Fiallo et al v. PNC Bank, National Association et al

Filing 14

MEMORANDUM OPINION AND ORDER granting 8 MOTION by plaintiffs to Remand to State Court ; directing clerk to remand case to the Circuit Court for Montgomery County and close this case. Signed by Judge Paul W. Grimm on 12/9/2014. (c/m 12/9/2014 aos, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Southern Division
ROBERT FIALLO, et ux.,

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Plaintiffs,

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v.

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PNC BANK, NATIONAL
ASSOCIATION, et al.,

Case No.: PWG-14-1857

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Defendants.
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MEMORANDUM OPINION AND ORDER
Plaintiffs Robert Fiallo and Jeanette S. Fiallo obtained a mortgage loan to purchase 10823
Burbank Drive, Potomac, Maryland 20854 (the “Property”) in 2003, but “fell behind in payments
in or about 2010.” They claim that they repeatedly attempted, without success, to contact PNC
“to bring [the] loan current.” Compl. ¶¶ 11, 14, 21, 23 & 28, ECF No. 2. After PNC began the
foreclosure process in August 2013, id. ¶ 18, Plaintiffs filed a Complaint against the current
administrator of their loan, Defendants PNC Bank, National Association; the PNC Financial
Services Group d/b/a PNC Bank, National Association; PNC Bank NA; and PNC Mortgage
(collectively, “PNC”) in the Circuit Court for Montgomery County, alleging eight state law
claims and seeking a declaratory judgment that “Defendants were not permitted to bring the
foreclosure proceeding under the circumstances [described in the Complaint]” and that the
“foreclosure proceeding should be dismissed,” Compl.
PNC removed the case to this Court on the basis of diversity jurisdiction. Notice of
Removal ¶ 5, ECF No. 1. Plaintiffs have filed a motion to remand to state court. ECF No. 8. It

is undisputed that the parties are diverse. See id. ¶¶ 6–8; Pls.’ Mot. PNC asserts that, “[i]n
actions seeking declaratory or injunctive relief, it is well established that ‘the amount in
controversy is measured by the value of the object of the litigation,’” and in this case, the
Property is the object of the declaratory judgment action and its value greatly exceeds $75,000.
Notice of Removal 9–10 (quoting Hunt v. Wash. State Apple Advertising Comm’n, 432 U.S. 333,
347 (1977)).
Pursuant to 28 U.S.C. § 1332(a), federal district courts “have original jurisdiction of all
civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of
interest and costs, and is between—(1) citizens of different States . . . .” When a plaintiff files
such an action in state court, the action “may be removed by the defendant or the defendants, to
the district court of the United States for the district and division embracing the place where such
action is pending.” 28 U.S.C. § 1441(a). But, “[i]f 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).
Here, as noted, it is undisputed that the parties are diverse, and Plaintiffs’ argument for
remand hinges on the amount in controversy.

Noting that they have filed an Amended

Complaint that eliminates the count for a declaratory judgment, ECF No. 7, Plaintiffs ask the
Court to remand the action to state court. ECF No. 8. They insist that they did not amend to
defeat jurisdiction, Pls.’ Mot. ¶ 4, but rather because the count was “unnecessary and
duplicative,” as “that issue is currently being determined in state court in the underlying
foreclosure action,” id. ¶ 2. Plaintiffs argue that a remand, while “not . . . required,” is “certainly
appropriate.” Pls.’ Mem. 2.  

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“[T]he amount in controversy for jurisdictional purposes is determined at the time of
removal.” Ross v. Mayor & City Council of Baltimore, No. ELH-14-369, 2014 WL 2860580, at
*5 (D. Md. June 20, 2014); see Porsche Cars North America, Inc. v. Porsche.net, 302 F.3d 248,
255–56 (4th Cir. 2002) (“[A] court determines the existence of diversity jurisdiction ‘at the time
the action is filed,’ regardless of later changes in originally crucial facts such as the parties’
citizenship or the amount in controversy.” (quoting Freeport–McMoRan, Inc. v. K N Energy,
Inc., 498 U.S. 426, 428 (1991))). Moreover, for well over a century, it has been “the general rule
that when the jurisdiction of a [trial] court of the United States has once attached it will not be
ousted by subsequent change in the conditions.” Kirby v. Am. Soda Fountain Co., 194 U.S. 141,
145–46 (1904) (citing, e.g., Clarke v. Matthewson, 37 U.S. (12 Pet.) 164, 171 (1838)); see St.
Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289–90 (1938) (same); Choice Hotels
Int’l, Inc. v. Shiv. Hospitality, L.L.C., 491 F.3d 171, 176 (4th Cir. 2007) (same). A plaintiff’s
reduction of the amount in controversy after removal is a subsequent event. Thompson v.
Victoria Fire & Cas. Co., 32 F. Supp. 2d 847, 849 (D.S.C. 1999) (“post-removal events, such as
amending a complaint in order to reduce the amount in controversy below the jurisdictional
limit, do not deprive federal court of diversity jurisdiction”) (emphasis added); see also Wiley v.
Advance Am., No. 3:07-3553-TLW-TER, 2008 WL 4179652 (D.S.C. Sept. 5, 2008) (“post
removal amendments cannot divest the court of jurisdiction”). Thus, “[i]t is well settled that
jurisdiction depending on diversity of citizenship is not lost . . . by the reduction of the amount
demanded below the jurisdictional amount.”

Hood ex rel. N.C. Bank & Trust Co. v. Bell, 84

F.2d 136, 137 (4th Cir. 1936).
The Fiallos are not the first plaintiffs to seek to secure remand by reducing their demands.
See, e.g., Kirby, 194 U.S. 141. In Kirby, after the defendant properly removed the case to federal

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court, the plaintiff reduced the amount in controversy and then moved to remand for lack of
jurisdiction. Id. at 145. The district court denied the plaintiff’s motion, and the Supreme Court
affirmed, reasoning that the amount in controversy exceeded the jurisdictional amount at the time
of removal, and the “jurisdiction thus acquired by the circuit court was not d[i]vested by
plaintiff’s subsequent action.” Id. at 146; see also Kanouse v. Martin, 56 U.S. (15 How.) 198,
207–08 (1853) (stating that federal court had jurisdiction even though, after removal, plaintiff
reduced his demand to below the jurisdictional minimum, because “when the jurisdiction of a
court of the United States has once attached, no subsequent change in the condition of the parties
would oust it”).
Here, Plaintiffs originally included a declaratory judgment count regarding their rights to
the Property, and it is undisputed that the declaratory judgment count put the amount in
controversy well over the jurisdictional minimum. It is true that, by amending and eliminating
that count, Plaintiffs reduced their demands to $70,000, $5,000 below the jurisdictional
minimum. See 28 U.S.C. § 1332(a). But, they did not do so until after Defendants filed their
Notice of Removal. Thus, when Defendants filed their Notice of Removal, the “matter in
controversy exceed[ed] the sum or value of $75,000,” and this Court had jurisdiction, see id., and
removal was proper, see 28 U.S.C. § 1441(a). Moreover, Plaintiffs’ reduction of the amount in
controversy did not destroy jurisdiction.

Kirby, 194 U.S. at 146; Cooke, 69 U.S. at 218;

Kanouse, 56 U.S. at 208; Hood, 84 F.2d at 137. Therefore, this Court has diversity jurisdiction,
and a remand for lack of subject-matter jurisdiction is not warranted.

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Perhaps ironically, had Plaintiffs not amended, a remand would have been warranted for
the declaratory judgment count pursuant to the Younger abstention doctrine, see Younger v.
Harris, 401 U.S. 37 (1971),1 and the remaining claims pursuant to 28 U.S.C. § 1367(c).
The doctrine of abstention articulated in Younger requires a federal court to
abstain from interfering in state proceedings, even if jurisdiction exists,” if there
is: “(1) an ongoing state judicial proceeding, instituted prior to any substantial
progress in the federal proceeding; that (2) implicates important, substantial, or
vital state interests; and (3) provides an adequate opportunity for the plaintiff to
raise the federal constitutional claim advanced in the federal lawsuit.
Laurel Sand & Gravel, Inc. v. Wilson, 519 F.3d 156, 165 (4th Cir. 2008); see Graves v. One West
Bank, FSB, No. DKC-13-3343, 2014 WL 994366, at *2 (D. Md. Mar. 13, 2014) (same).
Significantly, “‘“Younger is not merely a principle of abstention; rather, the case sets forth a
mandatory rule of equitable restraint, requiring the dismissal of a federal action.”’” Id. (quoting
Williams v. Lubin, 516 F. Supp. 2d 535, 539 (D. Md. 2007)). Section 1367 provides that this
Court “may decline to exercise supplemental jurisdiction [over claims that form part of the same
controversy as those over which the Court has original jurisdiction] if . . . (3) the district court
has dismissed all claims over which it has original jurisdiction.” 28 U.S.C. § 1367(c)(3).
Here, the foreclosure proceedings in state court satisfy the first element of the Younger
doctrine. Maryland’s “substantial interest in its property law” satisfies the second element.
Graves, 2014 WL 994366, at *2 (citing Harper v. Pub. Serv. Comm’n of W. Va., 396 F.3d 348,

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Although Younger is not a jurisdictional doctrine, district courts may raise the issue sua sponte.
See Boyd y. Georgia, 512 F. App’x 915, 916 (11th Cir. 2013) (affirming sua sponte dismissal on
Younger abstention grounds); D.A. Osguthorpe Family P’ship v. ASC Utah, Inc., 705 F.3d 1223,
1231 (10th Cir. 2013) (“a court may raise the issue of abstention sua sponte”) see also
Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 717, 718, 721 (1996) (“[I]t has long been
established that a federal court has the authority to decline to exercise its jurisdiction when it is
asked to employ its historic powers as a court of equity. . . . [T]he authority of a federal court to
abstain from exercising its jurisdiction extends to all cases in which the court has discretion to
grant or deny relief.” It does not extend to damages actions, which may be stayed but not
dismissed on abstention grounds. (citations and quotation marks omitted)).
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352 (4th Cir. 2005) (“[P]roperty law concerns, such as land use and zoning questions, are
frequently ‘important’ state interests justifying Younger abstention.”)). Thus, given that the
Fiallos do not advance any federal constitutional claims, the Younger doctrine would require
dismissal of the one claim giving rise to this Court’s jurisdiction. See id.; Williams, 516 F. Supp.
2d at 539; Nivens, 444 F.3d at 247. Accordingly, it would be appropriate to dismissal the
remaining state law claims. See 28 U.S.C. § 1367(c)(3).
Under the unusual circumstances of this case, Plaintiffs eliminated the one claim that
both gave rise to this Court’s jurisdiction and for which dismissal was necessary. It would not be
appropriate for this Court to retain jurisdiction over the remaining eight claims, all based in state
common law and all concerning the Property that is the subject of a pending foreclosure
proceeding.2 Therefore, this Court will decline to exercise supplemental jurisdiction over the
remaining claims.

See 28 U.S.C. § 1367(c)(4) (permitting such action “in exceptional

circumstances” when “there are . . . compelling reasons for declining jurisdiction”); see also 28
U.S.C. § 1367(c)(3).
Accordingly, it is this 9th day of December, 2014, hereby ORDERED that:
1. Plaintiffs’ Motion to Remand, ECF No. 8, IS GRANTED; and
2. The Clerk IS DIRECTED to remand this case to the Circuit Court for Montgomery
County and to CLOSE THIS CASE.
/S/
Paul W. Grimm
United States District Judge
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  The Maryland Judiciary Case Search website, the contents of which I judicially notice, Fed. R.
Civ. P. 201, 803(8)(a)(i), 901(b)(5), establishes that the foreclosure action with regard to the
Property still is pending in the Circuit Court for Montgomery County. 

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