Federal National Mortgage Association, Plaintiff v. Judith Tompson, Defendant

2018 DNH 108

• Court: District Court, D. New Hampshire
• Decided: May 3, 2012
• Docket: 17-cv-0699-SM
• Status: Published

Opinion

UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Federal National Mortgage Association, Plaintiff

v. Case No. 17-cv-0699-SM Opinion No. 2018 DNH 108 Judith Tompson, Defendant

O R D E R

Plaintiff, Federal National Mortgage Association (“Fannie

Mae”), began this action in New Hampshire’s 10th Circuit Court –

District Division (Salem), by filing a Landlord and Tenant Writ

against pro se defendant, Judith Tompson. Tompson removed the

suit to this court, invoking federal diversity jurisdiction.

See 28 U.S.C. § 1332. Fannie Mae has filed a motion to remand

the action to state court for lack of subject matter

jurisdiction. For the reasons stated herein, plaintiff’s motion

is granted.

BACKGROUND

This litigation arises out of the foreclosure sale of

property located at 9 Lancelot Court, Building 9, Unit 8, Salem,

New Hampshire (the “Property”). Fannie Mae acquired the

Property by foreclosure deed from First Eastern Mortgage

Corporation, and subsequently commenced eviction proceedings

1 against Tompson, the Property’s previous owner and mortgagor,

who remains in possession. On November 15, 2017, Fannie Mae

filed a Landlord and Tenant action in the 10th Circuit Court –

District Division (Salem). Tompson removed the case to federal

court, invoking this court’s diversity jurisdiction, which she

contends is proper because she is a resident of New Hampshire,

while plaintiff is a federal national association, and because

she seeks “damages under 26 U.S. Code §[]6334” that “meet the

federal threshold amount.” Def.’s Mot. for Removal at 1. In

her notice of removal, defendant further contends that federal

question jurisdiction exists as a result of her counterclaim

under 26 U.S.C. § 6334.

DISCUSSION

Pursuant to 28 U.S.C. § 1441, a defendant may remove a case

originally filed in state court to federal court if that case

presents a federal question, or is between citizens of different

states and involves an amount in controversy that exceeds

$75,000. See 28 U.S.C. §§ 1441, 1331, 1332(a). As the party

invoking federal jurisdiction, defendant bears the burden of

demonstrating that removal was proper. Fayard v. Northeast

Vehicle Servs., LLC, 533 F.3d 42, 48 (1st Cir. 2008). Tompson

contends that jurisdiction rests upon diversity of citizenship

2 and amount in controversy and, alternatively, that jurisdiction

is proper because the action raises questions of federal law.

1. Federal Diversity Jurisdiction Under 28 U.S.C. § 1332

As noted, 28 U.S.C. § 1332 grants federal district courts

original jurisdiction over civil actions between citizens of

different states where the amount in controversy exceeds

$75,000. It is plain from the face of plaintiff’s complaint

that the jurisdictional minimum of $75,000 was not claimed. The

Landlord and Tenant Writ served upon the defendant makes clear

that Fannie Mae seeks only possession of the Property; no rent

is claimed (or damages for use or occupation). In other words,

the plaintiff seeks no monetary award.

Defendant does not argue that plaintiff’s pleadings

conclusively establish the amount in controversy. Instead, she

asserts that the amount in controversy requirement is met as a

result of her 26 U.S.C. § 6334 counterclaim regarding her

entitlement to a homestead exemption for her principal residence

under the Internal Revenue Code. She states: “[t]he Defendant

stated the Homestead amount of $125,000 was the threshold amount

at the time of removal; which exceeds the $75,000 requirement.”

Def.’s Opp. to Motion to Remand at 10.

“The amount in controversy requirement is ordinarily

determined from the plaintiff's complaint.” Watch Hill

3 Partners, Inc. v. Barthel, 338 F. Supp. 2d 306, 309 (D.R.I.

2004) (citing Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 353

(1961), and Coventry Sewage Assocs. v. Dworkin Realty Co., 71

F.3d 1, 4 (1st Cir. 1995) (stating that “it has long been the

rule that a court decides the amount in controversy from the

face of the complaint”)). However, whether a defendant’s

counterclaim can be considered in order to satisfy the amount-

in-controversy requirement is somewhat unsettled, and our court

of appeals has not directly addressed the issue. While the

“traditional rule has been that no part of the required

jurisdictional amount can be met by considering a defendant’s

counterclaim,” “the problem is more complicated when the

defendant has been compelled to assert the counterclaim.” 14C

Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc.

Juris. § 3725.3 (4th ed.) (collecting cases).

Several district courts in this circuit have held that “the

amount in controversy for diversity jurisdiction is based

exclusively on the value of the claim asserted in the

plaintiff's complaint; the value of any claims that are asserted

in a counterclaim is not included in the determination of the

amount in controversy.” Brennan v. GinA, No. 1:15-CV-00382-NT,

2015 WL 7424149, at *2 (D. Me. Oct. 16, 2015), rept. &

recommendation adopted, No. 1:15-CV-382-NT, 2015 WL 7428543 (D.

4 Me. Nov. 20, 2015) (citations omitted) (emphasis added); see

also Kurra v. Synergy Computer Solutions, Inc., No. 15-CV-13952-

ADB, 2016 WL 5109132, at *4 (D. Mass. Sept. 19, 2016) (“courts

in this District have held that any counterclaims to be asserted

by the removing defendant should not be considered when

determining the amount in controversy.” (citations omitted);

Watch Hill Partners, Inc. v. Barthel, 338 F. Supp. 2d 306, 309

(D.R.I. 2004) (“[t]he majority of courts faced with this issue

also have held that even compulsory counterclaims are not to be

considered for purposes of determining whether the

jurisdictional amount is pled.”) (citations omitted); FIA Card

Servs., N.A. v. Riley, 748 F. Supp. 2d 31, 33 (D. Me. 2010)

(addressing defendant’s appeal of district court’s refusal to

consider counterclaims when assessing the amount in controversy,

and stating: “Binding legal precedent stands overwhelmingly

against [defendant’s] position, and the Court regards

[defendant’s] likelihood of success on appeal as beyond

remote.”) (citing, inter alia, Ballard's Service Ctr., Inc. v.

Transue, 865 F.2d 447, 449 (1st Cir. 1989)).

The court agrees with that approach, especially given that

defendant’s counterclaim is not compulsory, or compelled. As

stated by Wright and Miller, the “traditional rule” — which does

not take counterclaims into account when determining the amount-

5 in-controversy — “surely is sound with respect to permissive

counterclaims, which, by definition are not transactionally

related to the original claim by the plaintiff.” 14C Charles

Alan Wright et al., Federal Practice & Procedure § 3725.3. For

those reasons, the court concludes the defendant’s permissive

counterclaim cannot be considered as part of the amount-in-

controversy, and that the defendant has not sufficiently

demonstrated that this action satisfies the amount-in-

controversy requirement for diversity jurisdiction. 1

2. Federal Question Jurisdiction Under 28 U.S.C. § 1331

Defendant further contends that federal question

jurisdiction exists because she is entitled to “Homestead

pursuant to federal law . . . which may only be adjudicated by a

U.S. District Court.” Def.’s Mem. in Supp. of Obj. to Mot. to

1 The court also observes that the defendant did not assert her 26 U.S.C. § 6334 counterclaim in state court. See Document No. 11, at pp. 18-19 (asserting counterclaims for wrongful foreclosure and violations of NH RSA 540-A). After removing the case to federal court, and following plaintiff’s motion to remand, defendant filed an answer, and therein asserted the 26 U.S.C. § 6334 counterclaim. See Document No. 12. That is problematic because removal jurisdiction is determined from the “face of the state court complaint that triggered the removal” at the time the petition for removal was filed. Danca v. Private Health Care Sys., Inc., 185 F.3d 1, 4 (1st Cir. 1999).

Thus, even assuming that defendant’s counterclaim could be considered for purposes of determining the amount in controversy, no 26 U.S.C. § 6334 counterclaim existed at the time of removal.

6 Remand at 3. That argument — that this case arises under

federal law as a result of her counterclaim — is also

unpersuasive.

A case arises under federal law for purposes of Section

1331 if “a well-pleaded complaint establishes either that

federal law creates the cause of action or that the plaintiff’s

right to relief necessarily depends on resolution of a

substantial question of federal law.” Empire Healthchoice

Assur., Inc. v. McVeigh, 547 U.S. 677, 690 (2006). And, as our

court of appeals has instructed, “28 U.S.C. § 1446 authorizes

removal only by defendants and only on the basis of claims

brought against them and not on the basis of counterclaims

asserted by them.” Ballard's Serv. Ctr., 865 F.2d at 449

(emphasis added).

Plaintiff’s eviction action is based on New Hampshire law,

and does not implicate a federal question on its face. Nor has

defendant sufficiently explained why resolution of plaintiff’s

landlord-tenant claim would require the court to address an

“embedded question of federal law that is both substantial and

disputed.” R.I. Fishermen's Alliance, Inc. v. R.I. Dep't Of

Envtl. Mgmt., 585 F.3d 42, 48 (1st Cir. 2009). Accordingly,

defendant fails to establish a federal question justifying

removal.

7 The court briefly addresses defendant’s argument concerning

the action Tompson v. First Eastern Mortgage Corporation, Case

No. 17-cv-113-PB. That case, which challenges First Eastern

Mortgage Corporation’s foreclosure of the Property, is currently

pending in this district, and defendant argues that it “renders

any subsequent possessory action as federal subject matter

jurisdiction.” Def.’s Mem. in Support of Opp. to Mot. to Remand

at 2. She contends that, because the federal court has

jurisdiction over the bank foreclosure case, the federal court

“has subject matter jurisdiction of the subsequent possessory

action in this case,” as well. Id.

Defendant seems to be relying upon the court’s supplemental

jurisdiction to supply the original jurisdiction necessary to

remove the case. Such reliance is misplaced. While our court

of appeals has not addressed the issue directly, several courts

have, and have held that a “case cannot be removed on the basis

that the claims it raises are related to claims asserted in a

separate federal action.” Residential Funding Real Estate

Holdings, LLC v. Chavez, No. CV 10-04488 MMM JCG, 2010 WL

3220065, at *1 (C.D. Cal. Aug. 12, 2010) (collecting cases); see

also Budri v. FirstFleet, Inc., No. 3:17-CV-3241-C-BN, 2017 WL

6506469, at *2 (N.D. Tex. Nov. 30, 2017), rept. & recommendation

adopted, No. 3:17-CV-3241-C, 2017 WL 6513688 (N.D. Tex. Dec. 19,

8 2017) (“Where original jurisdiction is lacking, ‘§ 1367, by its

own terms, cannot fill the void,’ as that section ‘grants

‘supplemental jurisdiction’ over state claims, not original

jurisdiction.’” (quoting Halmekangas v. State Farm Fire & Cas.

Co., 603 F.3d 290, 294 (5th Cir. 2010)) (footnote omitted).

As the Court of Appeals for the Sixth Circuit observed,

“[t]he supplemental-jurisdiction statute is not a source of

original subject-matter jurisdiction, and a removal petition

therefore may not base subject-matter jurisdiction on the

supplemental-jurisdiction statute.” Ahearn v. Charter Twp. of

Bloomfield, 100 F.3d 451, 456 (6th Cir. 1996) (internal

citations omitted). See also Fabricius v. Freeman, 466 F.2d

689, 693 (7th Cir. 1972) (“That a related case was pending in

federal court was not in itself sufficient grounds for removal

under 28 U.S.C. § 1441.”). As such, the action Tompson v. First

Eastern Mortgage Corporation, Case No. 17-cv-113-PB, does not

provide a basis for federal question jurisdiction in this

separately-filed action that does not involve any federal

claims.

3. Timeliness of Plaintiff’s Motion to Remand

Finally, defendant argues that plaintiff’s motion to remand

is untimely, citing in support 28 U.S.C. § 1447, which requires

that a motion to remand be made within 30 days after the filing

9 of the notice of removal. Defendant’s argument overlooks the

fact that the “30-day deadline for moving to remand an

improperly removed case is subject to one exception: lack of

subject matter jurisdiction, which may be raised at any time.”

Katz v. McVeigh, No. 15-CV-338-LM, 2015 WL 7016334, at *6

(D.N.H. Nov. 12, 2015) (citing 28 U.S.C. § 1447(c). Plaintiff

has moved to remand because the court lacks subject matter

jurisdiction. Defendant’s argument, therefore, lacks merit.

4. Attorneys’ Fees and Costs

Plaintiff requests an award of fees and costs incurred in

seeking a remand. However, an award of fees and costs is

appropriate “only where the removing party lacked an objectively

reasonable basis for seeking removal.” Martin v. Franklin

Capital Corp., 546 U.S. 132, 141 (2005). Plaintiff fails to

present any argument as to why Tompson lacked a reasonable basis

for seeking removal, and, while Tompson “has not sustained [her]

burden of showing federal question jurisdiction or the

jurisdictional amount necessary for diversity jurisdiction, the

court is not persuaded that [she] lacked an objectively

reasonable basis for seeking removal, particularly considering

[her] pro se status.” Bassi v. Krochina, No. 12-CV-39-JD, 2012

10 WL 1570836, at *5 (D.N.H. May 3, 2012). Accordingly,

plaintiff’s request for award of fees and costs is denied.

CONCLUSION

For the foregoing reasons, plaintiff’s motion to remand

(document no. 8) is granted due to lack of subject matter

jurisdiction. The case is remanded to New Hampshire’s 10th

Circuit Court – District Division (Salem).

SO ORDERED.

____________________________ Steven J. McAuliffe United States District Judge

May 21, 2018

cc: Patrick J. Martin, Esq. Judith Tompson, pro se