Stoler v. PennyMac Loan Services, LLC
Filing
25
MEMORANDUM OPINION AND ORDER denying 11 MOTION by Jessica A. Stoler to Remand Case to Circuit Court of Kanawha County; pursuant to this court's 15 order of 7/20/2018, staying the briefing on the pending motion to dismiss, that briefing is no longer stayed, and PennyMac has until 12/20/2018 to file its reply in support of its 4 motion to dismiss. Signed by Judge John T. Copenhaver, Jr. on 12/6/2018. (cc: counsel of record; any unrepresented parties) (taq)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
JESSICA A. STOLER,
Plaintiff,
v.
Civil Action no. 2:18-cv-00988
PENNYMAC LOAN SERVICES, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
Pending is plaintiff Jessica L. Stoler’s motion to
remand to the Circuit Court of Kanawha County, West Virginia,
filed July 17, 2018.
Defendant PennyMac Loan Services, LLC,
(“PennyMac”), filed a response in opposition on August 3, 2018,
to which the plaintiff replied on August 10, 2018.
I.
Background
This case involves the plaintiff’s April 2014
$109,693.00 Single Family Housing Guaranteed Loan Program
mortgage loan, serviced by defendant PennyMac.
Compl. at ¶ 4.
In February 2017, plaintiff began having difficulty affording
her monthly loan payments of $547.68; she requested but was
denied assistance from PennyMac.
Id. at ¶¶ 7-8; Defendant’s
Opposition, ECF # 18, Ex. A at 6.
In May 2017, plaintiff’s
situation worsened when she lost her job; she again requested
assistance from PennyMac.
Id. at ¶ 9.
PennyMac then provided
plaintiff with a forbearance plan, allegedly with the assurance
that, at the end of it, her loan would be permanently modified.
Id. at ¶ 10.
In November 2017, plaintiff became unable to make her
forbearance payments because her unemployment income expired.
Id. at ¶ 11.
According to the complaint, she then contacted
PennyMac several times to inquire about permanent modification
of her loan.
Id. at ¶¶ 12-13.
PennyMac allegedly did not
respond to these inquiries until January, after they already
scheduled a foreclosure sale for January 30, 2018.
13, 15, 16.
Id. at ¶¶
PennyMac denied plaintiff’s request because it was
made too close to a scheduled foreclosure, which plaintiff
disputes.
Id. at ¶ 16.
By early January 2018, plaintiff
regained employment and was able to make her monthly mortgage
payments but could not afford the arrearage that had accumulated
during the prior months.
Id. at ¶ 14.
On January 25, 2018, plaintiff contacted PennyMac,
notifying it of alleged servicing violations and requesting that
future communications be directed to plaintiff’s counsel.
at ¶ 17.
Id.
Plaintiff accuses PennyMac of nonetheless continuing
to contact her directly to collect payment.
Id. at ¶ 18.
Plaintiff further accuses PennyMac of failing to put forth a
2
good faith effort to achieve a sustainable payment plan and
refusing to properly process her requests for loss mitigation.
Id. at ¶ 19.
Plaintiff asserts that she remains able to pay her
regular monthly payments but cannot afford the “accrued
arrears.”
Id. at ¶ 21.
Plaintiff filed this action in the Circuit Court of
Kanawha County on May 2, 2018, asserting four counts under state
law.
Plaintiff does not specify the amount of damages she
seeks, yet she asserts that she is entitled to the following:
for Count I alleging violations of the West Virginia Consumer
Credit Protection Act (“WVCCPA”), she seeks maximum civil
penalties of $1,000 for each violation pursuant to W. Va. Code §
46A-5-101-106, actual damages, attorney’s fees and costs, and
such other relief the court deems equitable and just; for Count
II alleging negligence, she seeks appropriate equitable relief,
actual damages, attorney’s fees, and such other relief the court
deems equitable and just; for Count III alleging tortious
interference with contract, she seeks actual damages, punitive
damages, attorney’s fees, and such other relief the court deems
equitable and just; and for Count IV alleging estoppel, she
seeks appropriate equitable relief, actual damages, and such
other relief the court deems equitable and just.
3
PennyMac removed the action to this court on June 1,
2018, pursuant to the court’s diversity jurisdiction.
The
plaintiff now objects to the removal, claiming that the amount
in controversy does not meet the $75,000 requirement.
The
parties do not dispute that they are completely diverse.
II.
Discussion
“Federal courts are courts of limited jurisdiction.
They possess only that power authorized by Constitution and
statute, which is not to be expanded by judicial decree.”
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377
(1994).
“Removal jurisdiction is to be construed narrowly, and
when jurisdiction is doubtful, remand is proper.”
Caufield v.
EMC Mortg. Corp., 803 F. Supp. 2d 519, 529 (S.D.W. Va. 2011)
(citing Mulcahey v. Columbia Organic Chemicals Co. Inc., 29 F.3d
148, 151 (4th Cir.1994)).
The court is vested with original jurisdiction of all
actions between citizens of different states when the amount in
controversy exceeds $75,000.
28 U.S.C. § 1332(a)(1).
“‘Estimating the amount in controversy is not nuclear science,
as a removing defendant is somewhat constrained by the
plaintiff.”
Scott v. Cricket Commc'ns, LLC, 865 F.3d 189, 196
(4th Cir. 2017) (quoting S. Fla. Wellness, Inc. v. Allstate Ins.
Co., 745 F.3d 1312, 1317 (11th Cir. 2014)).
4
“[P]laintiffs are
free to purposely omit information that would allow a defendant
to allege the amount in controversy with pinpoint precision.”
Id., (citing Lincoln Prop. Co. v. Roche, 546 U.S. 81, 94
(2005)).
Accordingly, for cases in which the plaintiff has made
an unspecified demand for damages in state court, a defendant
asserting the existence of federal diversity jurisdiction is
tasked with proving by a “preponderance of the evidence that the
value of the matter in controversy exceeds the jurisdictional
amount. This test is framed alternatively as a requirement that
a defendant demonstrate that it is more likely than not that the
amount in controversy exceeds the jurisdictional amount.”
Landmark Corp. v. Apogee Coal Co., 945 F. Supp. 932, 935 (S.D.W.
Va. 1996) (citing Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th
Cir.1992)).
In calculating this amount, the court “looks to the
totality of the circumstances, including the complaint, the type
and extent of the plaintiff's injuries, the amounts awarded in
similar cases, and losses incurred to date of removal.”
Scaralto v. Ferrell, 826 F. Supp. 2d 960, 963–64 (S.D.W. Va.
2011).
The court uses this information “to estimate what a
reasonable plaintiff would demand or claim. If the court thinks
that a reasonable plaintiff would claim more than $75,000, then
the defendant has met its burden of proof.”
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Id.
PennyMac argues two alternative methods for
establishing the amount in controversy: first, that the amount
of damages sought, alone, exceeds $75,000; and second, that the
total value of the home and/or the loan is in controversy.
Finding the first argument dispositive, the court does not
address the second.
Although the plaintiff’s complaint does not contain a
demand for a specific monetary award, the complaint nonetheless
reflects a claim for damages in excess of $75,000.
The court
herein carefully analyzes the complaint and each type of relief
sought.
Turning first to statutory penalties under the WVCCPA,
the plaintiff seeks “[m]aximum civil penalties for each
violation” of the WVCCPA.
Compl. at p. 5.
Accordingly, the
court affords $1,000 per violation, which is the standard method
of calculating penalties for WVCCPA violations in this setting.
See e.g., Maxwell v. Wells Fargo Bank, N.A., No. 2:09-CV-0500,
2009 WL 3293871, at *2 (S.D.W. Va. Oct. 9, 2009), and
Stottlemire v. Caliber Home Loans, Inc., No. 1:16-CV-118, 2017
WL 282419, at *2 (N.D.W. Va. Jan. 20, 2017); and see W. Va. Code
§ 46A-5-101.
As this court did in Maxwell, so too here must it
examine the complaint to determine the total number of WVCCPA
violations alleged, which the plaintiff does not specify in her
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complaint or motion to remand.
The defendant asserts: “hampered
in part by Plaintiff’s deliberately vague pleading, PennyMac has
been able to discern at least six statutory violations[.]” ECF #
18 at 10, n. 3 (emphasis in original).
In determining the number of such violations, the
court most clearly finds allegations in paragraph 13, wherein
the plaintiff accuses PennyMac of failing to respond to her
“several inquiries[,]” paragraph 16, wherein she accuses
PennyMac of misrepresenting when she requested loss mitigation,
and paragraph 18, wherein she accuses PennyMac of contacting
her, instead of her attorney, by telephone and written
correspondence.
Therefrom, the court finds at least six alleged
violations: at least three from the “several inquiries,” one for
the declination of plaintiff’s request for assistance in lieu of
foreclosure, one for the telephone communication, and one for
the written correspondence.
Although the plaintiff likely plans
on alleging more, the court finds the defendant’s claim of six
statutory violations to be a reasonable, conservative estimate.1
1
Notably, the plaintiff does not dispute the defendant’s
estimate or provide an alternative. In her motion, the
plaintiff merely devotes one sentence to the issue, stating that
the defendant’s estimate is speculative and is far less than the
amount in Maxwell. Memo. in Support, ECF # 12 at 8. This is
true, though irrelevant. The court pauses to note that, aside
from the greater number of violations found in the 2009 decision
in Maxwell, the maximum statutory penalties used therein were
greater as well, reflecting 35 years of inflationary increases
7
Accordingly, the court assigns a value of $6,000 to the request
for statutory penalties.
Because attorney’s fees are specifically provided for
in the WVCCPA, they are also included in the calculation for the
amount in controversy.
In similar cases, the court has found a
reasonable estimate of attorney’s fees to be upwards of $25,000.
See McGraw v. Discover Fin. Servs., Inc., No. 2:05-CV-0215, 2005
WL 1785259, at *6 (S.D.W. Va. July 26, 2005), Patton v. Fifth
Third Bank, No. 2:05-CV-0790, 2006 WL 771924, at *3 (S.D.W. Va.
Mar. 24, 2006), and Kessler v. Fay Servicing, LLC, No. 2:18-CV00518, 2018 WL 4628322, at *3 (S.D.W. Va. Sept. 27, 2018).
court finds $25,000 to be a reasonable estimate here.
The
Indeed,
the court notes that not only was plaintiff’s counsel here, Bren
J. Pomponio, also the plaintiff’s counsel in Kessler, but that
Mr. Pomponio has previously requested fees in a default judgment
case in the amount of $325 per hour in Davis v. Second Chance
Pre-Owned Auto Sales, LLC, which Judge Goodwin found to be
reasonable.
No. 2:14-CV-26957, 2015 WL 2137272, at *4 (S.D.W.
from the WVCCPA’s creation in 1974. In 2015, the legislature
amended the section, W. Va. Code. § 46A-5-106, so that penalties
are adjusted for inflation from September 1, 2015, rather than
from 1974, resulting today in a maximum penalty slightly in
excess of $1,000 per violation.
8
Va. May 7, 2015).
It would take only 77 hours for fees at that
rate to surpass $25,000.
As for actual damages, the plaintiff asserts in her
complaint that she suffered damage by the accrued arrears, ¶ 30,
the imminent loss of her home, ¶ 36, as well as worry and
stress, annoyance and inconvenience, and fear of loss of her
home, ¶ 22.
counts.
She seeks actual damages for each of her four
In calculating this amount, the court notes that it
“‘is not required to leave common sense behind.’”
Weddington v.
Ford Motor Credit Co., 59 F. Supp. 2d 578, 584 (S.D.W. Va. 1999)
(quoting Mullins v. Harry's Mobile Homes, Inc., 861 F. Supp. 22,
24 (S.D.W. Va. 1994)).
In her complaint, the plaintiff repeatedly emphasizes
that she has been significantly damaged by the “substantial”
amount of the arrears “accrued on the loan over the course of
years,” though she does not quantify the damage in dollars.
Compl. at ¶ 29, ¶ 30, ¶ 35, and ¶ 36.
See
As for the remaining
compensatory damages sought, the court reasonably assumes that
the plaintiff will seek substantial damages based on the strong
accusatory language in her complaint and her alleged damages for
worry and stress, annoyance and inconvenience, and fear of loss
of her home.
While the court, based on its own experience,
projects these damages, if recovered, as falling in the range of
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$1,000 to $10,000, the court, having insufficient evidence from
which to assign a dollar amount to these damages, forgoes
speculating.
The plaintiff seeks punitive damages per Count III for
tortious interference with contract.
Inasmuch as the $6,000
civil penalty under the WVCCPA is itself punitive, it is not
included in the calculation of punitive damages, which are
awarded in proportion to compensatory damages.
Attorney’s fees
and costs awarded pursuant to the WVCCPA are considered
compensatory damages and “shall be included in the compensatory
to punitive damages ratio in cases where punitive damages are
available.”
Quicken Loans, Inc. v. Brown, 230 W. Va. 306 Syl.
pt. 11 (2012).
Punitive damages would be potentially available
here, should the plaintiff prevail on her tortious interference
or negligence claims.
The United States Supreme Court has suggested that
single digit ratios for calculating punitive damages are
presumptively valid.
State Farm Mutual Automobile Insurance Co.
v. Campbell, 538 U.S. 408 (2003). For purposes of this motion,
the court finds the ratio of 2.5 to 1 to be a reasonable,
conservative estimate.
Cf., Patton, 2006 WL 771924, at *3
(finding the parties’ proposed ratio of 2.55 to 1 to be a
reasonable, “conservative punitive damages ratio” for
10
calculating the amount in controversy), and Judy v. JK Harris &
Co. LLC, No. 2:10-CV-01276, 2011 WL 4499316, at *7 (S.D.W. Va.
Sept. 27, 2011) (using a 3 to 1 ratio to calculate “a reasonable
estimate of the likely amount [plaintiff] would be awarded”).
Accordingly, based on the estimated $25,000 in compensatory
damages, punitive damages would equal $62,500.
To summarize, the court has found it more likely than
not that the plaintiff will seek damages in the amount of at
least: $6,000 for statutory penalties, $25,000 for attorney’s
fees and costs, and punitive damages, which may be measured at
$62,500.
Accordingly, the estimated total amount in controversy
is $93,500 plus actual damages and equitable relief, well in
excess of the jurisdictional requirement.
Bolstering this conclusion is the fact that the
plaintiff has failed to argue or provide any evidence that she
is seeking less than $75,000.
Indeed, had the plaintiff wished
to maintain her action in state court, she could have stipulated
to an amount of damages at $75,000 or below per McCoy v. Erie
Ins. Co., 147 F. Supp. 2d 481, 485 (S.D.W. Va. 2001).
While the
burden lays with the removing party, the court notes that when
the party seeking remand fails plausibly to dispute the removing
party’s assertions, the court has difficulty finding that the
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plaintiff plans on requesting less than the amount proffered by
the removing party.
Accordingly, having considered the entire record and
made an independent evaluation that the amount in controversy
surpasses the $75,000 threshold, the court finds that remand is
not warranted.
III. Conclusion
For the foregoing reasons, it is ORDERED that the
plaintiff’s motion be, and it hereby is, denied.
It is further ORDERED, pursuant to this court’s order
of July 20, 2018 staying the briefing on the pending motion to
dismiss, (ECF # 15), that briefing is no longer stayed, and
PennyMac has until December 20, 2018 to file its reply in
support of its motion to dismiss.
The Clerk is directed to transmit copies of this order
to all counsel of record and to any unrepresented parties.
ENTER: December 6, 2018
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