# Inge v. Rock Financial Corp.

> Court of Appeals for the Sixth Circuit · February 26, 2002 · 281 F.3d 613

URL: https://www.frixlaw.com/law-library/cases/7009317

## Case

- **Full name:** LaTonya INGE, Jody Holman, on behalf of herself and all others similarly situated v. ROCK FINANCIAL CORPORATION d/b/a Rock Financial Corp. d/b/a Rock Financial d/b/a Boulder Financial d/b/a Fresh Start Loan Center, a Division of Rock Financial d/b/a Fresh Start Loan Center d/b/a MoveEasy, a Michigan Corporation
- **Court:** Court of Appeals for the Sixth Circuit
- **Decided:** February 26, 2002
- **Citations:** 281 F.3d 613; 2002 WL 269174
- **Precedential status:** Published
- **Opinion:** Dissent by Dowd
- **Judges:** Clay, Dowd, Jones
- **Cited by:** 53 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/7009317

## How later opinions describe it (automated extraction)

- reversing district court’s denial of Plaintiffs post-dismissal request to file a third amended complaint in action against lender that alleged violations of Truth in Lending Act (TILA)

## Opinion text

DOWD, District Judge,
dissenting.
I respectfully dissent from the majority’s opinion because, in my view, the case below was either improperly or untimely removed, resulting in lack of jurisdiction in the district court.
Title 28, Section 1446, outlines the procedure for removal. Subsection (b) contains two paragraphs, the first of which states that “notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, 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[.]” The second paragraph of subsection (b) states that:
[i]f 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[.] (italics added).
The Complaint in this case was filed in state court on December 18, 1998 and set forth several state law claims in five counts, 1 all based on the same factual allegations. Although the defendanf/appellee, Rock Financial Corporation (“Rock” or “defendant”), received the Summons and Complaint on March 8, 1999, a Notice of Removal was not filed until May 13, 1999. Since this was well beyond thirty days from Rock’s receipt of the “initial pleading,” the removal must have been based on some “other paper.” In fact, the Notice of Removal stated:
On April 15, 1999, plaintiffs filed and served their Response to Defendant’s Motion for Protective Order which asserted that their causes of action were based upon federal law. (See Exhibit 7 at pp. 3-4). This pleading was the first paper filed by plaintiff [sic] from which it may be ascertained that the case is one which is removable.
(R. 1 at 2, italics added). The “Exhibit 7” referenced in the notice was plaintiffs’ response to a motion for protective order filed by Rock.
Thus, a determination of whether this case was properly removed requires, first, an analysis of this “other paper” to ascertain whether it contained language that would have triggered removal, and second, a comparison of the “initial pleading” to this “other paper” to ascertain whether, in fact, there was nothing in the initial pleading which would have triggered removal. As explained more fully below, in my view, this dual analysis reveals that the district court had no jurisdiction because the removal was either improper or untimely.
In support of removal on the basis of federal question jurisdiction, the Notice of Removal made reference to “Exhibit 7,” the response of plaintiffs to Rock’s motion for protective order. In that response, plaintiffs had argued that:
... the suggestion that Plaintiffs [sic] claims are grounded solely on the unauthorized practice of law claim, is belied by a close examination of Counts 1, 4 *628 and 5 of the Complaint. Those counts, in addition to focusing on [Rock’s] unauthorized preparation of legal documents, challenge [Rock’s] charging fees for document preparation that exceed the actual costs of preparing the final legal papers as defined by Regulation X and the HUD Settlement Costs booklet promulgated pursuant to Regulation X. Thus, the Defendant’s bald assertion that this case will evaporate after the Court hears Defendant’s summary disposition motion is neither consistent with a fair reading of Plaintiffs [sic] well pleaded complaint nor is it supported by the history of the “document preparation cases” that have been filed in the Kent County Circuit Court, including the Krause case....
(R. 1, Ex. 7, at 3-4, italics added). Rock asserted that this mention of “Regulation X and the HUD Settlement Costs booklet” was its first indication that plaintiffs were stating a federal claim.
In my view, plaintiffs’ mere mention of Regulation X (which is not even applicable in this case) 2 and the HUD Settlement Costs booklet was simply not a trigger for removal. If it were, then virtually identical language in plaintiffs’ Complaint surely should also have triggered removal.
All of the counts of the Complaint were phrased in state law terms; however, Count 1 (the Michigan Consumer Protection Act claim) alleged in part as follows:
35. In the course of charging Plaintiffs and the class members a “document preparation” fee for the service of preparing final legal papers in connection with their real estate mortgage loan operations, Rock Financial violated M.C.L. § 445.903; MSA 19.418(3) of the MCPA by engaging in the following unfair, unconscionable, or deceptive methods, acts or practices:
H* H< H* H< H< H*
(d) Failing to reveal a material fact, the omission of which tends to mislead or deceive the consumer, and which fact could not reasonably be known by the consumer, in violation of Sec. 3(s), including but not limited to:
‡ ‡ ‡ H? ‡ ‡
ii. Tending to mislead or deceive the borrower about the actual expense or cost of preparing the “final legal papers,” where HUD regulations provide that the fee is to cover the cost of preparing the “final legal papers” but the bank failed to reveal the actual cost was less than that charged to the borrower.
(J.A. at 23-24, italics added). Counts 4 and 5 allege “innocent” and negligent misrepresentation with respect to the document preparation fee, although they contain no specific allegations similar to ¶ 35(d)(ii) above relating to HUD documents or regulations. The original Complaint also had several attachments, including a copy of the HUD Guide relating to “Settlement Costs.” 3
Comparing the Complaint and plaintiffs’ response to Rock’s motion for protective order, I do not believe that the language of either document was sufficient to create federal question jurisdiction. Further, if *629 the language in the later-filed response was sufficient to trigger removal, I would conclude that virtually identical triggering language was contained in the Complaint. Therefore, I believe that the removal was either improper because there never was a federal claim stated in the Complaint or untimely because the information contained in plaintiffs’ response to the motion for protective order, upon which removal was premised, was also contained in the Complaint, causing the “removal clock” to start running on March 8,1999, the date of service, and rendering the May 18, 1999 removal untimely.
On June 21, 1999, plaintiffs made essentially the same point in a motion to remand wherein they argued that “[u]nder black-letter law, citation to Regulation X in a brief, or reliance on an aspect of Federal law to support a state law claim, does not confer federal court jurisdiction.” (R. 6, ¶ 3). Plaintiffs later withdrew their motion to remand and, instead, moved for leave to amend their complaint. The district court granted the motion and, for the first time, a Truth-in-Lending (“TILA”) claim under 15 U.S.C. § 1601 , et seq., was asserted. Removal jurisdiction, however, is determined from the face of the well-pleaded complaint, Rivet v. Regions Bank of Louisiana, 522 U.S. 470, 475 , 118 S.Ct. 921 , 139 L.Ed.2d 912 (1998), not a post-removal amended complaint. Parties cannot create federal jurisdiction by personal fíat or waiver. United States v. Griffin, 303 U.S. 226, 229 , 58 S.Ct. 601 , 82 L.Ed. 764 (1938). Even if plaintiffs decided to give up the fight for remand and stay in federal court, the initially improper removal cannot be “cured” by plaintiffs’ acquiescence to federal jurisdiction where there actually is no federal claim in the “well-pleaded complaint.” Further, Fed. R.Civ.P. 12(h)(3) requires a court to dismiss the action “[wjhenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction!!]” On the face of the original Complaint, in my view and apparently in defendant’s view, there was no federal claim alleged. I do not think that plaintiffs’ response to the motion for protective order, upon which defendant based its removal, was enough to suggest a federal claim. Therefore, timely or not, there simply was no federal claim to remove.
In summary, I believe that one of two things happened here with respect to federal question jurisdiction: the district court either (1) lacked subject matter jurisdiction because no federal claim was ever alleged prior to removal; or (2) improperly failed to remand a case which had been untimely removed.
I would never reach the merits of this case relating to the pleading requirements for a TILA action. Rather, I would remand to the district court with directions to vacate all orders and remand the case to state court. I, therefore, respectfully dissent.
. The counts were: (1) Michigan Consumer Protection Act, M.C.L. § 445.901, et seq.; MSA 19.418(1), et seq.; (2) replevin; (3) unjust enrichment; (4) innocent misrepresentation; and (5) negligent misrepresentation.
. Regulation X is the shorthand name given to 24 C.F.R. Part 3500, the enabling regulations for the Real Estate Settlement Procedures Act ("RESPA”), 12 U.S.C. §§ 2601-2617 . See 24 C.F.R. § 3500.1 (“This part may be referred to as Regulation X.”). The Truth in Lending Act is 15 U.S.C. § 1601 , et seq. and is governed by Regulation Z found in 12 C.F.R. Part 226.
. This Guide discusses, inter alia, a Buyer’s Rights, which included a discussion of good faith estimates, Truth in Lending and Specific Settlement Services.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/7009317. Public record. Not legal advice.