Motion to Remand to State Court Re Foreclosure

8/12/2019 Motion to Remand to State Court Re Foreclosure

1/22

Douglas E. Gershuny, Executive DirectorSouth Jersey Legal Services, Inc.745 Market StreetCamden, New Jersey 08102(856)964-2010 Ext. 6907

By: Abigail B. Sullivan, Esq.Attorneys for Defendant/Third PartyPlaintiffs, Victor & Enoabasi Ukpe

UNITED STATES DISTRICT COURTDISTRICT OF NEW JERSEY

CAMDEN VICINAGE_________________________________________

:BANK OF NEW YORK AS TRUSTEE FOR :THE CERTIFICATE HOLDERS CWABS, INC. :

ASSET-BACKED CERTIFICATES, :SERIES 2005-AB3 :: Judge: Hon. Joseph H. Rodriguez, U.S.D.J

Plaintiff, ::

v. ::

VICTOR and ENOABASI UKPE., : CIVIL ACTION NO.: 09-cv-1710::

Defendants, :_________________________________________ :VICTOR and ENOABASI UKPE :

:Counterclaimants :and Third Party Plaintiffs :

:v. : Civil Action

:BANK OF NEW YORK AS TRUSTEE FOR :THE CERTIFICATE HOLDERS CWABS, INC. :ASSET-BACKED CERTIFICATES, :SERIES 2005-AB3, :

Defendant on the Second :Amended Counterclaim, :

and :AMERICAS WHOLESALE LENDER; :COUNTRYWIDE HOME LOANS, INC.; :MORGAN FUNDING CORPORATION; :

Case 1:09-cv-01710-JHR-JS Document 7 Filed 04/24/09 Page 1 of 22 PageID: 95


2/22

ROBERT CHILDERS; COUNTRYWIDE :HOME LOANS SERVICING LP, PHELAN :HALLINAN & SCHMIEG , PC

:Third Party Defendants on :

the Second Amended :Third Party Complaint :__________________________________________

_____________________________________________________________________________

BRIEF OF DEFENDANT/THIRD PARTY PLAINTIFFS VICTOR AND ENOABASI

UKPE IN SUPPORT OF MOTION TO REMAND UKPES CAUSE OF ACTION TO

STATE COURT

_____________________________________________________________________________

Of counsel:

James Villere, Jr., Esq.Mark Malone, Esq.Erica Askin, Esq.LAW OFFICE OF JAMES F. VILLERE, JR.441 Main StreetMetuchen, New Jersey 08840(973) 267-0787



3/22

TABLE OF CONTENTS

PRELIMINARY STATEMENT ...............................................................................1

COUNTER-STATEMENT OFPROCEDURAL HISTORY AND FACTS ...............................................................2

LEGAL ARGUMENT...............................................................................................6

I. THE COUNTRYWIDE THIRD-PARTY DEFENDANTSREMOVAL VIOLATES THE WELL-PLEADEDCOMPLAINT RULE...............................................................................6

II. THE UKPES CLAIMS AGAINST THECOUNTRYWIDE THIRD-PARTY DEFENDANTS ARE

NOT SEPARATE AND INDEPENDENT FROM THECWABS TRUSTEES CLAIMS...........................................................12

III. THE UKPE DEFENDANTS REQUEST REMAND OFTHE ENTIRE CASE BECAUSE NEW JERSEY STATELAW PREDOMINATES ALL MATTERS INVOLVED ....................15

IV. THE UKPE DEFENDANTS REQUEST THE COURT TOAWARD ATTORNEY FEES AND COSTS ........................................16

CONCLUSION........................................................................................................17

i



4/22

TABLE OF AUTHOTITIES

Federal Cases

American Fire & Casualty Co. v. Finn, 341 U.S. 6 (1951) .............................. 14, 15

Balazik v. County of Dauphin, 44 F.3d 209 (3rd Cir. 1995) ..................................12

Caterpillar Inc. v. Williams, 482 U.S. 386 (1987)...................................................10

Coleman v. A & D Mach. Co., 298 F. Supp. 234 (E.D. Cal. 1969) ........................15

Collins v. Baxter Healthcare Corp., 949 F. Supp. 1143 (D.N.J. 1996) ...................11

First Nat'l Bank v. Pulaski, 301 F.3d 456 (6th Cir. 2002) .......................................14

FirstBank v. Gittens, 466 F. Supp. 2d 614 (D.Virgin Islands 2006) .................. 9, 11

Kaye Associates v. Bd. of Chosen Freeholders of Gloucester,757 F. Supp. 486 (D.N.J. 1991)........................................................... 6, 7, 8, 9, 11

Krashna v. Oliver Realty, Inc., 895 F.2d 111 (3d Cir. 1990) ..................................10

Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804 (1986) ................................10

Michaels v. New Jersey, 955 F. Supp. 315 (D.N.J. 1996).......................................12

Monmouth-Ocean Collection Serv., Inc. v. Klor,46 F. Supp. 2d 385(D.N.J. 1999)..................................................................... 9, 11

New Venture Gear, Inc. v. Fonehouse, 982 F. Supp. 892 (N.D.N.Y. 1997).... 14, 15

Palmer v. Univ. of Medicine and Dentistry of N.J.,2009 U.S. Dist. Lexis 25313, 17 (D.N.J. 2009) ............................................ 10. 11

Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941) .....................................7

Somerset Medical Center v. Jewett, 2009 WL 792269 (D.N.J. 2009) ....................11

ii



5/22

iii

Soper v. Kahn, 568 F. Supp. 398 (D. Md. 1983).....................................................15

State Farm Indemnity Co. v. Fornaro, 227 F. Supp. 2d 229(D.N.J. 2002) ............................................................................................ 9, 11, 13

Sun Buick, Inc. v. Saab Cars USA, Inc., 26 F.3d 1259 (3d Cir.1994) ......................7

Syngenta Crop Protection Inc. v. Henson, 537 U.S. 28 (2002).................................7

State Cases

Associates Home Equity Services, Inc. v. Troup,343 N.J. Super. 254 (App Div. 2001)...................................................................13

Federal Statutes

15 U.S.C. 1692....................................................................................................5, 6

28 U.S.C. 1331 ........................................................................................................7

28 U.S.C. 1441..................................................................................... 1, 6, 7, 9, 10

28 U.S.C. 1441(a) ...............................................................................................7, 8

28 U.S.C. 1441(b) ...................................................................................................8

28 U.S.C. 1441(c) .................................................................................... 7, 8, 9, 14

28 U.S.C. 1446 ........................................................................................................8

28 U.S.C 1446(a) ............................................................................................ 3, 12

28 U.S.C. 1446(b) ...................................................................................................7

28 U.S.C. 1447(c) .................................................................................................16

42 U.S.C. 3601 ......................................................................................................13

Other Authorities

1A MOORE'S FEDERAL PRACTICE 0.167[10] (2nd Ed.1990).........................7



6/22

PRELIMINARY STATEMENT

The initial pleading in this case was filed on March 13, 2008 in the Superior

Court of New Jersey where Plaintiff Bank of New York as Trustee for the

Certificate Holders CWABS, Inc. Asset-Backed Certificates, Series 2005-AB3

(hereinafter CWABS Trustee) filed a two-count foreclosure action based entirely

on state law claims against the Ukpe Defendants. This residential mortgage

foreclosure complaint and all counter-claims and third-party claims, including

those against third party Defendants Americas Wholesale Lender, Countrywide

Home Loan Servicing LP, and Countrywide Home Loans, Inc. (collectively the

Countrywide Third-Party Defendants) should be remanded to State Court. This

foreclosure case is not removable because it does not arise under federal law

pursuant to 28 U.S.C. 1441. The well-pleaded complaint rule followed by a

majority of the District Courts in this Circuit and elsewhere around the country

requires that the federal question be presented on the face of the plaintiffs properly

pleaded complaint.

After extended motion practice and discovery in the state court civil action,

the Ukpe defendants uncovered evidence of the use of fraudulent mortgage

assignments in this case and thousands of other foreclosure cases. The Honorable

William C. Todd, P.J. Ch., Superior Court of New Jersey, scheduled a plenary

1



7/22

hearing for April 20, 2009 to get to the bottom of the matter. (A copy of Judge

Todds March 4, 2009 order is attached as Exhibit A.)

On March 30, 2009, the foreclosure Defendants, Mr. and Mrs. Ukpe,

submitted a 41-page brief addressing the plenary hearing issues in the state court

civil action. (A copy of the brief is attached as Exhibit B.) Plaintiff CWABS

Trustees answering brief was due on April 13, 2009. The Countrywide Third

Party Defendants filed their removal action on April 9, 2009.

The issues in the pending plenary hearing involve matters of great public

importance. The Countrywide Third-Party Defendants removal has thwarted the

effort to expose and remedy widespread fraud involving thousands of New Jersey

mortgage foreclosure cases. In 2008 alone, Third Party Defendant, Phelan Hallinan

& Schmieg, P.C. (PHS), handled between 24,000 to 26,000 foreclosure cases in

New Jersey and Pennsylvania. (See Certification of Abigail B. Sullivan, Esq.

attached as Exhibit O). Defendants respectfully request the Court to remand the

matter forthwith.

COUNTER-STATEMENT OF PROCEDURAL HISTORY AND FACTS

On March 13, 2008, Plaintiff CWABS Trustee filed the initial pleading in

this removal matter, a foreclosure complaint in the Chancery Division of the

Superior Court of New Jersey, seeking a determination of the amount due on a

promissory note executed by Defendants along with possession of the property

2



8/22

securing payment of the note. The foreclosure complaint is based entirely on state

law claims. No federal question claims were asserted. (A copy of the March 13,

2008 complaint is attached as Exhibit C.)

Seemingly in contravention of 28 U.S.C 1446(a), the Countrywide Third

Party Defendants did not include a copy of this initial pleading with their removal

notice. Indeed, their procedural history in the notice of removal incorrectly begins

on March 11, 2009, nearly a year after the initial foreclosure complaint was filed.

They failed to include any relevant pleadings and orders from the state case

predating the filing of an amended answer, counterclaim and third-party complaint

on March 10, 2009. (Notice of removal, 1.)

Through South Jersey Legal Services, Inc., Defendants filed an answer and

counterclaim to the foreclosure complaint on April 29, 2008 raising federal

question claims against Plaintiff CWABS Trustee. (A copy of the answer and

counterclaim is attached as Exhibit D.)

By order dated September 30, 2008, the state court granted leave for the

Ukpe defendants to file a third-party complaint. (A copy of the September 30,

2008 Order is attached as Exhibit E.) On October 23, 2008, the Ukpes filed a third

party complaint against Third Party Defendant Americas Wholesale Lender

alleging common law fraud, New Jersey Consumer Fraud Act, negligence and

contract claims. Additionally, the third party complaint alleged violations of

3



9/22

federal law involving the Real Estate Settlement Procedures Act, the Fair Housing

Act, and the Equal Credit Opportunity Act all arising out of the same common

nucleus of facts involving the mortgage loan transaction. (A copy of the October

22, 2008 third party complaint is attached as Exhibit F.)

In October 2008, Plaintiff CWABS Trustee moved for summary judgment to

strike the Ukpes answer. Judge Todd denied the Plaintiff's summary judgment

motion and directed the Ukpes to bring a Motion to Dismiss for lack of jurisdiction

pursuant to R. 4:6-2(a). Plaintiff opposed the Ukpes motion and cross-moved for

summary judgment. The Ukpes opposed the cross-motion for summary judgment

in part based upon deposition testimony showing the assignment of the Ukpes

mortgage and note to Plaintiff CWABS Trustee had been falsely notarized. At the

hearing on these cross motions, Judge Todd directed that additional discovery be

made and set in motion the procedures leading up to the Plenary Hearing scheduled

for April 20, 2009. (See Exhibit O, Certification of Abigail B. Sullivan)

In a March 4, 2009 Order, Judge Todd directed the Ukpes counsel to file an

amended Third Party Complaint by March 10, 2009 and to serve all third party

defendants by March 17, 2009. (See Exhibit A) An amended answer,

counterclaim and third party complaint was filed on March 10, 2009. Although

this was the fourth pleading filed in the case after (1) the March 13, 2008

complaint, (2) the April 29, 2008 answer and counterclaim, and (3) the October 23,

4



10/22

2008 third party complaint, it is the first pleading attached to the Countrywide

Third Party Defendants notice of removal. (A filed copy of the March 10, 2009

amended third party complaint is attached to the Countrywide Third Party

Defendants notice of removal as Exhibit G.)

On March 20, 2009, the Ukpes counsel filed the fifth pleading in the state

court civil action, a second amended answer, counterclaim and third party

complaint adding PHS as a third party defendant for violating the Fair Debt

Collection Practices Act, 15 U.S.C. 1692 et. seq. (FDCPA). (An unfiled copy

of the March 20, 2009 amended answer, counterclaim and third party complaint is

also attached to the Countrywide Third Party Defendants notice of removal as

Exhibit H.)

On March 30, 2009, Defendants filed their brief in connection with the

scheduled April 20, 2009 plenary hearing before Judge Todd. In part, Defendants

asserted, The evidence will establish a prima facie case that in connection with

recording the assignments with county clerks and filing the assignments with the

court system, PHS lawyers were involved in:

Falsifying or Tampering with Records, N.J.S.A. 2C:21-4a. Tampering with Public Records or Information (Making, Presenting or

Filing a False Document, Record or Thing), N.J.S.A. 2C:28-7a(2).

5



11/22

Tampering with Public Records or Information (False Entry or Alteration),N.J.S.A. 2C:28-7a(1).

Fraud on the court.

Consumer Fraud Act violations. Common law fraud. Violation of the Fair Debt Collection Practices Act, 15 U.S.C. 1692 et. seq.

(FDCPA).

(See Exhibit B, March 30, 2009 brief, pp. 8-9.)

On April 9, 2009, the Countrywide Third Party Defendants removed the

entire case from state court. The April 9, 2009 removal occurred almost 13

months after the initial foreclosure pleading was filed. The removal occurred

just short of one year after the Ukpe defendants filed an answer and

counterclaim against CWABS Trustee asserting federal question claims.

LEGAL ARGUMENT

I. THE COUNTRYWIDE THIRD-PARTY

DEFENDANTS REMOVAL VIOLATES THE

WELL-PLEADED COMPLAINT RULE.

The right of defendants to remove state claims to federal court is purely

statutory--such that [the Courts] removal jurisdiction exists only when authorized

by Congress. Kaye Associates v. Bd. of Chosen Freeholders of Gloucester, 757 F.

Supp. 486, 488 (D.N.J. 1991). Courts narrowly construe Section 1441 against

6



12/22

removal. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941).

See also Sun Buick, Inc. v. Saab Cars USA, Inc., 26 F.3d 1259, 1267 (3d

Cir.1994), Kaye Associates 757 F. Supp. at 488. The statutory procedures for

removal are to be strictly construed. Syngenta Crop Protection Inc. v. Henson, 537

U.S. 28, 32 (2002).

A district court has subject matter jurisdiction to hear claims

arising under the Constitution, laws, or treaties of the UnitedStates," pursuant to 28 U.S.C. 1331. A defendant may

remove a claim brought in state court to federal district courtunder 28 U.S.C. 1441(a) in cases where the United Statesdistrict courts have original jurisdiction. If the removed case

presents a separate and independent claim or cause of actionbased on federal question jurisdiction that is joined with oneor more otherwise non-removable claims or causes of action,the entire case may be removed and the district court maydetermine all issues therein, or, in its discretion, may remandall matter in which State law predominates.

28 U.S.C. 1441(c).

28 U.S.C. 1441 et seq. creates a narrow removal jurisdiction for federal

courts limited to any civil action brought in a State court of which the district

courts of the United States have original jurisdiction, . . . Congress further limited

removal jurisdiction in expressly providing: The removal of an action under this

subsection [1441] shall be made in accordance with section 1446 of this title, . . .

In turn 28 U.S.C. 1446(b) provides: The notice of removal of a civil action or

proceeding shall be filed within thirty days after the receipt by the defendant,

7



13/22

through service or otherwise, of a copy of the initial pleading setting forth the

claim for relief upon which such action or proceeding is based, . . . . (emphasis

added.) The initial pleading in the civil action brought in the Superior Court of

New Jersey is the March 13, 2008 foreclosure complaint in which the Ukpes are

the only defendants. Only the Ukpes could remove this civil action and only if

federal question jurisdiction appeared on the face of CWABS Trustees foreclosure

complaint. Congress carved out an additional, narrow removal exception

applicable only to the Ukpe defendants named in the initial pleading. If the case

stated by the initial pleading is not removable, a notice of removal may be filed

within thirty days after receipt by the defendant, through service or otherwise, of a

copy of an amended pleading, motion, order or other paper from which it may first

be ascertained that the case is one which is or has become removable, . . . 28

U.S.C. 1446 (b). (emphasis added.)

Congress did not confer removal jurisdiction on federal courts for third-party

defendants. [T]hird-party defendants are not proper parties for removal because

they are not 'defendants' under 1441(a)and/or because 1441(c)only applies to

claims joined by plaintiffs." Kaye Associates v. Board of Chosen Freeholders, 757

F. Supp. 486, 487 (D.N.J.1991) (citing 1A MOORE'S FEDERAL PRACTICE

0.167[10] (2nd Ed.1990). The Kaye court reasoned that the legislative history of

the statute shows that the section was not intended to extend the right of removal to

8

http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=1000546&DocName=28USCAS1441&FindType=L&ReferencePositionType=T&ReferencePosition=SP_8b3b0000958a4http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=1000546&DocName=28USCAS1441&FindType=L&ReferencePositionType=T&ReferencePosition=SP_4b24000003ba5http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=1000546&DocName=28USCAS1441&FindType=L&ReferencePositionType=T&ReferencePosition=SP_4b24000003ba5http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=1000546&DocName=28USCAS1441&FindType=L&ReferencePositionType=T&ReferencePosition=SP_8b3b0000958a4


14/22

third-party defendants. Id. at 489 ("Looking at that legislative history, it seems

clear that the intent of 1441(c)was to ensure that the plaintiff cannot preclude the

right to remove a removable claim through the device of joining a wholly separate

and independent non-removable claim.") (internal quotations and citation omitted).

The Kaye court held "[g]iven that intent, the policy of strict construction of

removal statutes, and the apparent conflict with other well-established principles of

removal, we cannot conclude, without more express guidance from Congress, that

section (c) [of 28 U.S.C. 1441] was intended also to expand removal jurisdiction

by allowing removal by third-party defendants." Kaye Assocs., 757 F.Supp. at 489.

Accordingly, the majority of courts within this District apply the well-

pleaded complaint rule only to the initial pleadings of the original plaintiff and thus

disallow third party defendants to remove state claims to federal court. See e.g.,

State Farm Indemnity Co. v. Fornaro, 227 F. Supp. 2d 229 (D.N.J. 2002);

FirstBank v. Gittens, 466 F. Supp. 2d 614 (D.V.I. 2006); Monmouth-Ocean

Collection Serv., Inc. v. Klor, 46 F. Supp. 2d 385, 393 (D.N.J. 1999); The minority

rule allows third party defendants to remove but only if the claims against them are

separate and independent from the main cause of action.

In order for a case to be removable under 1441 and 1331, the well-

pleaded complaint rule requires that the federal question be properly presented on

the face of the plaintiffs properly pleaded complaint." Krashna v. Oliver Realty,

9

http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=1000546&DocName=28USCAS1441&FindType=L&ReferencePositionType=T&ReferencePosition=SP_4b24000003ba5http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=1000546&DocName=28USCAS1441&FindType=Lhttp://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=345&FindType=Y&ReferencePositionType=S&SerialNum=1991047173&ReferencePosition=489http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=345&FindType=Y&ReferencePositionType=S&SerialNum=1991047173&ReferencePosition=489http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=345&FindType=Y&ReferencePositionType=S&SerialNum=1991047173&ReferencePosition=489http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=1000546&DocName=28USCAS1441&FindType=Lhttp://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=1000546&DocName=28USCAS1441&FindType=L&ReferencePositionType=T&ReferencePosition=SP_4b24000003ba5


15/22

Inc., 895 F.2d 111, 113 (3d Cir. 1990) (quoting Railway Labor Executives Ass'n

v. Pittsburgh & L.E. R.R., 858 F.2d 936, 939 (3d Cir. 1988)). See Palmer v. Univ.

of Medicine and Dentistry of N.J., 2009 U.S. Dist. Lexis 25313, 17 (D.N.J. 2009)

(quoting Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 (1987)). In Palmer v.

Univ. of Medicine and Dentistry of N.J., supra, the court held that a cross-claim

could not serve as the basis for arising under jurisdiction pursuant to Section

1441 even when the defendants cross-claim raised a federal constitutional

question. See 2009 U.S. Dist. Lexis 25313, 17, 25-27 (D.N.J. 2009).

Under the well-pleaded complaint rule as applied in Palmer, the defendants

federal First Amendment claim was insufficient for arising under jurisdiction

when the plaintiffs original claims arose under New Jerseys Conscientious

Employee Protection Act (CEPA) and common law claims for slander,

intentional infliction of emotional distress, and intentional interference with

prospective economic advantage. Id. at 25-26. Declining to expand the well-

pleaded complaint rule to cross-claims, the Palmer court emphasized that the

mere presence of a federal issue in a state cause of action does not automatically

confer federal-question jurisdiction." Id.at 26 (quoting Merrell Dow Pharm. Inc.

v. Thompson, 478 U.S. 804, 813-14 (1986)).

The courts decision in Palmer followed the weight of authority in third-

party defendant removal cases within this circuit holding that removal is reserved

10



16/22

solely for the original defendant except in the limited circumstance of a third-party

defendant removing a state claim preempted by the federal Employee Retirement

Income Security Act (ERISA). See 2009 U.S. Dist. Lexis 25313 at 16. See e.g.,

State Farm Indemnity Co. v. Fornaro, 227 F. Supp. 2d 229 (D.N.J. 2002);

FirstBank v. Gittens, 466 F. Supp. 2d 614 (D. Virgin Islands 2006); Monmouth-

Ocean Collection Serv., Inc. v. Klor, 46 F. Supp. 2d 385, 388-89 (D.N.J. 1999)

(adopting the Magistrate Judges report asserting the majority view that a third-

party defendant may not remove under 1441); Kaye Associates, 757 F. Supp. at

487-89 (D.N.J. 1991) (concluding that the better reasoned view is that third-party

defendants do not have the right to remove cases to federal courts under section

1441). See also Collins v. Baxter Healthcare Corp., 949 F. Supp. 1143 (D.N.J.

1996), for an opinion by Judge Rodriguez remanding the case to state court under

the well-pleaded complaint rule because removal was not based upon federal

claims within the plaintiffs original pleadings and because the case did not

properly come within federal jurisdiction by complete preemption.

The most recent discussion on the issue in this District is found in Chief

Judge Browns unpublished opinion in Somerset Medical Center v. Jewett, et al.,

2009 WL 792269 (D.N.J. 2009) After an extensive discussion of the majority and

minority rules, the Court decided that removal was inappropriate under either rule.

Under the majority rule, a third-party defendant is not empowered to remove.

11



17/22

Under the minority rule, the third-party defendant could not remove because the

indemnification claim against it was not a separate and independent claim. (Slip

op. p. 4.) (A copy of the decision is attached as Exhibit P.)

Application of the well-pleaded complaint rule to the present removal action

means the removal must be denied. The initial state-court mortgage foreclosure

complaint by Plaintiff CWABS Trustee against the Ukpe defendants Ukpes was

purely a state law claim based on an alleged failure to pay a promissory note

secured by a mortgage on real property. No federal question claims are present.

Finally, the Ukpe defendants have never sought removal and they never

consented to the removal in this case. Judicial construction of the phrase in 28

U.S.C. 1446(a) "defendant or defendants" has given rise to the "well-settled rule

of law - commonly known as the `rule of unanimity' - that all defendants must join

in or consent to the removal petition." Michaels v. New Jersey, 955 F. Supp. 315,

319 (D.N.J. 1996) (citing Balazik v. County of Dauphin, 44 F.3d 209, 213 (3rd Cir.

1995) (other citations omitted)).

II. THE UKPES CLAIMS AGAINST THE

COUNTRYWIDE THIRD-PARTY DEFENDANTS

ARE NOT SEPARATE AND INDEPENDENT

FROM THE CWABS TRUSTEES CLAIMS.

The third-party defendants cannot remove under the majority view of the

well-pleaded complaint rule. Even if this Court adopts the minority view, then the

Countrywide Third-Party Defendants failed to meet their burden of showing that

12



18/22

the allegations of the Ukpe Defendants regarding the fraudulent origination of the

mortgage are separate and independent from the action to foreclose.

In interpreting the scope of their removal jurisdiction, courts adopting the

minority rule within this District disallow third party defendants to remove state

claims to federal court unless the claims against them are separate and

independent from the main cause of action. See e.g., State Farm Indemnity Co. v.

Fornaro, 227 F. Supp. 2d 229 (D.N.J. 2002). The Countrywide Third-Party

Defendants fail to show how the allegations of the Ukpe Defendants regarding the

fraudulent origination of the mortgage are separate and independent from the

action to foreclose. In Associates Home Equity Services, Inc. v. Troup, 343 N.J.

Super. 254 (App. Div. 2001), the New Jersey Appellate Division ruled that

predatory lending counterclaims and third-party claimswhich included federal

discrimination housing claims under Title VIII of the Fair Housing Act, 42 U.S.C.

3601 et seq. are germane in state foreclosure actions. The Ukpes two Fair

Housing Act (FHA) and Equal Credit Opportunity Act (ECOA) claims are set

among eight other state consumer fraud and contractual issues that render the

entire case a state controversy over CWABS Trustees right to foreclose as an

assignee of the Countrywide Third-Party Defendants Americas Wholesale Lender.

13



19/22

The Ukpes FHA and ECOA third-party claims cannot be used by the

Countrywide Third-Party Defendants to bring this foreclosure action, strongly

rooted in New Jerseys property, contract, and consumer law, into federal court.

The Supreme Court held that claims are not separate and independent

where there is a single wrong to plaintiff, for which relief is sought, arising from

an interlocked series of transactions. American Fire & Casualty Co. v. Finn, 341

U.S. 6, 14, 71 S. Ct. 534, 540, 95 L. Ed. 702 (1951). If the non-removable claim is

derived from the same set of facts as the main cause of action, it is not a

separate and independent claim under Section 1441(c). See New Venture Gear,

Inc. v. Fonehouse, 982 F. Supp. 892, 893 (N.D.N.Y. 1997).

It is well-recognized that claims by third-party defendants are rarely separate

and independent from the main cause of action in removal cases. See First Natl

Bank v. Pulaski, 301 F.3d 456, 465 (6th Cir. 2002). As the Sixth Circuit Court of

Appeals stated, even in the courts holding that 1441(c) permits third-party

defendants to remove to federal court, as a general proposition, those courts have

often held that the third-party claims at issue did not satisfy the "separate and

independent" requirement of 1441(c). Id. See also New Venture Gear, Inc. v.

Fonehouse, 982 F. Supp. 892, 893 (N.D.N.Y. 1997) (holding that "a third-party

claim cannot be 'separate and independent' if it is substantially derived from the

same set of facts, or if it is contingent in some way on the plaintiff's non-removable

14



20/22

claim"); Soper v. Kahn, 568 F. Supp. 398, 405 (D. Md. 1983) (holding that third-

party claim for indemnity, under state law, was not "separate and independent"

under 1441(c)); Coleman v. A & D Mach. Co., 298 F. Supp. 234, 237 & n.9

(E.D. Cal. 1969) (holding that removal was improper because the third-party claim

was not separate and independent.)

Following the Supreme Courts standard in American Fire & Cas. Ins. Co. v.

Finn, 341 U.S. 6, 14 (1951), the Plaintiff CWABS Trustee asserted a single

wrong of nonpayment of the mortgage loan, which the Ukpes allege arises from

an interlocked series of transactions, beginning with the discriminatory subprime

mortgage given by the Countrywide Third-Party Defendants. Contrary to the

Countrywide Third-Party Defendants contention that the collection rights under

the mortgage are separate and independent from the origination and set-up of the

Ukpes loan (Notice of Removal 7), the collection rights under the mortgage are

derived from the same set of facts controlling the discriminatory and predatory

origination of the mortgage loan. New Venture Gear, Inc. v. Fonehouse, 982 F.

Supp. 892, 893 (N.D.N.Y. 1997).

III. THE UKPE DEFENDANTS REQUEST REMAND OF

THE ENTIRE CASE BECAUSE NEW JERSEY STATELAW PREDOMINATES ALL MATTERS INVOLVED.

Even if this Court elects to follow the minority rule, Defendants respectfully

request the Court to remand the entire matter forthwith. The litigation has been

15



21/22

going on for over a year and involves a foreclosure action by a securitized trust

created by the Countrywide Third Party Defendants. Evidence of the use of

fraudulent assignments in the case and thousands of other cases led the Superior

Court of New Jersey to schedule a plenary hearing to get to the bottom of the

matter. Removal of the claims would frustrate efforts to expose and remedy

widespread fraud involving thousands of mortgage foreclosure cases in New

Jersey.

IV. THE UKPE DEFENDANTS REQUEST THE COURTTO AWARD ATTORNEY FEES AND COSTS

An order remanding the case may 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). An award of counsel fees is appropriate because the

Countrywide Third-Party Defendants removal action did not comply with the

removal statutes mandate to include the initial pleading. The initial pleading

reveals on the face of the complaint that the matter is not removable if this Court

follows the majority rule. In addition, the Countrywide Third-Party Defendants

electronically filed their removal notice with this Court on April 9, 2009, they

hand-delivered it to the state court on April 9, 2009, but sent it by regular mail to

the Ukpe Defendants so their counsel did not receive it until April 13, 2009.

Because their counsel did not receive timely notice of the removal, the Ukpes

16



22/22

counsel continued to work through the Easter holiday weekend in preparation for

the plenary hearing before Judge Todd.

Accordingly, an award of attorney fees is appropriate not just for removal

work, but also for the work that was done preparing for April 20, 2009 plenary

hearing in state court because counsel did not receive prompt and appropriate

notice of the removal action. South Jersey Legal Services, Inc. (SJLS) throughits counsel Abigail B. Sullivan, Esq., is not requesting attorney fees and will not be

sharing in any fees awarded as it is a recipient of Legal Services Corporation funds

and is therefore prohibited from requesting and receiving attorney fees. Co-

counsel James F. Viller Jr., Esq., and Mark J. Malone, Esq., and Erica B. Askin,

Esq., from the Law Offices of James Viller, Jr. are not so prohibited. SJLS, in

addition, is not prohibited from requesting and receiving costs incurred.

CONCLUSION

For the foregoing reasons, the Court should remand the matter to the state

court forthwith.

Dated: April 24, 2009 Respectfully submitted,SOUTH JERSEY LEGAL SERVICES, INC.Attorney for Defendants/Third Party Plaintiffs

By: /s/ Abigail B. Sullivan, EsquireABIGAIL B. SULLIVAN, ESQUIRE

On the brief:James F. Viller Jr., Esq.Mark J. Malone, Esq.Erica B. Askin, Esq.Abigail B. Sullivan, Esq.


Documents

Motion to Remand to State Court Re Foreclosure