Seitz v. Federal National Mortgage Ass'n

909 F. Supp. 2d 490, 2012 WL 5523078, 2012 U.S. Dist. LEXIS 162927
CourtDistrict Court, E.D. Virginia
DecidedNovember 14, 2012
DocketCivil Action No. 3:12cv633
StatusPublished
Cited by8 cases

This text of 909 F. Supp. 2d 490 (Seitz v. Federal National Mortgage Ass'n) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Seitz v. Federal National Mortgage Ass'n, 909 F. Supp. 2d 490, 2012 WL 5523078, 2012 U.S. Dist. LEXIS 162927 (E.D. Va. 2012).

Opinion

MEMORANDUM OPINION

ROBERT E. PAYNE, Senior District Judge.

This matter is before the Court on Plaintiff George H. Seitz’s (“Seitz”) MOTION TO REMAND (Docket No. 19). For the reasons set forth below, the motion will be granted.

FACTUAL AND PROCEDURAL BACKGROUND

This action concerns a piece of real property located in the County of Hanover, Commonwealth of Virginia, known as 16297 Washington Highway, Doswell, Virginia 23047. On June 9, 2008,1 Seitz entered into a mortgage loan with Defendant Flagstar Bank, FSB (“Flagstar”) which was duly recorded. What happened next is the crux of the underlying dispute between the parties, but, for present purposes, it suffices to say that, in April 2010, Flagstar appointed Defendant Samuel I. White, P.C. (“White”) as trustee and began the foreclosure process. On May 3, 2011, White conducted a foreclosure sale in which Flagstar submitted the highest bid. On July 25, 2011, Flagstar executed a trustee’s deed which purported to convey the property to Defendant Federal National Mortgage Association (“Fannie Mae”), which was recorded.

On September 30, 2011, Fannie Mae filed an unlawful detainer action against Seitz in the Hanover County General District Court, No. GV11-2904. The General District Court entered a judgment against Seitz and in favor of Fannie Mae. On November 4, 2011, Seitz timely appealed the case to the Circuit Court of Hanover County, No. CL11-1804.

On June 7, 2012, while the unlawful detainer action was pending before the Circuit Court of Hanover County, Seitz filed an action in that court against Fannie Mae and Flagstar Bank. That suit was filed as a suit to quiet title and, in it, Seitz alleged that the defendants had failed to comply with several of the pre-foreclosure requirements set forth in the Deed of Trust. The [494]*494Complaint prayed the court to award Seitz compensatory damages in the amount of $50,000 and for an Order “quieting Seitz’ [sic] title to ownership of the home.” Compl. ¶ 44 in CL12-1110.

On May 25, 2012, the Circuit Court denied Fannie Mae’s motion for summary judgment and its motion in limine, and, after Seitz withdrew his demand for a jury trial, the case was set for a bench trial on June 14, 2012. PI. Mem. in Supp. (Docket No. 20) Ex. B. Seitz moved to consolidate for trial the unlawful detainer action and the quiet title action and the Circuit Court of Hanover County granted that motion on June 12, 2012. PI. Mem. in Supp. Ex. A. On August 30, 2012, the defendants filed their Notice of Removal, removing the “quiet title” action to this Court (Docket No. 1). On September 26, 2012, Seitz filed his Motion to Remand (Docket No. 19).

LEGAL STANDARD

At issue in this action is the so-called “prior exclusive jurisdiction doctrine.” Applying the doctrine here resolves the motion to remand.

It is well-settled that, generally speaking, “the pendency of an action in the state court is no bar to proceedings concerning the same matter in the Federal court having jurisdiction.” McClellan v. Carland, 217 U.S. 268, 282, 30 S.Ct. 501, 54 L.Ed. 762 (1910). However, it is similarly well-settled that, “when one court is exercising in rem jurisdiction over a res, a second court will not assume in rem jurisdiction over the same res.” Marshall v. Marshall, 547 U.S. 293, 311, 126 S.Ct. 1735, 164 L.Ed.2d 480 (2006). The Supreme Court of the United States has explained:

Where the action is in rem the effect is to draw to the federal court the possession or control, actual or potential, of the res, and the exercise by the state court of jurisdiction over the same res necessarily impairs, and may defeat, the jurisdiction of the federal court already attached. The converse of the rule is equally true, that where the jurisdiction of the state court has first attached, the federal court is precluded from exercising its jurisdiction over the same res to defeat or impair the state court’s jurisdiction.

Kline v. Burke Const. Co., 260 U.S. 226, 229, 43 S.Ct. 79, 67 L.Ed. 226 (1922); see also City of Orangeburg v. So. Ry. Co., 134 F.2d 890, 892 (4th Cir.1943) (“[T]he court, state or federal, which first acquires jurisdiction of the subject matter of a suit in rem holds it to the exclusion of any other court until its duty is fully performed.”). The purpose of this rule is to prevent two courts from issuing contradictory and incompatible rulings regarding the same res.

As the Supreme Court explained long ago:

It is a doctrine of law too long established to require a citation of authorities, that, where a court has jurisdiction, it has a right to decide every question which occurs in the cause, and whether its decision be correct or otherwise, its judgment, till reversed, is regarded as binding in every other court; and that, where the jurisdiction of a court, and the right of a plaintiff to prosecute his suit in it, have once attached, that right cannot be arrested or taken away by proceedings in another court. These rules have their foundation, not merely in comity, but on necessity. For if one may enjoin, the other may retort by injunction, and thus the parties be without remedy; being liable to a process for contempt in one, if they date [sic] to proceed in the other. Neither can one take property from the custody of the other by replevin or any other process, [495]*495for this would produce. a conflict extremely embarrassing to the administration of justice.

Peck v. Jenness, 48 U.S. 612, 624-25, 7 How. 612, 12 L.Ed. 841 (1849). Accordingly, “where the judgment sought is strictly in personam ... both a state court and a federal court having concurrent jurisdiction may proceed with the litigation.” Penn Gen. Casualty Co. v. Pennsylvania, 294 U.S. 189, 195, 55 S.Ct. 386, 79 L.Ed. 850 (1935).

However, “if the two suits are in rem or quasi in rem, requiring that the court or its officer have possession or control of the property which is the subject of the suit in order to proceed with the cause and to grant the relief sought, the jurisdiction of one court must of necessity yield to that of the other.” Id. This rule has been described as a principle of jurisdiction, see e.g. Palmer v. Texas, 212 U.S. 118, 125, 29 S.Ct. 230, 53 L.Ed. 435 (1909) (describing the rule as removing jurisdiction from the federal court “as if the property had been entirely removed to the territory of another sovereignty”). It also has been said to be a rule of comity, see e.g. Metro. Finance Corp. v. Wood, 175 F.2d 209, 210 (9th Cir.1949) (describing the rule as “one of necessitous comity”). Whatever the basis, it is clear that the rule is viewed as “a principle of right and of law, and therefore of necessity. It leaves nothing to discretion or mere convenience.” Covell v. Heyman, 111 U.S. 176, 182, 4 S.Ct. 355, 28 L.Ed. 390 (1884).

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Bluebook (online)
909 F. Supp. 2d 490, 2012 WL 5523078, 2012 U.S. Dist. LEXIS 162927, Counsel Stack Legal Research, https://law.counselstack.com/opinion/seitz-v-federal-national-mortgage-assn-vaed-2012.