PNC Bank v. Sheila Spencer
763 F.3d 650
7th Cir.2014Background
- Spencer defaulted on her Wisconsin mortgage in 2008 and foreclosure proceedings followed in state court in 2009; PNC Bank pursued the foreclosure after merging with PNC Bank, N.A.
- Spencer retained attorney Wendy Nora, whose aggressive, object-to-everything strategy spanned numerous motions.
- Nora moved to remove the case to federal court on several grounds just before a summary-judgment hearing; the district court remanded and awarded fees and costs to PNC.
- Nora’s primary removal theory rested on 28 U.S.C. § 1349, arguing Freddie Mac was the real party in interest; Freddie Mac purportedly did not own or hold the loan documents.
- The district court found no objectively reasonable basis for removal, denied Nora’s request for reconsideration, and awarded fees; Nora’s appeal was dismissed for lack of standing, and Spencer’s appeal was affirmed.
- The court ordered Nora to show cause why she should not be sanctioned for pursuing a frivolous appeal and noted potential disciplinary concerns.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether removal was objectively reasonable | Nora asserted Freddie Mac as real party in interest. | Freddie Mac was not a party; no jurisdictional basis. | No, removal was not reasonably grounded; district court had proper remand and fee award. |
| Nora's standing to appeal | Nora sought relief personally from the fee award. | Liability for the award rests with Spencer, not Nora. | Nora lacked standing; appeal dismissed as to Nora. |
| Jurisdiction under § 1349 via Freddie Mac | Freddie Mac’s status as real party in interest created federal jurisdiction. | Freddie Mac was not a party to the suit; § 1349 does not apply. | Jurisdiction lacking; § 1349 did not authorize removal. |
| Fees and costs award on removal | Removal was proper; fees should not be awarded. | Removal was objectively unreasonable; fees were proper. | District court properly awarded fees and costs to PNC. |
| Sanctions for frivolous appeal | Nora’s arguments were colorable; practice otherwise. | Appeal merits dismissal; potential sanction warranted. | Court orders Nora to show cause why sanctions are warranted. |
Key Cases Cited
- Garbie v. DaimlerChrysler Corp., 211 F.3d 407 (7th Cir. 2000) (jurisdictional review of removal and remand matters; reliance on § 1447)
- Seymour v. Hug, 485 F.3d 926 (7th Cir. 2007) (standing to appeal and attorney conduct issues)
- Lincoln Property Co. v. Roche, 546 U.S. 81 (2005) (do not look beyond pleadings to unnamed real parties in interest)
- Martin v. Franklin Capital Corp., 546 U.S. 132 (2005) (fee-shifting standard for frivolous removals)
- Tenner v. Zurek, 168 F.3d 328 (7th Cir. 1999) (guidance on frivolous litigation conduct and fees)
- Wisconsin v. Hotline Indus., Inc., 236 F.3d 363 (7th Cir. 2000) (jurisdiction and remand-related collateral matters)
- MB Fin., N.A. v. Stevens, 678 F.3d 497 (7th Cir. 2012) (fees on appeal following § 1447(c) award)