Bonner v. Newrez LLC

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
BERNARD E. BONNER, §
Plaintiff, §
§
v. § CIVIL ACTION NO. 4:24-CV-3805
§
NEWREZ LLC D/B/A SHELLPOINT §
MORTGAGE SERVICING, §
Defendant. §
MEMORANDUM AND RECOMMENDATION
Before the Court is Plaintiff’s Motion to Remand (ECF 46) and Defendant’s
Response (ECF 50). Having considered the parties’ submissions and the law, the
Court recommends that Plaintiff’s Motion to Remand be DENIED.
I. Background
Plaintiff owns a home at 4302 Ennis Street, Houston, Texas 77004. ECF 1-3
¶2. Defendant Shellpoint Mortgage Servicing services his mortgage loan and has
notified him he is in default on the loan. Id. ¶8. Plaintiff, proceeding pro se, initiated
this case in state court on September 26, 2024 to stop the sale of his residence at a
foreclosure sale noticed for October 1, 2024. Id. Defendant removed the case to
this federal court on October 7, 2024 on the basis of diversity jurisdiction. ECF 1.
United States District Court
Southern District of Texas
ENTERED
March 05, 2026
Nathan Ochsner, Clerk
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II. Removal/Diversity Jurisdiction
A defendant may remove a case from state court to federal court if the federal
court has jurisdiction. 28 U.S.C. § 1441(a). Federal jurisdiction is limited. Howery
v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001) (citations omitted). The party
invoking this Court’s removal jurisdiction bears the burden of establishing the
existence of federal jurisdiction. See Manguno v. Prudential Prop. & Cas. Ins. Co.,
276 F.3d 720, 723 (5th Cir. 2002) (citations omitted). Any doubt regarding the
propriety of removal should be construed strictly in favor of remand. Id.
A civil case may be removed to federal court based on diversity subject matter
jurisdiction where (1) the amount in controversy exceeds $75,000, and (2) the
controversy is between citizens of different states, meaning the citizenship of all
persons on one side of the controversy differs from that of all persons on the other
side. 28 U.S.C. § 1332(a)(1).
The citizenship of limited liability companies, for diversity jurisdiction
purposes, is determined by the citizenship of all of its members. Harvey v. Grey
Wolf Drilling Co., 542 F.3d 107, 1080 (5th Cir. 2008). As the removing party,
Defendant bears the “burden to ‘distinctly and affirmatively allege[] the citizenship
of the parties[.]’” Trafigura AG v. Enter. Prod. Operating LLC, 995 F. Supp. 2d
641, 646 (S.D. Tex. 2014) (quoting Howery v. Allstate Ins. Co., 243 F.3d 912, 919
(5th Cir. 2001)).
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III. Analysis
Plaintiff contends this case must be remanded to state court because
Defendant has not met its burden to establish (1) complete diversity or (2) the
minimum amount in controversy. See ECF 46. Both contentions are wrong.
Shellpoint has met its burden to specifically allege the citizenship of every
LLC in its chain of ownership. Settlement Funding, L.L.C. v. Rapid Settlements, Ltd.,
851 F.3d 530, 536 (5th Cir. 2017) (“A party seeking to establish diversity jurisdiction
must specifically allege the citizenship of every member of every LLC or partnership
involved in a litigation.”). Shellpoint expressly identified the citizenship of all
members of the LLC in its Notice of Removal. ECF 1 at 2. Specifically, Shellpoint
is a wholly owned subsidiary of Shellpoint Partners, LLC, which is a wholly owned
subsidiary of NRM Acquisition LLC and NRM Acquisition II, LLC. Id. Both NRM
Acquisition LLC and NRM Acquisition II LLC are wholly owned subsidiaries of
New Residential Mortgage LLC, which is a wholly owned subsidiary of Rithm
Capital Corp., a Delaware corporation with its principal place of business in New
York. Thus, Shellpoint is citizen of Delaware and New York for purposes of
diversity jurisdiction. Id. Plaintiff’s residence and domicile are in Texas and thus
he is a Texas citizen for purposes of diversity. Therefore, Shellpoint has met its
burden to plead complete diversity and Plaintiff has not contradicted those
allegations.
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Plaintiff does not deny the amount in controversy exceeds $75,000 in this case
but argues that Shellpoint’s assertion that “the value of the relief sought” exceeds
$75,000 is speculative. ECF 46 at 2. A party can meet its burden to show that the
minimum amount in controversy is met if “(1) it is apparent from the face of the
petition that the claims are likely to exceed $75,000, or, alternatively, (2) the
[removing party] sets forth ‘summary judgment type evidence’ of facts in
controversy that support a finding of the requisite amount” See Ordonez v. NewRez
LLC, No. 7:20-CV-00326, 2020 WL 7258363, at *2 (S.D. Tex. Dec. 9, 2020)
(citations omitted). In the Fifth Circuit, “when ‘a right to property is called into
question in its entirety, the value of the property controls the amount in
controversy.’” Perez v. Wells Fargo USA Holdings, Inc., No. 7:19-CV-317, 2019
WL 6687704, at *4 (S.D. Tex. Dec. 6, 2019) (citing Waller v. Prof'l Ins. Corp., 296
F.2d 545, 547-48 (5th Cir. 1961)). In addition, while the amount of the note on a
property may not reflect the property’s precise value, it “is also sufficient to satisfy
the amount in controversy requirement for diversity jurisdiction.” Id. Plaintiff took
out a loan in December 2005 in the amount of $188,800.00. ECF 38 at 15. The
Harris County Appraisal District assessed the 2024 market value of the property as
$323,320. ECF 1 at 3; ECF 1-4 at 2. Therefore, the amount in controversy in this
case exceeds $75,000.
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IV. Conclusion and Recommendation
For the reasons stated above, the Court recommends that Plaintiff’s Motion to
Remand (ECF 46) be DENIED.
The Clerk of the Court shall send copies of the memorandum and
recommendation to the respective parties, who will then have fourteen days to file
written objections, pursuant to 28 U.S.C. § 636(b)(1)(C). Failure to file written
objections within the time period provided will bar an aggrieved party from attacking
the factual findings and legal conclusions on appeal. Douglass v. United Servs. Auto.
Ass’n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc), superseded by statute on
other grounds.
Christina A. Bryan
United States Magistrate Judge
Signed on March 05, 2026, at Houston, Texas.
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