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Mortgage Guaranty Insurance Corp. v. Rivera

United States District Court, W.D. North Carolina, Charlotte Division

May 28, 2019

ANGEL L. RIVERA, Defendant.


          Frank D. Whitney, Chief United States District Judge.

         THIS MATTER comes now before the Court upon the Motion to Dismiss by pro se Defendant Angel Rivera (Doc. No. 5). Before considering the Motion to Dismiss the Court considers sua sponte the issue of subject matter jurisdiction. By Notice of Removal, Defendant claims this Court has jurisdiction under diversity of citizenship pursuant to § 1332(a)(1) and § 1332 (c)(1) (Doc. No. 1). For the reasons stated below, removal of this case on the basis of diversity of citizenship is improper and pursuant to § 1447(c) this case is REMANDED to the Mecklenburg County Civil Superior Division.

         I. BACKGROUND

         According to the Complaint, Plaintiff Mortgage Guaranty Insurance Corporation is a corporation engaged in the business of providing private mortgage insurance for the benefit of mortgage lenders. (Doc. No. 1-1, p. 3). Plaintiff is organized and incorporated in the State of Wisconsin and licensed as an insurance company by the State of North Carolina. Id. Defendant is an adult individual and resident of Mecklenburg County, North Carolina. Id. at 17. On or about March 19, 2008, Sue Hicks in her capacity as authorized agent for Defendant signed and delivered a promissory note to Bank of America, N.A. (“Lender”), stating Defendant promised to pay Lender the principal amount of $157, 500 plus interest at an annual rate of 6.625%, in monthly installments. Id. at 4.

         Plaintiff alleges Defendant defaulted under the terms of the Note. (Doc. No. 3-1, p. 1). The Substitute Trustee initiated foreclosure proceedings, and at public auction on March 27, 2018, Lender was the highest and last bidder for the Property, bidding $209, 900. (Doc. No. 1-1, p. 4). Plaintiff (as the insurer) provided private mortgage insurance to and for the benefit of the Note Holder (the insured) with respect to the Note and the Deed of Trust, issuing a policy of mortgage guarantee insurance that protected the Note Holder in the event of default by the borrower. Id. at 5. Bank of America, N.A. was the Note Holder as of March 27, 2018. Id. at 4. On or about April 24, 2018, the Note Holder filed a claim for loss against Plaintiff. Id. at 5. The Complaint indicates the claim for loss was $254, 400.84. Id. at 16.

         After crediting all payments and credits to which Defendant may be entitled, Plaintiff maintains the balance due and owing on the Note to be $35, 597.54 as of March 27, 2018. Id. Plaintiff asserts that as the insurer, Plaintiff was required to pay, and did pay, a payment to the Note Holder (the insured) in an amount greater than $35, 597.54 in connection with the loss (Doc. No. 5, p. 4). Pursuant to the terms of the policy, Plaintiff posits it was subrogated to the rights of the Note Holder (the insured), including the right to collect from Defendant the $35, 597.54 “Deficiency Balance.” Id. Defendant alleges that pursuant to the Deed of Trust they were obligated “to pay the premiums required to maintain the mortgage in effect, ” and challenges Plaintiff's right to recover the “Deficiency Balance” (Doc. No. 3, p. 2).

         Believing Defendant was a resident of Cabarrus County, Plaintiff filed its complaint in the General Court of Justice Superior Court for Cabarrus County, North Carolina on January 22, 2019, seeking a deficiency judgment of $35, 597.54 plus interest at the rate of 6.625% per annum from and after March 27, 2018 until paid, plus costs of this action. Id. at 1. Defendant was served the Summons and Complaint on March 5, 2019. Plaintiff, on March 8, 2019, made a motion pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure and N.C. Gen. Stat. § 1-83 for an Order to change venue from Cabarrus County to Mecklenburg County, where Defendant is now a resident (Doc. No. 1-1, p. 17). Defendant filed timely notice of removal on April 4, 2019 (Doc. No. 1).


         A defendant may remove “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). Defendant asserts that this Court has original subject matter jurisdiction solely on the basis of diversity of citizenship under § 1332(a) (Doc. No. 1). When subject matter jurisdiction is based on diversity of citizenship, “[(1)] no plaintiff may be a citizen of the same state as any defendant, and [(2)] the amount in controversy must exceed $75, 000, exclusive of interest and costs.” Elliott v. Am. States Ins. Co., 883 F.3d 384, 394 (4th Cir. 2018) (citing 28 U.S.C. § 1331(a)(1)). Further, “[t]he party seeking removal bears the burden of establishing federal subject matter jurisdiction.” Jones v. Wells Fargo Co., 671 Fed.Appx. 153, 154 (4th Cir. 2016); Hoshar v. Appalachian Power Co., 739 F.3d 163, 169 (4th Cir. 2014).

         In consideration of “well-established federalism concerns, removal jurisdiction must be strictly construed.” Jones, 671 Fed.Appx. at 154. Thus, 28 U.S.C. § 1447(c) provides, “[i]f at any time before final judgement it appears that the district court lacks subject matter jurisdiction the case shall be remanded.” See also Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 816 (4th Cir. 2004) (per curiam) (declaring “if federal jurisdiction is doubtful, a remand to state court is necessary”). Therefore, pursuant to 28 U.S.C. § 1447(c), “[t]he objection that a federal court lacks subject-matter jurisdiction . . . may be raised by a party, or by a court on its own initiative, at any stage in the litigation.” Arbaugh v. Y&H Corp., 546 U.S. 500, 506 (emphasis added).

         In determining whether this Court has subject matter jurisdiction, the citizenship of the parties will first be analyzed. If the parties are determined to be completely diverse, this analysis will then examine whether the amount in controversy exceeds $75, 000, exclusive of interest and costs.

         III. ANALYSIS

         For purposes of diversity of citizenship, “a corporation shall be deemed to be a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business.” 28 U.S.C. § 1332(c)(1). In determining a corporation's principal place of business, the Supreme Court held in Hertz Corp. v. Friend that principal place of business “refers to the place where the corporation's high level officers direct, control, and coordinate the corporation's activities, ” otherwise known as its “nerve center” 559 U.S. 77, 80 (2010).

         Individuals are citizens where they are “legally domiciled.” Sun Printing & Publ'g Ass'n v. Edwards, 194 U.S. 377, 382 (1904). In determining an individual's domicile, courts may consider factors such as “the person's declarations, place of business, payment of taxes, house of residence, driver's license and automobile registration and title, ownership of real and personal ...

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