Anderson et al v. Select Portfolio Servicing, Inc. et al, No. 1:2017cv00010 - Document 38 (S.D. Ga. 2017)

Court Description: ORDER denying 8 Motion for Attorney Fees; granting 8 Motion to Remand. All other outstanding motions in this case are DENIED as moot. Signed by Judge Lisa G. Wood on 6/29/2017. (ca)

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Anderson et al v. Select Portfolio Servicing, Inc. et al Doc. 38 Stt tl^e ?!9tttteb States; SBtsitrtct Court for tl^e ^ontfiem IBiOtrict of ((Georgia Kngnota l9ttitOion JAMES T. ANDERSON, JR. & MARY H. ANDERSON, Plaintiffs, No. 1:17-CV-10 V. SELECT PORTFOLIO SERVICING, INC. & U.S. BANK N.A., as Trustee for Certain MortgageRelated Assets, Defendants. ORDER Before Anderson's the (^'the Court is Plaintiffs Andersons") motion James for T. remand, and Mary dkt. H. no. 8. As explained more fully below, the motion will be GRANTED as to remand, but DENIED as to attorneys' Select Portfolio Servicing, Inc. (^'SPS") fees. Defendants and U.S. Bank N.A. are correct that no document prior to the amended complaint justified untimely. requisite removability, so their removal is not per se But the amended complaint does not establish the amount in controversy. The Court must supplementary evidence submitted by Defendants. disregard And even if it considered that evidence, it could not find removability. A0 72A (Rev. 8/82) Background The Andersons Have an Adjustable Rate Mortgage For truth purposes of the of this overview, the facts operative complaint. alleged in the assumes the Andersons' currently The Andersons took on an adjustable rate note to buy a home on September 19, 2003. SI 5. Court Dkt. No. 1-1 at 105 That note is in an asset pool of which US Bank N.A. is trustee, and SPS is its servicing agent. The note Id. at 106 SISI 12-13. was bought by Thornburg Mortgage Home Loans, Inc. {^^Thornburg"), which entered a loan modification with the Andersons on December 1, 2005. Under it, the initial agreement Id. at 105 SISI 7-9. interest rate would be 6.25% annually for the first ten years, until December 1, 2015. Id. at 122 § 3(a). That day, and every December 1 thereafter, the rate recalculated would Offered be Rate ("LIBOR"), ""a based on benchmark the rate London Interbank that some of the world's leading banks charge each other for short-term loans." Id. § 3(b); LIBOR, Investopedia, terms/l/libor.asp (accessed Mar. 17, 2017). The rate would be ^'1.875% in excess of [LIBOR] . . . rounded to the nearest one- eighth of one percent." Dkt. No. 1-1 at 122 § 3(c). On December 1, 2015, this was 2.75%.^ ^ Defendants miscalculated that initial rate and the parties resolved this. Id. at 44-49, 108 f 26; Dkt. No. 27 at 5. The agreement also limited rate fluctuation. On December 1, 2015, the rate would ''not increase by more than 5% of the interest rate previously in effect." § 3(e). Each following year, it Dkt. No. 1-1 at 122 would "not increase or decrease by more than 2% of the interest rate previously in effect." Id. Additionally, the interest rate would "never be greater than 11.25% or less than 1.875%." Id. The parties dispute these terms' meanings. On December 1, 2016, Defendants raised the Andersons' rate to 3.5%, which the Andersons claim to be excessive rate previously in effect." as "27% of the interest Id. at 108 SI 27. The Parties Began Litigating in State Court The Andersons filed a class-action suit in Richmond County Superior Court on January 14, 2016, on behalf of [a]11 persons who entered into a loan modification agreement with Thornburg whereby their interest rate was "fixed" for a given period of time and thereafter converted to an "adjustable rate" subject to a "Limits on Interest Rate Changes" provision substantially identical to Section 3(e) of the Loan Modification Agreement, and to whose loan Defendants applied a maximum limit on the amount of allowable interest rate decrease occurring on the First Change Date. Id. at 5, 12 1 43 (emphasis added). They alleged that this class perhaps contained homeowners." "many Id. 9-10 hundreds, 27-30. or thousands, of But SPS's Curtis Pulsipher testified in a March 21, 2016 affidavit (''Pulsipher I") that there was "only one additional loan in the group of Thornburg loans where the interest rate at the first change date was not calculated correctly under the loan modification before there 12-13. was any agreement," and that wrongful payment. it was changed Dkt. No. 1-2 at 4 He also testified that there were 228 Thornburg-SPS loans "that were originated as adjustable interest rate loans and subsequently modified rate loans." by Thornburg to remain adjustable Id. SI 11.^ The Andersons added a second putative class of plaintiffs on January 10, 2017: All persons who entered into a loan modification agreement with Thornburg whereby their interest rate was "fixed" for a given period of time and thereafter converted to an "adjustable rate" subject to a "Limits on Interest Rate Changes" provision substantially identical to Section 3(e) of the Loan Modification Agreement, and to whose loan Defendants have attempted to apply, on any Change Date subsequent to the First Change Date, an interest rate increase of greater than 2% of the interest rate previously in effect. Dkt. No. 1-1 at 112-13 1 46(b). The Andersons' next morning, interest-rate the Superior changes and Court limited enjoined the Defendants making from negative credit references or starting foreclosure proceedings against them. Dkt. No. 11-1 at 23:19-24:4. ^ Defendants have since reduced this number to 198. 4 Dkt. No. 27 at 8 n.3. Defendants Remove the Case to this Court Six days later. Defendants removed the case. Dkt. No. 1. Their notice appended the original complaint, dkt. no. 1-1 at 5-18, the loan modification agreement, id. at 20-23, the amended complaint, id. at 104-20, and Pulsipher I, dkt. no. 12. The Andersons timely moved for remand. Dkt. No. 9. Defendants responded on February 28, 2017. Their response appended {^^Pulsipher II"). spreadsheet (^^the loans '''possessing another Dkt. No. 27-2. Spreadsheet") a declaration It with Modification similar to Plaintiffs." data Dkt. No. 27. from also Pulsipher contained relating Agreement to a 198 substantially Dkt. No. 27-1; see also Dkt. No. 29. The average time remaining on each after the first day of interest-rate adjustment was interest rate set at 1.9%. 22.12 years, with Dkt. No. 27-1 at 10. interest-rate-change limit was 1.97%. The Andersons replied. the average The average Id. Dkt. No. 32. This Court heard oral arguments on the remand motion on April 12, 2017. No. 35. 2017. Dkt. The parties supplemented their briefing on April 24, Dkt. Nos. 36, 37. various LIBOR forecasts. 37-5, 37-6, 37-7. At that time. Defendants filed Dkt. Nos. 37 at 14-15, 37-3, 37-4, The motion is ripe for disposition. LEGAL STANDARD Federal courts' jurisdiction is limited to authorized by Constitution and statute." ^^that power Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A defendant is authorized to remove a civil suit to federal court within 30 days of either the plaintiff's initial pleading or ^^receipt by the defendant . . . of a copy of an amended pleading . . . from which it may first be ascertained that the case is one which is or has become removable." 28 U.S.C. §§ 1446(b)(1), (3). The removal notice must '"contain[ ] a statement of the grounds for removal." short and plain Id. § 1446(a). It must show that the federal court has original jurisdiction. Id. § 1441(a). Such jurisdiction extends to "any civil action in which the matter in controversy exceeds the sum or value of $5,000,000 . . . and is citizenship. a class action" with diversity of Id. § 1332(d)(2). "[N]o antiremoval presumption attends" such cases. Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547, Dart 554 (2014); see also Dudley v. Eli Lilly & Co., 778 F.3d 909, 912 (11th Cir. 2014). unspecified, the But removing where, party as here, bears "damages the burden are of establishing the jurisdictional amount by a preponderance of the evidence." Lowery v. Ala. Power Co., 483 F.3d 1184, 1208 (11th Cir. 2007). ^^unambiguously" ''^Preponderance" means that removability is clear. Id. at certainty is neither attainable 1213. Although '^absolute nor required, the value of declaratory . . . relief must be ^sufficiently measurable and certain'." S. Fla. Wellness, Inc. v. Allstate Ins. Co., 745 F.Sd 1312, 1316 (11th Cir. 2014) (quoting Morrison v. Allstate Ins. Co., omitted)). 28 F.3d 1255, 1269 (11th Cir. 2000) (citation Remand is required if the amount in controversy is ""too speculative and immeasurable." Cohen v. Office Depot, Inc., 204 F.3d 1069, 1077 (11th Cir. 2000) (quoting Ericsson GE Mobile Commc'ns, Inc. v. Motorola Commc'ns & Elec., Inc., 120 F.3d 216, 221-22 (11th Cir. 1997)). DISCUSSION Remand is GRANTED. Attorneys' fees are DENIED. I. THIS CASE MUST BE REMANDED. This case must be remanded. Defendants did not wait too long to remove, as no document before the amended complaint supported removability. But the amended complaint does not establish amount the requisite in controversy. Defendants cannot rely on supplemental evidence obtained elsewhere than from the Andersons. Even if they unpredictable for removal to be proper. could, LIBOR is too A. Defendants Did Not Wait Too Long to Remove. Although remand is appropriate. Defendants did not err by failing to remove earlier, as the Andersons suggest. document prior to the amended complaint provided with a basis for removal. No Defendants 28 U.S.C. § 1446 authorizes removal at two points in time: ^'within 30 days after the receipt by the defendant . . . of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based," or ''within 30 days after receipt by the defendant . . . of a copy of an amended pleading . . . from which it may first be ascertained that the case is one which is or has become removable." 28 U.S.C. §§ 1446(b)(1), (3). The Andersons suggest that if anything, this suit should have been removed within 30 days of the original complaint. No. 9 at allegations: 19. They (1) they rely were on three being of their overcharged by Dkt. original $325.28 monthly; (2) their putative class contained "many hundreds, or perhaps thousands" of plaintiffs; and (3) multiplying the Andersons' monthly overcharge by twelve, then by sixteen for the years left in their loan term, then by 100 plaintiffs, equals more than $5 million. Id. at 19-20 (citation omitted). Removal at this case's outset would have been improper, because the original complaint did not give Defendants "a good faith basis for asserting that 8 the amount in controversy requirement was satisfied." Randall v. Target Corp., No. 13- 61196-CIV, 2013 WL 3448116., at *4 (S.D. Fla. July 9, 2013). Defendants claim, and the Andersons have not contested, that Defendants served. reviewed their records Dkt. No. 27 at 1. testifies that they immediately after being Pulsipher I, dated March 21, 2016, only found one loan fitting into the putative class—and no wrongful payments were made under it before its rate was corrected. Dkt. No. 1-2 12-13. Those findings dispelled any removal hope Defendants might have had. Defendants' removal motion is not too late by virtue of following the amended complaint. B. The Amended Complainh Does Not Establish the Requisite Amount in Controversy. But, looking to the amended complaint, the Court cannot find that the amount in controversy here is unambiguously at least $5 million. See Lowery v. Ala. Power Co., 483 F.3d 1184, 1213 (11th Cir. 2007) (describing ^'the heart" of the analysis as whether the removal notice and its attachments ^^unambiguously establish federal jurisdiction."); but see Mitchell V. Cody Exp., LLC, No. 3:16-CV-165, 2016 WL 6246793, at *4 (M.D. standard has Ala. met Oct. an 25, icy 2016) (commenting reception understanding its rationale). and that admitting Lowery's to not The amended complaint does not allege that amount to be in controversy. See generally Dkt. No. 1-1 at Defendants' 104-20. removal notice fails to convincingly posit that amount to have been in controversy. It claims that $1766.52 was in controversy for 2016-17. No. 1 ^ 29. Dkt. Then, it simply multiplies this by sixteen to find the amount for the Andersons' loan's entire life, then multiplies that number by 228 to grand total. Id. 30-31. get the putative class's That math is far too simple. ^^The only way each class member would have the same damages would be if they each had the same loan, for the same amount, with the same terms; and paid the same amount," and "[t]here is nothing to suggest that scenario here." White v. Impac Funding Corp., No. 6:lO-CV-1780, 2011 WL 836947, at *5 (M.D. Fla. Feb. 15, 2011), adopted, 2011 WL 861172 (M.D. Fla. Mar. 9, 2011). The Court cannot find removability based on the amended complaint. C. Defendants Cannot Supplement their Argument with Evidence Received Elsewhere than from the Andersons. That means remand must be granted. Defendants cannot supplement their case with their evidence, as it did not come from the Andersons.^ In Lowery v. Alabama Power Co., the defendant removed the case after the plaintiffs amended their ^ The Andersons incorrectly claim that the evidence is also improper because the Court cannot look beyond "the limited universe of evidence available when the motion to remand is filed." Dkt. No. 36 at 3 (quoting Lowery, 483 F.3d at 1214). The Eleventh Circuit has held that this language from Lowery is not binding and should be disregarded. Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 772-74 (11th Cir. 2010); accord Shannon v. Albertelli Firm, P.C., 610 F. App'x 866, 871 n.2 (11th Cir. 2015) (per curiam). 10 complaint to ^'add[ ] more than four amend[ ] their prayers for relief." hundred plaintiffs 483 F.Sd at 1188. and The defendant tried to support removal with evidence that ^^recent mass tort actions" had netted ^'greater than $5,000,000." at 1189. Id. The Eleventh Circuit held that because this evidence ^'was not received from the plaintiffs, but rather was gathered from outside sources," it was ^^not of the sort contemplated by [28 U.S.C.] § 1446(b)." consideration Defendants' of LIBOR Id^ at 1221. Pulsipher forecasts II, here. That holding bars the See Spreadsheet, Dkt. No. 37 and at 11 (conceding that ^^Lowery . . . preclude[d] a defendant's . . . evidence (even though it was the plaintiff who had caused the changed circumstances [arguably triggering removability] by filing an amended complaint)."). To be sure, Lowery is thorny. The general rule lurking behind it is that a defendant cannot create removability using one of its own documents. See Pretka v. Kolter City Plaza II, Inc., 608 F.Sd 744, 761 (11th Cir. 2010). As Defendants point out, that is not what they are trying to do. 11. Dkt. No. 37 at Defendants clearly identify the amended complaint as the document triggering removability, and their own evidence is simply an effort to illuminate that document's significance. Apart from two conclusory lines of evidence would apparently be permissible. 11 Lowery, Defendants' Pretka, 608 F.Sd at 761 (^'[The] ^receipt from the plaintiff rule plainly does not limit the type of evidence a defendant may use to establish that the plaintiff s complaint already is removable—without any ^conversion.'"). Defendants' unconvincing. But Lowery binds. two contentions Defendants to first the claim contrary that Lowery are was abrogated by Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547, 554 (2014). Dkt. No. 37 at 11. Dart Cherokee merely noted that ^^both sides submit proof" when disputing the amount in controversy. Id. Defendants go astray by ^^read[ing] into [Dart Cherokee] more than is there in order to justify not following a particularly pesky . . . precedent." Johnson v. K Mart Corp., 273 F.3d 1035, 1067 (11th Cir. 2001) (Carnes, J., dissenting), reh'q en banc granted & op. vac'd, Dec. 19, 2001; see also Garrett v. Univ. of Ala, at Birmingham Bd. of Tr., 344 F.3d 1288, 1292 (11th Cir. 2003) (per curiam) (^'While overrule an intervening the decision decision of a of prior the panel Supreme of our Court can court, the Supreme Court decision must be clearly on point."). Defendants then point to Whaley v. Bay View Law Group, PC, No. CV 114-050, 2014 WL 4926458 (S.D. Ga. Sept. 30, 2014). But Whaley did not meaningfully grapple with Lowery, so it gives this Court no way to get out from underneath that case. Because Lowery has not been 12 overturned, the Court must disregard Pulsipher II, the Spreadsheet, and Defendants' LIBOR forecasts. However, the continued viability of Lowery is just one, but not the only, reason remand is appropriate. D. Remand Would Be In Order Even Were the Court to Consider Defendants' Evidence. Remand would be required even if the Court did consider Defendants' additional evidence. The Spreadsheet shows that the average interest rate for the loans at issue is pegged at 1.9% over LIBOR, with a change limit of 1.97% and an average of 22.12 term years remaining. Dkt. No. 27-1 at 10. Thus, where LIBOR goes over the next two decades, and how quickly, will determine the size of the gap between Defendants' and the Andersons' interest calculations. See Dkt. No. 36 at 8, 10-11 (modeling gap as less than $5 million given certain LIBORs). In estimating that, it is not enough to assume LIBOR hits its all-time low and stays there. See Dkt. No. 27 at 15-16.'^ can the Court guess that LIBOR will hold steady. See id. Nor Nor may it assume LIBOR will ^^increase back to its historically normal levels." See id. at 12. Nor does the only data that the Court can be sure about—that for the most recent year—even come close to $5 million. in controversy for most See id. at 11 (identifying amount recent year as $388,135.44), 18 (adding $97,033.86 for attorneys' fees). Defendants invite the Court to rewrite the Andersons' claim into one that the interest rate must be 1.875% of LIBOR. Id. at 14-16. This is spurious. 13 Instead, the Court must consider all plausible LIBORs, and all plausible rates of change thereto, including ones that would put the interest rate within the ranges that would be found under the Andersons' formula. LIBOR's range has proven quite tectonically active over the past twenty-two years, with sudden eruptions, depression. rapid slides, and a half-decade of calm The following picture spares the need for the proverbial thousand words of volatility descriptions: FRED ^ — Il-Wonli ipndon nurbjnk Of>tr*da«( aS0*Lb«Md onUJ.Oolwe 1494 19V6 jMtv Kl mMurh 1991 2ClO« 20C1 »«4 2006 2009 2010 2SI2 2014 2016 Lwioa r4&> tnif.n<V4(d4V4 12-Month London Dollar, FRED Interbank Ec. Data, topography historic See, is e.g., Who Guardian (DK) , light of Liam Vaughan this the 18, (LIBOR), Reserve Bank Mar. 20, Based on of St. U.S. Louis, 2017) . That of unpredictable market movement, recession, Fixed Jan. Fed. (accessed result economic Bankers In the Offered Rate & and Gavin World^ s 2017, history, other Finch, Most 1:00 EST, it 14 unforeseeable would be Libor Important a forces. Scandal: The Number, The sheer speculation to guess LIBOR's altitude and incline over the next two decadeseven in light of the forecasts Defendants supplied. Dkt. Nos. 37 at 14-15, 37-3, 37-4, 37-5, 37-6, 37-7. For this reason, the amount in controversy is just ^^too speculative and immeasurable" to permit removal. Office Depot, Inc., 204 F.3d (quoting Ericsson GE Commc^ns & Inc., 1997)). Elec., Even Mobile F.3d V. Nattin, 58 F.2d 216, Defendants' then, this case must be REMANDED. Co. 1077 Commc^ns, 120 considering 1069, 979, Cohen v. {11th Inc. Cir. v. 221-22 2000) Motorola (11th additional Cir. evidence, Cf. Vicksburq, S. & P. Ry. 980 (5th Cir. 1932) (''Only prophetic ken of a rare order could forecast what will ensue. Jurisdiction is based on actuality, not prophecy . . . .").^ II. ATTORNEYS' FEES ARE DENIED. The Andersons' request for U.S.C. § 1447(c) will be denied. fees in remand motions is a attorneys' fees under 28 Whether to award attorneys' discretionary matter. Graham Commercial Realty, Inc. v. Shamsi, 75 F. Supp. 2d 1371, 1373 (N.D. Ga. 1998). "Defendants' attempt at removal" here was not "so lacking as to justify . . . an award." Sapp v. AT & T Corp., 215 F. Supp. 2d 1273, 1279 (M.D. Ala. 2002). Defendants legal presented standard, it insufficient was evidence reasonable to to test "Although satisfy the the bounds ^ Binding precedent, under Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981) (en banc). 15 of Lowery" in light of Dart Cherokee. C and E, Inc. v. Friedman^s Jewelers, Inc., No. CV 107-122, 2008 WL 64632, at *3 (S.D. Ga. Jan. 4, 2008). The Andersons' motion for attorneys' fees is DENIED. CONCLUSION The Andersons' Motion to Remand dkt. no. 8, is attorneys' fees. GRANTED as to and for Attorney Fees, remand, but DENIED as to The Clerk of Court is hereby directed to REMAND this case to the Superior Court of Richmond County. All other outstanding motions in this case are DENIED as moot. SO ORDERED, this 29th day of June, 2017. HON. LISA GODBEY^WOOD, JUDGE UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF GEORGIA 16

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