Lagrant v. U.S. Bank National Association et al
Filing
6
MEMORANDUM OPINION, Defendant U.S. Bank's Motion to Dismiss. Signed by District Judge Henry E. Hudson on 3/16/2015. (sbea, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division
RONALD L. LAGRANT,
Plaintiff,
U.S. BANK NATIONAL ASSOCIATION
as Trustee for BNC Mortgage Loan Trust
2007-1, Mortgage Pass Through
Civil Action No. 3:14-cv-809-HEH
Certificate Series 2007-1,
NECTAR PROJECTS, INC., and
JOHN AND JANE DOES 1-10,
Defendants.
MEMORANDUM OPINION
(Defendant U.S. Bank's Motion to Dismiss)
Ronald L. LaGrant, a plaintiff proceedingpro se, filed suit seeking various forms
of relief in connection with the alleged wrongful foreclosure of his home in 2012. The
matter is before the Court on a Motion to Dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6), filed by Defendant U.S. Bank National Association, as Trustee for
BNC Mortgage Loan Trust 2007-1, Mortgage Pass Through Certificates, Series 2007-1
("U.S. Bank")- For the reasons stated herein, the Motion to Dismiss will be granted in
part. Plaintiffs state law claims will be remanded to the Circuit Court of Chesterfield
County, Virginia, as this Court lacks original jurisdiction over such claims and the Court
declines to exercise supplemental jurisdiction over those claims.
I.
BACKGROUND
As required by Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court
assumes Plaintiffs well-pleaded allegations to be true, and views all facts in the light
most favorable to him. T.G. Slater & Son v. Donald P. & Patricia A. Brennan, LLC, 385
F.3d 836, 841 (4th Cir. 2004) (citing Mylan Labs, Inc. v. Matkari, 7 F.3d 1130, 1134 (4th
Cir. 1993)). Viewed through this lens, the facts are as follows.
On approximately, December 14,2006, Ronald L. LaGrant ("LaGrant")
refinanced his home with Americor Lending ("Americor" or the "Lender"), secured by a
promissory note (the "Note") and Deed of Trust. (Compl. ffl| 4, 7.) LaGrantdescribes his
loan as subprime and complains of various predatory elements, including a three-year
prepayment penalty, shifting interest rates and monthly payments, and a negative
amortization feature. (Id. at ffl| 4, 6.) LaGrant claims that Americor disregarded his
ability to repay the loan, and induced him into making the loan through fraud, deceit, and
misrepresentation. (Id. at ffl[6, 16.) He also claims that Americor overlooked federal
guidelines regarding subprime lending, as well as federal and Virginia state statutes
regarding disclosures to the borrower. (Id. at ffi| 6, 8.) In particular, LaGrant alleges that
he never received the "Right to Cancel" disclosure required by the Truth in Lending Act
("TILA"), nor did he ever receive a copy of the Note or "closing package." (Id.)
Although it appears LaGrant's loan was conveyed multiple times, as applicable
here, his Note and Deed of Trust were subsequently transferred and assigned to BNC
Mortgage Loan Trust 2007-1, Mortgage Pass Through Certificates, Series 2007-1 for
which U.S. Bank serves as Trustee. (Id. at ffl| 10-13, 16.) Ocwen Loan Servicing, LLC
("Ocwen") became the servicer of LaGrant's loan. (Id.) Ocwen also served as attorneyin-fact for U.S. Bank and appointed Nectar Projects, LLC ("Nectar") as substitute trustee
on July 12, 2012. (Id. at tl 23, 28, Ex. 6.)' LaGrant, however, claims that Nectar's
appointment was a nullity, as the Lender failed to provide him with proper notice, and
because the signature on the Substitution of Trustee document "appears fake." (Id. at ffil
23-24, 28.) Thereafter, Nectar foreclosed on LaGrant's home, and U.S. Bankpurchased
the property at a foreclosure sale. (Id. at U29.) LaGrant claims that U.S. Bank
wrongfully obtained its deed to his home by fraudulently appointing Nectar as the
substitute trustee to conduct the foreclosure. (Id. at 1fll 29, 31.)
On approximately November 7, 20142, LaGrant filed his Complaint in the Circuit
Court of Chesterfield County, Virginia, seeking various forms of relief from a number of
parties—some named in the suit and some not. The named Defendants include U.S.
Bank, Nectar, and "John and Jane Does 1-10." To the extent that LaGrant seeks relief
from any party other than those named in the Complaint, the Court has no authority to
grant reliefagainst parties not before this Court. This Court has carefully reviewed
Plaintiffs requests for relief against the named defendants, and construes his Complaint
as asserting the following claims: (1) a permanent injunction preventing U.S. Bank from
taking possession of the property; (2) common law breach of contract, based on U.S.
Bank's alleged breach of the Deed of Trust; (3) equitable relief to set aside the
1Although Plaintiff alleges in Paragraph 23 of his Complaint that the lender failed to appoint Nectar as the substitute
trustee, he filed in state court what he marked Exhibit 6, which is an executed Substitution of Trustee recorded in the
ChesterfieldCounty, Virginia land records on July 27,2012.
2It appears LaGrant filed his Complaint at the same time he filed a Motion for Temporary Injunction, seeking to
maintain possession of his home. The state court declined to issue the injunction.
foreclosure sale based on alleged fraud; (4) common law fraud; (5) rescission and money
damages under TILA, 15 U.S.C. §§ 1601, et seq. based on inadequate disclosures; (6)
money damages under Section 2605 of the Real Estate Settlement Procedures Act
("RESPA"), 12 U.S.C. §§ 2601, et seq., for failing to respond to Plaintiffs qualified
written request; (7) common law intentional misrepresentation; (8) common law
negligent misrepresentation; and (9) common law negligence.
U.S. Bank removed LaGrant's case to this Court on December 1, 2014 (ECF No.
1), and filed a Motion to Dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure with the appropriate Roseboro Notice to the plaintiff on December 8, 2014
(ECF Nos. 3, 3-1). See E.D. Va. Loc. Civ. R. 7(K); see also Roseboro v. Garrison, 528
F.2d 309 (4th Cir. 1975). U.S. Bank filed an Addendum to the Motion to Dismiss on
January 21, 2015, to provide the Court with copies of the exhibits to Plaintiffs Complaint
to which U.S. Bank made reference in its motion. (ECF No. 5.) As of the date of this
Memorandum Opinion, LaGrant has failed to file a response, has not requested additional
time in which to do so, and has not otherwise indicated any interest in opposing U.S.
Bank's Motion to Dismiss. This Court, nevertheless, is obligated to ensure that dismissal
is proper even when a motion to dismiss is unopposed. See Stevenson v. City ofSeat
Pleasant, Md, 743 F.3d 411, 416 n.3 (4th Cir. 2014).
This Court is also obligated to consider whether it has subject matter jurisdiction
before turning to the merits of a case. Because removal raises significant federalism
concerns, this Court must strictly construe removal jurisdiction. Mulcahey v. Columbia
Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994). If federal jurisdiction is doubtful,
remand to state court is appropriate. Md. Stadium Auth. v. Ellerbe Becket Inc., 407 F.3d
255, 260 (4th Cir. 2005).
II.
SUBJECT MATTER JURISDICTION
U.S. Bank removed this matter, alleging the existence of federal question
jurisdiction under28 U.S.C. § 1331, based on Plaintiffs claims under TILA and RESPA.
Consequently, U.S. Bank asserts that this Court may exercise supplemental jurisdiction
over LaGrant's state law claims under 28 U.S.C. § 1367 because those claims arose from
issues common to the TILA and RESPA claims.
Alternatively, as to the remaining claims, U.S. Bank asserts the existence of
jurisdiction under 28 U.S.C. § 1332(a) based on diversity of citizenship, as the amount in
controversy exceeds the $75,000 threshold. It also maintains that Plaintiff is a citizenof
Virginia, U.S. Bank is a citizen of Ohio, and although Nectar is a citizen of Virginia, its
citizenship should be disregarded because Nectar is merely a nominal defendant and/or
has been fraudulently joined. (Id. at ffl[ 9-11.) Based on its assertion that Nectar is
improperly joined, U.S. Bank argues that Nectar's consent to removal is unnecessary.
(Id. at H 16.)
A.
Federal Question Jurisdiction
Pursuant to 28 U.S.C. 1331, "[t]he district courts shall have original jurisdiction of
all civil actions arising under the Constitution, laws, or treaties of the United States." The
Supreme Court has recognized federal question jurisdiction under Section 1331 in a
variety of cases, including, as is the case here, when "federal law creates the cause of
action." Verizon Md., Inc. v. Global Naps, 371 F.3d 355, 362 (4th Cir. 2004) (quoting
MerrellDow Pharm. Inc. v. Thompson, 478 U.S. 804, 808 (1986)).
RESPA provides that any action brought pursuant to the provisions of Section
2605 of RESPA may be brought in the United States district court for the district in
which the property itself is located. 12 U.S.C. § 2614. LaGrant's property is located in
Chesterfield County, Virginia, which is within the jurisdiction of this Court. (Compl. 2.)
As such, LaGrant's RESPA claim could have originated in this Court. Likewise,
LaGrant's TILA claim could have also been initiated in this Court, as 15 U.S.C. §
1640(e) provides that any claim brought pursuant to TILA may be filed in any United
States district court.
Accordingly, U.S. Bank correctly asserts that this Court has federal question
jurisdiction over LaGrant's claims under TILA and RESPA. Moreover, Nectar's consent
to removal of the federal claims is not required, as "[o]nly defendants against whom a
[federal] claim ... has been asserted are required to join in or consent to removal." 28
U.S.C. § 1441(c)(2). LaGrant's TILA and RESPA claims seek recovery from only U.S.
Bank.3 The Complaint makes no substantive TILA or RESPA allegations against Nectar.
B.
Diversity Jurisdiction
This Court also properly has "original jurisdiction of all civil actions where the
amount in controversy exceeds the sum or value of $75,000, exclusive of interest and
costs, and is between (1) citizens of different States ...." 28 U.S.C. § 1332(a)(1).
Diversity must be complete "such that the state of citizenship of each plaintiff must be
3LaGrant's Complaint prays for recovery from Ocwen under TILA and RESPA. As previously noted, however, this
Court cannotgrant Plaintiffrelief against parties not before the Court, and Ocwen is not a party-defendant.
different from that of each defendant" at the time an action commences. Athena
Automotive, Inc. v. DiGregorio, 166 F.3d 288, 290 (4th Cir. 1999). The Court is satisfied
that the value of the property at issue exceeds $75,000. In any event, Plaintiffs requested
monetary relief exceeds the threshold. As noted above, Plaintiff is a citizen of Virginia,
U.S. Bank is a citizen of Ohio, and Nectar is citizen of Virginia. Thus, complete
diversity does not exist because LaGrant and Nectar are both citizens of Virginia.
Nevertheless, U.S. Bank argues that Nectar's consent to removal is unnecessary and its
citizenship should be disregarded because Nectar, as the substitute trustee, is merely a
nominal defendant or has been fraudulently joined.
1.
Fraudulent Joinder
"The fraudulent joinder doctrine provides an exception to the complete diversity
requirement." E.D. ex rel. Darcy v. Pfizer, Inc., 722 F.3d 574, 578 (4th Cir. 2013). The
term "fraudulent joinder" is, in many ways, a misnomer. It is more accurately
characterized as "a term of art, [which] does not reflect on the integrity of plaintiff or
counsel, but is merely the rubric applied when a court finds either that no cause of action
is stated against the non-diverse defendant, or in fact no cause of action exists." AIDS
Counseling & Testing Centers v. Group WTelevision, Inc., 903 F.2d 1000, 1003 (4th Cir.
1990). "The removing party must establish that there is no possibility the plaintiff could
establish a cause of action against the in-state defendant in state court, or that there has
been outright fraud in the plaintiffs pleading ofjurisdictional facts. A claim need not
succeed to defeat removal; only a possibility of a right need be asserted." Sherman v.
Litton Loan Servicing, L.P., 796 F. Supp. 2d 753, 759 (E.D. Va. July 1, 2011) (citations
omitted).
U.S. Bank relies on Nectar's status as the substitute trustee to conclude that
Plaintiff could not establish a cause of action against Nectar. Although this Court finds
that even if Plaintiff named Nectar as a defendant, he could not maintain a cause of action
under either TILA or RESPA, U.S. Bank has not met its burden with respect to the state
law claims. The status of the substitute trustee with respect to fraudulent joinder "hinges
on the nature of the actions allegedly taken by the trustee, if any, and the type of relief
sought against the trustee, if any." Id. at 760. In Payne v. Bank ofAmerica, the Court
held that a substitute trustee was properly joined because the plaintiff made extensive
factual and legal allegations against the trustee and sought specific relief from the
trustee—namely, setting aside a previously conducted foreclosure sale. 2010 U.S. Dist.
LEXIS 12076 (W.D. Va. Feb. 11, 2010). Setting aside the foreclosure sale of his home is
precisely the sort of relief LaGrant requests from Nectar, and therefore, this Court cannot
find that Nectar has been fraudulently joined.
2.
Nominal Parties
A related, but not identical, exception to the complete diversity requirement is that
of a nominal party. Under this doctrine, a court may disregard nominal parties and find
that diversity jurisdiction exists based only upon the citizenship of real parties to the
controversy. See Navarro Sav. Ass 'n v. Lee, 446 U.S. 458, 461 (1980). "Determining
nominal party status is a practical inquiry, focused on the particular facts and
circumstances of a case." HartfordFire Ins. Co. v. Harleyswill Mut. Ins. Co., 736 F.3d
255, 260 (4th Cir. 2013) (citing Shaugnessy v. Pedreiro, 349 U.S. 48, 54 (1955) (noting
that party status is determined by "practical considerations")). Construing the pro se
Complaint liberally, as this Court must, LaGrant alleges at the very least a fraud claim
against Nectar, and also requests that the Court set aside Nectar's foreclosure of his
home. Those substantive allegations preclude this Court from finding that Nectar is
merely a nominal party, as U.S. Bank has failed to show that under no circumstances
could LaGrant succeed on a state claim against Nectar.
The burden is on the party claiming fraudulent or improper joinder to show that a
claim could not be established against the non-diverse defendant even after resolving all
issues of law and fact in the plaintiffs favor. Mayes v. Rapoport, 198 F.3d 457,464 (4th
Cir. 1999) (citing Marshall v. Manville Sales Corp., 6 F.3d 229, 232-33 (4th Cir. 1993)).
U.S. Bank has not met its burden of proving that there is no possibility that LaGrant
would be able to establish a cause of action under state law against Nectar, precluding
diversityjurisdiction over LaGrant's supplemental, non-federal claims.
C.
Supplemental Jurisdiction
Title 28 U.S.C. § 1367 provides that "in any civil action of which the district
courts have original jurisdiction, the district courts shall have supplemental jurisdiction
over all other claims that are so related ... that they form part of the same case or
controversy ...." 28 U.S.C. § 1367(a). "Supplemental jurisdiction thus allows parties to
append state law claims over which federal courts would otherwise lack jurisdiction, so
long as they form part of the same case or controversy as the federal claims." Shanaghan
v. Cahill, 58 F.3d 106, 109 (4th Cir. 1995). U.S. Bank asserts that this Court has
supplementaljurisdiction over "Plaintiffs state law claims [because they] arise from
issues common to the TILA and RESPA claims—namely, the origination of the loan, the
enforceability of the loan instruments and the foreclosure sale of Plaintiffs property."
(Notice of Removal ^ 7.) The exercise of supplemental jurisdiction is, nevertheless,
discretionary; and a federal court is free to decline its exercise of supplemental
jurisdiction when, inter alia, "the federal basis for an action drops away." Shanaghan, 58
F.3d at 109; see also 28 U.S.C. § 1367(c) (enumerating grounds to decline exercise of
supplemental jurisdiction).
III.
FED. R. CIV. P. 12(b)(6) STANDARD OF REVIEW
A motion to dismiss pursuant to Rule 12(b)(6) challenges the legal sufficiency of a
complaint, and "does not resolve contests surrounding the facts, the merits of a claim, or
the applicability of defenses." Republican Party ofN.C. v. Martin, 980 F.2d 943, 952
(4th Cir. 1992) (citation omitted). As noted above, a court ruling on a Rule 12(b)(6)
motion must take as true all of the plaintiffs well-pleaded allegations and should view
the complaint in the light most favorable to the plaintiff. Mylan Labs., Inc. v. Matkari, 1
F.3d 1130, 1134 (4th Cir. 1993). A plaintiffs complaint must contain '"a short and plain
statement of the claim showing that the pleader is entitled to relief in order to 'give the
defendant fair notice of what the ... claim is and the grounds upon which it rests.'" Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41,
47(1957)). The pleadings need not be supported by "detailed factual allegations," but
they must "contain sufficient factual matter, accepted as true, to 'state a claim for relief
that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). The pleading
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standard of Fed. R. Civ. P. 8 "demands more than an unadorned, the-defendant-
unlawfully-harmed-me-accusation," id. at 678, and "while a plaintiff is not required to
plead facts that constitute a prima facie case in order to survive a motion to dismiss,
'[f]actual allegations must be enough to raise a right to relief above the speculative
level.'" Coleman v. Md. Court ofAppeals, 626 F.3d 187, 190 (4th Cir. 2010) (quoting
Twombly, 550 U.S. at 555 (internal citation omitted)).
When a plaintiff ispro se, as in the immediate case, a court must construe the
pleadings liberally. Erickson v. Pardus, 551 U.S. 89, 94 (2007). To that end, "a pro se
complaint, however inartfully pleaded, must be held to less stringent standards than
formal pleadings drafted by lawyers." Id. (citation and internal quotation marks omitted).
And "[p]leadings must be construed to do justice." Fed. R. Civ. P. 8(d). Nonetheless, the
court may not construct legal arguments that the plaintiffhas not presented to the court.
Williams v. Ozmint, 716 F.3d 801, 810-11 (4th Cir. 2013) (quoting Beaudett v. City of
Hampton, 115 F.2d 1274, 1278 (4th Cir. 1985)). At the same time, courts recognize that
a plaintiff"can plead himselfout of court by pleading facts that show that he has no legal
claim." Atkins v. City ofChicago, 631 F.3d 823, 832 (7th Cir. 2011) (Posner, J.) (citing
Hecker v. Deere & Co., 556 F.3d 575, 588 (7th Cir. 2009); Tamayo v. Blagojevich, 526
F.3d 1074, 1086 (7th Cir. 2008); EEOC v. Concentra Health Servs., Inc., 496 F.3d 773,
777 (7th Cir. 2007); Orthmann v. Apple River Campground, 757 F.2d 909, 915 (7th Cir.
1985); and Trudeau v. FTC, 456 F.3d 178, 193 (D.C. Cir. 2006)). The Court is not
required to accept apro se plaintiffs legal conclusions that are presented as factual
allegations, Twombly, 550 U.S. at 555, or "unwarranted inferences, unreasonable
11
conclusions, or arguments." E. Shore Mkts., Inc. v. T.D. Assocs. Ltd. P'ship, 213 F.3d
175, 180 (4th Cir. 2000); see also Iqbal, 556 U.S. at 678.
Generally, the district court does not consider extrinsic materials when evaluating
a complaint under Rule 12(b)(6). The court may, however, consider "documents
incorporated into the complaint by reference," Tellabs, Inc. v. Makor Issues & Rights,
Ltd., 551 U.S. 308, 322 (2007), as well as documents attached to a motion to dismiss, so
long as they are integral to or explicitly relied upon in the complaint, and the authenticity
ofsuch documents is not disputed.4 Philips v. Pitt Cnty. Mem. Hosp., 572 F.3d 176, 180
(4th Cir. 2009); Phillips v. LCIInt'l, Inc. 190 F.3d 609, 618 (4th Cir. 1999).
IV.
A.
DISCUSSION
Truth in Lending Act Claims Barred by the Statute of Limitations
By passing the Truth in Lending Act ("TILA"), Congress intended "to assure a
meaningful disclosure of credit terms so that the consumer will be able to compare more
readily the various credit terms available to him and avoid the uninformed use of credit,
and to protect the consumer against inaccurate and unfair credit billing." 15 U.S.C. §
1601(a). "As such, TILA requires that a creditor make certain material disclosures at the
time the loan is made." Gilbert v. Residential FundingLLC, 678 F.3d 271, 276 (4th Cir.
2012); see also 15 U.S.C. § 1638(a). TILA also provides that the borrower may remedy a
4The Court notes that LaGrant's references to exhibit numbers in his Complaint do not correspond with the
documents attached. It is unclear whether his exhibits correspond to the Complaint or his request for a temporary
injunction filed in state court, which the Court received with the Notice of Removal. U.S. Bank provided an
Addendum to its Motion to Dismiss to clarify its references to Exhibits, purportedly referenced in LaGrant's
Complaint. The Court has made everyeffort to decipher Plaintiff's references to theexhibits to hisComplaint.
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creditor's failure to make required disclosures by seeking rescission of the loan, money
damages, or both. See 15 U.S.C. §§ 1635(f)-(g), 1640. Here, Plaintiffseeks both.5
1.
Rescission
Section 1635 of TILA provides the borrower with the right to rescind the loan if
the creditor does not comply with the disclosure requirements. Gilbert, 678 F.3d at 276;
see also 15 U.S.C. § 1635(f)- This right, however, does not last forever. "Even if a lender
never makes the required disclosures, the 'right of rescission shall expire three years after
the date of consummation of the transaction or upon the sale of the property, whichever
comes first.'" Jesinoski v. Countrywide Home Loans, Inc., 574 U.S.
, 135 S.Ct. 790,
791-92 (2015) (quoting 15 U.S.C. § 1635(f)) (emphasis in original). To exercise the right
to rescind, the borrower must notify the creditor in writing of his intent to rescind the
loan. Gilbert, 678 F.3d at 277; see also 12 C.F.R. § 1026.23(a)(2). "[S]o long as the
borrower notifies within three years after the transaction is consummated, his rescission
is timely. The statute does not also require him to sue within three years." Jesinoski, 574
U.S.
, 135 S.Ct. at 792.
Plaintiffs loan closed on December 14, 2006. Plaintiff neither filed suit, nor
alleged that he provided the required written notice of his intent to rescind the transaction
within three (3) years of closing. Because Plaintiffs Complaint does not allege he gave
the required written notice of his intent to rescind the loan to his creditor by December
14, 2009, his claim for rescission under TILA will be dismissed without prejudice.
5Plaintiffsloan was originated by Americor, and subsequently assigned with U.S. Bank serving astrustee.
Notwithstanding Americor's assignmentof the loan, U.S. Bank is a proper party, as, with a few exceptions, any
TILA claim existing against the original creditor may be brought against an assignee. See 15 U.S.C. 1640.
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2.
Monetary Damages
Where a court finds that a creditor has violated TILA disclosure requirements such
that rescission would be appropriate, money damages may be awarded in addition to
rescission of the transaction. See 15 U.S.C. §§ 1635(g), 1640. "Section 1640(e) provides
a one-year statute of limitations for the filing of a suit once a violation of [the] TILA has
occurred." Gilbert, 678 F.3d at 278, see also 15 U.S.C. § 1640. Plaintiff alleges that his
lender made none of the required disclosures at settlement. Thus, the alleged TILA
disclosure violations occurred on December 14, 2006, but Plaintiff did not file suit until
November 7, 2014. Plaintiffs claim for money damages under TILA is barred by the
statute of limitations, and his claim will be dismissed with prejudice.
To the extent Plaintiff claims that his creditor, or its assignee, did not comply with
disclosure requirements under Virginia statutory law, those claims will be remanded for
disposition by the state court.
B.
U.S. Bank is Not Loan Servicer under Real Estate Settlement Procedures Act
Plaintiff also seeks recovery under Section 2605(e) of the Real Estate Settlement
Procedures Act ("RESPA"), which establishes the duty of loan servicers to respond to
borrower inquiries. 12 U.S.C. § 2605(e). To survive Rule 12(b)(6) scrutiny, a plaintiff
must allege facts to support that: (1) the defendant is a loan servicer, (2) the plaintiff sent
the defendant a valid Qualified Written Request, as statutorily defined, (3) the defendant
failed to adequately respond within the statutory period, and (4) the plaintiff is entitled to
damages. See Tieffertv. Equifax Info. Servs., LLC, 2014 U.S. Dist. LEXIS 175546 (E.D.
14
Va. Dec. 19, 2014); Bowman v. Vantium Capital, Inc., 2014 U.S. Dist. LEXIS 3558, at
♦9-10
(W.D. Va. Jan. 13, 2014).
U.S. Bank argues, inter alia, that Plaintiffs RESPA claim should be dismissed
because U.S. Bank is not a loan servicer. The Court agrees. During the period at issue,
Plaintiff alleges that Ocwen Loan Servicing, LLC ("Ocwen") serviced Plaintiffs loan for
U.S. Bank. Ocwen is not named as a defendant in Plaintiffs Complaint. Nevertheless,
with respect to the RESPA claim, Plaintiff seeks a judgment against Ocwen for failing to
properly identify the owner of the loan. Plaintiffs RESPA claim fails, as Plaintiff failed
to name as a defendant the servicer of his loan. Plaintiff cannot maintain a RESPA claim
against U.S. Bank, and this claim will be dismissed.
C.
Supplemental Jurisdiction over State Claims Declined
At its core, this case evolves from the foreclosure and subsequent sale of a
Chesterfield County residence, which the homeowner, Plaintiff LaGrant, alleges was
wrongfully executed by the trustee and represents the culmination of a series of alleged
misrepresentations occurring throughout, and following, the refinancing of his mortgage.
The remaining claims hinge on application of the statutory and common law of Virginia.
The residual claims will require the interpretation of Virginia tort statutes and those
which define the rights and duties of parties with respect to a note secured by a deed of
trust—daily tasks in state courts.
Supplemental jurisdiction vests federal courts with "discretion to retain or dismiss
state law claims when the federal basis for an action drops away." Shanaghan, 58 F.3d at
109 (emphasis in original); see also 28 U.S.C. § 1367(a). "Recent case law has
15
emphasized that trial courts enjoy wide latitude in determining whether or not to retain
jurisdiction over state claims when all federal claims have been extinguished." Id. at 110
(citing Noble v. White, 996 F.2d 797, 799 (5th Cir. 1993)). After carefully reviewing all
the factors that inform the exercise of this discretionary determination under 28 U.S.C. §
1367(c)(3), this Court will decline to retain supplemental jurisdiction over this case.
Absent the TILA and RESPA claims, this Court lacks original jurisdiction over this case,
as there exists neither federal question nor diversityjurisdiction. Furthermore, none of
the remaining issues involve federal policy. Moreover, while it appears Nectar has been
served with the state court action, Nectar has not appeared before this Court postremoval. Were this Court to adjudicate the remainder of LaGrant's claims, it could not
afford LaGrant complete relief, if appropriate, as one of the named parties is not before
the Court. This Court will therefore remand the remainder of this action back to the
Circuit Court for Chesterfield County, Virginia, from which it was removed.
V.
CONCLUSION
In sum, the Court finds that LaGrant's claims for rescission and damages under
TILA are barred by the statute of limitations, and he likewise cannot recover under
Section 2605 of RESPA because U.S. Bank is not a loan servicer as defined in the statute.
Accordingly, the Motion to Dismiss will be granted with respect to LaGrant's claims
under TILA and RESPA.
Absent the federal claims, the Court lacks original jurisdiction over this matter, as
complete diversity does not exist among the parties, and this Court declines to exercise
16
supplemental jurisdiction. Consequently, the remainder of LaGrant's claims will be
remanded to the Circuit Court for Chesterfield County, Virginia.
An appropriate Order will accompany this Memorandum Opinion.
*y^
Is!
Henry E. Hudson
United States District Judge
Date: W\o»Jl /6, 2<>tS
Richmond, Virginia
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