United States District Court, E.D. Virginia, Norfolk Division
OPINION AND ORDER
S. DAVIS, UNITED STATES DISTRICT JUDGE.
matter is before the Court on a Motion to Remand filed by
Plaintiffs Ricky Wingate ("Mr. Wingate") and
LaSandra Wingate ("Mrs. Wingate") (collectively
"Plaintiffs") pursuant 28 U.S.C. § 1447(c),
ECF No. 6, as well as Plaintiffs' Motion to File Out of
Time and for Defendant's Motion to Dismiss to be Held in
Abeyance Until the Court Determines Jurisdiction
("Motion to File Out of Time"), ECF No. 9. For the
reasons stated below, Plaintiffs' Motion to Remand is
DENIED, and Plaintiffs' Motion to File
Out of Time is GRANTED in part and
DENIED in part.
FACTUAL AND PROCEDURAL HISTORY
are residents of Chesapeake, Virginia, and citizens of the
Commonwealth of Virginia. Compl. ¶ 1, ECF No.
1-1. Defendant Ocwen Loan Servicing, LLC
("Defendant" or "Ocwen") is a limited
liability company organized under the laws of Delaware and
for purposes of federal diversity jurisdiction is a citizen
of the U.S. Virgin Islands. See Pis.' Remand Br.
4, ECF No. 7. Defendant Equity Trustees, LLC
("Equity") is a citizen of the Commonwealth of
September 2004, Plaintiffs entered into a mortgage loan
contract to purchase property in Chesapeake, Virginia.
Compl. ¶¶ 4-5. The loan was evidenced by a
note and secured by a deed of trust. Id. ¶ 5.
The deed of trust contains the following provision:
This Security Instrument shall be governed by
federal law and the law of the jurisdiction in which the
Property is located. All rights and obligations contained in
this Security Instrument are subject to any requirements and
limitations of Applicable Law.
Id. ¶ 6. The deed of trust defines
"Applicable Law" as "all controlling
applicable federal, state and local statutes, regulations,
ordinances and administrative rules and orders (that have the
effect of law) as well as all applicable final,
non-appealable judicial opinions." Id. ¶
Mr. Wingate was laid off from his job in January 2017,
Plaintiffs kept current in their mortgage payments until June
2017. Id. ¶ 8-11. Mr. Wingate then contacted
Ocwen to inform his lender that, despite having fallen behind
in payments, he would soon be able to make a lump sum payment
after the sale of his father's home. Id. ¶
12. During this conversation, Ocwen's representative did
not discuss any loss mitigation options with Mr. Wingate.
Id. ¶ 13. At some point after June 2017, Ocwen
informed Mr. Wingate that his property was scheduled for a
foreclosure sale in March 2018. Id. ¶ 19-21.
Mr. Wingate was "shocked" by this news, as he was
under the impression that Ocwen was still waiting on a lump
sum payment to bring the loan current. Id. ¶
19. As of March 2018, the sale of Mr. Wingate's
father's home had not yet gone through. Id.
February 2018, Plaintiffs filed suit in the Circuit Court for
the City of Chesapeake. Id. With respect to Ocwen,
Plaintiffs assert breach of contract, breach of the covenant
of good faith and fair dealing, and violations of the
Virginia Consumer Protection Act. Id. ¶¶
22-36, 44-47. Plaintiffs claim that various provisions of the
Real Estate Settlement and Procedures Act ("RESPA")
are incorporated into the mortgage contract so that a
violation of RESPA constitutes a breach of contract.
Id. ¶¶ 22-32. Plaintiffs do not, however,
include a count directly asserting a violation of RESPA. With
respect to Equity, Ocwen's substitute trustee, Plaintiffs
state only that Equity "has not gained the- authority to
foreclose." Id. ¶¶ 37-43. In their
prayer for relief, Plaintiffs seek an injunction to prevent
Defendants from instituting foreclosure proceedings and an
award of $70, 000 in compensatory damages. Id. at
March 2018, Ocwen removed this case to federal court pursuant
to 28 U.S.C. § 1441. Not. Removal, ECF No. 1.
Importantly, Ocwen was the only defendant to consent to the
removal. See id. at 9. In its notice of removal,
Ocwen argues first that jurisdiction is proper based on
federal question jurisdiction because Plaintiffs assert a
violation of federal law under RESPA. Id.
¶¶ 11-18. Second, Ocwen claims that there is
diversity jurisdiction under 28 U.S.C. § 1332(a) because
(1) there is complete diversity between Plaintiffs and Ocwen;
(2) Equity is the trustee for the foreclosure and has been
fraudulently joined; and (3) the amount in controversy
exceeds $75, 000.00 because Plaintiffs request equitable
relief. Id. ¶¶ 19-34.
April 2018, Plaintiffs filed their Motion to Remand. ECF No.
6. Therein, Plaintiffs make three arguments in favor of
remand. First, Plaintiffs note that Ocwen failed to obtain
the consent to removal of Equity. See Mem. Supp.
Mot. Remand 3, ECF No. 7. Because removal normally requires
the unanimous consent of all defendants, Plaintiffs claim
removal here is defective. Id. Second, Plaintiffs
argue that diversity jurisdiction is improper because of the
lack of an amount in controversy exceeding $75, 000 and
because there is a lack of complete diversity between the
parties in that Equity and Plaintiffs are citizens of
Virginia. Id. at 4. Third, Plaintiffs claim that
there is no federal question jurisdiction because they claim
that they are merely advancing state law theories of
contract. Id. at 5-6. Lastly, in addition to
claiming that removal is improper, Plaintiffs seek an award
of attorney's fees and costs related to the improper
removal pursuant to 28 U.S.C. § 1447(c). Mem. Supp. Mot.
April 3, 2018, Ocwen filed its Motion to Dismiss the
Complaint under Federal Rule of Civil Procedure 12(b)(6), ECF
No. 6. Ocwen then filed its opposition to the Motion to
Remand on April 18, 2018. ECF No. 8. On April 19, 2018,
Plaintiffs filed their Motion to File Out of Time, ECF No. 9,
and on April 26, 2018, Ocwen filed its opposition to the
Motion to File Out of Time, ECF No. 13. Having been fully
briefed, the instant motions are ripe for review.
STANDARD OF REVIEW
district courts are courts of limited subject matter
jurisdiction. United States ex rel. Vuyyuru v.
Jadhav, 555 F.3d 337, 347 (4th Cir. 2009) (citing
Exxon Mobile Corp. v. Allapattah Servs., Inc., 545
U.S. 546, 552 (2005)). They may-exercise "only the
jurisdiction authorized them by the United States
Constitution and by federal statute." Id.
(citing Bowles v. Russell, 551 U.S. 205 (2007)).
District courts have diversity jurisdiction in civil actions
between "citizens of different states" and
"where the matter in controversy exceeds the sum or
value of $75, 000, exclusive of interest and costs." 28
U.S.C. § 1332(a). If a case based on diversity
jurisdiction is not initially filed in federal court, a court
may exercise jurisdiction over the case upon proper removal
to federal court. 28 U.S.C. §§ 1441, 1446. District
courts have federal question jurisdiction in "all civil
actions arising under the Constitution, laws, or treaties of
the United States." 28 U.S.C. ...