Barrett v. Fifth Third Bank et al
Filing
24
MEMORANDUM OPINION by Senior Judge Charles R. Simpson, III on 12/11/2013; re 11 MOTION to Remand ; a separate order will be entered in accordance with this opinion.cc:counsel (TLB)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
AT LOUISVILLE
CHARLOTTE E. BARRETT
PLAINTIFF
v.
NO. 3:13-CV-00494-CRS
FIFTH THIRD BANK and
TRANS UNION, LLC
DEFENDANTS
MEMORANDUM OPINION
This matter is before the court on a motion to remand filed by Plaintiff Charlotte E.
Barrett (“Plaintiff”) against Defendants Fifth Third Bank (“Fifth Third”) and Trans Union, LLC
(“Trans Union”) (collectively, “Defendants”). (DN 11). For the reasons set forth below, the
court will deny Plaintiff’s motion to remand (DN 11).
BACKGROUND
Plaintiff owns two properties located in Jefferson County, Kentucky: a personal residence
located at 4123 Dover Avenue (hereinafter, the “personal residence”), and rental property located
at 4127 Dover Avenue (hereinafter, the “rental property”). Fifth Third holds mortgages on both
the personal residence and the rental property, in addition to a home equity line of credit on the
personal residence. In November 2011, Fifth Third agreed to refinance the remaining debt on
the personal residence mortgage. Plaintiff alleges that in the refinancing agreement she signed in
November 2011, Fifth Third agreed to refinance the personal residence mortgage and allow
Plaintiff to pay off the remaining debt on said mortgage, leaving Fifth Third with the mortgage
on the rental property and the home equity line of credit on the personal residence. Plaintiff
contends that as a result of the refinancing agreement, Fifth Third paid off the remaining debt on
the rental property mortgage and the personal residence’s home equity line of credit, but it failed
to pay off the remaining debt on the personal residence mortgage. Plaintiff alerted Fifth Third to
this alleged error in December 2011, and again in March 2012, after receiving a notice from Fifth
Third that she was in default on the personal residence mortgage.
Plaintiff claims that she and Fifth Third entered into a separate mortgage agreement in
March 2012 to address the alleged error caused by the November 2011 refinancing agreement.
According to Plaintiff, the March 2012 mortgage agreement provided that the personal residence
mortgage would be extinguished and the rental property mortgage and home equity line of credit
revived. Yet after signing this mortgage agreement in March 2012, Plaintiff claims to have
received additional notices from Fifth Third concerning an outstanding mortgage on the personal
residence. Plaintiff also contends that she was denied financing in November 2012 as a result of
her alleged delinquency on the personal residence mortgage.
In addition to these claims, Plaintiff alleges that Jennifer Anglin (“Anglin”), the manager
of the Fifth Third branch at which Plaintiff was denied financing, made false statements
concerning Plaintiff’s lack of creditworthiness and alleged delinquency on the personal residence
mortgage. Plaintiff further claims that Fifth Third falsely reported to Trans Union that Plaintiff
was delinquent on the personal residence mortgage. Plaintiff maintains that since November
2012, she has repeatedly alerted Anglin to the falsity of the Trans Union report and has requested
that Fifth Third inform Trans Union of Fifth Third’s alleged errors.
On April 29, 2013, Plaintiff filed this action in Jefferson County Circuit Court.
Plaintiff’s complaint raised the following claims against Fifth Third1: common law negligence;
common law defamation; violation of the Kentucky Consumer Protection Act, KRS §
367.170(1); negligent violation of the Federal Credit Reporting Act (“FCRA”), 15 U.S.C. §
1
The complaint also stated several claims against Trans Union, but the court dismissed Trans Union as a defendant
to this action on June 19, 2013. (DN 18). Thus, the only parties remaining to this action are Plaintiff and Fifth
Third.
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1681s-2(a), (b); willful violation of the FCRA, 15 U.S.C. § 1681s-2(a), (b); and violation of the
Truth in Lending Act, 15 U.S.C. § 1666a. On May 16, 2013, after being served with Plaintiff’s
complaint, Trans Union—with Fifth Third’s consent—removed the action to this court on the
basis of federal question jurisdiction and pursuant to 28 U.S.C. § 1441. In its notice for removal,
Trans Union stated that the court has original jurisdiction over the action because it “falls within
the FCRA,” which creates federal question jurisdiction. On May 29, 2013, Plaintiff moved to
remand the action to Jefferson County Circuit Court, claiming that Trans Union failed to satisfy
its burden of establishing this court’s jurisdiction over the claims raised in the complaint.
Having reviewed the parties’ briefs and being otherwise sufficiently advised, the court will now
consider Plaintiff’s motion to remand.
STANDARD
Pursuant to 28 U.S.C. § 1441(a), a civil action filed in state court is removable only if it
could have originally been brought in federal court. 28 U.S.C. § 1441(a). Thus, “a district court
must remand a removed case if it appears that the district court lacks subject matter jurisdiction.”
Chase Manhattan Mortg. Corp. v. Smith, 507 F.3d 910, 913 (6th Cir. 2007). One source of
original jurisdiction is federal question jurisdiction, which is present only in cases “arising under
the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. Such jurisdiction
exists where “a well-pleaded complaint establishes either that federal law creates the cause of
action or that the plaintiff’s right to relief necessarily depends on resolution of a substantial
question of federal law” so that “federal law is a necessary element of one of the wellpleaded...claims.” Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 13,
27–28 (1983). However, “the plaintiff is the master of the claim,” Gafford v. Gen. Elec. Co., 997
F.2d 150, 157 (6th Cir. 1993) (quoting Smolarek v. Chrysler Corp., 879 F.2d 1326, 1329 (6th
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Cir. 1989)) (internal marks omitted), and “the fact that the wrong asserted could be addressed
under either state or federal law does not...diminish the plaintiff’s right to choose a state law
cause of action.” Alexander v. Elec. Data Sys. Corp., 13 F.3d 940, 943 (6th Cir. 1994). The
defendant bears the burden of establishing the existence of federal subject matter jurisdiction and
the propriety of the removal. Id. at 948–49; Eastman v. Marine Mech. Corp., 438 F.3d 544, 549
(6th Cir. 2006). “All doubts as to the propriety of removal are resolved in favor of remand.”
Coyne v. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999). Thus, federal question
jurisdiction requires not only that the plaintiff could have asserted a federal claim, but also that
the plaintiff has in fact chosen to characterize his or her claim as arising under federal law.
DISCUSSION
As the removing party, Fifth Third bears the burden of establishing federal jurisdiction.
See Alexander, 13 F.3d at 948–49. Plaintiff contends that Fifth Third has failed to establish that
a substantial question of federal law exists in this case, and she cites to the case of
Commonwealth ex rel. Gorman v. Comcast Cable of Paducah, Inc., 881 F. Supp. 285 (W.D. Ky.
1995) to support her argument that the action was improperly removed. Plaintiff relies on
Gorman for the proposition that when a plaintiff files an action in a Kentucky state court
invoking Kentucky’s Consumer Protection Act, a defendant may remove the action only if “the
plaintiff’s right to relief depends necessarily on a substantial question of federal law.” Gorman,
881 F. Supp. at 289 (emphasis in original). However, Plaintiff’s reliance on this case is
misplaced. In Gorman, the plaintiff brought state claims under the Kentucky Consumer
Protection Act, and her complaint merely referenced a federal statute to set the standard of
conduct for the state law claims. Id. That situation is distinguishable from the case at bar, in
which Plaintiff’s complaint contains a separate cause of action for Fifth Third’s alleged
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violations of the FCRA. Unlike in Gorman, Plaintiff’s complaint does not use the FCRA to set
the standard of conduct for her state law claim. Rather, Plaintiff’s FCRA claim is independent
from her claims arising under the Kentucky Consumer Protection Act and the common law.
It is also well-settled that the plaintiff is the “master of the claim; he or she may avoid
federal jurisdiction by exclusive reliance on state law.” Phillips v. Southern Graphic Sys., 380 F.
Supp. 2d 827, 828 (W.D. Ky. 2005) (citing Caterpillar Inc. v. Williams, 482 U.S. 386, 392
(1987)). Though Plaintiff could have avoided federal jurisdiction by relying solely on state and
common law claims, she chose to allege violations of—and seek relief under—the FCRA. Thus,
federal question jurisdiction exists because Plaintiff’s “well-pleaded complaint establishes...that
federal law creates the cause of action....” Franchise Tax Bd. of Cal., 463 U.S. at 27–28.
Therefore, removal was proper because Plaintiff chose to characterize her claim as arising under
federal law.
In the alternative, Plaintiff argues that even if federal question jurisdiction exists, the
court should decline to exercise supplemental jurisdiction over her state and common law claims.
Title 28 U.S.C. § 1367(a) provides that “in any civil action of which the district courts have
original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims
that are so related to claims in the action within such original jurisdiction that they form part of
the same case or controversy under Article III of the United States Constitution.” 28 U.S.C. §
1367(a). “Claims form part of the same case or controversy when they derive from a common
nucleus of operative facts.” Harper v. AutoAlliance Int’l, Inc., 392 F.3d 195, 209 (6th Cir. 2004)
(quotations and citations omitted). Although § 1367(a) authorizes federal courts to exercise
supplemental jurisdiction over state law claims, federal courts are not required to exercise
jurisdiction in all cases. See City of Chicago v. Int’l Coll. of Surgeons, 522 U.S. 156, 172 (1997).
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Rather, district courts can decline to exercise jurisdiction for a number of valid reasons and
should “deal with cases involving claims in the manner that best serves the principles of
economy, convenience, fairness and comity which underlie the jurisdiction doctrine.” Id.
Plaintiff contends that the court should decline to exercise supplemental jurisdiction over
her state and common law claims because the facts that give rise to those claims do not arise
from the same nucleus of operative fact as the FCRA claims. The court finds, however, that the
facts underlying Plaintiff’s state and common law claims are sufficiently related and intertwined
with Plaintiff’s federal claims, such that the exercise of the court’s supplemental jurisdiction
under 28 U.S.C. § 1367(a) is warranted. Plaintiff’s state, common law, and federal claims all
require proof of similar facts. In particular, they each require proof that Fifth Third made false
reports to Trans Union, that Plaintiff was not delinquent on the personal residence mortgage, and
that Fifth Third published false statements regarding Plaintiff’s creditworthiness. Because
Plaintiff’s state and common law causes of action are so related to her federal claims that they
form part of the same case or controversy, this court has supplemental jurisdiction over
Plaintiff’s related state and common law claims pursuant to 28 U.S.C. § 1367(a). Accordingly,
the court finds that this case was properly removed to federal court pursuant to 28 U.S.C. §
1441(a). Therefore, Plaintiff’s motion to remand (DN 11) must be denied.
A separate order will be entered in accordance with this opinion.
December 11, 2013
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