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Morgan v. HSBC Bank USA, National Association

United States District Court, D. South Carolina, Greenville Division

June 24, 2015

Gilbert B. Morgan and Deette S. Morgan, Plaintiffs,
v.
HSBC Bank USA, National Association Association as Trustee for the Holders of the Ellington Loan Acquisition Trust 2007-2 Mortgage Pass-Through Certificates, Series 2007-2, Bank of America, N.A., and Nationstar Mortgage, LLC, Defendants.

ORDER AND OPINION

J. MICHELLE CHILDS, District Judge.

Plaintiffs Gilbert B. Morgan and Deette S. Morgan ("Plaintiffs") filed this action against Defendants HSBC Bank USA, National Association as Trustee for the Holders of the Ellington Loan Acquisition Trust 2007-2, Mortgage Pass-Through Certificates, Series 2007-2 ("HSBC Bank"), Bank of America, N.A. ("BANA") and Nationstar Mortgage, LLC ("Nationstar") (collectively, "Defendants") seeking a jury trial to determine actual, punitive and treble damages along with attorney's fees and costs, and alleging breach of contract and violation of the South Carolina Unfair Trade Practices Act ("SCUTPA"), S.C. Code Ann. § 39-5-10 to -560 (2014). (ECF No. 1-1.)

This matter is before the court on Defendants' Motion to Dismiss the Complaint pursuant to Fed.R.Civ.P. 12(b)(6) ("Rule 12(b)(6) Motion") because Plaintiffs have failed to state a claim for which relief may be granted. (ECF No. 11.) Plaintiffs oppose the Rule 12(b)(6) Motion asserting that the Complaint states appropriate claims for relief. (ECF No. 19.) For the reasons set forth below, the court DENIES the Rule 12(b)(6) Motion as to the breach of contract claim and GRANTS the Rule 12(b)(6) Motion regarding the SCUTPA claim.

I. JURISDICTION

Federal courts are courts of limited jurisdiction. A defendant is permitted to remove a case to federal court if the court would have had original jurisdiction over the matter. 28 U.S.C. § 1441(a). A federal district court has "original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interests and costs, and is between - (1) citizens of different states...." 28 U.S.C. § 1332(a). The removing party has the burden of establishing federal jurisdiction. Mulcahey v. Columbia Organic Chems. Co., Inc., 29 F.3d 148, 151 (4th Cir. 1994). 28 U.S.C. § 1332 requires complete diversity between all parties. Strawbridge v. Curtiss, 7 U.S. 267, 267 (1806). Complete diversity requires that "no party shares common citizenship with any party on the other side." Mayes v. Rapoport, 198 F.3d 457, 461 (4th Cir. 1999). Because federal courts are forums of limited jurisdiction, any doubt as to whether a case belongs in federal or state court should be removed in favor of state court. See Auto Ins. Agency, Inc. v. Interstate Agency, Inc., 525 F.Supp. 1104, 1106 (D.S.C. 1981).

A. Diversity of Parties

Plaintiffs are domiciled in South Carolina. ( See ECF No. 1-1 at ¶ 1.) HSBC Bank is a citizen of Virginia because its articles of association establish its main office as located in McLean, Virginia. (ECF No. 1 at ¶ 11.); see Wachovia Bank v. Schmidt, 546 U.S. 303, 307 (2006) (explaining that a national bank is a citizen of the State in which its main office, as set forth in its articles of association, is located); see also Willis v. Bank of Am. Corp., No. ELH-13-02615, 2014 U.S. Dist. LEXIS 105339, at *116 (D. Md. Aug. 1, 2014). BANA is a citizen of North Carolina because its articles of association establish its main office in North Carolina. (ECF No. 1 at ¶ 12 (citing, e.g., Wachovia Bank, 546 U.S. at 307).) Nationstar is a citizen of both Delaware and Texas as it is incorporated under the laws of Delaware, its articles of association establish that its main office is in Texas, and its principal place of business is in Texas. (ECF No. 1 at ¶ 13 (citing, e.g., Wachovia Bank, 546 U.S. at 307; 28 U.S.C. 1332(c)(1)).)

The court is satisfied that there is complete diversity between parties. No defendant is a citizen of South Carolina. ( See ECF No. 1 at ¶¶ 10-14.)

B. Amount in Controversy

The United States Court of Appeals for the Fourth Circuit has not set forth a rule concerning the burden of proof on the removing party in regard to establishing the amount in controversy. See, e.g., Rota v. Consolidation Coal Co., No. 98-1807, 1999 U.S.App. LEXIS 6125, at *5 (4th Cir. Apr. 5, 1999) (expressly declining to adopt a particular standard of proof for determining the amount in controversy). Courts within the District of South Carolina are inclined to require "defendants in this position to show either to a legal certainty' or at least within reasonable probability' that the amount in controversy has been satisfied." Phillips v. Whirlpool Corp., 351 F.Supp.2d 458, 461 (D.S.C. 2005).

Where a complaint does not specify an amount, "the object which is sought to be accomplished by the plaintiff may be looked to in determining the value of the matter in controversy." Mattison v. Wal-Mart Stores, Inc., No. 6:10-cv-01739-JMC, 2011 U.S. Dist. LEXIS 11634, at *4 (D.S.C. Feb. 4, 2011) (internal citations and quotations omitted). Where the plaintiff has alleged an indeterminate amount of damages, the court may consider the plaintiff's claims as alleged in the complaint, the notice of removal filed with the court, and other relevant materials in the record. Crosby v. CVS Pharm., Inc., 409 F.Supp.2d 665, 667 (D.S.C. 2005). The court is limited to examining only evidence that was available at the moment the petition for removal was filed. Id. The court may include claims for punitive and consequential damages as well as attorney fees and costs in assessing whether the amount in controversy is satisfied to establish diversity jurisdiction. See Mattison, 2011 WL 494395, at *5; see also Thompson v. Victoria Fire & Cas. Ins. Co., 32 F.Supp.2d 847, 849 (D.S.C. 1999) (holding the amount in controversy exceeds $75, 000.00 where complaint sought consequential damages, punitive damages, and attorneys' fees and costs beyond the $25, 000.00 in actual damages claimed).

The court is satisfied that the amount in controversy exceeds the $75, 000.00 requirement under 28 U.S.C. § 1332(b). Although Plaintiffs do not specify an amount prayed for, they seek actual, punitive and treble damages concerning their $291, 120.00 mortgage loan and the money they lost trying to have the loan modified. (ECF No. 1-1 at ¶¶ 2, 19, 3.) Plaintiffs also seek attorney's fees and costs. ( Id. at ¶¶ 19, 3.)

II. RELEVANT BACKGROUND

The following relevant facts from the Complaint are taken as true only for the purposes of the pending motion. See Ostrzenski v. ...


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