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Trustee Services of Carolina, LLC v. Gutowski

United States District Court, W.D. North Carolina, Charlotte Division

March 13, 2014

TRUSTEE SERVICES OF CAROLINA, LLC SUBSTITUTE TRUSTEE FOR BANK OF AMERICA, N.A., Plaintiff,
v.
MICHAEL DAVID GUTOWSKI, MARY ANNE GUTOWSKI, Defendants.

ORDER

ROBERT J. CONRAD, Jr., District Judge.

THIS MATTER comes before the Court on Plaintiff's Motion to Remand (Doc. 5) and Supporting Memorandum, (Doc. 6), Defendants' Motion to Strike, (Doc. 7), Magistrate Judge's Memorandum and Recommendation (M&R), (Doc. 9), Defendants' Objections to M&R, (Doc. 10), Plaintiff's Reply to Defendants' Objections, (Doc. 11), and Plaintiff's Response, (Doc. 12).

I. BACKGROUND

A foreclosure action was brought by Plaintiff against Defendants pursuant to N.C. Gen. Stat. § 45-21.16 in Union County Superior Court on February 14, 2012. On May 22, 2012, the Union County Clerk of Court conducted a foreclosure hearing, the Defendants contested the foreclosure, and the Clerk subsequently entered an order to allow the foreclosure. Defendants appealed the clerk's order to Superior Court Judge Tanya T. Wallace, and, on November 16, 2012, the appeal was denied. Consequently, Defendants filed a Motion for New Trial, Motion for Necessary Joinder of Parties, and Motion to Disqualify Judge Tanya T. Wallace. Later, on December 12, 2013, Defendants filed a notice of removal to the United States District Court for the Western District of North Carolina. Plaintiff then filed the instant Motion to Remand on December 20, 2013.

II. STANDARD OF REVIEW

A. Subject Matter Jurisdiction

Federal courts are courts of limited jurisdiction. Aldinger v. Howard , 427 U.S. 1, 15 (1976). Accordingly, a federal court must dismiss a case whenever it lacks subject matter jurisdiction. FED. R. CIV. P. 12(h)(3); Goldsmith v. Mayor & City Council of Balt. , 845 F.2d 61, 64 (4th Cir. 1988). Ultimately, the plaintiff has the burden of proving that subject matter jurisdiction exists. Richmond, Fredericksburg & Potomac R.R. v. United States , 945 F.2d 765, 768 (4th Cir. 1991) (citing Adams v. Bain , 697 F.2d 1213, 1219 (4th Cir. 1982)). In general, an action filed in state court may be removed to federal court only if it might have been brought in federal court originally through diversity or federal question jurisdiction. Darcangelo v. Verizon Communications, Inc. , 292 F.3d 181, 186 (4th Cir. 2002).

B. Memorandum and Recommendation

The Federal Magistrate Act provides that "a district court shall make a de novo determination of those portions of the report or specific proposed findings or recommendations to which objection is made." 28 U.S.C.§ 636(b)(1); Camby v. Davis , 718 F.2d 198, 200 (4th Cir. 1983). "By contrast, in the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'" Diamond v. Colonial Life & Accident Ins. Co. , 416 F.3d 310, 315 (4th Cir. 2005) (quoting FED. R. CIV. P. 72 advisory committee's note). Similarly, de novo review is not required by the statute "when a party makes general or conclusory objections that do not direct the court to a specific error in the magistrate judge's proposed findings and recommendations." Orpiano v. Johnson , 687 F.2d 44, 47 (4th Cir. 1982).

III. DISCUSSION

Defendants allege that due process violations existed in relation to the foreclosure hearing in state court since they were denied their right to defend their interest in the property in question. (Doc. 7 at 3-4). Plaintiff contends that Defendants have failed to raise a substantial federal claim. (Doc. 6). The Magistrate Judge agreed and found that foreclosure actions brought under state law do not give rise to federal question jurisdiction. (Doc. 9 at 3).

A. Subject Matter Jurisdiction

There are two avenues for bringing a claim to federal court: federal question jurisdiction or diversity. Davis v. Pak , 856 F.2d 648, 650 (4th Cir. 1988). Specifically, federal jurisdiction requires a party assert a substantial federal claim. Id . citing Hagans v. Lavine , 415 U.S. 528, 536-37 (1974) (emphasis added). The Supreme Court has emphasized that "the federal courts are without power to entertain claims otherwise within their jurisdiction if they are so attenuated and insubstantial as to be absolutely devoid of merit, wholly insubstantial, obviously frivolous, plainly insubstantial, or no longer open to discussion.'" Hagans, U.S. at 536-37 (holding federal courts do not have the jurisdiction to hear frivolous constitutional claims). "The doctrine of substantiality is especially important where a wholly frivolous ...


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