IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Judge William J. Martínez

Civil Action No. 11-cv-02392-WJM-MJW

FEDERAL NATIONAL MORTGAGE ASSOCIATION,

Plaintiff,

v.

AMEE LYN SECHRIST, 

Defendant and Third-Party Plaintiff,

v. 

CITIMORTGAGE, INC., and all unknown persons who claim any interest in the subject

of this action, 

Third-Party Defendants.

ORDER GRANTING MOTION FOR RECONSIDERATION

This matter is before the Court on Defendant and Third-Party Plaintiff Amee Lyn

Sechrist’s (“Sechrist”) Motion to Reconsider Order Regarding Attorney’s Fees and/or in

the Alternative Make Specific Findings as to Reasonableness of Removal (the “Motion

for Reconsideration”). (ECF No. 46.) Third-Party Defendant CitiMortgage, Inc.

(“CitiMortgage”) has filed an Opposition to the Motion for Reconsideration (ECF No. 48),

and Sechrist has filed a Reply (ECF No. 49). After carefully considering the arguments

presented, the Court GRANTS the Motion for Reconsideration.

I. BACKGROUND

This action was originally filed in the District Court of Adams County, Colorado,

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by Plaintiff Federal National Mortgage Association, bringing suit against Sechrist

alleging the unlawful detainer by Sechrist of a property that had been foreclosed on in

Aurora, Colorado. (ECF No. 3.) Sechrist then brought third-party claims against

CitiMortgage based on, inter alia, CitiMortgage’s alleged breach of a loan modification

agreement. (ECF No. 4.) 

On September 12, 2011, CitiMortgage removed the action to this Court based on

diversity jurisdiction under 28 U.S.C. § 1332. (ECF No. 1.)

On October 12, 2011, Sechrist filed a Motion to Remand Pursuant to 28 U.S.C. §

1447(c). (ECF No. 22.) In the Motion to Remand, Sechrist argued that CitiMortgage

had no basis to remove the action to federal court because, inter alia, as a Third-Party

Defendant CitiMortgage did not have the power to remove the action under 28 U.S.C. §

1441, and CitiMortgage did not obtain the consent of all of its co-defendants (namely,

Sechrist) prior to removal. (Id. at 5-8.) Sechrist’s Motion to Remand included a request

for attorney’s fees and costs under 28 U.S.C. § 1447(c).

On October 31, 2011, CitiMortgage filed a Notice Conceding Sechrist’s Motion to

Remand Pursuant to 28 U.S.C. § 1447(c) and Opposing Request for Attorneys’ Fees. 

(ECF No. 35.) In that filing, CitiMortgage stated that it

removed this case on the basis of what is admittedly a minority line of

authority with respect to a third-party defendant’s right to remove, and the

existence of which right is an issue the Tenth Circuit has yet to address. . .

. Upon review of the law recited in defendant Sechrist’s motion to remand

regarding whether a third-party defendant can remove a case to federal

court pursuant to 28 U.S.C. § 1447(c), and in an effort to avoid a time

consuming and expensive dispute over the existence of subject matter

jurisdiction, [CitiMortgage] now concedes the motion and consents to

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Sechrist’s request that this Court remand the case to the District Court for

Adams County.

Id. at 2. However, CitiMortgage opposed the request for attorney’s fees and costs,

stating that it had a reasonable basis to remove the action based on the minority line of

authority holding that third-party defendants can remove cases to federal court.

On November 28, 2011, this Court granted Sechrist's Motion to Remand,

providing two bases for doing so: 

(a) Defendant Sechrist has not consented to or joined in the removal of

this action to this Court, as required by 28 U.S.C. Sec. 1441(a), and thus

Third-Party Defendant [CitiMortgage’s] Petition for Removal is

procedurally defective in at least this regard; and (b) this Court has

previously held that third-party defendants are not defendants within the

meaning of 28 U.S.C. § 1441(a), and thus may not file a petition for

removal in this Court. NCO Financial Sys. v. Yari, 422 F. Supp. 2d 1237

(D. Colo. 2006).

(ECF No. 42.) The Court, however, denied Sechrist’s request for attorney's fees and

costs without explanation. (ECF No. 44.)

On December 7, 2011, Sechrist filed the now-pending Motion for

Reconsideration, arguing that she is entitled to attorney’s fees and costs incurred in

filing the Motion to Remand. (ECF No. 46.) Specifically, Sechrist argues that

CitiMortgage lacked an objectively reasonable basis to remove this action because,

inter alia, the overwhelming weight of case law authority holds that third-party

defendants may not remove actions to federal court. (Id.) In its Opposition,

CitiMortgage argues that it had an objectively reasonable basis to remove the action

because, inter alia, a minority of cases holds that a third-party defendant can remove an

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action to federal court, and there is no Tenth Circuit guidance on the issue. (ECF No.

48.)

Sechrist’s Motion for Reconsideration is now ripe for adjudication.

II. LEGAL STANDARD

“Grounds warranting a motion to reconsider include (1) an intervening change in

the controlling law, (2) new evidence previously unavailable, and (3) the need to correct

clear error or prevent manifest injustice.” Servants of Paraclete v. Does, 204 F.3d 1005,

1012 (10th Cir. 2000). “Thus, a motion for reconsideration is appropriate where the

court has misapprehended the facts, a party’s position, or the controlling law. It is not

appropriate to revisit issues already addressed or advance arguments that could have

been raised in prior briefing.” Id. (citation omitted).

III. ANALYSIS

After carefully considering the arguments of the parties, the Court concludes that

it is appropriate to reconsider its decision that Sechrist is not entitled to recover the

attorney’s fees and costs incurred in filing her Motion to Remand, to prevent manifest

injustice.

CitiMortgage does not dispute that this action was properly remanded to state

court, but simply disputes whether attorney’s fees and costs should be awarded. 28

U.S.C. § 1447(c) provides that “[a]n order [by a federal district court] remanding [a] case

[to state court] may require payment of just costs and any actual expenses, including

attorney fees, incurred as a result of the removal.” As the Supreme Court has

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explained, “[a]bsent unusual circumstances, courts may award attorney’s fees under §

1447(c) only where the removing party lacked an objectively reasonable basis for

seeking removal. Conversely, when an objectively reasonable basis exists, fees should

be denied.” Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005).

The question turns to whether CitiMortgage had an objectively reasonable basis

to remove this action to this Court. 28 U.S.C. § 1441(a) provides that a “civil action

brought in a State court of which the district courts of the United States have original

jurisdiction, may be removed by the defendant or the defendants, to the district court of

the United States for the district and division embracing the place where such action is

pending.” 

Although this statutory language itself is ambiguous regarding whether a

third-party defendant may remove an action (i.e., whether a third-party defendant

qualifies as a “defendant” under the statute), the overwhelming weight of authority not

only in this District, but in the entire Circuit, is that a third-party defendant may not

remove an action to federal court. In fact, upon a closer examination of the relevant

case law, the Court has not found (and CitiMortgage has not cited) a single case from

within this Circuit that has allowed a third-party defendant to remove a case from state

court. And the Court has found a plethora of contrary authority. See Wild Horse

Receivables, LLC v. Marosi, No. 10-cv-01454, 2010 WL 4595674, at *1-*2 (D. Colo.

Nov. 5, 2010); NCO Fin. Sys., Inc. v. Yari, 422 F. Supp. 2d 1237, 1239-40 (D. Colo.

2006); Mach v. Triple D Supply, LLC, 773 F. Supp. 2d 1018, 1051 (D.N.M. 2011); Bank

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of America v. Byrom, No. 2:10-CV-1017, 2010 WL 5170530, at *1 (D. Utah Dec. 14,

2010); Oklahoma v. 1983 Porsche, No. 08-cv-0528, 2008 WL 4570315, at *4 (N.D.

Okla. Oct. 10, 2008); Stillwater Nat’l Bank & Trust Co. v. Perryman Family Revocable

Trust, No. 06-cv-0584, 2006 WL 3716894, at *3-*4 (N.D. Okla. Dec. 14, 2006);

Menninger Clinic Inc. v. Schilly, No. 92-4104, 1992 WL 373927, at *1-2 (D. Kan. Nov.

23, 1992); Radio Shack Franchise Dep’t v. Williams, 804 F. Supp. 151, 152-53 (D. Kan.

1992); Elkhart Co-op Equity Exch. v. Day, 716 F. Supp. 1384, 1387 (D. Kan. 1989). 

Further, even outside this Circuit, it appears that the vast majority of courts do

not allow removal by a third-party defendant. Prominent commentators on federal civil

procedure also agree. See 14C Charles Alan Wright et al., Federal Practice &

Procedure § 3730 (4th ed.); 16 Moore’s Federal Practice – Civil § 107.11[1][b][iv] (3d

ed.). Given this overwhelming weight of authority, including uniform treatment within

this Circuit, CitiMortgage’s argument that it had an objectively reasonable basis to

remove this action (based only on a small number of out-of-Circuit cases) lacks merit.

CitiMortgage argues that the Tenth Circuit has not resolved the issue of whether

a third-party defendant may remove an action to federal court, and thus there is no

controlling authority on point. However, the Tenth Circuit likely has not resolved this

issue because remand orders are generally not appealable to the Tenth Circuit, so the

Tenth Circuit likely has not, and will not, be presented with the issue. See 28 U.S.C. §

1447(d). Under these circumstances, CitiMortgage cannot hide behind the lack of onpoint Tenth Circuit case law, given the uniform (and substantial) treatment of the issue

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1 CitiMortgage also argues that Sechrist failed to meaningfully confer prior to filing her

Motion to Remand, and that if she had provided CitiMortgage the authorities above,

CitiMortgage would have consented to remand without Sechrist having to file the Motion to

Remand. However, the burden was not on Sechrist post-removal to show CitiMortgage why

removal was improper. The burden was on CitiMortgage to have a reasonable basis for

removal in the first instance, which it did not have.

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by district courts in this Circuit. Also, the Tenth Circuit has clearly held that there is a

presumption against removal jurisdiction, Laughlin v. Kmart Corp., 50 F.3d 871, 873

(10th Cir. 1995), and that removal statutes are to be narrowly construed, Pritchett v.

Office Depot, Inc., 420 F.3d 1090, 1094-95 (10th Cir. 2005). Given this binding Tenth

Circuit authority, along with the substantial and uniform treatment of the issue by district

courts within this Circuit, CitiMortgage did not have an objectively reasonable basis to

remove this action.

When the Court originally denied Sechrist’s request for attorney's fees and costs,

the Court misapprehended how substantial and uniform the case law is in this Circuit

that third-party defendants may not remove actions to federal court under 28 U.S.C. §

1441. See Servants of Paraclete, 204 F.3d at 1012. Despite the overwhelming weight

of authority that should have informed CitiMortgage not to attempt to remove this action,

it did so anyway.1

 Thus, failure to award Sechrist attorney's fees and costs in bringing

the Motion to Remand would result in a “manifest injustice.” Id. Thus, the Court finds it

appropriate to grant Sechrist’s Motion for Reconsideration and award Sechrist the

reasonable amount of attorney’s fees and costs incurred in filing the Motion to Remand.

IV. CONCLUSION

In accordance with the foregoing, the Court hereby ORDERS as follows:

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(1) Defendant and Third-Party Plaintiff Amee Lyn Sechrist’s Motion to Reconsider

Order Regarding Attorney’s Fees and/or in the Alternative Make Specific

Findings as to Reasonableness of Removal (ECF No. 46) is GRANTED;

(2) Sechrist is entitled to an award of the reasonable amount of attorney’s fees and

costs incurred in preparing and filing her Motion to Remand, filed at ECF No. 22. 

Sechrist is not entitled to recover any attorney’s fees and costs incurred in

preparing and filing her Motion for Reconsideration (ECF No. 46) or her Reply on

the Motion for Reconsideration (ECF No. 49).

(3) On or before September 10, 2012, Sechrist’s counsel shall file a very short

Request for the reasonable amount of attorney’s fees and costs incurred in

preparing and filing the Motion to Remand (ECF No. 22), along with a more

detailed affidavit establishing the basis for the amount of the Request. 

CitiMortgage may file a Response to the Request on or before September 17,

2012. No Reply will be permitted. 

Dated this 30th day of August, 2012.

BY THE COURT:

_________________________ 

William J. Martínez 

United States District Judge

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