The Estate of Marion Edmonds, et al. v. First Horizon Bank, et al.

Summary

The United States District Court for the Eastern District of Virginia denied the plaintiff’s motion to remand, concluding that the parties were completely diverse after disregarding the citizenship of the substitute trustee as fraudulently joined or nominal. The court also held that the amount in controversy exceeded $75,000 based on the requested damages and injunctive relief concerning the subject property. The court granted First Horizon Bank’s Rule 12(b)(6) motion because the complaint did not identify a contractual provision requiring the bank to approve or review a loss-mitigation application, and dismissed the case.

Holdings

1. Removal was proper because the properly joined parties were completely diverse and the amount in controversy exceeded $75,000.
2. The substitute trustee was fraudulently joined or was a nominal party, and its Virginia citizenship did not defeat diversity jurisdiction.
3. The complaint failed to state a plausible breach-of-contract claim because it did not identify any contractual provision requiring First Horizon to review, approve, or provide a loan modification or other loss-mitigation option.
4. The complaint did not state a viable claim against the substitute trustee based on lack of authority to foreclose or wrongful foreclosure.

Questions Presented

1. Whether removal was proper under diversity jurisdiction despite the Virginia citizenship of the substitute trustee.
2. Whether the substitute trustee was fraudulently joined or merely a nominal party such that its citizenship could be disregarded.
3. Whether the amount in controversy exceeded $75,000 when the complaint sought damages and injunctive relief affecting real property.
4. Whether the complaint plausibly alleged that First Horizon breached a contractual duty to review, approve, or provide loss-mitigation options.
5. Whether the complaint stated a viable claim against the substitute trustee for lack of authority to foreclose or wrongful foreclosure.

Disposition

dismissed