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Covert v. Automotive Credit Corp.

United States District Court, Fourth Circuit

September 12, 2013

KEVIN COVERT, Plaintiff
v.
AUTOMOTIVE CREDIT CORP. Defendant

MEMORANDUM

JAMES K. BREDAR UNITED STATES DISTRICT JUDGE

Kevin Covert (“Plaintiff”) brought this putative class action against Automotive Credit Corporation (“Defendant”) alleging breach of contract and violations of the Maryland Credit Grantor Closed End Credit Provisions (“CLEC”), Md. Code Ann., Com. Law §§ 12-1001, et seq., and the Maryland Consumer Debt Collection Act (“MCDCA”), Md. Code Ann., Com. Law §§ 14-201, et seq. Now pending before the Court is Plaintiff’s motion to remand the case to state court. (ECF No. 16). The issues have been briefed and no hearing is required. Local Rule 105.6. For the reasons set forth below, Plaintiff’s motion will be GRANTED.

I. BACKGROUND

On April 23, 2013, Plaintiff filed this action in the Circuit Court of Maryland for Baltimore City (“Circuit Court”). (See Compl., ECF No. 2).

On May 31, 2013, Defendant filed a motion to strike Plaintiff’s class action complaint and jury demand with the Circuit Court. (ECF No. 4). Defendant claimed that the complaint failed to meet the requirements of Md. R. 2-305 in that it failed to include an ad damnum clause. (Id. ¶¶ 3, 4, 6).[1] On June 11, Plaintiff filed an amended complaint with the Circuit Court. (See Am. Compl., ECF No. 6). On July 8, this Court found Plaintiff’s motion to strike to be moot. (ECF No. 14).

The allegations in the complaint stem from the events surrounding the repossession of Plaintiff’s car by Defendant after Defendant deemed him in default of his retail installment contract. (Id. ¶¶ 9, 10). Specifically, Plaintiff alleges that Defendant failed to send defaulting borrowers adequate pre- and post-repossession notices and unlawfully collected or sought deficiencies from defaulting borrowers for interest, costs, fees, and other charges, in violation of CLEC and the MCDCA and in breach of the retail installment contract that Plaintiff and members of the putative class entered into with Defendant. (Id., ¶¶ 11-16, 25-32, 34-38, 40-43, 44-46). The amended complaint includes ad damnum clauses for Counts II, III, IV, and V stating that Plaintiff is seeking judgment in the amount of $50, 000 for himself and a sum in excess of $75, 000 on behalf of the putative class. (Id.).

Defendant removed the case on July 2, 2013, invoking this Court’s diversity jurisdiction on two grounds, the Class Action Fairness Act (“CAFA”), 28 U.S.C. §1332(d), and 28 U.S.C. § 1332(a). (ECF No. 1 ¶ 6). The next day, on July 3, 2013, Defendant filed a motion to compel arbitration and stay the proceedings. (ECF No. 10).[2] On July, 11, Plaintiff filed the motion to remand to state court that is currently before this Court. (ECF No. 16).

II. LEGAL STANDARD

An action brought in state court may be removed where the district court is able to exercise original jurisdiction over the matter. 28 U.S.C. § 1441(a).

The Class Action Fairness Act (“CAFA”), 28 U.S.C. §1332(d), confers original jurisdiction to federal district courts over class actions in which (1) the class is comprised of at least one hundred plaintiffs, §1332(d)(5)(B), (2) any member of the class of plaintiffs is a citizen of a state different from any defendant, §1332(d)(2)(A), and (3) the amount in controversy exceeds $5, 000, 000, exclusive of interest and costs. §1332(d)(2); Bartnikowski v. NVR, Inc., 307 Fed.Appx. 730, 734 (4th Cir. 2009).

In addition, 28 U.S.C. § 1332(a) confers original jurisdiction to federal district courts where the matter in controversy (1) “exceeds the sum or value $75, 000, exclusive of interest and costs, ” §1332(a), and (2) is between “citizens of different States.” § 1332(a)(2).

A defendant seeking removal of a civil action from a state court “shall file in the district court of the United States . . . a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement of the grounds for removal, together with a copy of all process, pleading, and orders served upon such defendant or defendants in such action.” 28 U.S.C. § 1446(a). This notice must be filed within thirty days after receipt by the defendant of the initial pleading, § 1446(b)(2)(B) or, if the case stated by the pleading is not removable, within thirty days after receipt “of a copy of an amended pleading . . . from which it may first be ascertained that the case is one which is or has become removable.” § 1446(b)(3).

“If a plaintiff files suit in state court and the defendant seeks to adjudicate the matter in federal court, through removal, it is the defendant who carries the burden of alleging in his notice of removal, and if challenged, demonstrating the court’s jurisdiction over the matter.” Strawn v. AT&T Mobility LLC, 530 F.3d 293, 297 (4th Cir. ...


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