U.S. Bank Trust, N.A. v. Gross
255 F. Supp. 3d 427
W.D.N.Y.2017Background
- U.S. Bank Trust, N.A. sued to foreclose a mortgage on 401 Washington Ave., Rochester, NY, after defendants Richard R. Gross, Sr. and Debbie D. Gross defaulted on a 2005 note and mortgage.
- Defendants were served but did not appear; the Clerk entered default on November 4, 2016, and Plaintiff moved for default judgment and foreclosure on January 23, 2017.
- Plaintiff alleged a principal balance and other charges and asserted diversity jurisdiction based on its principal place of business in Coppell, Texas.
- Court issued a scheduling order; Defendants did not respond to the motion.
- The Court found Plaintiff failed to properly allege the national bank’s state citizenship (no articles/main office identified) and also identified procedural defects (defective notice of pendency filing and deficient attorney-fee documentation).
- Result: complaint dismissed without prejudice for lack of subject-matter jurisdiction; motion for default judgment denied; case closed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter jurisdiction (diversity) | Plaintiff asserted diversity because its principal place of business is in Texas | No appearance; court reviews jurisdiction sua sponte | Dismissed — Plaintiff failed to allege the national bank’s citizenship via its articles/main office as required in this Circuit |
| Validity of notice of pendency (CPLR § 6511) | Notice of pendency was filed in Monroe County | No appearance | Even if jurisdiction existed, notice defective because complaint was not filed with the notice; would have defeated foreclosure relief |
| Request for attorney's fees | Seeks $4,950 as a flat foreclosure fee | No appearance | Denied as deficient — counsel did not submit contemporaneous time records; flat-fee unsupported under Second Circuit practice |
| Motion for default judgment procedure | Sought appointment of referee and sale | No appearance | Denied — lack of jurisdiction and procedural defects in foreclosure practice warranted denial |
Key Cases Cited
- Ford v. D.C. 37 Union Local 1549, 579 F.3d 187 (2d Cir.) (district courts must dismiss when lacking subject-matter jurisdiction)
- Makarova v. United States, 201 F.3d 110 (2d Cir. 2000) (plaintiff bears burden to show jurisdiction)
- D’Amico Dry Ltd. v. Primera Mar. (Hellas) Ltd., 756 F.3d 151 (2d Cir.) (courts must inquire into jurisdiction sua sponte)
- Wachovia Bank v. Schmidt, 546 U.S. 303 (2006) (national bank’s citizenship determined by location of main office in articles of association)
- OneWest Bank, N.A. v. Melina, 827 F.3d 214 (2d Cir.) (Circuit limits national bank citizenship to main office, not principal place of business)
- R.B. Ventures, Ltd. v. Shane, 112 F.3d 54 (2d Cir.) (elements lender must prove in New York foreclosure action)
- 5303 Realty Corp. v. O & Y Equity Corp., 64 N.Y.2d 313 (N.Y. 1984) (strict compliance required for notice of pendency filings that affect title)