Kelford et al v. Bank Of America, N.A.et al

Filing 21

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFFS MOTION TO REMAND 14 ;DENYING AS MOOT BANK OF AMERICAS MOTION TO STAY PRETRIAL DEADLINES AND DISCOVERY 10 ; AND DENYING BANK OF AMERICAS MOTION TO DISMISS WITHOUT PREJUDICE 8 . ORDERED that this case be DISMISSED and STRICKEN from the active docket of this Court. Pursuant to Federal Rule of Civil Procedure 58, the Clerk is DIRECTED to enter judgment on this matter. Signed by Senior Judge Frederick P. Stamp, Jr on 11/17/2011. (Copy counsel of record via CM/ECF, Circuit Court of Braxton County via US mail) (jmm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
JULIE KELFORD and
JOSEPH KELFORD,
Plaintiffs,
v.

Civil Action No. 1:11CV146
(STAMP)

BANK OF AMERICA, N.A. f/k/a
BAC HOME LOANS SERVICING, LP
and JOHN DOE HOLDER,
Defendants.
MEMORANDUM OPINION AND ORDER
GRANTING PLAINTIFFS’ MOTION TO REMAND;
DENYING AS MOOT BANK OF AMERICA’S MOTION TO
STAY PRETRIAL DEADLINES AND DISCOVERY; AND
DENYING BANK OF AMERICA’S MOTION TO
DISMISS WITHOUT PREJUDICE
I.

Background

On July 25, 2011, the plaintiffs commenced this civil action
by filing a complaint in the Circuit Court of Braxton County, West
Virginia against Bank of America, N.A. (“BOA”), the servicer of
their home mortgage loan.1

On August 15, 2011, the plaintiffs

filed an amended complaint in the Circuit Court of Braxton County.
The amended complaint sets forth seven claims against BOA arising
from its conduct in servicing the plaintiffs’ home mortgage loan:
(1) breach of contract; (2) fraud; (3) misrepresentations in debt
collection; (4) negligence; (5) estoppel; (6) failure to provide a

1

In their response to the motion to remand, BOA states that as
of July 1, 2011, BAC Home Loans Servicing, L.P. merged with and
into Bank of America, N.A. Def.’s Resp. to Mot. to Remand n.1.

statement of account; and (6) illegal debt collection. The amended
complaint also provides that the plaintiffs waive recovery of any
amount in excess of $74,999.99.

Am. Compl. ¶ 4.

A stipulation,

filed together with the amended complaint, states that the value of
all

of

the

plaintiffs’

alleged

damages

$75,000.00, inclusive of attorney’s fees.

is

no

greater

than

The stipulation further

provides that the plaintiffs are not entitled to recover any award
in excess of $75,000.00.

BOA removed the case to this Court on

September 19, 2011 pursuant to 28 U.S.C. § 1332.
Following removal, the plaintiffs filed a motion to remand
pursuant to 28 U.S.C. § 1446.

In support of this motion, the

plaintiffs argue that they executed a valid stipulation defeating
federal court jurisdiction by limiting the amount of recovery to
less than the amount in controversy required for subject matter
jurisdiction.

In its response, filed on October 27, 2011, BOA

argues that it has established that the amount in controversy
exceeds $75,000.00.

Specifically, BOA contends that because the

plaintiffs

injunction

seek

an

prohibiting

the

sale

of

their

property secured by the deed of trust, a judgment declaring that
the plaintiffs are entitled to the injunctive relief sought would
have a pecuniary result exceeding $75,000.00 because the defendant
would be left with no means of liquidating the debt and recovering
the outstanding balance of the loan.

2

According to BOA, the

plaintiffs’ stipulation limiting the amount of their potential
monetary recovery is not controlling.
On November 2, 2011, the plaintiffs filed a reply reiterating
that the stipulation, which includes equitable and injunctive
relief, is binding and arguing that BOA has not met its burden of
establishing that the value of the injunctive relief sought by the
plaintiffs exceeds $75,000.00.

For the reasons set forth below,

this Court grants the plaintiffs’ motion to remand.
II.

Facts2

In November 2007, Julie and Joseph Kelford obtained a mortgage
loan for $156,600.00 from Countrywide Bank, FSB in order to obtain
funds to conduct repairs on their home.

In February 2009, Mrs.

Kelford was seriously injured and unable to work.

A few months

later, Mrs. Kelford contacted the defendant to request a loan
modification. The defendant informed the plaintiffs that they prequalified for a reduced payment and instructed them to pay a sum
nearly half of their regular monthly payment for a period of six
months

while

the

defendant

worked

out

a

permanent

loan

modification.
After making timely reduced payments for six months, the
plaintiffs contacted the defendant repeatedly for a period of
thirteen months requesting information regarding the status of

2

For the purpose of deciding this motion to remand, this Court
considers, for the most part, the facts as set forth by the
plaintiffs in their amended complaint.
3

their loan modification.

The defendant repeatedly assured the

plaintiffs that their loan modification was being processed and
that their application was in order. Despite these assurances, the
defendant put the plaintiffs’ home in foreclosure.
III.

Applicable Law

A defendant may remove a case from state court to federal
court in instances where the federal court is able to exercise
original jurisdiction over the matter.

28 U.S.C. § 1441.

A

federal district court has original jurisdiction over cases between
citizens of different states where the amount in controversy
exceeds $75,000.00, exclusive of interests and costs.
§

1332(a).

establishing

The

party

federal

seeking

removal

jurisdiction.

See

bears

the

Mulcahey

28 U.S.C.
burden

v.

of

Columbia

Organic Chems. Co., Inc., 29 F.3d 148, 151 (4th Cir. 1994).
Removal

jurisdiction

is

strictly

construed,

and

if

jurisdiction is doubtful, the federal court must remand.
IV.

federal
Id.

Discussion

The defendant’s argument that this Court has subject matter
jurisdiction over this action hinges upon the plaintiffs’ request
for “appropriate equitable relief enjoining the foreclosure sale of
the home” that appears in Count IV of the original complaint.
Compl. ¶ 61.

The state court documents attached as Exhibit A to

the notice of removal include both the original complaint and the
amended complaint.

However, there are pages missing from the

4

amended complaint, including the page that contains Count IV.3
Because the plaintiffs state that the amended complaint sets forth
the same seven claims that appear in the original complaint, this
Court assumes that Counts IV and V are contained on the missing
pages to the amended complaint.

Pls.’ Mot. to Remand at 3.

Therefore, for the purposes of deciding this motion, this Court
assumes that the request for equitable relief that appears in the
original complaint also appears in the amended complaint and was
inadvertently omitted during the filing of the notice of removal or
was never received from the Circuit Court of Braxton County.
The plaintiffs allege that the original amount of the note
which

is

secured

$156,600.00.

by

a

deed

Am. Compl. ¶ 7.

of

trust

on

their

property

is

The plaintiffs seek an injunction

prohibiting the sale of the property secured by the deed of trust,
and if they are successful in this litigation, the defendant could
be left with an unsecured debt.

Thus, BOA asserts that the

injunctive relief requested in the plaintiffs’ amended complaint
should be factored into the amount in controversy.

Because the

outstanding balance on the note allegedly exceeds $75,000.00 and
the

plaintiffs

seek

to

enjoin

BOA’s

right

to

repossess

the

collateral securing the note, BOA argues that a judgment enjoining
it from foreclosing on the property would exceed the $75,000.00

3

The amended complaint attached to the notice of removal is
missing page five and page eleven.
5

threshold.

BOA further argues that the plaintiffs’ representation

that they will not seek damages in excess of $75,000.00 has no
meaningful impact on this inquiry.
The plaintiffs argue that because they do not seek avoidance
of

the

debt

or

an

injunction

preventing

the

defendant

from

collecting on the note, the defendant has failed to carry its
burden

of

Further,

establishing
the

the

plaintiffs

requisite

contend

that

amount
the

in

controversy.

defendant

has

not

established that the stipulation limiting “any award” and the
waiver in the complaint of “recovery of any amount in excess of
$74,999.99” fail to account for the value of any injunctive relief
the Court may award.
The burden of establishing that the amount in controversy
exceeds $75,000.00, exclusive of interests and costs, rests with
the party seeking removal.

Mulcahey, 29 F.3d at 151.

This Court

has consistently applied the “preponderance of evidence” standard
to determine whether a defendant has met its burden of proving the
amount in controversy.

When no specific amount of damages is set

forth in the complaint, the defendant bears the burden of proving
that the claim meets the requisite jurisdictional amount.

Mullins

v. Harry’s Mobile Homes, Inc., 861 F. Supp. 22, 23 (S.D. W. Va.
1994).

In such circumstances, the Court may consider the entire

record before it and may conduct its own independent inquiry to

6

determine

whether

the

jurisdictional minimum.

amount

in

controversy

satisfies

the

Id.

This Court is not required to grant remand simply because the
plaintiffs limit themselves to a demand for recovery below the
jurisdictional minimum.

McCoy v. Erie Ins. Co., 147 F. Supp. 2d

481, 485 (S.D. W. Va. 2001). Rather, “the amount in controversy is
determined by considering the judgment that would be entered if the
plaintiff prevailed on the merits of his case as it stands at the
time of removal.”

Id. at 489; see also JTH Tax, Inc. v. Frashier,

624 F.3d 635, 638 (4th Cir. 2010) (stating that jurisdiction turns
on the good faith allegation in the complaint of an adequate
jurisdictional

amount).

“In

actions

seeking

declaratory

or

injunctive relief, it is well established that the amount in
controversy

is

measured

by

the

value

of

the

object

of

the

litigation.” Hunt v. Washington State Apple Adver. Com’n, 432 U.S.
333, 347 (1977). In evaluating the value of injunctive relief, the
United States Court of Appeals for the Fourth Circuit has adopted
the either-viewpoint rule, meaning that the value is properly
judged from the viewpoint of either party.

McCoy, 147 F. Supp. 2d

at 492; JTH Tax, Inc., 624 F.3d at 639 (“We ascertain the value of
an injunction for amount in controversy purposes by reference to
the large of two figures: the injunction’s worth to the plaintiff
or its cost to the defendant.”).

7

In this case, BOA argues that the cost of the injunction would
be $156,600.00 -- the original principal balance of the loan.

BOA

asserts

the

that

based

on

the

payment

history

described

in

plaintiffs’ amended complaint, the plaintiffs have not demonstrated
that the amount of the current outstanding balance is less than
$75,000.00.

Def.’s Resp. to Mot. to Remand n.2.

Contrary to the

defendant’s assertion, the burden is on BOA to establish that the
amount in controversy exceeds $75,000.00.

While it is quite

possible that the current balance of the plaintiffs’ loan is
greater than $75,000.00, it is also possible that the plaintiffs
have made additional payments in order to reduce their debt.

BOA

has provided no records showing the actual amount due on the loan
at the time of removal and has failed to show that the value of an
injunction preventing foreclosure would equal the value of the
amount remaining on the loan at the time of removal. See Caulfield
v. EMC Mortgage Corp., No. 2:11-cv-00244, 2011 WL 2947039, at *8
(S.D. W. Va. July 19, 2011) (holding that the defendant failed to
meet its burden of proving that the value of either party of the
injunction sought by the plaintiffs is sufficient to satisfy the
amount in controversy requirement).
Like the defendant in Caulfield, BOA has provided no record,
statement, or other tangible evidence of the amount due on the loan
at the time of removal.

Instead, BOA asks this Court to speculate

as to the current outstanding balance of the loan based upon the

8

few

facts

plaintiffs’

set

forth

monthly

in

the

amended

payments.

complaint

Removal

regarding

cannot

be

the

based

on

speculation; rather, it must be based on facts as they exist at the
time of removal.

See Varela v. Wal-Mart Stores, East, Inc., 86 F.

Supp. 2d 1109, 1112 (D.N.M. 2000).

Therefore, this Court finds

that BOA has not met its burden of proof with regard to the amount
in controversy, the plaintiffs’ stipulation adequately limits their
recovery, and the plaintiffs’ motion to remand must be granted.
V.

Conclusion

For the reasons stated above, the plaintiffs’ motion to remand
(ECF No. 14) is GRANTED. Accordingly, it is ORDERED that this case
be REMANDED to the Circuit Court of Braxton County, West Virginia.
Further, BOA’s motion to stay pretrial deadlines and discovery (ECF
No. 10) is DENIED AS MOOT and BOA’s motion to dismiss (ECF No. 8)
is DENIED WITHOUT PREJUDICE.

It is further ORDERED that this case

be DISMISSED and STRICKEN from the active docket of this Court.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein and to the Clerk of
the Circuit Court of Braxton County, West Virginia.

Pursuant to

Federal Rule of Civil Procedure 58, the Clerk is DIRECTED to enter
judgment on this matter.

9

DATED:

November 17, 2011

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

10