Davis v. Citizens Bank, N.A.

Background

Edward F. Davis and Regina C. Davis, representing themselves, sued Citizens Bank, N.A.; Citizens One Home Loans; Citizens Financial Group Inc.; CCO Mortgage Corp.; Royal Bank of Scotland; and RBS Citizens, N.A. They alleged that the defendants willfully mismanaged their mortgage contract and violated bankruptcy and consumer-credit laws. They sought money damages and injunctive relief.

The plaintiffs alleged that Citizens Bank, N.A. failed to pay property taxes on their home in February 2018, leading to $1,086.15 in late fees and interest that was deducted from their escrow account. They also alleged that the resulting public notice of delinquent taxes led to unwanted inquiries from people seeking to benefit from their financial problems. They further alleged that, in June 2019, the bank incorrectly told Allstate that their home was empty, causing Allstate to cancel their insurance policy, and that the bank refused to help reinstate it.

The plaintiffs had previously participated in a bankruptcy case in the Southern District of New York, and another bankruptcy case was pending when they filed this action. Citizens Bank, N.A. was a creditor in those bankruptcy cases.

Jurisdiction

The court explained that federal district courts generally have jurisdiction over federal-law claims and over disputes between citizens of different states when more than $75,000 is at stake.

The court held that the plaintiffs did not allege facts showing that they could bring a federal claim. To the extent they relied on the federal bankruptcy jurisdiction statute, the court stated that the bankruptcy court had jurisdiction over those claims. Because the plaintiffs had a pending bankruptcy case there, the district court declined to refer the claims to that court.

The court also held that diversity jurisdiction was unavailable. The plaintiffs were citizens of New York, the complaint alleged that a defendant had offices in New York, and the plaintiffs did not allege damages exceeding $75,000.

Disposition

The court dismissed the complaint for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(h)(3). The opinion did not state that the dismissal was with or without prejudice. The court granted the plaintiffs 30 days to replead their claims in an amended complaint. The amended complaint had to include facts supporting each claim against each defendant and facts establishing subject-matter jurisdiction. The court directed the plaintiffs to file it with the Pro Se Intake Unit and warned that failure to do so, absent good cause, would result in entry of a civil judgment consistent with the order and termination of the matter.

The court also denied the plaintiffs’ request for injunctive relief as moot. Judge Louis L. Stanton ordered the Clerk of Court to mail the order to the plaintiffs and keep the matter open until a civil judgment was entered.