Parks et al v. Countrywide Home Loans, Inc. et al
MEMORANDUM OPINION re 8 Motion to Remand. Signed by Honorable Judge W. Harold Albritton, III on 12/14/2011. (dmn, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
GEORGE and PHYLLIS PARKS,
COUNTRYWIDE HOME LOANS, INC.;
BAC HOME LOANS SERVICING, LP.; et
CIVIL ACTION NO. 2:11cv852-WHA
I. FACTS AND PROCEDURAL HISTORY
This cause is before the court on a Motion to Remand (Doc. #8) filed by the Plaintiffs,
George and Phyllis Parks.
The Plaintiffs originally filed their case in the Circuit Court of Montgomery County,
Alabama on September 2, 2011. The Plaintiffs brought claims against Countrywide Home
Loans, Inc. (“Countrywide”) and BAC Home Loans Servicing, L.P. (“BAC”) and fictitious
defendants. According to the Notice of Removal, Bank of America, N.A. (“Bank of America”)
became the successor by merger to BAC on July 1, 2011. The Plaintiffs are citizens of Alabama.
Defendant Bank of America, N.A. is a citizen of North Carolina and Defendant Countrywide
Home Loans, Inc. is a citizen of New York and California.
The Plaintiffs bring claims arising out of a promissory note and mortage. They do not
claim a specific amount in damages in the Complaint. The Plaintiffs allege in their Complaint
that they executed a promissory note and mortgage on or about November 25, 2006, the
collateral for which was a lien on their residence. They allege that Countrywide charged false
points, closing costs, origination fees, service charges, and other fees and charges “in order to
bloat the loan.” Doc. 1-1 at ¶ 12. The Plaintiffs further allege that Countrywide gave financial
advice concerning the structure of the loan and how to manage their finances. The Plaintiffs
state that Defendant BAC Home Loan Servicing, LP (“BAC”) improperly charged late fees for
payments timely received, held payments “in suspense,” and forced the Plaintiffs to apply for
repayment plans and loan modifications. The Plaintiffs state that BAC represented that the
Plaintiffs had been approved for a repayment plan and/or loan modification on June 5, 2009, but
despite the Plaintiffs’ performance with the terms of the plan and/or modification, BAC assessed
improper charges and attempted to foreclose on the home. The Plaintiffs state that they were
forced to seek additional repayment plans and/or loan modifications up to and including a plan
and/or modification which BAC represented had been approved on July 28, 2011. The Plaintiffs
state that they never received this plan and/or modification from BAC, but instead received a
notice of acceleration of note and mortgage and a threatened foreclosure. Notice of foreclosure
was published, but the Defendants made conflicting statements as to the status of the mortgage
and whether foreclosure proceedings were actually scheduled, among other representations. Id.
at ¶ 38.
Countrywide and Bank of America removed the case to this court on October 7, 2011, on
the basis of diversity jurisdiction. The Plaintiffs seek remand of the case to state court on the
basis that the amount in controversy does not exceed $75,000. The Plaintiffs appear to concede
that there is complete diversity of parties.1
For reasons to be discussed, the Motion to Remand is due to be GRANTED.
The citizenship of fictitious parties is not considered. 28 U.S.C. § 1441(a).
II. REMAND STANDARD
Federal courts are courts of limited jurisdiction. See Kokkonen v. Guardian Life Ins. Co.,
511 U.S. 375 (1994); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (1994); Wymbs v.
Republican State Executive Comm., 719 F.2d 1072, 1076 (11th Cir. 1983), cert. denied, 465 U.S.
1103 (1984). As such, federal courts only have the power to hear cases that they have been
authorized to hear by the Constitution or the Congress of the United States. See Kokkonen, 511
U.S. at 377. Because federal court jurisdiction is limited, the Eleventh Circuit favors remand of
removed cases where federal jurisdiction is not absolutely clear. See Burns, 31 F.3d at 1095.
A federal district court may exercise subject matter jurisdiction over a civil action in
which only state law claims are alleged if the civil action arises under the federal court's
diversity jurisdiction. See 28 U.S.C. § 1332(a)(1). The diversity statute confers jurisdiction on
the federal courts in civil actions "between citizens of different states," in which the
jurisdictional amount is met. Id. To satisfy diversity, not only must a plaintiff be a citizen of a
state other than the state of which one defendant is a citizen, but also, under the rule of
"complete diversity," no plaintiff may share the same state citizenship with any defendant. See
Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806).
To sustain federal removal jurisdiction based on diversity of citizenship in a case in
which the complaint as filed in a state court seeks an unspecified amount of damages, the burden
is on the defendant to prove by the preponderance of the evidence that the amount in
controversy, exclusive of interests and costs, exceeds $75,000.00. See, e.g., Tapscott v. MS
Dealer Serv. Corp., 77 F.3d 1353, 1357 (11th Cir.1996). “A court's analysis of the
amount-in-controversy requirement focuses on how much is in controversy at the time of
removal....” Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 751 (11th Cir. 2010).
As noted above, the Plaintiffs claim damages against Countrywide based on points,
closing costs, fees, and service charges allegedly charged to increase the amount of their loan,
and late fees and suspension of payments which caused the plaintiffs to apply for repayment
plans or loan modifications. The Plaintiffs also claim damages against BAC/Bank of American
for charges associated with repayment plans and/or modification of loan, initiation of foreclosure
proceedings, and publication of the information which damaged the Plaintiffs’ reputations. They
do not seek to a declaration of invalidity of the mortgage in its entirety or an injunction to
prevent foreclosure, but rather seek to recover compensatory damages for mental anguish and
emotional distress, compensatory damages for money paid “for unnecessary closing costs and
fees, for additional interest, [and] lost interest on money . . . ”, Doc. #1-1 at ¶ 48, and punitive
The Defendants rely on Bourgeois v. Wells Fargo Bank, No. 10-00626-KD, 2011 WL
836677 (S.D. Ala. Feb. 16, 2011), among other cases, to establish that the amount in
controversy in this case is the entire balance of the plaintiff’s debt. In Bourgeois, the plaintiff
expressly sought declaratory and injunctive relief, which the court explained was “critical to the
court’s determination of whether the jurisdictional threshold has been established. . . .” Id. at *3.
The court determined that by seeking declaratory and injunctive relief, the plaintiff had pled the
entire debt into issue. Id. The other cases relied on by the Defendants similarly involved
requests for injunctive relief, and the courts determined the amount in controversy by valuing the
injunctive relief from the plaintiff’s perspective. See, e.g., Mapp v. Deutsche Bank National
Trust Co., No. 3:08cv695-WKW, 2009 WL 3664118 (M.D. Ala. Oct. 28, 2009. The Defendants
argue that in this case, any decision as to whether the Defendants improperly instituted
foreclosure will necessarily implicate the validity of the foreclosure action and the acceleration
of the full value of the debt. They cite no persuasive authority to support their theory that the
amount in controversy is to be calculated based on the value of the home/mortgage even in the
absence of requested injunctive or declaratory relief, however. The Defendants seek to have this
court extend the reasoning of cases which have determined the value of requested injunctive and
declaratory relief to this case, in which no such relief is requested.
This case is more similar to White v. Wells Fargo Home Mortgage, No. 1:11cv408-MHT,
2011 WL 3666613 (M.D. Ala. Aug. 22, 2011) (Thompson, J.), than it is to the injunctive relief
cases cited by the Defendants. In White, the defendants argued that the value of the home was a
measure of damage, even though the plaintiff did not seek injunctive relief, because the plaintiff
brought state law claims based on unidentified fees and for actions which forced her to seek a
loan modification. The court reasoned that the value of the home was not the amount in
controversy, because the plaintiff did not challenge the validity of the mortgage or seek an
injunction prohibiting foreclosure. Id. at *3.
Similarly, in Peterson v. BAC Home Loan Servicing, LP, No. 3:11cv805, 2011 WL
6058273, at * 1 (M.D. Ala. Dec. 6, 2011), the court reasoned that when a judgment entered by a
court would not void the mortgage in its entirety, the value of the mortgage cannot be counted
for amount-in-controversy purposes.
This court is persuaded by the reasoning of these cases and concludes that in this case, in
which the Plaintiffs have not asked for declaratory or injunctive relief, the court should not
consider what the value to the Plaintiffs would have been if they had requested declaratory or
injunctive relief. A court may rely on “deduction, inference, or other extrapolation” to determine
the amount in controversy, but must do so based on facts in the record. Pretka v. Kolter City
Plaza II, Inc., 608 F.3d 744, 752 (11th Cir. 2010). Furthermore, the removal statutes are to be
narrowly construed so that uncertainties are resolved in favor of remand. Burns v. Windsor Ins.
Co., 31 F.3d 1092, 1095 (11th Cir. 1994). Therefore, in the absence of declaratory or injunctive
relief requested by the Plaintiffs, the court will not consider the amount of the debt or the value
of the home in determining the amount in controversy.
The Defendants also state that this court should consider the Plaintiffs’ requests for
compensatory damages for mental anguish and requests for punitive damages and conclude that
the requisite amount is in controversy. The Defendants contend that the court should review
verdicts rendered in previous state court cases requesting such relief and determine that the
requisite amount is in controversy. The Defendants acknowledge that previous damage awards
generally are only considered when other readily determinable damages are also established.
See Doc. #13 at p.8.
In this case, no evidence has been presented as to the amount of fees at issue. There
being no evidence of a monetary amount of any damages, the court cannot conclude that reliance
on verdicts in previous state cases, not shown to be similar to the claims in this case, meets the
Defendants’ burden of establishing that in excess of $75,000 is at issue. See Lowery v. Alabama
Power Co., 483 F.3d 1184, 1221 (11th Cir. 2007) (stating “we question whether such general
evidence is ever of much use in establishing the value of claims in any one particular suit.”);
Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329 F.3d 805, 809 (11th Cir. 2003) (stating
that “mere citation to what has happened in the past does nothing to overcome the indeterminate
and speculative nature of Federated's assertion in this case”); see also Fields v. Travelers Indem.
Co., No. 2:08cv155, 2008 WL 2225756, at *3 (M.D. Ala. May 28, 2008) (stating “The mere fact
that other cases involved the same cause of action does not establish the amount in controversy
here.”). The court concludes, therefore, that the request for mental anguish and punitive
damages in this case does not establish that more than $75,000 is at issue.
For the reasons discussed, the court concludes that the Defendants have not met their
burden of establishing that diversity jurisdiction existed at the time of removal of this case. The
Motion to Remand is due to be GRANTED. A separate Order will be entered in accordance
with this Memorandum Opinion.
DONE this 14th day of December, 2011.
/s/ W. Harold Albritton
W. HAROLD ALBRITTON
SENIOR UNITED STATES DISTRICT JUDGE
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