Wong v. Mortgage

• Court: U.S. District Court — Western District of Missouri
• Writing for the Court: Fernando J. Gaitan, Jr.
• Decision Date: 18 April 2011
• Docket Number: No. 10-1038-CV-W-FJG,10-1038-CV-W-FJG
• Citation: Wong v. Bann-Cor Mortg., No. 10-1038-CV-W-FJG (W.D. Mo. Apr 18, 2011)
• Parties: JAMES G. WONG, DANIEL R. AND WANDA D. JENSEN, and TERRY M. LOVETT (f/k/a TERRY M. BROOKS), individually and on behalf of all those similarly situated, Plaintiffs, v. BANN-COR MORTGAGE, et al., Defendants.

JAMES G. WONG, DANIEL R. AND WANDA D. JENSEN and TERRY M. LOVETT (f/k/a TERRY M. BROOKS) individually and on behalf of all those similarly situated, Plaintiffs, v. BANN-COR MORTGAGE, et al., Defendants.

No. 10-1038-CV-W-FJG

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF MISSOURI WESTERN DIVISION

Dated: April 18, 2011

ORDER

Pending before the Court is Plaintiffs' Motion to Remand (Doc. No. 46). Together with said motion are Plaintiffs' Suggestions in Support (Doc. No. 47); Plaintiffs' Notice of Supplemental Authority in Support of Motion to Remand (Doc. No. 61); Defendant Wells Fargo's Suggestions in Opposition to Plaintiffs' Motion to Remand (Doc. No. 95); Defendant Sovereign Bank's Suggestions in Opposition to Plaintiffs' Motion to Remand (Doc. No. 96); Joining Removing Defendants' Supporting Suggestions in Opposition to Plaintiffs' Motion to Remand (Doc. No. 101); Defendant Franklin Credit Management Corporation's Joinder in Wells Fargo's Suggestions in Opposition to Plaintiffs' Motion to Remand (Doc. No. 102); Plaintiffs' Joint Reply to Defendants' Suggestions and Joinders in Opposition to Motion to Remand (Doc. No. 147); Plaintiffs' Second Notice of Supplemental Authority in Support of Motion to Remand (Doc. No. 166); and Wells Fargo Bank, N.A.'s Suggestions in Opposition to Plaintiffs' Second Notice of Supplemental Authority in Support of Plaintiffs' Motion to Remand (Doc. No. 167).

I. Background

On October 22, 2010, defendant Wells Fargo Bank, N.A. ("Wells Fargo") filed its Notice of Removal (Doc. No. 1). Defendant Wells Fargo indicated that it was removing this action pursuant to 28 U.S.C. §§ 1332, 1441, 1453 and 1446. In particular, defendant WellsFargo indicated in its Notice of Removal that its removal was based on the Class Action Fairness Act ("CAFA"), arguing that the suit against it commenced for purposes of CAFA on September 22, 2010, the date when plaintiffs filed their Sixth Amended Petition in state court.

This case has had a long history in the state and federal courts. Plaintiffs John and Jeannette Schwartz and James G. Wong filed their original petition in this matter on October 31, 2000. See Doc. No. 47, Ex. 1.¹ The original petition brought claims under the Missouri Second Mortgage Loan Act ("MSMLA"), RSMo. §§ 408.231 et seq., alleging their subordinate lien loans originated by Bann-Cor Mortgage ("Bann-Cor") and secured by Missouri real estate violate the MSMLA. The defendant parties in the original petition were Bann-Cor, U.S. Bank N.A. and Does 1 through 25. U.S. Bank N.A. and Does 1-25 were identified collectively as the "assignee defendants" and were alleged to be the "purchasers and/or assignees and/or were or are the current holders (or were or are the trustees of such purchasers, assignees or holders) of the Second Mortgage Loans of the plaintiffs and the plaintiff class, which Second Mortgage Loans were originated and made by BANN-COR to plaintiffs and the plaintiff class...." Doc. No. 47, Ex. 1, at ¶¶ 5, 7-8. The Does 1-25 were identified as "the yet to be named additional individual business trusts or mortgage pools organized under various state laws who purchased and/or were assigned and/or now hold the Second Mortgage Loans...." Id. at ¶ 7. Plaintiffs' original petition includes allegations directed at a putative defendant class, although it appears that plaintiffs have never sought to certify a defendant class in this matter.

Plaintiffs amended their petition multiple times. On December 18, 2000, they amended their petition to add defendant Master Financial, Inc. and delete defendant U.S. Bank N.A. See Doc. No. 95, Ex. 4. The allegations against defendant Does 1 through 25remained the same as in the original petition. The action was removed to federal court on December 19, 2000, by defendant Bann-Cor on the basis of diversity jurisdiction. See Case No. 00-01271-CV-W-FJG. The case was remanded on February 8, 2001, after the Court found the amount in controversy could not be met. On September 6, 2001, the case was removed yet again, based on plaintiffs' motion for leave to file a second amended petition. See Case No. 01-00980-CV-W-HFS. Judge Sachs entered an order remanding this case yet again on October 22, 2001, finding that federal question jurisdiction was not present. Id., Doc. No. 14.

On May 28, 2002, plaintiffs filed their Second Amended Petition², naming in addition to the defendants named in the amended petition the following: PSB Lending Corporation; Homeq Servicing Corporation; The Money Store, Inc.; The First National Mortgage Exchange, Inc.; Master Financial Asset Securitization Trusts 1997-1, 1998-1, and 1998-2; Home Loan Trust 1997-HI3; FirstPlus Home Loan Owner Trusts 1997-1, 1997-2, 1997-3, 1997-4, 1998-1, 1998-2, 1998-3, 1998-4, and 1998-5; Empire Funding Home Loan Owner Trusts 1997-1, 1997-2, 1997-3, 1997-4, 1998-1, 1998-2, 1998-3, and 1999-1; PSB Lending Home Loan Owner Trusts 1997-3 and 1997-4; Countrywide Home Loan Trust 2001-HLV1; The Money Store Residential Trusts 1997-I and 1997-II; Cityscape Home Loan Owner Trusts 1997-2, 1997-3, and 1997-4; Cityscape Home Equity Loan Trusts Series 1997 B and 1997 C; US Bank, National Association; US Bank National Association ND; Wilmington Trust Company; First Union Trust Company; and Chase Manhattan Bank.

On August 11, 2002, a Third Amended Petition was filed. See Doc. No. 95, Ex. 6. The Third Amended Petition named as defendants: Bann-Cor Mortgage; Master Financial, Inc.; Homeq Servicing Corporation; The Money Store, Inc.; Master Financial Asset Securitization Trust 1997-1; Master Financial Asset Securitization Trust 1998-1; MasterFinancial Asset Securitization Trust 1998-2; and Does 1-25, which are described the same way as in plaintiffs' original Petition.³

On January 28, 2005, the Circuit Court of Jackson County, Missouri, granted certain motions to dismiss and motions for summary judgment filed by the then-named defendants, ruling that plaintiffs' claims were barred by the three-year statute of limitations set forth in RSMo § 516.130(2). See Schwartz v. Bann-Cor Mortg., 197 S.W.3d 168, 170 (Mo. App. W.D. 2006). On May 9, 2006, this decision was reversed on appeal, as the Missouri Court of Appeals found that plaintiffs' claims were governed by the six-year statute of limitationsset forth in RSMo § 516.420, and thus the claims were timely-filed. See Id. at 178-79.

On January 5, 2007, plaintiffs filed a Fourth Amended Petition (Doc. No. 95, Ex. 7). The Fourth Amended Petition added Daniel R. and Wanda D. Jensen as plaintiffs. The defendants (including Does 1-25) remained the same as in the Third Amended Petition. On December 21, 2007, plaintiffs filed a Fifth Amended Petition. The plaintiffs and defendants remained the same as in the Fourth Amended Petition.

On March 25, 2008, Judge John M. Torrance of the Circuit Court of Jackson County, Missouri, entered an order certifying a plaintiff class, which was defined as "All individuals who, on or after October 31, 1994, obtained a 'Second Mortgage Loan' as defined by § 408.231.1 RSMo, from Bann-Cor Mortgage, secured by real property located in Missouri." Doc. No. 47, Ex. 2, p. 19.⁴ Additionally, on May 9, 2009, plaintiffs obtained a grant of partial summary judgment on certain liability issues against Bann-Cor (among others). See Doc. No. 95, Exs. 2 and 3.

On May 11, 2009, plaintiffs filed a motion for preliminary approval of class action settlement as to the claims of certain plaintiffs against defendants Wachovia Equity Servicing, LLC and The Money Store, LLC. See Doc. No. 1, Ex. 2. The state court entered final approval of the settlement by order dated July 6, 2009. See Doc. No. 1, Ex. 9.

On September 21, 2010, plaintiffs requested leave to file a Sixth Amended Petition to, in their words, "substitute a number of mortgage finance businesses for the previously named 'Doe Defendants, ' and members of the previously alleged Defendant Class." Doc. No. 1, Ex. 5, p. 1. Plaintiffs asserted that "Most of these Defendant Assignees were previously named as Defendants in this lawsuit and/or the companion lawsuit, Case No.03-CV-224-614, but were dismissed by the Court without prejudice." Id. at p. 2. The plaintiffs also asserted that the defendants remaining in the lawsuit (Bann-Cor, Master Financial, Inc.; Master Financial Asset Securitization Trust 1997-1; Master Financial Asset Securitization Trust 1998-1; and Master Financial Asset Securitization Trust 1998-2) are, "to the best of Plaintiffs' knowledge, defunct and out of business, unrepresented by counsel, and repeatedly unresponsive to numerous prior communications from the Court and Counsel." Id. at p. 1. The state court granted leave to file the Sixth Amended Petition on September 22, 2010.

The Sixth Amended Petition added as a named plaintiff Terry M. Lovett (f/k/a Terry M. Brooks). Plaintiffs also named the following defendants, besides the ones listed in the Fifth Amended Petition: US Bank, NA; US Bank, NA N.D.; Wilmington Trust Company; Firstplus Home Loan Owner Trusts 1997-1, 1997-2, 1997-3, 1997-4, 1998-1, 1998-2, 19983, 1998-4, and 1998-5; Empire Funding Home Loan Owner Trusts 1997-1, 1997-2, 1997-3, 1997-4, 1998-1, 1998-2, 1998-3, and 1999-1; Countrywide Home Loans, Inc.; Countrywide Home Loan Trust 2001-HLV1; Cityscape Home Loan Owner Trusts 1997-2, 1997-3, and 1997-4; Cityscape Home Equity Loan Trusts Series 1997 B and 1997 C; US Bank Trust, N.A.; PSB Lending Corporation; PSB Lending Home Loan Owner Trusts 1997-3 and 19974; Residential Funding Company, LLC; GMAC Mortgage, LLC; J.P. Morgan Chase Bank, NA, individually and/or formerly or as successor to Banc One, NA and Chase Manhattan Bank; Home Loan Trust 1997-HI3; Amaximis Company, LLC; Amaximis Lending, LP; The Bank of New York Mellon Corporation (f/k/a The Bank of New York); Citimortgage, Inc.; Comstar Mortgage Corporation f/k/a Accubanc Mortgage Corp.; Franklin Credit Management Company; Ocwen Loan Servicing, LLC; Old Republic Financial...