Summary:
The Manuels fell behind on their mortgage and engaged the assistance of Secure Property Solutions (“SPS”) (which is not a party to this action) and Gembala, an attorney licensed in Pennsylvania and New Jersey, in what the Manuels eventually regarded as a “mortgage modification scam.”
The Manuels initially filed suit in federal district court alleging various RICO and North Carolina state law violations. The federal district court dismissed the action for lack of subject matter jurisdiction, finding that even though RICO would provide for federal subject matter jurisdiction, it would “not embark on an excursion to interpret [Manuels’] verbose, tortured amended complaint to extract a RICO claim that might, but might not, lie hidden or buried somewhere within it.” The Manuels sought leave to file another amended complaint, but prior to a ruling by the federal district court, the Manuels brought suit in Bladen County Superior Court with substantially similarly allegations. Gembala then sought dismissal or stay of the state court action, while the federal district court case was still pending.
In making a determination whether to grant a stay under this section, the trial court may consider the following factors:
1. The nature of the case involved;
2. The relief sought;
3. The applicable law
4. Convenience and access to another forum;
5. The convenience of witnesses;
6. The availability of compulsory process to produce witnesses;
7. The relative ease of access to sources of proof;
8. The burden of litigating matters not of local concern;
9. The desirability of litigating matters of local concern in local courts;
10. The choice of forum by the plaintiff; and
11. All other practical considerations which would make the trial easy, expeditious and inexpensive.
In the present case, the trial court specifically concluded that “the interest of justice and judicial economy would be best satisfied” by granting a stay. Further, the trial court considered plaintiffs’ access to the federal court to hear their state law claims, the nature of the case, the choice of forum by plaintiffs, and the practical consideration of judicial economy. The Manuels argued that only a federal could not place Gembala into a North Carolina receivership and the stay should have been granted. As the Manuels chose a federal forum, they should have considered the relief available to them. Accordingly, the stay was appropriate.
For a copy of the opinion, please see:
Manuel v. Gembala- Motion to Stay State Court Action pending Resolution of Substantially Similar Federal Court Case.pdf
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