Kelly et al v. Bank of America, NA et al

Filing 22

MEMORANDUM. Signed by Judge Catherine C. Blake on 6/18/13. (jnls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

BRETT KELLY, et al.

v.

BANK OF AMERICA, N.A., et al.

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Civil No. CCB-12-2850

MEMORANDUM
Plaintiffs Brett Kelly and Patricia Borden Kelly (the “Kellys”) bring this suit against the
defendants, Bank of America, N.A. (“BOA”) and Wells Fargo Bank, N.A. (“Wells Fargo”)
(collectively, the “defendants”), alleging the defendants failed to comply with Maryland law
related to the Kellys’ requests to modify their mortgage loan. The Kellys originally filed suit in
Baltimore City Circuit Court, asserting violations of the Maryland Consumer Debt Collection
Act, Md. Code Ann., Com. Law, §§ 14-201, et seq.; Maryland Consumer Protection Act, Md.
Code Ann., Com. Law, §§ 13-101, et seq.; and the Maryland Mortgage Fraud Protection Act,
Md. Code Ann., Real Prop., §§ 7-401, et seq. The defendants removed the action to this court,
asserting diversity jurisdiction. See 28 U.S.C. § 1332. Now pending is the Kellys’ motion to
remand the removed action for lack of subject matter jurisdiction. See 28 U.S.C. § 1447. The
issues in this case have been fully briefed and no hearing is necessary. See Local Rule 105.6. For
the reasons stated below, the motion to remand will be granted.
BACKGROUND
Brett and Patricia Kelly purchased their home in New Market, Maryland in March 2005
for $450,000. (Compl., ECF No. 2, ¶¶ 5, 27.) The Kellys took out two mortgage loans – one for
$360,000 and a second for $90,000 – with NFM, Inc. (dba National Fidelity Mortgage
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Corporation), which funded the mortgages on behalf of WMC Mortgage Corporation (“WMC”),
a mortgage banking company in California. (Id. at ¶¶ 28, 29.) BOA acquired servicing rights to
the Kellys’ first mortgage as of July 1, 2011, and currently services the first mortgage on behalf
of WMC 2005-He5 MBS, the true owner and secured party of the first mortgage. (Id. at ¶¶ 30,
6.) Wells Fargo Bank, N.A. is Trustee for the Certificate-Holders of Asset Backed Securities
Corporation Home Equity Loan Trust, Series WMC 2005-He5, Asset Backed Pass-Through
Certificates, Series WMC 2005-He5 (“WMC 2005-He5 MBS”).1 (Id. at ¶ 7.)
In September 2011, the Kellys contacted BOA to seek a loan modification proactively to
avoid defaulting. (Id. at ¶ 34.) The Kellys submitted a modification application on December 12,
2011, but BOA never acknowledged receiving their application (Id. at ¶ 39.) The Kellys later
received an offer from BOA dated February 2, 2012, inviting them to apply for a loan
modification. (Id. at ¶ 42.) On February 17, 2012, BOA employee Deborah Renick-Adams
requested additional documentation as part of the Kellys’ application, which the Kellys sent on
March 3, 2012. (Id. at ¶ 43.)
Shortly thereafter, the Kellys received another offer from BOA to apply for a loan
modification, which was dated March 5, 2012. (Id. at ¶ 45.) On March 12, 2012, BOA sent the
Kellys and the Maryland Department of Labor, Licensing, and Regulation a Notice of Intent
(NOI) to foreclose identifying “Wells Fargo” as the secured party of the Kellys’ first mortgage.
The NOI indicated BOA believed the Kellys were in default on the first mortgage loan as of
January 2, 2012. (Id. at ¶ 46.) BOA sent the Kellys a second NOI on April 2, 2012, indicating
that the Kellys had defaulted on their first mortgage loan as of March 2, 2012. (Id. at ¶ 57.)

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WMC 2005-He5 MBS acquired “all beneficial interest” related to the first mortgage on March 23, 2012. (ECF No.
2, ¶ 31.)

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On March 30, 2012, Brad Peterson, a housing counselor at Frederick Community Action
Agency, submitted a second loan modification application through the Hope Loan Portal system
on the Kellys’ behalf. (Id. at ¶¶ 48-49.) BOA subsequently requested additional information and
documents, which Peterson provided on the Kellys’ behalf through the Hope Loan Portal system
on April 26, 2012. (Id. at ¶ 50.) BOA then sent several letters to the Kellys in early May 2012.
(Id. at ¶¶ 50.) The first letter, dated May 1st, requested documents the Kellys assert they had
already provided. (Id. at ¶ 52.) In the second letter, dated May 2nd, BOA stated that the Kellys’
modification request concerning their second mortgage was denied because the Kellys had not
submitted the required paperwork, even though the Kellys had not applied for a modification on
the second mortgage. (Id. at ¶ 53.) On May 9th, 10th, and 14th, BOA sent the Kellys three more
letters stating that the Kellys were not eligible for a loan modification on their first mortgage
because they had not provided BOA with the documents it had requested. (Id. at ¶¶ 63-65.)
In August 2012, the Kellys filed suit against BOA and Wells Fargo in Baltimore City
Circuit Court, asserting violations of the Maryland Consumer Debt Collection Act, the Maryland
Consumer Protection Act, and the Maryland Mortgage Fraud Protection Act. The complaint
seeks compensatory damages “not to exceed $50,000 for all claims and causes of action
combined,” as well as attorneys’ fees and costs. The defendants removed the action to this court
based on diversity jurisdiction on September 24, 2012.
ANALYSIS
The right to remove a case from state to federal court derives solely from 28 U.S.C. §
1441. Section 1441 provides, in pertinent part, that “any civil action brought in a state court of
which the district courts of the United States have original jurisdiction, may be removed by the
defendant or defendants, to the district court of the United States for the district and division

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embracing the place where such action is pending.” When a case is removed from state court, the
burden is on the defendant to support the exercise of jurisdiction. Strawn v. AT&T Mobility LLC,
530 F.3d 293, 296-97 (4th Cir. 2008). Removal jurisdiction raises “significant federalism
concerns”; thus, it must be strictly construed. Mulcahey v. Columbia Organic Chemicals
Company, Inc., 29 F.3d 148, 151 (4th Cir. 1994). “If federal jurisdiction is doubtful, a remand is
necessary.” Id.
Absent a federal question, removal under 28 U.S.C. § 1441 requires complete diversity of
citizenship of the named parties and an amount in controversy in excess of $75,000, exclusive of
interest and costs. 28 U.S.C. § 1332(a)(1). Generally, the amount requested in the complaint
determines the amount in controversy. Angus v. Shiley Inc., 989 F.2d 142, 145 (3d Cir. 1993)
(“The general federal rule is to decide the amount in controversy from the complaint itself.”)
(citing Horton v. Liberty Mutual Ins. Co., 367 U.S. 348, 353 (1961)).
In the present case, the parties do not dispute that complete diversity exists; however, the
Kellys argue that this case does not meet the $75,000 requirement. The Kellys claim their
complaint specifically capped the damages sought at $50,000 for all claims and causes of action
combined. (See ECF No. 2, ¶¶ 78, 86, 97.) In response, the defendants argue that (1) the Kellys
MCPA claim for “a sum against each Defendant” may be aggregated to exceed the jurisdictional
threshold; (2) the Kellys’ three causes of action may be aggregated to establish the amount-incontroversy requirement; (3) the amount in controversy exceeds $75,000 when accounting for
attorneys’ fees and additional relief; and (4) the Kellys are not limited to the amounts stated in
the ad damnum clauses in their complaint.
The Kellys MCPA claim, which demands “a sum against each Defendant not to exceed
$50,000,” may not be aggregated to satisfy the amount-in-controversy requirement for federal

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jurisdiction. Although joint tortfeasors are jointly and severally liable for the entire damage
sustained, only one satisfaction of the claim may be obtained. Maryland Lumber Co. v. White,
205 Md. 180, 199, 107 A.2d 73, 80 (1954). Here, the Kellys seek to hold BOA and WMC 2005He5 MBS jointly liable under the MCPA for a sum “not to exceed $50,000.” The most the
Kellys can obtain for this violation, then, is $50,000, not $100,000, as the defendants maintain.
Nor can the Kellys’ three causes of action be aggregated to meet the amount-incontroversy requirement. Under Maryland law, “multiple counts based upon the same facts or
circumstances but asserting different legal theories upon which the plaintiff may recover the
same damages, constitute one claim.” Huber v. Nationwide Mut. Ins. Co., 347 Md. 415, 421, 701
A.2d 415, 417-18 (1997). Here, the Kellys present several legal theories based on the same set of
facts. Because “the aggregate of the counts . . . constitute only one claim upon which relief can
be granted,” id. at 417, the defendants cannot show that the amount in controversy exceeds
$75,000.
The defendants’ argument that the amount in controversy surpasses $75,000 after
accounting for attorneys’ fees is also unavailing. Where a plaintiff claims a specific amount in
damages that is less than $75,000, removal is proper only if the defendant can prove to a “legal
certainty” that the plaintiff would actually recover more than that if she prevailed. Momin v.
Maggiemoo's Int'l, L.L.C., 205 F. Supp. 2d 506, 509 (D. Md. 2002). If, on the other hand, a
plaintiff's complaint does not allege a specific amount in damages, a defendant need only prove
by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional
minimum. Id. at 509-10. Here, the exercise of federal jurisdiction thus turns on whether an award
of attorneys’ fees will exceed $25,000, the difference between the $75,000 jurisdictional
threshold and the $50,000 in actual damages claimed. The defendants contend that “taking this

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matter through trial, including discovery and depositions, would reasonably require at least 83.4
hours” of the Kellys’ counsel’s time, which, at $300 per hour for his services, would place their
attorneys’ fees above $25,000. Such a claim in this case is purely speculative, however – the
defendants offer no evidence to support it.2 See Conrad Associates v. Hartford Acc. & Indem.
Co., 994 F. Supp. 1196, 1198 (N.D. Cal. 1998). The defendants thus have failed to prove that the
amount in controversy exceeds $75,000 under either the “legal certainty” or “preponderance of
the evidence” standard.3
Finally, the defendants argue incorrectly that the plaintiffs are not bound by the ad
damnum clause in their complaint. The Supreme Court has held that, for purposes of establishing
the amount in controversy, “the sum claimed by the plaintiff controls if the claim is apparently
made in good faith.” St. Paul Mercury Indem. Co. v. Red Cab. Co., 303 U.S. 283, 288 (1938);
see also Dow v. Jones, 232 F. Supp. 2d 491, 497-98 (D. Md. 2002) (“It is well established that
the sum claimed in the plaintiff’s complaint determines the amount in controversy, barring bad
faith or the legal impossibility of recovering such an amount.”). In Maryland, a plaintiff’s request
for damages must indicate a specific sum, by which recovery may be limited. See Gallagher v.
Fed. Signal Corp., 524 F. Supp. 2d 724, 727-28 (D. Md. 2007). Here, the Kellys’ complaint
explicitly states that they are seeking no more than $50,000 for all claims and causes of action
combined.4 Furthermore, the defendants have presented no evidence of bad faith or
impossibility. Accordingly, removal of the Kellys’ case was improper, and the motion to remand
will be granted.

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The only evidence before the court regarding attorneys’ fees is an affidavit from the Kellys’ counsel indicating that
the Kellys had incurred $8,155 in attorneys’ fees and costs at the time the case was removed. (Robinson Aff., ECF
No. 18, Ex. 1.)
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Cf. Williams v. Bank of New York Mellon, 2013 WL 2422895 (D. Md. June 3, 2013) (denying motion to remand
where exercise of federal jurisdiction turned on plaintiff incurring an additional $4,750 in attorneys’ fees, plaintiff’s
counsel already had spent $5,250 on the case before removal, and an affidavit was provided).
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Maryland Rule of Civil Procedure 2-305 provides, “[u]nless otherwise required by law, a demand for money
judgment that does not exceed $75,000 must include the amount of damages sought.”

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A separate Order follows.

June 18, 2013
Date

/s/
Catherine C. Blake
United States District Judge

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