Court Opinion

ID: 4310378
Source: CourtListenerOpinion
Date Created: 2018-09-07 00:00:26.624534+00
Date Added: 2024-06-11T14:43:46.323586
License: Public Domain

Case: 16-41569      Document: 00514631243         Page: 1    Date Filed: 09/06/2018

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

                                    No. 16-41569                               FILED
                                  Summary Calendar                      September 6, 2018
                                                                          Lyle W. Cayce
                                                                               Clerk
ALESSANDRO F. CERVANTES,

              Plaintiff - Appellant

v.

OCWEN LOAN SERVICING, L.L.C.; HOMEEQ SERVICING
CORPORATION; NEW CENTURY FINANCIAL CORPORATION; U.S.
BANK, N.A.; ELDON L. YOUNGBLOOD,

              Defendants - Appellees

                   Appeal from the United States District Court
                        for the Southern District of Texas
                              USDC No. 5:16-CV-129

Before DAVIS, HAYNES, and GRAVES, Circuit Judges.
PER CURIAM:*
       Alessandro Cervantes appeals the district court’s dismissal of his suit as
barred by res judicata and requests permission to appeal in forma pauperis
(“IFP”). Because Cervantes does not raise any non-frivolous issues, we deny
the IFP motion and dismiss the appeal.

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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: 16-41569     Document: 00514631243     Page: 2   Date Filed: 09/06/2018

                                 No. 16-41569
       I.   Background
      Cervantes received a loan from New Century Mortgage Corporation to
buy a home in 2006. To secure the loan, Cervantes signed a deed of trust
granting New Century a lien on the property. The deed of trust was later
assigned to U.S. Bank, N.A., and was serviced by Ocwen Loan Servicing, L.L.C.
      After Cervantes stopped making payments on the loan, U.S. Bank
instituted foreclosure proceedings. Cervantes sued in Texas state court to stop
foreclosure. He requested that the mortgage be voided because the assignment
to U.S. Bank was, he believed, not properly recorded. Cervantes also sued for
slander of title, statutory fraud, and sought other declaratory and injunctive
relief. In addition to New Century, U.S. Bank, and Ocwen, Cervantes named
Barclays Capital Real Estate Inc. (doing business as HomEq Servicing) and
Mortgage Asset Securitization Transactions, Inc. as defendants.
      The defendants removed the case to federal court in the Southern
District of Texas.   See Cervantes v. New Century Mortg. Corp., No. 5:14-CV-
180 (S.D. Tex. Nov. 10, 2014). The Southern District of Texas dismissed the
claims against the defendants with prejudice. See Cervantes v. New Century
Mortg. Corp., No. 5:14-CV-180, 2015 WL 12765515 (S.D. Tex. May 11, 2015).
We affirmed that decision. See Cervantes v. New Century Mortg. Corp., 633 F.
App’x 290 (5th Cir. 2016) (per curiam).
      About two months after we affirmed dismissal, Cervantes again filed suit
in Texas state court. This time, he also sued Eldon Youngblood, a substitute
trustee to the foreclosure proceedings.         Unlike the other defendants,
Youngblood is a citizen of Texas, from where Cervantes also hails.
      Defendants removed this second suit to the Southern District of Texas.
A federal court would not typically have diversity jurisdiction to hear the case
because Cervantes and Youngblood were from the same state, See 28 U.S.C.
§ 1332.     The district court, however, concluded that Youngblood was
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                                   No. 16-41569
fraudulently joined and dismissed him from the case.           It then exercised
diversity jurisdiction and dismissed the claims against all other defendants,
concluding that the dismissal in the previous suit barred his suit under the
principles of res judicata. Cervantes appealed, arguing that res judicata did
not bar suit.
      II.   Legal Standards
      Cervantes has requested that this court grant him IFP status, which
would permit him to file without paying the filing fee. To be given IFP status,
an appellant must be found to have taken an appeal “in good faith.” See
Donaldson v. Ducote, 373 F.3d 622, 624 (5th Cir. 2004) (per curiam); Baugh v.
Taylor, 117 F.3d 197, 202 (5th Cir. 1997). To determine if an appeal is taken
in good faith, we assess “whether the appeal involves legal points arguable on
their merits (and therefore not frivolous).” Howard v. King, 707 F.2d 215, 220
(5th Cir. 1983) (per curiam) (quotation marks omitted). If we determine that
an appeal is frivolous, we may dismiss the appeal. See 5TH CIR. R. 42.2. We
thus assess whether any of Cervantes’s arguments have arguable merit or,
instead, are frivolous.
     III.   Jurisdiction
      Though Cervantes does not challenge the district court’s jurisdiction, we
review it out of an abundance of caution. The district court exercised diversity
jurisdiction over the suit, which generally requires that (1) the dispute be about
more than $75,000 and (2) all of the plaintiffs be from different states than all
of the defendants. See 28 U.S.C. § 1332. Although Cervantes and Youngblood
are citizens of the same state, the district court concluded that Youngblood’s
citizenship did not need to be considered for determining diversity jurisdiction
purposes because he was “fraudulently joined.”

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                                      No. 16-41569
       The district court concluded he was fraudulently joined because it
concluded that Cervantes had not stated a legal claim against Youngblood. 1
When a district court checks a case for fraudulent or improper joinder, it
determines whether the plaintiff has pleaded enough facts that, if proven true,
would result in legal liability against the defendant. See Smallwood v. Ill.
Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004) (en banc). The improperly
joined defendant can then be eliminated from the case; so long as the
remaining parties meet the requirements of diversity jurisdiction, the federal
district court can exercise jurisdiction over the case. See Cuevas v. BAC Home
Loans Servicing LP, 648 F.3d 242, 250–51 (5th Cir. 2011).
       We affirm the district court’s exercise of diversity jurisdiction for two
reasons. First, Cervantes did not challenge Youngblood’s dismissal on appeal.
If an appellant fails to argue an issue on appeal, we usually consider the issue
waived and do not address it. See, e.g., Williams v. Henagan, 595 F.3d 610,
615 (5th Cir. 2010) (per curiam). One exception to that general rule is that a
party cannot waive a court’s jurisdiction. See, e.g., Hosp. House, Inc. v. Gilbert,
298 F.3d 424, 429 (5th Cir. 2002). However, here the waiver would be as to the
merits of the case against Youngblood, not jurisdiction per se. See Pritchett v.
Cottrell, Inc., 512 F.3d 1057, 1059 n.2 (8th Cir. 2008) (“We need not address
subject matter jurisdiction where, as here, the parties do not seek to invoke it
with regard to [a defendant who was dismissed as fraudulently joined].”). Just
as a plaintiff can sue only certain defendants to make jurisdiction proper, a
plaintiff can concede or waive the dismissal of the only party that would
preclude jurisdiction.

       1 The term “improperly joined” may be more appropriate here as the district court did
not find any actual fraud, just an improper joined of Youngblood.
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                                  No. 16-41569
      Second, Cervantes failed to state a claim against Youngblood, so the
district court was correct to conclude he was improperly joined. Under the
Federal Rules of Civil Procedure, a plaintiff must provide more than conclusory
allegations against a defendant. See Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). The plaintiff must “plead[] factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct
alleged.” Id. Here, Cervantes pled only legal conclusions, rather than facts,
against Youngblood.
      Cervantes alleges Youngblood took just one action. He “failed to inform
Plaintiff that upon executing the said Deed of Trust agreement, Plaintiff could
make a gift of his property to the trust.” This fact, without more, is insufficient
for a “court to draw the reasonable inference that the defendant is liable for
the misconduct alleged.” Id. Consequently, Cervantes has not stated a claim
against Youngblood, and Youngblood was improperly joined.
      Because the remaining defendants are all from different states than
Cervantes, the parties are diverse. Additionally, the amount-in-controversy
exceeds $75,000.        Thus, the district court properly exercised diversity
jurisdiction over the remaining defendants.
      IV.    Res Judicata
      The district court also dismissed the rest of Cervantes’s suit against the
remaining defendants because of the principle of res judicata. Simply put, res
judicata prevents a plaintiff from re-litigating a case that he previously
brought. See Bradberry v. Jefferson Cty., 732 F.3d 540, 548 n.6 (5th Cir. 2013).
Plaintiffs are not given a second chance to prove their claims; they must do it
right the first time.
      The district court correctly found that Cervantes’s claims were barred by
res judicata. Since Cervantes’s claims were based on Texas law, we apply
Texas’s law of res judicata. In Texas, res judicata applies if there is “(1) a prior
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                                  No. 16-41569
final judgment on the merits by a court of competent jurisdiction; (2) identity
of parties or those in privity with them; and (3) a second action based on the
same claims as were raised or could have been raised in the first action.”
Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996).
      Each requirement is satisfied in this case. First, the Southern District
of Texas properly had jurisdiction over his previous case, and it dismissed the
case with prejudice, meaning the suit could not be re-filed. We affirmed the
dismissal and issued the mandate. Nothing remains to be litigated. Thus, it
is a final judgment from a court of competent jurisdiction. See Matthews
Constr. Co., Inc. v. Rosen, 796 S.W.2d 692, 694 (Tex. 1990); Collins v. City of
Corpus Christi, 188 S.W.3d 415, 424 (Tex. App.—Corpus Christi 2006, no pet.).
Second, all of the remaining parties in this suit were defendants in the first
suit. So there is “identity of the parties.” Amstadt, 919 S.W.2d at 652. Finally,
though Cervantes uses slightly different causes of actions in this suit, all of his
claims relate to the same subject matter as the first suit, and each of them
could have been brought in that suit. See Getty Oil Co. v. Ins. Co. of N. Am.,
845 S.W.2d 794, 798 (Tex. 1992) (stating that res judicata applies “not only on
matters actually litigated, but also on causes of action or defenses which arise
out of the same subject matter and which might have been litigated in the first
suit” (quoting Barr v. Resolution Trust Corp., 837 S.W.2d 627, 630 (Tex.
1992))). Indeed, none of the issues that Cervantes presses on appeal are
different from his original suit other than the label put on them. Thus, the
district court correctly concluded that res judicata prohibited Cervantes from
bringing his second suit.
       V.   Conclusion
      For the reasons above, Cervantes cannot sue Defendants over the claims
and issues he raised in his first lawsuit. He has no non-frivolous issue for
appeal. Consequently, we DISMISS his appeal as frivolous. Motion DENIED.
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