Anderson et al v. Select Portfolio Servicing, Inc. et al

Filing 38

ORDER denying 8 Motion for Attorney Fees; granting 8 Motion to Remand. All other outstanding motions in this case are DENIED as moot. Signed by Judge Lisa G. Wood on 6/29/2017. (ca)

Stt tl^e ?!9tttteb States; SBtsitrtct Court
for tl^e ^ontfiem IBiOtrict of ((Georgia
Kngnota l9ttitOion
JAMES T. ANDERSON, JR. & MARY
H. ANDERSON,

Plaintiffs,
No. 1:17-CV-10

V.

SELECT PORTFOLIO SERVICING,
INC. & U.S. BANK N.A., as

Trustee for Certain MortgageRelated Assets,
Defendants.

ORDER

Before
Anderson's

the
(^'the

Court

is

Plaintiffs

Andersons")

motion

James

for

T.

remand,

and

Mary

dkt.

H.

no. 8.

As explained more fully below, the motion will be GRANTED as
to

remand,

but

DENIED

as

to

attorneys'

Select Portfolio Servicing, Inc.

(^'SPS")

fees.

Defendants

and U.S.

Bank N.A.

are correct that no document prior to the amended complaint
justified

untimely.
requisite

removability,

so

their

removal

is

not

per

But the amended complaint does not establish the
amount

in

controversy.

The

Court must

supplementary evidence submitted by Defendants.

disregard

And even if

it considered that evidence, it could not find removability.

A0 72A

(Rev. 8/82)

se

Background

The Andersons Have an Adjustable Rate Mortgage

For
truth

purposes

of

the

of this overview, the

facts

operative complaint.

alleged

in

the

assumes the

Andersons'

currently

The Andersons took on an adjustable rate

note to buy a home on September 19, 2003.
SI 5.

Court

Dkt. No. 1-1 at 105

That note is in an asset pool of which US Bank N.A. is

trustee, and SPS is its servicing agent.
The note

Id. at 106 SISI 12-13.

was bought by Thornburg Mortgage Home Loans, Inc.

{^^Thornburg"),

which

entered

a

loan

modification

with the Andersons on December 1, 2005.

Under

it,

the

initial

agreement

Id. at 105 SISI 7-9.

interest

rate

would

be

6.25%

annually for the first ten years, until December 1, 2015.

Id.

at 122 § 3(a).

That day, and every December 1 thereafter, the

rate

recalculated

would

Offered

be

Rate

("LIBOR"), ""a

based

on

benchmark

the

rate

London

Interbank

that some

of the

world's leading banks charge each other for short-term loans."

Id.

§

3(b);

LIBOR,

Investopedia,

http://www.investopedia.com/

terms/l/libor.asp (accessed Mar. 17, 2017).

The rate would be

^'1.875% in excess of [LIBOR] . . . rounded to the nearest one-

eighth

of one

percent."

Dkt. No.

1-1

at 122 § 3(c).

On

December 1, 2015, this was 2.75%.^

^ Defendants miscalculated that initial rate and the parties resolved this.
Id. at 44-49, 108 f 26; Dkt. No. 27 at 5.

The agreement also limited rate fluctuation.

On December

1, 2015, the rate would ''not increase by more than 5% of the

interest rate previously in effect."
§ 3(e).

Each

following

year,

it

Dkt. No. 1-1 at 122

would

"not

increase

or

decrease by more than 2% of the interest rate previously in
effect."

Id.

Additionally, the interest rate would "never be

greater than 11.25% or less than 1.875%."

Id.

The parties dispute these terms' meanings.

On December

1, 2016, Defendants raised the Andersons' rate to 3.5%, which
the

Andersons

claim

to

be

excessive

rate previously in effect."

as "27%

of the

interest

Id. at 108 SI 27.

The Parties Began Litigating in State Court
The

Andersons

filed

a

class-action

suit

in

Richmond

County Superior Court on January 14, 2016, on behalf of
[a]11 persons who entered into a loan modification
agreement with Thornburg whereby their interest rate
was "fixed" for
a
given
period
of
time
and
thereafter converted to an "adjustable rate" subject
to a "Limits on Interest Rate Changes" provision
substantially identical to Section 3(e) of the Loan
Modification Agreement, and to whose loan Defendants
applied a maximum limit on the amount of allowable
interest rate decrease occurring on the First Change
Date.

Id. at 5, 12 1 43 (emphasis added).

They alleged that this

class

perhaps

contained

homeowners."

"many

Id. 9-10

hundreds,
27-30.

or

thousands,

of

But SPS's Curtis Pulsipher testified in a March 21, 2016

affidavit (''Pulsipher I") that there was "only one additional
loan in the group of Thornburg loans where the interest rate
at the first change date was not calculated correctly under
the

loan

modification

before there
12-13.

was any

agreement," and

that

wrongful payment.

it

was

changed

Dkt. No. 1-2 at 4

He also testified that there were 228 Thornburg-SPS

loans "that were originated as adjustable interest rate loans
and subsequently modified

rate loans."

by Thornburg to remain

adjustable

Id. SI 11.^

The Andersons added a second putative class of plaintiffs
on January 10, 2017:
All persons who entered into a loan modification
agreement with Thornburg whereby their interest rate
was "fixed" for
a
given
period
of
time
and
thereafter converted to an "adjustable rate" subject
to a "Limits on Interest Rate Changes" provision
substantially identical to Section 3(e) of the Loan
Modification Agreement, and to whose loan Defendants
have
attempted
to
apply,
on
any
Change
Date
subsequent to the First Change Date, an interest
rate increase of greater than 2% of the interest
rate previously in effect.
Dkt. No. 1-1 at 112-13 1 46(b).

The

Andersons'

next

morning,

interest-rate

the

Superior

changes

and

Court

limited

enjoined

the

Defendants

making from negative credit references or starting foreclosure
proceedings against them.

Dkt. No. 11-1 at 23:19-24:4.

^ Defendants have since reduced this number to 198.
4

Dkt. No. 27 at 8 n.3.

Defendants Remove the Case to this Court

Six days later. Defendants removed the case.

Dkt. No. 1.

Their notice appended the original complaint, dkt. no. 1-1 at
5-18,

the

loan

modification

agreement,

id.

at

20-23,

the

amended complaint, id. at 104-20, and Pulsipher I, dkt. no. 12.

The Andersons timely moved for remand.

Dkt. No. 9.

Defendants responded on February 28, 2017.
Their

response

appended

{^^Pulsipher

II").

spreadsheet

(^^the

loans

'''possessing

another

Dkt.

No.

27-2.

Spreadsheet")
a

declaration
It

with

Modification

similar to Plaintiffs."

data

Dkt. No. 27.

from

also

Pulsipher

contained

relating

Agreement

to

a

198

substantially

Dkt. No. 27-1; see also Dkt. No. 29.

The average time remaining on each after the first day of
interest-rate

adjustment

was

interest rate set at 1.9%.

22.12

years,

with

Dkt. No. 27-1 at 10.

interest-rate-change limit was 1.97%.
The Andersons replied.

the

average

The average

Id.

Dkt. No. 32.

This Court heard

oral arguments on the remand motion on April 12, 2017.
No. 35.
2017.

Dkt.

The parties supplemented their briefing on April 24,
Dkt.

Nos.

36,

37.

various LIBOR forecasts.

37-5, 37-6, 37-7.

At

that

time.

Defendants

filed

Dkt. Nos. 37 at 14-15, 37-3, 37-4,

The motion is ripe for disposition.

LEGAL STANDARD

Federal courts'

jurisdiction

is limited to

authorized by Constitution and statute."

^^that

power

Kokkonen v. Guardian

Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).

A defendant

is authorized to remove a civil suit to federal court

within

30 days of either the plaintiff's initial pleading or ^^receipt
by the defendant . . . of a copy of an amended pleading . . .
from which it may first be ascertained that the case is one
which is or has become removable."

28 U.S.C. §§ 1446(b)(1),

(3).

The

removal notice

must '"contain[ ] a

statement of the grounds for removal."

short and

plain

Id. § 1446(a).

It

must show that the federal court has original jurisdiction.

Id. § 1441(a).

Such jurisdiction extends to "any civil action

in which the matter in controversy exceeds the sum or value of
$5,000,000 . . . and is
citizenship.

a

class action" with

diversity of

Id. § 1332(d)(2).

"[N]o antiremoval presumption attends" such cases.
Cherokee

Basin

Operating Co.

v.

Owens,

135 S.

Ct.

547,

Dart
554

(2014); see also Dudley v. Eli Lilly & Co., 778 F.3d 909, 912

(11th

Cir.

2014).

unspecified,

the

But

removing

where,

party

as

here,

bears

"damages

the

burden

are

of

establishing the jurisdictional amount by a preponderance of
the evidence."

Lowery v. Ala. Power Co., 483 F.3d 1184, 1208

(11th Cir. 2007).
^^unambiguously"

''^Preponderance" means that removability is

clear.

Id.

at

certainty is neither attainable

1213.

Although '^absolute

nor required, the

value

of

declaratory . . . relief must be ^sufficiently measurable and
certain'."

S. Fla. Wellness, Inc. v. Allstate Ins. Co., 745

F.Sd 1312, 1316 (11th Cir. 2014) (quoting Morrison v. Allstate
Ins.

Co.,

omitted)).

28

F.3d

1255,

1269

(11th

Cir.

2000)

(citation

Remand is required if the amount in controversy is

""too speculative and immeasurable."

Cohen v. Office Depot,

Inc., 204 F.3d 1069, 1077 (11th Cir. 2000) (quoting Ericsson
GE Mobile Commc'ns, Inc. v. Motorola Commc'ns & Elec., Inc.,
120 F.3d 216, 221-22 (11th Cir. 1997)).
DISCUSSION

Remand is GRANTED.

Attorneys' fees are DENIED.

I. THIS CASE MUST BE REMANDED.

This case must be remanded.

Defendants did not wait too

long to remove, as no document before the amended complaint
supported removability.

But the amended complaint does not

establish

amount

the

requisite

in

controversy.

Defendants

cannot rely on supplemental evidence obtained elsewhere than

from

the

Andersons.

Even

if

they

unpredictable for removal to be proper.

could,

LIBOR

is

too

A. Defendants Did Not Wait Too Long to Remove.

Although remand is appropriate. Defendants did not err by
failing

to

remove

earlier,

as

the

Andersons

suggest.

document prior to the amended complaint provided
with a basis for removal.

No

Defendants

28 U.S.C. § 1446 authorizes removal

at two points in time: ^'within 30 days after the receipt by
the defendant . . . of a copy of the initial pleading setting
forth

the

claim

for

relief

upon

which

such

action

or

proceeding is based," or ''within 30 days after receipt by the
defendant . . . of a copy of an amended pleading . . . from
which it may first be ascertained that the case is one which
is or has become removable."

28 U.S.C. §§ 1446(b)(1), (3).

The Andersons suggest that if anything, this suit should have
been removed within 30 days of the original complaint.

No.

9

at

allegations:

19.

They

(1)

they

rely
were

on

three

being

of

their

overcharged

by

Dkt.

original
$325.28

monthly; (2) their putative class contained "many hundreds, or

perhaps

thousands"

of

plaintiffs;

and

(3)

multiplying

the

Andersons' monthly overcharge by twelve, then by sixteen for
the

years left in their loan term, then by 100 plaintiffs,

equals more than $5 million.

Id. at 19-20 (citation omitted).

Removal at this case's outset would have been improper,
because the original complaint did not give Defendants "a good
faith

basis

for

asserting

that

8

the

amount

in

controversy

requirement was satisfied."

Randall v. Target Corp., No. 13-

61196-CIV, 2013 WL 3448116., at *4 (S.D. Fla. July 9, 2013).
Defendants claim, and the Andersons have not contested, that
Defendants

served.

reviewed

their

records

Dkt. No. 27 at 1.

testifies that

they

immediately

after

being

Pulsipher I, dated March 21, 2016,

only

found

one

loan

fitting

into

the

putative class—and no wrongful payments were made under it
before its rate was corrected.

Dkt. No. 1-2

12-13.

Those

findings dispelled any removal hope Defendants might have had.
Defendants'

removal

motion

is

not

too

late

by

virtue

of

following the amended complaint.

B. The Amended Complainh Does Not Establish the Requisite
Amount in Controversy.

But, looking to the amended complaint, the Court cannot
find that the amount in controversy here is unambiguously at
least $5 million.

See Lowery v. Ala.

Power

Co., 483 F.3d

1184, 1213 (11th Cir. 2007) (describing ^'the heart" of the

analysis as whether the removal notice and its attachments
^^unambiguously

establish

federal

jurisdiction.");

but

see

Mitchell V. Cody Exp., LLC, No. 3:16-CV-165, 2016 WL 6246793,

at

*4

(M.D.

standard

has

Ala.

met

Oct.

an

25,

icy

2016)

(commenting

reception

understanding its rationale).

and

that

admitting

Lowery's

to

not

The amended complaint does not

allege that amount to be in controversy.

See generally Dkt.

No.

1-1

at

Defendants'

104-20.

removal

notice

fails

to

convincingly posit that amount to have been in controversy.
It claims that $1766.52 was in controversy for 2016-17.

No. 1 ^ 29.

Dkt.

Then, it simply multiplies this by sixteen to

find the amount for the Andersons' loan's entire life, then

multiplies that number by 228 to

grand total.

Id.

30-31.

get the putative class's

That math is far too simple.

^^The only way each class member would have the same damages
would be if they each had the same loan, for the same amount,

with the same terms; and paid the same amount," and "[t]here

is nothing to suggest that scenario here."

White v. Impac

Funding Corp., No. 6:lO-CV-1780, 2011 WL 836947, at *5 (M.D.
Fla. Feb. 15, 2011), adopted, 2011 WL 861172 (M.D. Fla. Mar.

9, 2011).

The Court cannot find removability based on the

amended complaint.

C.

Defendants

Cannot

Supplement

their

Argument

with

Evidence Received Elsewhere than from the Andersons.

That

means

remand

must

be

granted.

Defendants

cannot

supplement their case with their evidence, as it did not come

from the Andersons.^

In Lowery v. Alabama Power Co., the

defendant removed the case after the plaintiffs amended their
^ The Andersons incorrectly claim that the evidence is also improper
because the Court cannot look beyond "the limited universe of evidence
available when the motion to remand is filed." Dkt. No. 36 at 3 (quoting
Lowery, 483 F.3d at 1214).
The Eleventh Circuit has held that this
language from Lowery is not binding and should be disregarded.
Pretka v.
Kolter City Plaza II, Inc., 608 F.3d 744, 772-74 (11th Cir. 2010); accord

Shannon v. Albertelli Firm, P.C., 610 F. App'x 866, 871 n.2 (11th Cir.
2015) (per curiam).
10

complaint to

^'add[ ] more than four

amend[ ] their prayers for relief."

hundred

plaintiffs

483 F.Sd at 1188.

and
The

defendant tried to support removal with evidence that ^^recent

mass tort actions" had netted ^'greater than $5,000,000."
at 1189.

Id.

The Eleventh Circuit held that because this evidence

^'was not received from the plaintiffs, but rather was gathered
from outside sources," it was ^^not of the sort contemplated by

[28 U.S.C.] § 1446(b)."
consideration
Defendants'

of

LIBOR

Id^ at 1221.

Pulsipher
forecasts

II,
here.

That holding bars

the
See

Spreadsheet,
Dkt.

No.

37

and
at

11

(conceding that ^^Lowery . . . preclude[d] a defendant's . . .

evidence (even though it was the plaintiff who had caused the
changed

circumstances

[arguably

triggering

removability]

by

filing an amended complaint).").
To be sure, Lowery is thorny.

The general rule lurking

behind it is that a defendant cannot create removability using
one of its own documents.

See Pretka v. Kolter City Plaza II,

Inc., 608 F.Sd 744, 761 (11th Cir. 2010).

As Defendants point

out, that is not what they are trying to do.
11.

Dkt. No. 37 at

Defendants clearly identify the amended complaint as the

document triggering

removability, and their

own

evidence

is

simply an effort to illuminate that document's significance.
Apart

from

two

conclusory

lines

of

evidence would apparently be permissible.
11

Lowery,

Defendants'

Pretka, 608 F.Sd at

761 (^'[The] ^receipt from the plaintiff rule plainly does not

limit the type of evidence a defendant may use to establish

that the

plaintiff s complaint already is removable—without

any ^conversion.'").
Defendants'

unconvincing.

But Lowery binds.

two

contentions

Defendants

to

first

the

claim

contrary

that

Lowery

are

was

abrogated by Dart Cherokee Basin Operating Co. v. Owens, 135
S. Ct. 547, 554 (2014).

Dkt. No. 37 at 11.

Dart Cherokee

merely noted that ^^both sides submit proof" when disputing the
amount

in

controversy.

Id.

Defendants

go

astray

by

^^read[ing] into [Dart Cherokee] more than is there in order to
justify not following a particularly pesky . . . precedent."
Johnson v. K Mart Corp., 273 F.3d 1035, 1067 (11th Cir. 2001)

(Carnes, J., dissenting), reh'q en banc granted & op. vac'd,
Dec. 19, 2001; see also Garrett v. Univ. of Ala, at Birmingham
Bd. of Tr., 344 F.3d 1288, 1292 (11th Cir. 2003) (per curiam)
(^'While

overrule

an

intervening

the

decision

decision

of

a

of

prior

the

panel

Supreme

of

our

Court

can

court,

the

Supreme Court decision must be clearly on point.").
Defendants then point to Whaley v. Bay View Law Group,
PC, No. CV 114-050, 2014 WL 4926458 (S.D. Ga. Sept. 30, 2014).

But Whaley did not meaningfully grapple

with Lowery, so it

gives this Court no way to get out from underneath that case.
Because

Lowery

has

not

been

12

overturned,

the

Court

must

disregard Pulsipher II, the Spreadsheet, and Defendants' LIBOR
forecasts.

However, the continued viability of Lowery is just

one, but not the only, reason remand is appropriate.
D.

Remand

Would

Be

In

Order

Even

Were

the

Court

to

Consider Defendants' Evidence.

Remand would be required even if the Court did consider
Defendants' additional evidence.

The Spreadsheet shows that

the average interest rate for the loans at issue is pegged at
1.9% over LIBOR, with a change limit of 1.97% and an average

of 22.12 term years remaining.

Dkt. No. 27-1 at 10.

Thus,

where LIBOR goes over the next two decades, and how quickly,
will determine the size of the gap between Defendants' and the
Andersons' interest calculations.

See Dkt. No. 36 at 8, 10-11

(modeling gap as less than $5 million given certain LIBORs).
In estimating that, it is not enough to assume LIBOR hits its

all-time low and stays there.

See Dkt. No. 27 at 15-16.'^

can the Court guess that LIBOR will hold steady.

See id.

Nor
Nor

may it assume LIBOR will ^^increase back to its historically
normal levels."

See id. at 12.

Nor does the only data that

the Court can be sure about—that for the most recent year—even

come close to $5 million.

in

controversy

for

most

See id. at 11 (identifying amount

recent

year

as

$388,135.44),

18

(adding $97,033.86 for attorneys' fees).
Defendants invite the Court to rewrite the Andersons' claim into one that
the interest rate must be 1.875% of LIBOR.
Id. at 14-16.
This is

spurious.
13

Instead, the

Court must

consider

all

plausible LIBORs,

and all plausible rates of change thereto, including ones that
would put the interest rate within the ranges that would be
found under the Andersons' formula.

LIBOR's range has proven

quite tectonically active over the past twenty-two years, with
sudden

eruptions,

depression.

rapid

slides,

and

a

half-decade

of

calm

The following picture spares the need for the

proverbial thousand words of volatility descriptions:

FRED ^

— Il-Wonli ipndon nurbjnk Of>tr*da«( aS0*Lb«Md onUJ.Oolwe

1494

19V6

jMtv Kl ■mMurh

1991

2ClO«

20C1

»«4

2006

2009

2010

2SI2

2014

2016

Lwioa r4&>

tnif.n<V4(d4V4

12-Month

London

Dollar,

FRED

Interbank
Ec.

Data,

http://bit.ly/2mlhJWQ
topography
historic

See,

is

e.g.,
Who

Guardian

(DK) ,

light

of

Liam

Vaughan

this

the

18,

(LIBOR),

Reserve

Bank

Mar.

20,

Based on
of

St.

U.S.
Louis,

2017) .

That

of unpredictable market movement,

recession,

Fixed

Jan.

Fed.

(accessed

result

economic

Bankers

In

the

Offered Rate

&

and

Gavin

World^ s

2017,

history,

other

Finch,
Most

1:00 EST,
it

14

unforeseeable

would

be

Libor

Important

a

forces.

Scandal:

The

Number,

The

http://bit.ly/2jJROD7.
sheer

speculation

to

guess LIBOR's altitude and incline over the next two decadeseven in light of the forecasts Defendants supplied.

Dkt. Nos.

37 at 14-15, 37-3, 37-4, 37-5, 37-6, 37-7.

For this reason, the amount in controversy is just ^^too

speculative and immeasurable" to permit removal.
Office

Depot,

Inc.,

204

F.3d

(quoting

Ericsson

GE

Commc^ns

&

Inc.,

1997)).

Elec.,

Even

Mobile

F.3d

V.

Nattin,

58

F.2d

216,

Defendants'

then, this case must be REMANDED.

Co.

1077

Commc^ns,

120

considering

1069,

979,

Cohen v.

{11th

Inc.

Cir.

v.

221-22

2000)

Motorola

(11th

additional

Cir.

evidence,

Cf. Vicksburq, S. & P. Ry.

980

(5th

Cir.

1932)

(''Only

prophetic ken of a rare order could forecast what will ensue.

Jurisdiction is based on actuality, not prophecy . . . .").^
II. ATTORNEYS' FEES ARE DENIED.

The

Andersons'

request

for

U.S.C. § 1447(c) will be denied.
fees

in

remand

motions

is

a

attorneys'

fees

under

28

Whether to award attorneys'

discretionary

matter.

Graham

Commercial Realty, Inc. v. Shamsi, 75 F. Supp. 2d 1371, 1373
(N.D. Ga. 1998).

"Defendants' attempt at removal" here was

not "so lacking as to justify . . . an award."

Sapp v. AT & T

Corp., 215 F. Supp. 2d 1273, 1279 (M.D. Ala. 2002).

Defendants
legal

presented

standard,

it

insufficient
was

evidence

reasonable

to

to
test

"Although

satisfy
the

the

bounds

^ Binding precedent, under Bonner v. City of Prichard, 661 F.2d 1206, 1207
(11th Cir. 1981) (en banc).
15

of Lowery" in light of Dart Cherokee.

C and

E, Inc.

v.

Friedman^s Jewelers, Inc., No. CV 107-122, 2008 WL 64632, at
*3

(S.D.

Ga.

Jan.

4,

2008).

The

Andersons'

motion

for

attorneys' fees is DENIED.
CONCLUSION

The Andersons' Motion to Remand
dkt.

no.

8,

is

attorneys' fees.

GRANTED

as

to

and for Attorney Fees,

remand,

but

DENIED

as

to

The Clerk of Court is hereby directed to

REMAND this case to the Superior Court of Richmond County.

All other outstanding motions in this case are DENIED as moot.

SO ORDERED, this 29th day of June, 2017.

HON. LISA GODBEY^WOOD, JUDGE
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF GEORGIA

16