Baker v. Ocean 18 LLC et al
ORDER granting 12 motion to remand. Signed on 10/10/19 by District Judge Stephen R. Bough. (Diefenbach, Tracy)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MISSOURI
OCEAN 18 LLC, et al.,
Case No. 19-0606-CV-W-SRB
Before the Court are 1) Defendant Martin Leigh PC’s Motion to Dismiss (Doc. #5) and 2)
Plaintiff’s Motion for Remand (Doc. #12). Defendants Ocean 18, LLC and Nationwide
Servicing Center, Inc. filed a notice joining, in part, Defendant Martin Leigh’s motion to dismiss.
(Doc. #9). Plaintiff’s Motion for Remand (Doc. #12) is GRANTED. This case is remanded to
the Circuit Court of Jackson County, Missouri. Defendant Martin Leigh PC’s Motion to Dismiss
(Doc. #5) will remain pending for the state court’s consideration.
Plaintiff Yvette Baker filed this action in the Circuit Court of Jackson County, Missouri
on December 11, 2018. Plaintiff’s claims arise from the purported, attempted, wrongful nonjudicial foreclosure of her property. Plaintiff’s original verified petition included claims against
Ocean 18, Nationwide, and Martin Leigh (collectively “Defendants”) for violations of the
Missouri Merchandising Practices Act (“MMPA”) and a request for injunctive relief to prevent
the foreclosure of Plaintiff’s property. A preliminary injunction was issued on December 21,
2018. Defendants filed a motion to dismiss on December 17, 2018, and Plaintiff filed a motion
for leave to file an amended petition on January 11, 2019. On February 5, 2019, and before the
state court ruled on the pending motion for leave to file an amended petition, Defendants
removed the case to this Court on the basis of diversity jurisdiction. Given that the operative,
original petition did not satisfy the amount-in-controversy requirement, this Court remanded the
case to state court on April 23, 2019.
On remand, the state court granted Plaintiff leave to file an amended petition, which was
filed on July 2, 2019. On August 1, 2019, Defendants again removed the case to this Court. The
now operative, first-amended petition includes three counts against the same Defendants. Counts
I and II are MMPA claims against all Defendants, and Count III is a state-wide, class-action
claim against only Defendant Martin Leigh for violation of the MMPA. The first-amended
petition defines the class:
All Missouri citizens who received a debt collection letter from Martin Leigh
between 2007 and the present where Martin Leigh was acting on behalf of a debt
(Doc. #1-1, ¶ 73).
Defendant Martin Leigh’s Notice of Removal states this Court has subject-matter
jurisdiction under the Class Action Fairness Act, 28 U.S.C. §§ 1332(d)(2) and 1453.
Alternatively, Defendant Martin Leigh states traditional diversity jurisdiction exists because
Defendant Martin Leigh has been fraudulently joined in this case in that a successor trustee
under a deed of trust cannot be found liable for MMPA violations as a matter of law. The
parties’ citizenship is undisputed. Plaintiff is a Missouri citizen, and Defendant Martin Leigh is
also a Missouri citizen. For purposes of CAFA, Ocean 18 is a citizen of California and
Delaware, and Nationwide is a California citizen.
The original petition identified Defendant Martin Leigh as a successor trustee under a
deed of trust. The first-amended petition does not use the term “successor trustee” but
characterizes Defendant Martin Leigh as a debt collector. More important for this Court’s
analysis, however, are the allegations of actual misconduct by Defendant Martin Leigh, some of
which fall inside the successor-trustee role and some of which fall outside the successor-trustee
The Court will summarize Plaintiff’s allegations in the first-amended petition. On
September 30, 2005, Plaintiff signed two Promissory Notes and two Deeds of Trust granting a
first and second mortgage to EquiFirst Corporation. The second mortgage was in the amount of
$26,600.00. The mortgages and/or servicing of the mortgages were thereafter transferred to
other entities. On or around July 1, 2009, Plaintiff began making all mortgage payments to the
then loan servicer, GMAC Mortgage, LLC. On August 8, 2012, GMAC sent Plaintiff a letter
approving a modification of Plaintiff’s mortgages. Plaintiff thereafter paid the modified
payments. Plaintiff did not receive any notice that her second mortgage or the servicing of her
second mortgage was transferred to Ocean 18 or Nationwide. Plaintiff did not receive any notice
of default until August 3, 2018, when Plaintiff received a 45-day Notice of Demand – Intent to
Foreclose and Right to Cure from Mortgage Default Services, LLC for the amount of
$29,123.90. Plaintiff alleges she was not in default on the second mortgage.
On October 15, 2018, Defendant Martin Leigh recorded a Request for Notice of Sale
dated October 12, 2018. Defendant Martin Leigh published notice in a newspaper of the
foreclosure sale scheduled for December 13, 2018. On or about November 14, 2018, Plaintiff
received fifteen certified-mail letters from Defendant Martin Leigh notifying Plaintiff of the
trustee’s sale scheduled for December 6, 2018, at 12:30 p.m. On December 4, 2018, Plaintiff
sent Defendant Martin Leigh a letter requesting validation of the debt. On December 7, 2018,
Plaintiff received from Defendant Martin Leigh a packet of documents that included a copy of
the second note. The second note indicated there were three allonges containing alleged
endorsements of the second note. The third allonge was not affixed to the second note. The
packet included a letter from Defendant Martin Leigh on the bottom of which was a statement in
all capital letters, “MARTIN LEIGH PC IS ATTEMPTING TO COLLECT A DEBT AND ANY
INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE.” (Doc. #1-1, p. 23).
On December 11, 2018, Plaintiff’s counsel inspected the second note at Defendant Martin
Leigh’s office, and Plaintiff’s counsel requested a scanned copy of the second note. The
December 11 scanned copy “was substantially different” than the December 7 copy in that the
December 11 copy had a third allonge affixed to the second note. (Doc. #1-1, p. 7). Plaintiff
alleges, “Upon information and belief, the second note was altered in order to argue that it was in
compliance with the applicable laws of Missouri requiring all allonges to be firmly fixed to the
note to be enforceable, and Ocean 18, Nationwide, and Martin Leigh were the only parties who
had access to the second note to make alterations.” (Doc. #1-1, p. 14).
On December 14, 2018, Defendant Martin Leigh proposed a “workout arrangement” that
would allow Plaintiff to make payments over time. On February 28, 2019, Defendant Martin
Leigh proposed Plaintiff make a $38,000 payment to Ocean 18 to satisfy the debt. In connection
with the state-wide class-action claim, Plaintiff alleges, “Martin Leigh’s business involves the
collection of debts and its collection activities were carried out to attempt to complete the sale
transactions on behalf of the servicer’s collection process.” (Doc. #1-1, p. 11).
Defendant Martin Leigh filed its motion to dismiss on August 7, 2019. In the motion to
dismiss, Defendant Martin Leigh argues Plaintiff failed to state a claim against Defendant Martin
Leigh because the MMPA does not apply to successor trustees under a deed of trust. Defendant
Martin Leigh also argues, and Defendants Ocean 18 and Nationwide join in this portion of the
motion, that Plaintiff’s MMPA claims fail because Plaintiff does not allege an ascertainable loss.
On August 16, 2019, Plaintiff filed her motion for remand. Though the motion to dismiss was
filed first, the Court must find it has subject-matter jurisdiction over this matter before it can
consider any merits arguments under Federal Rule of Civil Procedure 12(b)(6). See 28 U.S.C.
§ 1447(c) (“If at any time before final judgment it appears that the district court lacks subject
matter jurisdiction, the case shall be remanded.).
Defendants may remove to federal court “any civil action brought in a State court of
which the district courts of the United States have original jurisdiction[.]” 28 U.S.C. § 1441(a).
The party seeking removal bears the burden of establishing subject-matter jurisdiction. In re
Bus. Men’s Assurance Co. of Am., 992 F.2d 181, 183 (8th Cir. 1993). “[A] district court is
required to resolve all doubts about federal jurisdiction in favor of remand.” Transit Cas. Co. v.
Certain Underwriters at Lloyd’s of London, 119 F.3d 619, 625 (8th Cir. 1997) (citation omitted).
Pursuant to 28 U.S.C. § 1332(a)(1), “The district courts shall have original jurisdiction of
all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive
of interest and costs, and is between—(1) citizens of different states[.]” Section 1332(a)(1)
requires complete diversity, which means “each defendant is a citizen of a different State from
each plaintiff.” Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373 (1978) (emphasis in
original). Removal based on CAFA, however, requires only minimal diversity. Pursuant to
§ 1332(d)(2)(A), “The district courts shall have original jurisdiction of any civil action in which
the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs,
and is a class action in which—(A) any member of a class of plaintiffs is a citizen of a State
different from any defendant[.]” Two mandatory exceptions to CAFA jurisdiction are codified at
§ 1332(d)(4)(A) and (B), the local-controversy exception and the home-state exception,
“The doctrine of fraudulent joinder allows a district court to assume jurisdiction over a
facially nondiverse case temporarily and, if there is no reasonable basis for the imposition of
liability under state law, dismiss the nondiverse party from the case and retain subject matter
jurisdiction over the remaining claims.” Murphy v. Aurora Loan Svcs., LLC, 699 F.3d 1027,
1031 (8th Cir. 2012). The Eighth Circuit has articulated the fraudulent joinder standard:
Where applicable state precedent precludes the existence of a cause of action
against a defendant, joinder is fraudulent. “[I]t is well established that if it is clear
under governing state law that the complaint does not state a cause of action against
the non-diverse defendant, the joinder is fraudulent and federal jurisdiction of the
case should be retained.” Iowa Pub. Serv. Co. v. Med. Bow Coal Co., 556 F.2d
400, 406 (8th Cir. 1977). However, if there is a “colorable” cause of action—that
is, if the state law might impose liability on the resident defendant under the facts
alleged—then there is no fraudulent joinder. See Foslip Pharm., Inc. v. Metabolife
Int’l, Inc., 92 F. Supp. 2d 891, 903 (N.D. Iowa 2000). As we recently stated in
[Wiles v. Capitol Indem. Corp., 280 F.3d 868, 871 (8th Cir. 2002)], “. . . joinder is
fraudulent when there exists no reasonable basis in fact and law supporting a claim
against the resident defendants.” . . . Conversely, if there is a reasonable basis in
fact and law supporting the claim, the joinder is not fraudulent.
Filla v. Norfolk S. Ry. Co., 336 F.3d 806, 810 (8th Cir. 2003) (emphasis in original) (footnote
The Filla standard for determining fraudulent joinder is distinct from the standard under
Federal Rule of Civil Procedure 12(b)(6) for determining failure to state a claim. A district
court’s fraudulent-joinder analysis under Filla is “limited to determining whether there is
arguably a reasonable basis for predicting that the state law might impose liability based upon
the facts involved.” Junk v. Terminix Int'l Co., 628 F.3d 439, 445 (8th Cir. 2010) (internal
quotations omitted) (quoting Filla, 336 F.3d at 811). To survive a Rule 12(b)(6) motion to
dismiss, on the other hand, “a complaint must contain sufficient factual matter, accepted as true,
to state a claim to relief that is plausible on its face.” Junk, 628 F.3d at 445 (internal quotations
omitted) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Thus, the Filla standard is less
“demanding” on a plaintiff than the 12(b)(6) standard is. Knudson v. Sys. Painters, Inc., 634
F.3d 968, 980 (8th Cir. 2011) (citing Junk, 628 F.3d at 445) (“By requiring the defendant to
prove that the plaintiff's claim against the non-diverse defendant has no reasonable basis in law
and fact, we require the defendant to do more than merely prove that the plaintiff's claim should
be dismissed pursuant to a Rule 12(b)(6) motion.”).
The parties dispute which parties’ citizenship should be considered for minimal diversity
under CAFA because the two, non-diverse defendants are not named in the sole, class-action
claim. The parties also dispute whether Plaintiff can plead around the $5,000,000 jurisdictional
threshold by alleging in the first-amended petition, “The amount in controversy on the state-wide
class action claim does not exceed $5 million.” (Doc. #1-1, ¶ 79). The Court finds it need not
reach these issues, however, because regardless, the local-controversy exception and the homestate exception would require this Court to decline to exercise CAFA jurisdiction.
“The party seeking remand bears the burden of proof for a CAFA exception.” Hood v.
Gilster-Mary Lee Corp., 785 F.3d 263, 265 (8th Cir. 2015) (citing Westerfield v. Indep.
Processing, LLC, 621 F.3d 819, 822 (8th Cir. 2010)). Any doubt about the applicability of a
CAFA exception should be resolved in favor of the non-moving party. Westerfield, 621 F.3d at
823. As instructed in Westerfield, the Court begins with the language of the statute itself. Id.
Section 1332(d)(4) 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; or
(B) two-thirds or more of the members of all proposed plaintiff classes in
the aggregate, and the primary defendants, are citizens of the State in which
the action was originally filed.
The Eighth Circuit has recognized a plaintiff’s ability to define a class as including only
“citizens” of a particular State in order to satisfy the “greater than two-thirds” requirement of the
local-controversy exception and the “two-thirds or more” requirement of the home-state
exception. Hood, 785 F.3d at 266 (citing In re Sprint Nextel Corp., 593 F.3d 669, 674 (7th Cir.
2010)). As previously stated, Plaintiff’s proposed class includes only “Missouri citizens.”
Accordingly, Plaintiff has carried her burden with respect to these elements of the two
In Westerfield the Eighth Circuit held that “whether an in-state defendant is a significant
defendant for purposes of the local-controversy exception must be determined by considering the
claims of ‘all of the class members in [the] class action[.]’” 621 F.3d at 824-25 (quoting 28
U.S.C. § 1332(d)(1)(A)). In this case Defendant Martin Leigh is the sole class-claim Defendant
and, therefore, certainly a significant Defendant in relation to the “claims of all class members in
the class action.” Defendant Martin Leigh is the sole Defendant from whom the proposed
plaintiff class seeks relief, and Defendant Martin Leigh is the sole Defendant whose conduct
forms a basis of the claims asserted by the proposed plaintiff class.
Defendant Martin Leigh argues that Westerfield supports the conclusion that Defendant
Martin Leigh is not a significant defendant for purposes of the local-controversy exception.
Defendant Martin Leigh relies on the following quote from Westerfield, “This reading of the
local-controversy exception would allow class-action plaintiffs to avoid federal jurisdiction
under CAFA simply by pleading their claims against an in-state defendant as separate counts on
behalf of a separate class.” (Doc. #18, p. 14) (citing 621 F.3d at 825). In Westerfield the Eighth
Circuit analyzed the significant-defendant requirement where the plaintiff pled class claims
against a non-diverse defendant and pled separate class claims against a diverse defendant, each
on behalf of separate plaintiff classes. 621 F.3d at 823. In this case Plaintiff has not pled a class
claim against the non-diverse Defendants. As a result, the preceding quote is inapplicable to
Defendant Martin Leigh’s position relative to the plaintiff class.
The statutory language of § 1332(d)(4)(A)(i)(II)(aa)-(bb) ties a defendant’s
“significance” to the “plaintiff class.” The proposed plaintiff class in this case has no connection
to the non-diverse Defendants Ocean 18 and Nationwide because no claims are brought on
behalf of the proposed plaintiff class against those non-diverse Defendants. The Court finds
Plaintiff has carried her burden with respect to § 1332(d)(4)(A)(i)(II).
The Court finds Plaintiff has also satisfied her burden with respect to
§ 1332(d)(4)(A)(i)(III). The class includes Missouri citizens who received a debt collection
letter from Defendant Martin Leigh. Therefore, the principal injuries are necessarily tied to the
State of Missouri. Finally, Plaintiff has satisfied her burden with respect to § 1332(d)(4)(A)(ii).
Plaintiff states she searched for and could not find a similar class action having been filed in the
last three years. (Doc. #12, p. 10). Defendant Martin Leigh does not challenge this finding.
With respect to the primary-defendant requirement of the home-state exception, the
parties agree the test is as stated in Nicholson v. Prime Tanning Corp., No. 09-6083-CV-SJGAF, 2009 WL 2900042, at *1 (W.D. Mo. Sept. 3, 2009). “[A] ‘primary defendant’ has been
understood to mean a defendant who (1) has the greater liability exposure; (2) is most able to
satisfy a potential judgment; (3) is sued directly, as opposed to vicariously, or for
indemnification or contribution; (4) is the subject of a significant portion of the asserted claims;
or (5) is the only defendant named in a particular cause of action.” Id. (emphasis added)
(internal quotation marks omitted) (citing Moua v. Jani-King of Minn., Inc., 613 F.Supp.2d 1103,
1107 (D. Minn. 2009)). Reading § 1332(d)(4) as a whole and considering the constructioninterpretation instructions in Westerfield, the Court finds that the primary-defendant analysis
should also focus on the relationship between the argued primary defendant and the plaintiff
class. Defendant Martin Leigh is the only party with liability exposure to the proposed plaintiff
class and therefore, the only party able to satisfy a potential judgment. Defendant Martin Leigh
is sued directly and is the sole subject of the asserted class claim. The Court finds Plaintiff has
carried her burden to establish Defendant Martin Leigh is a primary defendant in connection with
the home-state exception.
Defendant Martin Leigh casts this case as an “interstate class action.” (Doc. #18, p. 6). It
is not. The sole class claim is brought on behalf of only Missouri citizens against a single
Missouri-citizen Defendant, Martin Leigh. The Court finds that both the local-controversy
exception and the home-state exception require the Court to decline to exercise CAFA
Although this Court is required to decline to exercise jurisdiction under CAFA,
traditional diversity jurisdiction may still exist if, as Defendant Martin Leigh argues, it has been
fraudulently joined. Defendant Martin Leigh argues it has been fraudulently joined because “it is
well-settled law that the MMPA does not apply to claims against Successor Trustees under a
Deed of Trust.” (Doc. #1, ¶ 63) (citing Wivell v. Wells Fargo Bank, N.A., 773 F.3d 887, 895-96
(8th Cir. 2014)). As previously stated, in a fraudulent-joinder analysis, this Court is required to
consider only whether Missouri law might impose liability on Defendant Martin Leigh, the nondiverse Defendant, based on the facts alleged. Filla, 336 F.3d at 810.
“When determining the scope of Missouri law, we are bound by the decisions of the
Supreme Court of Missouri.” Wivell, 773 F.3d at 897 (internal quotation marks and citation
omitted). Three Missouri Supreme Court cases must guide this Court’s fraudulent-joinder
analysis—Conway v. CitiMortgage, Inc., 438 S.W.3d 410 (Mo. banc 2014); Watson v. Wells
Fargo Home Mortg., Inc., 438 S.W.3d 404 (Mo. banc 2014); and Jackson v. Barton, 548 S.W.3d
263 (Mo. banc 2018). All three cases analyze the meaning of the phrase “in connection with” as
used in the MMPA. The MMPA provides in relevant part:
The act, use or employment by any person of any deception, fraud, false pretense,
false promise, misrepresentation, unfair practice or the concealment, suppression,
or omission of any material fact in connection with the sale or advertisement of any
merchandise in trade or commerce . . . is declared to be an unlawful practice. . . .
Any act, use or employment declared unlawful by this subsection violates this
subsection whether committed before, during or after the sale, advertisement or
Mo. Rev. Stat. § 407.020.1 (emphasis added).
In Conway the Missouri Supreme Court reversed the trial court’s dismissal of an MMPA
claim against a loan servicer who was not an original party to the loan. The Conway court
A loan is composed of both the initial extension of credit and the bundle of related
services. It creates a long-term relationship in which the borrower and the lender
continue to perform various duties, such as making and collecting payments over
an extended period of time. Because each party must continue to perform these
duties for the life of the loan, the sale continues throughout the time the parties
perform their duties. A party’s right to collect a loan is part of that sale and is,
therefore, “in connection with” the loan.
438 S.W.3d at 415. The Conway court interpreted “in connection with” “to include enforcing the
terms of a loan” and further found “the MMPA may cover parties who enter the relationship
after a buyer enters the transaction, including a loan servicer.” Id. at 416.
In Watson the Missouri Supreme Court considered an appeal from the trial court’s grant
of summary judgment to a loan servicer who the plaintiff alleged violated the MMPA by
wrongfully foreclosing on the deed of trust and engaging in bad-faith, loan-modification
negotiations. 438 S.W.3d at 406. The trial court granted summary judgment and found the loan
servicer’s actions were not “in connection with” the sale of the loan because the loan servicer’s
“actions were not done before or at the time of the extension of credit in the original loan, and
[the loan servicer] was not an original party to that transaction[.]” Id. The Watson court relied
on Conway in reversing summary judgment on the claim that the loan servicer violated the
MMPA in connection with a wrongful foreclosure. Id. The Watson court affirmed the grant of
summary judgment as to the claim for bad-faith, loan-modification negotiations. The Watson
court stated, “The loan modification negotiations, however, were not ‘in connection with’ the
sale of this loan because that was not a service the lender agreed to sell or the borrower agreed to
buy when the parties agreed to the loan.”1 Id. at 408.
After the Missouri Supreme Court decided Conway and Watson but before the Missouri
Supreme Court decided Jackson, the Eighth Circuit issued its decision in Wivell, which is the
principal case relied on by Defendant Martin Leigh. In Wivell the Eighth Circuit analyzed
whether the district court had been correct in deciding that a successor trustee was fraudulently
joined to an MMPA claim. The plaintiffs alleged the successor trustee “violated the MMPA by
making false and misleading statements, refusing to help them, and by failing to carry out its
duties as trustee.” Wivell, 773 F.3d at 895. In applying Conway and Watson, the Eighth Circuit
Conway and Watson do not supply a reasonable basis in law for the Wivell’s
MMPA claim against [the successor trustee]. Both cases concerned the lenderborrower relationship, not the trustee-borrower relationship at issue here, . . . and
the Conway court made clear that its rationale turned on the continuing nature of
the lender-borrower relationship.
Id. Finding no reasonable basis in fact and law for the plaintiff’s claim, the Eighth Circuit
affirmed the district court’s decision. Id. at 895-96.
Defendant Martin Leigh does not argue that the loan modification granted to Plaintiff has any
impact on this Court’s analysis. The fact Plaintiff was granted a loan modification and made
payments pursuant to the modification distinguishes this case from that portion of Watson. As
the Court must engage in a fraudulent-joinder analysis and not a Rule 12(b)(6) analysis and
given the documentation of the loan modification is not before this Court nor has it been argued
by the parties, the Court finds the fact Plaintiff was granted a loan modification during the life of
the loan does not impact the analysis at this stage.
In Jackson the Missouri Supreme Court considered whether a lawyer’s activity in filing a
collection action and sending a demand letter, all in an attempt to collect a debt owed to a dentist
creditor, was “in connection with” the sale of dental services. 548 S.W.3d at 266. The plaintiff
alleged that the contract on which the purported debt was based had been fabricated and the
defendant lawyer should have known plaintiff’s signature on the contract was forged. Id. The
Missouri Supreme Court concluded that the lawyer defendant’s “efforts to collect payment were
an attempt to complete the sale transaction and, therefore, were ‘in connection with’ the sale.”
Id. at 265.
In so holding, the Jackson court specifically disagreed with Wivell that a lender-borrower
relationship is required. The Jackson court stated, “First, while both Conway and Watson
involved a lender-borrower relationship, nothing in this Court’s analysis suggests such a
relationship is required to find a third-party debt collector’s actions were ‘in connection with’ a
sale.” Id. at 272. The Jackson court distinguished Wivell based on the “narrow, contingent role”
of the successor trustee involved in that case.
Defendant Martin Leigh’s alleged actions here were not so narrow. Plaintiff alleges in
this case that Defendant Martin Leigh took actions to collect the debt. Defendant Martin Leigh
sent Plaintiff a letter stating, “MARTIN LEIGH IS ATTEMPTING TO COLLECT A DEBT[.]”
(Doc. #1-1, p. 23). Plaintiff alleges Defendant Martin Leigh, in conjunction with the other
Defendants, altered the second note by attaching the third allonge and thereafter, Defendant
Martin Leigh used the altered loan documents to support its efforts to collect the debt. Plaintiff
alleges Defendant Martin Leigh made two, specific attempts to collect the debt.
Several principles emerge from the Missouri Supreme Court’s decisions in Conway,
Watson, and Jackson. In order for an alleged MMPA violator’s action to be found to have been
taken “in connection with” a sale, the alleged violator need not have been party to the original
transaction. A lender-borrower relationship is not required. The alleged wrongful conduct must
relate to the bundle of services agreed to at the inception of the sale. A party’s right to collect
payment is a part of the sale, and therefore, action taken in an attempt to collect payment is made
“in connection with” the sale.
Based on Conway, Watson, and Jackson this Court finds it is reasonable to conclude that
Missouri law might impose liability on Defendant Martin Leigh for the conduct alleged in the
first-amended complaint. As Defendant Martin Leigh has not been fraudulently joined in this
case, traditional diversity does not exist. This case must be remanded to Missouri state court.
As both the local-controversy exception and the home-state exception apply, either would
require this Court to decline to exercise CAFA jurisdiction over this case. The Missouri
Supreme Court’s decisions in Conway, Watson, and Jackson compel the conclusion that
Missouri law might impose liability on Defendant Martin Leigh for the conduct alleged in the
first-amended complaint. Whether the first-amended complaint survives a motion to dismiss is
for the state court to decide. As a result, Plaintiff’s Motion for Remand (Doc. #12) is
GRANTED, and this case is remanded to the Circuit Court of Jackson County. The motion to
dismiss (Doc. #5) will remain pending for the state court’s consideration. Plaintiff’s request for
costs, expenses, and attorneys’ fees incurred in connection with the removal proceedings is
IT IS SO ORDERED.
/s/ Stephen R. Bough
STEPHEN R. BOUGH
UNITED STATES DISTRICT JUDGE
Dated: October 10, 2019
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