Opinion
CIVIL ACTION NO. H-15-1174
07-15-2016
BARRY K. HALLEY, et al., Plaintiffs/Counter-Defendants, v. DEUSTCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR MORGAN STANLEY ABS CAPITAL I INC., TRUST 2004-HE3, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-HE3, et al., Defendants/Counter-Plaintiffs.
MEMORANDUM AND ORDER
Counter-Defendants Barry K. Halley and Blanca E. Olvera originally brought this suit challenging a foreclosure sale at 10223 Metronome Drive in Houston (the "Property"), but have voluntarily dismissed their claims against the original Defendants. The original Defendants, who no w are only Counter-Plaintiffs, are Deutsche Bank National Trust Company, as Trustee for Morgan Stanley ABS Capital I Inc., Trust 2004-HE3, Mortgage Pass-Through Certificates, Series 2004-HE3 ("Deutsche Bank") and Ocwen Loan Servicing, L.L.C. ("Ocwen"). Counter-Plaintiffs bring claims for declaratory judgment regarding the Property. As instructed by the Court, the parties have briefed the issue of this Court's subject matter jurisdiction in light of the Supreme Court's decision in Americold Realty Trust v. Conagra Foods, Inc., 136 S. Ct. 1012 (2016). See Counter-Plaintiffs' Brief in Support of Jurisdiction [Doc. # 27]; Counter-Defendants' Response [Doc. # 28]. Having considered the parties' submissions, all matters of record, and applicable legal authorities, the Court determines that it has subject matter jurisdiction over this case.
I. BACKGROUND
Deutsche Bank and Ocwen removed this action from state court on May 4, 2015. Notice of Removal [Doc. # 1]. In their original pleadings in state court, Halley and Olvera alleged that the foreclosure sale of the Property on April 7, 2015, should be enjoined due to violations of the Real Estate Settlement Procedures Act. However, on May 19, 2015, Halley and Olvera voluntarily dismissed all of their claims against Deutsche Bank and Ocwen. See Notice of Dismissal of Defendants Without Prejudice [Doc. # 9]; Hearing Minutes and Order, dated July 16, 2015 [Doc. # 22]. The only claims remaining in this suit are Counterclaims [Doc. # 5] by Deutsche Bank and Ocwen seeking a declaratory judgment that they are entitled to foreclose on the Property.
On December 23, 2015, this Court stayed and administratively closed the case pending the Supreme Court's decision in a case that potentially implicated this Court's subject matter jurisdiction. See Order [Doc. # 25]. On March 7, 2016, after the Supreme Court's decision in Americold, the Court reinstated the instant action on its active docket and ordered briefing on the jurisdictional issue. See Order [Doc. # 26]. The parties now have filed timely briefs and both take the position that this Court has subject matter jurisdiction over their dispute. See Docs. # 27, # 28.
II. SUBJECT MATTER JURISDICTION
The Counterclaims filed by Deutsche Bank and Ocwen invoke this Court's diversity jurisdiction under 28 U.S.C. § 1332. Counter-Defendants Halley and Olvera are citizens of Texas.
Counter-Plaintiff Deutsche Bank is a trustee. The Supreme Court's recent Americold holding reaffirmed the holding in Navarro Savings Ass'n v. Lee, 446 U.S. 458 (1980), stating that "when a trustee files a lawsuit or is sued in her own name, her citizenship is all that matters for diversity purposes." Americold, 136 S. Ct. at 1016. See Navarro, 446 U.S. at 465-66 (a trustee who is the real party in interest can invoke diversity jurisdiction based on its own citizenship rather than that of the trust's beneficial shareholders). As a national bank association, Deutsche Bank is considered a citizen of the state in which its main office is located. See Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303, 318 (2006). Because Deutsche Bank has its main office in California, as specified in its articles of association, see Notice of Removal [Doc. # 1], at 3, Deutsche Bank is a citizen of California for purposes of diversity jurisdiction.
Counter-Plaintiff Ocwen is a limited liability company whose sole member is Ocwen Mortgage Servicing, Inc. The citizenship of a limited liability company is determined by the citizenship of its members. Harvey v. Grey Wolf Drilling, 542 F.3d 1077, 1080 (5th Cir. 2008). Ocwen Mortgage Servicing, Inc., is a citizen of the U.S. Virgin Islands, the territory in which it is incorporated. See Notice of Removal, at 4. Counter-Plaintiff Ocwen therefore is a citizen of the U.S. Virgin Islands for purposes of diversity jurisdiction.
Complete diversity of citizenship is present in this case. In addition, the amount in controversy exceeds $75,000, and thus satisfies the requirements of 28 U.S.C. § 1332(a). See Counterclaims [Doc. # 5], at 5 (alleging that Counter-Defendants owe "at least $148,650.33 as unpaid principal, interest, fees, and escrow advances"). This Court has diversity jurisdiction over the parties' dispute under 28 U.S.C. § 1332(a).
The appraised value of the Property was $136,019 on January 1, 2015. Harris County Appraisal District Real Property Account Information [Doc. # 1-6]. See Farkas v. GMAC Mortgage, L.L.C., 737 F.3d 338, 341 (5th Cir. 2013) ("In actions enjoining a lender from transferring property and preserving an individual's ownership interest, it is the property itself that is the object of the litigation; the value of that property represents the amount in controversy.") --------
III. CONCLUSION
For the reasons stated above, this Court has subject matter jurisdiction. The Court's previous Docket Control Order [Doc. # 23], entered on July 16, 2015, set multiple deadlines that expired during the stay pending the Americold decision. Therefore it is hereby
ORDERED that the deadlines in the Docket Control Order [Doc. # 23] are revised as follows: expert witnesses for Counter-Defendant shall be identified on or before August 5, 2016; discovery must be completed by August 31, 2016; dispositive motions and all other pretrial motions must be filed by September 30, 2016; the Joint Pretrial Order must be filed by November 30, 2016; and Docket Call is set for Wednesday, December 7, 2016 at 4:00 p.m.
SIGNED at Houston, Texas, this 15th day of July, 2016.
/s/_________
NANCY F. ATLAS
SENIOR UNITED STATES DISTRICT JUDGE