Yelton v. LoanDepot.com, LLC

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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
1:25-cv-350-MOC-WCM
WILLIAM YELTON, )
)
Plaintiff, ) MEMORANDUM AND
v. ) RECOMMENDATION
)
LOANDEPOT.COM, LLC, )
)
Defendant. )
_______________________________
This matter is before the Court on an Unopposed Motion and
Memorandum in Support Thereof to Amend Complaint (the “Motion to
Amend,” Doc. 19) and for case management purposes.
I. Background
On October 10, 2025, Plaintiff filed his Complaint, contending that this
Court has subject matter jurisdiction under 28 U.S.C. § 1332(a) because the
amount in controversy exceeds $75,000, and the parties are citizens of different
States. Doc. 1.
On October 14, 2025, Plaintiff filed a citizenship disclosure statement
which indicated that he is a citizen of North Carolina. Doc. 3.
During an initial pretrial conference on December 15, 2025, the
undersigned directed Defendant to file a citizenship disclosure statement by
December 17, 2025.
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Defendant complied. Doc. 17. That filing indicates that Defendant, which
is a limited liability company, has two members – LD Holdings Group LLC,
which is shown as being a citizen of “Delaware/California” and Mark McGowen
who is shown as being a citizen of North Carolina. Although Defendant’s
citizenship disclosure statement does not identify all of the individual
members of LD Holdings Group LLC itself and the citizenship of each one, see
Doc. 17 at n.1; see also Fed. R. Civ. P. 7.1(a)(2); Jennings v. HCR ManorCare,
Inc., 901 F.Supp.2d 649, 651 (D.S.C. 2012) (“an LLC’s members’ citizenship
must be traced through however many layers of members there may be”), the
disclosure indicates that there are citizens of North Carolina on both sides of
this matter.
Consequently, on December 22, 2025, Plaintiff was directed to show
cause, on or before January 2, 2026, why the undersigned should not
recommend that this matter be dismissed for lack of subject matter
jurisdiction. Doc. 18.
On January 2, 2026, Plaintiff filed the Motion to Amend, by which
Plaintiff seeks leave to file an amended complaint that asserts a federal cause
of action. Doc. 19-1. Defendant does not object.
On January 21, 2026, the undersigned conducted a status conference and
hearing on the Motion to Amend. During that proceeding, the parties
confirmed that there was not complete diversity at the time the Complaint was
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filed. The parties further advised that Plaintiff intended to remedy this
jurisdictional defect through the filing of an Amended Complaint that now
asserts a federal claim. The undersigned, however, questioned whether the
Court could exercise jurisdiction under those circumstances and directed
Plaintiff to file, on or before January 28, 2026, either a supplemental brief in
support of his Motion to Amend or any other appropriate filing.
Plaintiff has made no further filings.
II. Discussion
As noted, complete diversity did not exist at the time Plaintiff filed his
Complaint. Plaintiff now wishes to include a federal claim and argues that this
Court should give him leave to amend his Complaint to do so. Plaintiff, though,
has cited no authorities that suggest the Court has jurisdiction to allow the
proposed amendment. See Saxon Fibers, LLC v. Wood, 118 Fed. Appx. 750, 752
(4th Cir. Jan. 4, 2005) (unpubl.). (“The parties agree that a plaintiff may not
use 28 U.S.C.A. § 1653 (West 1994) or any other means to obtain leave of court
to amend a complaint to allege a federal cause of action not previously pled
when the court had no jurisdiction over the original complaint. Such a
proposition makes sense, considering that a court without subject matter
jurisdiction lacks authority to grant a party's amendment motion.”) (internal
citations omitted); Kidney Dialysis & Transplant Grp. PLLC v. Gouda, No.
1:15CV239, 2016 WL 3093945, at *3 (N.D.W. Va. June 1, 2016) (“Simply put,
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a court without subject matter jurisdiction lacks the authority to grant a
party's motion to amend the complaint.”).1
III. Recommendation
Therefore, the undersigned RESPECTFULLY RECOMMENDS that this
matter be DISMISSED WITHOUT PREJUDICE for lack of subject matter
jurisdiction.
1 The undersigned is compelled to note that the Court has closely considered requiring
Plaintiff to show cause why sanctions should not be imposed on Plaintiff or his
counsel. In response to the Court’s December 22, 2025 order, Plaintiff did move to
amend his Complaint, though he did not identify the deficiencies with such a request,
and, perhaps most problematic, made no filings in response to the Court’s January
21, 2026 oral order. However, for judicial economy, the undersigned has chosen to
recommend dismissal.
Signed: February 2, 2026
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Time for Objections
The parties are hereby advised that, pursuant to Title 28, United States
Code, Section 636, and Federal Rule of Civil Procedure 72(b)(2), written
objections to the findings of fact, conclusions of law, and recommendation
contained herein must be filed within fourteen (14) days of service of same.
Responses to the objections must be filed within fourteen (14) days of service
of the objections. Failure to file objections to this Memorandum and
Recommendation with the presiding District Judge will preclude the parties
from raising such objections on appeal. See Thomas v. Arn, 474 U.S. 140, 140
(1985); United States v. Schronce, 727 F.2d 91, 94 (4th Cir. 1984).
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