MorEquity, Inc. v. Candelaria et al

Filing 3

MEORANDUM and ORDER DISMISSING 1 Complaint w/o prejudice ; pltf shall file an amended complaint w/i 21 days of this order; Clerk of Court will be directed to close this case if pltf does not file a timely amended complaint.Signed by Honorable James M. Munley on 4/16/13. (sm)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
MorEquity, Inc.,

:
No. 3:13cv944
Plaintiff
:
:
(Judge Munley)
v.
:
:
Luis A. Candelaria and
:
Clarissa Candelaria,
:
Defendants
:
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
MEMORANDUM
Before the court is Plaintiff MorEquity, Inc.’s (hereinafter “plaintiff”)
mortgage foreclosure complaint. (Doc. 1). A review of the complaint reveals
that it fails to establish this court’s subject matter jurisdiction. Therefore, the
court will dismiss the complaint without prejudice to plaintiff amending it to
cure the defects identified in this memorandum.
Background
Plaintiff filed the instant mortgage foreclosure action against Defendants
Luis A. Candelaria and Clarissa Candelaria on April 12, 2013. (Doc. 1,
Compl.). Plaintiff contends that this court has subject matter jurisdiction
pursuant to the diversity statute. See 28 U.S.C. § 1332(a)(1) (“The district
courts shall 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 . . . citizens of different States”). In support of this

contention, the complaint alleges as follows:
1. MorEquity, Inc. is a corporate body having a place of
business in c/o Nationastar Mortgage, LLC 350 Highland Drive,
Lewisville, TX 75067.
2. Defendants Luis A. Candelaria and Clarissa Candelaria, who
reside at 2659 Tacoma Drive, Blakeslee, PA 18610 is/are the
mortgagor(s) and real owner(s) of the real property hereinafter
described.
(Id. ¶¶ 1-2). For the following reasons, we find these averments are
insufficient to establish federal subject matter jurisdiction.
Discussion
Federal courts have an obligation to address issues of subject matter
jurisdiction sua sponte. See Shaffer v. GTE North, Inc., 284 F.3d 500, 502
(3d Cir. 2002) (citing Club Comanche, Inc. v. Gov't of the V.I., 278 F.3d 250,
255 (3d Cir. 2002)). Pursuant to the Federal Rules of Civil Procedure, federal
complaints are required to contain “a short and plain statement of the grounds
for the court’s jurisdiction, unless the court already has jurisdiction and the
claim needs no new jurisdictional support.” FED. R. CIV. P. 8(a)(1).
Here, plaintiff claims diversity jurisdiction. Cases are properly brought in
federal district court under the diversity statute when the action involves
citizens of different states and an amount in controversy, exclusive of interest
and costs, in excess of $75,000.00. See 28 U.S.C. § 1332(a). In cases
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premised on diversity of citizenship, there must be complete diversity between
the plaintiff and all of the defendants. See Gen. Refractories Co. v. First
State Ins. Co., No. 04-3509, 2012 WL 424247, at *2 (E.D. Pa. Jan. 30, 2012)
(citing Stawbridge v. Curtiss, 7 U.S. 267 (1806)). Moreover, when federal
jurisdiction is premised on diversity, a plaintiff’s failure to allege citizenship is
fatal. See Carlsberg Res. Corp. v. Cambria Sav. & Loan Ass'n, 554 F.2d
1254, 1256 (3d Cir.1977) (citing Thomas v. Bd. of Trs., 195 U.S. 207, 211
(1904)). District courts cannot overlook such a defect, even when the parties
fail to call attention to it or when they consent to have it waived. Id.
Furthermore, “[w]hen the foundation of federal authority is, in a particular
instance, open to question, it is incumbent upon the courts to resolve such
doubts, one way or the other, before proceeding to a disposition of the
merits.” Id.
In the instant case, plaintiff is identified as a corporation. For diversity
jurisdiction purposes, “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). A corporation can only have one principal place of business, S.
Freedman & Co., Inc. v. Raab, 180 F. App’x. 316, 320 (3d Cir. 2006), which is

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“the place where a corporation’s officers direct, control, and coordinate the
corporation’s activities.” Heinz Corp. v. Friend, 559 U.S. 77, 130 S. Ct. 1181,
1192 (2011). Court’s have commonly referred to this place as the
corporation’s “nerve center.” Id.
Plaintiff does not properly demonstrate its citizenship for subject matter
jurisdiction purposes. Plaintiff alleges, confusingly, that it has a corporate
place of business in care of another business entity– Nationastar Mortgage,
LLC.1 Plaintiff fails to allege its state of incorporation or its principal place of
business. As such, based upon the information alleged in the complaint, the
court cannot determine whether plaintiff meets the requirements of 28 U.S.C.
§ 1332(a)(1).
In addition, diversity of citizenship is insufficiently alleged in the
complaint as to Defendants Luis A. Candelaria and Clarissa Candelaria. For
natural persons, “[c]itizenship is synonymous with domicile, and ‘the domicile
of an individual is his true, fixed and permanent home and place of habitation.

1

With respect to determining the jurisdictional citizenship of an LLC,
federal courts look to the citizenship of the LLC’s members. See Zambelli
Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 418 (3d Cir. 2010). When one or
more of an LLC’s members is itself an LLC, then “‘the citizenship of
unincorporated associations must be traced through however many layers of
partners or members there may be’ to determine the citizenship of the LLC.”
Id. (quoting Hart v. Terminex Int’l, 336 F.3d 541, 543 (7th Cir. 2003)).
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It is the place to which, whenever he is absent, he has the intention of
returning.’” McCann v. Newman Irrevocable Trust, 548 F.3d 281, 286 (3d Cir.
2006) (quoting Vlandis v. Kline, 412 U.S. 441, 454 (1973)). The complaint
alleges that these defendants “reside” in Blakeslee, Pennsylvania. However,
it is well established that the term “citizenship” is not synonymous with
“resident.” See Bell v. Pleasantville Hous. Auth., 443 F. App’x 731, 734 (3d
Cir. 2011) (finding that the plaintiff’s physical presence at the address of
residence is “but only one factor” a court would examine to determine the
plaintiff’s place of domicile); see also Pa. House, Inc. v. Barrett, 760 F. Supp.
439, 449 (M.D. Pa. 1991) (“Although a party’s residence is prima facie
evidence of domicile, residency alone is insufficient to establish jurisdiction on
the basis of diversity: two elements are necessary to establish domicile,
residency coupled with an intent to continue to remain at that location.”). In
the instant case, to properly allege diversity jurisdiction, plaintiff must allege
the defendants’ state of citizenship, not merely the place of their current
residence.
Conclusion
For the reasons stated above, the court holds that the complaint fails to
adequately allege a basis for this court to exercise subject matter jurisdiction

5

because it alleges the citizenship of neither plaintiff nor defendants. Thus, the
court cannot determine whether subject matter jurisdiction exists. The court
will allow plaintiff twenty-one (21) days to cure the defects identified in this
memorandum.

6

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
MorEquity, Inc.,

:
No. 3:13cv944
Plaintiff
:
:
(Judge Munley)
v.
:
:
Luis A. Candelaria and
:
Clarissa Candelaria,
:
Defendants
:
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

AND NOW, to wit, this 16th day of April 2013, Plaintiff MorEquity, Inc.’s
complaint (Doc. 1) is hereby DISMISSED WITHOUT PREJUDICE. Plaintiff
MorEquity, Inc. shall file an amended complaint that adequately alleges
subject matter jurisdiction within twenty-one (21) days of the date of this
Order. The court will direct the Clerk of Court to close this case if plaintiff fails
to file a timely amended complaint.

BY THE COURT:

s/ James M. Munley
JUDGE JAMES M. MUNLEY
United States District Court

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