16‐155
Knox v. Countrywide Bank.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second
Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
City of New York, on the 7th day of December, two thousand sixteen.
PRESENT: JOHN M. WALKER, JR.,
ROBERT D. SACK,
DENNY CHIN,
Circuit Judges.
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DIANA A. KNOX, PHILIP L. KNOX, JR.,
Plaintiffs‐Appellants,
v. 16‐155
COUNTRYWIDE BANK, BANK OF AMERICA N.A.,
THEIR SUCCESSORS AND ASSIGNS, OCWENS LOAN
SERVICING, LLC, THEIR SUCCESSORS AND ASSIGNS,
FEDERAL NATIONAL MORTGAGE ASSOCIATION,
MERSCORP HOLDINGS, INC., MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS, INC., ANY
AND ALL INDIVIDUAL(S)/BUSINESS(ES) UNKNOWN
TO PLAINTIFF(S) AND HAVING AN ADVERSE CLAIM
OF AN ESTATE OR INTEREST IN REAL PROPERTY OF
PLAINTIFF(S),
Defendants‐Appellees.
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FOR PLAINTIFFS‐APPELLANTS: Diana A. Knox and Philip L. Knox, Jr.,
pro se, Sea Cliff, NY.
FOR DEFENDANTS‐APPELLEES Suzanne M. Berger, Bryan Cave LLP, New
COUNTRYWIDE BANK, BANK OF York, NY.
AMERICA N.A., THEIR SUCCESSORS
AND ASSIGNS, MERSCORP
HOLDINGS, INC., MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC., ANY AND ALL
INDIVIDUAL(S)/BUSINESS(ES)
UNKNOWN TO PLAINTIFF(S) AND
HAVING AN ADVERSE CLAIM OF AN
ESTATE OR INTEREST IN REAL
PROPERTY OF PLAINTIFF(S):
FOR DEFENDANT‐APPELLEES Dustin Mansoor, Houser & Allison, APC,
OCWENS LOAN SERVICING, LLC, New York, NY.
THEIR SUCCESSORS AND ASSIGNS,
FEDERAL NATIONAL MORTGAGE
ASSOCIATION:
Appeal from a judgment and order of the United States District Court for
the Eastern District of New York (Bianco, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment and order of the district court are
AFFIRMED.
Plaintiffs‐appellants Diana A. Knox and Philip L. Knox, Jr. (the ʺKnoxesʺ),
pro se, brought this action in state court against several financial institutions, including,
inter alia, Bank of America, N.A. (ʺBANAʺ), and Countrywide Bank, FSB (ʺCWBʺ), to
quiet title to certain real property located in Sea Cliff, New York. The complaint alleges
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that fraud invalidates BANAʹs interest in the residential mortgage encumbering such
property, which BANA obtained after acquiring CWB.
Defendants removed this action to the district court based on diversity
jurisdiction. Pursuant to various motions filed by the parties, the magistrate judge
recommended granting summary judgment to defendants on the Knoxesʹ quiet title
claim and denying the Knoxesʹ motion to amend their complaint (the ʺR&Rʺ), which
sought to add a nondiverse defendant, Countrywide Home Loans (ʺCHLʺ). While the
Knoxes did not formally object to the R&R, they did file a letter requesting a pre‐motion
conference concerning subject matter jurisdiction. The district court construed the
letter as challenging its subject matter jurisdiction, and treated it as both an objection to
the R&R and a motion to reconsider the denial of the Knoxesʹ motion to remand.
On September 9, 2015, the district court adopted the R&R, rejected the
Knoxesʹ subject matter jurisdiction challenge, and dismissed all of their claims. It
entered a final judgment on September 11, 2015. The Knoxes did not file a notice of
appeal from the underlying judgment within the 30 days prescribed by Federal Rule of
Appellate Procedure 4(a)(1)(A), but did file a motion to vacate and remand on
November 9, 2015, again challenging the district courtʹs subject matter jurisdiction on the
basis that CHL ‐‐ a New York company and subsidiary of CWB ‐‐ destroyed diversity.
The district court construed that submission as a motion for reconsideration and denied
it on December 18, 2015. The Knoxes filed a notice of appeal on January 14, 2016. On
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appeal, they challenge both the underlying judgment and the denial of their motion for
reconsideration. We assume the partiesʹ familiarity with the underlying facts,
procedural history, and issues on appeal.
As a threshold matter, although the Knoxes did not file their motion for
reconsideration within 28 days of the judgment, we have jurisdiction to review the
underlying judgment. Under Federal Rule of Appellate Procedure 4(a)(4)(A)(vi), a
motion for reconsideration filed within 28 days of the judgment tolls the 30‐day deadline
to appeal. Unlike the 30‐day deadline for filing a notice of appeal, which is
jurisdictional, the 28‐day tolling deadline for filing a motion for reconsideration is a
ʺclaim‐processing ruleʺ and thus may be waived by the opposing party or equitably
excused. See Weitzner v. Cynosure, Inc., 802 F.3d 307, 311‐13 (2d Cir. 2015). Therefore, a
reconsideration motion that is filed more than 28 days after entry of judgment may toll
the time to appeal under Rule 4(a)(1)(A) if the opposing party fails to object to it as
untimely. See id. On appeal, defendants do not argue that the untimeliness of the
reconsideration motion deprives the Knoxes of the benefits of Rule 4(a)(4(A)(vi) tolling.
Consequently, defendants have waived any such argument and we have jurisdiction to
review both the denial of reconsideration and the underlying judgment. See id.
Applying principles of liberal construction, we conclude that the Knoxes
sufficiently objected to the R&R to the extent that it recommended denying their motion
for leave to amend to add CHL as a party so as to preserve the issue for appellate review.
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See United States v. Male Juvenile, 121 F.3d 34, 38‐39 (2d Cir. 1997). As noted, the Knoxes
also challenged subject matter jurisdiction in their motion for reconsideration,
contending that CHL either was a defendant or should have been added as a defendant.
We discuss each issue below.
We review questions of subject matter jurisdiction de novo, Lefkowitz v. Bank
of New York, 528 F.3d 102, 107 (2d Cir. 2007), and a district courtʹs denial of a
reconsideration motion for abuse of discretion, Stevens v. Miller, 676 F.3d 62, 67 (2d Cir.
2012). A district court has abused its discretion ʺif it based its ruling on an erroneous
view of the law or on a clearly erroneous assessment of the evidence, or rendered a
decision that cannot be located within the range of permissible decisions.ʺ Sims v. Blot,
534 F.3d 117, 132 (2d Cir. 2008) (internal citations and quotations marks omitted).
We conclude that the district court correctly determined that it had subject
matter jurisdiction over the Knoxesʹ claims. As noted, with the exception of CHL, who
was not a named defendant, the parties to this action are completely diverse and the
amount in controversy exceeds $75,000. Therefore, the district court plainly had subject
matter jurisdiction over the Knoxesʹ claims. See 28 U.S.C. § 1332(a)(1). Moreover, we
identify no error in the district courtʹs adoption of the magistrate judgeʹs
recommendation that it deny leave to amend or its denial of the reconsideration motion.
Federal Rule of Civil Procedure 21 permits a district court to dismiss claims against a
dispensable nondiverse party to preserve diversity jurisdiction. See Call Ctr. Techs., Inc.
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v. Grand Adventures Tour & Travel Pub. Corp., 635 F.3d 48, 51 (2d Cir. 2011). Here, CHL
would have been a dispensable party because, as the Knoxesʹ own brief acknowledges,
BANA, not CHL, ʺwas the responsible partyʺ because it has ʺabsorbedʺ CHL.
Appellantsʹ Br. at 12. Therefore, because the district court could have dismissed any
claim against CHL to preserve diversity jurisdiction under Rule 21, it was not error to
deny the Knoxes leave to amend or to deny their reconsideration motion. See Call Ctr.
Techs., Inc., 635 F.3d at 51.
As to the Knoxesʹ challenges to the underlying judgment, we conclude
that, by objecting to the R&R only on the basis of subject matter jurisdiction, the Knoxes
have waived appellate review of any non‐jurisdictional challenges to the dismissal of
their quiet title claim and the denial of leave to amend. See Male Juvenile, 121 F.3d at 38
(ʺWe have adopted the rule that failure to object timely to a magistrate judgeʹs report
may operate as a waiver of any further judicial review of the decision, as long as the
parties receive clear notice of the consequences of their failure to object.ʺ). Although we
may excuse waiver ʺin the interests of justice,ʺ id. at 39, we decline to do so here: The
Knoxes could not have succeeded on their claim to quiet title because, as the magistrate
judge noted, they had an outstanding mortgage obligation and amendment would have
been futile because their proposed amended complaint did not allege any facts
suggesting that their mortgage obligation was discharged. See Cuoco v. Moritsugu, 222
F.3d 99, 112 (2d Cir. 2000).
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We have considered the Knoxesʹ remaining arguments and find them to be
without merit. Accordingly, we AFFIRM the judgment and order of the district court.
FOR THE COURT:
Catherine OʹHagan Wolfe, Clerk
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