Fowler v. BAC Home Loans Servicing LP et al

Filing 27

MEMORANDUM AND ORDER...IT IS HEREBY ORDERED that Plaintiff's Motion to Remand [ECF No. 21 ] is GRANTED. An Order of Remand is filed herewith. Signed by District Judge Ronnie L. White on 11/19/2014. (NEB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

MIMI FOWLER, individually and on behalf
of all others similarly situated,

)
)
)
Plaintiffs,
)
)
vs.
)
)
BAC HOME LOANS SERVICING, L.P., et al., )
)
Defendants.
)

Case No. 4:14CV1127 RLW

MEMORANDUM AND ORDER
This matter is before the court on Plaintiff’s Motion to Remand (“Motion”) (ECF No. 21).
This motion is fully briefed and ready for disposition.
BACKGROUND
On November 4, 2011, Plaintiff Mimi Fowler (“Plaintiff” or “Fowler”) and her counsel
filed successive class actions in the Circuit Court of St. Louis County, State of Missouri. (ECF
No. 23 at 9). Both of these cases involved claims in connection with attorney’s fees paid by the
class to reinstate Missouri mortgage loans. (Id.) In the first case, which was a predecessor to this
action, Plaintiff filed claims against BANA 1, Kozeny & McCubbin, L.C. (“Kozeny”), and other
mortgage lenders that had retained Kozeny as their foreclosure counsel and trustee, in connection
with fees paid by Fowler in reinstating her mortgage loan. See Mimi Fowler, individually and on
behalf of all others similarly situated v. BAC Home Loans Servicing, L.P., et al., Cause No.
11SL-CC04434 (Twenty First Judicial Circuit, St. Louis County, Missouri)(the “Kozeny Class
Action”). Plaintiff voluntarily dismissed the Kozeny Class Action without prejudice prior to a
1

Defendant Bank of American, successor by merger to the former BAC Home Loans Servicing,
L.P. (“BANA”).
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hearing on Defendants’ summary judgment motion. On or around March 6, 2014, Plaintiff Mimi
Fowler re-filed her Petition for Individual and Class Action Relief (hereinafter “Complaint”; ECF
No. 5).
Fowler, through her present counsel, also previously filed on November 4, 2011 another
putative class action against GMAC, South & Associates, P.C. (“South”), and other mortgage
lenders that had retained South as their foreclosure counsel and trustee. See Mimi Fowler,
individually and on behalf of all others similarly situated, v. GMAC Mortgage, LLC, South &
Associates, P.C., and South Lenders 1-100, Cause No. 11SL-CC004435 (Twenty First Judicial
Circuit, St. Louis County, Missouri) (“South Class Action”). (ECF No. 23 at 9). Defendants
contend that BANA was one of the mortgage lenders that utilized South as successor trustee for
mortgages and that BANA was one of the unnamed “Doe” defendants.

(Id.) Plaintiff dismissed

the South Class Action before identifying the lenders in this group. (ECF No. 23 at 10).
In the present action, the Complaint alleges claims for (1) violation of §443.360, R.S. Mo.;
(2) breach of fiduciary duty (against Kozeny); and (3) violation of the Missouri Merchandising
Practices Act (“MMPA”). (Notice of Removal, ¶18). Plaintiff alleges that Kozeny, the trustee,
and the lender defendants illegally charged, and collected from class members, attorneys’ fees in
connection with the reinstatement of their mortgages.

Plaintiff seeks to represent a class

consisting of “[a]ll persons residing in Missouri and not represented by counsel who reinstated
their mortgage loan and paid Attorney’s Fees in foreclosure proceedings related to Missouri real
estate during the period beginning five years before the date this lawsuit was filed to the present.”
(Complaint, ¶12).
Defendant BANA filed its Notice of Removal on June 19, 2014. (ECF No. 1). In the
Notice of Removal, Defendants assert that this Court has jurisdiction pursuant to the Class Action
Fairness Act of 2005, 28 U.S.C. §1332(d) (“CAFA”). (ECF No. 1, ¶2). In the Notice of
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Remand, BANA contends that Fowler cannot meet the “no other class action within three years”
requirement of 28 U.S.C. §1332(d)(4)(A)(ii). (Notice, ¶26).
STANDARD FOR REMOVAL/MOTION FOR REMAND
“Removal statutes are strictly construed, and any doubts about the propriety of removal are
resolved in favor of state court jurisdiction and remand.” Manning v. Wal-Mart Stores East, Inc.,
304 F.Supp.2d 1146, 1148 (E.D. Mo. 2004) (citing Transit Cas. Co. v. Certain Underwriters at
Lloyd=s of London, 119 F.3d 619, 625 (8th Cir. 1997), cert. denied, 522 U.S. 1075, 139 L. Ed. 2d
753, 118 S. Ct. 852 (1998)). The party seeking removal and opposing remand has the burden of
establishing jurisdiction.

Cent. Iowa Power Coop. v. Midwest Indep. Transmission Sys.

Operator, 561 F.3d 904, 912 (8th Cir. 2009).
DISCUSSION
“CAFA authorizes removal of putative class actions ‘commenced’ on or after February 18,
2005 if: 1) the amount in controversy exceeds $5,000,000 in the aggregate; 2) the citizenship of at
least one member of the proposed class is diverse from any defendant; and 3) the proposed class
size is not less than 100.” Hargis v. Access Capital Funding, LLC, No. 4:09CV604CDP, 2009 WL
2757051, at *1 (E.D. Mo. Aug. 26, 2009) aff'd, 674 F.3d 783 (8th Cir. 2012), citing 28 U.S.C. §
1332(d)(2). In her Motion to Remand, Plaintiff maintains this case must be remanded because it
involves a local controversy within the meaning of 28 U.S.C. §1332(d)(4)(A) and because it
involves home state parties within the meaning of 28 U.S.C. §1332(d)(4)(B). 2 “It is Plaintiff's
burden to prove each element of the CAFA exceptions.” Roche v. Aetna Health Inc., No. CIV.A.
13-3933, 2014 WL 1309963, at *3 (D.N.J. Mar. 31, 2014).
A. Local Controversy Exception
2

The Court does not address the home state exception because the local controversy exception is
dispositive of this case.
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“Although complete diversity is not required for the Court to exercise jurisdiction under 28
U.S.C.A. § 1332(d)(2), subsections § 1332(d)(4) requires courts to decline to exercise jurisdiction
when greater than two-thirds of the members of all proposed plaintiff classes in the aggregate are
citizens of the State in which the action was originally filed.” Barfield v. Sho–Me Power Elec.
Co-op., No. 11–4321–NKL, 2012 WL 2368517 at *2 (W.D. Mo. Jun. 21, 2012) (internal quotation
marks omitted). The local controversy exception provides:
(4) A district court shall decline to exercise jurisdiction under paragraph (2)-(A)(i) over a class action in which-(I) greater than two-thirds of the members of all proposed plaintiff classes
in the aggregate are citizens of the State in which the action was originally
filed;
(II) at least 1 defendant is a defendant-(aa) from whom significant relief is sought by members of the plaintiff
class;
(bb) whose alleged conduct forms a significant basis for the claims asserted
by the proposed plaintiff class; and
(cc) who is a citizen of the State in which the action was originally filed; and
(III) principal injuries resulting from the alleged conduct or any related
conduct of each defendant were incurred in the State in which the action
was originally filed; and
(ii) during the 3-year period preceding the filing of that class action, no other
class action has been filed asserting the same or similar factual allegations
against any of the defendants on behalf of the same or other persons…
28 U.S.C.A. § 1332(d)(4)(A).
This mandatory exception, commonly known as the “local-controversy” exception
to the Class Action Fairness Act (“CAFA”), contains four requirements: Under the
local-controversy exception, a district court must decline to exercise jurisdiction
over a class action in which [1] more than two-thirds of the class members in the
aggregate are citizens of the state in which the action was originally filed, [2] at
least one defendant ‘from whom significant relief is sought by members of the
plaintiff class’ and ‘whose alleged conduct forms a significant basis for the claims
asserted by the proposed plaintiff class' is a citizen of the state in which the class
action was originally filed, [3] the principal injuries were incurred in the state in
which the action was filed, and [4] no other class action alleging similar facts was
filed in the three years prior to the commencement of the current class action.

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Barfield, 2012 WL 2368517 at *2 (citations omitted). Furthermore, “[t]he party seeking to invoke
the local controversy exception bears the burden of establishing by a preponderance of the
evidence that it applies.” Boegeman v. Bank Star, No. 4:12CV1514 JCH, 2012 WL 4793739, at *3
(E.D. Mo. Oct. 9, 2012).
Fowler argues that the “no other class action within three years” requirement of the local
controversy exception is not defeated by her previous filing of the Kozeny and South cases, which
were voluntarily dismissed and one of which was re-filed.
1. The South Class Action
Defendants argue that the South Class Action constitutes an “other class action” under the
local controversy exception. Defendants argue that the statute does not require that BANA be
specifically identified and that referring to it has a “Doe” defendant was sufficient. Defendants
contend that it would be “bad public policy” to allow Fowler to take advantage of the local
controversy exception because she chose to identify BANA as a “Doe” defendant, when its
identity was “clearly identifiable.” (ECF No. 23 at 10).
The Court holds that the South Class Action was not an “other class action.” Defendants ask
the Court to speculate as to who the “Doe” defendants are and argue that BANA’s “status as
intended defendant” is sufficient for the Court to find the South Class Action is an “other class
action.” The Court disagrees. The Court holds that naming a “Doe” defendant, who may or may
not have been BANA, is insufficient. The Court will not guess as to Plaintiff’s intentions at the
time of filing. Absent Fowler actually naming BANA as a defendant in the South Class Action,
the Court finds that that action does not constitute an “other class action” and does not bar
application of the local controversy exception.
2. The Kozeny Class Action

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Defendants also maintain that the Kozeny Class Action is an “other class action” under the
plain language of CAFA. (ECF No. 23 at 11). Defendants note “other class action” is not
defined under the statute, but that “the term ‘class action’ means any civil action filed under rule 23
of the Federal Rules of Civil Procedure or similar State statute or rule of judicial procedure
authorizing an action to be brought by 1 or more representative persons as a class action.” 28
U.S.C.A. § 1332 (d)(1)(B). Defendants contend that the plain and ordinary meaning of this
requirement is that “the same (or other) plaintiffs cannot have filed any other class action asserting
the same or similar claims against at least one of the defendants within a three-year period of the
instant purported class action.” (ECF No. 23 at 12). Defendants state that Fowler cannot meet
this requirement because the prior Kozeny Class Action was brought by the same plaintiff against
the same defendants involving identical claims. (ECF No. 23 at 12 (citing Roche v. Aetna Health
Inc., No. CIV.A. 13-3933, 2014 WL 1309963, at *4 (D.N.J. Mar. 31, 2014)(prior class action
which asserted the same or similar factual allegations against the same Defendants barred
application of the local controversy exception). Defendants assert that the “general rule in federal
court is that cases re-filed after a voluntary dismissal are separate proceedings.” (ECF No. 23 at
14)(citing cases).
Plaintiff, however, argues that the “no other class action within three years” requirement of the
local controversy exception is met because “BANA is defending the same lawsuit that Fowler
brought earlier against Kozeny & McCubbin and BANA.” (ECF No. 22 at 5) (citing Vodenichar
v. Halcon Energy Properties, Inc., 733 F.3d 497, 508 (3d Cir. 2013)). In Vodenichar, the
question presented was whether the first and second filed actions were the same case or if the first
filed action was an “other class action,” as contemplated under the local controversy exception.
The Third Circuit held that the second cause of action brought by the same representative plaintiffs
and the same counsel was “considered a continuation of the first filed action.” Id. The Third
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Circuit reasoned that the policy rationale behind CAFA was not implicated because it was “not a
copycat situation where the defendants face similar class claims brought by different named
plaintiffs and different counsel in different forums.” Id.
As relevant to this issue, the Third Circuit discussed the rationale behind the local controversy
exception:
CAFA does not define what constitutes an “other class action” other than to limit it
to filed cases asserting similar factual allegations against a defendant. The goals of
the statute, however, provide guidance. In enacting CAFA, Congress recognized
the benefits of having one federal forum to adjudicate multiple cases filed in
various courts against a defendant. See Class Action Fairness Act of 2005, Pub.L.
No. 109–2, § 2(a)(1), 119 Stat. 4. To this end, the statute seeks to control the impact
of multiple class actions filed by different members of the same class against a
defendant by providing a single forum to resolve similar claims. See S.Rep. No.
109–14, at 4–5 (2005), reprinted in 2005 U.S.C.C.A.N. 3, 5–6; DeHart v. BP
America, Inc., No. 09–626, 2010 WL 231744, at *12 (W.D.La. Jan. 14, 2010).
Moreover, Congress sought to have all but truly local controversies proceed in
federal court and found that when a “controversy results in the filing of multiple
class actions, it is a strong signal that those cases may not be of the variety that [the
local controversy] exception is intended to address.” S.Rep. No. 109–14, at 40–41,
2005 U.S.C.C.A.N. at 39; see also Class Action Fairness Act of 2005, Pub.L. No.
109–2, § 2(b)(2), 119 Stat. 4.
Vodenichar, 733 F.3d at 508. Applying the reasoning of Vodenichar, the Court finds that this
case is not an “other class action.” Here, Defendants are “defending the same case that it had been
defending since November 201[1].” Id., at 509. 3 The instant case does not implicate the policy
concern of “copycat cases” that Congress sought to remedy. Likewise, having this case in federal
3

In the alternative, the Court finds that the effect of Plaintiff’s voluntary dismissal in state court is
rendering the prior lawsuit a nullity so that there was no “other class action.” See Williams v.
Clarke, 82 F.3d 270, 273 (8th Cir. 1996)(quoting Smith v. Dowden, 47 F.3d 940, 943 (8th Cir.
1995)(“‘The effect of a voluntary dismissal without prejudice pursuant to Rule 41(a) is to render
the proceedings a nullity and leave the parties as if the action had never been brought.’”)(internal
citation omitted); Kirby v. Gaub, 75 S.W.3d 916, 918 (Mo. Ct. App. 2002)(quoting In re Estate of
Klaas, 8 S.W.3d 906, 909[8] (Mo .Ct. App. 2000)(“A voluntary dismissal without prejudice is a
‘species of nonsuit.’”).

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court does not provide “a single forum to resolve similar claims” because there are no other,
competing copycat claims.

The Kozeny Class Action is not an “other class action” as

contemplated under CAFA, but rather is the same case. Thus, the Court holds that the “no other
class action” prong of the local controversy exception is satisfied.
In addition, the Court finds Defendants’ attempts to distinguish the reasoning in Vodenichar to
be unavailing. Defendants contend that “Vodenichar can properly be seen as a case in which the
defendants, having destroyed federal jurisdiction through their demand for the addition of
non-diverse parties, were not permitted to use the prior filing to create federal jurisdiction by
invoking CAFA and the ‘other class action’ provision. … This case involves no such unfairness.”
(ECF No. 23 at 13).

This Court disagrees with this limited reading of Vodenichar.

In

Vodenichar, the Third Circuit emphasized the purpose of CAFA to prevent defendants from facing
multiple near copycat lawsuits in multiple forums. 733 F.3d at 508.

It is clear from the

background of this case that Defendants have not had to face near copycat lawsuits because they
have all been dismissed without prejudice and that this is simply a refiling of a prior lawsuit.
Rather, the Court believes that this is exactly the kind of “local controversy” for which the
exception was created. The Court finds that the “no other class action” requirement is satisfied.
3. Other Local Controversy Requirements
Defendants also contend that Plaintiff has not met its burden with respect to the first three
elements of the local controversy exception, i.e., (1) more than two-thirds of the class members in
the aggregate are citizens of the state in which the action was originally filed, (2) at least one
defendant ‘from whom significant relief is sought by members of the plaintiff class' and ‘whose
alleged conduct forms a significant basis for the claims asserted by the proposed plaintiff class' is a
citizen of the state in which the class action was originally filed, and (3) the principal injuries were
incurred in the state in which the action was filed. Boegeman, 2012 WL 4793739, at *3; ECF No.
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23 at 7 (noting that “Plaintiff presents no evidence at all that the first three elements of the
exception are met.”). Defendants assert that Plaintiff’s own Complaint contradicts her assertion
that Kozeny, the sole Missouri defendant, is a defendant from whom significant relief is sought.
(ECF No. 23 at 8). Defendants note that Plaintiff alleges in her Complaint that BANA, not
Kozeny, provided her reinstatement quote and required her to pay the attorney’s fees. (ECF No.
23 at 8 (citing Complaint, ¶8)).
In response, Fowler assets that she has met her burden with respect to the first three
requirements for the local controversy exception. (ECF No. 25 at 2-3). First, Fowler states that
she has established that more than two-third of the class members in the aggregate is citizens of
Missouri. (ECF No. 25 at 2). Fowler alleges that “[t]he single proposed plaintiff class consists
of, and is limited to, persons who reside in Missouri.” (Complaint, ¶12). Fowler claims that she
has established by a preponderance of the evidence that more than two-thirds of the class members
in the aggregate are citizens of Missouri because the putative class is limited only to citizens of
Missouri. (ECF No. 25 at 3). Second, Fowler contends that she has established that Kozeny, a
citizen of Missouri, is the defendant from whom significant relief is sought and whose conduct
forms a significant basis for the claims asserts. (ECF No. 25 at 3). Fowler notes that Kozeny is
the only defendant who is liable to all class members, whereas BANA and the other defendant
lenders are only liable to a fraction of the putative class. (Id.) In addition, Fowler states that it is
Kozeny’s conduct that provides the basis for every class members’ claim, regardless of which
Defendant provides a putative class member with a reinstatement quote. (Id.) Finally, Fowler
asserts that she has established that the principal injuries here were incurred in Missouri. (Id.)
The Court further holds that Fowler has satisfied the first three prongs of the local controversy
exception. First, there is no dispute that more than two-thirds of the class members are citizens of
Missouri because citizenship of Missouri is a class requirement. Second, there is no dispute that
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at least one defendant named in the case is local—that is, from the state in which the case was
originally filed. Kozeny is a citizen of Missouri, the state in which the case was originally filed,
and hence is a local defendant under CAFA. Third, the Court holds that Kozeny’s “alleged
conduct forms a significant basis for the claims asserted by the proposed plaintiff class.” The
Court notes that it is Kozeny’s alleged wrongful conduct that binds all of the claims in this class
action, which makes Kozeny’s actions an important ground for liability. See Westerfeld v. Indep.
Processing, LLC, 621 F.3d 819, 825 (8th Cir. 2010)(quoting (Kaufman v. Allstate New Jersey Ins.
Co., 561 F.3d 144, 157 (3d Cir. 2009)(“‘The local defendant's alleged conduct must be an
important ground for the asserted claims in view of the alleged conduct of all the Defendants’”).
Finally, the Court finds that there is no dispute that the “principal injuries” resulting from the
alleged conduct were incurred in Missouri, the state in which the case was originally filed, given
that all of the class members are Missouri citizens.
Thus, the Court finds that all of the requirements for the local controversy exception are met
and the Court remands this action to the Circuit Court of the County of St. Louis, State of Missouri.
Accordingly,
IT IS HEREBY ORDERED that Plaintiff’s Motion to Remand [ECF No. 21] is
GRANTED. An Order of Remand is filed herewith.
Dated this 19th day of November, 2014.

________________________________
RONNIE L. WHITE
UNITED STATES DISTRICT JUDGE

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