Party Notice: FELIX ECHENDU vs. U.S. BANK TRUST NATIONAL ASSOCIATION, et al

On September 02, 2021 a Party Notice was filed involving a dispute between Echendu, Felix, and Fay Servicing, Llc, U.S. Bank Trust National Association, for CNTR CNSMR COM DEBT in the District Court of Dallas County.

Preview
FILED
9/9/2021 4:27 PM
FELICIA PITRE
DISTRICT CLERK
DALLAS CO., TEXAS
Martin Reyes DEPUTY

CAUSE NO. DC-2 1-12122

FELIX ECHENDU IN THE DISTRICT COURT

§§§§§§§§§§§
Plaintiff

VS. 68TH JUDICIAL DISTRICT

U.S. BANK TRUST NATIONAL
ASSOCIATION, NOT IN ITS INDIVIDUAL
CAPACITY BUT SOLELY AS TRUSTEE OF
LSF8 MASTER PARTICIPATION TRUST
and FAY SERVICING, LLC
Defendants DALLAS COUNTY, TEXAS

DEFENDANTS’ NOTICE OF FILING REMOVAL

On September 9, 2021, Defendants, and U.S. Bank Trust National Association as Trustee

of the LSF8 Master Participation Trust (“Trustee”) and Fay Servicing, LLC (“Fay”) (collectively

“Defendants”) ﬁled the attached Notice of Removal (Without exhibits — documents previously

ﬁled in the above-styled case) in the Ofﬁce of the Clerk of the United States District Court for

the Northern District of Texas, Dallas Division. See attached Exhibit “A”.

Respectfully submitted,

HRSCH & WESTHEIMER, P.C.

By: /s/ Michael F. Hord Jr.
Michael F. Hord Jr.
State Bar No. 00784294
Eric C. Mettenbrink
State Bar No. 24043819
1415 Louisiana, 36th Floor
Houston, Texas 77002-2772
713-220-9182 Telephone
713-223-9319 Facsimile
Email: mhord@hirschwest.com
Email: emettenbrink@hirschwest.com

ATTORNEYS FOR DEFENDANT

20170194.20210572/4175080.1
CERTIFICATE OF SERVICE
I hereby certify that on this 9th day of September, 2021, a true and correct copy of the
foregoing was served on each attorney of record or party as follows:

D. Kimberli Wallace
D. KIMBERLI WALLACE, PLLC
1560 E. Southlake BlVd., Suite 100
Southlake, TX 76092
Tel. (817) 745-4581
Fax (817) 953-7000
Email: Kwallace@kwlawﬁrm.net
Attorney for Plaintiff
Via E-Service

/s/ Michael F. Hord Jr.
Michael F. Hord Jr.

20170194.20210572/4175080.1
Case 3:21-cv—02153-K Document 2 Filed 09/09/21 Page 1 of 8 PagelD 3

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION

FELIX ECHENDU

§§§§§§§§§§§
Plaintiff

VS. C.A. NO. 3:21-cv-2153

U.S. BANK TRUST NATIONAL
ASSOCIATION, NOT IN ITS INDIVIDUAL
CAPACITY BUT SOLELY AS TRUSTEE OF
LSF8 MASTER PARTICIPATION TRUST
and FAY SERVICING, LLC
Defendants

DEFENDANTS’ NOTICE OF REMOVAL

U.S. Bank Trust National Association, not in its individual capacity but solely as Trustee

of LSF8 Master Participation Trust (“Trustee”) and Fay Servicing, LLC (“Fay”) (both are

collectively referred to as “Defendants”) hereby remove this case from the 68th District Court,

Dallas County, Texas to the United States District Court for the Northern District of Texas,

Dallas Division. Defendants deny the claims and damages alleged in Plaintiff’s Original Petition

and ﬁles this Notice of Removal Without waiving any claims, defenses, exceptions, or

obligations that may exist in its favor in state or federal court.

I. INTRODUCTION

1. On or about September 2, 2021, Plaintiff, Felix Echendu (“Plaintiff”)

commenced this action by ﬁling Plaintiff‘ s Original Petition and Application for Temporary

Restraining Order (the “Complaint”), Cause No. DC-21-12122; In the 68th District Court,

Dallas County, Texas (the “State Court Action”).1 On September 3, 2021, Plaintiff obtained an

ex parte Temporary Restraining Order in the State Court Action? On September 9, 2021,

1
See Exhibit C-l. EXHIBIT
2
See Exhibit C-2.

20170194202]0572/4175745.l
Case 3:21-cv—02153-K Document 2 Filed 09/09/21 Page 2 of 8 PagelD 4

Defendants ﬁled their Answer in the State Court Action.3 The State Court Action was ﬁled for

purposes of preventing a foreclosure sale on real property that serves as collateral for a loan

secured by real property.4

2. Pursuant to 28 U.S.C. §1446(b) of the Federal Rules of Civil Procedure, this

Notice of Removal is timely ﬁled within thirty (30) days of Defendant’s ﬁrst receipt of the initial

state court pleadings

II. PLEADINGS AND NOTICE TO STATE COURT

3. True and correct copies of all pleadings, process, orders and other ﬁlings in the

State Court Action are being ﬁled along with this Notice of Removal as required by 28 U.S.C.

§1446(a). Pursuant to 28 U.S.C. §1446(d), written notice of this removal is being served on

Plaintiff and ﬁled in the State Court Action.

III. BASIS FOR REMOVAL

4. This action is within the original jurisdiction of the United States District Court

based on diversity jurisdiction. Furthermore, venue is proper in the Northern District of Texas,

Dallas Division, under 28 U.S.C. §1441(a) because the state court where the State Court Action

has been pending is located in this district.

IV. DIVERSITY JURISDICTION
A. Citizenship of the Parties.

5. This civil action involves a controversy between citizens of different states.

Plaintiff resides in and is domiciled in of the State of Texas and is therefore a citizen of Texas for

diversity purposesé
3456

See Exhibit C-3.
See Complaint generally and at 111129-36 requesting injunctive relief.
Bd. ofRegents of Univ. of Texas Sys. v. Nippon Tel. & Tel. Corp, 478 F.3d 274, 278 (5th Cir. 2007).
See Complaint at 118; Freeman v. Northwest Acceptance Corp., 754 F.2d 553, 555-56 (5th Cir. 1985).
2
20l70194.20210572/4175745.l
Case 3:21-cv—02153-K Document 2 Filed 09/09/21 Page 3 of 8 PagelD 5

6. Trustee is not a citizen of Texas for diversity purposes. The moﬁgagee for the

subject loan, Trustee, is the trustee of a trust. When determining citizenship of a trust for

purposes of diversity jurisdiction, it is the citizenship of the trustee which controls, not the

citizenship of the beneﬁciaries of the trust.7 U.S. Bank Trust, N.A.’s main ofﬁce is in Delaware.

Therefore, Trustee is a citizen of Delaware for diversity purposesg

7. Plaintiff has also named Fay in its capacity as loan servicer for Trustee. However,

Fay is either a nominal party or was improperly joined and its citizenship is not counted for

purposes of diversity jurisdiction.9 Fay as mortgage servicer is not alleged to have had any

contract with Plaintiff, is not the mortgagee for the subject loan and did not attempt to foreclose

as mortgagee for the subject loan. At most Fay is a nominal party whose citizenship does not

count for diversity purposes.” Alternatively, Fay has been improperly joined.

8. In applying the test for improper joinder, the court conducts “a Rule 12(b)(6)-type

analysis, looking initially at the allegations of the complaint to determine whether, under state

law, the complaint states a claim against the in-state defendant.”“ However, unlike a 12(b)(6)

analysis, the Court retains discretion to pierce the pleadings and review evidence on whether
12
plaintiff has a viable cause of action under state law.

7
Navarro Sav. Ass’n v. Lee, 446 U.S. 458, 464, 100 S. Ct. 1779, 64 L. Ed. 2d 425 (1980).
8
28 U.S.C. §1348; Wachovia Bank v. Schmidt, 546 U.S. 303, 307 (2006) (“[A] national bank, for 1348 purposes,
is a citizen of the State in which its main ofﬁce, as set forth in its articles of association, is located”).
9
See Larroquette v. Cardinal Health 200, Ina, 466 F.3d 373, 376 (5th Cir. 2006); Ekundayo v. PNC Bank, Nat.
Ass’n, No. A-14-CA-142-SS, 2014 WL 5092625 (W.D. Tex. Oct. 9, 2014) citing Cantor v. Wachovia Mortg.,
FSB, 641 F. Supp. 2d 602, 606 (N .D. Tex. 2009).
1°
Powell v. Nationstar Mortgage LLC, No. 4:16-cv-251, 2017 WL 191261, at *2 (E.D. Tex. Jan. 18, 2017)
(holding that a mortgage servicer is a nominal party and that the true party is the mortgagee); Schmelzer v.
Nationstar Mortg., LLC, No. 4:16-CV-389, 2016 WL 4368735, *1 (E.D. Tex. August 16, 2016); Byrd v.
Lakeview Loan Servicing, LLC, 1:17-CV-620-LY-ML, 2018 WL 1858235, at *3 (W.D. Tex. Jan, 11, 2018)
holding that non-parties to the subject contract in a breach of contract suit were improperly joined by the
plaintiff for diversity jurisdiction purposes because there were no possible legally viable claims asserted against
them).
11
Id.
12
Id.

20l70194.20210572/4175745.l
Case 3:21-cv—02153-K Document 2 Filed 09/09/21 Page 4 of 8 PagelD 6

9. In the context of a motion to dismiss, factual allegations in a complaint must be

sufﬁcient to raise the right to relief above a speculative level. 13 Reciting naked assertions devoid

of “further factual enhancement” does not sufﬁce.” Where the facts do not permit the court to

infer more than the mere possibility of misconduct, the Complaint has stopped short of showing

that the pleader is plausibly entitled to relief. 15

10. To establish an improper joinder a party must show either: “(1) actual fraud in the

pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action

against the non-diverse party in state court.”16

11. As stated, Fay as mortgage servicer, is not alleged to and had no contract with

Plaintiff. At most Fay is a nominal party Whose citizenship does not count for diversity

purposes.”

12. Plaintiff’s claims against Fay appear to be unclear or non-existent.18 Plaintiff has

alleged claims for Violations of the Texas Property Code pertaining to foreclosure notices and a

claim for breach of contract.” Plaintiff is not alleged to have attempted a foreclosure sale as

mortgagee and as stated, there is no actual or alleged contract between Fay and Plaintiff.

13. Further, although not alleged, to the extent Plaintiff is seeking to establish some

type of oral contract with Fay, any such attempted claims are precluded by the statute of frauds

since it is now well established that alleged oral agreements of a loan modiﬁcation agreement or

13
Id. at 555.
Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009).
14

15
BellAtl. Corp. v. Twombly, 550 U.S. 544, 557, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007).
16
Smallwood v. Illinois Central Railroad Company, 385 F.3d 568, 573 (5th Cir. 2004).
17
Powell v. Nationstar Mortgage LLC, No. 4:16-cv-251, 2017 WL 191261, at *2 (E.D. Tex. Jan. 18, 2017)
(holding that a mortgage servicer is a nominal party and that the true party is the mortgagee); Schmelzer v.
Nationstar Mortg, LLC, No. 4:16-CV-389, 2016 WL 4368735, *1 (E.D. Tex. August 16, 2016); Byrd v.
Lakeview Loan Servicing, LLC, 1:17-CV-620-LY-ML, 2018 WL 1858235, at *3 (W.D. Tex. Jan, 11, 2018)
holding that non-parties to the subject contract in a breach of contract suit were improperly joined by the
plaintiff for diversity jurisdiction purposes because there were no possible legally viable claims asserted against
them).
See Complaint generally.
See Complaint generally at 1121 and 1125 .

2017019420210572/4]75745.1
Case 3:21-cv—02153-K Document 2 Filed 09/09/21 Page 5 of 8 PagelD 7

promises to modify loan terms is unenforceable. Under Texas law, oral promises not to

foreclose are subject to the statute of frauds and must be in writing to be enforceable Where the

loan is for more than $50,000.20 This type of oral promise for a loan modiﬁcation or agreement

or alleged oral promise not to foreclose is exactly the type of claim that has routinely be held to

fail based on the pleadings.

14. From the face of the Complaint, it is evident that Plaintiff has not stated a legally

Viable a cause of action against Fay under Texas law.” A removing party may establish

improper joinder by showing that the plaintiff is unable to establish a cause of action against the

non-diverse defendant under state law.” A “mere theoretical possibility” of recovery under state

law does not sufﬁce to preclude removal.23 Fay is either a nominal party or was improperly

joined

15. Accordingly, the only named defendant who is potentially a citizen of Texas for

diversity purposes at any time material to removal was Fay, who has been improperly joined or

is a nominal party, and complete diversity exists between Plaintiffs and Trustee, the actual

mortgagee for the subject loan.

2°
See Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249, 256—57 (5th Cir. 2013) (applying Texas law
and holding that claims based on alleged oral promise that property would not be foreclosed were precluded by
the statute of frauds); Montalvo v. Bank of Am. Corp, 864 F. Supp. 2d 567, 582 (W.D. Tex. 2012) (“[B]oth
Texas state and federal courts have concluded that, generally, both the original loan and any alleged agreement
to modify the original loan are governed by section 26.02 and must be in writing”); see also Tex. Bus. & Com.
Code § 26.02(a)(2)(B) (“A loan agreement in which the amount involved in the loan agreement exceeds
$50,000 in value is not enforceable unless the agreement is in writing and signed by the party to be bound or by
that party's authorized representative”).
21
Larroquette, 466 F.3d at 375 (holding that standard for establishing improper joinder is “whether the defendant
has demonstrated that there is no possibility of recovery by the plaintiff against an in—state defendant, which
stated differently means that there is no reasonable basis of the district court to predict that the plaintiff might be
able to recover against an in-state defendant”) (quoting Smallwood v. Illinois Cent. R. Co., 385 F.3d 568, 573
(5th Cir. 2004)) (internal quotation marks omitted).
22
Id. (citing Smallwood, 385 F.3d at 573.
23
Badon v. RJR Nabisco Ina, 236 F.3d 282, 286 n.4 (5th Cir. 2000).
5
20l70194.20210572/4175745.l
Case 3:21-cv—02153-K Document 2 Filed 09/09/21 Page 6 of 8 PagelD 8

B. Amount in Controversv.

16. This case places an amount in controversy that exceeds the $75,000 threshold. A

party may remove an action from state court to federal court if the action is one over which the

federal court possesses subject matter jurisdiction.“ Such jurisdiction exists as long as the

parties are completely diverse and the amount in controversy exceeds $75 ,000.00.25

17. When ascertaining the amount in controversy in the context of a motion to

remand, district courts query Whether a plaintiff‘s state court petition, as it existed at the time of

removal, alleged damages in excess of the statutory minimum.26 If the petition does not allege a

speciﬁc amount of damages, the removing party must prove by a preponderance of the evidence

that the amount in controversy requirement is satisﬁed.” The removing party satisﬁes this

burden if the court ﬁnds it “facially apparent” that the plaintiff‘s claimed damages likely exceed

$75,000.00.”

18. In this instance, Plaintiff’s Complaint makes it apparent that Plaintiff s claimed

damages exceed $75,000.00 given that Plaintiff seeks to stop Defendant from foreclosing on

property located at 910 Maydelle Lane, Garland, Texas 75042 (the “Property”).29 The value of

the Property exceeds $75,000.00. See Exhibit D. The value of the Property according to the

Dallas County Appraisal District is no less than $242,] 10.00 for the tax year of 2021 .30

24
See 28 U.S.C.A. § 1441(a).
25
See 28 U.S.C.A. § 1332(a).
26
See S. W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 492 (5th Cir. 1996).
27
See Lewis v. State Farm Lloyds, 205 F. Supp. 2d 706, 708 (S.D. Tex. 2002) citing De Aguilar v. Boeing Co., 11
F.3d 55, 58 (5th Cir. 1993); see also Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir.
2002) (explaining that the removing party bears the burden of showing that federal jurisdiction exists and that
removal is proper).
28
Allen v. R & HOil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995).
29
See Complaint at 1129.
3°
See Exhibit D.

20l70194.20210572/4175745.l
Case 3:21-cv—02153-K Document 2 Filed 09/09/21 Page 7 of 8 PagelD 9

19. Federal jurisdiction can be established by facts alleged in the petition for removal

that support a conclusion that the amount in controversy requirement is satisﬁed.“ “In actions

seeking declaratory or injunctive relief, it is well established that the amount in controversy is

measured by the value of the object of the litigation?” Plaintiff seeks relief which if successful

would preclude enforcement of the contractual loan obligations and the right to foreclose on the

Property.”

20. “[W]hen the validity of a contract or a right to property is called into question in

its entirety, the value of the property controls the amount in controversy.”34 “[T]he amount in

controversy, in an action for declaratory or injunctive relief, is the value of the right to be protected

or the extent of the injury to be prevented.”35 Also, where a party seeks to quiet title or undo a

foreclosure, the object of the litigation is the property at issue and the amount in controversy is

measured by the value of the property.“ The value of the subject property in this instance for

diversity purposes is no less than $242,110.00 per the records of the Dallas County Appraisal

District for 2021.37 The value of the Property in this instance satisﬁes the jurisdictional amount of

$75,000.00 for diversity purposes.

V-

21. Plaintiff has made no known jury demand in the State Court Action.

VI. CONCLUSION

22. For the foregoing reasons, Defendants ask the Court to remove this suit to the

United States District Court, Northern District of Texas, Dallas Division.

31
Menendez v. Wal—Mart Stores, Ina, 364 F. App'x 62, 66 (5th Cir. 2010) (unpublished) (citing Garcia v. Koch
Oil C0. of Texas Ina, 351 F.3d 636, 638—39 (5th Cir. 2003)).
32
Hunt v. Washington State Apple Advert. Comm'n, 432 U.S. 333, 347, 97 S. Ct. 2434, 53 L. Ed. 2d 383 (U.S.
1977)
33
See Complaint at 1129-33..
34
Waller v. Prof] Ins. Corp., 296 F.2d 545, 547—48 (5th Cir. 1961).
35
Webb v. Investacorp, Ina, 89 F.3d 252 (5th Cir. 1996), citing Leininger v. Leininger, 705 F.2d 727 (5th Cir. 1983).
36
F
See Berry v. Chase Home in., LLC, No. CIV. A. C-09-116, 2009 WL 2868224, at *2 (S.D. Tex. Aug. 27, 2009).
37
See Exhibit D.
7
20l70194.20210572/4175745.l
Case 3:21-cv-02153-K Document 2 Filed 09/09/21 Page 8 of 8 PageID 10

Respectfully submitted,

By: /s/ Michael F. Hord Jr.
Michael F. Hord, Jr.
Texas Bar No. 00784294
Federal LD. No. 16035
Eric C. Mettenbrink
Texas Bar No. 24043819
Federal I.D. N0. 569887
HIRSCH & WESTHEIMER, P.C.
1415 Louisiana, 36th Floor
Houston, Texas 77002-2772
Telephone 713-220-9182
Facsimile 713-223-9319
E-mail: mhord@hirschwest.com
Email: emettenbrink@hirschwest.com

ATTORNEYS FOR DEFENDANTS
CERTIFICATE OF SERVICE
I hereby certify that on this 9th day of September, 2021, a true and correct copy of
Defendants’ Notice of Removal was forwarded as follows:

D. Kimberli Wallace
D. KIMBERLI WALLACE, PLLC
1560 E. Southlake B1vd., Suite 100
Southlake, TX 76092
Tel. (817) 745-4581
Fax (817) 953-7000
Email: Kwallace@kw1awﬁrm
Via Email and Regular Mail

/s/ Michael F. Hord Jr.
Michael F. Hord Jr.

20l70194.20210572/4175745.l
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.

Envelope ID: 57108533
Status as of 9/9/2021 4:31 PM CST

Associated Case Party: FELIX ECHENDU

Name BarNumber Email TimestampSubmitted Status
Dana Kimberli Wallace 792901 kwallace@kwlawﬁrm.net 9/9/2021 4:27:25 PM SENT

Associated Case Party: FAY SERVICING, LLC

Name BarNumber Email TimestampSubmitted Status
Eric Mettenbrink emettenbrink@hirschwest.com 9/9/2021 4:27:25 PM SENT
Michael F.Hord mhord@hirschwest.com 9/9/2021 4:27:25 PM SENT

Case Info

Judge

HOFFMAN, MARTIN Track Judge’s New Case

Case No.

(Subscribe to View)

Document Filed Date

September 09, 2021

Case Filing Date

September 02, 2021

County

Parties

For full print and download access, please subscribe at https://www.trellis.law/.

Party Notice: FELIX ECHENDU vs. U.S. BANK TRUST NATIONAL ASSOCIATION, et al

Preview

Related Topics

Case Info

Parties