Cutlip v. Rollyson et al

Filing 22

MEMORANDUM OPINION AND ORDER GRANTING MOTION TO INTERVENE AS PLAINTIFF PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 24(a)(2) 21 . Wilmington SHALL have until October 14, 2022, to file a complaint. The parties SHALL submit an amended Rule 26(f) Report at that time, as necessary. Signed by Senior Judge Irene M. Keeley on 9/16/2022. (jb)

Case 1:21-cv-00138-IMK Document 22 Filed 09/16/22 Page 1 of 13 PageID #: 245

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
DONALD CUTLIP,
Plaintiff,
WILMINGTON SAVINGS FUND SOCIETY,
FSB, as Trustee of Quercus Mortgage
Investment Trust,
Intervenor-Plaintiff,
Civil Action No. 1:21CV138
(Judge Keeley)

v.

G. RUSSELL ROLLYSON, JR.,
Deputy Commissioner of Delinquent
and Non-entered Lands of Harrison
County, West Virginia, in his Official
and Personal Capacities, and
WVTH, LLC,
Defendants.
MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO INTERVENE AS PLAINTIFF PURSUANT TO
FEDERAL RULE OF CIVIL PROCEDURE 24(a)(2) [DKT. NO. 21]
Pending is the motion to intervene as plaintiff pursuant to
Federal Rule of Civil Procedure 24 filed by Wilmington Savings
Fund Society, FSB (“Wilmington”), as Trustee of Quercus Mortgage
Investment Trust (Dkt. No. 21). For the reasons that follow, the
Court GRANTS the motion.

Case 1:21-cv-00138-IMK Document 22 Filed 09/16/22 Page 2 of 13 PageID #: 246

CUTLIP v. ROLLYSON

1:21CV138

MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO INTERVENE AS PLAINTIFF PURSUANT TO
FEDERAL RULE OF CIVIL PROCEDURE 24(a)(2) [DKT. NO. 21]
I. BACKGROUND
A. Factual Allegations in the Complaint
On November 11, 2021, Donald Cutlip (“Cutlip”) filed suit
against

G.

Commissioner

Russell
of

Rollyson,

Delinquent

and

Jr.,

(“Rollyson”),

Non-entered

Lands

of

Deputy
Harrison

County, West Virginia, in his official and personal capacities,
and WVTH LLC (“WVTH”) (Dkt. No. 1).
According to the complaint, at all times after March 29, 2012,
Cutlip

possessed

fee

simple

title

to

the

real

estate

at

57

Waterside Drive, Enterprise, Harrison County, West Virginia (“the
Property”). Id. at 3.1 He originally purchased the Property with a
loan

guaranteed

by

the

United

States

Department

of

Veterans

Affairs. Id. at 4. Since that time, however, he has refinanced
multiple times, most recently on December 21, 2017, with Low VA
Rates LLC, a West Virginia licensed home mortgage lender. Id.
As

part

of

the

refinancing

agreement,

Cutlip

signed

a

promissory note and deed of trust in favor of Low VA Rates LLC.

1

Cutlip originally jointly obtained title with his then-wife, Amanda
Cutlip (Dkt. No. 1 at 3). However, following their divorce on February
11, 2020, he obtained exclusive ownership. Id. at 3-4.

2

Case 1:21-cv-00138-IMK Document 22 Filed 09/16/22 Page 3 of 13 PageID #: 247

CUTLIP v. ROLLYSON

1:21CV138

MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO INTERVENE AS PLAINTIFF PURSUANT TO
FEDERAL RULE OF CIVIL PROCEDURE 24(a)(2) [DKT. NO. 21]
Id. Pursuant to that agreement, he agreed to make monthly payments
to Low VA Rates LLC’s servicer, AnnieMac Home Mortgage, which then
was required to pay his real estate taxes. Id. at 5. In accordance
with standard industry practice, Low VA Rates LLC and AnnieMac
Home Mortgage made arrangements with Harrison County tax officials
to send all post-December 2017 real estate tax bills directly to
them and not Cutlip. Id. Cutlip allegedly paid all his monthly
mortgage payments after December 21, 2017, and Low VA Rates LLC
never disclosed an issue with the payment of his taxes following
refinancing. Id.
Nevertheless, in November 2019, due to unpaid taxes for 2018,
the Sheriff of Harrison County, West Virginia, sold a tax lien on
the Property to WVTH. Id. at 6. Although required by W. Va. Code
§ 11A-3-2(b),2

Cutlip

never

received

written

notice

from

the

sheriff of the proposed sale, and he also was unaware of the unpaid

2

W. Va. Code §§ 11A-3-1 to -74 was amended effective June 10, 2022. S.
552, 2022 Reg. Sess. (W. Va. 2022) (enacted). However, because the events
here occurred prior to June 10, 2022, the prior statutory scheme applies
in this case, and all citations are to the prior statutes. Syl. Pt. 2,
Martinez v. Asplundh Tree Expert Co., 803 S.E.2d 582 (W. Va. 2017) (“The
presumption is that a statute is intended to operate prospectively, and
not retrospectively, unless it appears, by clear, strong and imperative
words or by necessary implication, that the Legislature intended to give
the statute retroactive force and effect.”)

3

Case 1:21-cv-00138-IMK Document 22 Filed 09/16/22 Page 4 of 13 PageID #: 248

CUTLIP v. ROLLYSON

1:21CV138

MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO INTERVENE AS PLAINTIFF PURSUANT TO
FEDERAL RULE OF CIVIL PROCEDURE 24(a)(2) [DKT. NO. 21]
taxes for 2018 because neither Low VA Rates LLC nor the sheriff
notified him. Id. at 5-6.
Following purchase of the tax lien, WVTH never demanded of
Cutlip that he pay the lien or the other costs and interest related
to the sale. Id. at 6. In October 2020, when WVTH applied to
Rollyson for the execution of a tax deed to transfer legal title
of the Property, Rollyson failed to notify Cutlip of his right to
redeem the Property as required under W. Va. Code §§ 11A-3-1
to -74. Id. at 6-7. Specifically, Cutlip never received or signed
the certified mail notice, and Rollyson’s hired process server
allegedly falsified a return of service, stating it had served
Cutlip on April 13, 2021, at 6:40 P.M., at which time he was
allegedly out of town at a job interview. Id.
Prior

to

service,

however,

on

April

1,

2021,

Rollyson

certified in writing that he had served the notice to redeem on
all persons entitled to be served. Id. at 8. And that same day, he
executed a tax deed transferring legal title of the Property to
WVTH, which then recorded the deed. Id.
Based on these allegations, Cutlip asserts the following two
causes of action: (1) deprivation of the Property without due
4

Case 1:21-cv-00138-IMK Document 22 Filed 09/16/22 Page 5 of 13 PageID #: 249

CUTLIP v. ROLLYSON

1:21CV138

MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO INTERVENE AS PLAINTIFF PURSUANT TO
FEDERAL RULE OF CIVIL PROCEDURE 24(a)(2) [DKT. NO. 21]
process of law; and (2) deprivation of the Property in violation
of the West Virginia tax sale statutory scheme, W. Va. Code §§ 11A3-1 to -74. Id. at 9-10. In addition to monetary relief, Cutlip
also seeks declaratory and injunctive relief to void the tax deed.
Id.
B. Motion to Intervene
On July 27, 2022, Wilmington moved to intervene as plaintiff
in this case under Federal Rule of Civil Procedure 24 (Dkt. No.
21). In support of its motion, Wilmington alleges that, after
Cutlip began to fall behind on his mortgage payments for the
Property, Low VA Rates LLC transferred the underlying promissory
note to Wilmington to begin foreclosure proceedings. (Dkt. No. 211 at 4). In late May 2022, however, Wilmington discovered this
lawsuit

during

a

title

search

and

placed

the

foreclosure

proceedings on hold. Id.
Wilmington seeks to intervene and void the tax deed. It
contends

that

intervention

of

it

has

right

satisfied
and

also

the

requirements

permissive

both

intervention

for
under

Federal Rule of Civil Procedure 24 (Dkt. No. 21-1 at 12-14). Should
it be permitted to intervene, Wilmington intends to argue that the
5

Case 1:21-cv-00138-IMK Document 22 Filed 09/16/22 Page 6 of 13 PageID #: 250

CUTLIP v. ROLLYSON

1:21CV138

MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO INTERVENE AS PLAINTIFF PURSUANT TO
FEDERAL RULE OF CIVIL PROCEDURE 24(a)(2) [DKT. NO. 21]
West Virginia tax sale statutory scheme, W. Va. Code §§ 11A-2-1 to
-19 and 11A-3-1 to -74, both on its face and as applied, fails to
provide

adequate

notice

and

thus

violates

the

constitutional

guarantee of due process under the Fifth and Fourteenth Amendments
of the Constitution of the United States. Id. at 6-12.
Cutlip has consented to Wilmington’s intervention, id. at 14,
and the defendants have not responded within their designated time
under Local Rule of Civil Procedure 7.02(b)(1). The Court therefore
deems the motion fully briefed and ripe for decision.
II. APPLICABLE LAW
A movant has a right to intervene if it “claims an interest
relating to the property or transaction that is the subject of the
action, and is so situated that disposing of the action may as a
practical matter impair or impede the movant’s ability to protect
its interest, unless existing parties adequately represent that
interest.”

Fed.

R.

Civ.

P.

24(a)(2).

“Thus,

in

addition

to

timeliness, intervention of right is dependent on the moving
party’s fulfillment of three requirements: interest, impairment of
interest and inadequate representation.” Gould v. Alleco, Inc.,
883 F.2d 281, 284 (4th Cir. 1989).
6

Case 1:21-cv-00138-IMK Document 22 Filed 09/16/22 Page 7 of 13 PageID #: 251

CUTLIP v. ROLLYSON

1:21CV138

MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO INTERVENE AS PLAINTIFF PURSUANT TO
FEDERAL RULE OF CIVIL PROCEDURE 24(a)(2) [DKT. NO. 21]
However, if a movant cannot meet the standard to intervene as
of right, the court may permit the movant to intervene if it “has
a claim or defense that shares with the main action a common
question of law or fact.” Fed. R. Civ. P. 24(b)(1)(B). Moreover,
“[i]n exercising its discretion, the court must consider whether
the intervention will unduly delay or prejudice the adjudication
of the original parties’ rights.” Id. 24(b)(3).
Under either mode of intervention, “[t]he motion must state
the grounds for intervention and be accompanied by a pleading that
sets out the claim or defense for which intervention is sought.”
Fed. R. Civ. P. 24(c).
III. DISCUSSION
Following a review of Wilmington’s unopposed arguments and
the facts of this case, the Court concludes that Wilmington has a
right to intervene under Federal Rule of Civil Procedure 24(a)(2).
A. Timeliness
District courts are afforded “wide discretion” in ruling on
the timeliness of a motion to intervene. Gould, 883 F.2d at 286.
Courts should consider “how far the suit has progressed, the
prejudice which delay might cause other parties, and the reason
7

Case 1:21-cv-00138-IMK Document 22 Filed 09/16/22 Page 8 of 13 PageID #: 252

CUTLIP v. ROLLYSON

1:21CV138

MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO INTERVENE AS PLAINTIFF PURSUANT TO
FEDERAL RULE OF CIVIL PROCEDURE 24(a)(2) [DKT. NO. 21]
for the tardiness in moving to intervene.” Id. The most important
factor, however, is whether granting the motion will result in
prejudice to the existing parties. United States v. Exxonmobil
Corp., 264 F.R.D. 242, 248 (N.D. W. Va. 2010).
This case is currently in the discovery phase, which is
scheduled to ends on December 9, 2022 (Dkt. No. 9). It is not set
for trial until May 22, 2023. Id. Wilmington asserts that, “within
the first few months of intervening,” it will be able to issue
additional discovery requests and review existing production (Dkt.
No. 21-1 at 13-14). Accordingly, any delay likely will be minor
and

none

of

the

existing

parties

have

argued

a

delay

would

prejudice them.
When Wilmington filed its motion to intervene on July 27,
2022 (Dkt. No. 21), it asserted that it only discovered this
lawsuit in “late May 2022” and, before filing its motion, had
gathered information on the factual allegations in the complaint
(Dkt. No. 21-1 at 14). Thus, by its own account, Wilmington took
roughly two months to file its motion after discovering this case.
Therefore, taking into account the stage of the case, the lack of

8

Case 1:21-cv-00138-IMK Document 22 Filed 09/16/22 Page 9 of 13 PageID #: 253

CUTLIP v. ROLLYSON

1:21CV138

MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO INTERVENE AS PLAINTIFF PURSUANT TO
FEDERAL RULE OF CIVIL PROCEDURE 24(a)(2) [DKT. NO. 21]
any alleged prejudice, and Wilmington’s prompt filing, the Court
concludes that the motion is timely.
B. Interest Relating to the Property
Federal Rule of Civil Procedure 24 “does not specify what
type of interest a party must have to intervene as a matter of
right, but the Supreme Court has recognized that

‘[w]hat is

obviously meant . . . is a significantly protectable interest.’”
JLS, Inc. v. Pub. Serv. Comm’n of W. Va., 321 F. App’x 286, 289
(4th Cir. 2009) (quoting Teague v. Bakker, 931 F.2d 259, 261 (4th
Cir. 1991)).
Here, Wilmington alleges that, after Cutlip began to fall
behind on mortgage payments for the Property, Low VA Rates LLC
transferred the underlying promissory note to Wilmington to begin
foreclosure

proceedings.

In

other

words,

Wilmington

is

the

successor-in-interest to Low VA Rates LLC as the beneficiary on
the promissory note, and as such, has a “significantly protectable
interest” in the Property under West Virginia law. JLS, Inc., 321
F. App’x at 289 (quoting Teague, 931 F.2d at 261). Specifically,
Wilmington was entitled to redeem the property and then initiate
foreclosure proceedings. See Syl. Pt. 1, Wells Fargo Bank, N.A. v.
9

Case 1:21-cv-00138-IMK Document 22 Filed 09/16/22 Page 10 of 13 PageID #: 254

CUTLIP v. ROLLYSON

1:21CV138

MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO INTERVENE AS PLAINTIFF PURSUANT TO
FEDERAL RULE OF CIVIL PROCEDURE 24(a)(2) [DKT. NO. 21]
UP Ventures II, LLC, 675 S.E.2d 883 (W. Va. 2009) (“[A] tax sale
purchaser is required to provide notice [of the right to redeem]
to parties who are of record at any time after the thirty-first
day of October of the year following the sheriff’s sale, and on or
before the thirty-first day of December of the same year.”); Arnold
v.

Palmer,

686

S.E.2d

725,

733

(W.

Va.

2009)

(“[A]

lending

institution may require the trustee of a valid deed of trust to
initiate foreclosure proceedings on the property subject to the
deed of trust.”).
C. Impairment of Interest
Denying Wilmington the right to intervene would substantially
impair its interest in the Property. Rollyson allegedly executed
a tax deed on April 1, 2021, transferring legal title of the
Property to WVTH, which subsequently recorded the deed. Under West
Virginia law,
Whenever the purchaser of any tax lien on any
real estate sold at a tax sale . . . has
obtained a deed for the real estate from the
State Auditor . . . , he or she or they shall
acquire all right, title and interest, in and
to the real estate, as was, at the time of the
execution and delivery of the deed, vested in
or held by any person who was entitled to
redeem.
10

Case 1:21-cv-00138-IMK Document 22 Filed 09/16/22 Page 11 of 13 PageID #: 255

CUTLIP v. ROLLYSON

1:21CV138

MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO INTERVENE AS PLAINTIFF PURSUANT TO
FEDERAL RULE OF CIVIL PROCEDURE 24(a)(2) [DKT. NO. 21]
W. Va. Code § 11A-3-30. Accordingly, were WVTH or any of its
successors to retain title to the Property, Wilmington’s interest
would be extinguished, leaving it unable to exercise its right to
redeem the Property and conduct foreclosure proceedings.
D. Adequate Representation
Where, as here, “the party seeking intervention has the same
ultimate objective as a party to the suit, a presumption arises
that its interests are adequately represented, against which the
petitioner must demonstrate adversity of interest, collusion, or
nonfeasance.” Virginia v. Westinghouse Elec. Corp., 542 F.2d 214,
216 (4th Cir. 1976).3 However, as the Supreme Court has noted, “the
burden on the [petitioner] of demonstrating a lack of adequate
representation ‘should be treated as minimal.’” Teague v. Bakker,
931 F.2d 259, 262 (4th Cir. 1991) (quoting Trbovich v. United Mine
Workers, 404 U.S. 528, 538 n.10 (1972)).
Although both Wilmington and Cutlip seek the “same ultimate
objective” – the invalidation of the tax deed, Westinghouse Elec.
3

The Supreme Court’s recent decision in Berger v. North Carolina State
Conference of the NAACP, 142 S. Ct. 2191, 2204 (2022), held only “that
a presumption of adequate representation is inappropriate when a duly
authorized state agent seeks to intervene to defend a state law.” It did
not hold that such a presumption was always inappropriate.

11

Case 1:21-cv-00138-IMK Document 22 Filed 09/16/22 Page 12 of 13 PageID #: 256

CUTLIP v. ROLLYSON

1:21CV138

MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO INTERVENE AS PLAINTIFF PURSUANT TO
FEDERAL RULE OF CIVIL PROCEDURE 24(a)(2) [DKT. NO. 21]
Corp., 542 F.2d at 216, Cutlip alleges that Low VA Rates LLC’s
servicer, AnnieMac Home Mortgage, failed to properly pay real
estate taxes on the Property. Stated differently, Cutlip claims
that the conduct of Wilmington’s successor-in-interest was at
least partially responsible for the transfer of the property.
Accordingly, while Wilmington’s ultimate objective is the same as
Cutlip’s, the allegations against Low VA Rates LLC establish
adversity

of

their

interests.

Cutlip

thus

cannot

adequately

represent Wilmington in this lawsuit.
Wilmington therefore may intervene as of right in this case
because it has satisfied the requirements of Federal Rule of Civil
Procedure 24(a)(2). The Court thus need not determine whether to
permit

Wilmington

to

intervene

under

Federal

Rule

of

Civil

Procedure 24(b)(1)(B).
IV. CONCLUSION
For the reasons discussed, the Court GRANTS Wilmington’s
motion to intervene. Wilmington SHALL have until Friday, October
14, 2022, to file a complaint, and as necessary, the parties SHALL
submit an amended Rule 26(f) Report at that time.
It is so ORDERED.
12

Case 1:21-cv-00138-IMK Document 22 Filed 09/16/22 Page 13 of 13 PageID #: 257

CUTLIP v. ROLLYSON

1:21CV138

MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO INTERVENE AS PLAINTIFF PURSUANT TO
FEDERAL RULE OF CIVIL PROCEDURE 24(a)(2) [DKT. NO. 21]
The Clerk SHALL transmit copies of this Order to counsel of
record.
DATED: September 16, 2022
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE

13