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Muathe v. Government National Mortgage Association

United States District Court, D. Kansas

May 14, 2014



J. THOMAS MARTEN, District Judge.

Acting pro se, plaintiffs Paul and Donald Muathe originally filed a petition in Johnson County District Court on February 21, 2014, seeking a quiet title to real estate property in Shawnee, Kansas. On March 28, 2014, the Government National Mortgage Association (GNMA) removed the case to the U.S. District Court for the District of Kansas. The plaintiffs filed a Motion to Remand to State Court (Dkt. 10) on April 24, to which all named defendants have responded. Defendants M&T Bank Corporation and Bank of America, N.A. have each filed a separate motion to dismiss, to which the plaintiffs have failed to timely respond.[1] The court is prepared to rule on the motions.

I. Factual Background

The plaintiffs seek a quiet title to real estate property located at 7518 Anderson Street, Shawnee, Kansas 66227. In their petition, they state that Paul Muathe executed a note with defendant Bank of America on July 15, 2009, which was secured by a mortgage on this property. The plaintiffs claim that they are ready and willing to perform the contract, but they are concerned that they may be "making payments for the benefit of the wrong party due to possible cloud on the title...."

The plaintiffs worry about "the possibility of an unperfected chain of title transfers" in any securitization of the mortgage by Bank of America. Specifically, the plaintiffs are apprehensive about the potential failure to provide "delivery receipts at each and every step of the securitization process." As a basis for their concerns of a cloud on the title, the plaintiffs cite their research about Bank of America's "much publicized mortgage documentation fraud and illegal securitization dealings...." Noting that no assignments have been recorded on the subject matter property mortgage loan documents, the plaintiffs fear that a cloud may exist on the property title, and they refuse to continue making payments to "unknown, hidden, wrong or undisclosed holders in due course with no proper recorded legal standing and no perfected chain of title transfer."

As a result of these fears, the plaintiffs demand that the defendants produce the "original wet ink signed mortgage and promissory note, " securitization documentation, and "each and every intervening agreement between any and all parties...." If these documents are not produced, the plaintiffs seek a quiet title to the property.

II. Motion to Remand

The plaintiffs filed a motion asking the court to remand this case to state court. They argue that this court has no federal question jurisdiction, as the claims are based solely on state law and seek state law remedies. They also argue that the court lacks diversity jurisdiction because the claims fail the $75, 000 damages threshold. Citing 28 U.S.C. § 1446(b)(2)(A), the plaintiffs also argue that GNMA's removal was improper because it failed to secure consent to removal from all other defendants. The plaintiffs' arguments rest on flawed assumptions, as the court explains below.

A. Jurisdictional Concerns

Although diversity or federal question jurisdiction is generally required in all cases, this case presents an exception to the general rule. The United States and its agencies may remove any action brought under 28 U.S.C. § 2410. 28 U.S.C. § 1444 (2012). Although the pro se plaintiffs do not identify it as such, this case is brought against the GNMA, a United States agency, under 28 U.S.C. § 2410. Section 2410 is the only section authorizing a civil action against the United States or its agencies in state court to quiet title to real property. The plaintiffs identify their quiet title action as stemming from KAN. STAT. ANN. § 60-1002. However, a case brought against the GNMA based solely on Kansas law would fail, as the federal agency would be entitled to sovereign immunity. To clear that hurdle, the court must construe the action as one brought under § 2410, which waives sovereign immunity in quiet title cases. As a § 2410 action brought against a United States agency, the agency can remove the action to federal court under § 1444. The GNMA properly identified § 1444 as the basis for removal here.

Section 1444 gives the United States a substantive right of removal that is independent of jurisdictional limitations. See Hood v. United States, 256 F.2d 522, 525 (9th Cir. 1958). The judicial power of the federal courts extends to any case in which the United States is a party. U.S. CONST. art. III, § 2, cl. 2. Additionally, other statutes give the United States the right to remove cases without regard to the amount in controversy. See 28 U.S.C. §§ 1442, 1442a & 1443. Section 1444 falls within this family of statutes. As a result, there is no defect in this court's subject matter jurisdiction over the case.

B. Unanimous Consent from Other Defendants

The plaintiffs also argue that the GNMA must obtain consent from the other defendants before removing this case. The plaintiffs rely on 28 U.S.C. § 1446(b)(2)(A), which states: "When a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action."

As the court established above, this civil action was not "removed solely under section 1441(1)." The GNMA removed the case by relying on § 1444, which does not require consent by other defendants. Section 1444 states that "[a]ny action brought under section 2410 of this title against the United States in any State court may be removed by the United States to the district court of the United States for the district and division in which the action is pending." 28 U.S.C. § 1444 (emphasis added). "Congress has used the passive term may be removed ' together with identification of particular defendants to permit those defendants to remove certain types of cases without obtaining consent of other defendants." Alban v. Exxon Mobil Corp., Nos. MJG-06-3098-MJG-06-3176, 2006 WL 6161862, at ...

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