Price v. Pennymac Loan Serv., LLC, CIVIL ACTION NO. 1:18-00951

SARAH PRICE, Plaintiff, v. PENNYMAC LOAN SERVICE, LLC, Defendant.

CIVIL ACTION NO. 1:18-00951

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA AT BLUEFIELD

September 6, 2018

MEMORANDUM OPINION AND ORDER

Before the court is Plaintiff's motion to remand and Defendant's partial motion for dismissal of Plaintiff's Complaint. ECF Nos. 2, 5. For the reasons that follow, the court GRANTS Plaintiff's motion to remand and remands the action to Mercer County Circuit Court.

I. BACKGROUND

Sarah Price brings this action against PennyMac Loan Service, LLC, the holder and servicer of a secured loan on her home located at 2812 Clovis Street, Bluefield, West Virginia (the "Bluefield Property"). Complaint at ¶ 3. The loan was originally entered into in August 2015 and insured by the Federal Housing Administration ("FHA") under the Single Family Housing Program which provides home-ownership opportunities to low income families. Id. at ¶¶ 3,4. Plaintiff claims that while she signed the Deed of Trust and truth-in-lending disclosures, she did not sign the note. Instead, her now ex-husband, Randy Caroll signed the note and originally bore the financial obligation on the Bluefield Property. Id. at ¶ 7.

Plaintiff finalized her divorce to Caroll in July 2017, and the divorce order granted Price possession of the Bluefield Property. Id. at ¶¶ 5-6. Price then communicated to PennyMac that she intended to assume the loan. However, and despite Caroll's verbal authorization that PennyMac could speak with Price about the loan, PennyMac refused to speak with Price because she was not an obligor on the loan. Instead, PennyMac stated that it needed written authorization due to restrictions established by the Fair Debt Collection Practices Act. Id. at ¶¶ 8-14. Curiously, however, PennyMac sent Price a letter indicating her right to cure the outstanding default on the Bluefield Property. Id. at ¶ 20.

Price eventually obtained a contempt order against Carroll requiring him to provide PennyMac with the necessary written authorization. Id. at ¶ 23. Thereafter, Price requested that PennyMac update the loan's mailing address to the Bluefield Property. Id. at ¶ 30.

On January 18, 2018, Price was allegedly pre-qualified by PennyMac for a loan modification. Nevertheless, this opportunity expired due to Price's failure to return the loan modification application. Id. at ¶¶ 30-31. Price contends thatshe never received this application because it was sent to Caroll's address, instead of the Bluefield Property. Id. at ¶¶ 32-33.

Despite Price's efforts to remedy the situation, the Bluefield Property was scheduled for foreclosure, id. at ¶¶ 26, 31-42, but the instant Complaint halted the planned foreclosure. Finally, Price alleges that a $6,682.02 balance was owed on the Bluefield Property loan when the Complaint was filed.

Price's Complaint includes three causes of action. Count One alleges unlawful debt collection under the West Virginia Consumer Credit and Protection Act ("WVCCPA") and seeks as relief:

• Actual damages;

• Civil penalties;

• Attorneys' fees and costs; and

• Equitable relief

Count Two alleges PennyMac breached its contract with Price, and seeks as relief:

• Actual damages;

• Punitive damages;

• Attorneys' fees and costs;

• Equitable relief; and

• Declaratory relief

Count Three alleges PennyMac engaged in fraud and seeks as relief:

• Actual damages;

• Punitive damages;

• Equitable relief; and

• Attorneys' fees and costs

Defendant filed her notice of removal on March 21, 2018, removing the action to federal court on the basis of diversity jurisdiction. Plaintiff filed the instant motion to remand, seeking to return this matter to the Circuit Court of Mercer County.

II. APPLICABLE LAW

Federal courts are courts of limited jurisdiction. Article III of the U.S. Constitution restrict federal jurisdiction to claims arising from federal questions and claims that satisfy diversity jurisdiction. 28 U.S.C. § 1332 confers federal jurisdiction over cases and controversies exceeding $75,000 where complete diversity exists between all plaintiffs and defendants. The party seeking removal carries the burden of demonstrating the court's jurisdiction over the matter by a preponderance of the evidence. 28 U.S.C. § 1332(a)(1); see also Strawn et al. v. AT&T Mobility, LLC et al., 530 F.3d 293, 296 (4th Cir. 2008) (citations omitted); see also Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994) ("The burden of establishing federal jurisdiction is placed upon the party seeking removal.").

Complete diversity of the parties is not contested. Price is domiciled in West Virginia. PennyMac is incorporated underthe laws of Delaware with its principal place of business in California. Therefore, the controversy is whether Plaintiff's action meets the $75,000 threshold required to sustain a diversity action in federal court. See 28 U.S.C. §§ 1332, 1441(a).

To determine the amount in controversy when the complaint establishes no concrete monetary demand, courts consider "the type and extent of the plaintiff's injuries and the possible damages recoverable therefore, including punitive damages if appropriate." McCoy v. Erie Ins. Co., 147 F. Supp. 2d 481, 485 (S.D.W.Va.2001); see also Scott v. Cricket Commc'ns, LLC, 865 F.3d 189, 194 (4th Cir. 2017). In doing so, courts look at the record at the time that the notice of removal was filed. Landmark Corp. v. Apogee Coal Co., 945 F. Supp. 932, 936 (S.D.W. Va. 1996).

"The starting point for ascertaining the amount in controversy when the petition for removal was filed is obviously the complaint itself." Sayre v. Potts, 32 F. Supp. 2d 881, 887 (S.D.W. Va. 1999). "Estimating the amount in controversy is not nuclear science," as a removing defendant is somewhat constrained by the plaintiff. S. Fla. Wellness, Inc. v. Allstate Ins. Co., 745 F.3d 1312, 1317 (11th Cir. 2014). "The key inquiry in determining whether the amount-in-controversy requirement is met is not what the plaintiff will actuallyrecover, but 'an estimate of the amount that will be put at issue in the course of the litigation.'" Scott v. Cricket Commc'ns, LLC, 865 F.3d 189, 196 (4th Cir. 2017) (quoting McPhail v. Deere & Co., 529 F.3d 947, 956 (10th Cir. 2008)).

III. DISCUSSION

Absent a specific demand for relief within the Complaint, McCoy, 147 F. Supp. 2d at 485, PennyMac extrapolates the following damages within the Complaint:

1) $15,000 in statutory damages for violations of WVCCPA (15 alleged violations multiplied by $1,000);

2) At least $10,000 in attorney's fees;

3) $70,696 in equitable relief (initial Bluefield Property loan obligation);

4) Unspecified actual damages;

5) Unspecified Punitive Damages; and

6) Unspecified "other relief" as the court deems equitable and just for claim of fraud.

Notice of Removal at p.8.

A. Equitable Relief

In cases seeking declaratory or injunctive relief, "it is well established that the amount in controversy is measured by the value of the object of the litigation." Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 347 (1977) (collecting cases). Here, the parties dispute what constitutes the appropriate object of the litigation: the initial purchase pricefor the Bluefield Property ($70,696) or the amount owed on the Bluefield Property ($6,682.02).

When federal jurisdiction hinges on an amount in controversy, the parties, as here, flip their natural tendencies. Plaintiffs confine their action, while defendants use broad strokes to encapsulate every potential remedy a court could award. Such arguments are made amidst claims for relief which are foggy at best. Nevertheless, courts wary of "the long-established principle that a Plaintiff may tailor the remedy he seeks to avoid federal court jurisdiction," must take at face value the strictures Plaintiff asserts on its own action. Besse v. Gen. Motors Corp., 317 F. Supp. 2d 646, 651 (D.S.C. 2004); see also Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 449 (7th Cir. 2005)) (emphasis omitted) ("When a plaintiff's complaint leaves the amount of damages unspecified, the defendant must provide evidence to 'show . . . what the stakes of litigation . . . are given the plaintiff's actual demands.'") (emphasis added). The only concrete requests for equitable relief within the Complaint flow from the alleged contractual failings by PennyMac,

a) refusing to provide Plaintiff with payment address, account number of payment amount on the account;

b) accepting and reviewing Plaintiff's financial status before refusing to review her for a loan modification and simultaneously referring the home to foreclosure;c) and (sic) requesting and accepting loan assumption paperwork from Plaintiff while failing to exercise reasonable diligence in obtaining documents and information from Plaintiff to complete her loss mitigation application because Plaintiff complied with every request from Defendant and yet Defendant still failed to send Plaintiff the proper loss mitigation application, thereby denying her the ability to save her home from foreclosure and retain her investment in the home;

d) Failing to conduct a face-to-face interview with Plaintiff as required by 24 C.F.R. § 203.604;

e) Failing to consider Plaintiff for modification pursuant to FHA-HAMP as required by Mortgagee Letter 2009-35;

f) Failing to consider specific options to minimize loss, most notably assumption or recasting of the mortgage as required by 24 C.F.R. § 203.501;

g) Otherwise failing to offer any foreclosure alternatives to Plaintiffs (sic) prior to instituting foreclosure proceedings . . .

Complaint at ¶ 77. Therefore, and as a result of these breaches, Plaintiff requests a "declaration that the Defendant breached the contract as alleged." Id. at ¶ 79. In a similar vein, Plaintiff's briefing represents that "the only equitable relief Plaintiff seeks is for Defendant to appropriately consider Price for any loss mitigation option to which she would qualify (a loan modification for lower payments, deed in lieu of...