Opinion
Civil Action 9:23-cv-02052-BHH-MHC
09-21-2023
Nationstar Mortgage, LLC d/b/a Mr. Cooper, Plaintiff, v. Carolyn Brantley; The United States of America acting by and through its agency, The Secretary of Housing and Urban Development; The United States of America acting by and through its agency, The Internal Revenue Service; South Carolina Department of Revenue; and T.N.S. LTD, LLC, Defendants.
REPORT AND RECOMMENDATION
Molly H. Cherry, United States Magistrate Judge
This action was removed to this Court from state court on May 15, 2023, by Defendant Carolyn Brantley (“Defendant Brantley”), proceeding pro se. ECF No. 1. Before the Court is Plaintiff's Motion to Remand. ECF No. 6. Defendant Brantley filed a Response in Opposition, ECF No. 17, and Plaintiff filed a Reply, ECF No. 18. No other Defendant filed any notice of removal, consent to removal, or memorandum in response to the Motion to Remand. The Motion is ripe for review. This Report and Recommendation is entered for review by the District Judge.
All pretrial proceedings in this case were referred to the undersigned United States Magistrate Judge pursuant to the provisions of 28 U.S.C. § 636(b)(1)(A) and (B) and Local Civil Rule 73.02(B)(2), D.S.C.
BACKGROUND
According to the Complaint, Defendant Brantley executed and delivered a promissory note to Real Estate Mortgage Network Inc. on September 4, 2009. ECF No. 1-6 at 42 ¶ 6. To secure the note, Defendant Brantley took out a mortgage on the subject property. Id. at 43 ¶ 7. The mortgage was thereafter assigned to Plaintiff. Id. at 43 ¶ 10.
On July 12, 2022, Plaintiff brought this foreclosure action against Defendant Brantley in the Court of Common Pleas in Jasper County, South Carolina, alleging that Defendant Brantley failed to make monthly payments due on the subject mortgage. ECF No. 1-6 at 40-48; ECF No. 18-1. The Complaint also names as Defendants The United States of American acting by and through its agency, the Secretary of Housing and Urban Development; The United States of America acting by and through its agency, the Internal Revenue Service; the South Carolina Department of Revenue; and T.N.S. LTD., LLC. Id.
In January 2023, the state court issued an order for service via publication, finding that after a reasonable search and proper due diligence on the part of Plaintiff's counsel, Defendant Brantley could not be located for service within the State or elsewhere. See ECF No. 18-2. The State Court ordered that service could be made upon Defendant Brantley by publication of the Summons and Notice in the Jasper County Sun Times and that a copy was to be mailed again to Defendant Brantley's last known address. Id. On March 17, 2023, Plaintiff filed in the state court proof of publication showing that the Summons and Notice were run in the newspaper on January 22, 2023, January 29, 20223, and February 5, 2023. See ECF No. 18-3.
On March 30, 2023, Defendant Brantley first appeared in the state court action when she filed a Notice of Billing Error Affidavit on March 30, 2023. ECF No. 1-2; see also ECF No. 18-4. On May 8, 2023, Defendant Brantley filed an “Entry of Special Appearance in the Nature of Interpleader,” in which she purported to represent, as a Trustee, “CRB Enterprise Revocable Living Trust, Attorney-In-Fact for CAROLYN BRANTLEY Centralized Authorization File -(CAF) Number: 0315-41505R,” which she identified as “Interpleader.” ECF No. 18-6 at 1.
On May 15, 2023, one day prior to the Final Hearing before the Special Referee of Jasper County was scheduled to take place, see ECF No. 1-6 at 48, Defendant Brantley removed the case to this Court based on purported federal question jurisdiction, see ECF No. 1 at 3.
Plaintiff filed the instant Motion to Remand on June 15, 2023. ECF No. 6.
LEGAL STANDARD
A defendant may remove a civil action brought in state court if the case originally could have been brought in a federal district court. See 28 U.S.C. § 1441(a) (“[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant . . . to the district court of the United States for the district and division embracing the place where such action is pending.”). Generally, a case can be filed in a federal district court only if there is diversity of citizenship under 28 U.S.C. § 1332, or if there is federal question jurisdiction under 28 U.S.C. § 1331. “The burden of establishing federal jurisdiction is placed upon the party seeking removal.” Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994).
In addition to demonstrating original jurisdiction, a removing defendant must follow proper removal procedures. See 28 U.S.C. § 1446 (listing procedure for removal of civil actions). When a plaintiff believes removal was procedurally improper and seeks to remand the case on that basis, he must move to remand “within 30 days after the filing of the notice of removal.” 28 U.S.C. § 1447(c). A motion to remand based on the court's lack of subject matter jurisdiction, by contrast, may be raised at any time. See Id. (“If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.”).
“Federal courts are courts of limited jurisdiction,” which “possess only that power authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). “Removal statutes, in particular, must be strictly construed, inasmuch as the removal of cases from state to federal court raises significant federalism concerns.” Barbour v. Int'l Union, 640 F.3d 599, 605 (4th Cir. 2011) (en banc) (abrogated in part on other grounds by the Federal Courts Jurisdiction and Venue Clarification Act of 2011, Pub. L. No. 112-63, 125 Stat. 758 (Dec. 7, 2011)); see also Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 816 (4th Cir. 2004) (en banc) (noting that federal courts “are obliged to construe removal jurisdiction strictly because of the significant federalism concerns implicated”) (internal quotation marks omitted). Thus, any doubts about the propriety of removal should be resolved against the federal forum and in favor of remanding the case to state court. Barbour, 640 F.3d at 605; see also Palisades Collections LLC v. Shorts, 552 F.3d 327, 336 (4th Cir. 2008) (emphasizing that courts have a “duty to construe removal jurisdiction strictly and resolve all doubts in favor of remand”); Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993) (recognizing “Congress' clear intention to restrict removal and to resolve all doubts about the propriety of removal in favor of retained state court jurisdiction”); Gates at Williams-Brice Condo. Ass'n & Katherine Swinson v. Quality Built, LLC, No. 3: 16-CV-02022-CMC, 2016 WL 4646258, at *3 (D.S.C. Sept. 7, 2016) (“The same rule applies to procedural deficiencies as jurisdictional deficiencies, so long as the procedural challenge is timely raised by a party.”).
DISCUSSION
In its Motion, Plaintiff argues that the case should be remanded to state court for the following reasons: (1) removal was procedurally defective under 28 U.S.C. § 1446(b) because (a) it was untimely, and (b) the co-Defendants have not joined in the removal; and (2) this Court lacks subject matter jurisdiction over this case.
Section 1446(b) provides, in relevant part:
(1) The notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within 30 days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.
(2)(A) When a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action.28 U.S.C. § 1446(b)(1)-(2)(A). Section § 1441(a) provides that a “civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants.” 28 U.S.C. § 1441(a).
“A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a).” 28 U.S.C. § 1447(c). “If a plaintiff does not file a motion to remand within thirty days of the filing of the Notice of Removal, the plaintiff waives all procedural defects in the removal.” Liam Motors, LLC v. M & A Auto Sales, No. CIV.A. 4:13-1810-MGL, 2013 WL 5888581, at *2 (D.S.C. Oct. 31, 2013).
Defendant Brantley filed the Notice of Removal on May 15, 2023. ECF No. 1. Plaintiff filed its Motion to Remand on June 15, 2013. ECF No. 6. The month of May contains 31 days, such that calculating the 30-day period required by § 1447(c), in accordance with Federal Rule of Civil Procedure 6(a)(1), results in Wednesday, June 14, 2023, being the last day of the 30-day period. Because Plaintiff did not file its Motion to Remand within the time prescribed by 28 U.S.C. 1447(c), Plaintiff has waived its right to object to a defect in removal procedure. See Liam Motors, 2013 WL 5888581, at *2. Accordingly, the undersigned declines to address the merits of the procedural arguments.
However, a motion to remand based on the court's lack of subject matter jurisdiction may be raised at any time. See 28 U.S.C. § 1447(c) (“If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.”). Accordingly, the undersigned has considered Plaintiff's Motion to Remand on jurisdictional grounds.
Upon review of the allegations in the Complaint, the Notice of Removal, and the parties' arguments, the undersigned concludes that Defendant Brantley has failed to carry her burden of establishing federal jurisdiction over this case. See Mulcahey, 29 F.3d at 151.
I. Jurisdictional Grounds Asserted in the Notice of Removal
In the Notice of Removal, titled “Interpleader's Notice of Removal to Federal Jurisdiction Under 28 U.S.C. § 1333 and 1335,” Defendant Brantley states that she “files this Notice of Removal from the South Carolina Jasper County Court of Common Pleas under the original jurisdiction of the district court pursuant to the express provisions of 28 U.S.C. § 1135.” ECF No. 1 at 6-7. She also asserts that “[t]his Court has original jurisdiction pursuant to 28 U.S.C. §1335 and [§] 1333,” and that “removal is proper in that district courts shall have original jurisdiction of all maters in the nature of Interpleader” and exclusive jurisdiction “over any civil case of admiralty or maritime jurisdiction, and any prize brought into the United States and all proceeding for the condemnation of property taken as prize pursuant to 28 U.S.C. § 1333.” ECF No. 1 at 11 (emphases in original) (citing Fed.R.Civ.P. 22); see Id. at 14. Defendant Brantley signed the Notice of Removal as “Carolyn Brantley, Trustee not Individually,” on behalf of “CRB Enterprise Revocable Living Trust, Interpleader.” Id. at 14.
As an initial matter, to the extent Defendant Brantley purports to have filed the Notice of Removal on behalf of a trust in her role as trustee, such filing was improper. While 28 U.S.C. § 1654 allows individuals to “plead and conduct their own cases personally,” the statute does not extend that right to represent other parties. Corporations, trusts, and other artificial entities may appear in this federal court and litigate only through a licensed attorney who is formally admitted to practice and in good standing with this Court. See Rowland v. Cal. Men's Colony, Unit II Men's Advisory Council, 506 U.S. 194, 202 (1993) (recognizing that the rationale for the rule that a corporation may appear in the federal courts only through licensed counsel applies equally to all artificial entities and that “save in a few aberrant cases, the lower courts have uniformly held that 28 U.S.C. § 1654 . . . does not allow corporations, partnerships, or associations to appear in federal court otherwise than through a licensed attorney”); Days Inn Worldwide, Inc. v. JBS, Inc., No. 4: 08-cv-1771, 2010 WL 625391, at *2-3 (D.S.C. Feb. 19, 2010) (collecting cases); see also First Hartford Corp. Pension Plan & Trust v. United States, 194 F.3d 1279, 1291 (Fed. Cir. 1999) (noting Court of Claims finding that pro se actions by non-attorneys on behalf of corporations “fail for lack of standing”).
“A trustee appearing in a solely representative capacity requires a lawyer in federal court.” United States v. Mraz, 274 F.Supp.2d 750, 755 (D. Md. 2003) (citation and internal quotation marks omitted); see Chien v. Commonwealth Biotechnologies, Inc., 484 B.R. 659, 666 (E.D. Va. 2012) (“[I]t is well settled that a trustee cannot represent the ‘trust' pro se, as the trustee is not the ‘real party in interest.'”); see also Knoefler v. United Bank of Bismark, 20 F.3d 347, 348 (8th Cir. 1994) (“A nonlawyer, such as these purported ‘trustee(s) pro se[,]' has no right to represent another entity, i.e., a trust, in a court of the United States.”); C.E. Pope Equity Trust v. United States, 818 F.2d 696, 697-98 (9th Cir. 1987) (“Because [a trustee of the plaintiff trust] is not the actual beneficial owner of the claims being asserted by the Trusts (so far as one can tell from the record), he cannot be viewed as a ‘party' conducting his ‘own case personally' within the meaning of [28 U.S.C. §] 1654. He may not claim that his status as trustee includes the right to present arguments pro se in federal court.”); Real Estate Unlimited, LLC v. Rainbow Living Trust, No. 2004-UP-019, 2004 WL 6248341, at *1-2 (S.C. Ct. App. Jan. 15, 2004) (collecting cases, and observing that “numerous other jurisdictions have addressed the issue and found a trustee's appearance in court on behalf of the trust would constitute the unauthorized practice of law”).
Because “Interpleader” is a trust and Defendant Brantley is not a licensed attorney admitted to practice before this Court, she cannot represent “Interpleader” in this Court, even if she is a trustee of the trust. Accordingly, the undersigned finds that this action was removed by Defendant Brantley only in her individual capacity representing herself as a Defendant in this action.
A. No Federal Question or Maritime Jurisdiction
Section 1331 grants district courts “original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. Federal question jurisdiction exists “only when a federal question is presented on the face of the plaintiff's properly-pleaded complaint.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987); see King v. Marriott Int'l Inc., 337 F.3d 421, 424 (4th Cir. 2003) (“Under the venerable well-pleaded complaint rule, jurisdiction lies under section 1331 only if a claim, when pleaded correctly, sets forth a federal question[.]”).
A plaintiff may avoid federal question jurisdiction by exclusive reliance on state law. Donaldson v. City of Walterboro Police Dep't, 466 F.Supp.2d 677, 679 (D.S.C. 2006); see also Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 809, n.6 (1986) (“Jurisdiction may not be sustained on a theory that the plaintiff has not advanced.”). Under the well-pleaded complaint rule, courts “ordinarily . . . look no farther than the plaintiff's complaint in determining whether a lawsuit raises issues of federal law capable of creating federal-question jurisdiction under 28 U.S.C. § 1331.” Custer v. Sweeney, 89 F.3d 1156, 1165 (4th Cir. 1996). Accordingly, “a claim in which the federal question arises only as a defense to an otherwise purely state law action does not ‘arise under' federal law, and hence jurisdiction would not lie under section 1331.” King, 337 F.3d at 424 (4th Cir. 2003) (emphasis in original) (citing Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 12 (1983)).
Upon review of Plaintiff's Complaint in this action, ECF No. 1-6 at 40-48, it appears that his action is a state law foreclosure action. In her Response to the Motion to Remand, Defendant Brantley appears to argue that the object of this case is a gold contract, which she claims involves federal law. ECF No. 17 at 7. However, there are no allegations on the face of the Complaint related to a gold contract, and the Mortgage and Note both exemplify that this is a real property action concerning land located in Jasper County, South Carolina. See ECF No. 18-5. Plaintiff's Complaint contains no federal question on its face, and no federal jurisdiction exists over a complaint that “merely states a cause of action for enforcement of a promissory note and foreclosure of the associated security interest in real property.” Burbage v. Richburg, 417 F.Supp.2d 746, 749 (D.S.C. 2006).
In her Notice of Removal, Defendant Brantley describes herself as a “Vessel” of the United States, ECF No. 1 at 10, and invokes admiralty, maritime, and prize jurisdiction, pursuant to 28 U.S.C. § 1333, Id. at 6, 11. However, none of the filings in this case suggest there is a factual basis for admiralty or maritime jurisdiction. Further, the property at issue is neither a “prize brought into the United States,” nor is the action one for “condemnation of property taken as prize.” See 28 U.S.C. § 1333(2). Therefore, the undersigned concludes that neither federal question jurisdiction nor admiralty/maritime/prize jurisdiction applies in this case. See Bank of Am., N.A. v. Goldberg, No. CV 19-00076 LEK-KJM, 2019 WL 1586747, at *4 (D. Haw. Apr. 12, 2019) (finding no jurisdiction under § 1333 over foreclosure action); In re Hardee, No. 18-67130-BEM, 2021 WL 1186477, at *2-3 (Bankr. N.D.Ga. Mar. 26, 2021) (finding no jurisdiction under § 1333).
Defendant Brantley appears to be asserting a discredited “sovereign citizen-type view which . . . holds that the federal government went bankrupt when it abandoned the gold standard in 1933 and began converting the physical bodies of its citizens into assets against which it could sell bonds.” United States v. Anzaldi, 800 F.3d 872, 875 (7th Cir. 2015); see also McLaughlin v. CitiMortgage, Inc., 726 F.Supp.2d 201, 209-12 (D. Conn. 2010) (describing so-called “redemptionist theory”); see also Bey v. Jefferson, No. 2: 17-CV-1007-RMG-MGB, 2017 WL 9250348, at *4-5 (D.S.C. Apr. 24, 2017) (collecting cases discrediting the “Sovereign Citizen” theory), report and recommendation adopted, No. CV 2:17-1007-RMG, 2017 WL 1956979 (D.S.C. May 11, 2017).
B. Defendant Brantley cannot remove this action based on diversity jurisdiction or 28 U.S.C. § 1135.
Pursuant to 28 U.S.C. § 1441(b), a defendant may not remove an action based on diversity jurisdiction where any defendant is a citizen of the forum state. 28 U.S.C. § 1441(b)(2) (“A civil action otherwise removable solely on the basis of [diversity] jurisdiction under section 1332(a) of this title may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.”); see Lincoln Prop. Co. v. Roche, 546 U.S. 81, 84 (2005) (“Defendants may remove an action on the basis of diversity of citizenship if there is complete diversity between all named plaintiffs and all named defendants, and no defendant is a citizen of the forum State.”); see also Phillips Contr., LLC v. Daniels Law Firm, PLLC, 93 F.Supp.3d 544, 548 (S.D. W.Va. 2015) (“This provision, commonly known as the ‘forum defendant rule,' is separate and apart from the statute conferring diversity jurisdiction and confines removal on the basis of diversity to instances where no defendant is a citizen of the forum state.”) (internal quotation marks omitted).
In her Response in opposition to the Motion to Remand, Defendant Bradley argues that she is not a citizen of any state but rather “is a ‘Georgian' as defined by the Government Printing Office, Style Manual, Page 95, Section 5.23-Nationalities.” ECF No. 17 at 8. To determine state citizenship, courts look to the person's domicile. Axel Johnson, Inc. v. Carroll Carolina Oil Co., 145 F.3d 660, 663 (4th Cir. 1998). “A person's domicile, in turn, is the place where a person has a fixed and permanent home to which she intends to return whenever she is absent therefrom.” Schieszler v. Ferrum Coll., 236 F.Supp.2d 602, 612-13 (W.D. Va. 2002) (citing C.I.R. v. Swent, 155 F.2d 513, 515 (4th Cir. 1946)).
In the Notice of Removal, Defendant Brantley states her address is 200 Oak Plantation Drive near Ridgeland, South Carolina. ECF No. 1 at 6. She further describes this property as “the chapel and private sanctuary (home) of Carolyn Brantley.” Id. at 7. Therefore, based on the representations made in the Notice of Removal, as well as the allegations in the Complaint, Plaintiff's domicile is in South Carolina, such that she is considered a citizen of South Carolina for purposes of determining diversity jurisdiction. See Axel, 145 F.3d at 663; Schieszler, 236 F.Supp.2d at 612-13. Thus, to the extent that Defendant Brantley seeks removal of this action based on diversity of citizenship, removal is barred by § 1441(b)(2).
Defendant Brantley cites 28 U.S.C. § 1335 to argue that the Court has jurisdiction of this “interpleader action.” See ECF No. 1 at 6, 11; see 28 U.S.C. § 1335(a)(1) (“The district court shall have original jurisdiction of any civil action of interpleader . . . if [t]wo or more adverse claimants, of diverse citizenship as defined in subsection (a) or (d) of section 1332 of this title, are claiming or may claim to be entitled to such money or property, or to any one or more of the benefits arising by virtue of any note, bond, certificate, policy or other instrument....).
Section 1335 “does not provide authority to remove to federal court actions that were filed in state courts which could have originally been filed in federal court. Rather, this Court must look to 28 U.S.C. § 1441 for authority to remove an action from state court to federal court.” Fed. Ins. Co. v. Tyco Int'l Ltd., 422 F.Supp.2d 357, 394 (S.D.N.Y. 2006) (quoting Cmty. Title Co. of St. Louis v. Lieberman Mgmt. Co., 719 F.Supp. 869, 870-71 (E.D. Mo. 1989)) (emphasis in original); see Mid-Century Ins. Co. v. Menking, 327 F.Supp.2d 1049, 1051 n.1 (D. Neb. 2003) (“Although [28 U.S.C. § 1335] does allow for original federal jurisdiction over interpleader actions, removed interpleader actions are still restricted by 28 U.S.C. § 1441(b), the removal statute.”).
As explained above, Defendant Bradley is barred by § 1441(b)(2) from removing this action on the basis of diversity. Moreover, although Defendant Brantley attempted to remove this action in her capacity as a trustee of an Interpleader trust, she cannot represent a trust in this Court. Further, it is not clear from the Complaint and the other filings in this case that this action is an interpleader action over which this Court would have original jurisdiction. Thus, because it is not clear that this action is an interpleader action arising under 28 U.S.C. § 1335 that was properly removed to this Court, and because any doubts about the propriety of removal should be resolved against the federal forum and in favor of remanding the case to state court, the undersigned concludes that remand is warranted. See Barbour, 640 F.3d at 605; see also Palisades Collections LLC, 552 F.3d at 336.
Because the undersigned finds that this case cannot be removed on the basis of diversity jurisdiction and that there is no federal question jurisdiction over this case, the undersigned concludes that there is no subject matter jurisdiction over this case. Accordingly, the undersigned recommends that the Motion to Remand be granted on this basis.
CONCLUSION
For the reasons set forth above, it is RECOMMENDED that Plaintiff's Motion to Remand (ECF No. 6) be GRANTED and that the case be REMANDED to state court.
The parties are referred to the Notice Page attached hereto.
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. “[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must ‘only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'” Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed.R.Civ.P. 72 advisory committee's note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); see Fed.R.Civ.P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk
United States District Court
Post Office Box 835
Charleston, South Carolina 29402
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).