Raspet et al v. Shellpoint Mortgage Servicing et al

Filing 17

MEMORANDUM OPINION AND ORDER DENYING PLAINTIFFS MOTION TO REMAND DKT. NO. 7 . Signed by Senior Judge Irene M. Keeley on 4/13/18. (jss)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
WILLIAM RASPET, JR.;
and DONNA RASPET,
Plaintiffs,
v.

//

CIVIL ACTION NO. 1:18CV19
(Judge Keeley)

SHELLPOINT MORTGAGE SERVICING,
a Division of New Penn Financial, LLC;
and THE BANK OF NEW YORK MELLON, f/k/a
The Bank of New York, as Trustee on
Behalf of the Holders of CWABS, Inc.,
Asset Backed Certificates, Series 2005-10,
Defendants.
MEMORANDUM OPINION AND ORDER DENYING
PLAINTIFFS’ MOTION TO REMAND [DKT. NO. 7]
On December 7, 2017, the plaintiffs, William and Donna Raspet
(collectively, “the Raspets”), filed a complaint in the Circuit
Court

of

Harrison

County,

West

Virginia,

against

defendants

Shellpoint Mortgage Servicing, A Division of New Penn Financial,
LLC (“Shellpoint”), and The Bank of New York Mellon, f/k/a The Bank
of New York, As Trustee, on Behalf of the Holders of CWABS, Inc.,
Asset Backed Certificates, Series 2005-10 (“BONY”) (Dkt. No. 1-1).
In reliance on diversity jurisdiction under 28 U.S.C. § 1332,
Shellpoint and BONY removed the case to this Court on January 26,
2018 (Dkt. No. 1). The Raspets moved to remand, contending that
Shellpoint

and

BONY

failed

to

establish

that

the

amount

in

controversy exceeds $75,000. For the reasons that follow, the Court
DENIES the Raspets’ motion (Dkt. No. 7).

RASPET V. SHELLPOINT, ET AL.

1:18CV19

MEMORANDUM OPINION AND ORDER DENYING
PLAINTIFFS’ MOTION TO REMAND [DKT. NO. 7]
I. BACKGROUND
According to the Raspets, “[t]his case involves mortgage loan
servicer abuse and seeks to rescind the needless foreclosure of
[their] home” (Dkt. No. 1-1 at 4). On June 24, 2005, the Raspets
entered into a $142,400 mortgage loan with Countrywide Home Loans,
Inc., which was secured by their home at 108 Jennifer Lane,
Bridgeport,

West

Virginia.

Id.

at

4-5.

Unfortunately,

they

“suffered a significant reduction of household income in 2011 when
. . . Donna Raspet became disabled.” By 2014, the Raspets had
fallen behind on their mortgage payments, but were able to obtain
a loan modification. Id. at 5. In 2016, however, “William Raspet,
Jr. was forced to take alternative employment at a significant
reduction of income.” Id. at 6.
On December 1, 2016, Shellpoint began servicing the Raspets’
mortgage loan, now held by BONY. Id. at 5-6. Shellpoint solicited
the Raspets to apply for a further loan modification that would
lower their payment and bring the loan current. Id. at 6. Although
the Raspets submitted a complete loan modification application on
January 12, 2017, Shellpoint erroneously advised that they had
failed to include necessary pay stubs and an IRS Form 4506-T.
Consequently, the Raspets again provided the necessary documents
and continued to allow their arrears to grow based on Shellpoint’s
2

RASPET V. SHELLPOINT, ET AL.

1:18CV19

MEMORANDUM OPINION AND ORDER DENYING
PLAINTIFFS’ MOTION TO REMAND [DKT. NO. 7]
“representations of assistance.” Id. On April 27, 2017, Shellpoint
notified the Raspets that their application had been denied, and
that it was closing their file for failure to provide the requested
documents. Thereafter, the defendants sold the Raspets’ home at a
foreclosure sale. Id.
In their complaint filed in state court, the Raspets contend
that

the

defendants

wrongfully

caused

them

“economic

loss,

annoyance and inconvenience, stress and worry, and fear of the loss
of

their

home,”

through

the

defendants’

negligent

acts

and

violations of the West Virginia Consumer Credit and Protection Act.
Id. at 7-8. The Raspets seek actual damages, civil penalties, and
appropriate

equitable

relief,

including

rescission

of

the

defendants’ foreclosure sale of their home. Id. at 1, 7-8.
On January 26, 2018, Shellpoint and BONY, both diverse from
the Raspets, removed the case to this Court (Dkt. No. 1). To
establish the amount in controversy, they attached to their notice
of removal proof that the value of the deed of trust was $142,400,
the Raspets’ property is assessed for $202,900, and the property
sold for $181,129.43 at the August 2017 foreclosure sale. The
defendants subsequently filed their answer on February 2, 2018
(Dkt. No. 3). On February 23, 2018, the Raspets filed the pending
motion to remand, in which they argue that the value of their home
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RASPET V. SHELLPOINT, ET AL.

1:18CV19

MEMORANDUM OPINION AND ORDER DENYING
PLAINTIFFS’ MOTION TO REMAND [DKT. NO. 7]
is not the appropriate measure of the amount in controversy (Dkt.
No. 7).
II. STANDARD OF REVIEW
Title 28 U.S.C. § 1441(a) provides that “any civil action
brought in a state court of which the district courts of the United
States have original jurisdiction, may be removed by the defendant
or the defendants.” See also King v. Marriott Int’l, Inc., 337 F.3d
421, 424 (4th Cir. 2003). Nonetheless, “federal courts, unlike
state courts, are courts of limited jurisdiction, created by
Congress

with

specified

jurisdictional

requirements

and

limitations,” Strawn v. AT&T Mobility LLC, 530 F.3d 293, 296 (4th
Cir. 2008), and federalism counsels that removal jurisdiction
should be strictly construed. Palisades Collections LLC v. Shorts,
552 F.3d 327, 334 (4th Cir. 2008) (citing Md. Stadium Auth. v.
Ellerbe Becket Inc., 407 F.3d 255, 260 (4th Cir. 2005)).
“The burden of establishing federal jurisdiction is placed
upon the party seeking the removal.” Mulcahey v. Columbia Organic
Chems., Inc., 29 F.3d 148, 151 (4th Cir. 1994). As this Court has
previously noted, “[a]ll doubts about the propriety of removal
should be resolved in favor of retaining state court jurisdiction,”
and

thus

remanding

a

case

to

state

4

court.

Vitatoe

v.

Mylan

RASPET V. SHELLPOINT, ET AL.

1:18CV19

MEMORANDUM OPINION AND ORDER DENYING
PLAINTIFFS’ MOTION TO REMAND [DKT. NO. 7]
Pharmaceuticals, Inc., 1:08cv85, 2008 WL 3540462, at *2 (N.D.W.Va.
Aug. 13, 2008) (citing Hartley v. CSX Transp., Inc., 187 F.3d 422,
425 (4th Cir. 1999)).
When a removing defendant relies on diversity jurisdiction,
and the plaintiff “does not allege a specific amount of damages,
the removing defendant must prove by a preponderance of the
evidence that the amount in controversy exceeds [$75,000].” Francis
v. Allstate Ins. Co., 709 F.3d 362, 367 (4th Cir. 2013) (alteration
in original) (quoting De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th
Cir. 1993)). “[T]he test for determining the amount in controversy
in a diversity proceeding is ‘the pecuniary result to either party
which [a] judgment would produce.’” Dixon v. Edwards, 290 F.3d 699,
710 (4th Cir. 2002) (quoting Gov’t Emps. Ins. Co. v. Lolly, 327
F.2d 568, 569 (4th Cir. 1964)). “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.” Francis, 709 F.3d at 367 (quoting Hunt v. Washington
State Apple Adver. Comm’n, 432 U.S. 333, 347 (1977)); see also Lang
v. Wells Fargo Home Mortgage, Inc., No. 3:13-CV-60, 2013 WL
12210772, at *3-*4 (N.D.W.Va. Sept. 23, 2013).

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RASPET V. SHELLPOINT, ET AL.

1:18CV19

MEMORANDUM OPINION AND ORDER DENYING
PLAINTIFFS’ MOTION TO REMAND [DKT. NO. 7]
III. DISCUSSION
The question presented is whether the Raspets have placed the
full value of their home at issue in this litigation by seeking “to
rescind the needless foreclosure of [their] home” (Dkt. No. 1-1 at
4). The Court concludes that the value of the Raspets’ home is the
appropriate measure of the amount in controversy, and that the
defendants have met their burden to establish by a preponderance of
the evidence that the value of the Raspets’ home exceeds $75,000.
A plaintiff seeking to rescind a foreclosure sale places the
value of the home at issue in the litigation. In Hudak v. Selene
Finance LP, the plaintiffs secured a $130,845 mortgage loan. Five
years later, they filed for bankruptcy, and were discharged from
their personal obligation on the loan. No. 1:15-CV-20, 2015 WL
1539740, at *1 (N.D.W.Va. Apr. 7, 2015) (Keeley, J.). Nonetheless,
the plaintiffs continued to make regular payments until about a
year later. When the plaintiffs fell behind, the servicer rejected
their request for a loan modification and scheduled a foreclosure
sale. The plaintiffs filed a lawsuit against the servicer in state
court, seeking specific performance of the servicer’s contractual
obligation to engage in an appropriate loss mitigation review prior

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RASPET V. SHELLPOINT, ET AL.

1:18CV19

MEMORANDUM OPINION AND ORDER DENYING
PLAINTIFFS’ MOTION TO REMAND [DKT. NO. 7]
to accelerating the loan and foreclosing on their home. Id. at *1-*2.
The loan servicer removed the case, asserting that the amount
in controversy was satisfied by either the $130,000 value of the
deed of trust or the $119,000 unpaid balance of the loan. Id. at
*2. The plaintiffs moved to remand, contending that the relief
actually sought from the loan servicer, loss mitigation review,
would cost it much less than $75,000. Id. at *3. The Court rejected
this argument, reasoning that it improperly discounted the value of
the litigation to the plaintiffs:
The Hudaks go to great lengths to demonstrate that loss
mitigation review would cost Selene very little, if
anything. Their focus on Selene, however, overlooks the
potential value of loss mitigation review from their
perspective. For the Hudaks, the value is not found in
the review process itself, but rather derives from the
potential that, as a consequence of the review process,
they will avoid foreclosure and the loss of their home.
As they have asserted in their complaint, “Plaintiffs
bring this suit to save their family home.”
Thus, from the Hudaks’ perspective, the pecuniary value
resulting from an award of specific performance would be
no less than the value of the home, for which they were
obligated to pay $130,845.
Id. at *4 (internal citation omitted).
Other courts in this District have reached a similar result.
In Schubert v. Federal National Mortgage Assocation, No. 5:12-CV166, 2013 WL 12137236 (N.D.W.Va. Mar. 25, 2013) (Bailey, J.), the
plaintiffs filed a lawsuit that sought, in part, $60,000 in
7

RASPET V. SHELLPOINT, ET AL.

1:18CV19

MEMORANDUM OPINION AND ORDER DENYING
PLAINTIFFS’ MOTION TO REMAND [DKT. NO. 7]
compensatory damages and “a declaratory judgment setting aside the
trustee’s sale of the real property valued at $39,500 and for which
Fannie Mae paid $30,453.03 at the trustee sale.” Id. at *1. When
the defendants removed the case, the plaintiffs argued that the
amount in controversy requirement was not satisfied. The court
acknowledged that, “[w]hen a plaintiff seeks declaratory relief,
the amount in controversy for purposes of section 1332 is the
‘value of the object of the litigation.’” Id. at *3 (internal
citation omitted). Further, “[i]n a wrongful foreclosure action,
the amount in controversy is the value of the property,” id. at *3
(citing Campos v. U.S. Bank Nat’l Ass’n, No. 4:12cv2236, 2012 WL
5828619, *5 (S.D. Tex. Nov. 13, 2012)):
In this case, the plaintiff purchased the property for
$32,000. The plaintiff borrowed $40,400 from defendant
Bank of America and secured the loan with a deed of trust
on the property at issue in this case. Defendant Fannie
Mae purchased the property for $30,453.03. The property
was appraised by the Marshall County Assessor’s Office at
$39,500. Without determining which number represents the
value of the property, this Court notes that even the
lowest figure ($32,000) establishes the amount in
controversy requirement when combined with the $60,000
compensatory damages sought by the plaintiff.
Id. at *4 (internal citation omitted). For these reasons, the court
denied the plaintiffs’ motion to remand. Id.1
1

Other district courts in the Fourth Circuit also have held
that, when a plaintiff seeks rescission of a foreclosure sale, the
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RASPET V. SHELLPOINT, ET AL.

1:18CV19

MEMORANDUM OPINION AND ORDER DENYING
PLAINTIFFS’ MOTION TO REMAND [DKT. NO. 7]
Here, the Raspets filed suit against Shellpoint and BONY after
the foreclosure sale of their property had already occurred, and
their complaint seeks “to rescind the needless foreclosure of the
Plaintiffs’ home” (Dkt. No. 1-1 at 4). As in Hudak, the pecuniary
value to the Raspets of setting aside the foreclosure “is no less
than

the

value

of

the

home,”

which

is

“the

object

of

the

litigation.” No. 1:15-CV-20, 2015 WL 1539740, at *4; Schubert, No.
5:12-CV-166, 2013 WL 12137236, at *3. The defendants have presented
evidence that the value of the deed of trust was $142,400.00, the
property is assessed for $202,900.00, and the property sold for
$181,129.43 at foreclosure (Dkt. No. 10 at 10). Regardless which
figure most accurately represents the value of the Raspets’ home,
any would satisfy the amount in controversy. Therefore, Shellpoint
and BONY have met their burden to establish by a preponderance of
the evidence that the amount in controversy exceeds $75,000.
The Raspets’ argument to the contrary is not convincing. They
contend that “[t]his Court has held that when a plaintiff seeks
equitable relief involving a mortgage, the full balance of the

amount in controversy is properly measured by the value of the
property. See, e.g., Wright v. U.S. Bank N.A., No. 3:14-CV-775,
2015 WL 12839124, at *2 (E.D. Va. Jan. 7, 2015) (Hudson, J.);
Harrell v. Caliber Home Loans, Inc., 995 F. Supp. 2d 548, 550-51
(E.D. Va. 2014) (Smith, C.J.).
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MEMORANDUM OPINION AND ORDER DENYING
PLAINTIFFS’ MOTION TO REMAND [DKT. NO. 7]
mortgage loan is not at issue” (Dkt. No. 8 at 6). The cases offered
in support are distinguishable and make clear that the Raspets’
argument is too broad.
For instance, in Bohigian v. Flagstar Bank, FSB, the plaintiff
alleged that her loan servicer “engaged in abusive loan servicing
by assessing unjustified property inspection fees and by impairing
her contractual right to reinstate her mortgage.” No. 1:11cv181,
2012 WL 112322, at *1 (N.D.W.Va. Jan. 12, 2012) (Keeley, J.). As
partial relief for her breach of contract claim against the loan
servicer, the plaintiff asked “[t]he Court to enjoin the Defendant
from taking possession or scheduling foreclosure of Plaintiff’s
home.” When it removed the case, the servicer argued that this
request for relief would cost it $101,938, the outstanding balance
of the loan. Id. at *2-*3. The Court rejected this argument,
reasoning that neither a temporary nor permanent injunction against
foreclosure would necessarily place the full balance of the loan at
issue because foreclosure was not “the defendant’s only avenue for
enforcing its loan.” Id. at *3. In any event, the servicer had not
provided

evidence

of

the

outstanding

balance,

and

the

Court

remanded the case to state court. Id.2
2

See also Kelford v. Bank of Am., N.A., No. 1:11CV146, 2011
WL 5593790, at *3-*4 (N.D.W.Va. Nov. 17, 2011) (reasoning that a
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MEMORANDUM OPINION AND ORDER DENYING
PLAINTIFFS’ MOTION TO REMAND [DKT. NO. 7]
Similarly, in Stottlemire v. Caliber Home Loans, Inc., the
plaintiffs filed suit against their mortgage servicer to stop the
scheduled foreclosure sale of their home and force the servicer to
engage in loss mitigation review (Civil No. 1:16cv118, Dkt. No. 1-3
at 1). As in Bohigan, the court in Stottlemire reasoned that the
amount in controversy was “not measured by the worth of the
Plaintiffs’ home. Rather, it [was] measured by the claims alleged
and the relief requested in the complaint.” Stottlemire v. Caliber
Home Loans, Inc., No. 1:16-CV-118, 2017 WL 282419, at *2 (N.D.W.Va.
Jan. 20, 2017) (Groh, C.J.). Analyzing the plaintiffs’ claims for
statutory penalties, attorney fees, actual damages, and punitive
damages, the court determined that the defendants had not met their
burden to establish the amount in controversy and granted the
plaintiffs’ motion to remand. Id. at *3.
Finally, in Addington v. Loandepot.com, LLC, the plaintiffs
filed suit prior to the scheduled foreclosure sale of their home,
alleging that defendants were liable for breach of contract and
numerous statutory violations. No. 2:17-CV-104, 2017 WL 4685428, at

request for injunctive relief to prevent a foreclosure sale did not
place the original principal balance of the loan at issue); Winnel
v. HSBC Mortg. Services, Inc., No. 2:11-cv-00561, 2011 WL 5118805,
at *3 (S.D.W.Va. Oct. 28, 2011) (reasoning that the amount in
controversy is met by the remaining balance of the loan only when
the plaintiff seeks to enjoin a sale that is the only recourse).
11

RASPET V. SHELLPOINT, ET AL.

1:18CV19

MEMORANDUM OPINION AND ORDER DENYING
PLAINTIFFS’ MOTION TO REMAND [DKT. NO. 7]
*1 (N.D.W.Va. Oct. 18, 2017) (Bailey, J.). The defendant argued
that, because the plaintiffs sought specific performance of the
loan agreement, they had effectively placed the balance of the
mortgage loan at issue. The court disagreed, reasoning that “the
object of litigation in a declaratory judgment action only includes
the object actually at issue, not the ‘ultimate strategic goal’ of
litigation.” Id. at *4 (emphasis in original). Although “[t]he
plaintiffs may . . . ultimately [have] wish[ed] to prevent their
home from being foreclosed upon, . . . the object actually at issue
in th[e] litigation” was whether the loan servicer had satisfied
its pre-foreclosure obligations under the parties’ contract. Id. at
*5 (emphasis in original). The court concluded that the defendants
had failed to meet their burden to establish that the amount in
controversy exceeded the jurisdictional requirement. Id.
The common thread among these cases is that they were filed
prior to any foreclosure sale and did not necessarily implicate the
value of the property at issue in the litigation. By contrast, the
Raspets have conceded that they “seek the rescission of the
foreclosure sale . . . to be provided loss mitigation” (Dkt. No. 11
at 1). Rescission of the defendants’ foreclosure sale is not merely
the “ultimate strategic goal” of this litigation, Addington, No.
2:17-CV-104, 2017 WL 4685428, at *4, but rather is a necessary
12

RASPET V. SHELLPOINT, ET AL.

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MEMORANDUM OPINION AND ORDER DENYING
PLAINTIFFS’ MOTION TO REMAND [DKT. NO. 7]
component

of

the

relief

in

controversy.

As

already

noted,

rescission of the foreclosure sale has a value to the Raspets in an
amount equal to the value of their home. Hudak, No. 1:15-CV-20,
2015

WL

1539740,

at

*4;

Schubert,

No.

5:12-CV-166,

2013

WL

12137236, at *3.
IV. CONCLUSION
For the reasons discussed, the Court DENIES the Raspets’
motion to remand (Dkt. No. 7), and directs the Clerk to transmit
copies of this Memorandum Opinion and Order to counsel of record.
It is so ORDERED.
DATED: April 13, 2018.
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE

13