Federal Court Allows Plaintiff To Amend Complaint to Defeat Diversity

Rago v. ING DIRECT, Dist. Court, ND Illinois 2013 – Google Scholar.

This is a decision holding that the court lacks diversity jurisdiction because the plaintiff could not possibly recover the minimum diversity amount, $75,000. The case is interesting because the plaintiff claimed that the defendant bank breached an agreement to refinance his mortgage in the amount of $493,500.

The bank argued that the diversity amount was met by the $493,500 allegation. Judge Durkin disagreed. The court explained:

“The Court finds that there was never any legal basis for Rago to be awarded an amount in excess of $75,000, let alone the $493,700 described in his original complaint. The $493,700 damage figure was never, and will never be, even plausibly possible. Rago alleges that ING breached a contract to refinance his mortgage such that he lost the opportunity to pay a decreased monthly payment at a lower interest rate and to pay down the principal. On the basis of these allegations, the only damages Rago can possibly seek flow from the higher interest he has paid and the fact that no portion of his payments has been applied to the loan’s principal.”

This is an interesting case because the plaintiff was allowed to amend the complaint to arguably defeat diversity jurisdiction.

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