Greathouse v. Vanderbilt Mortgage and Finance, Inc., 2:12-cv-04359

Plaintiff Eddie Greathouse sued Vanderbilt Mortgage, Carteret Title, and Janice Chaney in Roane County, WV, alleging predatory/unconscionable lending related to a 2008 mobile-home loan.
Vanderbilt (a Tennessee corporation) removed the case to federal court twice, asserting diversity jurisdiction by alleging Chaney (a WV resident) was fraudulently joined or misjoined.
The court previously remanded an earlier removal (Greathouse I), finding a possibility of recovery against Chaney on Count I (unconscionable inducement).
Vanderbilt’s second removal relied on discovery, a settlement with Carteret Title, and communications it contends show plaintiff retained Chaney only to defeat diversity (arguing actual fraud in pleading jurisdictional facts).
Plaintiff moved to remand again, arguing removal was untimely and that Chaney remains a proper (non-fraudulent) defendant on Counts I and V; plaintiff also sought fees under 28 U.S.C. § 1447(c).
The court concluded the settlement did not dismiss Chaney from Count I, found Vanderbilt’s new evidence insufficient to establish fraudulent joinder or actual fraud, granted remand, and denied fees.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Timeliness of removal under 28 U.S.C. § 1446(b)	Greathouse: Vanderbilt had notice from the initial complaint and prior removal; second removal untimely	Vanderbilt: removal timely within 30 days of receiving discovery showing plaintiff’s illicit motive	Removal untimely argument rejected on merits; court remanded for lack of jurisdiction on joinder grounds rather than solely on timeliness
Fraudulent joinder of Chaney to Count I (unconscionable inducement)	Greathouse: prior ruling and complaint show a possibility of recovery against Chaney	Vanderbilt: plaintiff acted with fraudulent intent; evidence (emails, stipulation, deposition) shows Chaney was retained to defeat diversity	Court found insufficient evidence of fraudulent joinder; prior finding of possible recovery controls; Chaney not fraudulently joined
Fraudulent misjoinder or improper joinder of Count V (unauthorized practice of law)	Greathouse: Count V properly joined and tied to same nucleus; declaratory relief claim legitimate	Vanderbilt: Count V is misjoined and/or a sham claim to preserve nondiverse defendant	Court rejected misjoinder/fraudulent misjoinder argument as unsupported; Count V not treated as defeating remand
Award of fees and costs under 28 U.S.C. § 1447(c)	Greathouse: removal was improper so fees warranted	Vanderbilt: removal had objectively reasonable basis	Court denied fees — Vanderbilt had objectively reasonable basis to remove

Md. Stadium Auth. v. Ellerbe Becket Inc., 407 F.3d 255 (4th Cir. 2005) (removal jurisdiction construed strictly; federalism concerns)
Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148 (4th Cir. 1994) (burden on party seeking removal)
Sayre v. Potts, 32 F. Supp. 2d 881 (S.D. W. Va. 1999) (diversity jurisdiction burden requires proof of diverse citizenship and amount in controversy)
Scaralto v. Ferrell, 826 F. Supp. 2d 960 (S.D. W. Va. 2011) (treatment of prior authority on related procedural issues)
Mayes v. Rapoport, 198 F.3d 457 (4th Cir. 1999) (standard for finding fraudulent joinder)
Marshall v. Manville Sales Corp., 6 F.3d 229 (4th Cir. 1993) (removing party must show plaintiff cannot establish claim even viewing facts in plaintiff’s favor)
Hartley v. CSX Transp., Inc., 187 F.3d 422 (4th Cir. 1999) (fraudulent joinder standard more favorable to plaintiff than Rule 12(b)(6))
AIDS Counseling & Testing Ctrs. v. Group W Television, Inc., 903 F.2d 1000 (4th Cir. 1990) (court may consider entire record in assessing joinder)
Martin v. Franklin Capital Corp., 546 U.S. 132 (2005) (attorney’s fees under § 1447(c) available only when removal lacked an objectively reasonable basis)
Strawbridge v. Curtiss, 7 U.S. 267 (U.S. 1806) (complete diversity requirement)