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Harmony Holdings, LLC v. Lounsbury Van Eck

United States District Court, D. Vermont

April 30, 2019



          Christina Reiss, United States District Court

         This matter came before the court for a review of the Magistrate Judge's December 27, 2018 Report and Recommendation ("R & R") (Doc. 78), in which he recommended the court remand to the Vermont Superior Court, Washington County Civil Division (the "Vermont Superior Court") the ejectment action initially filed in that court by Plaintiff Harmony Holdings, LLC and removed to this court by self-represented Defendants Linda Lounsbury Van Eck and Jan Van Eck (collectively, "Defendants"). On December 28, 2018, Plaintiff filed a motion to remand to the state court. (Doc. 80.) On January 15, 2019, Defendant Jan Van Eck ("Defendant Van Eck") objected to the R & R and opposed Plaintiffs motion to remand.

         I. Factual and Procedural Background.

         On April 5, 2018, Plaintiff filed a Complaint in the Vermont Superior Court asserting claims for (1) breach of a rental agreement; (2) breach of a purchase contract; and (3) unjust enrichment and seeking $3, 000 in unpaid rent and damages. Contrary to Defendant Van Eck's contention, no claim for a violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692-92p, may be found in the Complaint or Amended Complaint.

         Plaintiff alleges that it owns property in Northfield, Vermont with regard to which the parties entered into a purchase and sale agreement. Defendants sought to reside in the rental unit on the property and entered into a rental agreement whereby Defendants took occupancy and agreed to make monthly payments until they purchased the property. Plaintiff further alleges that Defendants failed to make scheduled payments but continued to reside in the rental unit. As a result, Plaintiff served them with a notice of the termination of their tenancy.

         On May 2, 2018, Defendants filed a motion to dismiss, and on May 7, 2018 Plaintiff filed a motion to amend its Complaint to update the caption to reflect Defendants' alleged aliases. On May 18, 2018, the Vermont Superior Court granted Plaintiffs motion to amend. Plaintiff subsequently filed a Second Amended Complaint, and Defendants filed a supplemental motion to dismiss. Thereafter, on June 11, 2018, Defendants filed their Answer and asserted counterclaims against Plaintiff. The Vermont Superior Court denied Defendants' supplemental motion to dismiss on September 20, 2018. On November 30, 2018, Defendants removed the case to this court.

         II. Legal Analysis and Conclusions.

         A. Standard of Review.

         A district judge must make a de novo determination of those portions of a magistrate judge's report and recommendation to which an objection is made. Fed.R.Civ.P. 72(b)(3); 28 U.S.C. § 636(b)(1); Cullen v. United States, 194 F.3d 401, 405 (2d Cir. 1999). The district judge may "accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1); accord Cullen, 194 F.3d at 405. A district judge, however, is not required to review the factual or legal conclusions of the magistrate judge as to those portions of a report and recommendation to which no objections are addressed. Thomas v. Arn, 474 U.S. 140, 150(1985).

         Self-represented parties are generally accorded leniency when making objections. See Walker v. Vaughan, 216 F.Supp.2d 290, 292 (S.D.N.Y. 2002) (quoting Vasquez v. Reynolds, 2002 WL 417183, at *5 (S.D.N.Y. Mar. 18, 2002)). Nevertheless, "even a pro se party's objections to a Report and Recommendation must be specific and clearly aimed at particular findings in the magistrate's proposal, such that no party be allowed a 'second bite at the apple' by simply relitigating a prior argument." Dixon v. Ragland, 2007 WL 4116488, at *1 (S.D.N.Y. Nov. 16, 2007).

         B. Whether the Court has Subject Matter Jurisdiction.

         Federal subject matter jurisdiction requires a "federal question," 28 U.S.C. § 1331, or plaintiffs and defendants of diverse citizenship with an amount in controversy that exceeds $75, 000, exclusive of interest and costs. 28 U.S.C. § 1332. "[F]ailure of subject matter jurisdiction is not waivable and may be raised at any time by a party or by the court sua sponte. If subject matter jurisdiction is lacking, the action must be dismissed." Lyndonville Sav. Bank & Tr. Co. v. Lussier, 211 F.3d 697, 700-01 (2d Cir. 2000); see also Fed. R. Civ. P. 12(h)(3) ("If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action."). "The burden of persuasion for establishing diversity jurisdiction[] .. . remains on the party asserting it[, ]" and "allegations of jurisdictional facts[] . . . must [be] support[ed] ... by competent proof." Hertz Corp. v. Friend, 559 U.S. 77, 96-97 (2010).

         With respect to the Magistrate Judge's conclusion that the court's jurisdiction is based solely on diversity of citizenship, Defendant Van Eck argues that federal question jurisdiction exists because "the matter sounds in breach of the Fair Debt Collection Practices Act[.]" (Doc. 84 at 1.) A claim based on a violation of the FDCPA requires a plaintiff to allege, among other things, that the plaintiff is a "consumer" and the defendant is a "debt collector" as those terms are defined in the FDCPA. Plaintiff does not allege an FDCPA violation. See Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) ("The presence or absence of federal-question jurisdiction is governed by the 'well-pleaded complaint rule,' which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiffs properly pleaded complaint."). There is no federal question in either the Complaint or Amended Complaint and Defendant Van Eck may not create one by recharacterizing Plaintiffs claims. See Id. ("The [well-pleaded complaint] rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law."). Because eviction is a state law claim and does not present a federal question, federal question jurisdiction is not present. See 9 V.S.A. §§ 4451-69a.

         Defendant Van Eck further contests the Magistrate Judge's conclusion that the parties are all Vermont citizens. Defendant Jan Van Eck contends that he is a citizen of Canada who is "permitted to live here quietly as a guest of the United States[, ]" and that Defendant Linda Van Eck has an out of state driver's permit. (Doc. 84 at 5.) They allege that Plaintiff is "an alien" and is merely an alter-ego of Nancy Carpenter, a South Dakota resident, who purportedly filed falsified documentation with the Vermont Secretary of State improperly claiming to be a Vermont corporation. (Doc. 1 at 1.) Defendants further challenge the Magistrate Judge's ...

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