United States District Court, D. South Carolina, Charleston Division
SALVATORE A. ZAMBITO, II, AS POWER OF ATTORNEY FOR SALVATORE A. ZAMBITO I, SALVATORE A. ZAMBITO I, and RITA A. ZAMBITO Plaintiffs,
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.
C. NORTON UNITED STATES DISTRICT JUDGE.
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.
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.
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.
September 7, 2016, the Ocwen defendants removed the case to
this court, arguing that HHPPOA was fraudulently joined for
the purpose of defeating diversity jurisdiction. 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
Motion to Remand
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).
case that is otherwise removable solely on the basis of
diversity jurisdiction “may not be removed if any of
the parties in interest properly joined and served as
defendants is a citizen of the State in which such action is
brought.” 28 U.S.C.A. § 1441(b)(2). HHPPOA is a
nonprofit organization organized under the laws of South
Carolina. Compl. ¶ 8. The Ocwen defendants filed a
notice of removal claiming that HHPPOA was fraudulently
joined for the purpose of defeating diversity jurisdiction.
ECF No. 1. The Zambitos contend in the motion before the
court that the fraudulent joinder grounds on which the Ocwen
defendants filed a notice of removal to this court are
improper and so the case should be remanded to state court.
Pls.' Mot. 3
To establish fraudulent joinder of a nondiverse defendant,
the removing party must establish either: [t]hat there is no
possibility that the plaintiff would be able to establish a
cause of action against the instate defendant in state court;
or [t]hat there has been outright fraud in the
plaintiff's pleading of jurisdictional facts.
Mayes v. Rapoport, 198 F.3d 457, 464 (4th Cir. 1999)
(quoting Marshall v. ManvilleSales 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 ...