United States District Court, W.D. Arkansas, Fayetteville Division
MARVIN A. HARLAN and CAROL G. HARLAN, Plaintiffs,
BANK OF AMERICA, N.A.; THE BANK OF NEW YORK MELLON f/k/a THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATE HOLDERS CWALT, INC., ALTERNATIVE LOAN TRUST 2006-30T1, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-30T1; and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Defendants.
MEMORANDUM OPINION AND ORDER
TIMOTHY L. BROOKS, District Judge.
Currently before the Court are Separate Defendants Bank of America, N.A.'s ("BANA") and Mortgage Electronic Registration Systems, Inc.'s ("MERS") Motion to Dismiss (Doc. 9) and brief in support (Doc. 10), and Plaintiffs Marvin A. Harlan's and Carol G. Harlan's ("the Harlans") Response in Opposition (Doc. 23). Also before the Court are the Harlans' Motion to Remand (Doc. 14), the Harlans' Second Motion to Remand (Doc. 21), and Defendants' Responses in Opposition (Docs. 17 and 24). For the reasons stated below, the Harlans' Motion to Remand (Doc. 14) is DENIED; and the Harlans' Second Motion to Remand (Doc. 21) is DENIED AS MOOT; Defendants' Motion to Dismiss (Doc. 9) is GRANTED; and Plaintiffs' Motion to Drop Party Defendants (Doc. 22) is DENIED AS MOOT.
The Harlans originally filed this lawsuit in Washington County Circuit Court on August 7, 2014, seeking a declaratory judgment as to their title to property located at 1621 N. Starr Drive in Washington County, Arkansas ("Property"). The Harlans contend that because MERS does not have the authority to transfer or assign their Note or Mortgage, no named Defendant has a legal or equitable interest in the Property. On September 12, 2014, Defendants removed the action to this Court, asserting diversity-of-citizenship jurisdiction, as the parties are diverse and the value of the Property exceeds $75, 000. In turn, the Harlans argue that because they do not specify an amount in controversy within their Complaint, the minimum amount in controversy has not been met.
On or about September 1, 2006, the Harlans executed a note ("Note") in favor of America's Wholesale Lender ("AWL") in the amount of $675, 900.00. To secure payment of the Note, the Harlans executed a mortgage ("Mortgage"), also dated September 1, 2006, on the Property in favor of AWL, as Lender, and MERS, solely as nominee for the Lender and the Lender's successors and assigns. Subsequently, MERS assigned the Note to The Bank of New York Mellon, as Trustee For the Certificate Holders CWALT, Inc., Alternative Loan Trust 2006-30T1 Pass-Through Certificates, Series 2006-30T1 ("BONY"). BONY was named as the investor and BANA as the servicer of the Mortgage. Servicing rights for the Note transferred to Residential Credit Solutions, Inc. on January 16, 2014.
BANA previously filed a foreclosure action in Washington County Circuit Court against the Harlans regarding the Note on July 20, 2012 in case number 12-CV-001757-4. The foreclosure sale occurred on December 19, 2012; however, the foreclosure sale was rescinded as a result of the Harlans' redemption of the Property.
The Harlans seek to quiet title to the Property, requesting that the Court find that no named Defendant has legal authority to claim a security interest in the Property, and therefore the Harlans should acquire the Property "free and clear of the efforts of the Defendants." (Doc. 3, p. 5). The Harlans assert that the assignment to BONY on February 16, 2011 is void and of no legal effect because MERS does not have authority to make assignments without being first nominated by a licensed mortgage broker. Further, the Harlans contend that BONY and BANA failed to provide a notice of assignment as required by Ark. Code Ann. § 4-71-207, and assert that none of the Defendants are holders in due course ("HIDC"). The Harlans also maintain a cause of action for slander of title due to their claim that Defendants "intentionally manufactured a scheme to defraud homeowners on a nationalized level... [by claiming] holder' status of mortgage loans when the Defendants had actual knowledge that they had no such status, doing so through perjured documents." (Doc. 3, p.9).
BANA and MERS seek dismissal from suit due to the Harlans' failure to state actionable claims for declaratory relief or slander of title, contending that: (1) Defendants no longer have an interest in the Property; (2) allegations regarding HIDC status should be dismissed as non-dispositive of the issue of a lender's right to enforce the Note and its attendant security interest; (3) even if MERS had no legal authority to make assignments, this does not erase the underlying debt; and (4) the Harlans' allegations do not support a cause of action for slander of title based on malicious publication of a false matter.
A. The Harlans' Motion to Remand
The Harlans object to Defendants' removal of this action to federal court, arguing that a specific dollar amount must be apparent in the Complaint in order to meet the minimum amount in controversy necessary for diversity jurisdiction.
An action filed in state court may be removed to federal court only if it originally could have been brought in federal court. Under the diversity-of-citizenship jurisdiction granted to federal courts, a civil action between citizens of different states with over $75, 000 in controversy may be brought in federal district court. The Eighth Circuit has held that in a suit for declaratory or injunctive relief, the amount in controversy is the value to the plaintiff of the right that is at issue. Usery v. Anadarko Petroleum Corp., 606 F.3d 1017, 1018-19 (8th Cir. 2010) (citing Federated Mut. Implement & Hardware Ins. Co. v. Steinheider, 268 F.2d 734, 737-38 (8th Cir. 1959); Advance Am. Servicing of Ark., Inc. v. McGinnis, 526 F.3d 1170. 1173-74 (8th Cir. 2008)). This is sometimes referred to as the "plaintiff's viewpoint rule." Id. The question is not how a plaintiff subjectively values a right but rather the actual value of the object of the suit. Id. In a quiet title action, therefore, "a district court must determine what the property interest at issue is worth in the marketplace." Id. (internal citations omitted).
In this case, the Harlans took out a Note for $675, 900.00, which is sufficient to meet the amount in controversy. Therefore, this action is properly before the Court, and the ...