United States District Court, S.D. West Virginia, Charleston Division
ANTHONY D. LONG, Plaintiff,
NATIONSTAR MORTGAGE LLC, Defendant.
MEMORANDUM OPINION AND ORDER
E. JOHNSTON, CHIEF JUDGE
before the Court are the parties' cross-motions for
partial summary judgment.(ECF No. 75; ECF No. 80.) Also pending
before the Court is Plaintiff's motion for class
certification. (ECF No. 78.) For the reasons discussed
more fully below, the Court GRANTS IN PART
and DENIES IN PART Defendant's motion
for partial summary judgment. (ECF No. 75.) The Court also
DENIES IN PART Plaintiff's motion for
partial summary judgment. (ECF No. 80.) The Court further
DENIES Plaintiff's motion for class
certification. (ECF No. 78.)
action arises from a dispute between Plaintiff Anthony Long
(“Long”) and his loan servicer, Defendant
Nationstar Mortgage, LLC (“Nationstar”),
regarding allegations of illegal debt collection.
2007, Long purchased a home and financed it with a loan from
Flagstar Bank. (See ECF No. 76 at ¶ 1.) On
October 1, 2009, Flagstar Bank transferred the servicing of
Long's mortgage to Nationstar. (Id. at ¶
4.) In December of 2009, because Long was struggling to make
his payments, Nationstar agreed to a loan modification that
would reduce the interest rate on Long's loan.
(Id. at ¶¶ 4-5.) The Loan Modification
Agreement was executed on January 5, 2010. (Id.)
the loan modification, Long continued to struggle to make
regular mortgage payments and his home was scheduled for
foreclosure on at least four separate occasions between 2011
and 2014. (See ECF No. 82 at 2-6.) Long alleges that
on several occasions during this time period, Nationstar
refused to accept Long's payments to reinstate the loan
and attempted to collect attorneys' fees from him.
(See ECF No. 20 at ¶¶ 55-56, 59-60, 63,
February 15, 2011, David Triplett (“Triplett”)
filed an action on behalf of himself and a class of similarly
situated individuals against Nationstar alleging that
Nationstar charged excessive late fees, failed and refused to
credit loan payments, and collected or threatened to collect
improper expenses, including attorneys' fees. (See
Triplett v. Nationstar Mortgage, LLC, Case No.
3:11-cv-238 at ECF No. 1-1.) Triplett sought to certify five
subclasses of West Virginia citizens whose loans were
serviced by Nationstar sometime after February 15, 2010,
including citizens whom Nationstar had charged attorneys'
fees. (See Id. at ECF No. 43.)
certification of any class, Triplett and Nationstar reached a
class-wide settlement. (See ECF No. 5 at ¶ 11.)
The Settlement Agreement sought to certify a class that
included individuals who were sent form debt collection
letters seeking payment for the “expenses of
collection” and individuals who had made partial loan
payments that were returned prior to the acceleration of
their loan. (Case No. 3:11-cv-238 at ECF No. 70-2 at 3
(Settlement Agreement).) This class included Long.
(See ECF No. 75-1 at 266 (Redacted Class Roster).)
United States District Judge Robert C. Chambers conditionally
certified the settlement class and preliminarily approved the
Settlement Agreement. (Case No. 3:11-cv-238 at ECF No. 73.)
to the Settlement Agreement, Nationstar sent a Notice of
Proposed Class Settlement (“Notice”) to all
members of the settlement class, including Long. (See
Id. at ECF No. 70-2.) The Notice included information on
class members' right to opt out of the settlement class
or to object to the settlement. (See id.) It also
advised class members that they had the right to make a claim
for reimbursement of any default expenses, such as
attorneys' fees, that were charged to their account.
(See id.) The Notice also informed class members
that they would not be able to “sue or continue to sue
Nationstar about any legal claims they have or may have up
until the Effective Date of the Settlement, arising out of,
related to, or in any manner concerning or involving claims
for charging excessive late fees, issuing demand letters
demanding payment of ‘expenses of collection, '
returning partial loan payments prior to the date of
acceleration, or default-related expenses.” (See
Id. at ECF No. 70-2 at 3.) The Effective Date was
defined as 31 days after entry of the Final Approval Order.
(Id. at ECF No 78.) The Notice directed the class
members to the Settlement Agreement for more information.
(Id. at ECF No. 70-2 at 3.)
Notice was sent by first class mail to Long's address.
(See ECF No. 91-1 at ¶ 8.) Long was not among
the ten class members who had “known bad
addresses” nor did the class administrator receive a
notification that the Notice sent to Long was not delivered
or received. (Id. at ¶¶ 10-11.) None of
the class members, including Long, opted out of the class.
(Id. at ¶ 12.)
October 16, 2012, the Court entered the Final Approval Order.
(Case No. 3:11-cv-238 at ECF No. 78.) On December 14, 2012,
the class administrator remitted payment of $704.69 to Long.
(ECF No. 76 at ¶ 22.) Long cashed the payout check a
month later. (Id.) Thus, pursuant to the terms of
the Settlement Agreement, Long released all claims against
Nationstar relating to late fees, returned payments, and
default-related fees, including attorneys' fees, arising
on or before November 16, 2012. (See Case No.
3:11-cv-238 at ECF No. 70-2.)
the class settlement, Long continued to struggle to make
payments on his mortgage and Nationstar once again brought
foreclosure proceedings. Long alleges that in the time period
following the settlement, Nationstar continued to demand
legal fees and returned payments that Long submitted to cure
the default on his mortgage. (See ECF No. 20 at
¶¶ 75- 93.) Long's home was most recently
scheduled for a foreclosure sale on October 7, 2014. (See
Id. at ¶ 90.) Before this date, Long attempted to
make payments to cure the default, but Nationstar remitted
these payments stating that they were insufficient.
(See ECF No. 76 at ¶¶ 27-30.) However, the
foreclosure sale was halted after Long appeared at the sale
and paid the trustee. (See ECF No. 20 at
December 10, 2014, Long filed the present action against
Nationstar in the Circuit Court of Nicholas County, West
Virginia, alleging multiple claims of illegal debt collection
and violations of law through the servicing of his mortgage.
(See ECF No. 1-1.) On January 28, 2015, Nationstar
timely removed this action to this Court. (See ECF
No. 1.) Long subsequently moved the Court to amend his
Complaint to convert one of his claims into three class
claims. (ECF No. 7.) The Court granted the motion and
Long's Amended Complaint was filed on May 7, 2015.
(See ECF No. 16; ECF No. 20.)
Amended Complaint alleges three class claims and seven
individual claims for relief. The class claims are premised
on the allegation that Nationstar routinely assesses and
collects illegal fees from West Virginia borrowers in
violation of the West Virginia Consumer Credit and Protection
Act (“WVCCPA”). (See ECF No. 20 at
¶¶ 95-115.) The seven individual claims allege
violations of the WVCCPA (claims one through three); breach
of contract (claim four); a violation of West Virginia Code
§ 38-1-15 (claim five); fraudulent inducement (claim
six); and inducement by unconscionable conduct in violation
of the WVCCPA (claim seven). (See Id. at
28, 2015, Nationstar filed a partial motion to dismiss the
Amended Complaint. (ECF No. 17.) The Court granted in part
and denied in part Nationstar's motion. (ECF No. 48.)
Specifically, the Court dismissed Long's fifth claim in
its entirety and dismissed Long's sixth and seventh
claims in part to the extent that they were premised on the
alleged illegality of Nationstar's capitalization of
past-due interest as part of Long's loan modification.
(Id. at 15.)
filed the present motion for partial summary judgment on
October 19, 2017, as to Long's first, third, fourth,
sixth, and seventh individual claims, and, in part, on
Long's second individual claim insofar as they are the
based on allegations that were the subject of the class
settlement. (ECF No. 76 at 2.) Nationstar also requests
summary judgment on Long's class claims, contending that
Long cannot represent a class of individuals who were charged
attorneys' fees because Long was never charged
attorneys' fees. (Id. at 3.) Long subsequently
filed a partial motion for summary judgment as to his class
claims. (ECF No. 80.) Timely responses and replies were filed
in both motions. (ECF No. 83; ECF No. 86; ECF No. 90; ECF No.
95.) Accordingly, both motions are fully briefed and ripe for
October 27, 2017, Long filed a motion for class certification
under Federal Rules of Civil Procedure 23(a), 23(b)(2)-(b)(3)
seeking to certify a class composed of individuals who
suffered the injuries alleged in his class claims. (ECF No.
78.) Nationstar filed a timely response in opposition to
Long's motion, (ECF No. 89), and Long filed a timely
reply. (ECF No. 94.) As such, that motion is also fully
briefed and ripe for review.
of the Federal Rules of Civil Procedure governs motions for
summary judgment. That rule provides, in relevant part, that
summary judgment should be granted if “there is no
genuine issue as to any material fact.” Summary
judgment is inappropriate, however, if there exist factual
issues that reasonably may be resolved in favor of either
party. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 250 (1986). “Facts are ‘material' when
they might affect the outcome of the case, and a
‘genuine issue' exists when the evidence would
allow a reasonable jury to return a verdict for the nonmoving
party.” News & Observer Publ. Co. v.
Raleigh-Durham Airport Auth., 597 F.3d 570, 576 (4th
Cir. 2010). When construing such factual issues, the Court
must view the evidence “in the light most favorable to
the [party opposing summary judgment].” Adickes v.
S.H. Kress & Co., 398 U.S. 144, 157 (1970).
moving party may meet its burden of showing that no genuine
issue of fact exists by use of “depositions, answers to
interrogatories, answers to requests for admission, and
various documents submitted under request for
production.” Barwick v. Celotex Corp., 736
F.2d 946, 958 (4th Cir. 1984). Once the moving party has met
its burden, the burden shifts to the nonmoving party to
“make a showing sufficient to establish the existence
of an element essential to that party's case, and on
which that party will bear the burden of proof at
trial.” Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986). If a party fails to make a sufficient
showing on one element of that party's case, the failure
of proof “necessarily renders all other facts
immaterial.” Id. at 323.
party opposing a properly supported motion for summary
judgment may not rest upon mere allegations or denials of his
pleading, but must set forth specific facts showing that
there is a genuine issue for trial.” Liberty
Lobby, 477 U.S. at 256. “The mere existence of a
scintilla of evidence” in support of the nonmoving
party is not enough to withstand summary judgment; the judge
must ask whether “the jury could reasonably find for
the plaintiff.” Id. at 252.
Rule of Civil Procedure 23(c)(1) “affords a district
court discretion to rule on a summary judgment motion before
ruling on a class certification motion.” Rhodes v.
E.I. du Pont de Nemours & Co., 657 F.Supp.2d 751,
756 (S.D. W.Va. 2011); see Fed. R. Civ. P. 23(c)(1)
(Adv. Comm. Note (2003)). Accordingly, the Court will address
the cross-motions for summary judgment prior to the motion
for class certification because a decision on the merits
necessarily affects the decision on class certification.
See Delebreau v. Bayview Loan Serv., LLC., 770
F.Supp.2d 813, 818-19 (S.D. W.Va. 2011); Rhodes, 657
F.Supp.2d at 756.
for summary judgment are reviewed separately if material
facts are in dispute. Rossignol v. Voorhaar, 316
F.3d 516, 523 (4th Cir. 2003). Here, because material facts
are in dispute, the Court will address each motion
separately. Nationstar's partial motion for summary
judgment seeks judgment as a matter of law on Long's
individual and class claims while Long's partial motion
for summary judgment only seeks judgment as a matter of law
as to his class claims. As such, the Court will address
Nationstar's motion before turning to Long's motion.
Nationstar's Partial Motion for Summary Judgment
Amended Complaint, Long alleges seven individual claims
against Nationstar. (See ECF No. 20.) As stated
above, claims one through four and, in part, six and seven of
Long's Amended Complaint survived Nationstar's motion
to dismiss. In its partial motion for summary judgment
Nationstar seeks judgment as a matter of law on Long's
individual and class claims. The court will address
Nationstar's arguments as to Long's individual claims
Long's Individual Claims
contends that Long's first, fourth, sixth, seventh, and,
in part, second and third individual claims are barred by res
judicata due to the Triplett Settlement discussed
above. Nationstar further offers arguments pertaining to
specific claims as to why it is entitled to judgment as a
matter of law. The Court will address the res judicata
argument first before turning to Nationstar's other,
claim specific arguments.
the doctrine of res judicata, or claim preclusion, “a
judgment on the merits in a prior lawsuit bars a second
lawsuit involving the same parties or their privies based on
the same cause of action.” Parklane Hosiery Co.,
Inc., v. Shore, 439 U.S. 322, 326 n.5 (1979). Res
judicata is an affirmative defense. See Fed. R. Civ.
P. 8(c)(1). Under West Virginia law, in order to assert res
judicata, the following three elements must be present:
First, there must have been a final adjudication on the
merits in the prior action by a court having jurisdiction of
the proceedings. Second, the two actions must involve either
the same parties or persons in privity with those same
parties. Third, the cause of action identified for resolution
in the subsequent proceeding either must be identical to the
cause of action determined in the prior action or must be
such that it could have been resolved, had it been presented,
in the prior action.
Blake v. Charleston Area Med. Ctr., Inc., 498 S.E.2d
41, 44 ( W.Va. 1997). In reviewing these factors, the Fourth
Circuit noted that “[t]he preclusive affect of a prior
judgment extends beyond claims or defenses actually presented
in previous litigation.” Meekins v. United Transp.
Union, 946 F.2d 1054, 1057 (4th Cir. 1991). Furthermore,
“[t]he doctrine of res judicata bars claims that were
‘raised and fully litigated' as well as claims that
could have been litigated in the prior proceeding,
‘regardless of whether they were asserted or
determined.'” Fugate v. Frontier W.Va.,
Inc., No. 2:17-cv-00559, 2017 WL 3065216, at *3 (S.D.
W.Va. 2017) (quoting Peugeot Motors of Am., Inc.
v. E. Auto Distribs., Inc., 892 F.2d 355, 359 (4th Cir.
judicata may be applied against class members if
“invocation of the bar is consonant with due
process.” Id. (citing Johnson v. Gen.
Motors Corp., 598 F.2d 432, 436 (5th Cir. 1979));
see also Matsushita Elec. Indus. Co. v. Epstein, 516
U.S. 367, 379 (“[U]nder Federal Rule of Civil Procedure
23, all members of the class, whether of a plaintiff or a
defendant class, are bound by the judgment entered in the
action unless, in a Rule 23(b)(3) action, they make a timely
election for exclusion.”). This includes class actions
where the preclusive action was resolved by a class
settlement. See In re MI Windows and Doors, Inc., Prods.
Liab. Litig., 860 F.3d 218, 225 (4th Cir. 2017)
(upholding district court decision enjoining plaintiff's
claims where plaintiff claims were “covered by the
final judgment and released by the settlement in the
MDL”). The “mandatory notice pursuant to
subdivision (c)(2), together with any discretionary notice
which the court may find it ...