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Craddock v. Beneficial Financial I Inc.

United States District Court, W.D. Virginia, Roanoke Division

May 19, 2014

MICHAEL C. CRADDOCK, ET AL., Plaintiffs,
v.
BENEFICIAL FINANCIAL I INC., Defendant.

MEMORANDUM OPINION

GLEN E. CONRAD, Chief District Judge.

This case is presently before the court on the plaintiffs' motion to remand, or in the alternative, for leave to amend the complaint. For the following reasons, the motion will be denied.

Background

The plaintiffs, Michael and Lourie Craddock, initiated this suit to quiet title in the Circuit Court of Craig County, Virginia. Although the plaintiffs named Beneficial Mortgage Company of Virginia ("Beneficial Mortgage") and Beneficial Discount Company of Virginia ("Beneficial Discount") as the only defendants to the suit, Beneficial Financial I Inc. ("Beneficial Financial") removed the case under the federal diversity jurisdiction statute, 28 U.S.C. § 1332, asserting that the named defendants had previously been merged into Beneficial Financial. Shortly thereafter, the plaintiffs filed the instant motion to remand, or in the alternative, for leave to amend the complaint. The matter has been fully briefed and, with neither party requesting a hearing, the matter is ripe for review.

Discussion

I. Motion to Remand

"If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). The Craddocks assert that the court lacks subject matter jurisdiction and seek to remand their case to the Circuit Court of Craig County. The plaintiffs base their motion to remand on (1) lack of diversity jurisdiction; (2) the doctrine of unclean hands; and (3) the Rooker-Feldman doctrine. The court will address each argument in turn.

A. Lack of Diversity Jurisdiction

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 interests and costs, and is between... citizens of different States." 28 U.S.C. § 1332(a)(1). "[A] corporation shall be 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). "If a plaintiff files suit in state court and the defendant seeks to adjudicate the matter in federal court through removal, it is the defendant who carries the burden of alleging in his notice of removal and, if challenged, demonstrating the court's jurisdiction over the matter." Strawn v. AT&T Mobility LLC , 530 F.3d 293, 296 (4th Cir. 2008).

Here, the parties agree that the Craddocks are citizens of Virginia. Compl. ¶ 1, Docket No. 1-1; Notice of Removal ¶ 5, Docket No. 1. However, the parties disagree over the identity and citizenship of the corporate defendant(s). In their complaint, the plaintiffs name as defendants both Beneficial Mortgage and Beneficial Discount. The Craddocks allege that each entity is incorporated in Delaware, with its principal place of business in Virginia. On the contrary, Beneficial Financial asserts in its notice of removal that the plaintiffs improperly identified the defendant in their complaint because Beneficial Mortgage and Beneficial Discount had previously merged into Beneficial Financial. The defendant alleges that Beneficial Financial is incorporated in California, with its principal place of business in Illinois.

Recognizing that the record contained insufficient evidence upon which to consider the plaintiffs' motion to remand, the court invited the parties to present evidence, declarations, or affidavits on the narrow issue of whether Beneficial Mortgage and Beneficial Discount are entities that no longer exist because they merged into Beneficial Financial. After reviewing the parties' submissions, the court is convinced that the named defendants have, in fact, merged into Beneficial Financial.[1] Further, the defendant has sufficiently established that Beneficial Financial is a California corporation with its principal place of business in Mettawa, Illinois. Therefore, the defendant is deemed to be a citizen of California and Illinois for diversity jurisdiction purposes, and the parties are completely diverse. 28 U.S.C. § 1332(c)(1).

The plaintiffs also argue that "the amount in controversy is questionable" since "there is no actual money in controversy." Mot. to Remand ¶ 4, Docket No. 5. It is well-established that in suits to quiet title, "the amount in controversy is the value of the whole of the real estate to which the claim extends and not the value of [the] defendant's claim." Peterson v. Sucro , 93 F.2d 878, 882 (4th Cir. 1938) (internal quotation marks and citations omitted); see also id. ("[I]t is the value of the property rather than the claim of the contending parties which fixes the amount in controversy for purposes of jurisdiction."). Here, the unchallenged value of the real estate at issue is $210, 300 - well above the $75, 000 threshold required under 28 U.S.C. § 1332. See Real Property Tax Assessor Record, Notice of Removal Ex. 3, Docket No. 1-3.

Since the parties are completely diverse and the amount in controversy exceeds $75, 000, the plaintiffs' motion to remand for lack of diversity jurisdiction must be denied. See Carnegie-Mellon Univ. v. Cohill , 484 U.S. 343, 356 ...


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