Ashby v. Wells Fargo Bank, N.A. DO NOT DOCKET. CASE HAS BEEN REMANDED.
4:12-cv-00803
S.D. Tex.May 18, 2012Background
- Patricia and John Ashby executed an Adjustable Rate Note in 1993 with a Deed of Trust securing the loan.
- Keith Ashby sued Wells Fargo and Barrett Daffin in Texas state court alleging improper foreclosure actions.
- Wells Fargo removed the case to federal court asserting diversity jurisdiction, with Barrett Daffin as a non-diverse defendant allegedly improperly joined.
- Ashby contends Wells Fargo could not foreclose without evaluating non-foreclosure alternatives such as HAMP/HAFA.
- The court must determine proper removal based on diversity and whether Barrett Daffin was improperly joined.
- The court grants remand, concluding Barrett Daffin was not improperly joined and there is no diversity jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Barrett Daffin improperly joined to defeat diversity? | Ashby argues no improper joinder; Barrett Daffin’s interests state-barred or related to the loan. | Wells Fargo argues Barrett Daffin is non-diverse and improperly joined, destroying diversity. | Barrett Daffin was not improperly joined. |
| Does Barrett Daffin’s non-diverse status defeat subject-matter jurisdiction? | No diversity because Barrett Daffin is a Texas citizen and a proper defendant. | Diversity exists only if all defendants are diverse from plaintiffs; improper join eliminates effect of non-diverse parties. | There is no complete diversity; remand appropriate. |
| Did Ashby have standing to sue as a non-borrower/non-party to the mortgage? | Ashby inherited the property and seeks to enforce rights under loan/finance-related statutes. | Ashby has no contractual relationship or duties under the Texas Finance Code as a non-borrower. | Ashby has no standing to assert claims against Wells Fargo or Barrett Daffin. |
| Are the jurisdictional facts sufficient to support removal on the basis of diversity? | N/A beyond standing; focus on remand due to lack of viable claim against non-diverse defendant. | If improper joinder failed, diversity exists and removal is proper. | Removal based on diversity is insufficient; remand granted. |
Key Cases Cited
- Rasul v. Bush, 542 U.S. 466 (2004) (courts have limited jurisdiction; burden on party seeking federal forum)
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) (jurisdictional facts must be established to support removal)
- McKee v. Kansas City S. Ry. Co., 358 F.3d 329 (5th Cir. 2004) (limits on federal jurisdiction; standard of review for removal)
- Howery v. Allstate Ins. Co., 243 F.3d 912 (5th Cir. 2001) (burden on removing party to show jurisdictional facts)
- Boone v. Citigroup, Inc., 416 F.3d 382 (5th Cir. 2005) (presumption in favor of remand when jurisdiction is doubtful)
- Kling Realty Co., Inc. v. Chevron USA, Inc., 575 F.3d 510 (5th Cir. 2009) (improper joinder standard; heavy burden on movant)
- Campbell v. Stone Ins., Inc., 509 F.3d 665 (5th Cir. 2007) (framework for improper joinder analysis)
- Smallwood v. Illinois Cent. R.R. Co., 385 F.3d 568 (5th Cir. 2004) (test for improper joinder; en banc discussion)
- Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278 (5th Cir. 2007) (reversal when doubt about jurisdiction favors remand)