Opinion
7:19-CV-16-BO
03-06-2019
MARIAN ELIZABETH DUBAR, Plaintiff, v. DITECH FINANCIAL LLC and GERALD LOMBARDO, Defendants.
ORDER and MEMORANDUM AND RECOMMENDATION
This pro se case is before the court on the application to proceed in forma pauperis under 28 U.S.C. § 1915(a)(1) (D.E. 1) by plaintiff Marian Elizabeth Dubar ("plaintiff"), and for a frivolity review pursuant to 28 U.S.C. § 1915(e)(2)(B). These matters were referred to the undersigned magistrate judge pursuant to 28 U.S.C. § 636(b)(1)(A) and (B), respectively. See D.E. dated 1 Feb. 2019. As set out below, the motion to proceed in forma pauperis will be allowed, and it will be recommended that plaintiff's claims be dismissed for lack of subject matter jurisdiction.
ORDER ON IN FORMA PAUPERIS MOTION
The court finds that plaintiff has adequately demonstrated her inability to prepay the required court costs. Her motion to proceed in forma pauperis is therefore ALLOWED.
MEMORANDUM AND RECOMMENDATION ON FRIVOLITY REVIEW
I. BACKGROUND
Plaintiff commenced this action on 31 January 2019. Her proposed complaint (D.E. 1-1) is on a preprinted complaint form, entitled "Complaint and Request for Injunction," to which are attached nine exhibits (D.E. 1-2 to 1-10).
In the filed copy of complaint, the second and third pages of the complaint are in reverse order.
The alleged facts underlying plaintiff's complaint appear to be as follows: In 1999, plaintiff entered into a mortgage and promissory note on her home in Bolton, Columbus County, North Carolina. See Motion to Enforce (D.E. 1-6) 1 (referencing 1999 mortgage and note); Aff. of Witness (D.E. 1-9 at pp. 2-3) 2 (giving address for plaintiff). As of 2018, defendant Ditech Financial LLC ("Ditech") was the creditor on plaintiff's mortgage and note. See Credit Agreement Payoff ("CAP") Security and Lien Release (D.E. 1-7 at pp. 3-4) 3. Ditech's account for plaintiff's debt to it was no. 88150303-1. Id.
Page references are to the page numbers assigned by the court's CM/ECF electronic filing system.
This is the name plaintiff uses in her complaint for this document. See, e.g., Compl. § III.A.
On 2 January 2018, plaintiff issued a CAP Security and Lien Release (D.E. 1-7 at pp. 3-4), labeled as Certified Negotiable Security No. 000016780, purporting to provide for payment of the remaining balance on plaintiff's debt to Ditech in the amount of $83,000.00 on specified terms. On 9 January 2019, plaintiff had a copy of the CAP Security and Lien Release hand delivered by a messenger, Steven Gross, on Lisa Thomas at the office of Ditech in Fort Washington, Pennsylvania. See Compl. § III.A, C; Aff. of Steven Gross (D.E. 1-8) 1. The CAP Security and Lien Release was accompanied by a letter (D.E. 1-7 at p. 2) to defendant Gerald "Jerry" Lombardo, the chief financial officer of Ditech, explaining that it provided for the release of plaintiff from her debt to Ditech. See Compl. § I.B.2 (identifying Lombardo as Ditech's chief financial officer). The delivery of the CAP Security and Lien Release on Ditech effected the release of plaintiff from her debt to Ditech. See Compl. § III.C. Ditech breached its obligations under the CAP Security and Lien Release by not releasing plaintiff from her debt. See id. § III.A., V. The breach occurred on 21 January 2019 (id. § V) and 30 January 2019 (id. § III.A).
Plaintiff filed a UCC financing statement (D.E. 1-10) relating to the CAP Security and Lien Release with the Texas Secretary of State on 2 January 2019. On 17 January 2019, plaintiff filed a copy of the CAP Security and Lien Release with the Columbus County Register of Deeds. See D.E. 1-7 at p. 1.
On 12 January 2019, plaintiff issued a check payable to Ditech in the amount of $83,000.00. Check (D.E. 1-9 at p. 1). Plaintiff remained at her residence from 12 to 15 January 2019 between 8:00 a.m. to 5 p.m. waiting for a Ditech representative to pick up the check. Aff. of Witness (D.E. 1-9 at pp. 2-3) 2. As of 16 January 2019, the date of execution of the affidavit by plaintiff, no representative of Ditech had come to pick up the check. Id. Ditech violated the CAP Security and Lien Release in this additional manner. Id.
Plaintiff characterizes the claims she asserts in various ways, including as trespass, breach of and default on the terms of the CAP Security and Lien Release, breach of and default on terms of the mortgage and note, physical and mental anguish, emotional distress, fraud, racketeering, negligence, lack of jurisdiction, loss of employment, and harm to her good name. See, e.g., Compl. § II.B.3; Pl.'s Stmt. (D.E. 1-2) ¶¶ 1, 2, 6, 10 & True Bill; Verified Aff. of Injury (D.E. 1-3) ¶¶ 2, 3, 12; Mot. to Enforce (D.E. 1-6) 1-2. Plaintiff seeks specific performance of the CAP Security and Lien Release and the "Remedy of Satisfaction of [the] Mortgage" to the property in Bolton. See Mot. to Enforce (D.E. 1-6); Compl. ¶ V. She seeks $5 million in damages. Compl. § II.B.3; True Bill (DE. 1-2 at p. 3) (showing breakdown of damages).
The complaint form plaintiff used alleges "federal question" as the basis for jurisdiction. Compl. § II. In response to the directive to provide the specific federal statute, federal treaty, and/or provision of the United States Constitution at issue, plaintiff identified only N.C. Gen. Stat. § 25-3-104. Id. § II.A. She did not complete the portion of the form for cases based on diversity of citizenship, which sought the citizenship of the parties, although she lists a North Carolina address for herself and the same Pennsylvania address for defendants. Id. §§ I.A, B; II.B.2.
Plaintiff's civil cover sheet also indicates that the basis for jurisdiction is federal question. Civ. Cover Sheet (D.E. 1-4) § II.3.
In her civil cover sheet, she identifies herself as a citizen of North Carolina, but leaves the spaces for defendants' citizenship blank. Civ. Cover Sheet § III.
II. APPLICABLE LEGAL STANDARDS FOR FRIVOLITY REVIEW
After allowing a party to proceed in forma pauperis, as here, the court must conduct a frivolity review of the case pursuant to 28 U.S.C. § 1915(e)(2)(B). The court must dismiss the complaint if it determines that the action is frivolous or malicious, 28 U.S.C. § 1915(e)(2)(B)(i); fails to state a claim upon which relief can be granted, id. § 1915(e)(2)(B)(ii); or seeks monetary relief from an immune defendant, id. § 1915(e)(2)(B)(ii). See Denton v. Hernandez, 504 U.S. 25, 27 (1992) (standard for frivolity).
Under Rule 8 of the Federal Rules of Civil Procedure, a pleading that states a claim for relief must contain "a short and plain statement of the grounds for the court's jurisdiction . . . [and] a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(1), (2). Case law explains that the complaint must "'state[ ] a plausible claim for relief' that 'permit[s] the court to infer more than the mere possibility of misconduct' based upon 'its judicial experience and common sense.'" Coleman v. Md. Court of Appeals, 626 F.3d 187, 190 (4th Cir. 2010) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). Likewise, a complaint is insufficient if it offers merely "labels and conclusions," "a formulaic recitation of the elements of a cause of action," or "naked assertion[s]" devoid of "further factual enhancement." Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks omitted)).
In evaluating frivolity specifically, a pro se plaintiff's pleadings are held to "less stringent standards" than those drafted by attorneys. White v. White, 886 F.2d 721, 722-23 (4th Cir. 1989). Nonetheless, the court is not required to accept a pro se plaintiff's contentions as true. Denton, 504 U.S. at 32. Instead, the court is permitted to "pierce the veil of the complaint's factual allegations and dismiss those claims whose factual contentions are clearly baseless." Neitzke v. Williams, 490 U.S. 319, 327 (1989). Provided that a plaintiff's claims are not clearly baseless, the court must weigh the factual allegations in plaintiff's favor in its frivolity analysis. Denton, 504 U.S. at 32. The court must read the complaint carefully to determine if a plaintiff has alleged specific facts sufficient to support the claims asserted. White, 886 F.2d at 724.
A court may consider subject matter jurisdiction as part of the frivolity review. See Lovern v. Edwards, 190 F.3d 648, 654 (4th Cir. 1999) (holding that "[d]etermining the question of subject matter jurisdiction at the outset of the litigation is often the most efficient procedure"); Cornelius v. Howell, No. 3:06-3387-MBS-BM, 2007 WL 397449, at *2-4 (D.S.C. 8 Jan. 2007) (discussing the lack of diversity jurisdiction during frivolity review as a basis for dismissal). "Federal courts are courts of limited jurisdiction and are empowered to act only in those specific situations authorized by Congress." Bowman v. White, 388 F.2d 756, 760 (4th Cir. 1968). The presumption is that a federal court lacks jurisdiction in a particular case unless it is demonstrated that jurisdiction exists. Lehigh Min. & Mfg. Co. v. Kelly, 160 U.S. 327, 336 (1895). The burden of establishing subject matter jurisdiction rests on the party invoking jurisdiction, here plaintiff. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982) ("The burden of proving subject matter jurisdiction . . . is on the plaintiff, the party asserting jurisdiction."). The complaint must affirmatively allege the grounds for jurisdiction. Bowman, 388 F.2d at 760. If in a frivolity review the court determines that it lacks subject matter jurisdiction, it must dismiss the action pursuant to 28 U.S.C. § 1915(e)(2)(B)(i). More generally, "[i]f the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action." Fed. R. Civ. P. 12(h)(3).
One basis for subject matter jurisdiction, so-called federal question jurisdiction, is that a claim arises under the Constitution, laws, or treaties of the United States. 28 U.S.C. § 1331. Another basis is diversity of citizenship or so-called diversity jurisdiction, which requires that the citizenship of each plaintiff be different from that of each defendant. Id. § 1332; see Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 372-74 (1978); Turner v. Cooper, No. 2:13-CV-02017-JMC, 2013 WL 5587856, at *3 (D.S.C. 16 Aug. 2013) ("Complete diversity of parties in a case means that no party on one side may be a citizen of the same State as any party on the other side."), rep. & recomm. adopted, 2013 WL 5587856, at *1 (10 Oct. 2013). For purposes of diversity jurisdiction, an individual is deemed to be a citizen of the state in which he is domiciled. Axel Johnson, Inc. v. Carroll Carolina Oil Co., 145 F.3d 660, 663 (4th Cir. 1998) ("As the Supreme Court has consistently held, however, state citizenship for purposes of diversity jurisdiction depends not on residence, but on national citizenship and domicile, . . . and the existence of such citizenship cannot be inferred from allegations of mere residence, standing alone."); Comm'r v. Nubar, 185 F.2d 584, 587 (4th Cir. 1950) ("'Residence' means living in a particular locality, but 'domicile' means living in that locality with intent to make it a fixed and permanent home," (internal quotation marks omitted)). A corporation is deemed a citizen of the state in which it is incorporated and the state in which it has its principal place of business. 28 U.S.C. § 1332(c)(1). There are also statutes conferring jurisdiction for particular types of cases.
III. DISCUSSION
The court finds that there is no demonstrated federal jurisdictional basis for plaintiff's action against defendants. It should accordingly be dismissed.
Plaintiff's complaint fails to demonstrate federal question jurisdiction. As discussed, the complaint specifically alleges that the statute plaintiff is proceeding under for the existence of federal question jurisdiction is a North Carolina statute. That statute, N.C. Gen. Stat. Ann. § 25-3-104, is entitled as and contains definitions for "Negotiable Instruments." This state statute cannot form the basis for federal question jurisdiction.
While, as noted, plaintiff alleges racketeering by defendants, she does not relate this to any statute. The complaint therefore does not show that she is attempting to assert a statutory claim of racketeering. Further, although there is a federal racketeering statute, the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C § 1961 et seq., there is also a North Carolina state counterpart, the North Carolina Racketeer Influenced and Corrupt Organizations Act, N.C. Gen. Stat. § 75D-1 et seq. To the extent that plaintiff is deemed to be asserting a statutory claim of racketeering, the court will not infer that she is relying on the federal RICO. To do so would eviscerate the requirement that the basis for federal jurisdiction be affirmatively alleged.
Moreover, although stating that she was relying on N.C. Gen. Stat. Ann. § 25-3-104 as the basis for jurisdiction, plaintiff herself repeatedly characterizes the action as one sounding in tort. See Pl.'s Stmt. 1; Verified Aff. of Injury 1; Mot. to Enforce 1. In fact, of course, she purports to assert various claims sounding in tort, including negligence and harm to her good name. She also purports to assert breach of contract claims. Neither such tort or contract claims confer federal jurisdiction. See, e.g., Schmier v. Fayetteville Pub. Works Comm'n, No. 5:18-CV-50-FL, 2018 WL 1662105, at *1 (E.D.N.C. 5 Apr. 2018) (holding that state tort law claims do not implicate federal question jurisdiction); Blackstock v. Miller, No. 4:18-CV-56-RBH-KDW, 2018 WL 1054819, at *2 (D.S.C. 29 Jan. 2018), rep. & recomm. adopted, 2018 WL 1036181 (21 Feb. 2018) ("Plaintiff's Complaint involves a routine intentional tort/personal injury dispute. Generally, such disputes are a matter of state law to be heard in the state courts, unless diversity of citizenship is present."); Ferebee v. Jeanett P. Henry, LLC, No. CV PWG-17-1397, 2017 WL 2812803, at *2 (D. Md. 28 June 2017) (holding that plaintiff's claims did not "state a jurisdictional basis for a federal question claim under this Court's federal question jurisdiction" and that "[a]t best, [plaintiff's] cause of action alleges nothing more than tortious conduct or breach of contract on the part of Defendant"); Bakra v. Tates Publ'g, No. 6:16-CV-00051, 2016 WL 4926214, at *2 (W.D. Va. 15 Sept. 2016) (finding on frivolity review that "no federal question jurisdiction exists for the contract claim"); McPhail v. Wells Fargo Dealer Servs., No. 5:13-CV-645-BO, 2013 WL 6839657, at *1 (E.D.N.C. 23 Dec. 2013) (adopting recommendation that plaintiff's claims for breach of contract, negligent misrepresentation, and fraud arose under state law and did not state an independent federal question); Mosley v. Wells Fargo Bank, N.A., 802 F. Supp. 2d 695, 699 (E.D. Va. 2011) (finding no federal question in case where mortgagor alleged claims against mortgagee for breach of contract, promissory estoppel, negligence, and violation of state consumer protection laws).
Similarly, in her civil cover sheet, she identifies her causes of action as breach and defaulted credit agreement security, fraud, and lack of jurisdiction. Civ. Cover Sheet § VI.
Plaintiff also has not established the existence of diversity jurisdiction. She does not allege the citizenship of either defendant, as is her burden to proceed on this basis. Davis v. Pak, 856 F.2d 648, 650 (4th Cir.1988) ("[T]he facts providing the court jurisdiction must be affirmatively alleged in the complaint." (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178 (1936)). While plaintiff lists the same address for both defendants in a state other than North Carolina, she has left blank on both her complaint and civil cover sheet their state of citizenship. See Compl. § II.B.2.b; Civ. Cover Sheet § III. The court may not presume citizenship of an individual from an address alone. Scott v. Cricket Commc'ns, LLC, 865 F.3d 189, 195 (4th Cir. 2017) ('"[F]or purposes of diversity jurisdiction, residency is not sufficient to establish citizenship.'" (quoting Johnson v. Advance Am., 549 F.3d 932, 937 n.2 (4th Cir. 2008))); Axel Johnson, 145 F.3d at 663 ("[S]tate citizenship for purposes of diversity jurisdiction depends not on residence, but on national citizenship and domicile . . . and the existence of such citizenship cannot be inferred from allegations of mere residence, standing alone.") (citations omitted). The same is true for a corporation. The fact that a corporation has an office in a particular state does not by itself establish that state as its principal place of business or its state of incorporation. Plaintiff has therefore not established in her complaint that the parties are citizens of different states. See Brissett v. Wells Fargo Bank, N.A., No. 4:17-CV-114-FL, 2017 WL 6368667, at *2 (E.D.N.C. 13 Dec. 2017) (dismissing claim for lack of subject matter jurisdiction on frivolity where complaint did not adequately plead that parties were citizens of different states); Juste v. McDonald Rest. Corp., No. 3:15-CV-54, 2015 WL 3939669, at *6 (N.D.W. Va. 5 June 2015) (recommending dismissal of claim on frivolity review, noting "[t]he burden is on Plaintiff, as the party seeking to invoke the jurisdiction of the federal court, to establish domicile for the purposes of diversity jurisdiction"), rep. & recomm. adopted, 2015 WL 3939669, at *1 (26 June 2015); Sheridan v. Reidell, 465 F. Supp. 2d 528, 535 (D.S.C. 2006) (dismissing for lack of diversity jurisdiction where "the Complaint does not allege facts from which the court could determine the state of Plaintiff's citizenship").
Given the lack of federal jurisdiction, the court expresses no opinion on whether, if jurisdiction existed, plaintiff's claim would survive further evaluation for frivolity.
IV. CONCLUSION
For the foregoing reasons, IT IS RECOMMENDED that the complaint be dismissed for lack of subject matter jurisdiction pursuant to 28 U.S.C. § 1915(e)(2)(B)(i).
IT IS DIRECTED that a copy of this Order and Memorandum and Recommendation be served on plaintiff or, if represented, her counsel. Plaintiff shall have until 20 March 2019 to file written objections to the Memorandum and Recommendation. The presiding district judge must conduct his own review (that is, make a de novo determination) of those portions of the Memorandum and Recommendation to which objection is properly made and may accept, reject, or modify the determinations in the Memorandum and Recommendation; receive further evidence; or return the matter to the magistrate judge with instructions. See, e.g., 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(3); Local Civ. R. 1.1 (permitting modification of deadlines specified in local rules), 72.4(b), E.D.N.C.
If plaintiff does not file written objections to the Memorandum and Recommendation by the foregoing deadline, 20 March 2019, plaintiff will be giving up the right to review of the Memorandum and Recommendation by the presiding district judge as described above, and the presiding district judge may enter an order or judgment based on the Memorandum and Recommendation without such review. In addition, plaintiff's failure to file written objections by the foregoing deadline will bar her from appealing to the Court of Appeals from an order or judgment of the presiding district judge based on the Memorandum and Recommendation. See Wright v. Collins , 766 F.2d 841, 846-47 (4th Cir. 1985).
This 6th day of March 2019.
/s/_________
James E. Gates
United States Magistrate Judge