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Council of Unit Owners of Fireside Condominium v. Bank of New York Mellon

United States District Court, Fourth Circuit

May 29, 2013

COUNCIL OF UNIT OWNERS OF FIRESIDE CONDOMINIUM, Plaintiff,
v.
THE BANK OF NEW YORK MELLON, Defendant.

MEMORANDUM OPINION

ALEXANDER WILLIAMS, Jr., District Judge.

Plaintiff Council of Unit Owners of Fireside Condominium (Fireside) filed suit against Defendant The Bank of New York Mellon (BONY) amid a dispute over a Deed of Trust BONY holds on a piece of property owned by Fireside. Pending before the Court are Plaintiff's Motion to Remand, Defendant's Motion for Leave to Amend Notice of Removal, Defendant's Motion for Leave to File a Surreply, and Defendant's Motion for Expedited Jurisdictional Discovery. Doc. Nos. 8, 11, 13, and 14. The Court has reviewed the parties' briefs and concludes that no hearing is necessary. See Loc. R. 105.6 (D. Md. 2011). For the reasons articulated below, Plaintiff's Motion to Remand will be GRANTED and Defendant's Motion for Leave to Amend Notice of Removal and Motion for Expedited Jurisdictional Discovery will be DENIED. The remaining motions in the case will be DENIED as moot.

I. FACTUAL AND PROCEDURAL BACKGROUND

Fireside filed suit against BONY in the Circuit Court for Montgomery County, Maryland on or about December 21, 2012. Doc. No. 1 at 2. Fireside is an unincorporated association of condominium owners, each of whom owns a unit on a property in Montgomery County. Doc. No. 2 at 2. BONY filed a notice of removal on February 7th, 2013, within the 30-day period for removal specified by 28 U.S.C. § 1446. Doc. No. 1. In doing so, BONY improperly relied upon 28 U.S.C. § 1332(d)(10) as a basis for diversity jurisdiction. The removal notice stated:

Upon information and belief, Plaintiff is an unincorporated condominium association located in the State of Maryland and subject to the laws of the State of Maryland. See generally Compl., Ex. A, ¶ 2. An unincorporated association is considered a citizen of the State where it has its principal place of business and the State under whose laws it is organized. 28 U.S.C. § 1332(d)(10). Here, Plaintiff is a citizen of Maryland.

Doc. No. 1 at 4. Section 1332(d)(10) is part of the Class Action Fairness Act, and both parties agree that it does not apply to the instant dispute. Doc. No. 8-1 at 4; Doc. No. 11-1 at 2. Instead, the parties agree that the proper standard to determine Fireside's citizenship is the citizenship of each of its members, the owners of the individual condominium units. Doc. No. 8-1 at 4; Doc. No. 11-1 at 2.

Based on this error, Fireside filed a motion to remand on February 28, 2013.[1] Doc. No. 8. On March 14, 2013, after the 30-day period for removal had elapsed, BONY filed a motion for leave to file an amended removal notice. Doc. No. 11. The relevant portion of the proposed amended removal notice reads:

Upon information and belief, Plaintiff is an unincorporated condominium association located in the State of Maryland and subject to the laws of the State of Maryland. See generally Compl., Ex. A, ¶ 2. An unincorporated association is considered a citizen of the State of which its members are citizens. Ferrell v. Express Check Advance of S.C. LLC, 591 F.3d 698, 703 (4th Cir. 2010). Upon information and belief, the members of Plaintiff are citizens of Maryland, and therefore, Plaintiff is a citizen of Maryland.

Doc. No. 11-2 at 4. BONY has not identified the names or citizenships of any individual members of Fireside. Doc. No. 1. BONY's removal notice stated multiple times that complete diversity exists between BONY and Fireside, even though the allegations BONY used to support that assertion were improper. Doc. No. 1 at 1-2, 4. Additionally, the complaint filed by Fireside specifies that Fireside is "an unincorporated condominium association located in the State of Maryland and subject to the laws of the State of Maryland." Doc. No. 2 at 2. Finally, BONY's civil cover sheet marked "diversity" as the basis for jurisdiction and Fireside as a "citizen of this state." Doc. No. 1-2.

BONY argues that there is no actual dispute about Fireside's citizenship, but that does not appear to be the case: Fireside is comprised of over 200 unit owners, some of whom are investors and lenders who may not be citizens of Maryland. Doc. No. 12-1 at 4. In an attempt to make the appropriate determination of Fireside's citizenship, BONY now files a motion for expedited jurisdictional discovery. Doc. No. 14.

II. ANALYSIS

"On a motion to remand, a court must strictly construe the removal statute and resolve all doubts in favor of remanding the case to state court.'" Receivership of Mann Bracken, LLP v. Cline, No. RWT 12cv292, 2012 WL 2921355, *2 (D. Md. 2011) (citing Stephens v. Kaiser Found. Health Plan of the Mid-Atl. States, Inc., 807 F.Supp.2d 375, 378 (D. Md. 2011)). "The burden of establishing federal jurisdiction is placed upon the party seeking removal.... Because removal jurisdiction raises significant federalism concerns, we must strictly construe removal jurisdiction.... If federal jurisdiction is doubtful, a remand is necessary." Mulcahey v. Columbia Organic Chems. Co., Inc., 29 F.3d 148, 151 (4th Cir. 1994) (citations omitted). While a strict construction of the removal statute is required, district courts should be cautious about denying defendants access to a federal forum because the decision to remand is effectively unreviewable. Semtek Int'l, Inc. v. Lockheed Martin Corp., 988 F.Supp. 913, 914-15 (D. Md. 1997).

Amendments to a removal notice are permitted by 28 U.S.C. § 1653, which states, in its entirety: "Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts." District courts in the Fourth Circuit have defined the interaction between § 1653 and the time limits for removal established in 28 U.S.C. § 1446 in two ways:

For issues of imperfect jurisdictional allegations, there appears to be a "liberal" and "strict constructionist" view of 28 U.S.C. § 1446(b)'s 30-day limitation period. The liberal approach generally allows for amendment that perfects a technically defective jurisdictional allegation after the 30 day removal period. The strict constructionist approach provides for a strict application of 28 U.S.C. § 1653, allowing amendment after 28 U.S.C. § 1446(b)'s thirty-day statutory period for removal has elapsed only for the purpose of setting forth more specifically ...

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