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