800 COOPER FINANCE, LLC v. LIU et al, No. 1:2016cv00736 - Document 72 (D.N.J. 2019)
Court Description: OPINION. Signed by Judge Joseph H. Rodriguez on 10/10/2019. (rtm, )
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800 COOPER FINANCE, LLC v. LIU et al Doc. 72 UNITED STATES DISTRICT COURT DISTRICT OF NEW J ERSEY 80 0 COOPER FINANCE, LLC, Plaintiff, v. SHU-LIN LIU, et al, : Hon. J oseph H. Rodriguez : Civil Action No. 16-736 : OPINION : Defendants. : This case com es before the Court on Plaintiff, Counterclaim Defendant’s, Motion to Dism iss Defendants, Counterclaim Plaintiffs’, Counterclaim s to 80 0 Cooper Finance’s Am ended Com plaint [Dkt. No. 59] pursuant to Fed. R. Civ. P. 12(b)(1). For the Reasons that follow the Court denies Counterclaim Defendant’s Motion. I. Background This m atter concerns the collection of a debt allegedly owed to 80 0 Cooper Finance, LLC (“80 0 Cooper Finance” or “Counterclaim Defendant”) by Defendants/ Counterclaim Plaintiffs, Shu-Lin Liu and J olin Chiaolin Tsao (“Counterclaim Plaintiffs”). The Counterclaim Plaintiffs are the sole m em bers of KL Holdings, LLC (“KL Holdings”) which had an ongoing loan relationship with PNC bank for m any years. Counterclaim Plaintiffs executed Guarantees for KL Holdings to secure its debt incurred with PNC. Am end. Com pl. ¶ 6. 80 0 Cooper Finance was a Delaware Lim ited Liability Com pany until its recent dissolution. “On J anuary 22, 20 16, PNC Bank assigned the KL Holdings debt to 80 0 Cooper, along with all rights and powers relating to the Com m ercial Guarantees.” Id. at ¶ 7. 1 Dockets.Justia.com Counterclaim Plaintiffs allege that its initial PNC loans were secured by a m ortgage on a parcel of real estate owned by KL Holdings, referred to as the “Bridgeview Property.” Am end. Counterclaim ¶ 8. Counterclaim Plaintiffs were also personal guarantees on that m ortgage. At som e point in 20 15, KL Holdings entered into an agreem ent of sale for the Bridgeview Property with a com pany, Kam girsons, Inc. That agreem ent was term inated in Novem ber 20 15 after inform ation on the loans at issue were provided. Id. at ¶ 9. According to Counterclaim Plaintiffs, Kowong, the principal of Kam grisons, subsequently created 80 0 Cooper Finance to acquire and hold KL Holdings’ loans. Id. at ¶ 10 . Counterclaim Plaintiffs claim that shortly after the acquisition, 80 0 Cooper Finance took “an aggressive litigation strategy to collect.” Id. at ¶ 11. Counterclaim Plaintiffs further allege that 80 0 Cooper Finance initiated excessive dem ands with the knowledge that the Counterclaim Plaintiffs had a new and pending agreem ent 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 m ortgage from 80 0 Cooper Finance. Id. at ¶ 12. 80 0 Cooper Finance initially filed a Com plaint in this Court for Confession of J udgm ent regarding the “debt” it purchased; particularly, 80 0 Cooper Finance sought m onies owed on a line of credit an d 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 paym ents: $ 10 0 ,0 0 0 Line of Credit: Principal, $ 62,819.50 ; Interest, $ 7,987.91 $ 50 0 ,0 0 0 Business Loan: Principal, $ 439,962.96; Interest, $ 21,830 .29 Legal Fees: $ 982.50 2 Appraisal Fees: $ 3,90 0 .0 0 $ 20 1,0 0 0 Business Loan: Principal, $ 20 1,0 0 0 .0 0 ; Interest, $ 9,881.0 4 Total Due and Owing through March 1, 20 16: $ 748,364.20 Am end. Com pl. ¶ 57. Counterclaim Plaintiffs argue that 80 0 Cooper Finance’s pleadings included “excessive and im proper calculations” of interest and collection fees due and failed to account for the loan extensions previously agreed to by PNC. Am end. Counterclaim ¶ 11. Counterclaim Plaintiffs disputed those am ounts and reserved affirm ative defenses to 80 0 Cooper Finance’s confession of judgm ent in its initial Answer to the Am ended Com plaint. [See Dkt No. 19]. Additionally, Counterclaim Plaintiffs requested docum entation confirm ing the costs and fees allegedly incurred by 80 0 Cooper Finance, which it then charged to them ; Cooper Finance did not provide any docum ents. Am end. Counterclaim ¶ 23. 80 0 Cooper Finance also rejected Counterclaim Plaintiffs’ request to reduce the am ount of paym ent dem anded and refused to place the disputed am ounts in escrow. Id. at ¶¶ 23-24. During the pendency of this action, the Counterclaim Plaintiffs ultim ately paid the am ounts dem anded on the debts and 80 0 Cooper Finance executed a satisfaction of m ortgage. Id. at ¶ 17. Counterclaim Plaintiffs claim that in order to m eet the dem and, they had to borrow m oney to fund a “bridge loan.” Id. at ¶ 28. After paym ent of the Debt, in J anuary 20 17, 80 0 Cooper Finance obtained a certificate of cancellation from the State of Delaware. Id. at ¶ 37. It then voluntarily dism issed this case on J uly 27, 20 17. [Dkt. No. 41]. On August 25, 20 17, Counterclaim Plaintiffs m oved for leave to file After Acquired Counterclaim and for Consolidation. [Dkt. No. 42]. Counterclaim Defendant opposed the 3 Motion. [Dkt. No. 43]. An Order was filed granting the m otion for leave on March 22, 20 18, at which point the case was reopened. [ Dkt. No. 50 ]. Another order was entered on April 6, 20 18 granting Counterclaim Plaintiffs leave to file their revised proposed pleading. Counterclaim Plaintiffs’ Am ended Answer proposes Counterclaim s for Breach of Contract (Count I), Conversion (Count II), Unjust Enrichm ent (Count II), Im proper Cancelation of 80 0 Cooper Finance (Count IV), and Im proper Distribution of LLC Assets (Count V). [Dkt. No. 54]. In response, Counterclaim Defendant filed the current Motion to Dism iss for Lack of J urisdiction on two grounds asserting that: (1) the Court lacks subject m atter jurisdiction because 80 0 Cooper Finance is no longer in existence; and (2) Counterclaim Plaintiffs’ assertions are insufficient to establish the am ount in controversy requirem ent for diversity jurisdiction. [Dkt. No. 59; Counterclaim Def. Brf. at 5-6]. I. Standard of Review A m otion to dism iss pursuant to Federal Rule of Civil Procedure 12(b)(1) m ay involve either a facial challenge to subject m atter jurisdiction or a factual challenge to the jurisdictional allegations. Gould Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 20 0 0 ). If the defendant’s attack is facial—i.e., “asserting that the com plaint, on its face, does not allege sufficient grounds to establish subject m atter jurisdiction”—a court m ust accept all allegations in the com plaint as true. Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 20 0 6). Alternatively, a defendant m ay “challenge a federal court’s jurisdiction by factually attacking the plaintiff's jurisdictional allegations as set forth in the com plaint.” Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 4 1977). A factual challenge attacks the existence of a court’s subject m atter jurisdiction apart from any of the pleadings and, when considering such a challenge, a presum ption of truthfulness does not attach to a plaintiff's allegations.” Id.; see also Martinez v. U.S. Post Office, 875 F. Supp. 10 67, 10 70 (D.N.J . 1995). II. Discussion A. Su bje ct Matte r Ju ris d ictio n o ve r th e Claim s as s e rte d First, Counterclaim Defendant argues that because 80 0 Cooper Finance is dissolved, it is no longer am enable to suit and the Court should, therefore, dism iss the Counterclaim s against it. The Court disagrees. Under Section 18-80 3 of Delaware’s Lim ited Liability Act: Upon dissolution of a lim ited liability com pany and until the filing of a certificate of cancellation as provided in § 18-20 3 of this title, the persons winding up the lim ited liability com pany's affairs m ay, in the nam e of, and for and on behalf of, the lim ited liability com pany, prosecute and defend suits, whether civil, crim inal or adm inistrative, gradually settle and close the lim ited liability com pany's business, dispose of and convey the lim ited liability com pany's property, discharge or m ake reasonable provision for the lim ited liability com pany's liabilities, and distribute to the m em bers any rem aining assets of the lim ited liability company, all without affecting the liability of m em bers and m anagers and without im posing liability on a liquidating trustee. Del. Code Ann. tit. 6, § 18-80 3 (em phasis added). Thus, generally, a suit m ay com m ence against a Delaware lim ited liability com pany (“LLC”) until it is fully dissolved, and the certificate of cancelation has been filed. Metro Com m c'n Corp. BVI v. Advanced Mobilecom m Techs. Inc., 854 A.2d 121, 138 (Del. Ch. 20 0 4). However, if a party pursues nullification of the certificate of cancelation because the affairs of the LLC were not wound up in com pliance with Section 18-80 4, litigation against the dissolved com pany m ay proceed. See Id. at 138-39. 5 Section 18-80 4 of the Delaware Lim ited Liability Act( the “LLC Act”) governs the distribution of a dissolved LLC’s assets. Capone v. LDH Mgm t. Holdings LLC, No. CV 11687-VCG, 20 18 WL 1956282, at *7 (Del. Ch. Apr. 25, 20 18). Pursuant to the Delaware LLC Act, a lim ited liability com pany which has dissolved: (1) Shall pay or m ake reasonable provision to pay all claim s and obligations, including all contingent, conditional or unm atured contractual claim s, known to the lim ited liability com pany; (2) Shall m ake such provision as will be reasonably likely to be sufficient to provide com pensation for any claim against the lim ited liability com pany which is the subject of a pending action, suit or proceeding to which the lim ited liability com pany is a party; and (3) Shall m ake such provision as will be reasonably likely to be sufficient to provide com pensation for claims that have not been m ade known to the lim ited liability com pany or that have not arisen but that, based on facts known to the lim ited liability com pany, are likely to arise or to become known to the lim ited liability com pany within 10 years after the date of dissolution. Del. Code Ann. tit. 6, § 18-80 4. Accordingly, under Delaware law, a court m ay allow suit against a dissolved LLC where plaintiff pleads sufficient facts to infer the LLC failed to “m ake such provision as will be reasonably likely to be sufficient to provide com pensation” for a likely claim known to it. Id.; See Metro Com m c'n Corp. BVI, 854 A.2d at 138-39. Here, Counterclaim Plaintiffs specifically claim im proper cancelation of 80 0 Cooper Finance and further allege that 80 0 Cooper Finance failed to wind up its affairs in accordance with Section 18-80 4(b) of the Delaware LLC Act. Am end. Counterclaim ¶ 38. The proper analysis is to determ ine whether Counterclaim Plaintiffs claim is plausible on its face in order to sustain action against 80 0 Cooper Finance. Accordingly, the Court agrees with Counterclaim Plaintiffs; 80 0 Cooper Finance’s argum ent that it is not 6 am enable to suit is a substantive defense to the Counterclaim s against it. 1 A m otion to dism iss pursuant to 12(b)(1) based on a facial challenge to the pleadings is sim ilar to a 12(b)(6) review. Bennett v. City of Atl. City, 288 F. Supp. 2d 675, 678 (D.N.J . 20 0 3). Nonetheless, Federal Rule of Civil Procedure 12(b)(6) allows a party to m ove for dism issal of a claim based on “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). A com plaint should be dism issed pursuant to Rule 12(b)(6) if the alleged facts, taken as true, fail to state a claim . Id. When deciding a m otion to dism iss pursuant to Rule 12(b)(6), ordinarily only the allegations in the com plaint, m atters of public record, orders, and exhibits attached to the com plaint, are taken into consideration.2 See Chester County Interm ediate Unit v. Pa. Blue Shield, 896 F.2d 80 8, 812 (3d Cir. 1990 ). It is not necessary for the plaintiff to plead evidence. Bogosian v. Gulf Oil Corp., 561 F.2d 434, 446 (3d Cir. 1977). The question before the Court is not whether the plaintiff will ultim ately prevail. Watson v. Abington Twp., 478 F.3d 144, 150 (20 0 7). Instead, the Court sim ply asks whether the plaintiff has articulated “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twom bly, 550 U.S. 544, 570 (20 0 7). 1 To illustrate this point, see generally Capone, 20 18 WL 1956282, at *7 (evaluating whether dissolve entity was am enable to suit under sum m ary judgm ent standard); Metro Com m c'n Corp. BVI, 854 A.2d at 138-39 (evaluating whether dissolve entity was am enable to suit under 12(b)(6) standard); Soroof Trading Dev. Co. v. GE Fuel Cell Sys., LLC, 842 F. Supp. 2d 50 2, 520 (S.D.N.Y. 20 12) (evaluating whether dissolve entity was am enable to suit under sum m ary judgm ent standard). 2 “Although a district court m ay not consider m atters extraneous to the pleadings, a docum ent integral to or explicitly relied upon in the com plaint m ay be considered without converting the m otion to dism iss into one for sum m ary judgm ent.” U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir. 20 0 2) (internal quotation m arks and citations om itted) (em phasis deleted). 7 “A claim has facial plausibility3 when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the m isconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (20 0 9) (citing Twom bly, 550 U.S. at 556). “Where there are well-pleaded factual allegations, a court should assum e their veracity and then determ ine whether they plausibly give rise to an entitlem ent to relief.” Id. at 679. The Court need not accept “‘unsupported conclusions and unwarranted inferences,’” Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 20 0 7) (citation om itted), however, and “[l]egal conclusions m ade in the guise of factual allegations . . . are given no presum ption of truthfulness.” Wyeth v. Ranbaxy Labs., Ltd., 448 F. Supp. 2d 60 7, 60 9 (D.N.J . 20 0 6) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)); see also Kanter v. Barella, 489 F.3d 170 , 177 (3d Cir. 20 0 7) (quoting Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 20 0 5). Further, although “detailed factual allegations” are not necessary, “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlem ent to relief’ requires m ore than labels and conclusions, and a form ulaic recitation of a cause of action’s elem ents will not do.” Twom bly, 550 U.S. at 555 (internal citations om itted). Thus, a m otion to dism iss should be granted unless the plaintiff’s factual allegations are “enough to raise a right to relief above the speculative level on the assum ption that all of the com plaint’s allegations are true (even if doubtful in fact).” Twom bly, 550 U.S. at 556. 3 This plausibility standard requires m ore than a m ere possibility that unlawful conduct has occurred. “When a com plaint pleads facts that are ‘m erely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of ‘entitlem ent to relief.’’” Id. 8 The Court finds that Counterclaim Plaintiffs have articulated sufficient facts to state a claim that the voluntary cancelation of 8 0 0 Cooper was im proper under Delaware law. First, it pleads that 80 0 Cooper Finance filed a certificate of cancelation while the present case in this Court was still pending, and the Docket reflects the sam e. Prior to voluntarily dism issing the m atter, Counterclaim Defendant voluntarily dissolved as a com pany while it was a party to this action that it com m enced. Counterclaim Plaintiffs’ Am ended Answer and Counterclaim further pleads that 80 0 Cooper Finance “knew that there was an ongoing unresolved dispute regarding the am ount due under the subject loan, and that as a result of a payoff dem and . . . a claim could be asserted for a return of the am ounts paid in excess.” Am end. Counterclaim ¶ 41. According to the pleadings, Counterclaim Plaintiffs had requested (1) a reduction in the payoff dem and, and (2) for all disputed am ounts owed to be held in escrow. “[A] dissolved LLC m ust provide for all claim s—'including all contingent, conditional or unm atured contractual claim s’—that are ‘known to the lim ited liability com pany.’ Capone v. LDH Mgm t. Holdings LLC, No. CV 11687-VCG, 20 18 WL 1956282, at *8 (Del. Ch. Apr. 25, 20 18). Accepting the truthfulness of the well-pleaded facts of Counterclaim Plaintiffs, it is plausible that 80 0 Cooper knew the Counterclaim s against it were likely to ensue. Finally, the Counterclaim Plaintiffs state that 80 0 Cooper Finance proceeded to distribute “funds received from KL Holdings [and them selves] to m em bers of the LLC, without m aking any provision for a proper accounting of these funds, and for paym ent of claim s to creditors,” like them selves. Id. at ¶ 44. Thus, the facts also sufficiently allege that 80 0 Cooper Finance was wound up in contravention of the LLC Act. Therefore, there are sufficient facts to sustain a claim for nullification of the 9 certificate of cancelation.4 Metro Com m c'n Corp. BVI, 854 A.2d at 13 (“[b]ecause the com plaint pleads facts that support the inference that [the defendant LLC] was wound up in contravention of the LLC Act, the com plaint also pleads facts that support an application to nullify the certificate of cancellation.”). Because the Counterclaim against 80 0 Cooper Finance is one that m ay allow for nullification of its certificate of cancelation and therefore, allow it to defend this action, it is “possible” for Counterclaim Plaintiffs to seek redress. Thus, the Court will not dism iss the action. 80 0 Cooper Finance next argues that “[t]o the extent redress m ay be possible as to a dissolved lim ited liability com pany, Counterclaim Plaintiffs m ust attem pt to seek sam e in the State of Delaware, as the Delaware Code does not confer jurisdiction on this Court.” Counterclaim Def. Brf. at 6. Defendan t’s do not cite any legal authority for this proposition. To the contrary, the Chancery Court of Delaware has held that “[w]hen a Delaware state statute assigns exclusive jurisdiction to a particular Delaware court, the statute is allocating jurisdiction am ong the Delaware courts. The state is not m aking a claim against the world that no court outside of Delaware can exercise jurisdiction over that type of case.” IMO Daniel Kloiber Dynasty Tr., 98 A.3d 924, 939 (Del. Ch. 20 14). Moreover, courts outside of Delaware have addressed the exact type of claim s before this Court, each concerning a dissolved Delaware entity and breach of contract claim s. See Soroof Trading Dev. Co. v. GE Fuel Cell Sys., LLC, 842 F. Supp. 2d 50 2, 520 (S.D.N.Y. 20 12) (analyzing a claim to nullify LLC’s certificate of cancelation based on the argum ent that the Delaware LLC was wound up in contravention to the Delaware LLC 4 There is no requirem ent that a separate action to nullify a certificate of cancelation be brought first, before the entity m ay be sued. Metro Com m c'n Corp. BVI, 854 A.2d at 13 n.27. 10 act); Anthony Wayne Corp. v. Elco Fastening Sys., LLC, No. 3:13CV140 6-PPS, 20 16 WL 687887, at *2– 4 (N.D. Ind. Feb. 19, 20 16) (sam e). B. Am o u n t in Co n tro ve rs y Having found that 80 0 Cooper Finance is am enable to suit at this tim e and furtherm ore, that the claim s against it m ay properly be addressed in a court outside the State of Delaware, the Court will address whether the Counterclaim s should be dism issed because the am ount in controversy is insufficient to sustain diversity jurisdiction.5 For the reasons that follow, the Court finds that is not clear to a legal certainty that the jurisdictional am ount cannot be m et. Pursuant to 28 U.S.C.A. § 1332, district courts have “original jurisdiction of all civil actions where the m atter in controversy exceeds the sum or value of $ 75,0 0 0 , exclusive of interest and costs, and is between . . . citizens of different States.” The Court will “discern the am ount in controversy by consulting the face of the com plaint and accepting the plaintiff's good faith allegations.” Dolin v. Asian Am . Accessories, Inc., 449 F. App'x 216, 218 (3d Cir. 20 11). The Court will dism iss for failure to m eet the am ount in controversy, if it appears to a “legal certainty that the claim is really for less than the jurisdictional am ount to justify dism issal.” St. Paul Mercury Indem . Co. v. Red Cab Co., 30 3 U.S. 283, 289 (1938). Counterclaim Plaintiffs’ Am ended Answer alleges a total am ount in controversy in excess of $ 10 0 ,0 0 0 . They are claim ing recovery for the disputed am ounts paid to 80 0 Cooper Finance in fulfilm ent of its supposed debt (totaling over $ 83,0 0 0 ) as well as 5 The Court points out that after Counterclaim Plaintiffs’ Am ended Answer and Counterclaim was subm itted to this Court, it was satisfied that the necessary federal jurisdictional requirem ents were m et. 11 interest costs for their bridge loan (in excess of $ 16,0 0 0 ) and legal fees to secure the release of m ortgage from 80 0 Cooper Finance (in excess of $ 1,50 0 ). First, Counterclaim Defendant contends that there is no legal basis alleged or existing for recovery of any costs incurred for Counterclaim Plaintiffs’ bridge loan. Second, it argues that “Counterclaim Plaintiffs cannot prove they are entitled to the $ 1,50 0 in legal fees to secure the release of the Mortgage.”6 Cooper Finance Brf. at 8. Counterclaim Plaintiffs m aintain that it incurred these costs as a result of 80 0 Cooper Finance’s breach of contract. Counterclaim Defendant does not suggest, nor can it show at this stage, that it did not breach its contract with KL Holdings and consequently, cause these dam ages to Counterclaim Plaintiffs as m em bers of KL Holdings and grantors of the loans at issue. Even assum ing arguendo that on the face of the Am ended Answer as pled, these am ounts were not recoverable to a legal certainty, Counterclaim Plaintiffs’ rem aining claim s for all am ounts overpaid to Counterclaim Defendant alone surpass the am ount in controversy requirem ent. Counterclaim Plaintiffs’ allege that the am ounts pursued exceeded what was legally due and owing. Their Am ended Answer specifically alleges that they requested docum ents confirm ing the collection of certain costs and fees actually incurred with no avail; and that 8 0 0 Cooper Finance’s dem and of unwarranted debts before discharging their m ortgage was a breach of loan docum ents. Counterclaim Plaintiffs’ specifically allege why each cost or fee was disputed; and thus, why 80 0 Cooper Finance is obligated to return excess am ounts originally dem anded and paid. The cases relied on by Counterclaim Defendant in its m oving brief for the proposition that attorney’s fees should not be considered for the am ount in controversy are distinguishable because the fees sought to be recovered as part of the am ount in controversy in this case are not attorney’s fees incurred by the parties for this action but rather those incurred as a result of the alleged breach of contract. 6 12 For exam ple, the Am ended Answer alleges that 80 0 Cooper dem anded charges and fees not recoverable after acceleration of the loan, fees for services undocum ented, and collection costs without a judicial determ ination prior to a com plaint for confession of judgm ent or docum entation supporting such costs. Am end. Counterclaim ¶ 22. The Counterclaim Defendant does not dispute any facts on which jurisdiction depends. Alternatively, 80 0 Cooper Finance argues that they were entitled to the types of paym ents dem anded, which is not disputed in this m atter. Counterclaim Plaintiffs assert claim s to recover the am ounts it overpaid to 80 0 Cooper and dam ages resulting from breach of contract and conversion. 80 0 Cooper Finance’s contention is that “[d]ebtor’s waived any right to object to the am ount of fees or the im position of default interest by paying all sum s in full and inducing 80 0 Cooper to sign a satisfaction of the m ortgage and note.” Counterclaim Def. Brf. at 10 . It provides no legal basis for this assertion and provides no evidence that the disputed paym ents were duly and legally owed to it. Accepting the plaintiff's good faith allegations set forth in its Am ended Answer and Counterclaim , the am ount in controversy requirem ent is satisfied. The Counterclaim s present to a legal certainty an am ount in controversy over $ 75,0 0 0 . The Court further finds that Plaintiffs’ Counterclaim s are also properly before this Court under to supplem ental jurisdiction. To be sure, such a separate basis for subject m atter jurisdiction was alleged in Counterclaim Plaintiffs Am ended Answer and Counterclaim under 28 U.S.C. § 137. 7 Section 137 provides in pertinent part: Except as provided in subsections (b) and (c) or as expressly provided otherwise by Federal statute, in any civil action of which the district courts Counterclaim Defendants ignore this basis for jurisdiction and present no argum ent that supplem ental jurisdiction does not exist. Counterclaim Plaintiffs address the issue in their opposition brief. The Court will address the issue analyze jurisdiction under Section 137 to reiterate that the Counterclaim s here are properly before this court. 7 13 have original jurisdiction, the district courts shall have supplem ental jurisdiction over all other claim s that are so related to claim s in the action within such original jurisdiction that they form part of the sam e case or controversy under Article III of the United States Constitution. 28 U.S.C.A. § 1367. “The rule applies even to claim s asserted by or against additional parties.” HB Gen. Corp. v. Manchester Partners, L.P., 95 F.3d 1185, 1197 (3d Cir. 1996). There is no dispute that the initial claim s asserted by 80 0 Cooper Finance have original J urisdiction in this court pursuant to diversity jurisdiction. In this case, there is also no question that the Counterclaim s asserted are so closely related to 80 0 Cooper Finance’s initial claims so as to form part of the sam e case or controversy. Counterclaim Plaintiffs’ claim s against 80 0 Cooper Finance arose directly from the original suit. They seek redress for breach of contract, conversion and unjust enrichm ent arising out of Counterclaim Defendant’s actions in collecting a debt (the initial basis of this suit). Additionally, it is alleged that 80 0 Cooper Finance then canceled its certification of form ation and distributed its assets—the m oney Counterclaim plaintiffs paid to it pursuant to this action—im properly and in violation of Delaware law. Counterclaim Plaintiffs seek to have 80 0 Cooper Finance repay them the disputed am ounts, which they contest were wrongfully collected as a result of this action for confession of judgm ent. Therefore, the counterclaim s in this case derive from a “com m on nucleus of operative fact” and thus, the Court has jurisdiction pursuant to 28 U.S.C.A. § 1367. Am brom ovage v. United Mine Workers of Am ., 726 F.2d 972, 976 (3d Cir. 1984). 14 III. Conclusion For the foregoing reasons, the Court finds that there is subject m atter jurisdiction over the Counterclaims asserted in this case by Defendants/ Counterclaim Plaintiffs. Therefore, the Court denies Plaintiff/ Counterclaim Defendant’s Motion to dism iss. An appropriate Order shall issue. Dated: October 10 , 20 19 s/ J oseph H. Rodriguez _ _ Hon. J oseph H. Rodriguez, UNITED STATES DISTRICT J UDGE 15
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