United States District Court, N.D. West Virginia
ROBERT G. CONRAD, Plaintiff,
OCWEN LOAN SERVICING, LLC; U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-SP2; and DAKOTA HINTERER, Defendants.
MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF'S
MOTION TO REMAND [DKT. NO. 6]
February 27, 2017, the plaintiff, Robert G. Conrad
(“Conrad”),  filed a complaint in the Circuit Court
of Doddridge County, West Virginia (“Circuit
Court”), against the defendants, Ocwen Loan Servicing,
LLC (“Ocwen”); U.S. Bank National Association, as
Trustee for C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2007-SP2 (“U.S. Bank”); and Dakota
Hinterer (“Hinterer”) (Dkt. No. 1-1 at 5). On
April 7, 2017, Ocwen and U.S. Bank removed the case to this
Court, arguing that Hinterer, the only non-diverse defendant,
was fraudulently joined to defeat diversity (Dkt. No.
1).After considering Conrad's motion to remand (Dkt. No.
6), the Court concludes that it lacks subject matter
jurisdiction. Therefore, it GRANTS
Conrad's motion and REMANDS this case to
the Circuit Court.
1996, Conrad purchased his home for $73, 000 with a loan held
by U.S. Bank. After Conrad refinanced the home in 2000,
Litton Loan Servicing, LP (“Litton”), began
servicing the loan. Thereafter, Conrad applied for a loan
modification, which Litton approved. By this, Conrad lowered
his interest rate from 8.5% to 3.5% (Dkt. No. 1 at 6-7).
the agreement was memorialized, Ocwen purchased Litton. After
it began servicing Conrad's loan, it “refused to
honor the agreement that Litton
provided.” Instead, on several occasions, Ocwen
instructed Conrad to reapply for loss mitigation assistance
and to stop making payments until it finalized his loan
modification. Most recently, in August 2016, Conrad again
applied for loss mitigation assistance because Ocwen had not
responded to his previous communications. Id. at
January 18, 2017, Conrad received a letter dated January 11,
2017, in which Ocwen denied his request for loss mitigation
assistance. It based its denial in part on the falsehood that
Conrad had failed to provide an application before 2017. An
individual also stopped at Conrad's house to notify him
that his property would be sold at foreclosure later that
day. Hinterer, whose family is involved in the oil and gas
business, purchased the home at the foreclosure sale.
Id. at 9. The contract of sale establishes that
Hinterer purchased the property for $171, 063.11, and paid
$17, 000.00 as a deposit (Dkt. No. 18-1).
complaint, Conrad alleges that Ocwen failed to comply with
industry standards and commercially reasonable business
practices regarding loss mitigation applications, and that it
never actually evaluated his application or provided him a
right to appeal its denial (Dkt. No. 1-1 at 9). He further
claims that, based on Ocwen's representations, he did not
pursue other options, such as selling the property,
refinancing, or obtaining assistance.
Conrad allegedly could not avoid foreclosure and suffered
“economic loss, annoyance and inconvenience, stress and
worry, and fear of loss of his home.” Id. at
10. Conrad seeks relief based on various violations of the
West Virginia Consumer Credit and Protection Act, as well as
common law claims for tortious interference, fraud,
“equity abhors a forfeiture, ” and estoppel.
Id. at 10-15. Only the latter two causes of action
are asserted against “all defendants.”
Id. at 14-15.
April 7, 2017, Ocwen and U.S. Bank (“the removing
defendants”), both diverse from Conrad, removed the
case to this Court (Dkt. No. 1). They aver that Hinterer, a
West Virginia resident, was fraudulently joined to defeat
diversity because Conrad “failed to allege any
wrongdoing or state a valid claim against him.”
Id. at 4. On April 14, 2017, the removing defendants
filed their answer to the complaint (Dkt. No. 5). Thereafter,
on May 8, 2017, Conrad moved to remand the case to state
court, contending that the removing defendants “have
failed to satisfy their burden in the notice of removal that
Defendant Hinterer has been fraudulently joined or that he
[is] only a nominal party” (Dkt. No. 6-1 at 1). At a
scheduling conference on June 20, 2017, the Court heard
argument on the motion to remand (Dkt. No. 12), and directed
the parties to file supplemental briefs by June 30, 2017
(Dkt. No. 13).
STANDARD OF REVIEW
28 U.S.C. § 1441(a) provides that “any civil
action brought in a state court of which the district courts
of the United States have original jurisdiction, may be
removed by the defendant or the defendants.” See
also King v. Marriott Int'l, Inc., 337 F.3d 421, 424
(4th Cir. 2003). Nonetheless, “federal courts, unlike
state courts, are courts of limited jurisdiction, created by
Congress with specified jurisdictional requirements and
limitations, ” Strawn v. AT&T Mobility
LLC, 530 F.3d 293, 296 (4th Cir. 2008), and federalism
counsels that removal jurisdiction should be strictly
construed. Palisades Collections LLC v. Shorts, 552
F.3d 327, 334 (4th Cir. 2008) (citing Md. Stadium Auth.
v. Ellerbe Becket Inc., 407 F.3d 255, 260 (4th Cir.
burden of establishing federal jurisdiction is placed upon
the party seeking the removal.” Mulcahey v.
Columbia Organic Chems., Inc., 29 F.3d 148, 151 (4th
Cir. 1994). “All doubts about the propriety of removal
should be resolved in favor of retaining state court
jurisdiction, ” and thus remanding a case to state
court. Vitatoe v. Mylan Pharm., Inc., No. 1:08cv85,
2008 WL 3540462, at *2 (N.D. W.Va. Aug. 13, 2008) (citing
Hartley v. CSX Transp., Inc., 187 F.3d 422, 425 (4th
Cir. 1999)). The Court is limited in its consideration to the
facts on the record at the time of removal. See Lowrey v.
Al. Power Co., 483 F.3d 1184, 1213-15 (11th Cir. 2007).
district courts have original jurisdiction of all civil
actions where the matter in controversy exceeds the sum or
value of $75, 000, exclusive of interest and costs, and is
between citizens of different states . . . .” 28 U.S.C.
§ 1332(a). This provision has been consistently
interpreted “to require complete diversity of
citizenship of each plaintiff from each defendant.”
Rosmer v. Pfizer Inc., 263 F.3d 110, 123 (4th Cir.
2001) (Motz, J., dissenting) (citing Strawbridge v.
Curtiss, 7 U.S. (3 Cranch) 267 (1806)).
naming a non-diverse defendant does not necessarily defeat
diversity jurisdiction. There are “three exceptions to
the strict requirement of diversity: (1) a court may ignore
the citizenship of nominal parties; (2) a court may dismiss
parties fraudulently joined; and (3) a court may realign the
parties based on their true interests.” Chamberlain
v. 37th Parallel Properties Inv. Grp., LLC, No.
3:15-cv-00080, 2015 WL 1954674, at *2 (E.D. Va. Apr. 29,
2015). Although Hinterer is non-diverse, the ...