Chapman et al v. Federal National Mortgage Association et al

Filing 20

MEMORANDUM AND ORDER IT IS HEREBY ORDERED that Plaintiffs amended complaint that was filed on December 15, 2014, shall be deemed filed with leave of Court.IT IS FURTHER ORDERED that Plaintiffs motion to remand the case to state court is DENIED. (Doc. No. 15.) Signed by District Judge Audrey G. Fleissig on 1/7/15. (JWJ)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
SCOT E. CHAPMAN and LINDA
CHAPMAN,
Plaintiffs,
v.
FEDERAL NATIONAL MORTGAGE
ASSOCIATION and NATIONSTAR
MORTGAGE, LLC,

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No. 4:14CV01526 AGF

Defendants.

MEMORANDUM AND ORDER

This matter, arising out of the foreclosure of Plaintiffs’ home pursuant to their
default on a residential mortgage, is before the Court on Plaintiffs’ motion to remand the
case to state court. For the reasons set forth below, the motion shall be denied.
Plaintiffs Scot Chapman and Linda Chapman commenced this action in Missouri
State Court, alleging that the two corporate Defendants wrongfully foreclosed on their
home in violation of state law, including the Missouri Merchandising Practices Act
(“MMPA”), and also violated the federal Real Estate Settlement Act, Truth in Lending
Act, and Fair Debt Collection Practices Act in their collection efforts and in failing to
credit all payments made by Plaintiffs. Plaintiffs sought to enjoin a state unlawful
detainer action brought by Defendants against them, declaratory judgment, attorney’s
fees, costs, statutory penalties, and “actual and punitive damages.”
On September 5, 2013, Defendant Nationstar Mortgage LLC (“Nationstar”) filed
a Notice of Removal based on two grounds: federal question jurisdiction pursuant to 28

U.S.C. §1331, and diversity jurisdiction under 28 U.S.C. §1332, as Plaintiffs and
Defendants have diverse citizenship and, according to Nationstar, the amount in
controversy exceeds $75,000. In support of the amount in controversy assertion,
Nationstar represented that the unpaid balance of the loan was $78,109.86 at the time of
the foreclosure sale and that the property sold for $65,635.21 at foreclosure. In addition,
Nationstar noted that Plaintiffs were seeking fees, costs, penalties, and actual and
punitive damages.
After removal, the two Defendants filed answers. Thereafter, on December 15,
2014, Plaintiffs filed an amended complaint, without seeking leave of the Court as
required by Federal Rule of Civil Procedure 15. The amended complaint removed all
federal causes of action. Also on December 15, 2014, Plaintiffs filed the motion to
remand now under consideration. In seeking remand, Plaintiffs point to the fact that
their amended complaint no longer contains any federal causes of action and, in addition,
they state that the amount in controversy “is not believed to exceed $75,000.00.” (Doc.
No. 15.)
In opposition to remand, Defendants argue that Plaintiffs’ amended complaint
should not be considered by the Court as it was filed without leave when leave was
required. They also argue that in any event, diversity jurisdiction exists as Plaintiffs
have not specifically limited their damages, via stipulation or otherwise, to an amount
below $75,000 and the relief Plaintiffs seek may well result in damages in excess of
$75,000. Defendants point to recent Missouri cases under the MMPA in which actual
damages were relatively minimal, but fees and punitive damages exceeded $75,000.

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When removal is based on diversity of citizenship, the amount in controversy
must exceed $75,000, exclusive of interest and costs. 28 U.S.C. 1332(a) (1). The United
States Supreme Court recently held that a notice of removal need not include evidentiary
submissions to support an allegation that the amount in controversy is met; rather it is
sufficient to allege the “requisite amount plausibly.” Dart Cherokee Basin Operating
Co. v. Owens, 135 S. Ct. 547, 554 (Dec. 15, 2014). If the plaintiff contests the
defendant’s allegation, § 1446(c)(2)(B) instructs: “[R]emoval . . . is proper on the basis
of an amount in controversy asserted” by the defendant “if the district court finds, by the
preponderance of the evidence, that the amount in controversy exceeds” the
jurisdictional threshold.
Here the Court agrees with Defendants that the amount of the outstanding debt
and the value of the property, together with Plaintiffs’ request for attorney’s fees and
punitive damages, moves this case beyond the threshold amount in controversy. See
Wyatt v. Liberty Mortg. Corp., No. 4:13-cv-00317-DGK, 2013 WL 6730298, at *6
(W.D. Mo. Dec. 19, 2013) (citing Garland v. Mortg. Elec. Registration Sys., Inc., No.
09-72 (JNE/JJG), 2009 WL 1684424, at *2 (D. Minn. June 16, 2009) (“[W]here there is
a dispute about the validity of a foreclosure, the amount in controversy will either be the
amount of the underlying debt or the fair market value of the property.”)).
Accordingly,
IT IS HEREBY ORDERED that Plaintiffs’ amended complaint that was filed
on December 15, 2014, shall be deemed filed with leave of Court.
IT IS FURTHER ORDERED that Plaintiffs’ motion to remand the case to state

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court is DENIED. (Doc. No. 15.)

________________________________
AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE

Dated this 7th day of January, 2015.

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