United States District Court, S.D. Alabama, Southern Division
MATTHEW R. BALGORD, Plaintiff,
PLEASURE ISLAND LAND CO., INC., et al., Defendants
For Matthew R. Balgord, Plaintiff: George R. Irvine, III, LEAD ATTORNEY, Stone, Granade & Crosby, P.C., Daphne, AL; Laura C. Strachan, Daphne, AL.
For Pleasure Island Land, Co., Inc., James E. Bridges, III, Defendants, Counter Claimants: James E. Bridges, III, LEAD ATTORNEY, Balch & Bingham, Montgomery, AL.
For PNC Bank, National Association, Defendant, Counter Claimant: Gregory M. Taube, Nelson Mullins Riley & Scarborough LLP, Atlanta, GA.
For Matthew R. Balgord, Counter Defendant: George R. Irvine, III, LEAD ATTORNEY, Stone, Granade & Crosby, P.C., Daphne, AL.
REPORT AND RECOMMENDATION
SONJA F. BIVINS, UNITED STATES MAGISTRATE JUDGE.
This case is before the Court on Plaintiff Matthew R. Balgord's Motion to Remand. (Doc. 14). The motion, which has been fully briefed and is ripe for resolution, has been referred to the undersigned for a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 72.2(c). Upon consideration of all matters presented, the undersigned RECOMMENDS, for the reasons stated herein, that Plaintiff's Motion to Remand (Doc. 14) be GRANTED, and that this action be REMANDED to the Circuit Court of Baldwin County, Alabama.
I. Background Facts
Plaintiff Matthew R. Balgord (hereinafter " Plaintiff" or " Balgord") commenced this action in the Circuit Court of Baldwin County, Alabama on August 12, 2014 against Defendants Pleasure Island Land Company, Inc., (hereinafter " PILC"), James E. Bridges, III, (hereinafter " Bridges") and PNC Bank, National Association (hereinafter " PNC Bank"). (Doc. 1-1 at 1). In the complaint, Plaintiff alleges that he purchased two properties in Orange Beach, Alabama, namely 32571 River Road (hereinafter " River Road") and 32516 Sandpiper Drive (hereinafter " Sandpiper"), and that both properties were financed by mortgages secured from Gulf State Bank. According to Plaintiff, Gulf State Bank serviced the loans, and pursuant to the parties' agreement, Gulf State Bank made automatic draft deductions from Plaintiff's checking account held with the Bank. In 2008, RBC acquired First Gulf Bank, and continued to draft from Plaintiff's checking account the funds necessary to service the mortgage debt on the River Road and Sandpiper properties. (Id. at 3). Later, in 2012, PNC Bank acquired RBC, and Plaintiff was advised that if his loan payments were being drafted from his checking account, the payments " would migrate successfully." (Id.) According to Plaintiff, notwithstanding PNC Bank's representations, it failed to properly service his loans, and he suffered damages as a result.
Plaintiff further alleges that in 2007, he leased the Sandpiper property to Defendant Bridges, an attorney who was providing legal representation to him at the time. Bridges signed the Sandpiper lease as president of Pleasure Island Land Co. (Id. at 3). Later, the lease was modified into an agreement that provided for the purchase of the Sandpiper property by PILC for $575, 000. (Id. at 4-5). Per the parties' agreement, PILC was responsible for making 15 monthly payments in the amount of $2, 050, and a final balloon payment on February 1, 2011. (Id.) In addition to the modified lease agreement, Plaintiff and PILC also executed a vendor's lien deed. (Id. at 3). As before, Bridges signed the documents as president of Pleasure Island Land Co. (Id.)
In his complaint, Plaintiff alleges that he is a resident of Alabama, that Bridges is a resident of Alabama, that PILC is an Alabama corporation with its principal place of business in Alabama, and that PNC Bank is a District of Columbia corporation with its principal place of business in Pennsylvania. (Id. at 1). In count one, Plaintiff asserts a breach of contract claim against PILC based on its failure to fulfill its obligations under the parties' modified lease agreement and vendor's lien deed. (Id. at 4-5). In count two, Plaintiff asserts that Defendant Bridges is the alter ego of PILC such that personal liability should be imposed on him for the liabilities and obligations of PILC. In count three, Plaintiff asserts a breach of fiduciary claim against Defendant Bridges and argues that Bridges represented Plaintiff in legal matters, including the Sandpiper lease transaction, and that Bridges failed to represent Plaintiff's best interests. (Id. at 6-7). In count four, Plaintiff contends that Bridges and PILC have been unjustly enriched in that they have accepted and retained the benefit and value of the Sandpiper property while failing to pay the amounts due under the parties' agreement. (Id. at 7-8). In Court five, Plaintiff asserts a breach of contract claim again PNC Bank based on its failure to service his loans by properly drafting his checking account. (Id. at 8) In count six, Plaintiff alleges that PNC Bank acted negligently and wantonly in failing to properly service his loans. (Id. at 9). In count seven, Plaintiff alleges that PNC Bank has defamed him by falsely reporting to credit agencies that his mortgages are in default despite the fact that it is PNC Bank's failure to properly service the loans that caused the problems. (Id. at 10). In count eight, Plaintiff seeks a preliminary and permanent injunction prohibiting PNC Bank from foreclosing on the Sandpiper and River Road properties. (Id. at 11).
On September 15, 2014, Defendant PNC Bank filed a Notice of Removal. (Doc. 1). In the Notice, PNC Bank asserts that the citizenship of Defendants PILC and Bridges should be disregarded because they have been fraudulently joined. (Id. at 9). PNC Bank argues that there are no common facts or issues with respect to Plaintiff's claims against the Defendants, nor is there any joint or several liability among PNC Bank and the nondiverse Defendants. (Id. at 11). PNC Bank contends that given the lack of connection between the claims, the citizenship of PILC and Bridges should be disregarded because they have been misjoined.
Plaintiff filed the instant motion to remand on October 14, 2014. (Docs. 13, 14). In the motion, Plaintiff concedes that the amount in controversy in this case exceeds $75, 000. (Doc. 13 at 7). However, Plaintiff argues that diversity jurisdiction is lacking because there is not complete diversity among the parties. According to Plaintiff, PNC Bank has failed to meet its burden of establishing that Bridges and PILC have been improperly joined in this action. (Id.) Plaintiff contends that the joinder of PNC Bank, PILC and Bridges into " a single action advances the express purposes of Rule 20 of the Alabama Rules of Civil Procedure [by] " promot[ing] trial convenience, prevent[ing] a multiplicity of suits, and expedit[ing] the final determination of litigation by inclusion in one suit of all parties directly interested in the controversy despite technical objections previously existing in many situations. Committee Comments to ALA. R.Civ.P.20." (Id. at 18-19). Plaintiff further asserts that PNC Bank has also failed to establish that the joinder of PILC and Bridges is " so egregious as to constitute fraudulent joinder." (Id.).
In response, PNC Bank argues that the joinder of the non-diverse Defendants is fraudulent because Plaintiff's claims against the non-diverse Defendants do not arise from the same alleged transaction, occurrence or same set of ...