed on March 29, 2019. Defendant JPMorgan Chase Bank N.A. ("JPMorgan") filed a Response in Opposition to Plaintiffs Motion (ECF No. 16) on April 11, 2019. 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. See E.D. Va. Local Civ. R. 7(J). For the reasons that follow, the Court denies Plaintiffs Motion.

         I. BACKGROUND

         According to the Complaint, Plaintiff owns property "in the city of North Chesterfield, Virginia" known as "Lot 44, North Settlers Landing, Section 1, with improvements thereon." (Compl. ¶ 4, ECF No. 1-1.) On June 20, 2003, Plaintiff allegedly entered into a mortgage loan contract in which he was the borrower.[1] (Id. ¶ 5.) The Complaint further states that the loan was evidenced by a Note and secured by a Deed of Trust. (Id. ¶ 5.)

         In January 2017, Plaintiff fell behind on his mortgage payments after experiencing a "reduction of income after a job change." (Id. ¶ 7.) Somtime thereafter, Plaintiff alleges that his income increased and that he sought several loan modifications with JPMorgan. (Id. ¶ 8.) However, he contends that JPMorgan repeatedly denied these attempts. (Id. ¶ 9.) Furthermore, Plaintiff alleges that, despite his best efforts, he was unable to save enough to satisfy the missed payments. (Id. ¶ 11.)

         In April 2018, Plaintiff states that he received an escrow statement from JPMorgan reflecting a surplus of $16, 360.86. (Id. ¶ 12.) In response, Plaintiff requested that JPMorgan apply those funds to the outstanding balance, however, JPMorgan allegedly declined to do so. (Id. ¶ 13.) Plaintiff contends that he has proof of funds to cover the remainder of the balance should JPMorgan apply the escrow funds to the outstanding amount. (Id. ¶ 14.)

         In May 2018, Plaintiff alleges that he attempted to make a payment to JPMorgan that, when combined with the amount in escrow, would bring his mortgage account current, but JPMorgan refused that payment. (Id. ¶¶ 15-16.)

         Thereafter, Plaintiff obtained counsel and sent an "error letter" to JPMorgan and the substitute trustee, Defendant Samuel I. White, P.C. ("SIWPC"), which outlined JPMorgan's alleged violations of 12 C.F.R. § 1024.35 and 12 C.F.R. § 1026.36. (Id. ¶¶ 17-18.) Representatives from JPMorgan allegedly informed Plaintiff that they could not process his request because the account is in active foreclosure status. (Id. ¶ 20.)

         On January 25, 2019, Plaintiff filed suit in Chesterfield County Circuit Court. As of the date of filing, Plaintiff contends that SIWPC intended to sell the property at auction on January 31.[2] (Id. ¶ 21.) The Complaint lodges five claims against JPMorgan and SIWPC.[3] (Id. ¶¶ 22-61.) On February 21, JPMorgan filed a Notice of Removal in this Court (ECF No. 1). On March 15, JPMorgan and SIWPC each filed respective Motions to Dismiss (ECF Nos. 9, 12). On March 29, Plaintiff filed the Motion that is currently before the Court.


         As the removing parties, Defendants bear the burden of demonstrating that this Court has subject-matter jurisdiction. Pressl v. Appalachian Power Co., 842 F.3d 299, 302 (4th Cir. 2016). Removing a proceeding 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).

         This 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).

         The fraudulent joinder doctrine, however, presents an exception to the complete diversity requirement, whereby a federal court can disregard the citizenship of a fraudulently joined party in determining whether the court has jurisdiction under § 1332. E.D. ex rel Darcy v. Pfizer, Inc., 722 F.3d 574, 578 (4th Cir. 2013); McFadden v. Fannie Mae, 525 Fed.Appx. 223, 227 (4th Cir. 2013) (citations omitted). The Fourth Circuit counsels that the fraudulent joinder standard "is even more favorable to the plaintiff than the standard for ruling on a motion to dismiss under Fed.R.Civ.P. 12(b)(6)." Hartley v. CSX Trans., Inc., 187 F.3d 422, 424 (4th Cir. 1999) (citing Batoffv. State Farm Ins. Co., 977 F.2d 848, 852 (3d Cir. 1992)). Consequently, the defendant must shoulder a significant burden to establish fraudulent joinder. Marshall v. Manville Sales Corp., 6 F.3d 229, 232-33 (4th Cir. 1993).

         The party claiming fraudulent or improper joinder must show that a claim could not be established against the non-diverse defendant, even after resolving all issues of law and fact in the plaintiffs favor. Mayes v. Rapoport, 198 ...

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