United States District Court, D. New Jersey
JOSEPH H. RODRIGUEZ, UNITED STATES DISTRICT JUDGE
Joseph H. Rodriguez This case comes before the Court on
Plaintiff, Counterclaim Defendant's, Motion to Dismiss
Defendants, Counterclaim Plaintiffs', Counterclaims to
800 Cooper Finance's Amended Complaint [Dkt. No. 59]
pursuant to Fed.R.Civ.P. 12(b)(1). For the Reasons that
follow the Court denies Counterclaim Defendant's Motion.
matter concerns the collection of a debt allegedly owed to
800 Cooper Finance, LLC (“800 Cooper Finance” or
“Counterclaim Defendant”) by Defendants/
Counterclaim Plaintiffs, Shu-Lin Liu and Jolin Chiaolin Tsao
(“Counterclaim Plaintiffs”). The Counterclaim
Plaintiffs are the sole members of KL Holdings, LLC
(“KL Holdings”) which had an ongoing loan
relationship with PNC bank for many years. Counterclaim
Plaintiffs executed Guarantees for KL Holdings to secure its
debt incurred with PNC. Amend. Compl. ¶ 6. 800 Cooper
Finance was a Delaware Limited Liability Company until its
recent dissolution. “On January 22, 2016, PNC Bank
assigned the KL Holdings debt to 800 Cooper, along with all
rights and powers relating to the Commercial
Guarantees.” Id. at ¶ 7.
Plaintiffs allege that its initial PNC loans were secured by
a mortgage on a parcel of real estate owned by KL Holdings,
referred to as the “Bridgeview Property.” Amend.
Counterclaim ¶ 8. Counterclaim Plaintiffs were also
personal guarantees on that mortgage. At some point in 2015,
KL Holdings entered into an agreement of sale for the
Bridgeview Property with a company, Kamgirsons, Inc. That
agreement was terminated in November 2015 after information
on the loans at issue were provided. Id. at ¶
9. According to Counterclaim Plaintiffs, Kowong, the
principal of Kamgrisons, subsequently created 800 Cooper
Finance to acquire and hold KL Holdings' loans.
Id. at ¶ 10. Counterclaim Plaintiffs claim that
shortly after the acquisition, 800 Cooper Finance took
“an aggressive litigation strategy to collect.”
Id. at ¶ 11. Counterclaim Plaintiffs further
allege that 800 Cooper Finance initiated excessive demands
with the knowledge that the Counterclaim Plaintiffs had a new
and pending agreement of sale for their property with a third
party. Id. at ¶ 13. To proceed on that property
sale, KL Holdings needed a release of the mortgage from 800
Cooper Finance. Id. at ¶ 12.
Cooper Finance initially filed a Complaint in this Court for
Confession of Judgment regarding the “debt” it
purchased; particularly, 800 Cooper Finance sought monies
owed on a line of credit and two business loans that it
declared KL Holdings defaulted on. [Dkt Nos. 1, 15].
Counterclaim Defendant brought this action against
Counterclaim Plaintiffs as the grantors of the debt owed. It
required the following payments:
$100, 000 Line of Credit: Principal, $62, 819.50;
Interest, $7, 987.91 $500, 000 Business Loan:
Principal, $439, 962.96; Interest, $21, 830.29 Legal
Fees: $ 982.50 Appraisal Fees: $ 3, 900.00
$201, 000 Business Loan: Principal, $201, 000.00;
Interest, $9, 881.04 Total Due and Owing through March 1,
2016: $748, 364.20
Amend. Compl. ¶ 57. Counterclaim Plaintiffs argue that
800 Cooper Finance's pleadings included “excessive
and improper calculations” of interest and collection
fees due and failed to account for the loan extensions
previously agreed to by PNC. Amend. Counterclaim ¶ 11.
Counterclaim Plaintiffs disputed those amounts and reserved
affirmative defenses to 800 Cooper Finance's confession
of judgment in its initial Answer to the Amended Complaint.
[See Dkt No. 19].
Counterclaim Plaintiffs requested documentation confirming
the costs and fees allegedly incurred by 800 Cooper Finance,
which it then charged to them; Cooper Finance did not provide
any documents. Amend. Counterclaim ¶ 23. 800 Cooper
Finance also rejected Counterclaim Plaintiffs' request to
reduce the amount of payment demanded and refused to place
the disputed amounts in escrow. Id. at ¶¶
23-24. During the pendency of this action, the Counterclaim
Plaintiffs ultimately paid the amounts demanded on the debts
and 800 Cooper Finance executed a satisfaction of mortgage.
Id. at ¶ 17. Counterclaim Plaintiffs claim that
in order to meet the demand, they had to borrow money to fund
a “bridge loan.” Id. at ¶ 28.
payment of the Debt, in January 2017, 800 Cooper Finance
obtained a certificate of cancellation from the State of
Delaware. Id. at ¶ 37. It then voluntarily
dismissed this case on July 27, 2017. [Dkt. No. 41]. On
August 25, 2017, Counterclaim Plaintiffs moved for leave to
file After Acquired Counterclaim and for Consolidation. [Dkt.
No. 42]. Counterclaim Defendant opposed the Motion. [Dkt. No.
43]. An Order was filed granting the motion for leave on
March 22, 2018, at which point the case was reopened. [ Dkt.
order was entered on April 6, 2018 granting Counterclaim
Plaintiffs leave to file their revised proposed pleading.
Counterclaim Plaintiffs' Amended Answer proposes
Counterclaims for Breach of Contract (Count I), Conversion
(Count II), Unjust Enrichment (Count II), Improper
Cancelation of 800 Cooper Finance (Count IV), and Improper
Distribution of LLC Assets (Count V). [Dkt. No. 54]. In
response, Counterclaim Defendant filed the current Motion to
Dismiss for Lack of Jurisdiction on two grounds asserting
that: (1) the Court lacks subject matter jurisdiction because
800 Cooper Finance is no longer in existence; and (2)
Counterclaim Plaintiffs' assertions are insufficient to
establish the amount in controversy requirement for diversity
jurisdiction. [Dkt. No. 59; Counterclaim Def. Brf. at 5-6].
Standard of Review
motion to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(1) may involve either a facial challenge to subject
matter jurisdiction or a factual challenge to the
jurisdictional allegations. Gould Elecs. Inc. v. United
States, 220 F.3d 169, 176 (3d Cir. 2000). If the
defendant's attack is facial-i.e., “asserting that
the complaint, on its face, does not allege sufficient
grounds to establish subject matter jurisdiction”-a
court must accept all allegations in the complaint as true.
Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181,
188 (3d Cir. 2006). Alternatively, a defendant may
“challenge a federal court's jurisdiction by
factually attacking the plaintiff's jurisdictional
allegations as set forth in the complaint.”
Mortensen v. First Fed. Sav. & Loan Ass'n,
549 F.2d 884, 891 (3d Cir. 1977). A factual challenge attacks
the existence of a court's subject matter jurisdiction
apart from any of the pleadings and, when considering such a
challenge, a presumption of truthfulness does not attach to a
plaintiff's allegations.” Id.; see
also Martinez v. U.S. Post Office, 875 F.Supp. 1067,
1070 (D.N.J. 1995).
Subject Matter Jurisdiction over the Claims asserted
Counterclaim Defendant argues that because 800 Cooper Finance
is dissolved, it is no longer amenable to suit and the Court
should, therefore, dismiss ...