     Case: 13-20192      Document: 00512464700         Page: 1    Date Filed: 12/09/2013




                        REVISED December 9, 2013

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT


                                    No. 13-20192
                                  Summary Calendar
                                                                         United States Court of Appeals
                                                                                  Fifth Circuit

                                                                                FILED
                                                                        November 18, 2013
NOEL T. CONNELL,
                                                                           Lyle W. Cayce
                                                                                Clerk
                                                 Plaintiff – Appellant
v.

CITIMORTGAGE, INCORPORATED; HUGHES, WATTERS, & ASKANASE,
L.L.P.,

                                                 Defendants – Appellees




                   Appeal from the United States District Court
                        for the Southern District of Texas
                             USDC No. 4:12-CV-3265


Before REAVLEY, JONES and PRADO, Circuit Judges.
PER CURIAM:*
       Appellant Noel T. Connell filed a state court suit on the eve of
CitiMortgage, Incorporated’s (“CMI”) scheduled foreclosure of his house. He
joined Appellees CMI and Hughes, Watters, & Askanase (“HWA”), the law firm
that made demand for his nonpayment of amounts allegedly due.                                 CMI


       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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                                  No. 13-20192
removed the case to the federal district court, arguing that the law firm was
fraudulently joined in the suit, rendering irrelevant its citizenship for diversity
purposes. Borden v. Allstate Ins. Co., 589 F.3d 168, 171 (5th Cir. 2009). Soon
afterward, the district court set a pretrial conference to discuss the case.
Immediately before the conference, Connell moved to remand because the law
firm is also a Texas resident whose joinder as a defendant destroyed complete
diversity.
      During the hearing, it became clear that the court had not read and did
not take time to review the just-filed motion to remand, nor did the court follow
Appellees’ arguments.     Instead, the court characterized Connell’s suit as
arising under federal question jurisdiction, and it wrongly equated Connell’s
pleadings alleging violations of the Texas Finance Code with pleadings under
the federal Fair Debt Collection Practices Act. On this basis alone, the court
denied remand. Summary judgment was later awarded to the Appellees.
      This court has been placed at a disadvantage on appeal. Because the
issue of fraudulent joinder goes to the court’s jurisdiction, we review it de novo.
La. ex rel. Caldwell v. Allstate Ins. Co., 536 F.3d 418, 425 (5th Cir. 2008). We
cannot approve the trial court’s methodology, however, which ignored the
parties’ pleadings and arguments in favor of its own creative evaluation of the
case. We must therefore start over without the benefit of a reliable district
court ruling.
      First, the question of diversity jurisdiction is reviewed based on the
pleadings at the time of removal. Cavallini v. State Farm Mu. Auto Ins. Co.,
44 F.3d 256, 264 (5th Cir. 1995). Second, in addressing a claim of fraudulent
joinder, the question is whether there is no possibility that the plaintiff could
prevail on a claim asserted against an in-state defendant. Travis v. Irby, 326
F.3d 644, 647 (5th Cir. 2003).


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                                 No. 13-20192
      Connell acknowledges that his state court pleading asserted the wrong
section of the Texas Finance Code as the basis of a claim against the law firm,
which is not a “credit bureau.” Cf. Tex. Fin. Code § 392.201 with § 392.202.
Connell did not seek to cure this pleading defect until after Appellees’ motions
for summary judgment had been filed. His state court pleading must be the
operative pleading for analysis of diversity jurisdiction. Because Connell’s
pleading relied on an inapposite statutory provision, there was “no possibility”
that he could prevail against the law firm on this claim. There was also no
reasonable possibility that Connell would recover against the law firm under
asserted claims applying specifically to debt collectors. See Tex. Fin. Code
§§ 392.303(a)(2) and 392.304(a)(8).     The Texas Finance Code specifically
excludes “an attorney collecting a debt as an attorney on behalf of and in the
name of a client” from the meaning of debt collector, and Connell did not allege
in his pleadings that the law firm qualified as a debt collector under the two
exceptions to this exclusion.    See Tex. Fin. Code § 392.001(7). Therefore,
jurisdiction was proper in the federal court.
      The remainder of the proceeding against Connell, although short-lived,
shows no reversible error. The court did not abuse its discretion in rejecting
his amended pleading. Ballard v. Devon Energy Prod. Co., 678 F.3d 360, 364
(5th Cir. 2012). Connell had been placed on notice immediately upon the filing
of the removal that CMI claimed fraudulent joinder, and he knew the reason
was the mischaracterization of the law firm’s status under state law. Yet he
waited three months, until after the summary judgment motions and his
responses had been filed, to amend and state a different provision of the Texas
Finance Code relevant to the law firm’s conduct. The court was not required
to stop in midstream for Connell to amend his pleadings.
      Because Connell challenges only the court’s procedure and not its
substantive summary judgment ruling, we do not consider the merits of the
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ruling. The record of the hearing displays the court’s verbally articulated
reasoning in granting summary judgment; the reasoning was sufficiently clear
and connected to the Appellees’ motion that Connell is not prejudiced in any
way by the absence of a written opinion. The court did not abuse its discretion
in ruling on the record rather than by writing an opinion. See Brumley Estate
v. Iowa Beef Processors, Inc., 704 F.2d 1351, 1359 (5th Cir. 1983).
      For these reasons, the judgment against Appellant is AFFIRMED.




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