Nasa Federal Credit Union v. W. Jenkins Plumbing & Heating Company

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
______________________________
)
NASA FEDERAL CREDIT UNION, )
)
Plaintiff, )
)
v. ) Civil Action No. 09-404 (RWR)
)
W. JENKINS PLUMBING )
& HEATING COMPANY et al., )
)
Defendants. )
______________________________)
MEMORANDUM OPINION AND ORDER
Mortgagor Patricia Harvey sued her mortgagee NASA Federal
Credit Union (“NASA FCU”) in Maryland for compensation for fire
damage caused by a furnace boiler negligently installed by W.
Jenkins Plumbing & Heating Company (“Jenkins”). In turn, NASA
FCU filed this suit in the Superior Court of the District of
Columbia against Jenkins seeking indemnification for any damages
awarded to Harvey from NASA FCU, and against Harvey for breach of
contract claiming she caused the property to decrease in value
after the fire. Harvey removed this case from the Superior Court
alleging that this court had both diversity jurisdiction under
28 U.S.C. § 1332(a), and federal question jurisdiction based upon
the plaintiff’s status as federal credit union, under 12 U.S.C.
§ 1789(a)(2).
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NASA FCU moves to remand the case to the Superior Court of
the District of Columbia, arguing that 28 U.S.C. § 1441(b)1
barred Harvey from removing since Jenkins is a citizen of the
state in which the action was brought, and nothing in 12 U.S.C.
§ 1789(a)(2) or NASA FCU’s status as a federal credit union
confers federal question jurisdiction upon a district court.
Harvey, citing Filla v. Norfolk & Southern Ry., 336 F.3d 806 (8th
Cir. 2003), opposes the motion arguing that NASA FCU fraudulently
joined Jenkins by asserting claims against Jenkins that are
without merit, and that Jenkins’ presence in the case should not
destroy diversity jurisdiction. In addition, Harvey argues that
one of her counterclaims against NASA FCU creates federal
question jurisdiction because it is based upon a purported
violation of the Real Estate Settlement Procedures Act, 12 U.S.C.
§ 2605(g).
To show that a defendant has been joined fraudulently by a
plaintiff for the purpose of destroying diversity, a defendant is
required to demonstrate either that there is “no possibility that
the plaintiff would be able to establish a cause of action
against the in-state defendant in state court; or that there has
1
A civil action of which the district courts have original
jurisdiction founded on diversity of citizenship “shall be
removable only if none of the parties in interest properly joined
and served as defendants is a citizen of the State in which such
action is brought.” 28 U.S.C. 1441(b). The District of Columbia
is considered a state for the purposes of § 1441(b). 28 U.S.C.
§ 1451(2).
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been outright fraud in the plaintiff’s pleadings of
jurisdictional facts.” Brown v. Brown & Williamson Tobacco
Corp., 26 F. Supp. 2d 74, 76-77 (D.D.C. 1998) (quoting B., Inc.
v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir. 1981)). A
defendant claiming fraudulent joinder bears a heavy burden, and
courts are required to resolve disputed issues of fact and law in
favor of the plaintiff. Id. at 77.
Harvey does not show that Jenkins was fraudulently joined as
a party in this case. This case began in Superior Court as an
action filed by NASA FCU solely against Jenkins; it was Harvey,
not Jenkins, who was later added to the case as a defendant.
(See Superior Court Electronic Docket, NASA Federal Credit Union
v. W. Jenkins Plumbing & Heating Company, 2008 CA 008311 B, filed
November 24, 2008, docket entries for November 24, 2008,
November 25, 2008 and February 13, 2009.) Harvey has not shown
that Jenkins was added to ths case to destroy diversity
jurisdiction, and she has provided no authority to establish that
the fraudulent joinder doctrine can be applied to a defendant who
was the original party to the case. Nor has Harvey shown that
NASA FCU has no possibility of any recovery. While Harvey
alleges that the indemnification action against Jenkins is
premature, NASA FCU alleges that it has already suffered damages
of at least $78,000 for which Jenkins should indemnify it. (See
Am. Compl. ¶¶ 24-26.) And, although Harvey alleges that a
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decrease in the value of mortgaged property has never been
recognized as supporting a cause of action for the benefit of the
lender, she provides no authority to support the proposition that
a decrease in the value of mortgaged property cannot be the basis
for damages in this action. Thus, Harvey has failed to meet her
burden to show that Jenkins was fraudulently joined to this
action.
Harvey also argues that federal question jurisdiction exists
for this action based upon one of Harvey’s counterclaims against
NASA FCU that is ostensibly governed by federal law. However,
“[t]he presence or absence of federal-question jurisdiction is
governed by the ‘well-pleaded complaint rule,’ which provides
that federal jurisdiction exists only when a federal question is
presented on the face of the plaintiff’s properly pleaded
complaint.” Van Allen v. Bell Atlantic-Washington, D.C., 921 F.
Supp. 830, 831-32 (D.D.C. 1996) (quoting Caterpillar, Inc. v.
Williams, 482 U.S. 386, 392 (1987)). “The rule makes the
plaintiff the master of the claim. A plaintiff may avoid federal
jurisdiction by exclusive reliance on state law.” Id. at 832;
see also Quality Mgmt., LLC v. Time & Place World, LLC, 521 F.
Supp. 2d 83, 86-87 (D.D.C. 2007) (remanding case to the Superior
Court of the District of Columbia because plaintiff’s claim had
less than $75,000 in controversy, even though defendant’s
counterclaim alleged a greater amount in controversy).
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Therefore, Harvey has not shown that this court has federal
question jurisdiction in this case.
Accordingly, because the plaintiff has established that
removal from the Superior Court of the District of Columbia was
improper, it is hereby
ORDERED that the plaintiff’s motion [2] to remand this case
be, and hereby is, GRANTED. The Clerk shall REMAND this case to
the Superior Court of the District of Columbia. It is further
ORDERED that this court shall retain jurisdiction over NASA
FCU’s motion [6] for sanctions regarding the fees and costs
related to removal. See Yazdani v. ACCESS ATM, Civil Action
No. 06-639 (CKK), Order filed May 16, 2006. That motion is
hereby referred to a Magistrate Judge for a report and
recommendation under Local Civil Rule 72.3.
SIGNED this 20th day of April, 2009.
/s/
RICHARD W. ROBERTS
United States District Judge