Diogo R. Esteves v. Suntrust Banks, Inc. ( 2015 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 14-13105
Non-Argument Calendar
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D.C. Docket No. 6:13-cv-01881-JA-TBS
DIOGO R. ESTEVES,
DANIELA E. ESTEVES,
Plaintiffs-Appellants,
versus
SUNTRUST BANKS, INC.,
SUNTRUST MORTGAGE, INC.,
NATIONSTAR MORTGAGE,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(July 8, 2015)
Before MARCUS, WILLIAM PRYOR, and ROSENBAUM, Circuit Judges.
PER CURIAM:
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Diogo R. Esteves and Daniele E. Esteves (“the Esteveses”), proceeding
pro se, appeal the denial of their motion to remand the instant case to state court
and the dismissal of their pro se civil complaint against SunTrust Banks, Inc., and
SunTrust Mortgage, Inc. (collectively, “SunTrust”), and Nationstar Mortgage
(“Nationstar”), the respective mortgage holder and loan servicer of their mortgage
loan. After careful review, we affirm in part and vacate in part, and we remand
with instructions for the case to be remanded to state court.
I.
In November 2013, the Esteveses filed a pro se amended complaint in
Florida state court against SunTrust and Nationstar seeking a declaratory judgment
under Fla. Stat. § 86.011. The Esteveses alleged that the defendants violated
various federal laws, including the Truth in Lending Act (“TILA”), the Real Estate
Settlement Procedures Act (“RESPA”), and the Fair Debt Collection Practices Act
(“FDCPA”), by failing “to substantively comply” with the Esteveses’ numerous
demands for the defendants to produce a “bona fide claim” establishing their title
to the mortgage debt. (See Doc. 2 ¶ 21).
According to the Esteveses, the defendants are required by state and federal
law to produce “an unbroken, complete, verified chain of legal title to the
purported ‘debt’, to include title to the documentary intangible personal property
(original note and security instrument), authenticated by credible, competent,
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reliable witnesses with first-hand knowledge, allegedly in possession, custody and
control of defendants and/or all of them, on demand from Plaintiff.” (Id. at 2). It
appears that SunTrust provided copies of certain documents, but the Esteveses
questioned the documents’ authenticity and demanded the originals. (See id. ¶ 25).
The Esteveses alleged that SunTrust had initiated two foreclosure lawsuits
against the Esteveses, and that the defendants had “interests adverse to Plaintiff of
a substantial enough basis to warrant a determination of ripeness.” (Id. ¶ 10).
According to the Esteveses, there was an “actual controversy” based on the
defendants’ failure to produce a bona fide claim. (Id. ¶¶ 42, 56-57). They asked
for a declaratory judgment “so that Plaintiffs can enforce Plaintiffs’ commercial
rights at law and equity in future suits.” (Id. ¶ 70).
The Esteveses specifically sought the following declarations: (a) that the
defendants owed them a duty “to produce a bona fide claim,” which includes a
“verified chain of legal title to the purported ‘debt’”; (b) that the defendants owed
a duty to respond to the Esteveses’ notices and demands to the defendants to
produce such a bona fide claim; (c) that the defendants breached their duty to so
respond; and (d) that the defendants “failed and refused to comply with state and
federal law, including trust, securities and commercial law by failing to produce a
bona fide claim.” (Id. at 19-20). They expressly stated that this was “not an action
seeking monetary damages” based on the alleged failure to respond. (Id. at 8 n.1).
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Nationstar removed the action to federal court (with SunTrust’s subsequent
consent), and both defendants then moved to dismiss the amended complaint. The
Esteveses moved to remand the action to state court, contending that they were not
asserting federal claims but were “merely seeking a declaratory judgment in state
court.” (Doc. 21 at 2). Further, they asserted, the state court was competent to
adjudicate any federal claims to the extent that any were asserted.
A magistrate judge prepared two reports and recommendations (“R&R”),
recommending that the Esteveses’ motion to remand be denied and that the
defendants’ motions to dismiss be granted, respectively. The magistrate judge’s
report and recommendation on the motions to dismiss recommended dismissing
the amended complaint on at least four separate grounds.
First, the magistrate judge found that the Esteveses’ amended complaint did
not give “fair notice” of the claim raised, in violation of Rule 8(a), Fed. R. Civ. P.
See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 1964 (2007)
(discussing Rule 8(a)’s pleading standards). Second, the magistrate judge
recommended that the district court exercise its discretion to dismiss the instant
declaratory-judgment action because it was simply an attempt to obtain discovery
in a foreclosure action in state court, which could provide an adequate remedy.
Third, the magistrate judge concluded that the amended complaint failed to state a
claim for declaratory relief; specifically, the Esteveses had not alleged that they
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were harmed by the defendants’ actions or that a favorable disposition would
redress any injury. Fourth, the magistrate judge concluded that the Esteveses could
not obtain the equitable relief of a declaratory judgment because the federal
statutes relied upon all provided legal remedies for the alleged violations. Finally,
the magistrate judge concluded that the plaintiffs had failed to state a valid claim
under the RESPA.
In a one-page order, the district court adopted the magistrate judge’s
recommendations, denied the motion to remand, and dismissed complaint with
prejudice. This appeal followed. 1
The Esteveses contend that the district court erred in denying their motion to
remand because questions of state law predominated in their amended complaint
and because Nationstar’s notice of removal was untimely. They attack the district
court’s dismissal of their complaint on grounds that the complaint puts the
defendants on full and actual notice of the claims asserted, that they were harmed
by the defendants’ failure to provide adequate documentation, and that the court
failed to analyze the case under applicable Florida case law. The defendants retort
that removal was proper and that the district court’s dismissal of the amended
complaint with prejudice should be affirmed.
1
On December 16, 2014, a motions panel of this Court denied the defendants-appellees’
motions to dismiss this appeal as untimely. We see no reason to disturb this ruling. See 11th
Cir. R. 27–1(g) (“A ruling on a motion or other interlocutory matter, whether entered by a single
judge or a panel, is not binding upon the panel to which the appeal is assigned on the merits, and
the merits panel may alter, amend, or vacate it.”).
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II.
We largely do not address the parties’ contentions because we find that the
Esteveses’ amended complaint fails to allege facts sufficient to establish their
standing to have the declaratory-judgment action decided by a federal court. The
district court addressed this issue but did not specifically refer to “standing.” In
any case, we have an obligation “to inquire sua sponte whenever a doubt arises as
to the existence of federal jurisdiction.” Vermeulen v. Renault, U.S.A., Inc., 985
F.2d 1534, 1542 (11th Cir. 1993); see Atlanta Gas Light Co. v. Aetna Cas. & Sur.
Co., 68 F.3d 409, 414 (11th Cir. 1995). We review questions of subject-matter
jurisdiction de novo. Pintando v. Miami-Dade Housing Agency, 501 F.3d 1241,
1242 (11th Cir. 2007).
Under Article III of the Constitution, federal courts have the power to
adjudicate only actual “Cases” and “Controversies.” Strickland v. Alexander, 772
F.3d 876, 882 (11th Cir. 2014); see 28 U.S.C. § 2201 (providing that a court may
issue a declaratory judgment “[i]n a case of [only] actual controversy within its
jurisdiction”). As part of the case-or-controversy requirement, a plaintiff must
establish that he has “standing” to invoke the power of a federal court to decide the
merits of a particular dispute. Malowney v. Fed. Collection Deposit Grp., 193 F.3d
1342, 1346 (11th Cir. 1999). The failure to establish standing “can deprive a
federal court of jurisdiction.” Strickland, 772 F.3d at 883.
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At a constitutional minimum, plaintiffs must make the following three
showings to establish standing: (1) that they personally have suffered a concrete
“injury in fact”—some actual or imminent invasion of a legally protected interest;
(2) that a causal connection exists between the injury and the conduct complained
of—the injury fairly must be traceable to the challenged action; and (3) that the
injury is likely to be redressed by a favorable decision. Id. “A case or controversy
must exist at the time the declaratory judgment action is filed.” GTE Directories
Publ’g. Corp. v. Trimen Am., Inc., 67 F.3d 1563, 1567 (11th Cir. 1995).
Where, as here, the plaintiff seeks only declaratory or injunctive relief, as
opposed to damages for injuries already suffered, “the injury-in-fact requirement
insists that a plaintiff ‘allege facts from which it appears there is a substantial
likelihood that he will suffer injury in the future.’” Strickland, 772 F.3d at 883
(quoting Malowney, 193 F.3d at 1346). Furthermore,
It is not enough that the [plaintiff]’s complaint sets forth
facts from which we could imagine an injury sufficient to
satisfy Article III’s standing requirements, since we
should not speculate concerning the existence of
standing, nor should we imagine or piece together an
injury sufficient to give plaintiff standing when it has
demonstrated none. The plaintiff has the burden to
clearly and specifically set forth facts sufficient to satisfy
[] Art. III standing requirements. If the plaintiff fails to
meet its burden, this court lacks the power to create
jurisdiction by embellishing a deficient allegation of
injury.
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Bochese v. Town of Ponce Inlet, 405 F.3d 964, 976 (11th Cir. 2005) (internal
quotation marks omitted).
Here, accepting the allegations in the amended complaint as true and
liberally construing the complaint in the Esteveses’ favor, we conclude that the
Esteveses have not “clearly and specifically” set forth facts showing a substantial
likelihood that they will suffer injury from the defendants’ actions in the future.
See id.; see also Strickland, 772 F.3d at 883; Malowney, 193 F.3d at 1346. They
allege that the defendants had committed various bad acts in the past, including
initiating two foreclosure suits against the plaintiffs, one of which was dismissed
on June 16, 2011; failing to respond to notices and demands under the FDCPA,
the RESPA, and the TILA, among other laws; and failing to produce a bona fide
claim. “Injury in the past, however, does not support a finding of an Article III
case or controversy when the only relief sought is a declaratory judgment.”
Malowney, 193 F.3d at 1348. And the amended complaint does not allege facts
showing “a real and immediate—as opposed to a merely hypothetical or
conjectural—threat of future injury.” Strickland, 772 F.3d at 883 (quoting Church
v. City of Huntsville, 30 F.3d 1332, 1337 (11th Cir.1994)). In conclusory fashion,
the amended complaint simply contends that plaintiffs are entitled to a “bona fide
claim” but have not received it.
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Nor do the Esteveses’ allegations show an actual or imminent “invasion of a
legally protected interest” for purposes of the injury-in-fact requirement. See id.“No legally cognizable injury arises unless an interest is protected by statute or
otherwise.” Cox Cable Commc’ns, Inc. v. United States, 992 F.2d 1178, 1182
(11th Cir. 1993). The Esteveses base their entitlement to proof of a “bona fide
claim” on a combination of the FDCPA, the RESPA, the TILA, and Florida law,
among other sources. While the federal statutes they rely upon generally impose
duties to disclose certain information upon request, the Esteveses have not
identified any provision requiring creditors to produce the type of original,
extensive documentation they requested. See, e.g., 12 U.S.C § 2605(e); 15 U.S.C.
§ 1692g. And, while Florida law generally requires a foreclosing party to produce
the original note in a foreclosure suit, see Downing v. First Nat’l Bank of Lake
City, 81 So. 2d 486, 488 (Fla. 1955); Deutsche Bank Nat’l Trust Co. v. Clarke, 87
So. 3d 58, 60-61 (Fla. Dist. Ct. App. 2012) (noting that the duty of production does
not extend to the original mortgage), the Esteveses have not alleged or shown that
Florida law imposes a similar duty to produce these documents outside of a
foreclosure proceeding. Consequently, the Esteveses have not shown an invasion
of a legally protected interest.
In addition, the amended complaint contains no allegations about how
receiving from defendants a bona fide claim will redress any injury. The amended
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complaint merely asserts that the plaintiffs need proof of the bona fide claim for
unspecified “future civil and criminal complaints,” and “so that Plaintiffs can
enforce Plaintiffs’ commercial rights at law and equity in future suits.” This is too
speculative to establish that the injury is likely to be redressed by a favorable
decision. See Strickland, 772 F.3d at 883.
In sum, we conclude that the district court properly found that there was not
an “actual controversy” because the Esteveses had not sufficiently alleged either
injury-in-fact or redressability. Therefore, we affirm the court’s ruling on that
ground. That does not end our inquiry, however.
After a case has been removed to federal court, the district court “shall”
remand the case “[i]f at any time before final judgment it appears that the district
court lacks subject matter jurisdiction.” 28 U.S.C. § 1447(c). The Supreme Court
has noted that the literal words of § 1447(c) give district courts no discretion to
dismiss rather than remand an action when subject-matter jurisdiction is lacking.
Int’l Primate Prot. League v. Adm’rs of Tulane Educ. Fund, 500 U.S. 72, 89, 111
S. Ct. 1700, 1710 (1991). And, as explained above, federal district courts lack
subject-matter jurisdiction over suits that do not meet Article III’s case-or-
controversy requirement. See, e.g., Bochese, 405 F.3d at 974 (“Standing is a
doctrine that stems directly from Article III’s ‘case or controversy’ requirement,
and thus it implicates our subject matter jurisdiction.” (internal quotation marks
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omitted)); Nat’l Advertising Co. v. City of Miami, 402 F.3d 1329, 1332 (11th Cir.
2005) (“[A] a moot suit cannot present an Article III case or controversy and the
federal courts lack subject matter jurisdiction to entertain it.” (internal quotation
marks omitted)).
Consequently, once the district court concluded that the Esteveses’ amended
complaint did not present a justiciable controversy, the court should have
remanded the matter to the state court from which it was removed instead of
dismissing the action with prejudice. See 28 U.S.C. § 1447(c); Int’l Primate Prot.
League, 500 U.S. at 89, 111 S. Ct. at 1710; Bromwell v. Michigan Mut. Ins. Co.,
115 F.3d 208, 213-14 (3d Cir. 1997) (holding that where a removed declaratory-
judgment action does not present a justiciable controversy under Article III, the
action must be remanded to state court under § 1447(c) rather than dismissed).
Therefore, we vacate the portion of the district court’s order dismissing the action
with prejudice, and we remand with instructions to remand the action to the Ninth
Judicial Circuit Court of Florida in Orange County, Florida. 2 “Whether the matter
2
We also note that one of the other grounds relied upon by the district court likewise
supports remand to state court rather than outright dismissal. Under the Declaratory Judgment
Act, district courts may discretionarily decline to exercise jurisdiction over a declaratory-
judgment action even if subject-matter jurisdiction requirements otherwise are met. Ameritas
Variable Life Ins. Co. v. Roach, 411 F.3d 1328, 1330-31 (11th Cir. 2005); see 28 U.S.C. § 2201.
We have identified numerous factors for district courts to consider in exercising this discretion.
See id. The magistrate judge in this case recommended declining to exercise jurisdiction over
the declaratory-judgment action because of a pending state foreclosure proceeding, which
provided an adequate remedy.
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is justiciable under state law is a matter for the state court to decide.” Bromwell,
115 F.3d at 214.
III.
In sum, we affirm the district court’s order to the extent it concluded that the
Esteveses’ amended complaint failed to allege a justiciable controversy over which
federal courts have jurisdiction. However, we vacate the dismissal of the
complaint with prejudice, and we remand this matter to the district court with
instructions to remand the case to the state court from which it was removed.
AFFIRMED in part; VACATED in part; and REMANDED with
instructions.
We need not and do not address the merits of that determination, but we note that the
consequence of declining jurisdiction over a removed declaratory-judgment action would be
remand to state court rather than dismissal. See, e.g., Reifer v. Westport Ins. Corp., 751 F.3d
129, 149 (3d Cir. 2014) (holding that the district court’s discretionary decision to decline
jurisdiction over a removed declaratory-judgment action “achieved the proper result: declining
jurisdiction and remanding to the state court”); cf. United Nat’l Ins. Co. v. R&D Latex Corp., 242
F.3d 1102, 1111-12 (9th Cir. 2001) (reviewing a district court’s discretionary remand under the
Declaratory Judgment Act); Snodgrass v. Provident Life & Accident Ins. Co., 147 F.3d 1163,
1165-67 (9th Cir. 1998) (same); Celestine v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 115 F.
App’x 658, 660 (5th Cir. 2004) (same).
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