United States District Court, District of Columbia
Andrea CANNON, on behalf of herself and all other similarly situated, Plaintiff,
WELLS FARGO BANK, N.A., et al., Defendants.
Harry T. Spikes, Washington, DC, for Plaintiff.
Russell J. Pope, Treanor Pope & Hughes, P.A., Towson, MD, Jennifer A. Slagle-Peck, Robyn Cort Quattrone, Buckley Sandler, LLP, Washington, DC, for Defendants.
COLLEEN KOLLAR-KOTELLY, District Judge.
Plaintiff Andrea Cannon filed a purported class action against Defendants Wells Fargo Bank, N.A., Wells Fargo Insurance, Inc., QBE Specialty Insurance Co., and QBE FIRST Insurance Agency, Inc. (formerly known as Sterling National Insurance Agency, Inc.), in the Superior Court for the District of Columbia, asserting a number of claims concerning lender-placed mortgage insurance. The QBE Defendants subsequently removed the case to this Court pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d), and the Court's federal question jurisdiction, 28 U.S.C. § 1331. Presently before the Court is the Plaintiff's motion to remand. Upon consideration of the parties' pleadings, the relevant legal authorities, and the record before the Court, the Court has subject matter jurisdiction in this action pursuant to both the Class Action Fairness Act and federal question jurisdiction. Accordingly, the Plaintiff's  Motion to Remand is DENIED.
The Court briefly recounts only those facts necessary to the disposition of the Plaintiff's motion. In December 2007 the Plaintiff took out a mortgage on her real property located at 1235 Queen Street, NE, Washington, D.C., in the amount of $307,665.50. Compl., ECF No. 1, at 3-4. The mortgage is currently owned and serviced by Defendant Wells Fargo Bank. Id. at 4. According to the Complaint, Wells Fargo Bank requires mortgagees to maintain insurance on the real property subject to mortgages owned and/or serviced by the Bank. Id. at 7, ¶ 12. The deeds of trusts issued by Wells Fargo Bank purportedly contain a clause indicating that if the mortgagee fails to maintain a sufficient level of insurance coverage or allows the insurance policy to laps, the Bank may " forcefully place insurance on the property." Id. The Plaintiff asserts that at all times relevant to the Complaint she maintained the necessary insurance on her property subject to the mortgage owned and serviced by Wells Fargo Bank. Id. at 7-8, ¶ 14;
On or about August 31, 2011, Wells Fargo Bank informed the Plaintiff that despite previous correspondence on the issue, the Bank still did not have evidence of homeowners/hazard insurance for the property in question. Compl., Ex. 6 at 1. The letter indicated the Bank had secured temporary insurance coverage effective July 16, 2011, which would be cancelled upon receipt of proof of other insurance. Id. The letter further indicated that " [t]here is no charge to you if there has been no lapse in coverage," but " [y]ou will be charged for any gap between the expiration of your last policy and the effective date of the new policy." Id. The Bank advised the Plaintiff that she had the right to independently obtain insurance and urged her to do so, noting " [i]n nearly all instances, coverage we obtain may be more expensive than a policy you could obtain fro an agent or insurance company of your choice." Id. at 2. On February 9, 2012, the Plaintiff received a nearly identical letter, with the same temporary insurance effective date as the August 31, 2011 letter. Compl., Ex. 7 at 1.
The thrust of Plaintiff's Complaint is that despite maintaining continuous insurance coverage on her property, Wells Fargo Bank obtained " unnecessary, unauthorized
[sic] duplicative insurance," and charged Plaintiff the full amount of the premium although " a substantial portion of the premiums are refunded to Wells Fargo through various kickbacks and/or commissions or kickbacks disguised as commissions." Compl. at 11, ¶ 26. The Plaintiff specifically alleges that Wells Fargo Bank " entered into an exclusive arrangement with QBE FIRST to be the sole insurance provider for all forced placed policies," and charged premiums in excess of what could have been obtained for similar policies " in the open market." Id. at 11, ¶ 28. As to putative class member-mortgagees whose insurance policies in fact lapsed, the Plaintiff alleges the Defendants obtained policies with " excessive premium[s]," instead of renewing the lapsed policy with the mortgagees' previous carrier(s). Compl. at 12, ¶ 29. The Plaintiff filed this suit in the Superior Court for the District of Columbia as a purported class action on behalf of what is now believed to be 738 putative class members, Pl.'s Mot. at 13, alleging a number of violations of the common law, the Truth in Lending Act, 15 U.S.C. 1601 note, and the District of Columbia Consumer Protection Procedures Act (" CPPA" ), D.C.Code § 28-3901 et seq. Compl. at 25-49. The QBE Defendants removed the action to this Court on the grounds the Complaint stated a federal question, and satisfied the requirements of the Class Action Fairness Act.
II. LEGAL STANDARDS AND DISCUSSION
A. Federal Question Jurisdiction
This Court has original jurisdiction over all civil actions " arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. " [A] suit arises under the Constitution and laws of the United States only when the plaintiff's statement of his own cause of action shows that it is based upon those laws or that Constitution." Louisville & Nashville R.R. Co. v. Mottley,211 U.S. 149, 152, 29 S.Ct. 42, 53 L.Ed. 126 (1908). The initial Complaint in this matter facially seeks relief for violations of the Truth in Lending Act. E.g., Compl. at 2 (" Defendants' [sic] violation Regulation Z and other provisions of the Truth In Lending Act." ); id. at 17 (describing certain conduct as " a violation of the Truth In Lending Act's (TILC) [sic] disclosure requirement" ); id. at 39. The Plaintiff ...