Opinion
CIVIL 1:24-CV-00903
07-24-2024
TERRY L. HOLLINGER, et al., Plaintiffs, v. SUNTRUST BANK, et al., Defendants.
REPORT AND RECOMMENDATION
Susan E. Schwab United States Magistrate Judge
I. Introduction.
The plaintiffs, Terry and Michelle Hollinger (collectively “the Hollingers”), acting pro se, bring the instant action against SunTrust Bank (“SunTrust”) and McCabe, Weisburg, & Conway, LLC (“law firm”). It appears the Hollingers also attempt to remove an action from state court. Currently pending are SunTrust's motion to strike the Hollingers' notice of removal and SunTrust's motion to dismiss the complaint (collectively “the pending motions”). We do not have subject-matter jurisdiction over this matter on the face of the amended complaint. Accordingly, we recommend that the Court dismiss the amended complaint, remand the case to the state court, deny the pending motions as moot, and give the Hollingers leave to file an amended complaint.
II. Background and Procedural History.
The Hollingers initiated this action by filing a form complaint on June 3, 2024. Doc. 1. The Hollingers paid the filing fee, and the summons was issued. See doc. 3. On June 4, 2024, the Hollingers filed a document titled:
In the caption of the complaint and the amended complaint, in the line for plaintiffs, the Hollingers wrote “TERRY L AND MICHELLE L HOLLINGER ESTATE c/o Terry L and Michelle L Hollinger, Grantor Executor[.]” Docs. 1, 5-1. In every other space provided to identify the plaintiffs on the form portion of the amended complaint, however, the Hollingers identify themselves as individuals and do not refer to an estate. See generally docs. 1, 5-1. Moreover, the Hollingers each signed the amended complaint and are representing themselves. See doc. 5-1 at 5. Accordingly, we will proceed our analysis with the Hollingers as plaintiffs, rather than an estate.
DEFENDANT'S ORDER TO CEASE & DESIST, ORDER TO STAY
DEMAND FOR THE ORIGIN OF CREDIT
AND
REMOVAL TO FEDERAL COURT FOR
NOTICE OF CRIMINAL VIOLATIONS(“removal document”). Doc. 4 at 1. In the removal document, the Hollingers “demand[ ] a removal to the United State[s] Federal District Court[.]” Doc. 4 at 2 (capitalization altered) (emphasis in original). The removal document contains a list of federal criminal statutes which the Hollingers appear to allege have been violated. Id. at 3-8. The removal document does not contain any documentation from a state action. See generally doc. 4.
On June 10, 2024, the Hollingers filed an amended complaint. Doc. 5. On June 25, 2024, an attorney entered her appearance on behalf of SunTrust, and SunTrust filed a motion to strike the removal document and a brief in support thereof. Docs. 6, 8, 9. On July 1, 2024, SunTrust filed a motion to dismiss the amended complaint and a brief in support thereof. Docs. 12, 13.
The amended complaint is very confusing. It consists of a form complaint and an attachment. See generally doc. 5. The attachment is titled “complaint for breach of contract and applied remedy” (“the attachment”). Doc. 5-1 (capitalization altered). The attachment includes what appears to be a draft contract between “offerors”-including an attorney at the law firm and the CEO of Truist Bank, as well as the Secretary of the United States Department of Housing and Urban Development-and the Hollingers as “acceptors.” Doc. 5-1 at 12. In short, it appears that the events outlined in the amended complaint all revolve around a home foreclosure. The following facts are taken from the amended complaint.
Elsewhere in the amended complaint, the Hollingers identify the defendant as “SUNTRUST/TRUIST BANK.” Doc. 5-1. We will refer to Suntrust and Truist Bank interchangeably.
According to the amended complaint, on October 18, 2022, the CEO of SunTrust gave the Hollingers “an offer of foreclosure[.]” Id. at 6. The Hollingers responded to this offer on May 6, 2024, by “fil[ing[ and record[ing] a Conditional Acceptance to the Court in case number 2022-SU-002548,” and emailing and mailing a copy to the bank in care of a Christine Graham (“Graham”). Id. “On May 7th of 2024 at 1:22:49 PM a perfected deed was filed and recorded with York County, Pennsylvania in Deed Book 2826[.]” Id. at 6-7. “The clerk of court mistakenly recorded the deed as a miscellaneous instrument on the parcel.” Id. at 7. The Hollingers “received no response” from the York County Court or Graham. Id.
“On May 16th, Sheriff Richard P. Keuerleber [(“Sheriff Keuerleber”)] had the deed transferred to Paul Witmer with an instrument number 2024028307.” Id. According to the Hollingers, they “had no contact with Paul Witmer” between the transfer of the deed on May 16, 2024, and May 25, 2024. Id. Bafflingly, the Hollingers refer to themselves as changing “status from Grantee to Grantor, thereby retaining all rights to Allodial ownership.” Id. (footnote added). The Hollingers reference contract law, saying that they “accepted the Court's acceptance of the deed updated as a tacit agreement[.]” Id. They describe Sheriff Keuerleber's actions as “premature” and “breach[ing] the agreement between [the Hollingers and the York County Court.” Id. The Hollingers are “seeking for an opportunity to cure on the part of York County court and a restoration of ownership status of their deed.” Id. at 8.
“‘Allodial title creates absolute ownership in the title holder, free and clear of any lien, mortgage, rent, service, property tax obligation, or other encumbrance.'” Reutov v. American Home Mortgage Acceptance Inc., ______, 2024 WL 232315, *4 (D. Or. Jan. 22, 2024) (quoting United States v. Miljus, 2007 WL 4287608, *3 (D. Or. Dec. 3, 2007)). “That is, allodial title ‘is not subject to involuntary alienation.” Id. (citing Miljus, 2007 WL 4287608 at *3). Accordingly, allodial rights “are sometimes claimed by . . . property owners who believe they can use these devices to prevent foreclosure.” Id. (citing Miljus, 2007 WL 4287608 at *3; Flores v. Wells Fargo Bank, N.A., 2013 WL 1192767, *2 (E.D. Wis. Mar. 22, 2013)) (internal quotation marks omitted). “[C]ourts that have ‘considered these types of claims in other cases . . . have uniformly rejected them, with most courts deeming the claims frivolous.'” Id. (quoting Flores, 2013 WL 1192767 at *2).
According to the Hollingers, the law firm “filed a rule to show cause” (“the motion”) in the York County foreclosure proceedings. Id. In the motion, SunTrust “request[s] to reinstate [a]n action . . . that was ordered that a rule be issued upon the Hollingers to show cause why [SunTrust] is not entitled to the relief requested.” Id. It is unclear from the amended complaint what “relief requested” is referred to in the motion. Id. The Hollingers appear to attempt to use this amended complaint to respond to the motion. Id. (“It is at this time that Terry L and MICHELLE L HOLLINGER submit reasons why Petitioner is not entitled to the relief requested.”).
The Hollingers state that they understood “that after the deed was perfected and a change in status occurred from ‘tenant in common' to ‘land owner [sic] in common law' that [they] were immune from non-judicial foreclosure since it only applied to tenants and not landowners.” Id. at 8-9. They “were expecting the opportunity execute a private administrative process that would give them a chance for a rightful defend the property.” Id. at 9 (errors in original).
In the form complaint in the section titled “Statement of Claim” the Hollingers identify the following causes of action: (1) breach of contract; (2) violation of the Truth in Lending Act; (3) “[v]iolation of GAAP Accounting Princip[le]s concerning the theft of credit”; and (4) “Forceful binding of an unilateral mortgage contract, without signatures, illegal securitization involving money laundering, wire fraud, and fraudulent inducement[.]” Id. at 4. Although the Hollingers marked the box to indicate that they intend to proceed under diversity jurisdiction, they also list the following statutes and court rules in the section designated for the basis of federal question jurisdiction: (1) 28 U.S.C. § 1746; (2) Federal Rule of Evidence 402; (3) 31 U.S.C. Chapter 38; and (4) “Statutes-at-Large.” Id. at 3. As for monetary relief, the Hollingers seek $1,721,692,000.00. Id. at 28. The Hollingers also seek “[t]he right to keep the property of full right of ownership and exemption of real estate taxes is to be paid by Respondent (Defendant) for the full time that the dwelling is occupied by the family.” Id. at 4 (errors in original).
III. Standard of Review.
“Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). “[T]hey have only the power that is authorized by Article III of the Constitution and the statutes enacted by Congress pursuant thereto.” Bender v. Williamsport Area School Dist., 475 U.S. 534, 541 (1986). “Subject-matter jurisdiction can never be waived or forfeited.” Gonzalez v. Thaler, 565 U.S. 134, 141 (2012). “Jurisdiction is power to declare the law, and when it ceases to exist, the only function remaining to the court is that of announcing the fact and dismissing the cause.” Ex parte McCardle, 74 U.S. 506, 514 (1868). This jurisdictional rule “‘spring[s] from the nature and limits of the judicial power of the United States' and is ‘inflexible and without exception.'” Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95 (1998) (quoting Mansfield, C. & L. M. Ry. Co. v. Swan, 111 U.S. 379, 382 (1884)).
“If 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). “[F]ederal courts have an ever-present obligation to satisfy themselves of their subject matter jurisdiction and to decide the issue sua sponte.” Liberty Mut. Ins. Co. v. Ward Trucking Co., 48 F.3d 742, 750 (3d Cir.1995); see also Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583-84 (1999) (citing Steel Co., 523 U.S. at 94-95 (1998) (noting that “subject-matter delineations must be policed by the courts on their own initiative”)). Consequently, this Court is required to determine whether it has subject-matter jurisdiction over the matter.
IV. Discussion.
In the section of the form complaint titled “Basis for Jurisdiction[,]” the Hollingers checked the box to indicate that the basis of our jurisdiction is diversity of citizenship. Doc. 5-1 at 3. However, they completed both the section labeled “If the Basis for Jurisdiction Is a Federal Question” and the section labeled “If the Basis for Jurisdiction Is Diversity of Citizenship[.]” Id. We will thus analyze both possibilities.
A. Diversity Jurisdiction.
The Court has diversity jurisdiction over civil actions where the amount in controversy exceeds the sum or value of $75,000 and is between inter alia citizens of different states. 28 U.S.C. § 1332. Section 1332 requires complete diversity. Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). There is complete diversity only when “the citizenship of each plaintiff is diverse from the citizenship of each defendant.” Id. “A plaintiff invoking a federal court's diversity jurisdiction bears the burden of stating ‘all parties' citizenships such that the existence of complete diversity can be confirmed.” Kissi v. Gillespie, 348 Fed.Appx. 704, 704-06 (3d Cir. 2009) (quoting Chem. Leaman Tank Lines, Inc. v. Aetna Cas. & Sur. Co., 177 F.3d 210, 222 n.13 (3d Cir. 1999)).
The Hollingers state that they are citizens of Pennsylvania. Doc. 5-1 at 3. Where the form complaint prompts them to state the citizenship of the defendants they wrote: (1) “The defendant, William H. Rogers, Jr, is a citizen of the State of Do Not Know” (id.) (cleaned up); (2) “The defendant, SUNTRUST BANK a/k/a TRUIST BANK, is incorporated under the laws of the State of Not Known, and has its principal place of business in the State of North Carolina” (id. at 4) (cleaned up). William H. Rogers, Jr., however, is not a defendant named in the amended complaint. Moreover, the Hollingers did not allege the citizenship of the second defendant, the law firm.
Thus, the Hollingers fail to allege facts from which it can reasonably be inferred that there is complete diversity. He has not fully alleged the citizenship of SunTrust and he has not alleged the citizenship of the law firm. Accordingly, as pleaded, the Court does not have diversity jurisdiction pursuant to 28 U.S.C. § 1332.
As discussed below, we recommend that the Court give the Hollingers leave to file a second amended complaint to attempt to cure the deficiencies in the amended complaint regarding subject-matter jurisdiction, if they can do so honestly. See 28 U.S.C. § 1653 (“Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts.”); Pierro v. Kugel, 386 Fed.Appx. 308, 310 (3d Cir. 2010) (stating that “a court should ordinarily allow a plaintiff to amend his complaint to properly allege the parties' citizenship unless amendment would be inequitable or futile”). Before deciding whether to file a second amended complaint, the Hollingers should consider that a corporation is “deemed to be a citizen of every State . . . by which it has been incorporated and of the State . . . where it has its principal place of business.” 28 U.S.C. § 1332(c)(1). A corporation's principal place of business is the place “where a corporation's officers direct, control, and coordinate the corporation's activities,” i.e., it's nerve center. Hertz Corp. v. Friend, 559 U.S. 77, 92-93 (2010). To properly plead the citizenship of a corporation, the plaintiffs must allege both its principal place of business and its state of incorporation.
B. Federal Question Jurisdiction.
The court has federal question jurisdiction over “civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. But merely citing a federal statute is not sufficient to convey subject matter jurisdiction; when a “claim is ‘so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal controversy[,]'” “dismissal for lack of subject-matter jurisdiction because of the inadequacy of the federal claim is proper[.]” Kissi v. Gillespie, 348 Fed.Appx. 704, 705-06 (3d Cir. 2009) (quoting Oneida Indian Nation of N.Y. v. County of Oneida, 414 U.S. 661, 666 (1974)).
When the form complaint instructed the Hollingers to “[l]ist the specific federal statutes, federal treaties, and/or provisions of the United State Constitution that are at issue in this case[,]” the Hollingers listed several statutes and court rules. Out of an abundance of caution we will also consider the federal statutes the Hollingers mention elsewhere in the complaint. None of these statutes, however, are sufficient to raise a federal controversy.
Many of the statutes the Hollingers rely upon for our jurisdiction have no cause of action. The Hollingers cite the Federal Rules of Evidence and “GAAP Accounting Principles[,]” both of which are not federal statutes that create causes of action. The Hollingers cite some federal statutes, but these do not provide private causes of action either. The Hollingers cite chapter 38 of title 31 of the United States Code, which provides administrative remedies for false statements. 31 U.S.C. §§ 3801-3812. But “[t]he Attorney General shall be responsible for judicial enforcement of any civil penalty or assessment imposed pursuant to the provisions of this chapter.” 31 U.S.C. § 3806. The Hollingers also cite 28 U.S.C. § 1746, which sets forth the form that a writing must take in order to be considered a sworn declaration. This statute also creates no cause of action.
The Hollingers make passing references to “fraud” and “statutes at large,” but even liberally construing the complaint to take account of the Hollingers' pro se status, we are unable to determine to what statute they refer, much less that they have set forth a federal controversy based on these references.
The Hollingers specifically cite the Truth in Lending Act (“TILA”). “Congress enacted TILA in 1968 to promote the ‘informed use of credit.'” Sherzer v. Homestar Mortgage Servs., 707 F.3d 255, 255 (3d Cir. 2013) (quoting 15 U.S.C. § 1601(a)). “To achieve this goal, TILA sought ‘to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.'” Id. A debtor may sue for damages for violations of TILA. See 15 U.S.C. §§ 1640(a), (e). Further, “when a loan made in a consumer credit transaction is secured by the borrower's principal dwelling, the borrower may rescind the loan agreement if the lender fails to deliver certain forms or to disclose important terms accurately.” Beach v. Ocwen Fed. Bank, 523 U.S. 410, 411 (1998) (citing 15 U.S.C. § 1635). Although the Hollingers allege having certain impressions about their property rights, the Hollingers do not make any factual allegations about failure to disclose terms surrounding their mortgage. See generally doc. 5-1.
“Dismissal for lack of jurisdiction is not appropriate merely because the legal theory is probably false, but only [if] the right claimed is ‘so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal controversy'” Kissi, 348 Fed.Appx. at 705-06 (quoting Oneida Indian Nation of N.Y., 414 U.S. at 666). Here, the Hollingers have not set forth an actual federal controversy. Accordingly, we find we lack federal question jurisdiction.
C. Removal.
Pursuant to 28 U.S.C. § 1446(a), “[a] defendant . . . desiring to remove any civil action from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant . . . in such action.” This the Hollingers did not do. Instead, in a case previously initiated by complaint, they filed a document purporting to be a notice of removal, among other things, and including no documents from the York County Court from which it appears the Hollingers intend to remove their foreclosure action. Doc. 4.
Moreover, we note for the Hollingers benefit that even if they were to remedy these procedural defects, they would still be required to demonstrate that we have jurisdiction over this case. “Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) (footnote omitted). From the filings it does not appear that we would have jurisdiction over the state action. The citizenship of the parties is not alleged, so we cannot find complete diversity as discussed above. The Hollingers instead appear to depend on alleged violations of federal criminal statutes by Sheriff Keuerleber. Doc. 4 at 3. But “[t]he presence or absence of federal-question jurisdiction is governed by the well-pleaded complaint rule[.]” Caterpillar, 482 U.S. at 392. “Under the well-pleaded-complaint rule, ‘federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint'” in the underlying state action. Maglioli v. All. HC Holdings LLC, 16 F.4th 393, 406 (3d Cir. 2021) (quoting Caterpillar, 482 U.S. at 392). Here, we are not presented with the state court complaint, so we cannot determine whether we would have federal question jurisdiction based on the complaint.
Accordingly, we recommend that the court remand this case to the York County Court of Common Pleas, due to the possibility that the state court interpreted the removal document as a proper notice of removal.
VI. Recommendations.
Based on the foregoing, we recommend that the Court dismiss the Hollingers' amended complaint for lack of subject-matter jurisdiction but grant them leave to file a second amended complaint. Furthermore, we recommend the Court deny as moot the pending motion to strike the notice of removal (doc. 8) and the motion to dismiss (doc. 12).
The Parties are further placed on notice that pursuant to Local Rule 72.3:
Any party may object to a magistrate judge's proposed findings, recommendations or report addressing a motion or matter described in 28 U.S.C. § 636 (b)(1)(B) or making a recommendation for the disposition of a prisoner case or a habeas corpus petition within fourteen (14) days after being served with a copy thereof. Such party shall file with the clerk of court, and serve on the magistrate judge and all parties, written objections which shall specifically identify the portions of the proposed findings, recommendations or report to which objection is made and the basis for such objections. The briefing requirements set forth in Local Rule 72.2 shall apply. A judge shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made and may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge, however, need conduct a new hearing only in his or her discretion or where required by law, and may consider the record developed before the magistrate judge, making his or her own determination on the basis of that record. The judge may also receive further evidence, recall witnesses or recommit the matter to the magistrate judge with instructions.