Jurisdiction over real estate with co/borrowers located in different states

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airwolf said:
What court has jurisdiction over a dispute between co-borrowers located in different states?

Thanks
JP
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If the parties negotiated the loan in sate X, and one resides in state X, and the other in state Y.

The suit could be brought in state X or state Y.

But, there is a better solution for legal disputes that arise, such as the one you posit.

Your situation arises out of what the law calls "diversity of citizenship".

A case such as yours may be filed in federal court based on the "diversity of citizenship" of the litigants, such as between citizens of different states, or between United States citizens and those of another country.

To ensure fairness to the out-of-state litigant, the Constitution provides that such cases may be heard in a federal court.

An important limit to diversity jurisdiction is that only cases involving more than $75,000 in potential damages may be filed in a federal court.

Claims of any amount can be pursued in a state court.

In your example, you could have trouble suing the other party in YOUR state's court system.
 
Ok - A little bit of more information that may be of assistance - both parties lived in different states (X, Y) and purchased real estate in State Z. One borrower is defaulting on the loan. Wouldn't state Z be a common place for the lawsuit given that is where the property is located? So neither party is located in the state where the proptery exists. Thanks
 
airwolf said:
Ok - A little bit of more information that may be of assistance - both parties lived in different states (X, Y) and purchased real estate in State Z. One borrower is defaulting on the loan. Wouldn't state Z be a common place for the lawsuit given that is where the property is located? So neither party is located in the state where the proptery exists. Thanks
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Yes, that would certainly be an option, maybe.

What is the amount in dispute?

What are you trying to accomplish?
 
It is over the 75K mark - and what I am trying to accomplish is getting the mortgage paid off. One party simply wants to have it foreclosed on.
 
airwolf said:
It is over the 75K mark - and what I am trying to accomplish is getting the mortgage paid off. One party simply wants to have it foreclosed on.
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What do you want the court to do, order the slacker to pay up?

The court can't do that.

If Jay and Kay enter into a contract to purchase a home.

Jay agrees to pay $500 of a $1,000 a month note each month.

Jay decides now not to pony up the $500 any longer.

Kay tells Jay, pay up, deadbeat.

Jay can say, screw you, Kay, you pay up.

Kay can either pay the $1,000 a month (alone) to keep the note current, but can't force Jay to pay.

A court doesn't have the power to order Jay to pay, either.

Now, was this property purchased while Jay and Kay were married?

Have Jay and Kay subsequently divorced?

What does their divorce decree say about the property?
 
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Actually - back to the original question. Wouldn't the state where the property resides be the jurisdiction? I believe you said maybe above or does it need to be done somewhere else. I know you said the court can't order someone to pay, but just more curious as to where the complaint should be given the three different states.
 
airwolf said:
Actually - back to the original question. Wouldn't the state where the property resides be the jurisdiction? I believe you said maybe above or does it need to be done somewhere else. I know you said the court can't order someone to pay, but just more curious as to where the complaint should be given the three different states.
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This isn't about jurisdiction, its more about venue.

Although jurisdiction is part of an argument the defendant might put forth, not the plaintiff.

If you're suing to force X to pay, no court has that power for you.

If you're the lender suing to collect the note, you have many options.

If there is a dispute about ownership, or some other controversy, and X lives in XX, Y lives in YY, the home was purchased in ZZ. A lawsuit could be brought in ZZ.

If the amount in controversy exceeds $75,000 as you said, then you can bring a civil lawsuit in a federal court in your state. Let's call you Y. You could also sue in a federal court located inside your state of YY.

Great questions, you're making me think, taking me back to Civil procedure 101, many, many years ago as a 1L.
 
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so what if it was a business agreement between the two parties and it was more a breach of contract? Just curious now.
 
airwolf said:
so what if it was a business agreement between the two parties and it was more a breach of contract? Just curious now.
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Okay, you say agreement.

Agreements do not impose legal duties, contracts do.

I can agree to give you a $100 a day.

I do it for two days, and then stop.

You can't sue me and win.

You can sue me, you can sue anyone.

When you sue, you want to prevail.

I have no legal duty to give you $100, and I can change my mind.

Does a contract exist?

What does the contract say about what X is required to do, and what is Y required to do?
 
I understand your comments, just curious as to the where a suit would be placed. Do contracts need to specify the governing laws? Is that how one decides or is it where the place of business or property resides?
 
airwolf said:
I understand your comments, just curious as to the where a suit would be placed. Do contracts need to specify the governing laws? Is that how one decides or is it where the place of business or property resides?
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A good contract usually speaks to how and where disputes will be governed.

If it fails to do that, then we look at precedence and statutes.
 
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