Plaintiff Is The Master And Commander Of Her Compaint And Can Limit The Amount In Controversy

McClendon v. Challenge Financial Investors Corp., No. 1:11 CV 1597, 2011 WL 5361069 (N.D. Ohio Nov. 3, 2011).

While remanding the action to state court based on the plaintiff's disclaimer of an award greater than $5 million, a District Court in Ohio held that the plaintiff being master of her complaint can plead in good faith to avoid federal jurisdiction.

Two years after the plaintiff, Jacqueline D. McClendon, filed her complaint against Challenge Financial Investors Corp.—a defunct mortgage broker, she filed a second amended class-action complaint and added as defendants, Hartford Fire Insurance Co., Travelers Casualty and Surety Company of America, and the Ohio Superintendent of Financial Institutions. Hartford and Travelers are the bonding companies from which Challenge obtained its mortgage-broker surety bonds; and the Ohio Superintendent is a titular obligee on Challenge's bonds.

McClendon alleged that in June 2007 Challenge served as her mortgage broker in connection with a $40,000 loan transaction secured by her property located at 14206 South Marks Road, Columbia Station, Ohio. McClendon used this address to maintain and operate a drug house in which she packaged heroin purchased in bulk from a Cleveland supplier, and from which she sold the heroin to a large number of customers. Nice lady. The Government imposed, and McClendon agreed to pay, $40,000 in criminal forfeiture representing the proceeds of her criminal drug enterprise. Shortly after signing the plea agreement, McClendon sought and obtained a mortgage loan from Challenge. She used the mortgage proceeds to satisfy the $40,000 criminal forfeiture.

On behalf of herself and the class of persons who purchased services from Challenge relating to a mortgage loan on Ohio realty, McClendon asserted a claim for monetary damages against Challenge for its failure to provide mortgage loan origination disclosure statements in compliance with the Ohio Mortgage Brokers Act, O.R.C. Chapter 1322 et seq. ("OMBA"); a claim for monetary damages against Hartford and Travelers, if liability is proven in the first instance against Challenge, based on the surety bonds they posted supporting Challenge's activities in Ohio; and a claim for an order requiring the Ohio Superintendent to declare that Hartford and Travelers are liable on the surety bonds.

Hartford removed the case to federal court pursuant to CAFA.

McClendon filed a motion to remand the action to state court, which the District Court...