Dish v. Firstplus Home Loan Trust 1996-2, 1:01CV00923.
| Decision Date | 06 March 2003 |
| Docket Number | No. 1:01CV00923.,1:01CV00923. |
| Citation | 248 F.Supp.2d 489 |
| Court | U.S. District Court — Middle District of North Carolina |
| Parties | Walter DASH, and wife Rosa Dash, Plaintiffs, v. FIRSTPLUS HOME LOAN TRUST 1996-2, Firstplus Home Loan Owner Trust 1996-3, Firstplus Home Loan Owner Trust 1996-4, Firstplus Home Loan Owner Trust 1997-1, Firstplus Home Loan Owner Trust 1997-2, Firstplus Home Loan Owner Trust 1997-3, Firstplus Home Loan Owner Trust 1997-4, Firstplus Home Loan Owner Trust 1998-1, Firstplus Home Loan Owner Trust 1998-2, Firstplus Home Loan Owner Trust 1998-3, Firstplus Home Loan Owner Trust 1998-4, Firstplus Home Loan Owner Trust 1998-5, German American Capital Corporation, UBS Warburg Real Estate Securities Inc., f/k/a Paine Webber Real Estate Securities, Inc., Ace Securities Corporate Home Loan Trust 1999 A, Sovereign Bank, Real Time Resolutions, Inc., U.S. Bank National Association, and U.S. Bank National Association, N.D., Defendants. |
A. Hoyt Rowell, III, Daniel Myers, Kevin Oufnac, Fred Thompson, Ness, Motley, Loadholt, Richardson & Poole, Mt. Pleasant, SC, Gary K. Shipman, Jennifer J. Slusser, William Grainger Wright, Sr., Shipman & Hodges, LLP, Wilmington, NC, Eric G. Calhoun, Lawson & Fields, PC, Dallas, TX, for Plaintiffs.
Hada V. Haulsee, Ronald R. Davis, Womble, Carlyle, Sandridge & Rice, Winston-Salem, NC, Jason Everett Moss, Wyatt, Early, Harris & Wheeler, LLP, High Point, NC, for Defendants.
Todd L. McLawhorn, David Stagman, Sheldon T. Zenner, Katten, Muchin, Zavis, Chicago, IL, Robert R. Marcus, Smith Moore, LLP, Greensboro, NC, for UBS Warburg Real Estate Securities Inc.
Larry B. Sitton, Smith, Helms, Mullis & Moore, Greensboro, NC, Roy W. Arnold, Mary J. Hackett, Thomas L. Allen, Reed Smith, LLP, Pittsburgh, PA, for Sovereign Bank.
This matter is before the Court on a Motion to Remand by Plaintiffs Walter and Rosa Dash ("Dash") [Document # 8], and Motions to Dismiss by Defendant Sovereign Bank ("Sovereign") [Document # 17], Defendant UBS Warburg Real Estate Securities, Inc., ("UBS Warburg") [Document # 19], and Defendants First-Plus Home Loan Trust 1996-2, FirstPlus Home Loan Owner Trust 1996-3, First-Plus Home Loan Owner Trust 1996-4, FirstPlus Home Loan Owner Trust 1997-1, FirstPlus Home Loan Owner Trust 1997-2, FirstPlus Home Loan Owner Trust 1997-3, FirstPlus Home Loan Owner Trust 1997^, FirstPlus Home Loan Owner Trust 1998-1, FirstPlus Home Loan Owner Trust 1998-2, FirstPlus Home Loan Owner Trust 1998-3, First-Plus Home Loan Owner Trust 1998-4, FirstPlus Home Loan Owner Trust 1998-5, German American Capital Corporation, Ace Securities Corporate Home Loan Trust 1999 A, Real Time Resolutions, Inc., U.S. Bank National Association, and U.S. Bank National Association, N.D. (collectively "Trust Defendants") [Document # 21], (Sovereign, UBS Warburg, and Trust Defendants are collectively "Defendants"), for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). Trust Defendants also allege that this Court lacks subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). For the following reasons, Plaintiffs' Motion to Remand is DENIED, Sovereign's Motion to Dismiss is GRANTED, UBS Warburg's Motion to Dismiss is GRANTED, and Trust Defendants' Motion to Dismiss is GRANTED.
1. BACKGROUND
On August 23, 1997, Plaintiffs Walter and Rosa Dash obtained a secondary mortgage loan from an originating lender1 secured by a lien on their residence. (Compl. ¶ 36.) The principal amount of the loan was $35,000, and pursuant to the terms of the agreement, the interest rate was 17.99% over a 180 month term. (Compl. ¶ 36.) The originating lender also charged Plaintiffs fees and costs totaling $4659.50 at closing, which included a general fee of $3500, an underwriting fee of $300, an administration fee of $125, a document preparation and signing fee of $125, a valuation review fee of $75, a flood certificate fee of $24.50, an attorney fee of $300, a title administration fee of $100, a title insurance fee of $70, and a recording fee of $40. (Compl. ¶¶ 37-39.)
Plaintiffs filed this putative class action in the General Court of Justice Superior Court Division of Durham County, North Carolina on September 12, 2001.2 Plaintiffs assert "upon information and belief that Defendants are the current holders or assignees of promissory notes related to second mortgage loans made to Plaintiffs and Plaintiffs' Class Members which violate North Carolina state laws. (Compl. ¶¶ 6, 40.) Count One of Plaintiffs' Complaint asserts that Defendants violated North Carolina General Statutes Chapter 24, Sections 10 and 14, when Defendants purchased second mortgage loans with interest rates, charges and fees allegedly in excess of the statutorily permitted amounts pursuant to Chapter 24, Sections 1.1 and 12, from the loan originators. (Compl. ¶ 58.) Count Two of Plaintiffs' Complaint alleges that Defendants engaged in unfair and deceptive trade practices when they "routinely charged borrowers, including Plaintiffs, inflated expenses or expenses which were not incurred in connection with the making, closing disbursing, extending, readjusting, or renewing of the second mortgage loan" in violation of Chapter 75 of the North Carolina General Statutes. (Compl. ¶ 67.)
On October 4, 2001, all Defendants removed the action to this Court based solely on assertions of diversity jurisdiction under 28 U.S.C. § 1332.3 Plaintiffs are North Carolina residents and Defendants are corporations and trusts whose places of incorporation and/or principal places of business are outside of North Carolina. (Notice of Removal ¶¶ 3-4.) Plaintiffs contend, however, that the amount in controversy does not exceed $75,000 as required by 28 U.S.C. § 1332, and consequently, filed a Motion to Remand on November 5, 2001. (Mot. to Remand ¶ 8.) On February 7, 2002, Defendant Sovereign, Defendant UBS Warburg, and all of the Trust Defendants, filed separate Motions to Dismiss alleging that Plaintiffs failed to state a claim upon which relief could be granted under Federal Rule of Civil Procedure 12(b)(6), and Trust Defendants further assert that this Court lacks subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). The arguments raised in each of these motions are substantially similar and will be dealt with by the Court together.
II. DISCUSSION
As an initial matter, the Court must address Plaintiffs' argument, made in their Motion to Remand, that Defendants improperly removed this action. Defendants removed this action on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332. Plaintiffs are all North Carolina residents while Defendants are corporations whose principal places of incorporation and/or principal places of business are outside of North Carolina. Therefore, the question for purposes of diversity jurisdiction is whether the "matter in controversy exceeds $75,000, exclusive of interest and costs." 28 U.S.C. § 1332(a). Plaintiffs argue that Defendants have not carried their burden of establishing facts that demonstrate the Court has diversity jurisdiction, that is Plaintiffs contend that Defendants have not demonstrated that Plaintiffs' Complaint asserts claims for which the amount in controversy will exceed $75,000. For this reason, Plaintiffs request that the Court remand the matter to the appropriate North Carolina court.
The gravamen of Plaintiffs' argument is that their "Complaint alleges no specific facts from which the Defendants or the Court can conclude to a reasonable probability and legal certainty that any or all of the named Plaintiffs' claims will exceed the jurisdictional amount in controversy, and Plaintiffs have specifically asserted a claim in good faith that compensatory damages shall not exceed $75,000.00." (Mem. in Supp. of Pis.' Mot. to Remand at 8.) Specifically, in their Complaint, Plaintiffs assert that they "will not have compensatory damages of Seventy-Five Thousand Dollars ($75,000.00) or greater." (Compl.f 54.) Defendants respond by arguing that "Plaintiffs cannot defeat jurisdiction by the use of allegations attempting to limit damages in the Complaint." (Resp. Br. in Opp'n to Pis.' Mot. to Remand at 11.) Defendants state that "[t]he unrebutted mathematical calculations based on the face of the Complaint establish that the amount in controversy is in excess of $75,000 ..." and, as support, they rely upon the affidavit of Vance Horner II, a Certified Public Accountant, which they submitted with the Notice of Removal.
All defendants have a statutory right to remove any civil action brought in state court over which "the district courts of the United States have original jurisdiction ...." 28 U.S.C. § 1441(a); Davis v. North Carolina Dep't of Corr., 48 F.3d 134, 138 (4th Cir.1995). However, because of inherent federalism concerns, federal courts construe removal jurisdiction quite strictly. Mulcahey v. Columbia Organic Chems. Co., Inc., 29 F.3d 148, 151 (4th Cir.1994). "Due regard for the rightful independence of state governments ... requires that [federal courts] scrupulously confine their own jurisdiction to the precise limits which the [removal] statute has defined." Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 109, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941) (citations omitted). If it appears that there is a defect in the removal of the action, a party can make a motion to remand the case to state court, provided that such a motion comes "within 30 days after the filing of the notice of removal ...." 28 U.S.C. § 1447(c). The party seeking to preserve the removal then bears the burden of establishing federal jurisdiction. Mulcahey, 29 F.3d at 151; McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780,...
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