Court Opinion

ID: 2671906
Source: CourtListenerOpinion
Date Created: 2014-05-01 00:01:30.951784+00
Date Added: 2024-06-11T09:35:11.909366
License: Public Domain

Case: 13-50417      Document: 00512612263         Page: 1    Date Filed: 04/29/2014

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                         United States Court of Appeals
                                                                                  Fifth Circuit

                                                                                FILED
                                      No. 13-50417                          April 29, 2014
                                                                           Lyle W. Cayce
JUDITH FRENCH; VIRGINIA J. FRENCH,                                              Clerk

                                                 Plaintiffs-Appellants
v.

EMC MORTGAGE CORPORATION; THE BANK OF NEW YORK MELLON,
formerly known as The Bank of New York as Successor Trustee to JP Morgan
Chase Bank, N.A. as Trustee for Certificate holders of Bear Stearns Asset
Backed Securities Trust 2006-3, Asset Banked Certificates, Series 2006-3;
BEAR STEARNS, L.L.C.; BEVERLY MITRISIN; CHARLES THOMAS
NATION; MORTGAGE ELECTRONIC REGISTRATION SERVICES.

                                                 Defendants-Appellees

                   Appeal from the United States District Court
                        for the Western District of Texas
                             USDC No. 3:12-CV-100

Before REAVLEY, JONES, and GRAVES, Circuit Judges.
PER CURIAM:*
       This case arises from the foreclosure sale of Appellants’ home after they
defaulted on their mortgage. Appellants challenge the removal of the case to
federal court and the dismissal of their claims alleging deceptive lending
practices on the part of Appellees. We AFFIRM.

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
    Case: 13-50417    Document: 00512612263     Page: 2   Date Filed: 04/29/2014

                                 No. 13-50417
      On December 1, 2005, Appellants executed an Adjustable Rate Note in
the amount of $147,750, secured by a Deed of Trust on their home at
1271 Morrow Court, El Paso, Texas. Appellants began to fall behind on their
mortgage payments around October 2008. On August 16, 2010, nearly a year
after Appellants last made a loan payment, EMC, the mortgage servicer, sent
two certified letters, notifying Appellants that it was accelerating the maturity
date of the debt and scheduling a foreclosure sale for September 7, 2010. The
letters were returned as unclaimed, despite three delivery attempts. On the
scheduled foreclosure date, however, Appellants filed suit in state court and
obtained an ex parte Temporary Restraining Order (“TRO”), enjoining the
foreclosure. Notwithstanding the TRO, a Substitute Trustee, appointed by
EMC, sold the home to The Bank of New York (BONY) for $202,837.46.
Appellants, however, continue to live at the home.
      Appellants initially alleged several causes of action under Texas law in
their state court case to enjoin the foreclosure sale. On March 20, 2012,
however, Appellants filed an amended complaint that claimed, for the first
time, that EMC’s conduct was “in direct violation of . . . the Federal Fair Debt
Collection Practices Act.” This amendment prompted Appellees to remove the
case to federal court on the basis of federal question jurisdiction. Appellants
moved to remand, and the district court denied the motion. Appellees then
moved for summary judgment on all of Appellants’ claims. After Appellants
failed to respond to the motion, the district court granted summary judgment
and entered a final judgment against Appellants. Appellants filed a motion for
reconsideration, which was denied. This appeal followed.
      Appellants press three arguments. First, they contend that removal was
improper because the two references in their amended complaint to the Fair
Debt Collection Practices Act (“FDCPA”) are not sufficient to invoke federal
question jurisdiction. Citing Grable & Sons Metal Prods. v. Darue Eng’g &
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                                       No. 13-50417
Mfg., 545 U.S. 308 (2005), Merrell Dow Pharms. Inc. v. Thomas, 478 U.S. 804
(1986), and Howery v. Allstate Ins. Co., 243 F.3d 912 (5th Cir. 2001), Appellants
assert that the district court should have considered the relative significance
of the federal claim. The rule from this line of authority, however, applies to
cases that do not plead a cause of action arising under a federal statute, but
where federal jurisdiction may exist over claims created by state law that
“incorporate federal standards or require the interpretation of federal law.”
Howery, 243 F.3d at 917; see also Grable & Sons Metal Prods., 545 U.S. at 312
(addressing state-law claims that implicate significant federal issues); Merrell
Dow Pharms. Inc., 478 U.S. at 805 (explaining that the question presented was
whether federal jurisdiction existed over state-law action that incorporated a
federal standard). In the present case, Appellants referenced the FDCPA by
way of asserting a cause of action under this federal statute. As such, the
amended complaint brought a claim “under the . . . laws . . . of the United
States,” 28 U.S.C. § 1331, and was properly removed to federal court. See
28 U.S.C. § 1441(a) (authorizing removal of civil actions over which the district
court has original jurisdiction). 1
       Second, Appellants argue that summary judgment was unwarranted
because Appellees failed to submit evidence that controverted the allegations
in the amended complaint that Appellees engaged in deceptive mortgage
practices. Appellees’ initial burden on summary judgment, however, was only

       1  Appellants do not argue that the district court erred in exercising supplemental
jurisdiction over their state law claims. To the contrary, Appellants concede that their claims
“arise from an interlocked series of transactions.” The Court agrees that Appellants’ claims
derive from the same nucleus of operative fact, the servicing of their mortgage loan and the
foreclosure of the subject deed of trust. As such, supplemental jurisdiction was proper. See
U.S.C. § 1367(a) (authorizing supplemental jurisdiction where the state law claims are “so
related” to the federal claims as to “form part of the same case of controversy”); Mendoza v.
Murphy, 532 F.3d 342, 356 (5th Cir. 2008) (stating that supplemental jurisdiction exists when
the federal and state claims “derive from a common nucleus of operative fact”).
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                                 No. 13-50417
to point to an absence of evidence supporting Appellants’ claims. Celotex Corp.
v. Catrett, 477 U.S. 317, 325 (1986) (holding that the party seeking summary
judgment can satisfy its initial burden by demonstrating an absence of
evidence to support the nonmoving party’s case where the nonmoving party
has the burden of proof at trial). Once Appellees made this initial showing, the
burden shifted to Appellants to identify genuine issues of material fact.
Esmark Apparel, Inc. v. James, 10 F.3d 1156, 1160 (5th Cir. 1994) (shifting
burden to nonmoving party after moving party pointed out to the district court
that there was no evidence in the record to support nonmoving party’s case).
Appellants, however, did not respond to Appellees’ motion, and the district
court found no evidence in the record that supported Appellants’ claims.
      On appeal, moreover, Appellants do not point to any summary judgment
evidence that demonstrates a genuine issue of material fact as to any of their
claims. Instead, Appellants refer to a demand letter from the Texas Attorney
General’s office concerning JP Morgan Chase & Co.’s foreclosure practices and
a stipulated final judgment from a federal lawsuit against EMC. Neither of
these documents, however, evidences any misconduct in Appellants’ case, and,
in any event, they cannot be used to challenge the district court’s summary
judgment ruling because they were not in the record when the court issued the
ruling. Moore v. Miss. Valley State Univ., 871 F.2d 545, 549 (5th Cir. 1989)
(holding that an appeals court is bound on summary judgment review to the
record as it existed before the district court). Accordingly, we find no error in
the district court’s grant of summary judgment.
      Finally, Appellants complain about the timing of the removal and the
summary judgment motion. Specifically, Appellants claim that Appellees took
advantage of the misfortune that befell Appellants’ counsel and circumvented
a discovery hearing in state court. In support, they point out that Appellees
filed their notice of removal three days before a scheduled discovery hearing in
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                                 No. 13-50417
state court, and on the same day that Appellants’ counsel received news that
an immediate family member was stricken with a life-threatening illness.
Appellants further indicate that counsel reduced his legal practice for a period
of seven months until the family member’s condition improved.             Given
counsel’s family health emergency, Appellants argue that the failure to file a
summary judgment response should be excused.
      Appellants’ grievances do not warrant relief. Appellees timely removed
the state court action on the basis of the amended complaint, which Appellants
filed six days before the discovery hearing. The fact that the removal occurred
on the eve of the hearing is of no significance because the availability of
removal is not dependent on whether the state court case has a pending
hearing but rather on whether the defendant acts promptly upon notice that
federal jurisdiction exists. See 28 U.S.C. § 1446. As to the summary judgment
motion, Appellants had ample time to seek a continuance in the district court
case. Appellees waited seven months from removal before moving for summary
judgment, and the district court waited an additional three months before
ruling on the motion.    In light of Appellants’ prolonged inactivity, which
persisted for several months after counsel’s emergency subsided, there was
nothing improper about the summary judgment process.
                                                                  AFFIRMED.

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