Opinion
No. 7:18-CV-147-D
11-26-2018
THEODORE STAIR, Plaintiff, v. RORY CALHOUN, ESQ. FOR ESCROW ACCOUNTS FOR AVE LTD. GENERAL FUNDS, Defendant.
ORDER and MEMORANDUM & RECOMMENDATION
This pro se case is before the court on the application [DE #1] by Plaintiff Theodore Stair to proceed in forma pauperis pursuant to 28 U.S.C. § 1915(a)(1) and for frivolity review pursuant to 28 U.S.C. § 1915(e)(2)(B), the matter having been referred to the undersigned by the Honorable James C. Dever III, United States District Judge. For the reasons set forth below, Plaintiff's application to proceed in forma pauperis is allowed, and it is recommended that Plaintiff's claims against Defendant be dismissed.
IFP MOTION
The standard for determining in forma pauperis status is whether "one cannot because of his poverty pay or give security for the costs . . . and still be able to provide himself and dependents with the necessities of life." Adkins v. E.I. DuPont de Nemours & Co., 335 U.S. 331, 339 (1948) (internal quotation marks omitted). Based on the information contained in Plaintiff's affidavit, the court finds that Plaintiff has demonstrated appropriate evidence of inability to pay the required court costs. Thus, Plaintiff's application to proceed in forma pauperis is allowed.
DISCUSSION
I. Background
Plaintiff seeks to sue Defendant for failure to return Plaintiff's money held in escrow (Compl. [DE #1-2] at 1.) According to the proposed complaint, Defendant served as former counsel for American Virgin Enterprises, Ltd. (dissolved in 1993), where Plaintiff as a shareholder held 24.2% interest. (Id. at 3; see also Pl.'s Exs. 1-2 [DE #1-3, 1-4].) Plaintiff seeks to recover $14,415 from money held in escrow, together with interest and court costs. (Compl. [DE #1-2] at 4.)
II. Standard for Frivolity Review
Notwithstanding the determination that Plaintiff is entitled to in forma pauperis status, the court is required to dismiss all or part of an action found to be frivolous or malicious, which fails to state a claim on which relief can be granted, or which seeks money damages from a defendant immune from such recovery. 28 U.S.C. § 1915(e)(2)(B)(i),(ii); Michau v. Charleston County, 434 F.3d 725, 728 (4th Cir. 2006). A case is frivolous if it lacks an arguable basis in either law or fact. Neitzke v. Williams, 490 U.S. 319, 325 (1989). Pro se complaints are entitled to a more liberal treatment than pleadings drafted by lawyers. See White v. White, 886 F.2d 721, 722-23 (4th Cir. 1989). However, the court is not required to accept a pro se plaintiff's contentions as true. Denton v. Hernandez, 504 U.S. 25, 32 (1992). The court is permitted to "pierce the veil of the complaint's factual allegations and dismiss those claims whose factual contentions are clearly baseless." Neitzke, 490 U.S. at 327. Provided that the plaintiff's claims are not clearly baseless, the court must weigh the allegations in his favor in its frivolity analysis. Denton, 504 U.S. at 32. The court must read the complaint carefully to determine if the plaintiff has alleged specific facts sufficient to support his claims. White, 886 F.2d at 724.
Rule 8 of the Federal Rules of Civil Procedure requires a complaint to give a "short plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8. The statement must give a defendant fair notice of what the claim is and the grounds upon which it rests. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). "A plaintiff must offer more detail . . . than the bald statement that he has a valid claim of some type against the defendant." Trulock v. Freeh, 275 F.3d 391, 405 (4th Cir. 2001); see also White, 886 F.2d at 723 (affirming district court's dismissal of plaintiff's suit as frivolous where plaintiff's complaint "failed to contain any factual allegations tending to support his bare assertion"). While the court must read the complaint carefully to determine if the plaintiff has alleged facts sufficient to support his claims, White, 886 F.2d at 724, the court is not required to act as the pro se plaintiff's advocate or to parse through volumes of documents or discursive arguments in an attempt to discern the plaintiff's unexpressed intent, Williams v. Ozmint, 716 F.3d 801, 805 (4th Cir. 2013).
III. Subject Matter Jurisdiction
A review of Plaintiff's complaint raises the threshold issue of subject matter jurisdiction. See 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."). "Federal courts are courts of limited jurisdiction and are empowered to act only in those specific situations authorized by Congress." Bowman v. White, 388 F.2d 756, 760 (4th Cir. 1968). The presumption is that a federal court lacks jurisdiction in a particular case unless it is demonstrated that jurisdiction exists. See id. "Furthermore, the complaint must state on its face the grounds for . . . jurisdiction," regardless of whether it is a case of diversity or federal question jurisdiction. Id.
Subject matter jurisdiction based on diversity of citizenship between the parties requires that each plaintiff be a citizen of a state different than that of each defendant and that the amount in controversy exceed $75,000 exclusive of interest and costs. See 28 U.S.C. § 1332(a); Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552-53 (2005) (explaining diversity jurisdiction).
Citizenship is not determined by residence, but rather by domicile. See Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 828 (1989); Axel Johnson, Inc. v. Carroll Carolina Oil Co., 145 F.3d 660, 663 (4th Cir. 1998). "Domicile requires physical presence, coupled with an intent to make the State a home." Johnson v. Advance America, 549 F.3d 932, 937 n.2 (4th Cir. 2008) (citing Mississippi Band of Choctaw Indians v. Holyfield, 490 U.S. 30, 48 (1989)). Courts determine a party's domicile on a case-by-case basis, considering all of the circumstances surrounding the individual's status. 13E Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 3612 (3d ed. & Supp. 2016). Generally, "domicile is an individual's place of residence where he intends to remain permanently or indefinitely and to which he intends to return whenever he is away." Hollowell v. Hux, 229 F. Supp. 50, 52 (E.D.N.C. 1964). In determining a person's domicile, courts may consider factors such as "the person's declarations, place of business, payment of taxes, house of residence, driver's license and automobile registration and title, ownership of real and personal property, telephone number and listing, payment for utilities, receipt of mail, and exercise of political rights or satisfaction of the domicile's requirements to register to vote." Mayfield v. Nat'l Ass'n for Stock Car Auto Racing, Inc., No. 3:09-CV-220-MU, 2010 WL 1434298, at *2 (W.D.N.C. Apr. 6, 2010) (quoting Janeau v. Pitman Mf'g Co., No. 3:90-CV-194-RLV, 1991 WL 538679, at *3 (W.D.N.C. Oct. 25, 1991)). "For purposes of diversity jurisdiction, residency is not sufficient to establish citizenship." Scott v. Cricket Commc'ns, LLC, 865 F.3d 189, 195 (4th Cir. 2017) (quoting Johnson, 549 F.3d at 937 n.2)).
Here, Plaintiff seeks the return of funds held in escrow. (Compl. [DE #1-2] at 1.) Plaintiff resides in Rocky Point, North Carolina, and alleges that Defendant resides in New York. (Id. at 1-2.) In his civil cover sheet, Plaintiff checked the box indicating diversity jurisdiction for basis of jurisdiction (Civil Cover Sheet [DE #1-1] at 1). Plaintiff asserts that this court has diversity jurisdiction since Defendant "may be still a long time resident and practicing attorney in New York." (Compl. [DE #1-2] at 1.) For purposes of diversity jurisdiction under 28 U.S.C. § 1332, Plaintiff has not sufficiently established the citizenship of Plaintiff and Defendant simply by stating that Plaintiff and Defendant reside in different states.
Further, even if Plaintiff had sufficiently established diversity of citizenship between the parties, this court still lacks subject matter jurisdiction pursuant to 28 U.S.C. § 1332 (diversity jurisdiction) because Plaintiff's claim does not meet the amount-in-controversy requirement. Plaintiff seeks $14,415 in relief for his shareholder distribution, exclusive of interest and costs. Thus, the amount in controversy in this action does not exceed $75,000, and this court lacks jurisdiction pursuant to 28 U.S.C. § 1332.
Lastly, having reviewed all of Plaintiff's filings, the undersigned discerns no federal constitutional provision or statute that would provide Plaintiff a cause of action, nor does Plaintiff refer to any such source in his proposed complaint. Plaintiff's sole claim concerns Defendant's alleged failure to distribute Plaintiff's shareholder money held in escrow. Because Plaintiff's claims do not appear to arise under the Constitution, laws or treaties of the United States and diversity of citizenship is lacking, the undersigned recommends that the matter be dismissed for lack of subject matter jurisdiction.
CONCLUSION
For the reasons stated above, Plaintiff's application to proceed in forma pauperis is ALLOWED, and it is RECOMMENDED that Plaintiff's claims be DISMISSED for lack of subject matter jurisdiction.
IT IS DIRECTED that a copy of this Memorandum and Recommendation be served on Plaintiff. Plaintiff is hereby advised as follows:
You shall have until December 13, 2018, to file written objections to the Memorandum and Recommendation. The presiding district judge must conduct his or her own review (that is, make a de novo determination) of those portions of the Memorandum and Recommendation to which objection is properly made and may accept, reject, or modify the determinations in the Memorandum and Recommendation; receive further evidence; or return the matter to the magistrate judge with instructions. See, e.g., 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(3); Local Civ. R. 1.1 (permitting modification of deadlines specified in local rules), 72.4(b), E.D.N.C.
If you do not file written objections to the Memorandum and Recommendation by the foregoing deadline, you will be giving up the right to review of the Memorandum and Recommendation by the presiding district judge as described above, and the presiding district judge may enter an order or judgment based on the Memorandum and Recommendation without such review. In addition, your failure to file written objections by the foregoing deadline may bar you from appealing to the Court of Appeals from an order or judgment of the presiding district judge based on the Memorandum and Recommendation. See Wright v. Collins, 766 F.2d 841, 846-47 (4th Cir. 1985).
This 26th day of November 2018.
/s/_________
KIMBERLY A. SWANK
United States Magistrate Judge