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Owen v. Saxon Asset Securities 2006-1 Mortgage Asset Backed Notes

United States District Court, S.D. West Virginia, Charleston

April 5, 2018

ROBERT T. OWEN, JR., Plaintiff,
v.
SAXON ASSET SECURITIES TRUST 2006-1 MORTGAGE ASSET BACKED NOTES, SERIES 2006-1, through Deutsche Bank Trust Co. Americas, indentured trustee; OCWEN LOAN SERVICING LLC; and PILL & PILL, PLLC, Defendants.

          MEMORANDUM OPINION AND ORDER

          John T. Copenhaver, Jr. United States District Judge

         Pending is plaintiff Robert T. Owen, Jr.'s motion to remand and to award fees and costs, filed December 18, 2017.

         I. Background

         The plaintiff, Robert T. Owen, Jr., resides at 827 Hughes Drive, St. Albans, Kanawha County, West Virginia. (Compl. ¶ 4.) On October 20, 2005, Owen refinanced the mortgage on his home, signing a note and deed of trust with America's Moneyline, Inc. (“America's Moneyline”), a nonparty to this action. (Id. ¶¶ 6, 8.) At the origination of Owen's refinancing, America's Moneyline withheld the fact that it was not licensed as a lender in West Virginia. (Id. ¶¶ 11, 32, 36.) Owen remained unaware of that fact until October 2017. (Id. ¶ 37.) Additionally, America's Moneyline did not allow Owen “to negotiate or give any input” on the terms of the refinancing. (Id. ¶¶ 45-46.)

         On December 30, 2005, America's Moneyline assigned Owen's note and deed of trust to Saxon Funding Management, Inc. (“Saxon Funding”), also a nonparty to this action. (Id. ¶¶ 12, 40.) Saxon Funding was not licensed as a lender or a servicer in West Virginia according to the state's “official licensing records.” (Id. ¶¶ 13, 41.)

         On August 3, 2017, Saxon Funding assigned Owen's note and deed of trust to defendant Saxon Asset Securities Trust 2006-1 Mortgage Asset Backed Notes, Series 2006-1 (the “Trust”). (Id. ¶ 14.) The Trust is a Delaware statutory trust and does not hold a license to “acqui[re], transfer, own[], or enforce[] . . . any primary or subordinate mortgage loan secured by real estate in West Virginia.” (Id. ¶¶ 15, 18-19.) The Trust's indentured trustee, Deutsche Bank Trust Company Americas, “has no ownership or servicing role as to [Owen's] mortgage.” (Id. ¶ 17.)

         Defendant Ocwen Loan Servicing LLC (“Ocwen Servicing”), a Florida corporation with its principal place of business in Florida, is the Trust's servicing agent for Owen's note and deed of trust. (Id. ¶¶ 20-21.) As of April 20, 2017, Ocwen Servicing has been prohibited by the state of West Virginia “from new acquisitions of servicing rights for any West Virginia mortgage; from new acquisition of any existing West Virginia mortgage; and from originating any new mortgages in West Virginia.” (Id. ¶¶ 25-26.)

         Defendant Pill & Pill PLLC (“Pill”) is a West Virginia law firm. (Id. ¶ 27.) On August 22, 2017, Ocwen appointed Pill as the substitute trustee under Owen's deed of trust. (Id. ¶ 28.) After Owen's evident default on his mortgage, Pill “scheduled [Owen's] home for foreclosure sale on the steps of the Kanawha County Courthouse on October 31, 2017.” (Id. ¶ 29.)

         Owen instituted this action on October 19, 2017, in the Circuit Court of Kanawha County. Pursuant to the West Virginia Residential Mortgage Lender, Broker and Servicer Act (“Residential Mortgage Act”), W.Va. Code § 31-17-1 et seq., Owen seeks to quiet title through a declaratory judgment that his note and deed of trust are “void and unenforceable as a matter of law” and further asks the court to permanently enjoin the defendants from claiming an interest in his home. (Id. ¶¶ 57-63.) He also brings an action against the defendants for slander of title and an action against Ocwen Servicing and the Trust for unjust enrichment. (Id. ¶¶ 64-66, 67-68.)[1]

         As to Pill in particular, Owen states as follows:

[Pill is] named as defendant[] solely for the purpose of obtaining temporary and final injunctive relief to prevent the sale of plaintiff's home. No. monetary claims are asserted against defendant [Pill].

(Id. ¶ 30.) In addition to that “sole[]” purpose, however, Owen also includes Pill under his quiet title and slander of title claims, and Owen alleges as well that Pill's substitution as trustee under the deed of trust was invalid. (See id. ¶¶ 51-52.) For these claims, he seeks equitable relief and damages. (See id. WHEREFORE Clauses.)

         The Trust and Ocwen Servicing (together, “Defendants”) removed the action to this court on November 22, 2017, invoking the court's diversity jurisdiction. Owen suggests that this action should be remanded because Pill failed to consent to removal. (Mem. Supp. 7.) Defendants claim that Pill, a West Virginia citizen for jurisdictional purposes, does not defeat complete diversity of citizenship because Pill was fraudulently joined or, alternatively, is a nominal party to the action by reason of which it was unnecessary for Pill to consent to removal. (Notice of Removal ¶¶ 6, 16-21; Mem. Opp'n 6 n.3.)

         On December 18, 2017, Owen moved to remand the case to state court and to recover attorney's fees and costs.[2] Since the filing of the motion to remand, Richard Pill, one of Pill's members, has submitted a declaration wherein he declares that “[Pill], as substitute trustee, will not initiate foreclosure ...


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