Peterson et al v. BAC Home Loan Servicing, L.P.

Filing 20

OPINION AND ORDER that it is the ORDER, JUDGMENT and DECREE of the court that plfs Carrie Peterson and Chandra Hooks' 10 motion to remand is granted and that pursuant to 28 U.S.C. 1447(c), this case is remanded to the Circuit Court of Macon Co unty, Alabama for want of jurisdiction; further ORDERING that all other pending motions are left for resolution by the state court after remand; directing the clerk to take appropriate steps to effect the remand. Signed by Honorable Judge Myron H. Thompson on 12/6/11. (Attachments: # 1 civil appeals checklist). Certified copy mailed to Clerk, Circuit Court of Macon County, Alabama.(djy, )

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IN THE DISTRICT COURT OF THE UNITED STATES FOR THE MIDDLE DISTRICT OF ALABAMA, EASTERN DIVISION CARRIE PETERSON and CHANDRA J. HOOKS, Plaintiffs, v. BAC HOME LOAN SERVICING, LP, Defendant. ) ) ) ) ) ) ) ) ) ) CIVIL ACTION NO. 3:11cv805-MHT (WO) OPINION AND ORDER Plaintiffs Carrie Peterson and Chandra J. Hooks brought suit in state court against defendant BAC Home Loan Servicing, LP, alleging misrepresentation of late fees, payment procedures, and insurance requirements for a mortgage. 1446, BAC Pursuant to 28 U.S.C. §§ 1332, 1441, and removed this case to federal court on diversity-of-citizenship grounds. The plaintiffs move to remand to state court because BAC has failed to satisfy its burden of demonstrating that the $ 75,000 amount-incontroversy requirement for diversity jurisdiction has been met in this case. For the reasons that follow, the plaintiffs’ remand motion will be granted. I. Where, as here, the defendant seeks to remove a case on diversity-jurisdiction grounds and the damages have not been specified by the plaintiffs, the removing defendant “must prove by a preponderance of the evidence that the amount in controversy exceeds the $ 75,000 jurisdictional requirement.” Leonard v. Enterprise Rent A Car, 279 F.3d 967, 972 (11th Cir. 2002). “A removing defendant bears the burden of proving proper federal jurisdiction.” Id. The court may not “speculate in an attempt to make up for the notice’s failings.” Lowery v. Alabama Power Co., 483 F.3d 1184, 1215 (11th Cir. 2007). II. BAC holds a mortgage on property plaintiffs in Macon County, Alabama. 2 held by the Beginning in 2008, the plaintiffs claim that BAC misrepresented certain facts regarding the mortgage agreement. For example, they assert that BAC improperly charged them for property insurance even insured. though During the this property dispute, was BAC adequately threatened the plaintiffs with foreclosure. In this litigation, misrepresentation, negligence, the suppression, wantonness, plaintiffs breach intentional of contract, infliction emotional distress, trespass, and defamation. compensatory and punitive damages. declaratory injunction judgment against voiding the foreclosure. claim of They seek They do not seek a mortgage No or an foreclosure proceedings are currently pending against the plaintiffs. III. Because the plaintiffs’ complaint does not specify the amount of damages sought in this case, the burden is on BAC to establish the jurisdictional 3 amount by a See Leonard, 279 F.3d at preponderance of the evidence. 972. BAC believes that because the plaintiffs’ right to the “peaceful possession and enjoyment of the[ir] property [is] at stake,” Mapp v. Deutsche Bank Nat’l Trust Co., 2009 WL 3664118, *3 n.7 (M.D. Ala. Oct. 28, 2009) (Watkins, J.), the amount in controversy is the value of the ($ 70,400). mortgage note ($ 62,400) or property Notice of Removal, Doc. No. 1, at 5. The plaintiffs respond that the value of the property is not at issue in this litigation. They seek only repayment of the overcharged mortgage fees, emotional distress damages, and punitive damages. They do not seek to invalidate the mortgage agreement in its entirety. The court recognizes that the determination of the “amount-in-controversy” for a disputed mortgage’s value has spawned a variety of approaches. See Mapp, 2009 WL at *1 (describing four different approaches to addressing this question in Alabama federal district courts). 4 This court, however, has been clear that, when a mortgage’s validity is not at stake, the value of the property itself is not the amount in controversy. See White v. Wells Fargo Home Mortgage, 2011 WL 3666613, *3 (M.D. Ala. Aug. 22, 2011) (Thompson, J.) (“But neither the total value of the property, nor [the plaintiffs’] current debt, represents the amount in controversy because [the plaintiffs] mortgage do[] or not seek challenge an the validity injunction of the prohibiting foreclosure.”); James v. U.S. Bank Nat’l Ass’n, 2009 WL 2170045 (M.D. Ala. July 17, 2009) (Thompson, J.) (same). Here, the plaintiffs requested neither declaratory nor injunctive relief. A judgment for them entered by this court or the Alabama state court would not void the mortgage. BAC, therefore, cannot count the value of the mortgage for amount-in-controversy purposes. The court notes that BAC has failed to provide any estimate of the allegedly overpaid fees. As these fees are the basis for the plaintiffs’ compensatory damages 5 claims, the court could properly count them toward the amount-in-controversy requirement. As BAC bears the burden of establishing federal jurisdiction, this court cannot speculate as to what that amount might be. Lowery, 483 F.3d at 1215 (“The absence of See factual allegations pertinent to the existence of jurisdiction is dispositive and, in such absence, the existence of jurisdiction should not be divined by looking to the stars.”). Even with appropriate the value benchmark, of BAC the comes property up short as the of the jurisdictional threshold: the property is appraised at $ 70,400. BAC attempts to make up the difference by looking to damages awards in similar cases. Removal, Doc. No. 1, at 4-6. Notice of The court has reviewed the cited decisions and finds them unpersuasive. Indeed, without the value of the mortgage, BAC would need to establish by a preponderance of the evidence that damages in excess of $ 75,000 would be awarded. 6 The court declines to rest jurisdiction solely on an estimate of potential damages. * * * Accordingly, it is the ORDER, JUDGMENT, and DECREE of the court that plaintiffs Carrie Peterson and Chandra J.Hooks’s motion to remand (Doc. No. 10) is granted and that, pursuant to 28 U.S.C. § 1447(c), this case is remanded to the Circuit Court of Macon County, Alabama for want of jurisdiction. It is further ORDERED that all other pending motions are left for resolution by the state court after remand. The clerk of the court is DIRECTED to appropriate steps to effect the remand. This case is closed. DONE, this the 6th day of December, 2011. /s/ Myron H. Thompson UNITED STATES DISTRICT JUDGE take

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