Salvatore A. Zambito, Ii, Zambito I, Salvatore A. Zambito I v. Fire, 9:16-cv-03039-DCN
| Decision Date | 15 December 2016 |
| Docket Number | No. 9:16-cv-03039-DCN,9:16-cv-03039-DCN |
| Court | U.S. District Court — District of South Carolina |
| Parties | SALVATORE A. ZAMBITO, II, AS POWER OF ATTORNEY FOR SALVATORE A. ZAMBITO I, SALVATORE A. ZAMBITO I, and RITA A. ZAMBITO Plaintiffs, v. OCCIDENTAL FIRE & CASUALTY COMPANY OF NORTH CAROLINA, IAT INSURANCE GROUP, INC., OCWEN FINANCIAL CORPORATION, OCWEN LOAN SERVICING, LLC, ALTISOURCE SOLUTIONS, INC., and HILTON HEAD PLANTATION PROPERTY OWNERS ASSOCIATION, INC., Defendants. |
This matter is before the court on plaintiffs Salvatore A. Zambito, II, Salvatore A. Zambito, I, and Rita A. Zambito ("the Zambitos") motion to remand, ECF No. 9. For the reasons set forth below, the court grants the Zambitos' motion to remand.
The instant suit arises from an alleged unlawful intrusion, theft, and disposal of personal property in August 2014 from the residence located at 11 Sundew Court, Hilton Head Island, South Carolina ("the House") in the gated Hilton Head Plantation community ("the Plantation"). Compl. ¶¶ 10, 24, 77. Plaintiffs Salvatore A. Zambito, I, and Rita A. Zambito were the lawful owners of the House and owners of the personal property contained within the House at the time of the alleged theft. Id. ¶ 11. The Zambitos had recently become the owners of the house as a result of a prior foreclosure proceeding initiated by Salvatore A. Zambito I, who had issued a loan to the prior owner that was secured by a second mortgage. Id. ¶ 11-24. The Zambitos allege that defendant Altisource gained unauthorized entry to the Plantation where it removed personal property from the House and changed the locks on the doors. Id. ¶¶ 26, 79.
The Zambitos initiated this action on July 27, 2016 in the Beaufort County Court of Common Pleas. ECF No. 1. The Zambitos allege: (i) breach of contract against Defendant Occidental Fire & Casualty Company of North Carolina ("Occidental"); (ii) declaratory judgment against Occidental; (iii) bad faith refusal to pay insurance claim against Occidental and IAT Insurance Group, Inc. ("IAT Insurance"); (iv) violation of the South Carolina Unfair Trade Practices Act against Occidental and IAT Insurance; (v) conversion against Defendants Ocwen Financial Corporation and Ocwen Loan Servicing LLC ("the Ocwen defendants") and Defendant Altisource Solutions, Inc. ("Altisource"); (vi) trespass against the Ocwen Defendants and Altisource; (vii) negligence against Defendant Hilton Head Plantation Property Owners Association, Inc. ("HHPPOA"); (viii) intentional infliction of emotional distress against the Ocwen defendants and Altisource; (ix) violation of the South Carolina Unfair Trade Practices Act against the Ocwen Defendants and Defendant Altisource; and (x) negligence against the Ocwen Defendants and Defendant Altisource. ECF No. 1.
On September 7, 2016, the Ocwen defendants removed the case to this court, arguing that HHPPOA was fraudulently joined for the purpose of defeating diversityjurisdiction. ECF No. 1. The Zambitos filed a motion to remand on October 11, 2016. ECF No. 9. The Ocwen defendants filed a response on October 26, 2016. ECF No. 17. HHPPOA filed a response on November 7, 2016. ECF No. 24. The Zambitos filed a reply to Ocwen's response on November 7, 2016. ECF No. 25. The Zambitos filed a reply to HHPPOA's response on November 17, 2016. ECF No. 27. The motion has been fully briefed and is ripe for the court's review.
A. Motion to Remand
As the parties seeking to invoke the court's jurisdiction, defendants have the burden of proving jurisdiction upon motion to remand. Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 816 (4th Cir. 2004) (citing Mulcahy v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994)). In deciding the motion, the federal court should construe removal jurisdiction strictly in favor of state court jurisdiction. Id. "If federal jurisdiction is doubtful, a remand is necessary." Mulcahy, 29 F.3d at 151 (citations omitted).
Mayes v. Rapoport, 198 F.3d 457, 464 (4th Cir. 1999) (quoting Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993)) (emphasis in original). "'The burden on the defendant claiming fraudulent joinder is heavy: the defendant must show that the plaintiff cannot establish a claim against the nondiverse defendant even after resolving all issues of fact and law in the plaintiff's favor.'" Id. (quoting Marshall, 6 F.3d at 232-33). "This standard is even more favorable to the plaintiff than the standard for ruling on a motion to dismiss under Fed. R. Civ. P. 12(b)(6)." Hartley v. CSX Transp., Inc., 187 F.3d 422, 424 (4th Cir. 1999) (citation omitted). When determining whether attempted joinder is fraudulent, the court is "not bound by the allegations of the pleadings, but may instead consider the entire record, and determine the basis of joinder by any means available.'" Mayes, 198 F.3d at 464 (quoting AIDS Counseling, 903 F.2d at 1004) (internal citation and quotation omitted).
In the notice of removal, the Ocwen defendants argue that HHPPOA is fraudulently joined because there is no "factual or legal basis for [HHPPOA's] alleged duty to prevent criminal activity" and so there is "no possibility" that the Zambitos can establish a cause of action for negligence against HHPPOA. Notice of Removal 4. Sincenegligence is the only claim that the Zambitos assert against HHPPOA, the Ocwen defendants argue that the "lack of factual or legal basis" for HHPPOA's duty towards the Zambitos precludes a cause of action against HHPPOA for negligence and demonstrates that HHPPOA was fraudulently joined. Notice of Removal 4-5.
In order to state a claim for negligence in South Carolina, a plaintiff must allege the following: (1) a duty of due care; (2) a breach of that duty by a negligent act or omission; (3) the defendant's breach was the actual and proximate cause of the plaintiff's injury; and (4) the plaintiff suffered an injury or damages. Andrade v. Johnson, 588 S.E.2d 588, 592 (S.C. 2003). The Zambitos allege that in early August 2016, unauthorized persons were granted access to Hilton Head Plantation through a security gate that is under the "ownership, control and authority" of the HHPPOA. Pl.'s Mot. 5. The Zambitos allege that they did not approve of any guest or visitor to enter Hilton Head Plantation for purposes of entering their House and did not authorize Altisource or any other company to remove their personal property. Pl.'s Mot. 6.
The Ocwen defendants argue that a homeowner's association has no general duty to protect property owners from the criminal acts of third parties. Ocwen Def.'s Resp. 2. It is true that South Carolina courts have "decline[d] to find that landlords owe an affirmative duty to protect tenants from criminal activity merely by reason of the [landlord/tenant] relationship." Cramer v. Balcor Prop. Mgmt., Inc., 441 S.E.2d 317, 318 (S.C. 1994). However, South Carolina recognizes the affirmative acts exception to this general rule, which provides that one who undertakes to act, even under no obligation to do so, becomes obligated to act with reasonable care. Sherer v. James, 351 S.E.2d 148,150 (S.C. 1986). The Zambitos allege that HHPPOA had discussed recent episodes of criminal activity and the implementation of measures to identify perpetrators and to prevent future episodes. Pl.'s Mot., Ex. F July 214 HHPPOA Security Committee Meeting Minutes. The court finds that the Zambitos' allegations that HHPPOA was on notice of "recent episodes" of criminal activity, and took some steps to address it, suggest that HHPPOA undertook an affirmative duty extending beyond the landlord/tenant relationship contemplated by the Cramer court.
The Ocwen defendants cite Wright v. PRG Real Estate Mgmt., Inc., 775 S.E.2d 399 (S.C. Ct. App. 2015), reh'g denied (Aug. 20, 2015) to support the argument that HHPPOA did not have a duty to keep common areas secure from criminal activity. Ocwen Def.'s Resp. 5. In Wright, the court found that even under the affirmative acts exception, the creation of a courtesy officer program did not impose a duty to exercise reasonable care in providing security at the complex. Id. at 406. Here, HHPPOA maintains 27 full-time Security Officers who are directly employed by the HHPPOA, and are responsible for enforcing the "stringent" requirements for entering the community. Pl.'s Mot., Ex. C HHPPOA's Description of Security Department. The Security Officers of the HHPPOA are responsible for providing a number of services, including "access control to the Plantation at three gates" and "enforcement of . . . Plantation regulations." Id. This veritable fleet of Security Officers is distinguishable from the voluntary courtesy officer program in Wright, where the apartment complex contemplated in the creation of the program itself that there would be times when there was no courtesy officer on duty. Wright, ...
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