United States District Court, D. Maryland, Southern Division
ALAN J. HYATT, et al., Plaintiffs,
KOS N. JOHNS, et al., Defendant.
MEMORANDUM OPINION AND ORDER
J. HAZEL, UNITED STATES DISTRICT JUDGE
before the Court is Plaintiffs' Motion to Remand, ECF No.
3. A hearing is unnecessary. Loc. R, 105.6 (D. Md. 2016). For
the reasons stated more fully below, the Court will grant
Plaintiffs' Motion to Remand, along with their request
for costs, expenses and reasonable attorney's fees
incurred in responding to Defendants' removal of the
case. The Court will deny Defendants' request for costs
and other reasonable fees.
April 16, 2014, the above-captioned matter was commenced in
the Circuit Court for Montgomery County, Maryland by the
filing of an Order to Docket in the foreclosure of a deed of
trust granted by Defendants Kosmas Johns and Aphrodite Johns
(collectively, "Defendants") and secured by real
property located in Montgomery County ("Foreclosure
Action"). ECF No. 6-1. The Foreclosure Action is
based on a state statute addressing deeds of trust,
mortgages, and other liens in default. See Md. Code.
Real Prop. Art. § 7-105.1 et seq.
August 18, 2016, Defendants removed the Foreclosure Action to
this Court. ECF No. 1. On August 22, 2016, Plaintiffs filed
the presently pending Motion to Remand to the Circuit Court
for Montgomery County, Maryland. ECF No. 3. Included in their
Motion was a request for costs, expenses and reasonable
attorney's fees. Id. ¶ 14. On August 26,
2016, Defendants submitted a Response in Opposition to
Plaintiffs' Motion for Remand which included a request
that the Court grant them their costs and reasonable fees.
ECF No. 7 ¶ 14. On August 31, 2016, Plaintiffs'
filed a Reply, ECF No. 8, and shortly thereafter Defendants
submitted a further Supplement in support of their
opposition, ECF No. 9.
PLAINTIFFS' REQUEST FOR REMAND
Courts are courts of limited jurisdiction, and a district
court must remand any case in which it lacks subject matter
jurisdiction. See 28 U.S.C. § 1447(c); see
also In Re Blackwater Sec. Consulting. LLC, 460 F.3d
576, 584 (4th Cir. 2006). Therefore, a party seeking
adjudication in federal court must "demonstrate the
federal court's jurisdiction over the matter."
Strawn v. AT&T Mobility. LLC 530 F.3d 293, 296
(4th Cir. 2008) (internal citation omitted). "Where a
defendant seeks to remove a case to federal court, the
defendant must simply allege subject matter jurisdiction in
his notice of removal." Cunningham v. Twin City Fire
Ins. Co., 669 F.Supp.2d 624, 627 (D. Md. 2009).
"But if the plaintiff challenges removal in a motion to
remand, then the burden is on the defendant to demonstrat[e]
that removal jurisdiction is proper.'" Id.
(quoting Strawn v. AT &T Mobility, LLC 530 F.3d
293, 297 (4th Cir. 2008)). Here, Defendants have not met
their burden of demonstrating that removal was proper
because, despite their contentions, removal based on
diversity jurisdiction is barred by the forum-defendant rule
and the Court lacks federal question jurisdiction.
courts have diversity jurisdiction over civil actions where
the matter in controversy exceeds $75, 000 and is between
citizens of different states. 28 U.S.C. § 1332(a)(1).
However, a civil action removable solely on the basis of
diversity jurisdiction "may not be removed if any 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)(2). Known as the
forum-defendant rule, this rule "recognizes that there
is no need to protect out-of-state defendants from local
prejudice 'where the defendant is a citizen of the state
in which the case is brought.'" Reimold v.
Gokaslan, 110 F.Supp.3d 641, 642-43 (D. Md.
2015)(quoting lively v. Wild Oats Markets, Inc., 456
F.3d 933, 940 (9th Cir. 2006)). Here, Defendants state in
their own Notice of Removal that they are citizens of the
State of Maryland. ECF No. 1 ¶ 17. Thus, the case is not
removable based on diversity jurisdiction.
attempt to remove this case based on federal question
jurisdiction is also misplaced. Federal question jurisdiction
arises only from "those cases in which a well-pleaded
complaint establishes either that federal law creates the
cause of action or that the plaintiffs right to relief
necessarily depends on resolution of a substantial question
of federal law." Franchise Tax Bd., of the State of
Cat. v. Constr. Laborers Vacation Trust for S. Cal., 463
U.S. 1, 27-28 (1983). This case involves no such causes of
action; rather, this case is an in rem foreclosure
proceeding arising under Maryland state law, involving
property located in Maryland. See Wells Fargo Home
Mortg., Inc. v. Neal, 398 Md. 705, 726 (2007)
("This 'power of sale' foreclosure is
'intended to be a summary, in rem proceeding' which
carried out 'the policy of Maryland law to expedite
mortgage foreclosures.'"). While Defendants'
Opposition to Plaintiffs' Motion to Remand, ECF No. 7,
includes references to federal statutes that reflect that
they may be contemplating filing counterclaims based on
federal law, for removal purposes, the Court looks only to
the complaint, or in this case, the order to docket suit, to
determine whether a federal question is presented. See
Franchise Tax Bd., 463 U.S. at 10 ("For better or
worse, under the present statutory scheme ... a defendant may
not remove a case to federal court unless the plaintiffs
complaint establishes that the case 'arises under'
federal law." (emphasis in original)); see also
Martin Pet Products (U.S.), Inc. v. Lawrence, 814
F.Supp. 56, 58 (D. Kan. 1993) (rejecting argument that
damages requested in counterclaim may be considered in
establishing amount in controversy because "[t]he
counterclaim had not been filed at the time of removal and
cannot serve as a basis for later establishing this
court's jurisdiction"). Because the Foreclosure
Action, as instituted by Plaintiffs, only involves a state
law proceeding, and does not involve any federal causes of
action, the Court lacks federal question diversity. Removal
on this ground is therefore improper.
failed to demonstrate that removal was proper, the Court must
remand this action to the Circuit Court for Montgomery
County, Maryland for further proceedings.
PLAINTIFFS' REQUEST FOR COSTS, EXPENSES AND
addition to requesting that this case be remanded to state
court, Plaintiffs also request costs, expenses and reasonable
attorney's fees that they incurred in defending this case
against removal. ECF No. 3 ¶ 14. When a Court grants an
order to remand, it may also "require payment of just
costs and any actual expenses, including attorney fees,
incurred as a result of the removal." 28 U.S.C. §
1447(c). Although the case is being remanded, the Court will
retain jurisdiction over the collateral issue of fees
pursuant to 28 U.S.C. § 1447(c). See Am. Capital
Advance, LLC v. Gordon, No. RWT 10CV2113, 2010 WL
5055810, at *2 (D. Md. Dec. 3, 2010).
developing an appropriate test for awarding fees in a removal
case, the Supreme Court noted that such a test "should
recognize the desire to deter removals sought for the purpose
of prolonging litigation and imposing costs on the opposing
party, while not undermining Congress' basic decision to
afford defendants a right to remove as a general matter, when
the statutory criteria are satisfied. " Martin v.
Franklin Capital Corp., 546 U.S. 132, 140 (2005). The
Court went on to hold that "[a]bsent unusual
circumstances, courts may award attorney's fees under
§ 1447(c) only where the removing party lacked an
objectively reasonable basis for seeking removal."
Id. at 141. A showing of bad faith is not required
and the fact that the removing party is a pro se
litigant does not prevent the Court from imposing sanctions.
See Am. Capital Advance, LLC, 2010 WL 5055810, at *2
(citing Miller v. Baker, 2010 WL 3585423, at *1
(W.D.Va. September 9, 2010)); but see Baby C v.
Price. 138 F.App'x 81, 84-85 (10th Cir. 2005)
(suggesting that the pro se status of the removing party may
justify a reduction in the attorney's fees awarded).
Defendants lacked an objectively reasonable basis for seeking
removal since their arguments were in violation of
"well-settled and firmly established" legal
principles. See Id. at *3 (holding that
attorney's fees were justified in a removal case where
Defendants' arguments for removal were contrary to
well-settled and firmly established diversity jurisdiction
principles). Defendants' assertion of diversity
jurisdiction was in clear violation of the plain language of
28 U.S.C. § 1441(b)(2), which bars defendants from
removing cases to federal courts on the basis of diversity
when they are citizens of the forum state. Similarly, the
concept that a defendant may not remove a case based on
federal question jurisdiction unless the plaintiffs complaint
establishes that the case "'arises under'"
federal law is based on Supreme Court precedent dating back
over 30 years. See Franchise Tax Bd., 463 U.S. at
as Plaintiffs point out, Defendant Kos Johns, in his role as
an attorney, has had seven cases remanded on the same or
similar grounds in the past year and half. See ECF
No. 8 ¶ 1; see also ECF No. 8-1. In one of the
more recent cases. Judge Chasanow stated that "Mr. Johns
is forewarned that continued actions in removing obviously
unremovable actions could result in referral to this
court's disciplinary and admissions committee for
consideration of sanctions." Clarke v. Nguyen,
No. C1V.A. DKC 15-2452, 2015 WL 5255291, at *2 (D. Md. Sept.
8, 2015)(holding that a Maryland citizen is not permitted to
remove to a Maryland District Court on the basis of diversity
jurisdiction and that a federal question must be present on
the complaint and not in a contemplated defense). Mr.
Johns' prior actions lead credence to Plaintiffs'
argument that Defendants filed this case "with the
purpose of attempting to prevent the Foreclosure Sale from
going forward." ECF No. 3 ¶ 10. Therefore, an award