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Addington v. Loandepot.Com, LLC

United States District Court, N.D. West Virginia, Elkins

October 18, 2017




         Pending before this Court is the plaintiffs' Motion to Remand to State Court [Doc. 8], filed September 6, 2017. For the reasons that follow, the motion is GRANTED.

         I. BACKGROUND

         This case was originally filed in the Circuit Court of Webster County, West Virginia, on June 30, 2017 [Doc. 1 -1 ]. In the Complaint [Doc. 1 -1 ], the plaintiffs allege that their loan provider, defendant, LLC, breached the deed of trust agreement between the parties by violating certain Federal Housing Administration ("FHA") regulations incorporated into the terms of the agreement and engaged in illegal and abusive practices in servicing the loan, causing the plaintiffs to suffer stress, anxiety, and fear of losing their home [Doc. 1-1, pp. 5-7]. The Complaint alleges that the defendant intended to foreclose on the plaintiffs' home on July 12, 2017 [Doc. 1-1, U 20].

         The Complaint sets forth four counts: (1) breach of contract; (2) misrepresentations/unconscionable conduct, in violation of W.Va. Code §§ 46A-2-127, 128; (3) illegal late fees, in violation of W.Va. Code § 46A-3-112; and (4) illegal fees, in violation of W.Va. Code §§ 46A-2-127(g), 128(c). Specifically, the Complaint alleges that the defendant breached the parties' deed of trust by proceeding with foreclosure without providing the plaintiffs with foreclosure alternatives, assessing unpermitted late fees, failing to conduct a face-to-face interview with the plaintiffs as required by 24 C.F.R. § 203.604, failing to consider the plaintiffs for a modification pursuant to the FHA Home Affordable Modification Program ("HAMP"), failing to consider specific loss mitigation options before foreclosure, and otherwise failing to offer the plaintiffs any foreclosure alternatives before initiating foreclosure. As relief forthe alleged breaches, the plaintiffs request a declaration that the defendant breached the contract as alleged, actual and punitive damages, attorneys fees and costs, and "[s]uch other relief as the Court deems equitable and just." [Doc. 1-1, 111121-27].

         As to the second count, the plaintiffs allege that the defendant engaged in debt or information collection practices that violated W.Va. Code § 46A-2-127, and that the defendant used unfair or unconscionable means to collect a debt in violation of W.Va. Code § 46A-2-128 [Doc. 1-1, fflf 28-30]. As to the third count, the plaintiffs allege that the defendant improperly assessed late fees, charged late fees that were not due on at least fifteen occasions, and routinely engaged in "pyramiding" late fees in violation of W.Va. Code § 46A-3-112 [Doc. 1 -1, Ufl 31-33]. As to the fourth count, the plaintiffs allege that the defendant routinely assessed illegal fees while attempting to collect on the loan [Doc, 1 -1, 1I113');">134-35]. As relief for each count, the plaintiffs request actual damages, attorneys fees and costs, and civil penalties for each violation under W.Va. Code §§ 46A-5-101(1) and 106. It is not clear from the face of the complaint precisely how many violations the plaintiff alleges in each count.

         On August 8, 2017, the defendant removed this case to this Court asserting diversity jurisdiction pursuant to 28 U.S.C. § 13');">1332 [Doc. 1]. Shortly thereafter, the defendant filed a Motion to Dismiss for Failure to State a Claim [Doc. 2]. On September 6, 2017, the plaintiffs filed the instant Motion to Remand to State Court [Doc. 8]. Both motions have been fully briefed and are ripe for disposition, however this Court may not address the motion to dismiss unless it determines that it has subject-matter jurisdiction over this action. For the reasons explained below, it does not, and this Court need not address the defendant's Motion to Dismiss.


         "We begin with the undergirding principle that federal courts, unlike most state courts, are courts of limited jurisdiction, created by Congress with specified jurisdictional requirements and limitations. Accordingly, a party seeking to adjudicate a matter in federal court must allege and, when challenged, must demonstrate the federal court's jurisdiction over the matter. If a plaintiff files suit in state court and the defendant seeks to adjudicate the matter in federal court through removal, it is the defendant who carries the burden of alleging in his notice of removal and, if challenged, demonstrating the court's jurisdiction over the matter." Strawn v. AT&T Mobility, 530 F.3d 293, 296 (4th Cir. 2008) (citations omitted).

         Federal courts "are obliged to construe removal jurisdiction strictly because of the 'significant federalism concerns implicated'... [therefore, 'if federal jurisdiction is doubtful, a remand to state court is necessary.'" Md. Stadium Auth. v. Ellerbe Becket Inc., 407 F.3d 255, 260 (4th Cir. 2005) (internal quotation marks, citations, and alterations omitted); see also Healy v. Ratta, 292 U.S. 263, 270 (1934) ("Due regard for the rightful independence of state governments, which should actuate federal courts, requires that they scrupulously confine their own jurisdiction to the precise limits which the statute has defined."). .

         Defendants seeking removal bear the burden of demonstrating that jurisdiction is proper. See Strawn, 530 F.3d at 296-97; Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994). "While a defendant filing a notice of removal under 28 U.S.C. § 1446(a) need only allege federal jurisdiction with a short plain statement-just as federal jurisdiction is pleaded in a complaint-when removal is challenged, the removing party bears the burden of demonstrating that removal jurisdiction is proper." Strawn, 530 F.3d at 297 (citing Ellenburg v. Spartan Motors Chassis, Inc., 519 F.3d 192, 200 (4th Cir. 2008)); see also Dart Cherokee Basin Operating Co. v. Owens, 13');">135 S.Ct. 547, 554 (2014) (when challenged, defendant must show that removal is proper by preponderance of the evidence).

         "The question then becomes how that burden is to be satisfied. Generally, the amount specified in the complaint will determine whether the jurisdictional amount is satisfied for the purposes of removal." Bartnikowski v. NVR, Inc., 307 Fed.Appx. 730, 734 (4th Cir. 2009) (citations omitted). "Determining the amount in controversy becomes more difficult, however, where, as here, Plaintiffs have left damages unspecified in their complaint." Id. In West Virginia, it is not required that the Complaint's ad damnum clause state a specific dollar amount. In such circumstances, the Court may consider the entire record before it and may conduct its own independent inquiry to determine whether the amount in controversy satisfies the jurisdictional minimum. Mullins v, Harry's Mobile Homes, 861 F.Supp. 22, 23 (S.D. W.Va. 1994) (Faber, J.). In so doing, the Court is not required "to leave its common sense behind." Id. at 24.

         Because the amount in controversy is measured by "the pecuniary result to either party which [the] judgment would produce" when declaratory judgment is sought, Gov't Employees Ins. Co. v. tally, 327 F.2d 568, 569 (4th Cir. 1964), it is crucial to determine precisely what relief the plaintiff seeks. In an action seeking declaratory judgment, however, the amount in controversy only includes the object actually at issue, not the future impact or goal of the litigation. Lanham Ford, Inc. v. Ford Motor Co., 101 Fed.Appx. 381, 382 (4th Cir. 2004) (per curiam) (emphasis added).

         Pursuant to § 13');">1332, diversity must be complete "such that the state of citizenship of each plaintiff must be different from that of each defendant." Athena Auto., Inc. v. DiGregorio,166 F.3d 288, 290 (4th Cir. 1999). Further, for purposes of diversity, the citizenship of a limited liability company is determined by the citizenship of its ...

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