8/21/2019 LNV MGC C&S Objection2MagistrateJudge LNV, MGC Cordilis & Stawairski's Objection to Magistrate Judge's Recom… http://slidepdf.com/reader/full/lnv-mgc-cs-objection2magistratejudge-lnv-mgc-cordilis-stawairskis 1/32 OBJECTIONS TO R ECOMMENDATION AND BRIEF IN SUPPORTIN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION SAMUEL G. BREITLING AND JO ANN BREITLING, § § § Plaintiffs, § § vs. § § CIVIL ACTION NO. 3:14-cv-3322-M LNV CORPORATION, ET AL., § § Defendants. § OBJECTIONS TO RECOMMENDATION AND BRIEF IN SUPPORT Respectfully submitted, /s/ Marc D. Cabrera Robert T. Mowrey State Bar No. 14607500 [email protected]Jason L. Sanders State Bar No. 24037428 [email protected]Marc D. Cabrera State Bar No. 24069453 [email protected]LOCKELORDLLP 2200 Ross Avenue, Suite 2200 Dallas, Texas 75201-6776 T: (214) 740-8000 F: (214) 740-8800 ATTORNEYS FOR DEFENDANTS LNV CORPORATION AND MGC MORTGAGE, INC. Case 3:14-cv-03322-M-BN Document 47 Filed 11/12/14 Page 1 of 32 PageID 561
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C. Removal to Federal Court ........................................................................................7
D. The Recommendation ..............................................................................................7
III. OBJECTIONS TO RECOMMENDATION ........................................................................8
A. Legal Standard .........................................................................................................8
B. Defendants Object to the Recommendation Because the Magistrate
Judge Erred by Relying on Matters Outside of the Petition ....................................9
1. Only Claims Asserted in the Petition at the Time of RemovalAre Considered in Determining Whether Removal Jurisdictionis Present ....................................................................................................10
2. The Magistrate Judge Improperly Considered Matters Outside
of the Pleadings in Determining Removal Jurisdiction .............................12
C. Defendants Object to the Magistrate Judge's Conclusion That
Defendants Failed to Demonstrate That Judge Tillery is a NominalDefendant that Plaintiffs Improperly Joined ..........................................................13
1. Nominal Defendant / Improper Joinder Standard ......................................14
2. Judge Tillery is a Nominal Defendant That Has Been
Improperly Joined Because He is Entitled to Judicial Immunity ..............15
D. Defendants Object to the Magistrate Judge's Conclusion That theClaims Asserted Against Judge Tillery and Defendants Were Not
Medistar Twelve Oaks Partners, Ltd. v. American Economy Ins. Co.,
No. 2010 WL 1996596, at *2 (S.D. Tex. May 17, 2010) ..................................................10, 12
Mireles v. Waco,502 U.S. 9, 11-12 (1991) ...................................................................................................15, 16
Mitchell v. Forsyth, 472 U.S. 511, 526 (1985) .........................................................................................................15
Mitchell v. McBryde,994 F.2d 229, 230 (1991) .........................................................................................................16
Wells Fargo Bank, N.A. v. American Gen. Life Ins. Co.,670 F. Supp. 2d 555, 563 (N.D. Tex. 2009) ................................................................20, 21, 23
Wheeler v. JPMorgan Chase Bank, Nat. Ass'n, No. 4:13-cv-364, 2013 WL 3965304, at *1 (S.D. Tex. Aug. 1, 2013) ..............................10, 12
Wisconsin Dept. of Corrections v. Schacht ,524 U.S. 381, 386, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998) ..................................................14
OBJECTIONS TO R ECOMMENDATION AND BRIEF IN SUPPORT PAGE 4
A. THE ALLEGATIONS ASSERTED AGAINST JUDGE TILLERY
In their Petition, Plaintiffs assert claims against Judge Tillery for violation of the United
States Constitution and the Texas Constitution based on rulings that he made on a motion for
continuance, motion to transfer, and motion for summary judgment in a foreclosure lawsuit that
LNV filed against Plaintiffs in April 2014 in the 134th District Court, Dallas County, Texas,
styled LNV Corporation, Its Successors and Assigns v. Samuel G. Breitling, et al., No. DC-14-
04053 (the "Foreclosure Action").1 In support of their constitutional claims against Judge
Tillery, Plaintiffs assert the following allegations:
As a state officer, [Judge Tillery] acted under a state law in a manner violative of
the Federal Constitution . . . [Petition at p. 3].
***
On April 15, 2014 Defendant LNV Corporation (LNV) filed an ' In Rem'
foreclosure petition against the Plaintiffs in the District Court, 134th DistrictCourt, Dallas County. . . . On July 7, 2014 LNV filed a motion for default
summary judgment. On the same day Defendant Tillery signed an Order granting
LNV's default motion for "in rem" summary judgment. . . . On July 7, 2014 LNVfiled a motion for default summary judgment. On the same day Defendant Tillery
signed an Order granting LNV's default motion for "in rem" summary judgment.
[Petition at p. 4].
***
On July 9, 2014 I, Plaintiff Jo Ann Breitling, discovered that the court ordered an
"in rem" default summary judgment in behalf of LNV; and had closed the case. . .. I, Plaintiff Jo Ann Breitling, phoned the clerk's office and told her that the Judge
could not sign a default Order granting LNV summary judgment because we filed
a timely answer and by law a hearing had to be held. . . . The next day the Order
signed on July 7, 2014 was replaced by an "unsigned" Order and a hearing wasscheduled for August 4, 2014. [Petition at p. 5].
***
On July 31, 2014 the Plaintiff's filed a Motion to Transfer back to the DallasCounty 116th District Court where the Plaintiffs had been Plaintiffs in litigation
against Defendant MGC and where it was discovered that MGC claimed to be a
mortgage servicer for LNV. [Petition at p. 6].
***
1 Pursuant to Rule 201 of the Federal Rules of Evidence, Defendants respectfully request that the Court take judicial
notice of the Foreclosure Action.
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OBJECTIONS TO R ECOMMENDATION AND BRIEF IN SUPPORT PAGE 5
Defendant Tillery immediately denied our motion for continuance. He provided
no judicially determined facts or conclusions of law to support his decision. We
were not permitted to give any oral argument or make any objection before hemade his decision. Any reasonable person who observed this would have cause to
doubt Defendant Tillery's impartiality. [Petition at p. 7].
*** Next Defendant Tillery denied Plaintiffs' motion to transfer. . . . as a result of
Defendant Tillery's decision to deny a continuance we were given no opportunity
to present our case in support of the transfer. Again Defendant Tillery providedno judicially determined facts or conclusions of law to support his decision.
Defendant Tillery's decision went against the preponderance of the evidence and
against the rule of law. Any reasonable person observing this would have cause to
conclude Defendant Tillery held a personal bias against us or was prejudicedconcerning the subject matter. [Petition at p. 8].
***Defendant Tilley said, "I am ruling in favor of LNV because you, the Breitlings,
did not answer their summary judgment." . . . I told Defendant Tilley, "We DID
answer. The attorneys answered before they withdrew and it was timely."
Defendant Tilley responded, "Well, I never saw an answer." [Petition at p. 9].
***
Any reasonable person would conclude that Defendant Tillery had intended togrant LNV a summary judgment before the hearing even began; . . . . Defendant
Tilley had the hearing scheduled only because I caught him denying us our due
process on July 9, 2014. The hearing on August 4, 2014 was nothing more than a
farce meant to give the appearance that we had a hearing. This does not meet theConstitutional requirement for due process of law. . . . On August 4, 2014 the
same day as the farce hearing a signed Order granting Defendant LNV's motion
for summary judgment was filed. [Petition at p. 10].
***
Plaintiffs filed Motion to Recuse and Disqualify Defendant Tillery. This motionwas . . . denied . . . . On August 27, 2014 Plaintiffs filed an amended Motion to
Recuse Defendant Tillery. Defendant Tillery refused to recuse himself . . . .
[Petition at p. 11].
***
Defendant Tillery made a decision to grant Defendant LNV a motion for
summary judgment allowing Defendant LNV to deprive us of our property. He
made his decision without reading any of our motions. He made his decisionagainst the preponderance of the evidence in our motions. He made his decision
against the rule of law cited in our motions. Any reasonable person would
conclude that Defendant Tillery had decided before he even entered the courtroom on August 4, 2014 that he would grant Defendant LNV their motion for
summary judgment. [Petition at p. 21].
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OBJECTIONS TO R ECOMMENDATION AND BRIEF IN SUPPORT PAGE 14
a defendant who is fraudulently joined); Farias v. Bexar County Bd. of Trustees for Mental
Health Mental Retardation Services, 925 F.2d 866, 871 (5th Cir. 1991) (citing Robinson v.
National Cash Register Co., 808 F.2d 1119, 1123 (5th Cir. 1987)); see also Smith v. Estate of
Wagner , No. H-06-02629, 2006 WL 2729282, at *5 (S.D. Tex. Sept. 25, 2006) ("Indeed, a
removing defendant need not obtain the consent of . . . defendants the removing party claims
were fraudulently joined . . . "); Jernigan v. Ashland Oil Co., 989 F.2d 813, 815 (5th Cir. 1993)
(requiring the written consent of "improperly or fraudulently joined parties would be
nonsensical, as removal in those cases is based on the contention that no other proper defendant
exists."); Yeldell v. GeoVera Specialty Ins. Co., No. 3:12-cv-1908-M, 2012 WL 5451822, at *3
(N.D. Tex. Nov. 8, 2012) (Lynn, J.) ("A removing defendant need not obtain the consent of a
defendant it alleges was improperly joined."); Hayden v. Allstate Texas Lloyds, No. H-10-646,
2011 WL 240388, at *6 (S.D. Tex. Jan. 20, 2011) ("Where a defendant has been fraudulently
joined . . . his consent is not required for removal.").
1. Nominal Defendant / Improper Joinder Standard8
The Fifth Circuit has "held that the nominal-party analysis ultimately dovetails with that
of [improper joinder], requiring the removing party to show that 'there is no possibility that the
plaintiff would be able to establish a cause of action against the non-removing defendants in state
court.'"9 Gutierrez , 2012 WL 5464957, at *3 (quoting Farias, 925 F.2d at 871); see also
8 Defendants object to the Magistrate Judge's form over substance conclusion that Defendants' reliance on the
doctrine of improper or fraudulent joinder to excuse Judge Tillery's lack of consent is misplaced. See
Recommendation at p. 10. To the contrary, the Fifth Circuit has applied the improper joinder doctrine in the federal-question context. See McKay v. Boyd Const. Co. , 769 F.2d 1084, 1087 (5th Cir. 1985), abrogated on other grounds
by Wisconsin Dept. of Corrections v. Schacht , 524 U.S. 381, 386, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998)
(acknowledging that fraudulent joinder had only been applied previously in diversity cases, but finding "no reason
why a different rule would apply where codefendant's presence bars federal jurisdiction . . . ."). Additionally,
improper joinder arguments have been construed as assertions of the nominal defendant doctrine. See, e.g.,
Gutierrez v. La Joya Independent School Dist., No. M-12-266, 2012 WL 5464957, at *3 (S.D. Tex. Nov. 8, 2012)
(construing assertion of improper joinder in federal question case as an assertion of nominal defendant doctrine and
recognizing that the Fifth Circuit has applied the improper joinder doctrine in the federal-question context).
9 The Fifth Circuit has adopted the term "improper joinder" instead of "fraudulent joinder." Mumfrey v. CVS
OBJECTIONS TO R ECOMMENDATION AND BRIEF IN SUPPORT PAGE 17
294, 297 (5th Cir. 1985), cert. denied , 474 U.S. 1101 (1986). In some situations, immunity is to
be afforded even though one or more of the factors is not met. Id.
Taking into consideration the above factors, the alleged actions of Judge Tillery in the
Petition are unequivocally judicial in nature. The claims asserted against Judge Tillery in the
Petition for violation of the United States Constitution and Texas Constitution arise solely from
rulings that he made on a motion for continuance, motion to transfer, and motion for summary
judgment while acting in his official and judicial capacities:
Defendant Tillery immediately denied our motion for continuance. He
provided no judicially determined facts or conclusions of law to support his
decision. We were not permitted to give any oral argument or make any objection before he made his decision. Any reasonable person who observed this would
have cause to doubt Defendant Tillery's impartiality. [Petition at p. 7 (emphasis
added)].
***
Next Defendant Tillery denied Plaintiffs' motion to transfer. . . . as a result of
Defendant Tillery's decision to deny a continuance we were given no opportunity
to present our case in support of the transfer. Again Defendant Tillery providedno judicially determined facts or conclusions of law to support his decision.
Defendant Tillery's decision went against the preponderance of the evidence and
against the rule of law. Any reasonable person observing this would have cause to
conclude Defendant Tillery held a personal bias against us or was prejudicedconcerning the subject matter. [Petition at p. 8 (emphasis added)].
***
Defendant Tillery made a decision to grant Defendant LNV a motion for
summary judgment allowing Defendant LNV to deprive us of our property. He made his decision without reading any of our motions. He made his decisionagainst the preponderance of the evidence in our motions. He made his decision
against the rule of law cited in our motions. Any reasonable person would
conclude that Defendant Tillery had decided before he even entered the court
room on August 4, 2014 that he would grant Defendant LNV their motion forsummary judgment. [Petition at p. 21 (emphasis added)].
Similarly, in Plaintiffs' Motion to Remand, Plaintiffs argue that Judge Tillery violated
their "rights to due process and equal protection of the laws by issuing an order for summary
judgment . . . against the preponderance of the evidence and against rule of law." See Plaintiffs'
Motion to Remand at p. 2 (emphasis added). Plaintiffs additionally claim that Judge Tillery
Case 3:14-cv-03322-M-BN Document 47 Filed 11/12/14 Page 23 of 32 PageID 583
OBJECTIONS TO R ECOMMENDATION AND BRIEF IN SUPPORT PAGE 24
motion for continuance, motion to transfer, and motion for summary judgment. Id. The
purported claims against Defendants, however, are both factually and legally unrelated to those
asserted against Judge Tillery. In this regard, Plaintiffs assert various state and federal law
claims against Defendants relating to the servicing and origination of their loan.12
Contrary to the Magistrate Judge's conclusion, the loan servicing and origination claims
against Defendants are wholly distinct and so disconnected factually and legally from the claims
against Judge Tillery relating to his rulings on various motions such that their joinder is so
egregious that it is fraudulent. In holding that the conversion claim against the former employee
and the breach of contract/bad faith claim against the insurer were fraudulently misjoined, the
court in Nsight stressed that such "claims raised different factual issues, turned on different legal
issues, and would be proved by different evidence." Tex. Instruments, 266 F.R.D. at 151
(quoting Nsight Technologies, LLC , 2009 WL 1106868 at *4)
Here, the claims against Judge Tillery for constitutional violations and the purported loan
servicing and origination claims against Defendants, like the claims in Nsight and Palermo, raise
different factual issues, turn on different legal issues, and will be proven by different evidence.
In this regard, whether Judge Tillery was or was not acting in his official and judicial capacities
when he made his rulings on various motions in the Foreclosure Action is a different legal issue
12 Plaintiffs assert claims against Defendants for violations of the FDCPA, TDCA, RESPA, and TILA arising from
the origination and servicing of their loan for the Property based on the following allegations: (1) required
disclosures were not received at the closing of their loan; (2) their signatures on unspecified loan documents were
forged; (3) their rescission document was postdated, and as a result, they were denied any right of rescission; (4)
their mortgage broker misrepresented that the loan's interest rate was temporary and that the interest rate would be
reduced in two years; (5) they did not receive notification of loan and servicing transfers; and (6) the assignment oftheir deed of trust contains forgeries, false signatures, and false statements. See Petition at pp. 12-14. Plaintiffs
further allege that MGC purportedly: (1) has not shown that it has the legal right to collect their payments; (2) did
not properly apply unspecified payments to the loan balance; and (3) charged unspecified excessive late fees. Id.
Plaintiffs additionally contend that they disputed the debt owed on the loan in response to a debt collection letter, but
that the validity of the debt was not investigated. Id. at p. 14. Plaintiffs also assert claims for "abuse of process" and
"fraud upon the court" in connection with the filing of multiple summary judgment motions and a purportedly
overwhelming document production that allegedly caused Plaintiffs' former attorneys to withdraw from representing
them in a previous lawsuit that Plaintiffs filed in June 2011 against MGC. Id. at 15-16. Plaintiffs further assert
claims against Defendants for fraud and civil and criminal conspiracy relating to the alleged failure to accept
unspecified mortgage payments and charging of unspecified excessive late fees. Id. at pp. 17-19. Plaintiffs also
contend that unidentified mortgage-related documents were falsified before recordation. Id.
Case 3:14-cv-03322-M-BN Document 47 Filed 11/12/14 Page 30 of 32 PageID 590