• June 2, 2015

Motion_yo-yoIn late 2013, David and Tiffany Gallagher sued U.S. Bank in Rice County District Court to stop the foreclosure on their home. U.S. Bank was able to remove the case to federal court based on federal diversity jurisdiction. Then U.S. Bank was able to have the case thrown out of court.

In the mean time, the Gallaghers had filed a “notice of lis pendens” with the Rice County recorders office. In English, this is a notice to the world that a piece of real property is the subject to pending litigation. It is difficult to sell property when it is subject to such a notice.

(Don’t get any funny ideas. If you record a notice of lis pendens just to mess with someone, you’ll be a juicy target for a lawsuit for “slander of title”).

So, having won dismissal of the Gallagher’s lawsuit, U.S. Bank headed back into the federal court to have the Gallagher’s notice of lis pendens “discharged” (essentially removed from the record of the property). See any problem(s) with that?

The federal court is not where you go to deal with notices of lis pendens and there is an insufficient basis for federal diversity jurisdiction because the jurisdictional minimum of $75,000 in dispute is absent. (Thus, the yo-yo diagram, showing the state-federal-state court required round-trip.)

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