# Carpenter, Administrator of the Estate of Daniel N. Grimes v. Secretary of Housing and Urban Development

> District Court, S.D. Ohio · May 2, 2024

URL: https://www.frixlaw.com/law-library/cases/10384565

## Case

- **Court:** District Court, S.D. Ohio
- **Decided:** May 2, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Patrick Carpenter, Administrator
of the Estate of Daniel N. Grimes,
Plaintiff, Case No. 2:23-cv-3885
Vv. Judge Michael H. Watson
Secretary of Housing and Urban Magistrate Judge Jolson
Development, et ai/.,
Defendants.

OPINION AND ORDER
The Secretary of Housing and Urban Development (the “Secretary’)
moves to dismiss Patrick Carpenter's, Administrator of the Estate of Daniel N.
Grimes’s (“Plaintiff’) Complaint. ECF No. 4. For the following reasons, the
motion is GRANTED.
I. FACTS
Daniel N. Grimes passed away in September 2019. Compl., ECF No. 3,
PAGEID #67. At the time of his death, Mr. Grimes owned real property located
in Licking County, Ohio, at 1815 Hallie Lane Road, Granville, Ohio 43023 (the
“Property’). /d. HUD holds the primary mortgage on the Property, a home equity
conversion mortgage (also known as a reverse mortgage), by way of
assignment. See Resp. 1-2, ECF No. 7.

In 2019, HUD sent a condolence letter to Grimes’ estate (“Estate”), setting
forth the balance due on the mortgage and the Estate’s options for satisfying the

same. HUD’s Notice 1-2, ECF No. 13. When no response was received, HUD
later issued a notice of intent to foreclose, pursuant to 24 C.F.R § 206.125(a)(2).
Id. at2. Again, HUD received no response. /d.
In 2021, after a delay due to the COVID-19 foreclosure moratorium, HUD
referred the case to the foreclosure commissioner to proceed with foreclosure.
See id.; see also Plaintiffs Notice 3, ECF No. 16 (“The Referral was
subsequently recorded in the Office of the Licking County Recorder on
November 15, 2022[.]”).
In July 2023, Plaintiff opened an estate administration case for Grimes in
the Licking County Probate Court, and Plaintiff was appointed as the
administrator of the estate. Compl., ECF No. 3, PAGEID # 67. Plaintiff then
brought this land sale action, seeking to sell the Property under Ohio Revised
Code § 2127.02, free and clear of all liens (the “Land Sale Action”). /d. PAGEID
# 67-68. Plaintiff also requested permission to pay the costs of administering the
sale, his fiduciary commission, and attorney's fees, all from the proceeds of the
sale. /d. PAGEID # 69.
The Secretary removed the Land Sale Action to this Court pursuant to 28
U.S.C. §§ 1442(a)(1) and 1444. See Notice of Removal, ECF No. 1,
PAGEID # 2-3. The Secretary represents that HUD has initiated a nonjudicial
foreclosure. See id. PAGEID # 2 (“HUD has initiated foreclosure proceedings.”);

Case No. 2:23-cv-3885 Page 2 of 9

HUD’s Notice 2, ECF No. 13 (“HUD recently issued the Notice of Default and
Foreclosure Sale Legal Notice[.]’).1 The Secretary now moves to dismiss the
claims against HUD on the grounds of sovereign immunity and because the
Single Family Mortgage Foreclosure Act preempts state probate law.
For the reasons explained below, the Court finds HUD has not waived
sovereign immunity, and, therefore, the Court cannot address preemption.
ll. © STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(1) provides for dismissal for lack of
subject matter jurisdiction. Without subject matter jurisdiction, a federal court
lacks authority to hear a case. Lightfoot v. Cendant Mortg. Corp., 580 U.S. 82,
91 (2017) (citation omitted). “Motions to dismiss for lack of subject matter
jurisdiction fall into two general categories: facial attacks and factual attacks.”
United States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994). A facial attack under
Rule 12(b)(1) “is a challenge to the sufficiency of the pleading itself,” and the trial
court therefore takes the allegations of the complaint as true. /d. (citation
omitted). To survive a facial attack, the complaint must contain a “short and plain
statement of the grounds” for jurisdiction. Rote v. Zel Custom Mfg. LLC, 816
F.3d 383, 387 (6th Cir. 2016) (internal quotation marks and citations omitted).

1 The nonjudicial forclosure of the mortgage is “commence[d]’ when the foreclosure
commissioner serves “a notice of default and foreclosure sale in accordance with
sections 3757 and 3758 of this title.” 12 U.S.C. § 3756. The Court notes that the
Secretary has not stated the day on which the foreclosure commissioner served the
notice of default and foreclosure sale. The Court presumes that the nonjudicial
foreclosure commenced after Plaintiff brought the Land Sale Action.

Case No. 2:23-cv-3885 Page 3 of 9

A factual attack is a “challenge to the factual existence of subject matter
jurisdiction.” Ritchie, 15 F.3d at 598. No “presumptive truthfulness applies to the
factual allegations[.]’ /d. (citation omitted). When examining a factual attack
under Rule 12(b)(1), “the court can actually weigh evidence to confirm the
existence of the factual predicates for subject-matter jurisdiction.” Glob. Tech.,
Inc. v. Yubei (XinXiang) Power Steering Sys. Co., 807 F.3d 806, 810 (6th Cir.
2015) (internal quotation marks and citation omitted).
HUD does not specify whether it brings a facial or a factual attack on the
Court's subject matter jurisdiction. See generally, Mot., ECF No. 4. Here, the
Court need not consider any evidence offered by the parties beyond the
Complaint to dispose of the Motion to Dismiss. Accordingly, the Court treats this

as a facial attack.
lll. ANALYSIS
The Secretary moves to dismiss Plaintiffs Complaint for lack of subject
matter jurisdiction because sovereign immunity bars Plaintiffs suit. Mot., ECF
No. 4.
“The doctrine of sovereign immunity removes subject matter jurisdiction in
lawsuits against the United States unless the government has consented to suit.”
Beamon v. Brown, 125 F.3d 965, 967 (6th Cir. 1997). The United States
includes federal agencies. Fed. Hous. Admin. v. Burr, 309 U.S. 242, 244 (1940).
“A waiver of the Federal Government’s sovereign immunity must be
unequivocally expressed in statutory text.” Lane v. Pena, 518 U.S. 187, 192

Case No. 2:23-cv-3885 Page 4 of 9

(1996) (cleaned up). Courts generally construe a waiver of sovereign immunity
narrowly. See Hunter v. United States, 769 F. App’x 329, 331 (6th Cir. 2019).
The burden is on Plaintiff to show sovereign immunity has been waived. /d.
Relevant here, 28 U.S.C. § 2410(a) provides a limited statutory waiver as
follows:
[T]he United States may be named a party in any civil action or suit in
any district court, or in any State court having jurisdiction of the subject
matter--
(1) to quiet title to,
(2) to foreclose a mortgage or other lien upon,
(3) to partition,
(4) to condemn, or
(5) of interpleader or in the nature of interpleader with respect to,
real or personal property on which the United States has or claims a
mortgage or other lien.
(the “Statute”). Thus, if Plaintiff shows this action falls within the scope of the
Statute, then sovereign immunity is waived, and the Court has subject matter
jurisdiction over this suit.
As an initial matter, Plaintiff argues that § 2410 does not require the suit be

one of the five types listed in subsections (a)(1}(5). See Resp. 7-8, ECF No. 7.
Plaintiff instead argues § 2410 encompasses any action involving real property in
which the United States holds an interest, so long as the court in which the action
is commenced has jurisdiction over the enumerated types of cases. /d.

Case No. 2:23-cv-3885 Page 5 of 9

Plaintiff's argument is unavailing. The Statute requires that the civil action

or suit for which waiver is claimed must be one of the types listed in subsections
(a)(1}1{(5). See, e.g., Pollack v. United States, 819 F.2d 144, 145-46 (6th Cir.
1987) (analyzing whether the action could be characterized as “a suit to quite title

so as to fall within the limited waiver of sovereign immunity provided by 28 U.S.C.
§ 2410” (emphasis added)). Not only has the Sixth Circuit Court of Appeals
implicitly so held, but also the principles of statutory interpretation demand that
result. Plaintiff's reading would impermissibly broaden the scope of the waiver.
See Hunter, 769 F. App’x at 332 (declining to adopt Hunter’s broader
interpretation of § 2410 because “courts should interpret Congress's waiver of
sovereign immunity narrowly”). Therefore, in order for the Statute to apply and
waive sovereign immunity, the Land Sale Action must be one of the listed types.
Accordingly, the Court must next decide whether the Land Sale Action falls
into one of the five categories. Plaintiff argues that this is a suit “to quiet title.”2
See Plaintiffs Notice 13-14, ECF No. 16. Therefore, the Court must decide
whether this is a suit “to quiet title” within the meaning of the Statute.
The Sixth Circuit has yet to take a position on the meaning of “quiet title” in
§ 2410, but it has laid out two possible interpretations. Hunter v. United States,
769 F. App’x 329, 331 (6th Cir. 2019). “Some courts have read the words ‘quiet

2 Because it is Plaintiffs burden to show waiver, and Plaintiff has not argued this is a “to
foreclose a mortgage or other lien upon,” “to partition,” “to condemn, or” “of interpleader
or in the nature of interpleader[,]’ the Court will not address whether this is a suit under
§ 2410(a)(2)-(5). See generally Resp., ECF No. 7; Plaintiffs Notice, ECF No. 16.

Case No. 2:23-cv-3885 Page 6 of 9

title’ narrowly” such that “Congress waived immunity only over disputes about”
who holds title to property. /d. (citing cases). “[O]ther courts have interpreted
Congress’s waiver more broadly, saying that quiet title actions can also seek to

remove a cloud over already established title.” /d. (cleaned up; emphasis in
original); see also Nationstar Mortg., LLC v. Humphrey, No. 11-2185-STA, 2011
WL 3273077, at *4 (W.D. Tenn. July 29, 2011) (finding § 2410(a)(1) waives
sovereign immunity with respect to “claims to adjudicate lien priority” (citing
cases)).
Here, the Land Sale Action is not a suit “to quiet title” under either
interpretation. Under the narrow interpretation, Plaintiff does not bring a quiet
title action because the Complaint does not raise any dispute over title to the
property. The primary relief Plaintiff seeks out of the Land Sale Action is the
authority to sell the property. See generally Compl., ECF No. 3; Resp. 9, ECF
No. 7 (“The entire focus of the Land Sale Action is to sell the [Property] and
utilize the sale proceeds to pay off creditors.”). Plaintiff also seeks an order
confirming the sale, extinguishing all liens (so that the sale may be made free
and clear), and determining distribution of the sale proceeds in accordance with
Ohio law. These requests do not require the Court to resolve a dispute over who
holds title, and the Land Sale Action is therefore not a quiet title action under the

narrow interpretation.
Even under the broader interpretation, the Land Sale Action is not a suit to
quiet title. First, it is not a suit to challenge the procedural regularity of HUD’s

Case No. 2:23-cv-3885 Page 7 of 9

lien. See Pollack, 819 F.2d at 145 (holding that suits to challenge the procedural
regularity of the Government's lien are actions to quiet title under § 2410).
Indeed, Plaintiff provides no basis for challenging the existence, validity, or
amount of HUD’s mortgage. See generally Compl., ECF No. 3. Second, it is not

a suit to determine lien priority, as Plaintiff likewise provides no basis to dispute
HUD’s lien priority. /d. Instead, Plaintiff seeks to extinguish HUD'’s mortgage,
selling the property free and clear, and then determine lien priority for purposes
of distributing the sale proceeds. The Statute does not provide for waiver of
sovereign immunity in a suit to sell property free and clear of the government's
lien. See Estate of Green, No. 20 C 6608, 2021 WL 185081, at *2 (N.D. Ill. Jan.
19, 2021) (“There is no provision in Section 2410 that indicates that a party can
first sell a property free and clear of a government lien, and then quiet title to the
proceeds.” (cleaned up)). Accordingly, the Land Sale Action is not a suit “to quiet
title” under the Statute.
Plaintiff counters that if the Statute does not waive sovereign immunity with
respect to the Land Sale Action, then in circumstances in which HUD took no
foreclosure action and refused to consent to sale, an administrator of an
insolvent estate would have no way of disposing of the property and paying the
estate debts. See Plaintiffs Notice 14-15. Plaintiff argues that is precisely the
type of situation § 2410 was intended to remedy when Congress added the
words “quiet title” to the Statute. /d.

Case No. 2:23-cv-3885 Page 8 of 9

But an administrator in such circumstances would have other options. For
example, an adminstrator could seek to sell the property subject to HUD'’s lien.
See Pennant Mgmt., Inc. v. First Farmers Fin., LLC, No. 14-CV-7581, 2015 WL
4511337, at *3 (N.D. Ill. July 24, 2015); see also Mot. 8, ECF No. 4.
Alternatively, an administrator could seek to sell the property in accordance with
the requirements laid out in the Code of Federal Regulations § 206.125(c) for
selling the property when a home equity conversion mortgage is due and
payable. See HUD’s Notice 3, ECF No. 15. Accordingly, Plaintiffs argument is
unpersuasive.
Plaintiff points to no other statute waiving sovereign immunity in an action
brought by an administrator to sell the property free and clear of all liens, nor is
the Court independently aware of any. Accordingly, because Plaintiff has not
met his burden of demonstrating waiver of sovereign immunity, the Court lacks
subject matter jurisdiction.
IV. CONCLUSION
The Secretary's motion is GRANTED and the claims against the Secretary
are DISMISSED WITHOUT PREJUDICE. The case is REMANDED to the
Licking County Probate Court.
IT IS SO ORDERED. : | | Non
MICHAEL H. WA N, JUDGE
UNITED STATES DISTRICT COURT

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10384565. Public record. Not legal advice.