Case 4:13-cv-00338-RC-ALM Document 41 Filed 10/21/13 Page 1 of 3 PageID #: 516
**NOT FOR PRINTED PUBLICATION**
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
VICTOR H. CANTU and
JAYME L. CANTU
BANK OF AMERICA, N.A. D/B/A
BAC HOME LOANS SERVICING, LP,
FEDERAL NATIONAL MORTGAGE
ASSOCIATION A/K/A FANNIE MAE,
and GREG BERTRAND, MIKE VESTAL, §
CASE NO. 4:13cv338
Judge Clark/Judge Mazzant
RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
ORDER ADOPTING REPORT AND
Came on for consideration the report of the United States Magistrate Judge in this action, this
matter having been heretofore referred to the United States Magistrate Judge pursuant to 28 U.S.C.
§ 636. On August 20, 2013, the report of the Magistrate Judge was entered containing proposed
findings of fact and recommendations that Plaintiffs’ Motion to Abstain and to Remand [Doc. #10]
be denied [Doc. #20]. On September 3, 2013, plaintiffs filed Objections to the Report and
Recommendation of United States Magistrate Judge [Doc. #22]. On September 20, 2013, defendants
filed a response [Doc. #25]. On September 25, 2013, plaintiffs filed a reply [Doc. #27].
Plaintiffs filed their original petition in state court. On June 20, 2013, defendants Bank of
America, N.A. d/b/a BAC Home Loans Servicing, LP (“Bank of America”) and Federal National
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Mortgage Association a/k/a Fannie Mae (“Fannie Mae”) filed a Notice of Removal. Defendants
removed this case pursuant to diversity jurisdiction. Plaintiffs also sued Greg Bertrand (“Bertrand”)
and Mike Vestal (“Vestal”) as substitute trustees (collectively, “Trustees”). The Magistrate Judge
issued a report that found that there was no possibility of recovering from a substitute trustee,
making Bertrand and Vestal improperly joined.
Plaintiffs object, asserting that Bertrand and Vestal were properly joined and their presence
in this lawsuit defeats diversity jurisdiction. Plaintiffs argue that there is a reasonable probability
that they will recover on their claim against the Trustees for common law fraud. Plaintiffs concede
that the Trustees are not liable for any good faith error resulting from reliance on any information
in law or fact provided by the mortgagor or mortgagee.
Plaintiffs argue that the Trustees acted in bad faith by intentionally and recklesslesly making
false representations and assertions, which resulted in common law fraud. Plaintiffs assert that
Bertrand made a material representation through a Substitute Trustee’s Deed filed with the county
that the “Grantor conveyed the property to Trustee to secure payment of the Note.” Plaintiffs argue
that this representation is false due to the fact that Bertrand was never legally conveyed as the trustee
for the Property. Plaintiffs’ theory is based upon the allegation that Bank of America was not legally
assigned the Deed of Trust until May 30, 2013, but the Trustee appointment was filed on September
28, 2009. Plaintiffs also attack the Appointment of Substitute Trustee as fraudulent.
Defendants assert that although plaintiffs’ response attempts to introduce other allegations
of bad faith, these allegations are beyond the scope of their amended complaint and, therefore,
should not be considered for purposes of remand. The court agrees. Moreover, defendants correctly
assert that neither new example asserted by plaintiffs amounts to bad faith on the part of the Trustees,
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because plaintiffs have not alleged that the purported invalidity of the documents is due to any
conduct by the Trustees. Even if these allegations are considered, none demonstrate conduct
supporting bad faith on the part of the Trustees. The court views the addition of the Trustees as
Plaintiffs’ desire to destroy diversity jurisdiction. The court rejects this attempt. Plaintiffs allege
no facts that would support bad faith on the part of the Trustees. Plaintiffs’ conclusory statements
or speculation are not sufficient to make the Trustees properly joined.
Plaintiffs ask the court to abstain, but since the court finds that removal was proper, there is
no basis for the court to abstain in this action.
Having received the report of the United States Magistrate Judge, and considering the
objections thereto filed by plaintiffs [Doc. #22], this court is of the opinion that the findings and
conclusions of the Magistrate Judge are correct and adopts the Magistrate Judge’s report as the
findings and conclusions of the court.
It is, therefore, ORDERED that Plaintiffs’ Motion to Abstain and to Remand [Doc. #10] is
DENIED and that Greg Bertrand and Mike Vestal are DISMISSED with prejudice.