Ippolito et al v. SunTrust Bank et al

Filing 18

ORDER that all claims asserted by the Plaintiffs, with the exception of the claims asserted by Plaintiff Mark A. Ippolito, are hereby severed from this action; futher denying as moot 9 Motion to Dismiss for Failure to State a Claim. ***See Order for further instructions***. Signed by District Judge Martin Reidinger on 06/22/2012. (thh)

THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
BRYSON CITY DIVISION
CIVIL CASE NO. 2:12cv5

MARK A. IPPOLITO, NEIL H. ULLMAN,
and WILLIAM WRIGHT,
Plaintiffs,
vs.
SUNTRUST BANK and APRIL
KISSELBURG DAVIS,
Defendants.

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ORDER

THIS MATTER is before the Court on the parties’ Response to the
Court’s Show Cause Order [Docs. 16, 17].
I.

PROCEDURAL BACKGROUND
This is an action brought by three purchasers of subdivision lots in a

failed real estate development in Jackson County, North Carolina known as
the River Rock subdivision (“River Rock”). [Complaint, Doc. 1 at ¶ 1]. The
Plaintiffs have brought suit against Suntrust Bank and April Kisselburg Davis
for violations of the Interstate Land Sales Act, 15 U.S.C. § 1703(a)(2) (“ILSA”),
violations of the North Carolina Deceptive Trade Practices Act, N.C. Gen.
Stat. § 75-1.1, et seq. (“Chapter 75”), negligent misrepresentation, and fraud,

arising from the Defendants’ alleged involvement in a scheme to artificially
inflate the value of the lots in River Rock. The Defendants have moved to
dismiss the Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure. [Doc. 9].
On June 6, 2012, the Court entered an Order questioning whether the
Plaintiffs are properly joined in this action pursuant to Rule 20 of the Federal
Rules of Civil Procedure and ordering the parties to show cause why the
Plaintiffs should not be severed in this case and why each should not be
required to pay the requisite filing fee. [Doc. 15]. The parties responded to
the Court’s Show Cause Order on June 20, 2012. [Docs. 16, 17].
II.

DISCUSSION
Rule 20 of the Federal Rules of Civil Procedure provides that persons

may be joined as plaintiffs in one action if:
(A) they assert any right to relief jointly, severally, or
in the alternative with respect to or arising out of the
same, transaction, occurrence, or series of
transactions or occurrences; and
(B) any question of law or fact common to all plaintiffs
will arise in the action.
Fed. R. Civ. P. 20(a)(1). The “transaction or occurrence” test set forth in Rule
20 “is designed to permit all reasonably related claims for relief by or against

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different parties to be tried in a single proceeding.” Advamtel, LLC v. AT&T
Corp., 105 F.Supp.2d 507, 514 (E.D. Va. 2000). “Absolute identity of all
events is not necessary, and the rule should be construed in light of its
purpose, which is to promote trial convenience and expedite the final
determination of disputes, thereby preventing multiple lawsuits.” Id.
Joinder is not a substantive right; it is a procedural mechanism that
allows parties with similar substantive claims to enforce them jointly. See
Saval v. BL Ltd., 710 F.2d 1027, 1031 (4th Cir. 1983). Courts have “wide
discretion concerning the permissive joinder of parties” under Rule 20.
Aleman v. Chugach Support Servs., Inc., 485 F.3d 206, 218 n.5 (4th Cir.
2007). As the Fourth Circuit has recognized, whether claims are properly
joined under Rule 20 is a determination that must be made on a case-by-case
basis. Saval, 710 F.2d at 1031. The Court may act upon motion by a party
or sua sponte to remedy improperly joined parties. Fed. R. Civ. P. 21. Where
plaintiffs are improperly joined, the proper remedy is not to dismiss the
misjoined parties but rather to sever all misjoined claims. See Grennell v.
Western Southern Life Ins. Co., 298 F.Supp.2d 390, 399 (S.D. W. Va. 2004).
In the present case, the Plaintiffs contend that they are properly joined
in this action because their claims all arise from the same series of

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transactions or occurrences, namely, the purchase of lots in River Rock.
Beyond the mere fact that the Plaintiffs were all purchasers in the same
subdivision, however, there is little commonality between the Plaintiffs’ claims.
Each of the claims arise out of the purchase of a separate lot (or lots) that
were purchased at different times and relate to financing that occurred under
circumstances entirely different from every other lot purchase.
Further, to the extent that the Plaintiffs assert claims based on
misrepresentations and fraud, such claims are entirely dependent on facts
specific to each Plaintiff, such as the particular misrepresentation made and
the reasonableness of any reliance by the particular Plaintiff on such
misrepresentation.

Given the variation in the Plaintiffs’ claims, and the

uniquely personal nature of the deception claims in particular, each Plaintiff
will require a “mini-trial,” each involving different evidence and testimony.
Such a trial would be an “enormous burden” on the Court and would
substantially hinder the fair administration of justice. CineTel Films, Inc. v.
Does 1-1,052, __ F.Supp.2d __, Civil No. JFM 8:11-cv-02438, 2012 WL
1142272, at *8 (D. Md. Apr. 4, 2012).
The Court further notes that the filing of these claims as a single lawsuit
when they are in fact separate lawsuits causes inaccuracies in the filing

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statistics of this District. Such inaccuracies are not insignificant. As another
Court in this District has noted, “[s]uch statistical data is extremely important
as it determines the resources that are necessarily allotted to this district.
Thus, the misfiling of these cases could result in less resource[s] being
allocated to the district than it is entitled to which, of course, could have
negative consequences.” Slep-Tone Entertainment Corp. v. Mainville, No.
3:11-cv-00122, 2011 WL 4713230, at *5 n.3 (W.D.N.C. Oct. 6, 2011) (Mullen,
J.). Moreover, the filing of the Plaintiffs’ claims as a single action, with the
payment of a one-time $350 filing fee, does little to compensate the Court “for
this significant drain on judicial resources.” CineTel, 2012 WL 1142272, at *8
n.4.
In arguing in favor of joinder, the Plaintiffs note that the Court previously
consolidated a similar group of individually-filed cases in Synovus Bank v.
Karp, 1:10cv172.

The individual cases in Karp, however, have been

consolidated only for the purposes of pretrial proceedings, and the issue of
whether those cases should be consolidated for trial purposes remains to be
resolved. The claims asserted by the Plaintiffs in the present case may have
enough commonality to justify a limited consolidated for some purposes of
pretrial proceedings, as in Karp. For the reasons discussed above, however,

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what limited commonality these claims have does not justify the continued
joinder of such a disparate group of Plaintiffs in this one civil action.
In sum, the Court concludes that there is no legitimate basis for joining
all of the Plaintiffs together in a single lawsuit. The Plaintiffs’ claims lack the
requisite commonality to justify joinder pursuant to Rule 20(a). Accordingly,
the Court concludes that all of the claims asserted by the Plaintiffs in this
matter, aside from the claims asserted by the Plaintiff Mark A. Ippolito shall be
severed from this action and refiled, upon payment of the requisite filing fees,
as new, separate actions.

Such claims shall be filed based upon the

particular lot purchased and shall include only those Plaintiffs and Defendants
associated with that particular lot purchase. Any Complaints that are filed
further must include factual allegations of sufficient particularity to conform to
the standards of Rule 9(b) of the Federal Rules of Civil Procedure and
otherwise should provide an adequate description of the basis for the specific
claims asserted against the named Defendants.
IT IS, THEREFORE, ORDERED that all claims asserted by the
Plaintiffs, with the exception of the claims asserted by Plaintiff Mark A. Ippolito
are hereby SEVERED from this action.

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IT IS FURTHER ORDERED that within thirty (30) days of the entry of
this Order and upon payment of the requisite filing fees, the severed Plaintiffs
may refile their claims as separate lawsuits against the Defendants or seek
dismissal of their claims.
IT IS FURTHER ORDERED that the Defendants shall have thirty (30)
days from service of the newly filed Complaints to answer or otherwise
respond.
IT IS FURTHER ORDERED that the Plaintiff Mark A. Ippolito shall file
an Amended Complaint within thirty (30) days of the entry of this Order.
IT IS FURTHER ORDERED that the Defendants shall have thirty (30)
days from service of Plaintiff Ippolito’s Amended Complaint to answer or
otherwise respond.
IT IS FURTHER ORDERED that the Motion to Dismiss filed by
Defendants Suntrust Bank and April Kisselburg Davis [Doc. 9] is DENIED AS
MOOT.
IT IS SO ORDERED.

Signed: June 22, 2012

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