Delebreau v. Bayview Loan Servicing, LLC, No. 6:09-CV-00245, 2011 WL 145298 (S.D.W.Va. Jan. 18, 2011).
In this case, a District Court in West Virginia ruled that if a complaint doesn’t contain “a short and plain statement of the grounds for the court’s jurisdiction,” the courts are required to discuss the jurisdictional issue before ruling on the parties’ motions.
The plaintiffs, who were borrowers, brought a class action alleging that the defendant, Bayview Loan Servicing, LLC, routinely adds thousands of dollars in illegal fees to consumer accounts and then attempts to collect these sums from West Virginia borrowers by threats of foreclosure.
In December 1999, the plaintiffs refinanced the loan on their home and entered into a loan agreement with Option One Mortgage Corporation. The plaintiffs executed a note in the amount of $84,500 payable to Option One and a deed of trust conveying the plaintiffs’ home as security for repayment of the loan. The deed of trust, however, contained an acceleration clause. Because the plaintiffs missed payments and made late payments, Bayview, the loan servicer for Option One, regularly assessed late fees on the plaintiffs’ account. In June 2007, the plaintiffs were behind on their loan payments and Bayview accelerated the loan, and then proceeded with a foreclosure sale.
The plaintiffs then filed this suit against Bayview in the District Court asserting claims on behalf of themselves and a class consisting of other West Virginia customers of Bayview. Specifically, the plaintiffs asserted that Bayview illegally assessed late fees, attorney fees, and other default fees, and misapplied payments resulting in increased principal and interest charges in violation of the West Virginia Consumer Credit and Protection Act (the “WVCCP”), W. Va. Code §§ 46A-1-101–46A-7-116. In addition, the plaintiffs’ complaint asserted an individual claim (not on behalf of the purported class) against Bayview for breach of contract and the implied covenant of good faith and fair dealing.
After discovery, Bayview filed a motion for summary judgment, and the plaintiffs filed a motion to certify the class.
In the interim, the Court discovered that the plaintiffs failed to include a jurisdictional statement in their complaint as required by Fed. R. Civ. P. 8(a)(1). Rule 8(a)(1) states that a pleading must contain “a short and plain statement of the grounds for the court’s jurisdiction”. Therefore, the Court discussed the jurisdictional issue before ruling on the parties’ motions.
Turning first to the issue of jurisdiction, the Court found that it had original subject-matter jurisdiction over the plaintiffs’ purported class action claims in Counts One, Two, and Three of the complaint pursuant to CAFA, 28 U.S.C. §§ 1332(d).
The Court observed that the proposed plaintiff class consisted of at least 150 members because Bayview serviced over 300 loans in West Virginia during the class period. Second, the plaintiffs asserted that Bayview committed at least 2,662 statutory violations while servicing the loans of the purported class members, and that, given the statutory fine of $4,400 per violation, the amount in controversy exceeded $11 million. Finally, the plaintiffs are citizens of West Virginia, whereas Bayview is a citizen of Delaware and Florida. Accordingly, the Court concluded that the parties had demonstrated a basis for it to exercise subject-matter jurisdiction under § 1332(d) over the plaintiffs’ class action claims.
Next, the Court found that the plaintiffs’ claims under the WVCCPA were barred by the statute of limitations; and accordingly, granted Bayview’s summary judgment as to Counts One, Two, and Three of the plaintiffs’ complaint.
Because the Court dismissed the plaintiffs’ class claims under the WVCCPA, it declined to exercise supplemental jurisdiction over the plaintiffs’ individual cause of action against Bayview for breach of contract and breach of the implied covenant of good faith and fair dealing. While holding so, the Court noted that § 1367(c)(3) specifically provides that a district court “may decline to exercise supplemental jurisdiction over a claim,” if “the district court has dismissed all claims over which it has original jurisdiction.” Although the Court had original jurisdiction under CAFA over the plaintiffs’ purported class claims, it did not, however, have any independent basis for the plaintiffs’ individual claim against Bayview.
As the plaintiffs had not alleged that their breach of contract claim independently satisfied the amount in controversy requirement, and given that the Court had granted summary judgment to Bayview on all of the plaintiffs’ claims over which the court had original jurisdiction, the Court declined to exercise supplemental jurisdiction over the plaintiffs’ remaining state-law breach of contract claim. Accordingly, the Court dismissed Count Four of the plaintiffs’ complaint, without prejudice.