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Hosey v. Quicken Loans Inc.

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

July 2, 2018

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


         This matter is before the court pursuant to Plaintiff Lonnie Hosey's Motion to Remand (ECF No. 38). Defendant Quicken Loans, Inc. filed a response in opposition (ECF No. 40). For the reasons set forth below, the court DENIES Plaintiff's Motion to Remand (ECF No. 38).


         Plaintiff filed this action seeking compensation based on Defendant's alleged violation of the South Carolina Attorney Preference Statute (“SCAPS”), SC Code Ann. § 37-10-102 (2012), in connection with his application for a mortgage loan from Defendant. (See ECF No. 12-3.) For this violation, Plaintiff requested that the court assess the maximum statutory penalty of $7, 500.00. (Id.) Plaintiff also brought a claim under S.C. Code Ann. § 37-10-105(C) (2012), alleging that Defendant was guilty of unconscionable conduct in the closing of a mortgage loan based on the same alleged conduct by Defendant, i.e., Defendant's depriving Plaintiff of a meaningful choice as to the attorney to represent him in the transaction. (Id.) In connection with this claim, Plaintiff requested that the court grant the relief provided by S.C. Code Ann. § 37-10-105(C)(4) (2012). (Id.) In his state court Complaint, Plaintiff stipulated that he does not seek to recover more than $75, 000.00[1] in this action for Defendant's alleged unauthorized practice of law (“UPL”). (See ECF No. 12-3 at 4, 7.)

         On August 4, 2017, Defendant filed a Notice of Removal. (ECF No. 1.) On August 24, 2017, Plaintiff filed his first Motion to Remand. (ECF No. 12.) In denying Plaintiff's first Motion to Remand, the court found that Plaintiff's recovery under his claim for unconscionability could amount to more than $75, 000.00, given that the non-monetary relief permitted by § 37-10-105(C)(4) (2012) includes the possibility of finding the entire agreement unenforceable. (ECF No. 24.) Because such a finding would render Defendant unable to foreclose on the property or collect the outstanding balance, such a relief could cost Defendant $212, 232.12, a loss substantially in excess of the jurisdictional minimum amount in controversy. (Id. at 6-8.)

         Shortly after denying Plaintiff's Motion to Remand, the court granted in part and denied in part Defendant's Motion to Dismiss Plaintiff's Complaint. (ECF No. 29.) Specifically, the court denied dismissal of Plaintiff's SCAPS claim under S.C. Code Ann. § 37-10-102 (2012). (Id. at 6-8.) The maximum statutory penalty for a violation of this section is $7, 500.00. See S.C. Code Ann. § 37-10-105(A) (2012). The court, however, granted Defendant's Motion to Dismiss Plaintiff's unconscionability claim pursuant to S.C. Code Ann. § 37-10-105(C) (2012), for which a possible remedy was finding the entire agreement unenforceable. (Id. at 8-11.)

         In Plaintiff's present Motion to Remand, he claims that what remains is only his SCAPS claim for which the maximum damages are $7, 500.00. (ECF No. 38.) Accordingly, Plaintiff asserts that the jurisdictional minimum amount in controversy of $75, 000.00 is not satisfied in this case, and the court should remand the case to the South Carolina state court. (Id.) In response, Defendant maintains that (1) Plaintiff still desires to bar Defendant from foreclosing on the property, which places more than $75, 000.00 at risk for Defendant; (2) even if the amount in controversy has been reduced, the court should still retain supplemental jurisdiction over Plaintiff's remaining claims; and (3) Defendant should be awarded its costs and attorney's fees for defending Plaintiff's second Motion to Remand. (ECF No. 40.) Plaintiff replied, essentially restating his position that his Motion to Remand “must” be granted because subject matter jurisdiction does not exist. (ECF No. 43.)


         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, 000.00, 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 diversity jurisdiction 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 non-monetary 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

         A. Federal Diversity Jurisdiction

         There is no dispute that complete diversity exists in this matter. The parties dispute whether the amount in controversy requirement is still met after the court's partial dismissal of Plaintiff's Complaint. The only claim remaining in this matter is for violation of SCAPS, SC Code Ann. § 37-10-102 (2012). Section 37-10-105(A) discusses what remedy may result for violations of § 37-10-102 (2012):

If a creditor violates a provision of this chapter, the debtor has a cause of action, other than in a class action, to recover actual damages and also a right in an action, other than in a class action, to recover from the person violating this chapter a penalty in an amount determined by the court of not less than one thousand five hundred ...

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