PENNYMAC LOAN SERVICES, LLC v. JOHNSON

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

PENNYMAC LOAN SERVICES, LLC, )

)

Plaintiff/ )

Counterclaim Defendant, )

)

v. ) 1:20CV175

)

BRAD JOHNSON and ELCI )

WIJAYANINGSIH, )

)

Defendants/ )

Counterclaim Plaintiff/ )

Third-Party Plaintiff, )

)

v. )

)

STANDARD GUARANTY INSURANCE CO., )

ERIKA L. SANCHEZ, EFREN )

SALDIVAR, and ASSURANT, INC., )

)

Third-Party Defendants. )

MEMORANDUM OPINION AND ORDER

OSTEEN, JR., District Judge

Presently before this court is a Motion to Remand, (Doc.

10), filed by Plaintiff Pennymac Loan Services, LLC (“Pennymac”

or “Plaintiff”). Plaintiff seeks to remand this case, including

both Pennymac’s original claim and Defendants’ counterclaim, to

the Forsyth County General Court of Justice, District Court

Division. Pro se Defendants Brad Johnson (“Johnson”) and Elci

Wijayaningsih (“Wijayaningsih”) (together “Defendants”) oppose

Plaintiff’s motion. This court will grant Plaintiff’s Motion to

Remand. Other motions remain pending and will be dismissed as

moot upon remand. (Docs. 26, 27, 29, 48, 49, 51, 52, 61, 63,

66.)

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Factual Background

Pennymac is a Delaware company that conducts business in

North Carolina. (Complaint (“Compl.”) (Doc. 4) ¶ 1.) Defendant

Brad Johnson is an individual who lives in Oak Island, Brunswick

County, North Carolina. (Id. ¶ 2.) Johnson’s domicile is in

South Carolina. (Doc. 16 ¶ 3.) Defendant Elci Wijayaningsih is

married to Johnson and lives in Oak Island. (Compl. (Doc. 4)

¶ 3; Doc. 16 ¶ 3.)

In 2008, Johnson received a Limited Warranty Deed, (Ex. A

(Doc. 4) at 8)1, for property from AmTrust Bank. (Compl. (Doc. 4)

¶ 6.) In the public registry, that land was recorded as “all of

Lots 16 and 18, Block 186, Section N-6, Long Beach (now Oak

Island), NC as shown on map recorded in Map Book 11, Page 89,

Brunswick County Registry.” (Id.) Several years later, in 2012,

Johnson received a General Warranty Deed from Homer E. Wright,

Jr. (Id. ¶ 8; Ex. B at 10-11.) That deed was recorded as

1 All citations in this Memorandum Opinion and Order to

documents filed with the court refer to the page numbers located

at the bottom right-hand corner of the documents as they appear

on CM/ECF.

covering “ALL OF LOTS 13, 15 AND 17, BLOCK 186, SECTION N-6,

LONG BEACH (now Oak Island) as per map for National Development

Corp.” (Id.)

In 2013, Johnson applied for a loan via Weststar Mortgage

(“Weststar”). (Id. ¶ 10.) Weststar ordered an appraisal of

Johnson’s property in order to settle what tract of land would

be collateral for the loan. (Id. ¶ 11.) This appraisal covered

the entire property, including the property conveyed to Johnson

in both 2008 and 2012. (Id. ¶ 12.) Johnson executed an

Instrument of Combination on June 12, 2013, in order to combine

the two separately-conveyed lots into one parcel. (Id., Ex. C at

13.) Weststar extended Defendants a loan of $335,562.00. (Doc.

11 at 4.) As security, “Defendants, as Grantors, executed and

delivered to Linear Title, as Trustee, and Mortgage Electronic

Registration Systems, Inc. (“MERS”) as nominee for the benefit

of Lender, as Grantee, a Deed of Trust” for the land. (Id.;

Compl. (Doc. 4) ¶ 17.) This Deed of Trust (“the Deed”), however,

describes only the second tract conveyed in 2012. (Compl. (Doc.

4), Ex. D at 15.) Pennymac now alleges this description was a

result of “mutual mistake, inadvertence or mistake of the

draftsman.” (Compl. (Doc. 4) ¶ 28; Doc. 11 at 4.) In 2019, MERS

subsequently assigned this Deed of Trust to Pennymac, the

present holder of the Deed of Trust. (Compl. (Doc. 4) ¶ 22.)

Pennymac brought the original complaint in this action

against Defendants seeking amendment of the Deed of Trust for

the property on 14th Street in Oak Island. Pennymac alleges that

a “mutual mistake, inadvertence or mistake of the draftsman”

resulted in an incomplete and inaccurate legal description on

the Deed of Trust conveyed to Pennymac. (Id. ¶ 28.) Pennymac

requests that “the legal description attached to the Deed of

Trust be reformed to reflect the true intentions of the

parties.” (Id. ¶ 30.)

Defendants Johnson and Wijayaningsih filed an Answer,

(Docs. 1-2, 6), and Defendant Johnson2 brought a counterclaim

against Pennymac and joined additional third-party defendants

Standard Guaranty Insurance Company, Assurant Inc., Erika L.

Sanchez, and Efren Saldivar. (Doc. 16.) Defendants’ counterclaim

brings counts under RICO, the Fair Debt Collection Practices Act

of 1970, and common law breach of contract and fraud. (Id.)

B. Procedural History

Pennymac brought its claim in Forsyth County District Court

on January 23, 2020. (Doc. 4.) Defendants Johnson and

Wijayaningsih filed an answer and original counterclaim on

2 As will be further explained, although the counterclaim

states it is brought by Johnson, Wijayaningsih is named as a

party and is at least a putative beneficiary of the counterclaim

as a “similarly situated” individual.

February 21, 2020, (Docs. 6, 16), then filed for removal to

federal court in the Middle District of North Carolina on the

same day, (Doc. 1). Pennymac filed its Motion to Remand, (Doc.

10), on March 19, 2020. On April 6, 2020, Johnson amended the

counterclaim against Pennymac. (Doc. 16.) Defendants also filed

motions for leave to file a Surreply. (Doc. 26.) Pennymac filed

a Motion to Dismiss the First Amended Counterclaim on May 27,

2020. (Doc. 29.) Defendant Johnson filed a motion to amend the

counterclaim again on September 21, 2020. (Doc. 51.)

Meanwhile, third-party Defendants Standard Guaranty

Insurance Company and Assurant, Inc., filed a Motion to Dismiss

Count I of the Counterclaim. (Doc. 27.)

II. STANDARD OF REVIEW

Courts “should dismiss a complaint for lack of subject

matter jurisdiction pursuant to Rule 12(b)(1) if the complaint

fails to allege facts upon which subject matter jurisdiction can

be based or if jurisdictional allegations in the complaint are

not true.” McLaughlin v. Safway Servs., LLC, 429 F. App’x 347,

348 (4th Cir. 2011) (per curiam) (citation omitted); Adams v.

Bain, 697 F.2d 1213, 1219 (4th Cir. 1982) (outlining two ways

lack of subject matter jurisdiction arises: failure “to allege

facts upon which subject matter jurisdiction can be based” and

when “the jurisdictional allegations of the complaint were not

true”). A challenged plaintiff “bears the burden of persuasion”

in defending subject-matter jurisdiction. Williams v. United

States, 50 F.3d 299, 304 (4th Cir. 1995).

“The burden of establishing federal jurisdiction is placed

upon the party seeking removal.” Mulcahey v. Columbia Organic

Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994). Ultimately, “[a]ny

doubts about removal must be resolved in favor of remand.” UMLIC

Consol., Inc. v. Spectrum Fin. Servs. Corp., 665 F. Supp. 2d

528, 532 (W.D.N.C. 2009); see also Shamrock Oil & Gas Corp. v.

Sheets, 313 U.S. 100, 108-09, (1941); Turner v. CTS Con-Way

Transp. Services, No. 1:98CV00624, 1999 WL 1939243, at *1

(M.D.N.C. Apr. 28, 1999). Out of “[d]ue regard for the rightful

independence of state governments . . . [federal courts must]

scrupulously confine their own jurisdiction to the precise

limits which the statute has defined.” Healy v. Ratta, 292 U.S.

263, 270 (1934). Matters can be removed to federal court only

when they could have been brought in federal court in the first

instance. See 28 U.S.C. § 1441(a). For example, federal courts

have jurisdiction over any case that implicates a question of

federal law, and such a case can therefore generally be removed

to federal court. See 28 U.S.C. § 1331.

III. ANALYSIS

A. Federal Question Jurisdiction

Johnson and Wijayaningsih first argue that this court has

federal question jurisdiction over the claim and counterclaim

under 28 U.S.C. § 1331. (Doc. 1 at 2.) Federal-question

jurisdiction exists when either (1) the right to relief arises

directly under federal law, or (2) “the case’s resolution

depends on resolution of a federal question sufficiently

substantial to arise under federal law within the meaning of 28

U.S.C. § 1331.” Ormet Corp. v. Ohio Power Co., 98 F.3d 799, 806

(4th Cir. 1996). It must be apparent from the face of the

complaint that the plaintiff’s claims cannot be resolved without

reference to federal law or to the U.S. Constitution. Franchise

Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for So. Cal.,

463 U.S. 1, 8–9 (1983).

However, the original well-pleaded complaint, as filed by

Pennymac, does not contain a federal claim or issue. (Compl.

(Doc. 4).) The complaint focuses only on a potential mistake in

the Deed of Trust, (id. ¶ 30), and requests reformation of the

deed of trust, (id. at 5-6). Defendants advocate for federal

question jurisdiction on the federal issues raised in the

counterclaim. However, the Supreme Court has made clear that a

counterclaim may not be considered to establish federal question

jurisdiction. Vaden v. Discover Bank, 556 U.S. 49, 66 (2009)

(“Under the well-pleaded complaint rule, a . . . counterclaim

. . . does not provide a key capable of opening a federal

court’s door.”); Holmes Grp., Inc. v. Vornado Air Circulation

Sys., Inc., 535 U.S. 826, 832 (2002) (declining “to transform

the longstanding well-pleaded-complaint rule into the ‘well-

pleaded-complaint–or-counterclaim rule’”). Thus, this court does

not have federal question jurisdiction over this claim or

counterclaim.

B. Diversity Jurisdiction

Defendants’ second jurisdictional basis for removal derives

from 28 U.S.C. § 1332. In order to establish diversity

jurisdiction under that statute, Defendants must show two

elements: (1) complete diversity of citizenship between

plaintiffs and defendants and (2) an amount in controversy in

excess of $75,000. 28 U.S.C. § 1332. Prior to determining

whether diversity jurisdiction exists, however, this court will

address the dispositive forum-defendant rule. The forum-

defendant rule determines whether diversity jurisdiction, even

if it exists, could serve as a proper basis for removal to

federal court.

The forum-defendant rule, contained in 28 U.S.C.

§ 1441(b)(2), provides that “[a] civil action otherwise

removable solely on the basis of the jurisdiction under section

1332(a) of this title may not be removed if any of the parties

in interest properly joined and served as defendants is a

citizen of the State in which such action is brought.” This case

qualifies as a civil action that is “otherwise removable solely

on the basis of” diversity jurisdiction, and in this instance,

Defendant Wijayaningsih is undisputedly a resident of North

Carolina, the “State in which [the] action is brought.” Id. The

only remaining question is whether Wijayaningsih was properly

joined and served.

1. Proper Joinder and Service

Both Defendants filed a motion to dismiss pursuant to Fed.

R. Civ. P. 12(b)(1) and 12(b)(6) in their Answer. (Doc. 6.) The

motion explains that there “was ineffectual service of process

upon each of the Defendants, Brad R. Johnson and Elci

Wijayaningsih.” (Id. at 1.) However, contrary to LR 7.3(a),

neither Defendant filed a brief in support of the motion to

dismiss. Both Defendants have fully participated in this

litigation; this court therefore finds, as explained hereafter,

that the motion to dismiss should be denied and both Defendants

deemed to have been properly served and joined.

Pleadings filed by pro se litigants are liberally

construed. See Hill v. Braxton, 277 F.3d 701, 707 (4th Cir.

2002). However, courts are not bound by the “legal conclusions

drawn from the facts” and need not accept as true “unwarranted

inferences, unreasonable conclusions, or arguments.” E. Shore

Markets, Inc. v. J.D. Assocs. Ltd. P’ship, 213 F.3d 175, 180

(4th Cir. 2000). Johnson contends he is the sole counterclaim

plaintiff in each of the counterclaims. (See Pl. Johnson’s

Counterclaims Under the Racketeer Influenced and Corrupt

Organizations Act Against Countercl. Defs. (“Original

Countercl.”) (Doc. 6-1) at 2; Countercl. Pl. Johnson’s Verified

First Am. Countercl. against Countercl. Defs. (“First Am.

Countercl.”) (Doc. 16) at 2; Countercl. Pl. Johnson’s Verified

Second Am. Countercl. against Countercl. Defs. (“Second Am.

Countercl.”) (Doc. 51-1) at 2.)3 Yet, Elci Wijayaningsih is

listed as a party to the counterclaims nonetheless. (Original

Countercl. (Doc. 6-1) at 5; First Am. Countercl. (Doc. 16) at 5;

Second Am. Countercl. (Doc. 51-1) at 7.) Moreover, though each

counterclaim lists Wijayaningsih as a “Party,” none explain her

standing with any specificity. (See id.)

3 The operative counterclaim pleading at the time of this

court’s analysis is the First Amended Counterclaim, (Doc. 16),

as the motion to amend has remained pending up until this time,

(Doc. 51). However, in order to demonstrate the extent of

Wijayaningsih’s simultaneous inclusion and silence, this court

will look at all three versions of the Defendant’s counterclaim

in its analysis.

Each of the counterclaims alleges some collective claim on

behalf of similarly situated individuals to Johnson, without

identifying anyone other than Wijayaningsih who could

potentially be implicated. In the original counterclaim, Johnson

alleges Plaintiff’s schemes were employed “to deprive other

persons similarly situated of money and their beneficial

interests in real property.” (Original Countercl. (Doc. 6-1) at

26.) Likewise, in subsequent counterclaims, Johnson brings class

claims on behalf of “similarly situated” individuals. (See First

Am. Countercl. (Doc. 16) at 2-3 (“Dr. Johnson seeks to recover

statutory damages for . . . other persons similarly

situated[]”); Second Am. Countercl. (Doc. 51-1) at 3 (“Defendant

Brad Johnson . . . individually, and as representative of a

class of assignee PennyMac debtors . . .”).)

Wijayaningsih is a necessary party to the action to reform

the deed of trust, see Nat’l Union Fire Ins. Co. of Pittsburgh

v. Rite Aid of S.C., Inc., 210 F.3d 246, 250 (4th Cir. 2000),

and is named as a party in each of Johnson’s counterclaims. She

is also the only known “similarly situated” individual as

referred to in Johnson’s counterclaims. Wijayaningsih has been

served with at least one of the counterclaims seeking relief on

behalf of Johnson and others, (Original Countercl. (Doc. 6-1) at

39), and has not filed any response or any objection to her

inclusion as a party. Wijayaningsih’s silence suggests that

while she may contend that she is not properly served and

joined, she is also in an obvious position to recover as a party

plaintiff in the event Johnson obtains relief on behalf of

himself and others similarly situated.

In this case, Johnson and Wijayaningsih are both fully

aware of the requirements as to removal: their own briefing

acknowledges that “§ 1446(b)(2)(B) allows each defendant ‘30

days after receipt by or service on that defendant of the

initial pleading or summons . . . to file the notice of

removal,’ whereupon ‘all defendants who have been properly

joined and served must join in or consent to the removal of the

action.’” (Defs.’ Joint Resp. in Opp’n to Pl.’s Mot. to Remand

(“Defs.’ Remand Resp.”) (Doc. 22) at 5.) Both Johnson and

Wijayaningsih joined in the notice of removal. (Doc. 1 at 7.) In

light of their argument, they both did so with the understanding

that “all defendants properly joined and served” must join in

removal. Although both Johnson and Wijayaningsih persist in

arguing that Wijayaningsih has not been “properly joined and

served,” (Defs.’ Remand Resp. (Doc. 22) at 7), they offer no

explanation as to why she joined in removal as opposed to

remaining silent or consenting to removal. (See generally id.)

Furthermore, while Wijayaningsih did not sign the

counterclaims filed by Johnson, she is listed as a party -

without objection - and is readily identifiable as a necessary

party to actions affecting the deed of trust. Under these

circumstances, this court does not disregard warranted

inferences or reasonable conclusions. The aforementioned facts

lead this court to conclude that Wijayaningsih is an intended

beneficiary of the counterclaims ostensibly asserted solely by

Johnson: she is the only known beneficiary of any recovery

Johnson might receive on behalf of a “similarly situated”

individual.

It is therefore not unreasonable for this court to conclude

that Johnson and Wijayaningsih’s failure to file a brief in

support of their motion to dismiss for lack of service of

process, (Doc. 6 at 1), as required by LR 7.3,4 is not simply an

oversight on the part of a pro se litigant. Instead, this court

concludes that the failure to submit a brief is an effort by

Wijayaningsih to indefinitely maintain a posture in this court

that she has not been served and joined, while simultaneously

4 LR 7.3(a) provides that “[a]ll motions, unless made during

a hearing or at trial, shall be in writing and shall be

accompanied by a brief except as provided in section (j) of this

rule.” LR 7.3(k) provides that “[a] motion unaccompanied by a

required brief may, in the discretion of the Court, be summarily

denied.”

maintaining a position as to Johnson’s counterclaim in order to

benefit from affirmative relief. Johnson has specifically sought

affirmative relief in this court. This court finds, pursuant to

LR 7.3(k), that Johnson and Wijayaningsih’s failure to file a

brief in support of their motion should result in denial of the

motion to dismiss. (Doc. 6.) Objections to service of process

may be waived under Fed. R. Civ. P. 12(h)(1). See also Wabash W.

Ry. v. Brow, 164 U.S. 271, 276 (1896). This court finds that

Johnson and Wijayaningsih waived any defects in service of

process when the original counterclaim was filed by Johnson and

named Wijayaningsih as a party was filed in state court, all

prior to removal to this court. (See Doc. 1-2.) The motion to

dismiss, (Doc. 6), will be denied for failing to file a brief in

this court as required. This court finds Johnson and

Wijayaningsih have been joined and served in this action. As a

result, remand is proper under 28 U.S.C. § 1441(b)(2).

2. Absurd Results

As an alternative basis for remand, this court has also

considered the “absurd result” doctrine of the forum-defendant

rule. While this court does not find that doctrine compelling

except where the outcome would be “so gross as to shock the

general moral or common sense,” Sigmon Coal Co. v. Apfel, 226

F.3d 291, 304 (4th Cir. 2000), this court finds that Defendants

should not be afforded more latitude to manipulate removal

jurisdiction than any plaintiff would be given. See,

e.g., Hughes v. Wells Fargo Bank, N.A., 617 F. App’x 261, 264

(4th Cir. 2015) (dismissing claim against defendant fraudulently

joined by plaintiff merely to prevent removal of case). Here,

both Johnson and Wijayaningsih are attempting to seek

affirmative relief by manipulating the pleadings so that

Wijayaningsih can claim improper service while Johnson

simultaneously pursues affirmative relief on her behalf.

The absurd results doctrine divides courts over whether the

forum-defendant rule should be applied literally. Phillips

Constr., LLC v. Daniels Law Firm, PLLC, 93 F. Supp. 3d 544, 550

(S.D. W. Va. 2015) (“There is a broad and growing divide among

the district courts as to whether the forum-defendant rule bars

pre-service removal based on diversity jurisdiction.”).

Typically, the Fourth Circuit requires courts to read statutory

text plainly and literally. Hillman v. I.R.S., 263 F.3d 338, 342

(4th Cir. 2001). However, there are two stated exceptions to

this Plain Meaning Rule:

The first exception applies when literal application

of the statutory language at issue produces an outcome

that is demonstrably at odds with clearly expressed

congressional intent to the contrary. Sigmon Coal Co.

v. Apfel, 226 F.3d 291, 304 (4th Cir. 2000). The

second exception implicated by the Hillmans’ argument

applies when literal application of the statutory

language at issue “results in an outcome that can

truly be characterized as absurd, i.e., that is so

gross as to shock the general moral or common sense

. . . .” Id. (internal quotation marks omitted).

Id.

Courts have split on whether, and under what circumstances,

a literal application of the forum-defendant rule would create

“absurd” results. Some courts have confined rejection of the

literal reading to instances in which all defendants are forum

defendants. See, e.g., Phillips Constr., 93 F. Supp. 3d at 556

(“[I]n cases involving only resident defendants, the forum-

defendant rule bars resident defendants from removing an action

pursuant to diversity jurisdiction before effectuation of

service.”). In the instant case, Defendant Johnson contends he

is not a citizen of North Carolina. (Original Countercl. (Doc.

6-1) ¶ 3.) However, the forum defendant actively joined in the

removal of this action, which creates a different set of

circumstances.

[P]ermitting a forum defendant to appear and seek

federal jurisdiction for an action through removal,

whilst simultaneously asserting that it cannot be

barred from removing because it has not been properly

made party to the action — through delivery of summons

and a copy of the complaint — is patently absurd.

Campbell v. Hampton Roads Bankshares, Inc., 925 F. Supp. 2d 800,

809–10 (E.D. Va. 2013). The rule from Campbell is most directly

applicable here: Campbell narrowly and “expressly limited its

analysis to situations in which the removing defendant was also

the unserved forum defendant.” Bloom v. Library Corp., 112

F. Supp. 3d 498, 505 (N.D. W. Va. 2015). The court in Campbell

read “served” to mean “actual notice and involvement in the

case,” since notice is “the effect that service has on a party.”

Campbell, 925 F. Supp. 2d at 810. The court held that “[a]

removing defendant has actual notice of the case, and has become

involved by seeking removal.” Id. This narrow exception to the

Plain Meaning Rule has been acknowledged elsewhere in this

circuit even where removal was upheld under different

circumstances. Bloom, 112 F. Supp. 3d at 505.

Nor is the purpose of diversity jurisdiction served by

interpreting the forum-defendant rule in the absurd manner

suggested by Defendants. The “protection upon which removal

based upon diversity is premised is not an issue when an out-of-

state plaintiff chooses to bring[] a suit in the state where the

defendant is a citizen.” Councell v. Homer Laughlin China Co.,

823 F. Supp. 2d 370, 379 (N.D. W. Va. 2011) (citation omitted).

This is why the forum-defendant rule exists: “federal diversity

jurisdiction is unnecessary because there is less reason to fear

state court prejudice against the defendants if one or more of

them is from the forum state.” Ada Liss Grp. v. Sara Lee Branded

Apparel, No. 1:06CV610, 2007 WL 634083, at *2 (M.D.N.C. Feb. 26,

2007).

Furthermore, there is no evidence that Pennymac added

Wijayaningsih purely to block removal. See Teamsters Local 677

Health Servs. & Ins. Plan v. Friedman, Civil Action No. CCB-18-

3868, 2019 WL 5423727, at *3 (D. Md. Oct. 23, 2019) (foregoing a

literal reading of the forum-defendant rule where “there is no

suggestion that [the plaintiffs] added the Maryland defendants

to their lawsuit to prevent removal to federal court” and “most

of the defendants . . . are Maryland citizens”). Wijayaningsih

is a direct signatory on the loan, (Compl. (Doc. 4) ¶ 16; Ex. D

at 15), and is a necessary party to the action. See Kemp v.

Funderburk, 224 N.C. 353, 355, 30 S.E. 2d 155, 157 (1944) (“[I]n

an action to reform a deed, all parties claiming an interest in

the land or any part thereof, purported to have been conveyed by

the instrument sought to be reformed, and whose interest will be

affected by the reformation of the instrument, are necessary

parties to the action.”).

Ultimately, the dispositive factor is that Defendant

Wijayaningsih joined Defendant Johnson in the motion to remove

this case to federal court. Even assuming she was not “properly

joined and served” in the traditional sense, Wijayaningsih

clearly had notice of the action by virtue of actively

participating in it. For Wijayaningsih to actively file for

removal of the case, then claim her domicile cannot be

considered for removal purposes due to lack of notice, defies

logic and the purpose of the forum-defendant rule. Since the

forum defendant herself “actively sought the removal of this

action,” this court will accept the interpretation of the forum-

defendant rule proffered by Campbell, which prevents

exploitation of the literal meaning of 28 U.S.C. § 1441(b)(2).

Campbell, 925 F. Supp. 2d at 810.

By virtue of filing an answer and for removal,

Wijayaningsih clearly had actual notice of the suit: permitting

a forum defendant to remove a case in this instance fails to

serve the anti-gamesmanship purpose of the forum defendant rule.

See Perez v. Forest Lab’ys, Inc., 902 F. Supp. 2d 1238, 1244

(E.D. Mo. 2012) (“The rationale underlying the forum defendant

rule is most clearly contravened when a forum defendant itself

removes the action before being served.”).

This court need not address whether diversity jurisdiction

exists. Any diversity jurisdiction would be an improper basis

for removal in this instance, due to the application of the

forum-defendant rule. Thus, even under this alternative basis,

this case will be remanded to Forsyth county.

C. Remand

Defendants contest whether this case is properly before the

Forsyth County court. However, a remanded case must return to

the court it was removed from: the removal statute, 28 U.S.C.

§ 1447, describes remand as an “order remanding a case to the

State court from which it was removed.” 28 U.S.C. § 1447(d). See

also Fletcher Partners, LLC v. Truist Bank, Civil No. 2:20-cv-

00775-JMG, 2020 WL 5407857, at *3 (E.D. Pa. Sept. 9, 2020);

Konold v. Superior Int’l Indus. Inc., 911 F. Supp. 2d 303, 309

(W.D. Pa. 2012). Thus, as this court does not have subject

matter jurisdiction over the case and must remand it, the action

must return to Forsyth County court.

IV. CONCLUSION

Perhaps future litigation will demonstrate that the deed of

trust should be reformed. On the other hand, future litigation

may demonstrate the deed of trust should not be reformed and

Plaintiff is entitled to some type of damage award. Regardless,

Defendants’ attempted manipulation of the removal statute by

filing federal counterclaims while simultaneously picking and

choosing which individuals would challenge service of process

has effectively converted a relatively routine state case into

an action that does not appear to reflect an effort to secure

the just, speedy, and inexpensive determination of the relevant

claims. See Fed. R. Civ. P. 1.

For the reasons set forth herein,

IT IS ORDERED that Defendants’ motion to dismiss pursuant

to Fed. R. Civ. P. 12(b) (6) and 12(b) (1), (Doc. 6), is DENIED.

IT IS FURTHER ORDERED that Plaintiff Pennymac’s Motion to

Remand, (Doc. 10), is GRANTED and that this case is hereby

REMANDED for further proceedings in the District Court of

Forsyth County, North Carolina.

IT IS FURTHER ORDERED that the Clerk of Court is directed

to send a certified copy of this Memorandum Opinion and Order to

the Clerk of District Court in Forsyth County.

IT IS FURTHER ORDERED that the remaining motions, (Docs. 26,

27, 29, 48, 49, 51, 52, 61, 63, 66), are DENIED AS MOOT.

This the 8th day of March, 2021.

□

Wy Uirm L. Blur.

Bo Ai san Osha Mt

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