Williams v. Specialized Loan Servicing, LLC

Background

Patricia Williams, proceeding without a lawyer, sued Specialized Loan Servicing, LLC; The Bank of New York Mellon; John Beggins; Stuart Irving; Anthony Paribello; Kara Sorrentino; and Community Housing Innovations, Inc. Her complaint asserted claims described as mortgage violations, violations of the foreclosure and modification process, breach of fiduciary duty under New York banking regulations, negligent misrepresentation, recovery, wrongful execution of a mortgage loan, and intentional infliction of emotional distress.

Community Housing Innovations, Paribello, and Sorrentino moved to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The court addressed subject-matter jurisdiction first because a court must resolve whether it has authority to hear a case before deciding whether the complaint states a valid claim.

Diversity Jurisdiction

The court held that diversity jurisdiction was unavailable because complete diversity was required. Williams was domiciled in New Rochelle, New York, and the complaint acknowledged that Community Housing Innovations’s principal place of business was in White Plains, New York. Because a plaintiff and a defendant were connected to the same state for diversity purposes, diversity was not complete.

The court also noted that the complaint did not clearly allege several defendants’ citizenship information, including places of incorporation, principal places of business, or domiciles. The court further noted that Community Housing Innovations represented that it was a New York domestic not-for-profit corporation, but stated that it did not need to rely on that unsupported representation to decide the motion.

Federal-Question Jurisdiction

The court also found that Williams had not established federal-question jurisdiction. Although the complaint referred briefly to the Real Estate Settlement Procedures Act and the Truth in Lending Act, it did not allege facts supporting a claim for relief under either statute. A reference to federal statutes, without supporting facts, was insufficient to establish federal jurisdiction.

Because the court found that subject-matter jurisdiction was lacking, it did not decide the defendants’ argument that the complaint failed to state a claim under Rule 12(b)(6).

Disposition

The court dismissed Williams’s claims against the defendants without prejudice. It allowed Williams to file an amended complaint within 30 days, but only to address specific pleading deficiencies involving any viable federal-question claims. The court stated that simply refiling the existing complaint would result in dismissal of the action, and that failing to file an amended complaint within 30 days would result in dismissal of the action with prejudice. Judge Philip M. Halpern directed the Clerk of Court to terminate the motion sequence at docket entry 27 and mail Williams a copy of the opinion and order.