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Toney v. LaSalle Bank Nat'l Ass'n

United States District Court, D. South Carolina, Columbia Division

August 4, 2014

Laura Toney, Plaintiff,
v.
LaSalle Bank National Association As Trustee for the Registered Holders of Structured Asset Investment Loan Trust, Mortgage Pass-Through Certificates Series 2004-11; AltiSource Homes; Pro Capital Investors; Wayne Capell, Lee County Treasurer; and Lee County Planning and Zoning, Defendants

Ordered Filed March 11, 2014

Page 658

Laura Toney, Plaintiff, Pro se, Bishopville, SC.

For LaSalle Bank National Association, As Trustee for the Registered Holders of Structured Asset Securities Corporation, Structured Asset Investment Loan Trust, Mortgage Pass-Through Certificates Series 2004-11, AltiSource Homes, Defendants: Sean A O'Connor, LEAD ATTORNEY, Finkel Law Firm, Charleston, SC.

For Pro Capital Investors, Defendant: A Parker Barnes , III, James Y Becker, LEAD ATTORNEYS, Haynsworth Sinkler Boyd, Columbia, SC.

For Wayne Capell, Lee County Treasurer, Lee County Planning and Zoning, Defendants, Counter Claimants: Paul M Fata, Stuckey Fata and Segars, Bishopville, SC.

Page 659

ORDER AND OPINION

Margaret B. Seymour, Senior United States District Judge.

I. FACTS AND PROCEDURAL HISTORY

Plaintiff Laura Toney, proceeding pro se, previously has appeared before this court seeking relief with respect to a foreclosure of certain property located at 729 Chatmon Street, Bishopville, South Carolina (" the Property" ). It appears that Plaintiff took possession of the Property after her husband's death, and on October 6, 2004 refinanced a mortgage on the Property. The Property went into foreclosure and was sold on May 7, 2007 to LaSalle Bank National Association, As Trustee for Structured Asset Securities Corporation, Structured Asset Investment Loan Trust, Mortgage Pass-Through Certificates, Series 2004-11 (" LaSalle Bank" ). Plaintiff filed a notice of appeal to the South Carolina Court of Appeals. The foreclosure and rulings appertaining thereto were affirmed by the South Carolina Court of Appeals. LaSalle Bank Nat'l Ass'n v. Toney, 2011 WL 11734978 (S.C. Ct. App. June 27, 2011).

On July 13, 2011, Plaintiff filed a complaint in this court, alleging that she was not provided at the time of refinance with

Page 660

disclosures mandated by the Truth-in-Lending Act, 15, U.S.C. § § 1601-1667f. Plaintiff further contended that she issued a notice of rescission on June 14, 2005, to which LaSalle did not respond until October 19, 2005. According to Plaintiff, she had been relieved of her obligations under the mortgage and the foreclosure should be set aside. The court found that Plaintiff's action was barred by res judicata based on the rulings adverse to Plaintiff in state court. Accordingly, Plaintiff's complaint was dismissed. See Toney v. LaSalle Bank Nat'l Ass'n, C/A No. 3:11-1686-MBS. Plaintiff appealed the court's ruling to the Court of Appeals for the Fourth Circuit. The Fourth Circuit affirmed on August 24, 2012. Toney v. LaSalle Bank Nat'l Ass'n, 512 F.App'x 363 (4th Cir. 2013).

On November 13, 2013, Plaintiff commenced the within action in the Court of Common Pleas for Lee County, South Carolina, against Defendants; AltiSource Homes; Pro Capital Investors; Wayne Capell, Lee County Treasurer; and Lee County Planning and Zoning. Although it is not clear, it appears that the Property consisted of four lots, and that Plaintiff's husband, now deceased, deeded one of the lots to an unnamed grantee. Plaintiff alleges that, as a result, her husband owned the Property as a tenant-in-common with the grantee. Plaintiff alleges that in 2004 Lee County Planning and Zoning illegally drew a plat and partitioned the Property. In addition, Plaintiff alleges that in 2012, Wayne Capell, Lee County Treasurer, partitioned the Property in order to allow a portion of the Property to be sold for delinquent taxes. In 2013, the Property, or at least a portion of it, was purchased by Pro Capital Investors. Plaintiff contends that ownership of the Property could not be destroyed without the consent of the unnamed individual who purportedly was a tenant-in-common with Plaintiff's husband. Accordingly, Plaintiff asserts that the foreclosure and partition were illegal acts, and that she retains title to the Property. Id. at ¶ ¶ 3-8. Plaintiff seeks to quiet title to the Property in her favor; transfer legal title and possession to her; issue a declaration that each Defendant has no estate, right, title, or interest in the Property; and enjoin each Defendant from any claim in estate, right, title, or interest in the Property. Plaintiff also seeks attorney's fees and costs, as well as treble, actual, and punitive damages in the amount of $10,000,000.00.

On December 13, 2013, LaSalle Bank and AltiSource Homes filed a notice of removal asserting jurisdiction based on federal question and diversity of citizenship. LaSalle Bank and AltiSource Homes contend federal jurisdiction is proper because (1) Plaintiff alleges claims arising under the Truth-in-Lending Act; and (2) Lee County Treasurer Wayne Capell and Lee County Planning and Zoning (" Lee County Defendants" ) are sham Defendants who may be disregarded for purposes of establishing complete diversity of citizenship. On December 31, 2013, U.S. Bank Custodian for Pro Capital III LLC (" Pro Capital" ), incorrectly identified as in the complaint as " Pro Capital Investors," consented to removal.

On January 3, 2014, Plaintiff filed a motion to remand. Plaintiff asserts that her complaint does not implicate the Truth-In-Lending Act. Plaintiff also states that the Lee County Defendants are not sham Defendants in that they partitioned the Property without a court order. Thus, Plaintiff argues that the court lacks both federal question and diversity jurisdiction. Plaintiff also contends that Pro Capital's consent to removal was untimely. On January 20, 2014, LaSalle Bank and AltiSource Homes filed a response in opposition

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to motion to remand.[1] LaSalle Bank and AltiSource Homes state that Plaintiff specifically references the Truth-In-Lending Act in paragraphs 3 and 9 of the complaint. LaSalle Bank and AltiSource Homes also state that there is no possibility Plaintiff can recover against the Lee County Defendants because (1) the court previously dismissed a complaint by Plaintiff disputing title to the Property; (2) the complaint fails to state a cause of action against the Lee County Defendants; (3) claims regarding the tax sale are not ripe; and (4) the action against the Lee County Defendants is barred by sovereign immunity and the South Carolina tort Claims Act (" SCTCA" ), S.C. Code Ann. § § 15-78-10, et seq. LaSalle Bank and AltiSource Homes further argue that removal is proper because Pro Capital had not been " properly joined and served" at the time of removal, and thus its consent was not required. See 28 U.S.C. § 1446(b)(2)(A).

In accordance with 28 U.S.C. § 636(b) and Local Rule 73.02, D.S.C., this matter was referred to United States Magistrate Judge Shiva V. Hodges for pretrial handling. On March 11, 2014, the Magistrate Judge filed a Report and Recommendation in which she determined that Plaintiff's allegations in her complaint regarding the Truth-in-Lending Act, read in context, refer to her appeals of the court's prior ruling. The Magistrate Judge further found that Plaintiff's complaint alleges negligence on the part of the Lee County Defendants, and that LaSalle Bank and AltiSource Homes had failed to demonstrate Plaintiff had no possibility of relief again the Lee County Defendants. Based on these findings, the Magistrate Judge concluded that LaSalle Bank and AltiSource Homes had not met their burden of establishing subject matter jurisdiction. Accordingly, the Magistrate Judge recommended that Plaintiff's motion to remand be granted.

On March 27, 2014, LaSalle Bank and AltiSource Homes filed objections to the Report and Recommendation. Plaintiff filed a response to the objections on April 11, 2014, to which LaSalle Bank and AltiSource Homes filed a reply on April 18, 2014.

The Magistrate Judge makes only a recommendation to this court. The recommendation has no presumptive weight. The responsibility for making a final determination remains with this court. Mathews v. Weber, 423 U.S. 261, 270, 96 S.Ct. 549, 46 L.Ed.2d 483 (1976). This court is charged with making a de novo determination of any portions of the Magistrate Judge's Report to which a specific objection is made. The court may accept, reject, or modify, in whole or in part, the recommendation made by the Magistrate Judge or may recommit the matter to the Magistrate Judge with instructions. 28 U.S.C. § 636(b)(1) (2012).

II. DISCUSSION

LaSalle Bank and AltiSource Homes contend that the Magistrate Judge erred in finding that the court lacks subject matter jurisdiction, such that removal was not proper. The court disagrees.

If removal is challenged, the defendant bears the burden of establishing that federal jurisdiction is proper. Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994). The thumb is on the scale in favor of remand. Id. Because federal ...


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