United States District Court, D. Maryland, Southern Division
LAURA H.G. O'SULLIVAN, et al., Plaintiff,
JEFFREY DIAMOND, et al., Defendants.
J. HAZEL UNITED STATES DISTRICT JUDGE
as substitute trustees under a deed of trust, initiated this
foreclosure action in the Circuit Court for Montgomery
County, Maryland (“State Court”). ECF No. 3.
Following Defendants Jeffrey and Georgia Diamond's
removal of the action to this Court, Plaintiffs filed a
Motion to Remand. ECF No. 7. No. hearing is necessary to
resolve the pending motion. See Loc. R. 105.6 (D.
Md. 2016). For the following reasons, Plaintiffs' Motion
to Remand is granted.
are substitute trustees under the deed of trust secured
against the real property located at 18 Stapleford Hall
Court, Potomac, Maryland 20854 (“the Property”).
See ECF No. 3-5. On March 28, 2019, Plaintiffs
initiated a foreclosure action for the Property by filing an
Order to Docket Suit in the State Court. ECF Nos. 3-1, 3-2,
3-2; see also O'Sullivan v. Diamond, No. 417984V
(Mont. Cty. Cir. Ct.). The foreclosure action is based on a
state statute addressing deeds of trust, mortgages, and other
liens in default. See Md. Code. Ann., Real Prop.
§§ 7-105.1 et seq. A foreclosure sale was
held on June 13, 2018, and the Property was purchased by the
U.S. Bank National Association, as Trustee for Residential
Funding Mortgage Securities I, Inc., Mortgage Pass-Through
Certificates, Series 2007-S6 (“Noteholder”). ECF
No. 3-13. On or about December 14, 2018, Defendants'
title and interest in the Property was extinguished pursuant
to an order of ratification of sale. ECF No. 3-10; see
also O'Sullivan, No. 417984V. Defendants noted an
appeal on January 11, 2019, ECF No. 3-11, and the Noteholder
initiated eviction proceedings by filing a Motion for
Judgment Awarding Possession on March 1, 2019, ECF No. 3-9.
filed a Notice of Removal in this Court on March 21, 2019.
ECF No. 3. Plaintiffs filed a Motion to Remand on April 18,
2019, ECF No. 7, and Defendants filed a response on May 7,
2019, ECF No. 9.
contend that this case must be remanded to the State Court
because it is a routine foreclosure action arising solely
under Maryland law, the parties lack complete diversity, and
Defendants delayed in removing the case. In opposition,
Defendants contend that this case can only be heard in
federal court because it involves issues of federal
constitutional and statutory law.
courts are courts of limited jurisdiction, and a district
court must remand any case in which it lacks subject matter
jurisdiction. 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).
“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,
530 F.3d at 297) (emphasis in original). Here, Defendants
have not met their burden of demonstrating that removal was
proper because, despite their contention otherwise, the Court
lacks both federal question and diversity jurisdiction.
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
plaintiff's right to relief necessarily depends on
resolution of a substantial question of federal law.”
Franchise Tax Bd. of the State of Cal. 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, e.g., Fisher v. Cathey,
No. GJH-15-1357, 2016 WL 1214782, at *1 (D. Md. Mar. 22,
2016) (finding that a foreclosure proceeding could not serve
as the basis for federal question jurisdiction). Although
Defendants appear to be considering defenses or counterclaims
based on the United States Constitution and federal
securities and banking laws, 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
plaintiff's complaint establishes that the case
‘arises under' federal law.” (emphasis in
original)); see also Holmes Grp., Inc. v. Vornado Air
Circulation Sys., Inc., 535 U.S. 826, 831 (2002)
(stating that a counterclaim “cannot serve as the basis
for [federal question] jurisdiction”); Cook v.
Georgetown Steel Corp., 770 F.2d 1272, 1275 (4th Cir.
1985) (“A federal defense to a state cause of action is
not sufficient to invoke federal
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 jurisdiction and removal on
this ground was improper.
attempt to remove this action based on diversity jurisdiction
is similarly improper. District courts have jurisdiction over
civil actions where the matter in controversy exceeds $75,
000 and is between citizens of different states. See
28 U.S.C. § 1332(a)(1). For diversity jurisdiction to
exist, there must be “complete diversity, ”
meaning that “no party shares common citizenship with
any party on the other side.” Mayes v.
Rapoport, 198 F.3d 457, 461 (4th Cir. 1999). Here, there
is a lack of complete diversity because Defendants and at
least one Plaintiff, Laura H.G. O'Sullivan, are citizens
of Maryland. See ECF No. 1. As a result, this Court
lacks diversity jurisdiction and remand is
foregoing reasons, Plaintiffs' Motion to Remand is
granted, and this case is remanded to Circuit Court for
Montgomery County, Maryland. A separate Order shall issue.