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Ocwen Loan Servicing, LLC v. Mickna

United States District Court, W.D. Arkansas, Fayetteville Division

February 17, 2015

OCWEN LOAN SERVICING, LLC and FEDERAL HOME LOAN MORTGAGE CORPORATION, Plaintiffs,
v.
JAMIE T. MICKNA; SIGNATURE BANK OF ARKANSAS; BRADCO SUPPLY CORPORATION; RIDOUT CONTRACTOR OUTLET OF FAYETTEVILLE, INC.; AT&T ADVERTISING LP; AND ASHTON DOTSON, Defendants.

MEMORANDUM OPINION AND ORDER

TIMOTHY L. BROOKS, District Judge.

Currently before the Court are Separate Defendant Jamie T. Mickna's Motion to Remand (Doc. 11) and brief in support (Doc. 12), Plaintiffs Ocwen Loan Servicing, LLC ("Ocwen") and Federal Home Loan Mortgage Corporation's ("Freddie Mac") Response in Opposition (Doc. 16), and Mickna's Reply (Doc. 20). The Court held a hearing on the Motion on February 4, 2015, and after entertaining oral argument, ruled from the bench and GRANTED the Motion to Remand (Doc. 11). This Opinion and Order explains the basis for the Court's decision. To the extent anything in this Order differs from what the Court stated from the bench, this Order will control.

I. BACKGROUND

Plaintiffs filed a complaint in the Circuit Court of Washington County, Arkansas, on January 7, 2014, alleging that a loan held by Plaintiffs on Defendant Jamie T. Mickna's home went into default due to Mickna's failure to make timely mortgage payments. The complaint recounts that a non-judicial foreclosure action was initiated on December 16, 2009, and the property was conveyed from Ocwen to Freddie Mac. On May 5, 2011, the attorney for Ocwen executed an affidavit to rescind the sale, and that affidavit was filed of record with the Circuit Clerk of Washington County on May 6, 2011.

In the meantime, on April 21, 2010, Mickna filed for Chapter 7 bankruptcy. Mickna's bankruptcy proceedings terminated, and he received a full discharge on July 30, 2010. Plaintiffs claimed that due to Mickna's discharge in bankruptcy, they were "not pursuing judgment in personam against Mr. Mickna, " but that Mickna was, nevertheless, "in default under the terms of the mortgage and note, having failed to make scheduled payments due October 1, 2008, and thereafter." (Doc. 3, p. 9).

In the original complaint, Plaintiffs asked the state court to declare that their rights and interest to the subject property were superior to the rights and interests of all of the other named defendants, whom Plaintiffs were concerned may assert some claim of right to the property. Only Mickna answered the complaint, however. Plaintiffs also sought a declaration that the prior non-judicial foreclosure sale and subsequent deeds in favor of Plaintiffs should be declared null and void, and that Plaintiffs be granted judgment in rem against the subject property for $229, 425.14, plus interest, attorney fees, and costs.

Mickna filed a motion to dismiss in state court on July 11, 2014 (Doc. 1-4), arguing that the foreclosure claim accrued in October of 2008, and due to the five-year statute of limitations on foreclosure actions under Arkansas law, the complaint was filed out of time. See Ark. Code Ann. ยง 16-56-111. According to Mickna, Plaintiffs had until October 2013 to file their lawsuit, but they waited until January 2014 and in doing so exceeded the statute of limitations period. Rather than respond directly to Mickna's motion to dismiss, Plaintiffs filed an amended complaint in state court on July 29, 2014 (Doc. 6). Mickna then filed a motion to strike the amended complaint (Doc. 7), asserting first, that the time to respond to the motion to dismiss ran prior to the filing of the amended complaint; and second, that the amended complaint failed to cure the statute of limitations defect identified by Mickna in his original motion to dismiss, such that the motion was still a live pleading and had not been rendered moot by the filing of the amended complaint.

On October 31, 2014, Circuit Judge Christi Beaumont's staff attorney emailed the parties to let them know that the court had decided to grant Mickna's motion to dismiss. The email stated in its entirety:

"Dear Counsel:
The Court finds Defendant Jamie Todd Mickna's Motion to Dismiss should be granted, and requests defense counsel draft a precedent to that effect for her review."

(Doc. 12-1)

Mickna maintains that while his counsel was drafting the precedent requested by Judge Beaumont, but before Judge Beaumont had the opportunity to review and sign the order of dismissal, Plaintiffs removed the case to this Court on November 3, 2014, ten months after they filed the matter in State court. Mickna believes Plaintiffs did this to avoid the unfavorable decision Judge Beaumont was about to enter against them.

On the same day the case was removed, Mickna filed a Motion to Remand (Doc. 11). The Court now considers whether federal subject-matter jurisdiction exists pursuant to a valid removal, and, secondarily, if subject-matter jurisdiction does exist, whether the Court should nonetheless exercise its ...


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