Faircloth v. National Home Loan Corp., 1:01CV01140.
| Decision Date | 17 March 2003 |
| Docket Number | No. 1:01CV01140.,1:01CV01140. |
| Citation | 313 F.Supp.2d 544 |
| Court | U.S. District Court — Middle District of North Carolina |
| Parties | Pamela J. FAIRCLOTH, individually and on behalf of other similarly situated individuals, Plaintiff, v. NATIONAL HOME LOAN CORPORATION; Financial Asset Securities Corporation Mego Mortgage Home Loan Owner Trust 1997-1; the Mego Mortgage Home Loan Owner Trust 1997-2; Financial Asset Securities Corporation Mego Mortgage Home Loan Owner Trust, Series 1997-3; Financial Asset Securities Corporation Mego Mortgage Home Loan Owner Trust, Series 1997-4; Sovereign Bank; U.S. Bank National Association, N.D.; Firstplus Home Loan Trust 1996-2; Firstplus Home Loan 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; Paine Webber Real Estate Securities, Inc.; Ace Securities Corporate Home Loan Trust 1999 A; Real Time Resolutions, Inc.; PSB Lending Corporation; Indymac Mortgage Holdings f/k/a INMC Mortgage Corp.; Paladian Financial, Inc.; National Consumers Services Corp., LLC; GRMT Mortgage Loan Trust 2001-1; and U.S. Bank National Association, Defendants. |
A. Hoyt Rowell, III, Daniel Myers, Kevin Oufnac, Fred Thompson, Ness, Motley, Loadholt, Richardson & Poole, Mt. Pleasant, SC, Gary K. Shipman, William Grainger Wright, Sr., Shipman & Hodges, LLP, Wilmington, NC, Eric G. Calhoun, Lawson & Fields, P.C., Dallas, TX, for Plaintiff.
Donald Hugh Tucker, Jr., Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, Raleigh, NC, for National Home Loan Corp.
Hada V. Haulsee, Ronald R. Davis, Womble, Carlyle, Sandridge & Rice, Winston-Salem, NC, Jason Everett Moss, Wyatt, Early, Harrris & Wheeler, L.L.P., High Point, NC, for Financial Asset Securities Corp Mego Mortgage Home Loan Owner.
This matter is before the Court on Plaintiff Pamela J. Faircloth's Motion to Remand [Document # 20]. Also before the Court are Motions to Dismiss Plaintiff's original Complaint submitted by Defendant PSB Lending Corporation ("PSB Lending") [Document # 26], Defendant Sovereign Bank [Document # 28], Defendant UBS Warburg Real Estate Securities, Inc., f/k/a Paine Webber Real Estate Securities, Inc. ("UBS Warburg") [Document # 30], Defendants Financial Asset Securities Corporation Mego Mortgage Home Loan Owner Trust 1997-1, et al. ("Trust Defendants") [Document # 32], Defendant Indymac Mortgage Holdings, f/k/a INMC Mortgage Corp. ("Indymac") [Document # 34], Defendant National Home Loan ("National") [Document # 41], and Defendant Paladin Financial, Inc. ("Paladin") [Document # 46]. Additionally, Defendants Financial Asset Securities Corporation Mego Mortgage Home Loan Owner Trust 1997-1, et al., have filed a Motion to Dismiss the Claims Asserted in Plaintiff's Amended Complaint [Document # 82]. Finally, counsel for Defendant National Home Loan Corporation has filed a Motion to Withdraw as Counsel [Document # 91]. For the reasons stated herein, Plaintiff's Motion to Remand is DENIED, all outstanding Motions to Dismiss are GRANTED, and counsel for Defendant National Home Loan Corp.'s Motion to Withdraw as Counsel is DISMISSED.
Plaintiff Pamela J. Faircloth ("Plaintiff") filed this action in the General Court of Justice Superior Court Division of Durham County, North Carolina on November 26, 2001, against the following named Defendants: "National Home Loan Corporation;1 Financial Asset Securities Corporation Mego Mortgage Home Loan Owner Trust 1997-1; The Mego Mortgage Home Loan Owner Trust 1997-2; Financial Asset Securities Corporation Mego Mortgage Home Loan Owner Trust, Series 1997-3; Financial Asset Securities Corporation Mego Mortgage Home Loan Owner Trust, Series 1997-4; Sovereign Bank; U.S. Bank National Association, ND.; 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; Paine Webber Real Estate Securities, Inc.; Ace Securities Corporate Home Loan Trust 1999 A; Real Time Resolutions, Inc.; PSB Lending Corporation; Indymac Mortgage Holdings, f/k/a INMC Mortgage Corp.; Paladian2 Financial, Inc.; National Consumers Services Corp., LLC; GRMT Mortgage Loan Trust 2001-1; and U.S. Bank National Association ..." (sic) ("Defendants"). (Compl. at 1-2.)
Plaintiff brings suit individually and on behalf of other unnamed, similarly situated class members3 who are North Carolina residents, and who all received secondary mortgage loans from National secured by real property located in North Carolina. (Compl.¶¶ 1-2.) On July 8, 1997, National loaned Plaintiff a principal amount of $26,450 at an interest rate of 13.99% with a disclosed Annual Percentage Rate of 15.952% and a term of 300 months. (Compl.¶ 47.) Plaintiff's original Complaint, filed on November 26, 2001, alleges that the second mortgage loans she and Class Members received contained illegal interest rates,4 costs, and fees. (Compl.¶¶ 1-2.) Plaintiff also alleges that National engaged in unfair and deceptive acts in marketing the second mortgage loans. (Compl.¶ 3.) Aside from National Plaintiff states that each Defendant is named because it is the originator or holder of promissory notes related to the mortgage loans made by National to Plaintiff and Class Members. (Compl.¶¶ 2, 10-37.) Plaintiff asserts two claims for relief against all Defendants. First, Plaintiff alleges that Defendants violated North Carolina's Interest Statutes, N.C. Gen.Stat. § 24-1 et seq., by charging Plaintiff usurious costs and fees. (Compl.¶¶ 67-73.) Second, Plaintiff contends that Defendants violated North Carolina's Unfair and Deceptive Trade Practices Act ("UDTPA"), N.C. Gen.Stat. § 75-1 et seq., by engaging in unfair and deceptive marketing practices and by charging usurious costs and fees. (Compl.¶¶ 74-86.)
On December 31, 2001, all Defendants removed the action to this Court based on assertions of diversity jurisdiction under 28 U.S.C. § 1332 and supplemental jurisdiction under 28 U.S.C. § 1367.5 Plaintiff is a citizen of North Carolina and Defendants are corporations and trusts whose places of incorporation and/or principal places of business are outside of North Carolina. (Compl. ¶ 2; Mot. to Remand ¶¶ 5(a), 5(f).) Plaintiff contends, 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 January 28, 2002. (Mot. to Remand ¶ 5.) Thereafter, Defendants filed their Motions to Dismiss in which all Defendants allege that Plaintiff failed to state a claim upon which relief could be granted under Federal Rule of Civil Procedure 12(b)(6). Defendants Indymac and Paladin 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.
As an initial matter, the Court must address Plaintiff's argument, made in her 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. Plaintiff is a North Carolina resident 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).
The Court recently addressed this identical issue in Dash v. FirstPlus Home Loan, 1:01CV00923 in a Memorandum Opinion and Order and Judgment filed on March 6, 2003. Notably, the plaintiffs in Dash were represented by the same counsel as Plaintiff is in the instant matter. In Dash, as in the present case, the plaintiffs, on behalf of themselves and other potential class members, brought suit against a group of possible assignees of their secondary mortgage loan alleging that the defendants charged them usurious fees and interest rates and engaged in unfair and deceptive trade practices in connection with the closing of their loan.6 After the defendants removed the case to this Court, the plaintiffs filed a Motion to Remand alleging that the amount in controversy did not exceed the statutory requirement of $75,000. Because of the similarity between the facts of Dash and the facts of the present case, and in the interest of judicial economy, the Court specifically adopts the reasoning regarding the denial of Plaintiff's Motion to Remand set forth in Dash v. FirstPlus Home Loan, 1:01CV00923. For the reasons stated in Dash, namely that Defendants have demonstrated by a preponderance of the evidence that the damages requested on the face of Plaintiff's Complaint ensure that the value of the case well exceeds the requisite amount in controversy, and Plaintiff has failed to demonstrate otherwise. Consequently, Plaintiff's Motion to Remand is DENIED.
Because Plaintiff's Complaint satisfies the requirements of diversity jurisdiction7, the Court will now address Defendants' Motions to Dismiss, some of which were filed by groups of Defendants and others of which were...
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