Briggs v. Nationstar Mortgage LLC et al

Filing 14

MEMORANDUM OPINION AND ORDER Denying 5 Motion to Remand. Signed by Chief Judge Gina M. Groh on 5/15/2015. (cmd)

IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF WEST VIRGINIA
MARTINSBURG
CHRISTINE M. BRIGGS,
Plaintiff,
v.

CIVIL ACTION NO.: 3:15-CV-24
(GROH)

NATIONSTAR MORTGAGE LLC and
NEWCASTLE MORTGAGE SECURITY
TRUST 2006-1,
Defendants.
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND
Currently pending before the Court is Plaintiff Christine M. Briggs’ Motion to Remand
[ECF 5] this case to the Circuit Court of Berkeley County, West Virginia. For the following
reasons, the Court DENIES this motion.
I. Background
On September 29, 2005, Briggs entered into a note for a loan to purchase a home.
Newcastle Mortgage Security Trust 2006-1 (“Newcastle”) owns the note, which Nationstar
Mortgage, LLC (“Nationstar”) services on behalf of Newcastle. Nationstar agreed to a trial
modification of the loan. The trial modification required Briggs to pay $1,238.82 on January
1, February 1 and March 1 of 2014. Nationstar stated that, after Briggs timely made these
payments, it would send her an agreement with the terms of the modified loan.
On January 1, 2014,1 Briggs attempted to make a payment on Nationstar’s website.
The website would not allow her to do so. She called Nationstar several times that day, but
got a recording and could not make the payment through Nationstar’s automated system.
1

From this point forward, all dates in this section refer to the year 2014 unless otherwise noted.

On January 2, Briggs called Nationstar and made a payment over the telephone.
Nationstar withdrew $1,238.82 from her bank account that day and credited $1,227.04
toward interest and escrow. On February 1, Briggs made another telephone payment after
she could not do so online. Nationstar withdrew $1,236.99 from her bank account on
February 4, crediting $1,227.04 toward interest and escrow.
On March 1, Briggs tried to make her mortgage payment online and could not do so.
Briggs called Nationstar approximately ten times that day to make her payment and left a
message for a Nationstar agent. On March 2, Briggs called Nationstar five more times, but
only received a recorded message. Briggs called Nationstar ten more times on March 3.
On the tenth call, Briggs reached a Nationstar agent. Briggs told the agent that she could
not make payments online. The agent responded that he could not accept a payment
because she had not made the February 2014 payment. Briggs stated she had done so
over the telephone. The agent asserted that the February 2014 payment was $8.00 short.
Briggs told the agent she had authorized Nationstar to deduct the full monthly payment
from her bank account and instructed him to add the $8.00 to her March payment. The
agent responded that he could not do that or anything else regarding her account. He
suggested that Briggs contact Lauren in a foreclosure office. Briggs called Lauren and left
her a message. Another Nationstar agent, April, returned her call. Briggs told April about
her attempts to pay her mortgage. April responded that she would open a case, contact
Lauren and get back to Briggs. April never called Briggs back.
Thereafter, Briggs sent Nationstar a check for $1,265.00 for the March 1 payment.
Nationstar then sent Briggs a series of letters concerning her account.
First, in a letter dated March 31, 2014, Nationstar returned the check to Briggs and
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stated it was doing so as the funds were “insufficient to bring [her] account current.” The
letter further provided that Briggs needed to pay $12,146.00 to bring her account current.
Next, in a letter to Briggs’ counsel dated April 12, 2014, Nationstar stated:
On February 1, 2014, funds for $1,227.04 were received and applied to
[plaintiff’s] account. A fee of $9.95 was assessed to the account due to Ms.
Briggs’ utilizing the Internal Voice Response (IVR), to schedule a payment.
Because the payment received on February 1, 2014 was not enough to
complete the second trial period payment it was applied to the suspense
account.
By letter dated April 17, 2014, Nationstar stated that Briggs was in default and
needed to pay $13,351.56 to bring her account current. In a letter dated May 5, 2014,
Nationstar informed Briggs her account “had unapplied funds in suspense for an extended
period of time” and gave her a check for $11.78. Finally, Briggs received a Notice of the
Consumer’s RIght to Cure Default dated June 11, 2014. This notice stated that, to bring
her account current, Briggs needed to pay $28,450.55, which included “5 months X
$2,046.55 payments & 9 months X $2,024.20 payments.”
Based on the foregoing allegations, Briggs initiated this case on July 3, 2014 by filing
a complaint against Nationstar and Newcastle in the Circuit Court of Berkeley County, West
Virginia. Her complaint raises four claims for relief. These claims are not labeled, but a
review of their allegations reveals what they are.
There are two breach of contract claims. Respectively, they allege the Defendants
breached the agreement to modify the loan and the deed of trust underlying the loan. The
remaining two claims allege violations of the West Virginia Consumer Credit and Protection
Act (“WVCCPA”). The first claim arises under the WVCPPA’s unfair and deceptive trade
practices provisions. It alleges the “Defendants’ actions with regard to plaintiffs’ mortgage

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loan account are unfair and deceptive practices prohibited by W. Va. Code § 46A-6-104.”
The second claim alleges the following actions of the Defendants violated the WVCCPA’s
debt collection provisions:
86.

Each of defendants’ assessments of fees for accepting payments from
plaintiff is the collection or attempt to collect from the consumer all or
any part of the debt collector’s fee or charge for services rendered in
violation of W. Va. Code § 46A-2-128(c).

87.

The June 11, 2014 letter sent to plaintiff by Golden & Amos, PLLC,
acting at the instruction of one or both defendants, violates W. Va.
Code § 46A-2-127(d), as it is a false representation or implication of
the character, extent or amount of a claim against a consumer.

The complaint does not contain a monetary demand. Instead, it demands actual
damages, “damages of no less than $200.00 per violation for damages suffered by plaintiff
as a result of defendants’ unfair and deceptive practices,” a permanent modification of the
loan, “actual and statutory damages for each of defendants’ violations of the debt collection
provisions of the [WVCCPA],” costs and attorneys’ fees.
On February 19, 2015, the parties attended mediation. During mediation, Briggs
demanded more than $75,000 to settle the case. On March 5, 2015, the Defendants
removed this case to this Court, invoking this Court’s diversity jurisdiction under 28 U.S.C.
§ 1332. Their notice of removal asserted that removal was timely because they had
removed it within thirty days of receiving Briggs’ settlement demand, the first time they
knew the amount in controversy exceeded $75,000 as § 1332 requires for this Court to
have diversity jursidiction.
On March 10, 2015, the Court entered an order directing the Defendants to file an
amended notice of removal because it was unclear whether this Court had subject matter
jurisdiction. The Defendants filed an amended notice of removal addressing that issue.
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On March 31, 2015, Briggs filed the instant motion to remand. She argues removal
was untimely because the complaint revealed that the amount in controversy exceeded
$75,000, and the Defendants therefore needed to remove this case within thirty days of
receiving the complaint. She alternatively argues that the Defendants have not shown
complete diversity of citizenship exists, another requirement of diversity jurisdiction under
§ 1332.

Finally, Briggs seeks an award of attorneys’ fees on the ground that the

Defendants lacked an objectively reasonable basis for removal.
The Defendants counter that the complaint was not removable because it did not
adequately reveal that the amount-in-controversy requirement was met. They assert that
this matter first became removable when they received Briggs’ settlement demand on
February 19, and that their notice of removal was timely filed on March 5. The Defendants
also argue diversity jurisdiction is proper because complete diversity of citizenship exists.
II. Applicable Law
A defendant may remove a case involving diversity of citizenship under 28 U.S.C.
§ 1332 from state to federal court. See 28 U.S.C. § 1441(a). Generally, a defendant must
file a notice of removal within thirty days of receiving the initial pleading. Id. § 1446(b)(1).
But, “if the case stated by the initial pleading is not removable,” a defendant may remove
a case “within 30 days after receipt . . . of a copy of an amended pleading, motion, order
or other paper from which it may first be ascertained that the case is one which is or has
become removable.”

Id. § 1446(b)(3).

The term “other paper” includes settlement

demands. Dijkstra v. Carenbauer, Civil Action No. 5:11CV152, 2012 WL 1533485, at *3
(N.D.W. Va. May 1, 2012).
The removing party has “[t]he burden of establishing federal jurisdiction.” Mulcahey
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v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994). Federal courts strictly
construe removal jurisdiction. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108
(1941). Thus, “[i]f federal jurisdiction is doubtful, a remand is necessary.” Mulcahey, 29
F.3d at 151. Conversely, if this Court has jurisdiction, it must exercise it. See Gum v. Gen.
Elec. Co., 5 F. Supp. 2d 412, 415 (S.D.W. Va. 1998) (“It is well-established federal courts
have a ‘virtually unflagging obligation . . . to exercise the jurisdiction given them.’”).
When removal is based on diversity of citizenship, a defendant must establish that
“the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and
costs, and is between citizens of different states.” 28 U.S.C. § 1332(a). Complete diversity
of citizenship is required, i.e., the citizenship of the plaintiff must be diverse from the
citizenship of each defendant. Cent. W. Va. Energy Co. v. Mt. State Carbon, LLC, 636
F.3d 101, 103 (4th Cir. 2011). In addition, when considering a motion to remand, a court
determines whether it has jurisdiction by “look[ing] at the case as of the time it was filed in
state court.” Wis. Dep’t of Corr. v. Schacht, 524 U.S. 381, 390 (1998).
III. Discussion
The first issue before this Court is whether removal was timely, which depends on
whether the complaint was removable. If removal was timely, the Court must then address
whether complete diversity of citizenship exists.
A.

Timeliness of Removal

In Lovern v. General Motors Corp., 121 F.3d 160 (4th Cir. 1997), the Fourth Circuit
adopted the following test for determining when a defendant could first ascertain a case is
removable:
[W]e will not require courts to inquire into the subjective knowledge of the
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defendant, an inquiry that could degenerate into a mini-trial regarding who
knew what and when. Rather, we will allow the court to rely on the face of
the initial pleading and on the documents exchanged in the case by the
parties to determine when the defendant had notice of the grounds for
removal, requiring that those grounds be apparent within the four corners of
the initial pleading or subsequent paper.
Thus, the timeliness of removal hinges on whether the Defendants could have established
the amount-in-controversy requirement if they removed this case based on the complaint.
The Court therefore finds it instructive to review the standard the Defendants would have
needed to meet to do so.
When, like here, the complaint does not plead a specific dollar amount, a defendant
must establish the jurisdictional amount by a preponderance of the evidence. See Marshall
v. Kimble, Civil Action No. 5:10-CV-127, 2011 WL 43034, at *2 (N.D.W. Va. Jan. 6, 2011);
Allman v. Chancellor Health Partners, Inc., Civil Action No. 5:08-CV-155, 2009 WL 514086,
at *1 (N.D.W. Va. Mar. 2, 2009). This standard requires that a defendant “show that it is
more likely than not that the amount in controversy exceeds the jurisdictional amount.”
Heller v. TriEnergy, Inc., Civil Action No. 5:12-CV-45, 2012 WL 2740870, at *9 (N.D. W. Va.
July 9, 2012). “[A] bare allegation that the amount in controversy exceeds $75,000” does
not suffice. Id. Rather, the defendant “must supply evidence to support his claim regarding
the amount at issue.” Id. (internal quotation marks and citation omitted).
A court determines the amount in controversy by “considering the judgment that
would be entered if the plaintiff prevailed on the merits of his case at the time of removal.”
Id. A court also may engage in an independent evaluation to determine whether the
amount in controversy has been met, and the court may look to the entire record before it.
Mullins v. Harry’s Mobile Homes, Inc., 861 F. Supp. 22, 23 (S.D.W. Va. 1994) (finding

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jurisdictional amount met through a common sense evaluation of the record although the
complaint did not state a specific dollar amount of damages).
In this case, Briggs argues that the WVCCPA claims revealed that the amount-incontroversy requirement was met.
First, Briggs argues that she alleged thirteen violations of the WVCCPA’s debt
collection provisions, which, at $4,800 of statutory damages available for each violation,2
revealed that this claim sought up to $62,400. Briggs maintains that her complaint raised
twelve violations for charging her $9.95 for accepting payments and one violation for
misrepresenting her debt in the June 11, 2014 letter. Briggs asserts that, although the
complaint does not identify the number of violations based on the fee assessments, the
Defendants knew twelve such violations are at issue because their records stated the
number of times they had assessed the fee.
Next, Briggs argues that the unfair and deceptive practices claim sought up to
$32,326.56 in actual damages based on Nationstar rejecting her mortgage payments from
March 1, 2014 onward. Briggs states that her complaint alleges returning her check for the
March 1, 2014 payment led the Defendants to declare her $13,351.56 in arrears. She
asserts that this arrearage plus fifteen $1,265.00 payments that the Defendants have
refused to accept total $32,326.56 in actual damages. Finally, Briggs argues that her claim
for attorneys’ fees further showed that the jurisdictional amount was met.
The Defendants respond that the complaint was not removable because it did not
state the total damages sought or identify the nature and number of WVCCPA violations.

2

The Defendants do not contest that Briggs could receive this amount for each violation.

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In particular, they argue that the debt collection claim does not allege that the $9.95 fee
was improper. The Defendants further assert that, even if it had, they had no obligation to
search their records to speculate as to the number of violations at issue. Finally, the
Defendants maintain that, because they could only speculate regarding the WVCCPA
violations, it appeared that Briggs sought damages much lower than she now claims and,
by extension, potential attorneys’ fees minimally increased the amount in controversy.
Here, the complaint at most reveals that Briggs sought statutory damages for two
violations of the WVCCPA’s debt collection provisions. The debt collection claim does
allege that the assessment of fees for accepting payments and representations made in
the June 11, 2014 letter violated the WVCCPA. The letter arguably is one alleged violation
of the WVCCPA. This claim does not, however, indicate that Briggs is alleging that twelve
fee assessments are at issue. The complaint neither specifies the type of fee that Briggs
claims violated the WVCCPA nor the number of times the Defendants assessed such fees.
At most, the allegation that the Defendants stated in a letter that they had charged Briggs
$9.95 for the February 1, 2014 payment could be construed as a fee assessment
underlying this claim.

As Briggs would have it, this single allegation obligated the

Defendants to search their records to elucidate that Briggs truly sought to recover for all of
the $9.95 fees charged to her account. But, under Lovern, the face of the complaint
controls, and the complaint lacks any such allegations. Moreover, had the Defendants
removed this case based on the complaint, the Court would have needed to speculate to
find that this claim alleged enough violations to near the jurisdictional amount as Briggs
would now have the Court find. Such speculation would be improper as courts must strictly
construe removal jurisdiction.

See Judy v. JK Harris & Co., Civil Action No.
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2:10-CV-01276, 2011 WL 4499316, at *7 (S.D.W. Va. Sept. 27, 2011) (declining to
increase amount in controversy based on statutory penalties for WVCCPA claim where
there was no evidence as to the number of violations alleged). Accordingly, the complaint
revealed a likely statutory damages award of no more than $9,600.
As for the unfair and deceptive practices claim, the complaint alleges only that the
“Defendants’ actions with regard to plaintiffs’ mortgage loan account are unfair and
deceptive practices.” There is no indication that Briggs was claiming that the rejected
mortgage payments damaged her. Because the complaint does not clarify the violations
underlying this claim, this claim does not increase the amount in controversy. See id.
Finally, attorneys’ fees are available for WVCCPA claims and, therefore, can
increase the amount in controversy. Jefferson v. Quicken Loans, Inc., Civil Action No.
5:13CV59, 2013 WL 3812099, at *2 (N.D.W. Va. July 19, 2013); see also Judy, 2011 WL
4499316, at *4 (including plaintiff’s undisputed estimate that she would incur $25,000 in
attorneys’ fees in amount-in-controversy calculation). “Under West Virginia law, for certain
types of conduct ‘the court may award all or a portion of the costs of litigation, including
reasonable attorney fees,’ but is not required to do so.” Jefferson, 2013 WL 3812099, at
*2 (quoting W. Va. Code § 46A-5-104). In addition, the Supreme Court of Appeals of West
Virginia has held that courts may only award reasonable attorneys’ fees after analyzing the
following twelve factors for reasonableness:
(1) the time and labor required; (2) the novelty and difficulty of the questions;
(3) the skill requisite to perform the legal service properly; (4) the preclusion
of other employment by the attorney due to acceptance of the case; (5) the
customary fee; (6) whether the fee is fixed or contingent; (7) time limitations
imposed by the client or the circumstances; (8) the amount involved and the
results obtained; (9) the experience, reputation, and ability of the attorneys;
(10) the undesirability of the case; (11) the nature and length of the
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professional relationship with the client; and (12) awards in similar cases.
Vanderbilt Mortg. & Fin., Inc. v. Cole, 740 S.E.2d 562, 572 (W. Va. 2013) (quoting Syl. Pt.
4, Aetna Casualty & Surety Co. v. Pitrolo, 342 S.E.2d 156 (W. Va. 1986)).
Here, to reach the jurisdictional amount, the complaint would need to reveal that it
was more likely than not that Briggs would recover at least $65,401 in attorneys’ fees
($75,001 less the $9,600 sought for the WVCCPA claims). The potential amount of
attorneys’ fees, however, does not rise to that level because they are merely speculative
on the face of the complaint. See Jefferson, 2013 WL 3812099, at *2. There is no
guarantee Briggs would receive attorneys’ fees as they are within the Court’s discretion to
award at all. See id. Even if the Court awarded them, the amount of the award is
unpredictable because it depends on factors that the Court has no evidence or argument
concerning now, let alone when Briggs filed her complaint. See id. Thus, because
potential attorneys’ fees are unpredictable in WVCCPA cases and there is no evidence
regarding them, the attorneys’ fees apparent from the complaint do not cause the amount
in controversy to reach the jurisdictional threshold. See id. (finding potential attorneys’ fees
for WVCCPA claim did not increase amount in controversy by $20,000 to reach
jurisdictional threshold as defendants failed “to provide adequate competent evidence
regarding potential attorney fees” and fees were unpredictable).

Accordingly, the

Defendants timely removed this case within thirty days of receiving Briggs’ settlement
demand because that was when they could first ascertain that the amount in controversy
exceeded $75,000. See 28 U.S.C. § 1446(b)(3).
B.

Diversity of Citizenship

Having found that removal was timely, the Court considers whether it has diversity
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jurisdiction. The parties dispute only whether complete diversity of citizenship exists. This
issue hinges on the citizenship of Nationstar and Newcastle because the parties agree that
Briggs is a citizen of West Virginia.
Nationstar is a limited liability company (“LLC”). An LLC’s citizenship “is determined
by the citizenship of all of its members.” Cent. W. Virginia Energy Co., 636 F.3d at 103.
The amended notice of removal states that Nationstar’s managing members are domiciled
in Texas. Nationstar also has produced an affidavit averring that its managing members
are two individuals, Jay Bray and Robert D. Stiles of Texas. Thus, their citizenship
determines Nationstar’s citizenship.
An individual is a citizen of the state in which he is domiciled. Johnson v. Advance
Am., 549 F.3d 932, 937 n.2 (4th Cir. 2008). “Domicile requires physical presence, coupled
with an intent to make the State a home.” Id. Courts determine domicile on a case by case
basis, considering all of the circumstances surrounding an individual’s situation. 13E
Charles Alan Wright et al., Federal Practice and Procedure § 3612 (3d ed. 2013). They
may consider the following factors in doing so, with no one factor being dispositive: “the
party's current residence; voter registration and voting practices; situs of personal and real
property; location of brokerage and bank accounts; membership in unions, fraternal
organizations, churches, clubs, and other associations; place of employment or business;
driver's license and automobile registration; [and] payment of taxes.” Wright el al., supra,
§ 3612.; see also Ronald Lane, Inc. v. Antero Res. Appalachian Corp., Civil Action No.
1:10CV137, 2011 WL 3102116, at *4 (N.D.W. Va. July 25, 2011).
Here, it is undisputed that Nationstar’s members reside in Texas. There is no
evidence tying them to West Virginia so as to defeat diversity jurisdiction. Accordingly, for
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diversity purposes, Nationstar’s members are citizens of Texas and, by extension,
Nationstar is a citizen of Texas. See Cent. W. Virginia Energy Co., 636 F.3d at 103.
Next, Newcastle is a trust. Neither the Supreme Court nor the Fourth Circuit have
addressed how courts determine the citizenship of a trust, and there is a split of authority
on the issue.

Per the Third Circuit’s decision in Emerald Investors Trust v. Gaunt

Parsippany Partners, 492 F.3d 192 (3d Cir. 2007), courts have developed four approaches
to determine a trust’s citizenship:
(a) look to the citizenship of the trustee only; (b) look to the citizenship of the
beneficiary only; (c) look to the citizenship of either the trustee or the
beneficiary depending on who is in control of the trust in the particular case;
or (d) look to the citizenship of both the trustee and the beneficiary.
LBR Holdings, LLC v. Poulos, 995 F. Supp. 2d 567, 569 (S.D.W. Va. 2014) (quoting
Emerald Investors Trust, 492 F.3d at 201).
Here, the amended notice of removal states that the trustee of Newcastle is Bank
of New York Mellon, which is incorporated in New York with a principal place of business
in New York, and the beneficiary of Newcastle is Wilmington Trust Company, which is
incorporated in Delaware with a principal place of business in Delaware. The Defendants
have provided a declaration from Nationstar’s Vice President that also asserts that is the
case. Because the trustee and beneficiary are corporations, they are citizens of every state
in which they are incorporated and the state of their principal place of business. 28 U.S.C.
§ 1332(c)(1). Thus, the undisputed evidence shows that the trustee is a citizen of New
York and the beneficiary is a citizen of Delaware. Because the trustee and beneficiary are
both citizens of a state other than West Virginia, Newcastle is diverse from Briggs under
all possible methods of determining citizenship of a trust. The Court therefore need not

13

decide which approach to follow because the outcome of this case is the same regardless.
Accordingly, because Briggs is a citizen of West Virginia and the Defendants are citizens
of Texas, New York and Delaware, complete diversity of citizenship exists and this Court
has diversity jurisdiction over this matter.
As a final matter, the Court denies Briggs’ request for attorney’s fees. Because
removal was proper, the Defendants had “an objectively reasonable basis for seeking
removal.” Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005).
IV. Conclusion
For the foregoing reasons, the Court DENIES the Plaintiff’s Motion to Remand.
The Clerk is directed to transmit copies of this Order to all counsel of record herein.
DATED: May 15, 2015

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