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Feuerbacher v. Wells Fargo Bank National Ass'n
701 F. App'x 297
| 5th Cir. | 2017
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Background

  • In 2006 the Feuerbachers took a Texas home-equity loan secured by a security instrument; they allege various constitutional defects in the loan's origination.
  • Billie Feuerbacher filed Chapter 7 bankruptcy in October 2009 and, in schedules/statements under penalty of perjury, did not disclose contingent or unliquidated claims arising from the loan; she received a discharge in January 2010.
  • In January 2015 the Feuerbachers sued in state court to vacate an order permitting foreclosure, asserting only state-law claims after amending their complaint post-removal.
  • Defendants removed the case to federal court; the Feuerbachers later added three defendants (two nondiverse) without leave. The district court dismissed the nondiverse defendants, denied remand, and granted summary judgment for defendants on judicial-estoppel grounds.
  • On appeal the Feuerbachers challenged summary judgment as to quiet title and breach of contract and argued the district court abused its discretion in refusing remand; the Fifth Circuit affirmed.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether judicial estoppel bars Feuerbachers' quiet title claim Quiet title claim had not accrued until after bankruptcy, so no duty to disclose Claim accrued at loan origination and was not disclosed in bankruptcy; estoppel applies Court: claim accrued at origination; judicial estoppel applies; summary judgment affirmed
Whether judicial estoppel bars breach-of-contract claim Breach claim accrued later when remedy (forfeiture) became available Breach accrued at origination because facts giving rise to claim existed then Court: breach accrued at origination; estoppel applies; summary judgment affirmed
Whether proceeds/claims trace to exempt property (affecting estoppel) Proceeds trace to exempt property so estoppel inappropriate (not raised below) Argument waived because not presented to district court Court: argument waived on appeal; not considered
Whether post-removal joinder of nondiverse defendants required remand Inclusion of nondiverse defendants should remand case to state court Joinder appeared intended to destroy federal jurisdiction and was untimely; district court may deny joinder Court: district court did not abuse discretion in dismissing nondiverse defendants and retaining jurisdiction

Key Cases Cited

  • Jethroe v. Omnova Sols., Inc., 412 F.3d 598 (5th Cir. 2005) (elements and application of judicial estoppel)
  • In re Coastal Plains, Inc., 179 F.3d 197 (5th Cir. 1999) (bankruptcy duty to disclose contingent and unliquidated claims)
  • Priester v. JP Morgan Chase Bank, N.A., 708 F.3d 667 (5th Cir. 2013) (quiet title accrual for void lien at lien creation)
  • Via Net v. TIG Ins., 211 F.3d 310 (5th Cir. 2000) (accrual rules: cause of action accrues when breach occurs)
  • Hensgens v. Deere & Co., 833 F.2d 1179 (5th Cir. 1987) (factors for post-removal joinder of nondiverse defendants)
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Case Details

Case Name: Feuerbacher v. Wells Fargo Bank National Ass'n
Court Name: Court of Appeals for the Fifth Circuit
Date Published: Jun 22, 2017
Citation: 701 F. App'x 297
Docket Number: 16-41343 Summary Calendar
Court Abbreviation: 5th Cir.