OPINION AND ORDER

WILLIAM C. LEE, District Judge.

This matter is before the court on the motion to dismiss and memorandum in support filed by Defendant Richard Bannec on December 16, 2015 (Docket Entries 19, 20).1 Plaintiff Llano Financing Group filed a response in opposition to the motion on December 30, 2015 (DE 22) and Bannec filed a reply on January 6, 2016 (DE 25). For the reasons discussed below, the motion to dismiss is GRANTED and this case is DISMISSED for lack of subject-matter and diversity jurisdiction.2

BACKGROUND

Llano Financing Group, a Texas limited liability corporation, filed this lawsuit against Bannec and Randall Prince, both of whom were residential real estate appraisers licensed by the State of Indiana. Complaint (DE 6), ¶¶ 1, 3. Llano states that it "is suing in its capacity as agent for Impac Funding Corporation, the master servicer, for DEUTSCHE BANK NATIONAL TRUST COMPANY, (`Trust') a national bank association, which owns the loan that is the subject of this suit. Plaintiff has an ownership interest in the subject matter of the suit." Id., ¶ 2 (capitalization in original). Llano brought this suit based on diversity jurisdiction. Id., ¶ 4. Bannec and Prince appraised a residential property in Gary, Indiana, in August of 2006 and determined that the market value of the property was $80,000.00. Id., ¶ 12; Plaintiff's Exh. A (DE 6-1), p. 2.3 Based in part on the appraisal report, the property owner obtained a loan for $64,000.00, secured, of course, by the property. Id., ¶ 16. Llano claims that the "Borrower subsequently defaulted and Plaintiff foreclosed on the Property and suffered a loss." Id., ¶ 17. Llano alleges that it "later discovered" that the appraisal report "prepared and submitted to the Lender by Defendants had been negligently prepared and contained material misrepresentations regarding the Property and that the Loan was significantly under-secured." Id., ¶ 18. Llano does not state in its Complaint just how undervalued the property allegedly was, but does offer that it was "far less than $64,000.00 at the time Lender funded the loan. Had Lender known the true market value of the property it would not have funded the loan." Id., ¶ 19. Based on these allegations, Llano asserts state law claims against Bannec for breach of contract, negligent misrepresentation, and professional negligence. Id., pp. 5-9. Additional facts will be discussed below as they become relevant to the court's discussion and analysis.

STANDARD OF REVIEW

A motion to dismiss for lack of subject-matter jurisdiction calls into question a court's power to decide the merits of the case before it. See Fed.R.Civ.P. 12(b)(1). When a defendant makes a jurisdictional challenge, it is the plaintiff's burden to establish that jurisdiction exists. Apex Digital, Inc. v. Sears, Roebuck, & Co., 572 F.3d 440, 443 (7th Cir. 2009). When subjectmatter jurisdiction has been challenged, the court "must accept as true all well-pleaded factual allegations and draw all reasonable inferences in favor of the plaintiff." St. John's United Church of Christ v. City of Chicago, 502 F.3d 616, 625 (7th Cir. 2007). In addition to any jurisdictional allegations, the court may consider any evidence in the record that may help determine whether there is subject-matter jurisdiction. Id. It is the duty of the court to review its jurisdiction over the matter before it may examine the merits of the case, regardless of whether the issue is raised by the parties. See Ricketts v. Midwest Nat. Bank, 874 F.2d 1177, 1181 (7th Cir. 1989). In the event that a court concludes that subject-matter jurisdiction does not exist, "the court must dismiss the complaint in its entirety" without examining the merits of the case. Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006).

DISCUSSION

I. Lack of Subject-Matter Jurisdiction.

Bannec's motion asks the court to dismiss this case pursuant to Fed.R.Civ.P. 12(b)(1), arguing that Llano lacks standing to bring this suit and, consequently, the court lacks subjectmatter jurisdiction, and subsection 12(b)(6), arguing that Llano fails to plead any valid claim. Motion to Dismiss (DE 19), p. 1. "When a motion to dismiss is brought both for lack of subject matter jurisdiction under Rule 12(b)(1) and for failure to state an actionable claim under Rule 12(b)(6), the Rule 12(b)(1) motion is addressed first." Villareal v. Snow, 1996 WL 28282, at *2 (N.D.Ill. 1996) (citing Winslow v. Walters, 815 F.2d 1114, 1116 (7th Cir. 1987)).

Bannec's motion is based on a host of arguments, as set forth below, but the standing argument boils down to this: Bannec claims that Llano is out to recover money from him for a deficiency that allegedly resulted from the defaulted loan even though Llano "did not[] request the written appraisal at issue, receive the written appraisal at issue, rely upon the allegedly deficient appraisal at issue, finance a mortgage transaction in reliance upon the appraisal at issue, or suffer any monetary damages whatsoever[.]" Motion to Dismiss, p. 2. In his memorandum in support of his motion, Bannec summarizes his position in terms that can hardly be referred to as equivocal when he writes: "Put simply, Llano buys lawsuits. Its actions are champertous and deceitful." Defendant's Memorandum, p. 1. According to Llano, that "contention is close to being libelous." Plaintiff's Response, p. 2. This is obviously a hotly contested battle, seeing as gauntlets are being thrown about; but Bannec doesn't back down, insisting that "Llano bought and paid for the claims it asserts in this lawsuit[]" and that Llano's actions are "little more than `thinly veiled champerty. . . ." Defendant's Memorandum, p. 6-7 (citation omitted).

Bannec contends that "Llano's Complaint must be dismissed for the following reasons: (1) Llano's pursuit of this action is nothing more than the champertous purchase of an interest in litigation by a disinterested party; (2) Llano's Complaint fails to sufficiently allege diversity jurisdiction; (3) Llano's lack of standing and the nonexistence of Llano's demonstrable interest in this suit prevents this Court from asserting subject matter jurisdiction; (4) Indiana does not recognize a cause of action for negligent misrepresentation on facts such as those presented in the instant case; (5) Llano's claims are barred by the applicable statutes of limitations; and (6) Plaintiff cannot state legally or factually cognizable claims for breach of contract, negligent misrepresentation, and professional negligence." Defendant's Memorandum, pp. 5-6. Bannec's contentions (1) and (3) are intertwined serve as the foundation for his argument about standing. Whether Llano's actions in bringing this suit (and dozens or even hundreds like it across the country) are champertous is not a determination this court has to make for present purposes. But the arguments Bannec presents on that issue are indeed relevant to the issue of standing, for the reasons explained below.

Bannec summarizes his standing argument as follows:

Id., p. 7.

Bannec cites the case of Birner v. General Motors Corp., 2007 WL 269847 (C.D.Ill. Jan. 26, 2007) in support of his argument. Id., pp. 6-7. In Birner, the district court held that the plaintiff lacked standing when he paid for an assignment of rights from an allegedly injured third-party in order to pursue a suit for money damages, even though the plaintiff was "a complete stranger" to the underlying transaction giving rise to the claim. Birner, 2007 WL 269847, at * 3. The court explained that "`[t]he law will not tolerate a principle which will allow a man of litigious disposition to go about the community, hunting up stale claims, or even meritorious ones, against his neighbors, either for the purpose of harassing them, or for speculation.'" Birner, 2007 WL 269847, at *2 (quoting McGoon v. Ankeny, 11 Ill. 558, 1850 WL 4273 (1850)). Bannec also points to the following information in support of his champerty argument:

Id., pp. 1-2 (citing Defendant's Exh. A (DE 20-1)) (court dockets from various state and federal courts). Bannec also notes that that this information is included on a website known as appraiserlawblog.com. Id., p. 2.4 Bannec contends that "[t]his case shares a common thread with the hundreds of other cases throughout the country purchased by Llano: (1) Llano has no relationship to the underlying transaction . . . (2) Llano was not a legal or remotely anticipated beneficiary of any alleged `agreement' or the appraisal at issue; [and] (3) Llano did not suffer any harm as a result of the transaction between the alleged lender and the Defendants in this matter[.]" Id.

In its response in opposition to Bannec's motion, Llano does not dwell long on this messy matter of alleged champerty. After protesting that Bannec's accusations are "close to being libelous," Llano reins in its outrage and simply states as follows:

Plaintiff's Response, p. 2. Llano then goes on to cite a few cases from other jurisdictions in support of its contention that it "is an agent of the master loan servicer for the mortgage holder, Impac. . . . As a sub-servicer of the master servicer [Llano] also has a direct and immediate interest in the right of action." Id., p. 4 (citing Trust for Certificate Holders of Merrill Lynch Inv'rs, Inc. v. Love Funding Corp., 591 F.3d 116 (2d Cir. 2010); Pineda v. PMI Mortgage Ins. Co., 843 S.W.2d 660 (Tex. App. 1992); and In re Reed, 532 B.R. 82 (Bankr. N.D. Ill. 2015)). The problem with these authorities is that they are factually and legally distinguishable from the present case. The Love Funding case involved a mortgage Trust that sued a loan originator following a mortgagor's default. The Second Circuit held that the actions of the Trust were not champertous under New York law. That decision, however, was based in large part on the fact that the plaintiff Trust had a "preexisting proprietary interest in the loan" and "was the party that would directly suffer the damages of any default. . . ." Love Funding, 591 F.3d at 122 (citation omitted). Because of that fact, the appellate court concluded that the plaintiff Trust had a legitimate (i.e., non-champertous) right to pursue a deficiency judgment. In the present case, however, Llano has not pled such a nexis. Llano's conclusory allegations, despite its insistence otherwise, do not establish how Llano acquired the standing it claims to have or how it suffered any damages when the underlying loan, held by a mortgage trust, went into default. In Pineda, a more than two-decade old Texas state court case, the court held that a mortgage insurer's right to pursue a deficiency judgment against mortgagors following foreclosure was not champertous under Texas law. But the determinative issue in that case was whether the plaintiff had given consideration for its subrogation rights. Pineda, 843 S.W.2d at 674-75. Additionally, the facts giving rise to that case are dramatically different from the instant case in that the plaintiff, a mortgage insurance provider, had paid the lender's claim following default by the borrower in exchange for a "subrogation and assignment agreement and the transfer of the note and supporting loan documents from the lender." Id. at 675. Finally, the Reed case cited by Llano is, as the citation indicates, a bankruptcy case. The bankruptcy court held that the defendant debtor could not raise a claim of champerty as a defense to an adversary proceeding based only on the debtor's "speculation" that the plaintiff's actions were champertous and, in any event, that such a claim was not cognizable under the Bankruptcy Code. Reed, 532 B.R. at 94. In summary, the cases cited by Llano are distinguishable from the case at bar-both factually and legally-and, of course, are not binding authority on this court.

Perhaps Llano decided not to expend too much effort refuting Bannec's "libelous" accusations of champerty because it is convinced that all it needs to do to withstand the motion to dismiss is to rest on its contention that "[i]t is well recognized that a mortgage loan servicer has standing to sue for injuries suffered by the owner of the mortgage loan." Plaintiff's Response, p. 2. What makes this argument smell so bad is that it is nothing more than a generic statement of contract and agency law without any explanation, let alone evidence, that it applies in this case. Put another way, Llano fails to adduce any evidence whatsoever that establishes its standing to bring this lawsuit, instead resting on the assertions in its Complaint to do so. Llano writes that Bannec "argues that Plaintiff is not a real party in interest because it has not sufficiently alleged how it acquired its interest; despite the Complaint explaining how that was done." Plaintiff's Response, p. 3. In other words, because the Complaint states that Llano "is suing in its capacity as agent for Impac Funding Corporation, the master servicer, . . ." and that Llano therefore "has an ownership interest in the subject matter of the suit[,]" (Complaint, ¶ 2), and because this court "must accept as true all material allegations of the complaint, drawing all reasonable inferences therefrom in the plaintiff's favor," this court must simply assume that standing exists based on Llano's conclusory allegations. But this argument is hollow, since it ignores other critical aspects of the Rule 12(b)(1) standard of review, to wit: the bare allegations in a complaint can be sufficient to establish standing "unless standing is challenged as a factual matter." Remijas v. Neiman Marcus Group, LLC, 794 F.3d 688, 691 (7th Cir. 2015) (citation omitted) (italics added). When that is the case, as it is here, "[t]he party invoking federal jurisdiction bears the burden of establishing the required elements of standing." Smith v. City of Chicago, 2015 WL 6859299, at *2, ___F.Supp.3d___; (N.D.Ill. Nov. 9, 2015) (citing Johnson v. U.S. Office of Personnel Mgmt., 783 F.3d 655, 661 (7th Cir. 2015)). Llano's argument that it has standing is based solely on its self-serving conclusory assertion that it acquired that standing by virtue of being a "sub-servicer" to Impac Lending, who, in turn, was the "master servicer" for the mortgage Trust. But as another district court pointed out, such conclusory assertions are insufficient to overcome a factual challenge to a plaintiff's standing:

Shales v. Schroeder Asphalt Services, Inc., 2013 WL 2242303, at *7 (N.D.Ill. May 21, 2013).

The distinction between facial and factual challenges to jurisdiction, which Llano fails to recognize (or perhaps deliberately avoids addressing), was explained in detail by the Seventh Circuit in Apex Digital, Inc. v. Sears, Roebuck & Co.:

Apex Digital, 572 F.3d at 443-44.

Applying the proper standard for analyzing a factual challenge to jurisdiction, it is clear that Llano has failed to establish standing to bring this lawsuit. Llano's vague, unsupported, and conclusory assertion that it has standing in this case does not make it so. Bannec raised a factual challenge to Llano's standing and Llano presented nothing to quash that challenge. "Once such evidence is proffered, `[t]he presumption of correctness that we accord to a complaint's allegations falls away,' . . . and the plaintiff bears the burden of coming forward with competent proof that standing exists[.]" Apex Digital, 572 F.3d at 445 (citations omitted). Llano has failed to meet its burden and this case must be dismissed in its entirety.

II. Diversity Jurisdiction.

The vague assertions and allegations in Llano's Complaint not only fail to establish subject-matter jurisdiction, they also fail to establish the existence of diversity jurisdiction. As Bannec puts it, "Llano's own allegations of `damage' are . . . weak." Bannec argues that Llano's Complaint reveals on its face that the amount in controversy "is clearly an amount less than $75,000 or even $64,000." Defendant's Reply, p. 8. Bannec argues that this fact means there is no diversity jurisdiction and Llano's Complaint should be dismissed for this reason also.

If a plaintiff's "`allegations of jurisdictional facts are challenged by his adversary in any appropriate manner, he must support them by competent proof.'" Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 540 (7th Cir. 2006) (quoting McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189 (1936)). Competent proof is synonymous with the preponderance of the evidence standard. Id. at 543; see also, Scott v. Bender, 948 F.Supp.2d 859, 867-68 (N.D.Ill. 2013). "When the complaint includes a number, it controls unless recovering that amount would be legally impossible. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845 (1938). When the complaint omits a number, however, the size of the claim must be evaluated in some other way." Rising-Moore v. Red Roof Inns, Inc., 435 F.3d 813, 815-16 (7th Cir. 2006). In this case, Llano does not state what the amount in controversy is, other than to allege that it "exceeds $75,000.00." Complaint, ¶ 4. Therefore, the court must try to determine whether the actual amount in controversy meets the jurisdictional threshold. That is not a simple task, given Llano's vague assertions on this point. Llano presents no evidence whatsoever to establish that this element of diversity jurisdiction is met in this case. It only says that "[t]he market value of the Property . . . was far less than $64,000.00 . . ." and that "only a fraction of the Loan was recovered through foreclosure." Complaint, ¶¶ 19, 27. So, the damages in this case would appear to be $64,000 minus whatever "fraction" of that was recovered by the Trust after foreclosure. Obviously this is below the amount required to support diversity jurisdiction. In its prayer for relief, Llano asks for "damages, costs and expenses in an amount in excess of the jurisdictional limits of this Court[.]" Complaint, p. 9. This is not helpful, since nowhere in the Complaint (or in its brief) does Llano explain what "costs and expenses" it seeks, how much money that amounts to, or even if such costs and expenses are properly included in calculating the amount in controversy (since the diversity statute expressly states that "costs" are not to be considered when calculating the amount in controversy-see 28 U.S.C. § 1332(a)). Just like it does with its arguments on the issue of standing, Llano rests on its vague and conclusory assertions to support its claim that the amount in controversy meets the jurisdictional threshold. "[I]f, from the face of the pleadings, it is apparent, to a legal certainty, that the plaintiff cannot recover the amount claimed or if, from the proofs, the court is satisfied to a like certainty that the plaintiff never was entitled to recover that amount, and that his claim was therefore colorable for the purpose of conferring jurisdiction, the suit will be dismissed." St. Paul Mercury Indem. Co., 303 U.S. at 289. The damages allegations in Llano's Complaint fail to support its conclusory allegation that the amount in controversy in this case satisfies the threshold amount required for diversity jurisdiction to exist. This is insufficient and dismissal of this case on this basis is also warranted. See NFLC, Inc. v. Devcom Mid-America, Inc., 45 F.3d 231, 237 (7th Cir. 1995).

CONCLUSION

For the reasons discussed above, the motion to dismiss filed by Defendant Richard Bannec (DE 19) is GRANTED and this case is DISMISSED for lack of subject-matter and diversity jurisdiction.