Henderson v. Truist Bank
| Decision Date | 05 December 2022 |
| Docket Number | Civil Action 1:22-cv-00341 (RDA/JFA) |
| Parties | KIM F. HENDERSON, Plaintiff, v. TRUIST BANK & MICHAEL R. COGAN, P.C., Defendants. |
| Court | U.S. District Court — Eastern District of Virginia |
This matter comes before the Court on Truist Bank f/k/a SunTrust Bank and Michael R. Cogan, P.C.'s (collectively “Defendants”) Motion to Dismiss. Dkt. 5. Plaintiff Kim F. Henderson (“Plaintiff”), who is proceeding pro se, has been afforded the opportunity to file responsive materials pursuant to Roseboro v Garrison, 528 F.2d 309 (4th Cir. 1975) and has responded. The Court has dispensed with oral argument as it would not aid in the decisional process. Fed.R.Civ.P. 78(b); Local Civil Rule 7(J). This matter has been fully briefed and is now ripe for disposition. Considering the Motion together with Defendants' Memorandum in Support, Dkt. 5-1; Plaintiff's Responses, Dkt. Nos. 7, 9; and Defendants' Reply, Dkt. 10; it is hereby ORDERED that Defendants' Motion to Dismiss is GRANTED for the reasons stated in this Court's opinion.
In 2017, Plaintiff received an adverse judgment in favor of Truist Bank's (“Truist”) predecessor, SunTrust Bank, for Plaintiff's failure to make debt payments. Dkt. 1-1 ¶ 1. The judgment awarded SunTrust Bank $690,497.75, plus attorneys' fees of $103,574.66 and costs of $358.00. Id.. The judgment resulted in a lien levied on Plaintiff's current home. Id. ¶¶ 10-11. $153,754.13 from a foreclosure sale of Plaintiff's former residence was awarded to SunTrust Bank in partial satisfaction of the judgment. Id. ¶ 2.
Plaintiff owed SunTrust Bank's successor, Truist, a principal balance of $536,743.62 and a total of $640,676.28 when including attorneys' fees and costs. He owned his home subject to a judgment lien in security of this debt. Michael R. Cogan, P.C. (“Cogan”)[2]served as Truist's counsel and the point of contact between Truist and Plaintiff. Id. ¶¶ 10-11.
In 2020, Truist issued Plaintiff an IRS Form 1099-C, discharging Plaintiff's debt in the amount of $536,743.62, pursuant to an event code “G.” Id. ¶¶ 3, 37. Event code “G” corresponded to Truist's “decision or . . . policy . . . to discontinue collection[.]” Id. ¶ 37. Form 1099-C directed Plaintiff to contact his creditors if he disagreed with the amount on the form. Id. ¶ 5. Plaintiff “agreed” with the information on the form. Id. ¶ 24.
In December 2021, Plaintiff, believing his debt to be cancelled, entered a contract to sell his home for $640,000.00. Id. ¶ 7. But the judgement lien on his home prevented Plaintiff from completing the sale. Id. ¶ 11. RGS Title LLC, on behalf of Plaintiff, emailed Cogan to request the status of the judgment and a release of the lien. Id. ¶¶ 9-10. In January 2022, Plaintiff emailed Cogan to ask if the judgment would be released. Id. ¶ 11. Cogan replied that Truist “is in the process of issuing a corrected 1099 for 2020 which will reverse the forgiven debt.” Id. ¶ 12.
Through Cogan, Truist then issued Plaintiff a second Form 1099-C with the same date as the first (December 18, 2020), but with a discharge amount of $0.00. Id. ¶¶ 12, 13, 18. Plaintiff replied that he did not agree with the corrected form. Id. ¶ 14. Cogan provided Plaintiff with a payoff statement indicating a balance of $640,676.28. Id. ¶¶ 9, 19. Shortly thereafter, Plaintiff terminated the sale of his home. Id. ¶ 33. In February 2022, Plaintiff filed suit claiming breach of contract, bad faith, and fraud. Id. at 2. Plaintiff has prayed for $640,000.00 in damages and did not request a jury trial. Dkt. 1-3.
On March 7, 2022, Plaintiff filed a pro se Complaint against Defendants in the Circuit Court of Fairfax County, alleging breach of contract, bad faith, and fraud. Dkt. 1-1 at 2. Defendants filed a Notice of Removal on March 28, 2022. Dkt. 1. Defendants moved to dismiss Plaintiff's Complaint for failure to state a claim on April 8, 2022. Dkt. 5; Dkt. 5-1 at 2-4. Counsel for Defendants advised Plaintiff of his rights in accordance with Local Civil Rule 7(K) and Roseboro. Dkt. 5. Plaintiff opposed both removal of the action and Defendants' Motion to Dismiss on April 14, 2022. Dkt. 7. Plaintiff also responded to Defendants' Memorandum in support of the Motion to Dismiss on April 20, 2022. Dkt. 9. Defendants filed their replies on April 20, 2022. Dkt. Nos. 10, 11.
A Rule 12(b)(6) motion tests the sufficiency of a complaint. Brockington v. Boykins, 637 F.3d 503, 506 (4th Cir. 2011). “[T]he reviewing court must determine whether the complaint alleges sufficient facts ‘to raise a right to relief above the speculative level[,]'” and dismissal is appropriate only if the well-pleaded facts in the complaint “state a claim that is plausible on its face.” Goldfarb v. Mayor & City Council of Baltimore, 791 F.3d 500, 508 (4th Cir. 2015) (quoting Twombly, 550 U.S. at 555, 570). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).
At the motion-to-dismiss stage, a plaintiff need only “allege facts sufficient to state all the elements of [his] claim,” Bass v. E.I. DuPont de Nemours & Co., 324 F.3d 761, 765 (4th Cir. 2003), and “the district court must ‘accept as true all well-pled facts in the complaint and construe them in the light most favorable to [the plaintiff].'” Dao v. Faustin, 402 F.Supp.3d 308, 315 (E.D. Va. 2019) (quoting United States v. Triple Canopy, Inc., 775 F.3d 628, 632 n.1 (4th Cir. 2015)). Still, “[c]onclusory allegations regarding the legal effect of the facts alleged” need not be accepted. Labram v. Havel, 43 F.3d 918, 921 (4th Cir. 1995); see also E. Shore Mkts., Inc. v. J.D. Assoc. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000) ( ).
Mindful that Plaintiff is proceeding pro se, this Court liberally construes his filings. Jackson v. Lightsey, 775 F.3d 170, 177 (4th Cir. 2014). That a pro se complaint should be liberally construed neither excuses a pro se plaintiff of his obligation to “clear the modest hurdle of stating a plausible claim” nor transforms the court into his advocate. Green v. Sessions, No. 1:17-cv-1365, 2018 WL 2025299, at *8 (E.D. Va. May 1, 2018), aff'd, 744 Fed.Appx. 802 (4th Cir. 2018).
Plaintiff challenges removal of this action. Dkt. 7. While the precise legal grounds for Plaintiff's challenge are unclear, Plaintiff notes that: (1) Defendants filed a Notice of Removal before proper service of the original complaint, and (2) Truist had over 260 branch locations in Virginia. Dkt. 7 at 2-3.
28 U.S.C. § 1446 controls the proper procedures for removal: “The notice of removal of a civil action . . . shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based ....” Plaintiff filed his Complaint on March 7, 2022; Defendants accepted service on March 18, 2022; and Defendants filed the Notice of Removal on March 28, 2022. Dkt. 11 at 3. Plaintiff did not properly serve either of the Defendants until March 28, 2022.[3]Dkt. 7-1 at 2-3. Regardless of when proper service was effected, Defendants (1) received a copy of the pleading prior to removal, and (2) filed the Notice of Removal within 30 days of both their receipt of the pleading and Plaintiff's filing in the Circuit Court of Fairfax County. Thus, Defendants “filed [Notice of Removal] within 30 days after the receipt . . ., through service or otherwise, of a copy of the initial pleading ....” 28 U.S.C. §1446 (emphasis added). Accordingly, Defendants properly filed the Notice of Removal.
Regarding Truist's branch locations in Virginia, Plaintiff appears to challenge Defendants' invocation of this Court's diversity jurisdiction. Plaintiff does not dispute that Plaintiff is a citizen of Virginia, Cogan is a citizen of Maryland, and the amount in controversy exceeds $75,000. Plaintiff only points to Truist's business presence in Virginia to challenge removal. Dkt. 7 at 2-3.
Plaintiff's challenge fails because Truist is a citizen of North Carolina, for diversity jurisdiction purposes. Despite its branch locations in Virginia, Truist “is not deemed a citizen of every State in which it conducts business or is otherwise amenable to personal jurisdiction.” Wachovia Bank v. Schmidt, 546 U.S. 303, 318 (2006). Rather, Truist's “citizenship derives, for diversity jurisdiction purposes, from its State of incorporation and principal place of business.” Id. (citing 28 U.S.C. § 1332(c)(1)). Defendants state-and Plaintiff does not challenge-that Truist's state of incorporation and principal place of business are both North Carolina. Dkt. 1 ¶ 9. Thus, Truist is a citizen of North Carolina, and diversity is complete.
Plaintiff alleges Truist's issuance of Form 1099-C required Truist to forgive Plaintiff's debt. Plaintiff claims Truist's failure to forgive Plaintiff's debt and release the associated lien on his home constituted breach of contract, bad faith, and fraud. Defendants argue their issuance of Form 1099-C did not forgive Plaintiff's debt and move to dismiss Plaintiff's claims. Defendants take the position...
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