Alig et al v. Quicken Loans Inc. et al
Filing
30
MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFFS' 10 MOTION TO REMAND. Signed by Chief Judge John Preston Bailey on 10/9/12. (c to Circuit Court of Ohio Co.)(mji)
IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF WEST VIRGINIA
WHEELING
PHILLIP ALIG, SARA J. ALIG,
ROXANNE SHEA, and
DANIEL V. SHEA, individually and on
behalf of a class of persons,
Plaintiffs,
v.
Civil Action No. 5:12-CV-114
(BAILEY)
QUICKEN LOANS, INC.,
TITLE SOURCE, INC., doing business as
TITLE SOURCE INC. OF WEST VIRGINIA, INCORPORATED,
DEWEY V. GUIDA,
APPRAISALS UNLIMITED, INC., and
RICHARD HYETT,
Defendants.
MEMORANDUM OPINION AND ORDER
GRANTING PLAINTIFFS’ MOTION TO REMAND
Pending before this Court is Plaintiffs’ Motion to Remand [Doc. 10], filed on August
21, 2012. Defendant Quicken Loans, Inc., filed its Response in Opposition to Plaintiffs’
Motion to Remand [Doc. 11] on September 4, 2012. On the same day, defendant Richard
Hyett filed his Response to Motion to Remand [Doc. 12]. Defendants Dewey V. Guida and
Appraisals Unlimited, Inc., filed their Response to Motion to Remand [Doc. 14] on
September 7, 2012.
Title Source, Inc., d/b/a Title Source Inc. Of West Virginia,
Incorporated, did not file a response to the Motion to Remand. Plaintiffs filed their Reply
Memorandum in Further Support of Their Motion to Remand [Doc. 15] on September 12,
2012. This Court, having reviewed the motion and the memoranda submitted with regard
thereto, finds that Plaintiffs’ Motion to Remand [Doc. 10] should be GRANTED for the
following reasons.
I. Background
On December 27, 2011, the plaintiffs filed a lawsuit in the Circuit Court of Ohio
County, West Virginia, on behalf of themselves as well as a proposed class of West
Virginians; on June 21, 2012, the plaintiffs filed an Amended First Complaint in the state
proceeding [Doc. 1-1 at 5-25]. The proposed plaintiff class was tentatively defined as the
following:
All West Virginia citizens at the time of the filing of this action who, within the
applicable statute of limitations preceding the filing of this action through the
date of class certification, obtained mortgage loans from Defendant Quicken
[Loans, Inc.], and (a) were provided unsigned loan documents at closing,
(b) were assessed loan discount, courier, or notary fees, or (d) [sic] for whom
Quicken [Loans, Inc.,] obtained appraisals through an appraisal request form
that included an estimate of value of the subject property.
[Id. at 15-16].
The lawsuit was brought against Quicken Loans, Inc. (“Quicken”), Title Source, Inc.,
d/b/a Title Source Inc. of West Virginia, Incorporated (“Title Source”), and a class of
defendant appraisers, represented by Appraisals Unlimited, Inc., Dewey V. Guida, and
Richard Hyett [Id. at 5-6]. The proposed class of defendant appraisers was defined by the
plaintiffs as the following:
All real estate appraisers who are citizens of the State of West Virginia at the
time of the filing of this action and who performed appraisals in connection
with home-secured loans [i]n West Virginia on behalf of Quicken after
2
receiving an appraisal request form with an estimate of value on it.
[Id. at 16].
In the First Amended Complaint, the plaintiffs bring eight causes of actions against
the defendants on behalf of themselves and the proposed class [See id. at 17-21]. In
addition, the plaintiffs bring two causes of action against the defendants on behalf of only
themselves [Id. at 21-23].1
On July 23, 2012, defendant Quicken filed a Notice of Removal [Doc. 1] with this
Court. In the Notice of Removal, defendant Quicken stated that this Court has jurisdiction
pursuant to 28 U.S.C. § 1332(d) (as amended by the Class Action Fairness Act of 2005
(“CAFA”)) [Id. at 1]. On August 21, 2012, the plaintiffs filed their Motion to Remand [Doc.
10]. In the motion to remand, plaintiffs concede that the lawsuit meets the requirements
1
The plaintiffs raise the following claims on behalf of themselves and the proposed
plaintiff class against all the defendants: (1) civil conspiracy [Id. at 17 (Count One)]; (2)
unfair or deceptive acts or practices in violation of the West Virginia Consumer Credit and
Protection Act under West Virginia Code Section 46A-6-104 [Id. at 17-18 (Count Two)]; and
(3) negligence and negligence per se [Id. at 21 (Count Eight)]. In addition, the plaintiffs
bring the following claims against all the defendants on behalf of only the named plaintiffs:
(1) fraud and intentional misrepresentation [Id. at 21-22 (Count Nine)]; and (2) illegal loans
in excess of fair market value in violation of the West Virginia Residential Mortgage Lender,
Broker and Servicer Act under West Virginia Code Section 31-17-8(m) [Id. at 23 (Count
Ten)].
The plaintiffs raise the following claims on behalf of themselves and the proposed
plaintiff class against defendant Quicken Loans, Inc.: (1) violation of the West Virginia
Residential Mortgage Lender, Broker and Servicer Act under West Virginia Code Section
31-7-8 [Id. at 18 (Count Three)]; (2) inducement into an unconscionable contract in violation
of the West Virginia Consumer Credit and Protection Act under West Virginia Code Section
46A-6-104 [Id. (Count Four)]; (3) unauthorized charges in violation of the West Virginia
Consumer Credit and Protection Act under West Virginia Code Sections 46A-3-109(a),
46A-1-102(7), and 46A-1-102(28) [Id. at 19-20 (Count Six)]; and (4) breach of contract [Id.
at 20-21 (Count Seven)]. Against the class of defendant appraisers, the plaintiffs raise the
following claim on behalf of themselves and the proposed plaintiff class: (1) violations of
the Real Estate Appraiser Licensing & Certification Act under West Virginia Code Sections
30-38-12(3) and 30-38-17 [Id. at 19 (Count Five)].
3
for federal jurisdiction pursuant to 28 U.S.C. § 1332(d)(2) [Doc. 10-1 at 5]. However,
plaintiffs state that (1) all of the proposed plaintiff class members are citizens of West
Virginia [Id. at 6-7]; (2) the class of defendant appraisers consists of West Virginia citizens
whose conduct forms a significant basis for the class claims and from whom the plaintiffs
seek significant relief [Id. at 7-9]; (3) the principal injuries to the proposed plaintiff class
were incurred in West Virginia [Id. at 9]; and (4) no other similar class actions have been
filed in the previous three years [Id.]. As such, the plaintiffs argue that the action falls under
the “local controversy” exception to CAFA, thereby precluding federal subject matter
jurisdiction pursuant to 28 U.S.C. § 1332(d)(4)(A) [Id. at 1]. Furthermore, the plaintiffs
argue that remand is mandatory [Id. at 6, citing Martin v. State Farm Mutual Auto Ins.
Co., 2010 U.S. Dist. LEXIS 84903, at *9 (S.D. W.Va. Aug. 18, 2010); and 28 U.S.C. §
1332(d)(4)(A)].
Defendant Quicken argues that the plaintiffs are seeking relief mainly from it, a
Michigan company [Doc. 11 at 2]. As such, defendant Quicken argues that the “local
controversy” exception should not apply to this case [Id.]. In particular, Quicken argues that
there is no West Virginia citizen defendant from whom the plaintiffs seek significant relief
and whose conduct forms a significant basis for the plaintiffs’ lawsuit [Id. at 3-4]. In his
response, defendant Hyett states that he opposes the plaintiffs’ motion to remand and joins
in defendant Quicken’s, response [Doc. 12]. In their response, defendants Dewey V. Guida
and Appraisals Unlimited, Inc., also state that they oppose the motion to remand and join
in defendant Quicken’s, response [Doc. 14]. Defendant Title Source filed no response to
the plaintiffs’ Motion to Remand.
4
II. Applicable Standard
Pursuant to 28 U.S.C. § 1332(d), a district court has jurisdiction over certain class
action lawsuits. “CAFA authorizes the removal of any civil action which is a class action
in which (1) ‘the matter in controversy exceeds the sum or value of $5,000,000, exclusive
of interest and costs,’ 28 U.S.C. § 1332(d)(2); (2) ‘any member of a class of plaintiffs is a
citizen of a State different from any defendant,’ id. § 1332(d)(2)(A); and (3) there are 100
or more plaintiff class members, id. § 1332(d)(5)(B).” West Virginia ex rel. McGraw v.
CVS Pharm., Inc., 646 F.3d 169, 174 (4th Cir. 2011).2 The removing party must prove
these three elements by a preponderance of the evidence. See Johnson v. Advance
Am., 549 F.3d 932, 935 (4th Cir. 2008).
In the event these three elements are satisfied, CAFA requires that “[a] district court
shall decline to exercise jurisdiction” over a class action law suit that meets the following
conditions: (1) more than two-thirds of the members of the proposed class are citizens of
the State in which the lawsuit was originally filed; (2) at least one defendant (a) is a
defendant from whom the plaintiff class is seeking significant relief, (b) is a defendant
whose conduct “forms a significant basis” for the plaintiff class’s claims, and (c) is a citizen
of the State in which the action was originally filed; (3) the principal injuries stemming from
the conduct alleged in the complaint occurred in the State in which the action was originally
filed; and (4) in the three years preceding the complaint, no other similar class action was
2
CAFA “defines ‘class action’ to mean any civil action filed under rule 23 of the
Federal Rules of Civil procedure or similar State statute or rule of judicial procedure
authorizing an action to be brought by 1 or more representative persons as a class action.’
Id. § 1332(d)(1)(B).” McGraw, 646 F.3d at 174 (emphasis in original). West Virginia Civil
Rule of Procedure 23 satisfies the emphasized “similarity” requirement. See id.
5
filed against any of the defendants on behalf of the same or other class. 28 U.S.C.
§ 1332(d)(4)(A). This is commonly known as the “local controversy” exception. See
Eakins v. Pella Corp., 455 F.Supp.2d 450, 451 (E.D. N.C. 2006). A plaintiff seeking
remand pursuant to a CAFA exception must prove by a preponderance of the evidence that
the particular exception applies. See Johnson, 549 F.3d at 934-935.
Finally, 28 U.S.C. § 1453(b) “eliminates at least three of the traditional limitations on
removal: (1) the rule that, in a diversity case, a defendant cannot remove a case from its
home forum, § 1441(b); (2) the rule that a defendant cannot remove a diversity case once
it has been pending in state court for more than a year, § 1446(b); and (3) the rule that all
defendants must consent to removal . . ..” Palisades Collections LLC v. Shorts, 552
F.3d 327, 331 (4th Cir. 2008) (internal citations omitted).
III. Discussion
Before addressing whether the local controversy exception applies to this
proceeding, this Court must determine whether it has jurisdiction over this proceeding
pursuant to CAFA. This Court first finds that the $5,000,000 amount in controversy has
been established.3 Next, this Court notes that the minimum diversity requirement has been
met because the plaintiffs are West Virginia citizens and defendant Quicken is a citizen of
3
Between January 1, 2012, and June 17, 2012, defendant Quicken originated 660
loans in West Virginia to more than 600 different West Virginia borrowers [Doc. 1-2 at 3].
Of those 660 loans, 192 included courier fees; these 192 loans totaled $28,024,196 [Id.].
As such, because that total is limited to a mere subset of the entire plaintiff class, this Court
has no problem finding that the amount in controversy requirement has been established
by the removing party.
6
Michigan.4 Finally, this Court finds that the third requirement has been met because there
are 100 or more members of the plaintiff class.5 Furthermore, this Court notes that the
parties do not dispute that all three CAFA requirements have been established in this case
[Doc. 1 at 4-10; Doc. 10-1 at 5].
Having determined that it has jurisdiction of this proceeding pursuant to CAFA, this
Court must next address whether it is required to refrain from exercising jurisdiction under
the local controversy exception. The plaintiffs argue that the local controversy exception
applies in this proceeding, requiring this Court to decline to exercise jurisdiction pursuant
to CAFA. The parties agree that the proposed plaintiff class meets the first element that
more than two-thirds of the members of the proposed class are citizens of the State in
which the lawsuit was originally filed [Doc. 10-1 at 6-7; Doc. 11 at 3; Doc. 12 at 1; and Doc.
14 at 1]; in fact, the proposed plaintiff class consists of only West Virginia citizens [See
Doc. 1-1 at 15] and, therefore, does indeed meet the first requirement. In addition, the
parties agree that the third element has been met in this case [Doc. 10-1 at 9; Doc. 11 at
3; Doc. 12 at 1; and Doc. 14 at 1]; this Court agrees because, based upon the proposed
plaintiff class, the loans at issue all occurred in West Virginia and were obtained by West
Virginia citizens [See Doc. 1-1 at 15-16]. Finally, the parties agree that the fourth element
has been established because no other similar class actions have been filed in the previous
three years [Doc. 10-1 at 9; Doc. 11 at 3; Doc. 12 at 1; and Doc. 14 at 1]; this Court
4
Quicken is incorporated under the laws of the state of Michigan; in addition, its
principal place of business is in the state of Michigan [See Doc. 1 at 5].
5
Between January 1, 2012, and July 17, 2012, Quicken originated 660 loans in West
Virginia to more than 600 different borrowers. From these 660 loans, 391 loans included
courier fees and 192 loans included discount fees. See Doc. 1 at 6 and Doc. 1-2 at 3.
7
agrees.6
As such, the only element of this exception in dispute is the second
element—whether the class of defendant appraisers qualifies as a significant local
defendant. In other words, plaintiffs must establish by a preponderance of the evidence
that the class of defendant appraisers is a local defendant from whom significant relief is
sought and whose alleged conduct forms a significant basis of the class claims asserted.
As explained below, this Court concludes that plaintiffs have made this showing.
A. Significant Relief
The term “significant relief” is ambiguous and has yet to be interpreted by the Fourth
Circuit Court of Appeals (“Fourth Circuit”). Although the Fourth Circuit has not interpreted
the phrase “significant relief,” the Eleventh Circuit Court of Appeals (“Eleventh Circuit”) has
held that “a class seeks ‘significant relief’ against a defendant when the relief sought
against the defendant is a significant portion of the entire relief sought.” Evans v. Walter
Indus., 449 F.3d 1159, 1167 (11th Cir. 2006) (citation omitted). The court in Evans further
explained that the significant relief test requires a comparative analysis that “includes not
6
On April 3, 2012, a class action case regarding credit scores was filed against
Quicken with this Court [Case Number 3:12-CV-24 Doc. 1]. On May 1, 2012, a class action
case regarding credit scores was filed against Quicken in the United States District Court
for the Southern District of West Virginia [United States District Court for the Southern
District of West Virginia Case Number 2:12-CV-1353 Doc. 1]. These two cases do not
assert the same or similar factual allegations against any of the defendants. Although a
similar case was filed with this Court [Case Number 5:12-CV-115], this Court notes that the
case was filed with the Circuit Court of Ohio County, West Virginia, on the same day as this
proceeding and, therefore, did not precede this proceeding. See 28 U.S.C. §
1332(d)(4)(A)(ii) (“during the 3-year period preceding the filing of [the] class action, no other
class action has been filed asserting the same or similar factual allegations against any of
the defendants on behalf of the same or other persons”) (emphasis added). In addition, the
two cases were removed from the circuit court to this Court on the same day.
8
only an assessment of how many members of the class were harmed by the defendant’s
actions, but also a comparison of the relief sought between all defendants and each
defendant’s ability to pay a potential judgment.” Id. (citation omitted). This Court has
applied the Eleventh Circuit’s standard in a recent decision pertaining to the local
controversy exception. See Carter v. Allstate Ins. Co., 2012 WL 3637239, *9 (N.D.W.Va.
Aug. 21, 2012).7
First, under a comparative analysis regarding harm, this Court notes that the loans
at issue were obtained through the alleged false appraisals provided by the class of
defendant appraisers. As such, although this Court does not have an exact number of
members of the class who were harmed by the defendant’s actions, the standard practices
alleged in the First Amended Complaint began with the appraisals obtained from the class
of defendant appraisers. Accordingly, this Court finds that this factor does weigh in favor
of finding that the plaintiffs are seeking significant relief from the class of defendant
appraisers.
Next, under the comparative analysis regarding relief sought from the defendants,
the defendants argue that the “[p]laintiffs failed to submit any evidence or assessment of
the value of the relief they are seeking” [Doc. 11 at 4; Doc. 12; and Doc. 14]. However, in
support of the plaintiffs’ claim that they are seeking significant relief from the class of
defendant appraisers, counsel for the plaintiffs submitted a declaration providing examples
7
This Court notes that the outcome in Carter was different in part because the
alleged local defendant was an officer of a foreign corporation that was also a defendant
in the proceeding; as such, the intra-corporate conspiracy doctrine precluded a finding of
the significant relief requirement with regard to the corporate officer. 2012 WL 3637239 at
*9.
9
of relief obtained in cases involving an appraiser defendant and a lender defendant [Doc.
15-8 at 2]. The plaintiffs argue that these examples demonstrate that the “appraisers
ma[de] significant contributions to the overall settlements” of those cases and demonstrate
that the plaintiffs are seeking significant relief from the appraisers in this case [Id. at 2-3].
This Court agrees. Mr. Causey’s declaration lists recovery from the appraisers in the
sample cases ranging from $35,000 to $500,000 and from 23% to 87% of the total recovery
[Id. at 3]. As such, this Court finds that this factor again weighs in favor of finding that the
plaintiffs are seeking significant relief from the class of defendant appraisers.
Finally, with regard to the comparative analysis regarding each defendant’s ability
to pay relief, the defendants argue that the representative defendants are not likely to
satisfy a judgment [Doc. 11 at 6; Doc. 12; and Doc. 14]. The defendants state that (1)
Appraisals Unlimited, Inc., filed articles of dissolution on May 18, 2012 [Doc. 11-1], (2)
Dewey V. Guida filed a bankruptcy petition on March 3, 2011 [Doc. 11-2], and (3) an Ohio
insurance company is funding the Richard Hyett’s defense and cost of judgment [Doc. 113]. The defendants argue that, as such, there is no evidence that significant relief will come
from these named representatives of the class of defendant appraisers [Doc. 11 at 6; Doc.
12; and Doc. 14, citing Laws v. Priority Tr. Servs. Of N.C., 2008 WL 3539512 (W.D.N.C.
Aug. 11, 2008) (ruling that because local defendant had no assets, plaintiffs could not meet
“significant relief” requirement because all monetary relief would be sought from out-ofstate defendant)]. The plaintiffs reply that the Guida bankruptcy petition was dismissed
[Doc. 15-10] and that they “reasonably anticipate that relief will be obtained from . . .
insurers” with regard to other individual appraiser defendants [Doc. 15 at 13]. Even if
insurers were not a sufficient basis to find that this factor weighs in favor of the significant
10
relief requirement, the other two factors do weigh in favor of such a finding. Accordingly,
the various comparative analyses lead this Court to conclude that the significant relief
requirement has been met in this case.
B. Significant Basis
The term “significant basis” has yet to be interpreted by the Fourth Circuit. The Third
Circuit Court of Appeals (“Third Circuit”) has held that this component of the local
controversy exception requires that there be “at least one local defendant whose alleged
conduct forms a significant basis for all the claims asserted in the action.” Kaufman v.
Allstate New Jersey Ins. Co., 561 F.3d 144, 155 (3d Cir. 2009) (emphasis added). In
addition, the Third Circuit has stated that “[t]he local defendant’s alleged conduct must be
an important ground for the asserted claims in view of the alleged conduct of all the
[d]efendants.”
Id. at 157. The Eighth Circuit Court of Appeals (“Eighth Circuit”) has
adopted the same approach. Westerfeld v. Independent Processing, LLC, 621 F.3d 819,
825 (8th Cir. 2010) (quoting Kaufman, 561 F.3d at 157). In addition, this Court has utilized
this approach in a recent decision pertaining to the local controversy exception. See
Carter, 2012 WL 3637239 at *10.
Under the analysis for this element, a court can consider various factors, such as
the following:
(1) the relative importance of each of the claims to the action; (2) the nature
of the claims and issues raised against the local defendant; (3) the nature of
the claims and issues raised against all the [d]efendants; (4) the number of
claims that rely on the local defendant’s alleged conduct; (5) the number of
11
claims asserted; (6) the identity of the [d]efendants; (7) whether the
[d]efendants are related; (8) the number of members of the [proposed]
class[ ] asserting claims that rely on the local defendant’s alleged conduct;
and (9) the approximate number of members in the [proposed] class.
Kaufman, 561 F.3d at 157 n.13 (listing examples of factors to be considered by the district
court on remand in preparing an analysis of the local and non-local defendants’ alleged
conduct).
Upon a review of the relevant factors, this Court determines that the plaintiffs have
established that the alleged conduct of the class of defendant appraisers forms a significant
basis of the alleged claims in this proceeding. First, this Court notes that the loans at issue
in this proceeding were obtained based upon the allegedly false appraisals.8 As such, the
factors pertaining to the importance and nature of the claims support a finding that the
significant basis requirement has been met in this proceeding. Although the defendants
argue that neither joint and several liability nor a theory of conspiracy is sufficient to
establish the significant basis requirement [Doc. 11 at 7],9 this Court does not reach its
conclusion merely on the alleged enterprise among the defendants. Instead, this Court
8
In their First Amended Complaint, the plaintiffs allege that it was Quicken’s standard
practice to obtain appraisals from the class of defendant appraisers based upon an
estimated value [Doc. 1-1 at 8]. The plaintiffs further allege that “[a]fter . . . obtain[ing] an
appraisal value sufficient to sustain the loan,” Quicken’s standard practice was to charge
certain “unlawful and excessive fees” for the loan and to provide unsigned copies of the
loan documents at the closing [Id. at 9-10]. Based upon these allegations, the plaintiffs
argue that the alleged conduct of the class of defendant appraisers forms a significant
basis of the claims asserted in this proceeding [Doc. 10-1 at 7-9; Doc. 15 at 8-11].
9
This argument was made in response to the plaintiffs’ statement that each
defendant’s conduct formed an essential role in the alleged enterprise [Doc. 10-1 at 8-9;
Doc. 15 at 8-9].
12
finds that the alleged conduct of the class of defendant appraisers plays a vital and
necessary role in the alleged enterprise because the loans were obtained through the
allegedly false appraisals.10
Next, this Court notes that the factors pertaining to the number of claims supports
the same conclusion regarding the significant basis requirement. Defendants argue that
the fact that four of the ten counts contained in the First Amended Complaint do not pertain
to the class of defendant appraisers indicates that the alleged conduct of the class of
defendant appraisers does not form a significant basis of the lawsuit [Doc. 11 at 9; Doc. 12;
and Doc. 14]. The plaintiffs reply that, although four of the counts were not filed against the
class of defendant appraisers, those claims are still based upon the alleged conduct of the
defendant appraisers class in that the loans were entered into based upon the appraisals
[Doc. 15 at 9]. Moreover, two of those claims directly refer to the false appraisals [Doc. 1-1
at 18, and 20-21]. This Court concludes that the majority of the counts contained in the
10
The defendants also argue that the alleged conduct of the class of defendant
appraisers cannot form a significant basis of the claims because the purpose of appraisals
is to protect lenders, not borrowers [Doc. 11 at 7-8 (citing Wallace v. Midwest Fin. &
Mortg. Servs. Inc., 728 F.Supp.2d 906 (E.D.Ky. 2010); Sararo v. United States Bank
Nat’l Ass’n, 2012 WL 2369254, *1 (M.D. Fla. Jun. 22, 2012); and Nymark v. Heart Fed’l
Sav. & Loan Ass’n, 231 Cal. App. 3d 1089 (Cal. Ct. App. 1991); Doc. 12; and Doc. 14].
However, as noted by the plaintiffs, federal law, The Appraisal Foundation, the Uniform
Standards of Professional Appraisal Practice (“USPAP”), Fannie Mae, and West Virginia
law all condemn the influencing of appraisals [Doc. 15 at 3-8]. Moreover, the appraisal
reports for the named representative plaintiffs specifically state that the borrower may reply
upon the appraisal report [Id. at 8]. The appraisal reports state that “[t]he borrower, another
lender at the request of the borrower, the mortgagee or its successors and assigns,
mortgage insurers, government sponsored enterprises, and other secondary market
participants may rely on this appraisal report as part of any mortgage finance transaction
that involves any one or more of these parties” [Doc. 15-4 at 12, ¶ 23; Doc. 15-5 at 7, ¶ 23;
Doc. 15-6 at 7, ¶ 23; Doc. 15-7 at 7, ¶ 23]. Accordingly, this Court finds that the appraisals
can support the significant basis requirement.
13
First Amended Complaint directly relate to the alleged conduct of the class of defendant
appraisers. See Kaufman, 561 F.3d at 155-56 (“The provision does not require that the
local defendant’s alleged conduct form a basis of each claim asserted; it requires that the
local defendant’s alleged conduct form a significant basis of all the claims asserted.”). In
addition, nearly all of the counts are a direct or indirect result of the alleged conduct of the
class of defendant appraisers because such conduct formed the foundation of the loans.
Accordingly, the factors pertaining to the number of claims provide further support for the
conclusion that the significant basis requirement has been met with regard to the class of
defendant appraisers.
The Court next examines the identity of and relationship among the defendants as
well as the approximate number of members of the plaintiff class. The defendants argue
that the definition of the proposed plaintiff class indicates that the defendant appraisers
class is merely “peripheral” [Doc. 11 at 8 (citing Eakins, 455 F.Supp.2d at 452); Doc 12;
and Doc. 14]. However, this Court disagrees. In their First Amended Complaint, the
plaintiffs allege standard practices by Quicken, which include references to the actions of
other defendants [Doc. 1-2 at 8-10]. In particular, the plaintiffs allege that the standard
practices pertaining to illegal fees and unsigned documents occurred after Quicken was
able to obtain a loan based upon a false appraisal [Id. at 9]. As such, the class of
defendant appraisers is not merely peripheral because their conduct serves as the basis
of each loan and claim. Moreover, the impact of the appraisals on the loans and the
members of the plaintiff class11 further supports the conclusion that the alleged conduct of
11
In Carter, this Court determined that the significant basis requirement had not
been met in part because the alleged local defendant interacted with only a limited number
14
the class of defendant appraisers forms a significant basis of the claims in this proceeding.
As such, based upon the relevant factors, this Court concludes that the plaintiffs
have established their burden to demonstrate that the alleged conduct of the class of
defendant appraisers forms a significant basis of the claims in this case. Because the
plaintiffs have met both the significant relief and significant basis requirements, this Court
is not able to retain jurisdiction in this case under CAFA and must remand the proceeding
to state court based upon the local controversy exception.
IV. Conclusion
For the foregoing reasons, Plaintiffs’ Motion to Remand [Doc. 10] is hereby
GRANTED. Accordingly, this case is REMANDED to the Circuit Court of Ohio County,
West Virginia.
It is so ORDERED.
The Clerk is directed to transmit copies of this Order to counsel of record herein.
DATED: October 9, 2012.
of members of the plaintiff class. This case in distinguishable from Carter because the
class of defendant appraisers had more than limited contact with the members of the
plaintiff class. 2012 WL 3637239 at *10.
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