Abbington Spe, LLC v. U.S. Bank, Nat'l Ass'n, 7:16–CV–249–D

• Decision Date: 27 October 2016
• Docket Number: No. 7:16–CV–249–D,7:16–CV–249–D
• Citation: 352 F.Supp.3d 508
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: ABBINGTON SPE, LLC, Plaintiff, v. U.S. BANK, NATIONAL ASSOCIATION, et al., Defendants.

352 F.Supp.3d 508

ABBINGTON SPE, LLC, Plaintiff,

v.U.S. BANK, NATIONAL ASSOCIATION, et al., Defendants.

No. 7:16–CV–249–D

United States District Court, E.D. North Carolina, Southern Division.

Signed October 27, 2016

Jennifer N. Fountain, Isaacson Isaacson Sheridan Fountain & Leftwich LLP, Greensboro, NC, for Plaintiff.

Kiah T. Ford, IV, Parker, Poe, Adams & Bernstein, LLP, Charlotte, NC, Matthew Patrick Weiner, Parker, Poe, Adams & Bernstein, LLP, Raleigh, NC, for Defendants.

ORDER

JAMES C. DEVER III, Chief United States District Judge

On June 3, 2016, Abbington SPE, LLC ("Abbington" or "plaintiff") filed suit in Onslow County Superior Court against U.S. Bank, National Association ("U.S. Bank") and C–III Asset Management, LLC ("C–III") (collectively, "defendants") alleging various contract and tort claims under North Carolina law [D.E. 1–2] 2–19. On July 11, 2016, defendants removed Abbington's action to this court based on diversity jurisdiction [D.E. 1]. On July 18, 2016, defendants moved to dismiss Abbington's complaint under Federal Rule of Civil Procedure 12(b)(6) [D.E. 7] and filed a memorandum in support [D.E. 8]. Abbington responded in opposition to the motion to dismiss [D.E. 12], and defendants replied [D.E. 15]. On August 9, 2016, Abbington moved to remand the action to Onslow County Superior Court based on a forum-selection clause in the promissory note [D.E. 13] and filed a memorandum in support [D.E. 14]. Defendants responded in opposition to the motion to remand [D.E. 17], and Abbington replied [D.E. 18]. As explained below, the court denies Abbington's motion to remand and grants defendants' motion to dismiss.

I.

In December 2005, Abbington executed a promissory note for $17,500,000 in favor of Wells Fargo Bank, N.A. in order to purchase real property in Onslow County, North Carolina. Compl. [D.E. 1–2] ¶¶ 4–7. Defendant U.S. Bank is the successor-in-interest to that promissory note, and defendant C–III is the loan's "special servicer." Id. ¶¶ 9–10.

The promissory note contained numerous obligations. First, the note contained a "due-date provision," stating that "principal and interest shall be due and payable thereafter in equal consecutive monthly installments of $100,022.86 each beginning on February 11, 2009, and continuing on the eleventh (11th) day of each and every month" until Abbington repaid the loan. [D.E. 1–2] 25. Additionally, Abbington agreed to an "event-of-default" provision, stating that "[a]n ‘Event of Default’ shall be deemed to exist if [ ] any sum payable under this Note is not paid on or before the date such payment is due." Id. 28. When "any Event of Default exists ... interest shall accrue on the outstanding principal balance of the Note at a rate per annum equal to five percent (5.0%) plus the interest rate which would be in effect hereunder absent such Event of Default." Id. The promissory note included a separate "late-fee provision," providing that "[i]n the event that any payment is not received ... within fifteen (15) days after the date when due, then in addition to any default interest payments due hereunder, Borrower shall also pay to Lender a late charge in an amount equal to four percent (4.0%) of the amount of such overdue payment." Id.

Before June 2015, Abbington made payments on the loan on or before the 11th of each month. Compl. ¶ 17. At some point "[d]uring the term of the loan," Abbington received statements that it claims indicated that there was a "grace period in which payments could be timely received from the 11th of each month through and including the 26th of each month." Id. ¶¶ 15–16; see [D.E. 1–3] 20–23. On June 22, 2015, Abbington tendered a late payment. Compl. ¶ 18. On June 25, 2015, U.S. Bank sent Abbington a letter notifying Abbington that "[t]he Loan is in default based on the Borrower's failure to make payments as and when due," but U.S. Bank "ha[d] chosen not to exercise its rights" at that time. [D.E. 1–3] 25, 34. On June 29, 2015, Deanna Jones ("Jones"), Abbington's controller and vice president of accounting, sent an email confirming that she had spoken to "Peter at C–III Asset Management," that she was aware "[t]he grace period is basically for late fees not to be a[ssessed]," and that "standard procedure [was] to place [the] loan in default if payment is not received by the due date." Id. 32. Jones also confirmed that she knew that the "due date" was the "11th." Id.

In July, August, and September 2015, Abbington again failed to make timely payments. Compl. ¶ 19. On November 6, 2015, U.S. Bank sent a letter to Abbington "accelarat[ing] the outstanding balance of the Note and demand[ing] payment in full." [D.E. 1–3] 29–30; see Compl. ¶ 22. In response, Abbington requested multiple "payoff statements." See Compl. ¶¶ 24–39. On March 3, 2016, subject to a reservation of rights, Abbington paid $16,578,956.99, the amount defendants claimed was due in the third adjusted payoff statement. See id. ¶¶ 37–39; [D.E. 1–3] 92–96.

On June 3, 2016, Abbington filed suit against defendants in Onslow County Superior Court, alleging that defendants violated North Carolina contract and tort law. See Compl. ¶¶ 40–94. Abbington asserted the following claims: (1) breach of contract, id. ¶¶ 40–46; (2) fraudulent misrepresentation, id. ¶¶ 47–53; (3) negligent misrepresentation, id. ¶¶ 54–61; (4) breach of the duty of good faith and fair dealing, id. ¶¶ 62–70; (5) "declaratory judgment determining estoppel and violation of N.C.G.S. § 45–36.7," id. ¶¶ 71–81; (6) unfair and deceptive trade practices in violation of North Carolina's Unfair and Deceptive Trade Practices Act ("UDTPA"), N.C. Gen. Stat. §§ 75–1.1 –75.16, id. ¶¶ 82–85: and (7) "unenforceable penalty." Id. ¶¶ 86–94. On July 11, 2016, pursuant to 28 U.S.C. § 1441(b), defendants removed the action based on diversity jurisdiction. See [D.E. 1] 3–4. Defendants then moved to dismiss the complaint, arguing that Abbington failed to state a claim upon which relief can be granted. [D.E. 7]; see Fed. R. Civ. P. 12(b)(6). On August 9, 2016, Abbington moved to remand the action to Onslow County Superior Court based on the forum-selection clause in the promissory note [D.E. 13].

II.

"Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the [federal] district courts ... have original jurisdiction[ ] may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). Federal courts "construe removal statutes narrowly," and any "doubts concerning removal ... [are] resolved in favor of state court jurisdiction." Barbour v. Int'l Union, 640 F.3d 599, 613 (4th Cir. 2011). The party who removed the action must establish federal subject-matter jurisdiction. See Hoschar v. Appalachian Power Co., 739 F.3d 163, 169 (4th Cir. 2014) ; Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994).

A defendant may waive its right to remove an action to federal court via "a valid and enforceable forum selection clause that mandates a state court as the forum for a case." Weener Plastics, Inc. v. HNH Packaging, LLC, No. 5:08-CV-496-D, 2009 WL 2591291, at *5 (E.D.N.C. Aug. 19, 2009) (unpublished); see Russell Corp v. Am. Home Assur. Co., 264 F.3d 1040, 1046–47 (11th Cir. 2001) ; Foster v. Chesapeake Ins. Co., Ltd., 933 F.2d 1207, 1216–18 (3d Cir. 1991) ; The London Manhattan Co. v. CSA–Credit Sols. of Am., Inc., CA No. 2:08-cv-00465-PMD, 2008 WL 2077554, at *1–3 (D.S.C. May 9, 2008) (unpublished); Advanced Mktg. Int'l, Inc. v. Morgan, No. 5:05-cv-435-OC-10GRJ, 2006 WL 1679219, at *3 (M.D. Fla. June 14, 2006) (unpublished). The rule of unanimity requires a court to remand the entire action even if only one defendant waives the right to remove. Weener Plastics, Inc., 2009 WL 2591291, at *5–6 ; see Russell Corp., 264 F.3d at 1050 ; Ondova Ltd. Co. v. Manila Indust., Inc., Civil Action No. 3:07-CV-1812-D, 2007 WL 4104192, at *3–5 (N.D. Tex. Nov. 19, 2007) (unpublished); Advanced Mktg. Int'l, Inc., 2006 WL 1679219, at *3 ; Black & Decker (U.S.) Inc. v. Twin City Fire Ins. Co., Civil Action No. HAR 92-3352, 1993 WL 56784, at *1, 3–4 (D. Md. Feb. 9, 1993) (unpublished).

The forum-selection clause in the promissory note states:

Borrower, to the full extent permitted by law, hereby knowingly, intentionally and voluntarily, with and upon the advice of competent counsel, (A) submits to personal jurisdiction in the state where the property is located over any suit, action or proceeding by any person arising from or relating to this note, (B) agrees that any such action, suit or proceeding may be brought in any state or federal court of competent jurisdiction sitting in either the city or the county where the property is located, (C) submits to the jurisdiction of such courts, and (D) agrees that borrower will not bring any action, suit or proceeding in any other forum (but nothing herein shall affect the rights of lender to bring any action, suit or proceeding in any other forum) ....

[D.E. 1–2] 32–33. Abbington contractually limited its ability to bring suit in any court "sitting" outside Onslow County. According to Abbington, no federal court "sits" in Onslow County. Abbington then argues that because it cannot bring suit in a federal court sitting in Onslow County, defendants cannot remove any action that Abbington filed in Onslow County Superior Court. [D.E. 14] 3–7.

The court disagrees. The forum-selection clause does not address the lender's right to remove an action. See [D.E. 1–2] 32–33. Because the lender did not contractually waive its right to remove, 28 U.S.C. § 1441 governs removal. Complete diversity exists between defendants and Abbington, and the amount-in-controversy exceeds $75,000.00. Thus, defendants properly removed this action. See [D.E. 1]; 28 U.S.C. §§ 1332, 1441. Accordingly, the court denies Abbington's motion to remand.¹

III.

A motion...