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Hosey v. Quicken Loans Inc.

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

March 7, 2018

Lonnie Hosey, Plaintiff,
Quicken Loans, Inc., Defendant.


         Plaintiff Lonnie Hosey filed the above-captioned action against Defendant Quicken Loans, Inc. alleging claims for violation of the South Carolina Attorney Preference Statute (“SCAPS”), SC Code § 37-10-102 (2017), and unconscionable conduct in the context of a mortgage loan closing. (ECF No. 1-1 at 5 ¶ 5-6 ¶ 11.)

         This matter is before the court on Plaintiff's Motion to Remand and Motion to Stay All Matters Related to Defendant's Motion to Dismiss. (ECF No. 12 (referencing ECF No. 4).) Defendant opposes Plaintiff's Motions and asks the court to retain jurisdiction. (ECF No. 14.) For the reasons set forth below, the court DENIES Plaintiff's Motion to Remand and DENIES AS MOOT Plaintiff's Motion to Stay.


         Defendant Quicken Loans “is a nationwide online mortgage lender that provides, among other things, residential mortgage loan refinances.” Boone v. Quicken Loans, Inc., 803 S.E.2d 707, 709 (S.C. 2017). “Under the Quicken Loans refinance procedure, the borrowers have already purchased the property and are simply seeking a new mortgage loan (presumably with more favorable terms) to replace the existing loan.” Id.

         On June 29, 2017, Plaintiff filed a Complaint against Quicken Loans in the Court of Common Pleas for Barnwell County, South Carolina alleging violation of the SCAPS. (ECF No. 1-1 at 6 ¶ 11.)) In support of this claim, Plaintiff alleges that he sought to obtain a real estate loan from Defendant and, as part of that process, Defendant was required under South Carolina law to determine Plaintiff's preference for legal counsel to assist him during the closing of the transaction. (Id. at 5 ¶¶ 5, 6.) Plaintiff further alleges that Defendant provided him with a pre-populated Attorney/Insurance Preference Checklist (“AIPC”), which prevented Plaintiff from selecting an attorney to represent him in the transaction. (Id. at 5 ¶ 7-6 ¶ 9.) In addition to his attorney preference claim, Plaintiff also alleges his entitlement to relief under S.C. Code §§ 37-10-105, -108, based on unconscionability because he was deprived of a meaningful choice as to the attorney to represent him in the transaction. (ECF No. 1-1 at 7-8 ¶ 18.)

         Even though Plaintiff did not specify an amount of damages in the Complaint, he does request that the court issue an order “(a) finding that the acts of the Defendant were unconscionable, and (b) granting relief included in S.C. Code Ann. § 37-10-105(c)(4), including (i) all interest paid under his note and mortgage to Defendant; (ii) an order allowing the remainder of the loan to be paid without interest; (iii) an award of double the closing costs or other costs paid to Defendant or Third Parties in connection to the loan; and (iv) attorney's fees and costs of this action.” (ECF No. 1-1 at 8 ¶ 19; see also 8 ¶¶ A-C.) Plaintiff further requests that the court assess a statutory penalty in the amount of $7, 500.00. (Id. at 6 ¶ 10.) However, Plaintiff states that he does not seek to recover more than $75, 000.00. (Id. at 8 ¶ 10, 9 ¶ D.)

         On August 4, 2017, Defendant filed a Notice of Removal asserting that the action was “within the original jurisdiction of the United States District Court pursuant to 28 U.S.C. § 1332” because “[c]omplete diversity of citizenship exists and the amount in controversy requirement is met.”[1] (ECF No. 1 at 2.) Thereafter, on August 24, 2017, Plaintiff moved the court to remand the matter to state court on the basis that “the amount in controversy does not exceed $75, 000.00 as required under 28 U.S.C. § 1332(a)(1).” (ECF No. 12 at 1.) Plaintiff also moved the court to stay all matters related to Defendant's Motion to Dismiss. (Id. at 1-2 (referencing ECF No. 4).) On September 6, 2017, Defendant filed a Memorandum in Opposition to Plaintiff's Motion to Remand and Stay. (ECF No. 14.)


         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 interest and costs, and is between - (1) citizens of different States; . . . .” 28 U.S.C. § 1332(a) (2012). In cases in which the district court's jurisdiction is based on diversity of citizenship, the party invoking federal jurisdiction has the burden of proving the jurisdictional requirements for diversity jurisdiction. See Strawn v. AT & T Mobility LLC, 530 F.3d 293, 298 (4th Cir. 2008) (holding that in removing case based on diversity jurisdiction, party invoking federal jurisdiction must allege same in notice of removal and, when challenged, demonstrate basis for jurisdiction).

         In determining the amount in controversy for federal diversity jurisdiction, the court must examine the complaint at the time of removal. Thompson v. Victoria Fire & Casualty Co., 32 F.Supp.2d 847, 848 (D.S.C. 1999) (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 292 (1938)). Generally, “the sum claimed by a plaintiff in her complaint determines the jurisdictional amount, and a plaintiff may plead less than the jurisdictional amount to avoid federal jurisdiction.” Phillips v. Whirlpool Corp., 351 F.Supp.2d 458, 461 (D.S.C. 2005) (citing, e.g., St. Paul Mercury Indem. Co., 303 U.S. at 294 (“If [the plaintiff] does not desire to try his case in the federal court he may resort to the expedient of suing for less than the jurisdictional amount, and though he would be justly entitled to more, the defendant cannot remove.”)) (internal citations omitted). However, where a complaint includes a request for nonmonetary relief or a request for a money judgment in a state that permits recovery in excess of the amount demanded, the court can look to the notice of removal to determine the amount in controversy. 28 U.S.C. § 1446(c)(2)(A). If the court finds by a preponderance of the evidence that the amount in controversy exceeds the amount specified in section 1332(a), then removal is proper. 28 U.S.C. § 1446(c)(2)(B).

         Additionally, section 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 resolved in favor of state court. See Auto Ins. Agency, Inc. v. Interstate Agency, Inc., 525 F.Supp. 1104, 1106 (D.S.C. 1981) (citations omitted).

         III. ANALYSIS

         There is no dispute that complete diversity exists in this matter. The parties dispute whether the amount in controversy requirement is met in order to support removal. Plaintiff moves to remand this matter to state court on the basis that “the amount in controversy does not exceed $75, 000.00 as required under 28 U.S.C. § 1332(a)(1).” (ECF No. 12 at 1.) Specifically, Plaintiff asserts that because the ad damnum clause of the Complaint limits the damages sought to $75, 000.00, the amount in controversy cannot be met. (E.g., ECF No. 12-1 at 8.) As support, Plaintiff submitted a Stipulation as to Damages, wherein Plaintiff states that (1) the entire value of his claim does not exceed $75, 000.00 and (2) he will not seek or accept either nonmonetary relief or any relief or recovery greater than $75, 000.00. (ECF No. 16-1 at 2 ¶¶ 3-5.) In response, Defendant asserts that Plaintiff seeks nonmonetary relief in the form of having the loan agreement declared unconscionable, and such relief would greatly exceed $75, 000.00. (ECF No. 14 at 8.)

         Upon review, the court notes that because Plaintiff did not specify an amount of damages in his Complaint (see ECF No. 1-1 at 8, 9), the court may interpret Plaintiff's Stipulation as to Damages as a clarification of the amount of damages Plaintiff seeks. See, e.g., Carter v. Bridgestone Americas, Inc., C/A No. 2:13-CV-00287-PMD, 2013 WL 3946233, at *3 (D.S.C. July 31, 2013) (“Defendant concedes that ‘Plaintiff does not specify an amount of damages in her Complaint.' The Court interprets Plaintiff's statements in her notarized affidavit as to the amount in controversy as a stipulation, clarifying that the total amount of damages sought by her Complaint is not more than $60, 000.000[sic].”) (internal citation omitted); Gwyn v. Wal-Mart Stores, Inc., 955 F.Supp. 44, 46 (M.D. N.C. 1997) (“A post-removal stipulation or amendment of the complaint to allege damages below the jurisdictional amount will not destroy federal jurisdiction once it has attached. However, when facing indeterminate claims, . . . the court may consider a stipulation filed by the plaintiff that the claim does not exceed” the jurisdictional amount.) (internal citation and quotation marks omitted). Though Plaintiff attempts to limit the maximum amount of damages sought, South Carolina law permits recovery in excess of the relief requested by Plaintiff. See Battery Homeowners Ass'n v. Lincoln Fin. Res., Inc., 422 S.E.2d 93, 95-96 (S.C. 1992) (quoting South Carolina Rule of Civil Procedure 54(c) which provides that a party shall be granted the relief to which it is entitled even if the relief was not demanded in the pleadings); Jones v. Bennett, 348 S.E.2d 365 (S.C. Ct. App. 1986) (noting that it was error for a trial judge to instruct a jury that it could not return a verdict in excess of the relief prayed for in accordance with SCRCP ...

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