Wyatt v. Capital One Bank (USA), N.A.
Filing
35
MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF'S MOTION TO REMAND AND REMANDING CIVIL ACTION TO THE CIRCUIT COURT OF OHIO COUNTY, WEST VIRGINIA: Granting 18 Motion to Remand to State Court; Civil action remanded to Circuit Court of Ohio Co., WV; Clerk directed to enter judgment. Signed by Senior Judge Frederick P. Stamp, Jr on 1/7/15. (soa)(copy to Clerk of Circuit Court)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
CLARENCE H. WYATT, JR.,
Plaintiffs,
v.
Civil Action No. 5:14CV55
(STAMP)
CAPITAL ONE BANK (USA), N.A.,
Defendant.
MEMORANDUM OPINION AND ORDER
GRANTING PLAINTIFF’S MOTION TO REMAND
AND REMANDING CIVIL ACTION TO THE
CIRCUIT COURT OF OHIO COUNTY, WEST VIRGINIA
I.
Procedural History
The above-styled civil action was filed in the Circuit Court
of Ohio County, West Virginia.
In his complaint, the plaintiff,
Clarence H. Wyatt, Jr. (“Wyatt”) asserts claims for violations of
the West Virginia Consumer Credit and Protection Act (“WVCCPA”) by
the defendant, Capital One Bank (USA), N.A. (“Capital One”).
The
plaintiff seeks statutory, compensatory, and punitive damages.
Capital One removed this case to this Court on the basis of
diversity jurisdiction, claiming that the parties are citizens of
different states and that the amount in controversy in the case
exceeds
$75,000.00,
exclusive
of
interest
and
costs.
The
plaintiffs then filed a motion to remand, which claims that
diversity jurisdiction is lacking because Capital One has failed to
demonstrate
that
the
amount
in
controversy
exceeds
the
jurisdictional amount of $75,000.00, exclusive of interest and
costs.
II.
Facts
In its notice of removal, Capital One argues that the amount
in controversy was met after requests for admissions were served on
the plaintiff and the plaintiff refused to stipulate that the
damages in this action were less than $75,000.00. Further, Capital
One asserts that the amount in controversy was not met when it
received two demand letters from the plaintiff (of amounts over
$75,000.00) based on the Clements v. HSBC Auto Finance, Inc., No.
5:09-cv-00086,
2011
WL
2976558
(S.D.W.
Va.
July
21,
2011),
graduated scale and that it believed the adjusted amount in
controversy was $42,477.70.
In his motion to remand, the plaintiff argues that removal was
untimely and the amount in controversy has not been sufficiently
proven by Capital One.
The plaintiff states that he sent two
demand letters on July 16, 2013 and August 23, 2013 which offered
resolution
for
respectively.
the
amounts
of
$250,000.00
and
$182,250.00,
The plaintiff asserts that these letters triggered
28 U.S.C. § 1446(b) and thus the removal by Capital One 257 days
after the second demand letter was received is untimely.
As to
Capital One’s proof, the plaintiff argues that it has not proven
the amount in controversy exceeds $75,000.00 because Capital One
has only provided the plaintiff's responses to Capital One's
requests for admission as evidence of the amount in controversy.
When asked to stipulate that the amount in controversy was less
than $75,000.00, the plaintiff refused. The plaintiff asserts that
2
such refusal may not be used as support for removal.
Finally, the
plaintiff asserts that Capital One is estopped from arguing that
the amount in controversy is more than $75,000.00 because Capital
One responded negatively to plaintiff's request for an admission
that the plaintiff was entitled to more than $75,000.00 in damages.
In response, Capital One argues that the plaintiff's denials
in his admissions should be used as support for the amount in
controversy because: (1) the West Virginia Rules of Civil Procedure
(“WVRCP”) do not state that a denial of a request cannot be
considered as evidence; (2) the WVRCP also provide an option other
then specifically admitting or denying the request, a party may
provide a detailed reason why the party cannot admit or deny; and
(3) a United States District Court for the Northern District of
Oklahoma held that an admission denial could be used as evidence in
support of removal.
As to the plaintiff's demand letters, Capital
One contends that this Court's prior holdings support a finding
that removal was not proper at that time because the demands were
unrealistic.
Finally, Capital One argues that it is not estopped
from arguing that the amount in controversy exceeds $75,000.00
because such a response does not touch upon whether the amount in
controversy is met.
Capital One contends that a defendant would
always have to respond that the plaintiff is entitled to $75,000.00
or more in damages if such a rule was implemented.
In reply, the plaintiff argues that its settlement demand
letters were not unrealistic as there were 81 violations complained
3
of by the plaintiff which, under West Virginia law, could result in
damages of $377,062.29.
Thus, Capital One was on notice that the
case was removable at the time it received the letters.
The
plaintiff also reiterates his other arguments.1
The parties have fully briefed the motion, and it is now ripe
for the consideration of this Court.
For the reasons that follow,
this Court will grant the plaintiff’s motion to remand.
III.
Applicable Law
A defendant may remove a case from state court to federal
court in instances where the federal court is able to exercise
original jurisdiction over the matter.
28 U.S.C. § 1441.
Federal
courts have original jurisdiction over primarily two types of
cases: (1) those involving federal questions under 28 U.S.C.
§ 1331, and (2) those involving citizens of different states where
the amount in controversy exceeds $75,000.00, exclusive of interest
and costs pursuant to 28 U.S.C. § 1332(a).
The party seeking
removal bears the burden of establishing federal jurisdiction. See
Mulcahey v. Columbia Organic Chems. Co., Inc., 29 F.3d 148, 151
1
There was a motion to strike requests for admissions pending
(previously filed in state court) at the time the motion to remand
came to fruition.
That motion was referred to United States
Magistrate Judge James E. Seibert. In the motion, the plaintiff
requests that admissions regarding the amount in controversy be
stricken because Capital One mislabeled the admissions and the
plaintiff was not properly served with the document.
The
magistrate judge denied that motion finding that although Capital
One had mistakenly mislabeled the admissions in the certificate of
service, the plaintiff was not prejudiced by such a mistake as the
plaintiff received the pleading and had notice of it.
No
objections were received to the magistrate judge's order.
4
(4th Cir. 1994).
Removal jurisdiction is strictly construed, and
if federal jurisdiction is doubtful, the federal court must remand.
Id.
IV.
Discussion
The plaintiff asserts that Capital One was untimely in its
removal as the plaintiff had sent two demand letters in July and
August
of
2013
$182,250.00.
requesting
Further,
in
a
settlement
those
letters,
of
$250,000.00
plaintiff’s
and
counsel
notified Capital One that the plaintiff is alleging 81 separate
violations of the WVCCPA.
Thus, the plaintiff argues that Capital
One’s removal in May of 2014 was untimely as it was outside of the
thirty-day limit allowed pursuant to 28 U.S.C. § 1446(b)(3).
Capital
One
argues
that
its
removal
was
timely
as
the
settlement demands did not provide evidence that the amount in
controversy exceeded $75,000.00, exclusive of interest and costs,
at that time.
Capital One cites three cases to support its
assertion, Williams v. Hodgson, Civil Action No. 5:11CV80, 2011 WL
3793328, at *2 (N.D.W. Va. Aug. 24, 2011), Soos v. Kmart Corp.,
Civil Action No. 5:08CV163, 2009 WL 192447, at *2-*3 (N.D.W. Va.
Jan. 26, 2009), and Clements (referenced above).
These cases will
be addressed below.
Pursuant to 28 U.S.C. § 1446(b)(3), “if the case stated by the
initial pleading is not removable, a notice of removal may be filed
within 30 days after receipt by the defendant, through service or
otherwise, of a copy of an amended pleading, motion, order or other
5
paper from which it may first be ascertained that the case is one
which is or has become removable.” The term “other paper” includes
settlement offers.
Tolley v. Monsanto Co., 591 F. Supp. 2d 837,
845 (S.D. W. Va. 2008).
Rather than focusing on the defendant’s subjective knowledge
to determine the timeliness of a notice of removal, courts “rely on
the face of the initial pleading and on the documents exchanged in
the case” and require “that those grounds be apparent within the
four corners of the initial pleading or subsequent paper.” Lovern,
121 F.3d at 163.
The “other paper” must contain “unequivocal
facts” that alert the defendant to the federal claim.
Tolley, 591
F. Supp. 2d at 845. However, district courts in the Fourth Circuit
have held that even if the other paper is “vague,” as long as it
provides at least some “clue” that federal claims are asserted, the
thirty day time period for removal begins to run.
Id. at 849; see
also Shonk Land Co., LLC v. Ark Land Co., 170 F. Supp. 2d 660, 662
(S.D. W. Va. 2001); Link Telecommunications, Inc. v. Sapperstein,
119 F. Supp. 2d 536, 541-42 (D. Md. 2000).
As to determining the amount in controversy, when there is a
maximum penalty by statute, it is appropriate to measure the amount
in controversy by the maximum and not by what the plaintiff is
likely to win. See Brill v. Countrywide Home Loans Inc., 427 F.3d
446, 449 (7th Cir. 2005); Korn v. Polo Ralph Lauren Corp., 536
F.Supp.2d 1199 (9th Cir. 2008).
This method of measuring the
amount in controversy is also the common practice in cases under
6
the West Virginia Consumer Credit Protection Act which have been
removed to federal court. See Knott v. HSBC Card Services Inc., No.
3:10CV82, 2010 WL 35522105 at *4 (N.D.W.Va. Sept. 8, 2010); Maxwell
v. Wells Fargo Bank, N.A., No. 2:09-0500, 2009 WL 3293871 (S.D.W.
Va. Oct.9, 2009).
As the surrounding case law demonstrates, it is
appropriate to use the statutory maximum in estimation of the
amount in controversy. See e.g., Woodrum v. Mapother & Mapother
P.S.C., Inc., No. 2:10-00478, 2010 WL 3943732 at *4 (W.Va. Oct. 5,
2010); Jefferson v. Quicken Loans, Inc., No. 5:13CV59, 2013 WL
3812099, at *2 (N.D.W. Va. July 19, 2013).
Capital One urges the Court to use the standard set forth in
Clements, a United States District Court for the Southern District
of West Virginia case.
In that case, the court used a graduated
scale assigning a lower penalty amount to earlier made phone calls
and a high penalty amount to later made phone calls in violation of
WVCCPA. Clements, 2011 WL 2976558, at *7
However, the court in
Clements specifically stated that its holding did not “set any
standard or precedent in assessing penalties (for any particular
number of calls) since the facts and circumstances of each case
must dictate the applicable result.” Id.
Further, the Clements
court applied the gradual scale to determine what the amount of
damages should be for a final judgment. Id.
This Court is not
determining the amount of damages for a final judgment.
In this
case, this Court is determining whether or not it has jurisdiction
and whether or not the amount in controversy has been shown.
7
To
reiterate, that determination is based on the statutory maximum as
an estimation of the amount in controversy. Thus, this Court finds
that Capital One was incorrect in basing its calculation of the
amount in controversy on Clements rather than prior case law of
this Court that has set forth a different standard. See Jefferson
v. Quicken Loans, Inc., No. 5:13CV59, 2013 WL 3812099, at *2
(N.D.W. Va. July 19, 2013).
Further,
Williams
and
Soos
Capital One’s arguments otherwise.
are
distinguishable,
despite
The controversy in Williams
involved a negligence claim which arose out of a car accident.
Williams, 2011 WL 3793328, at *2. The plaintiff in that action was
seeking damages, for among other things, mental anguish, loss of
ability to function, and future pain. Id.
Further, the plaintiff
had sent a demand letter to the defendant for $190,000.00, which
this Court found was too speculative to support a finding that the
amount in controversy had been met. Id.
However, the plaintiff’s
demand letter for $190,000.00 was based on damages that are more
difficult to calculate than the demand letters that were proffered
by the plaintiff in this action which informed Capital One that the
plaintiff is alleging a certain number, 81, of violations of the
WVCCPA which provides specific statutory penalties.
Further, this
Court has a set formula for determining the amount in controversy
for cases involving statutory penalties, specifically allegations
of violations of the WVCCPA.
8
This same analysis can be applied to this Court’s holding in
Soos, a slip and fall case, that the defendant had not shown that
the amount in controversy was met despite a demand letter from the
plaintiff requesting a $250,000.00 settlement. Id. at *2.
Again,
the damages in a slip and fall case are much more speculative than
those in a statutory penalty case such as this one.
Soos,
the
plaintiff
had
provided
a
subsequent
Further, in
non-binding-
representation to this Court that he would accept $75,000.00 to
settle the claims, which bolstered this Court’s finding that the
settlement amount in the demand letter was not enough to support a
finding that the amount in controversy had been met. Id. at *3.
In this action, the plaintiff has alleged 81 violations of the
WVCCPA
and
also
has
demanded
settlements
$182,250.00 in two separate demand letters.
of
$250,000.00
and
Those settlement
demands occurred outside of the thirty-day limit for removal set
forth in 28 U.S.C. § 1445(b)(3).
Thus, if Capital One could have
had a “clue” at the time that those demands were made that the
amount in controversy exceeded $75,000.00, exclusive of interest
and costs, then its removal was untimely.
Pursuant to the WVCCPA, penalties for such violations are “not
less than one hundred dollars nor more than one thousand dollars.”
W. Va. Code § 46A-5-101(1).2
Under the standard cited above, this
2
This Court notes that the plaintiff cites the United States
Department of Labor Consumer Price Index and an adjusted maximum
penalty of $4,655.09 because the $1,000.00 maximum was set in 1974.
ECF No. 18-1 at 9. However, the amount in controversy is met even
if the 1974 figure is used and thus this Court will use that
9
Court will use the maximum statutory penalty to calculate the
amount in controversy that existed when the plaintiff sent his
settlement demands. As such, the amount in controversy at the time
of those demands was at least $81,000.00 and would have been above
the $75,000.00 threshold.
Thus, Capital One should have had a
“clue” that the amount in controversy had been met and that federal
jurisdiction was appropriate at that time. Tolley, 591 F. Supp. 2d
at 845.
Accordingly, for the reasons noted above, this Court finds
that Capital One failed to timely remove this action from the state
court.
This Court will not address the parties’ other arguments
regarding the jurisdiction of this Court as the finding that the
defendant’s removal was untimely is dispositive.
This Court thus
lacks subject matter jurisdiction, and must remand this case to the
Circuit Court of Ohio County.
V.
Conclusion
For the reasons stated above, the plaintiffs’ motion to remand
is GRANTED. This matter is hereby REMANDED to the Circuit Court of
Ohio County, West Virginia.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein and to the Clerk of
the Circuit Court of Ohio County, West Virginia.
figure.
10
Pursuant to
Federal Rule of Civil Procedure 58, the Clerk is DIRECTED to enter
judgment on this matter.
DATED:
January 7, 2015
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
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