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Karlberg v. Santander Bank, N.A.

United States District Court, E.D. Pennsylvania

October 25, 2017

DREW KARLBERG, et al.
v.
SANTANDER BANK, N.A.

          MEMORANDUM

          Bartle, J.

         Plaintiff Drew Karlberg, a Pennsylvania citizen, individually and on behalf of others similarly situated, originally filed this action against defendant Santander Bank, N.A., a Delaware citizen, in the Court of Common Pleas of Philadelphia County. He alleges various state law causes of action related to improper overcharges for private mortgage insurance collected, held in trust, and distributed by defendant. The putative class consists only of Pennsylvania citizens.

         After plaintiff's amended class action complaint was docketed in the state court on July 11, 2017, the defendant filed a Notice of Removal in this court on August 9, 2017. The Notice of Removal avers that the individual plaintiff and the defendant are of diverse citizenship and that the other jurisdictional requirements of the Class Action Fairness Act, 28 U.S.C. § 1332(d), have been met, including an aggregate amount in controversy in excess of $5, 000, 000, exclusive of interest and costs. See § 1332(d)(2) and (6).

         The plaintiff has now filed a Motion to Remand. While there is no dispute about the existence of diversity of citizenship, plaintiff maintains that the jurisdictional amount cannot be satisfied. He also argues that the Notice of Removal was untimely.

         Removal of an action over which the district court has original jurisdiction must occur “within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief.” § 1446(b)(1); see also id. § 1441. Section 1446(b)(3) further provides:

Except as provided in subsection (c), if the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.[1]

         Here, the original complaint was filed on April 26, 2017. It sought damages for overcharges of premiums but the amount was never quantified. After careful review, the court concludes that the amount in controversy could not reasonably be ascertained from that pleading. The plaintiff, however, as noted above, filed an amended class action complaint in the state court on July 11, 2017. That pleading contained more detailed allegations of damages. The Notice of Removal was timely filed within thirty days thereafter. The plaintiff's argument that defendant's Notice of Removal was late is without merit.

         Plaintiff next contends that the amount in controversy required under the Class Action Fairness Act has not been satisfied. See id. § 1332(d)(2). Under the Act, “the claims of the individual class members shall be aggregated to determine whether the matter in controversy exceeds the sum or value of $5, 000, 000, exclusive of interest and costs.” See Id. § 1332(d)(6).

         In the amended complaint, plaintiff alleges five state law causes of action: (1) Count I - violations of Pennsylvania Unfair Trade Practices and Consumer Protection Law; (2) Count II - breach of contract; (3) Count III - unjust enrichment/restitution (pled in the alternative); (4) Count IV - breach of fiduciary duty (pled in the alternative); and (5) Count V - declaratory judgment. Count I pleads the following claim for actual and statutory damages for plaintiff and the class:

[F]or each instance of unfair or deceptive acts including, but not limited to each instance in which Santander overcharged its mortgage borrowers in excess of the parties' agreed-upon PMI, in an amount in excess of $50, 000, treble damages, . . . [and] reasonable attorneys' fees . . . .

         Plaintiff also seeks punitive damages in the count for breach of fiduciary duty in addition to the damages claimed for violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law.

         Defendant's Notice of Removal reads the amended complaint as seeking damages in excess of $50, 000 for each instance of an alleged monthly mortgage insurance overcharge in addition to seeking treble damages, punitive damages, and attorneys' fees. In a declaration which accompanied the Notice of Removal, an assistant vice president of defendant states that defendant has reviewed its mortgage portfolio and that “[a]s a result of this review, Santander has identified a total potential population of 281 Pennsylvania loans that may satisfy the alleged class criteria as pled in the Amended Complaint.” If defendant's reading of the amended complaint is correct, the aggregate amount in controversy with appropriate multiplication is clearly greater than $5, 000, 000.

         Plaintiff does not challenge the number of loans which equates to significantly more than the minimum of 100 class members required for removal of a putative class action. See id. § 1332(d)(5)(B). However, plaintiff maintains that while the plaintiff and the putative class seek damages for each monthly overcharge the amount of each overcharge is only a few dollars as shown by the amended complaint and its exhibits. The plaintiff himself has alleged a loss of only $52. The claim for damages in excess of $50, 000, plaintiff asserts, is in the aggregate and was simply stated to conform to a local procedural requirement in the Court of Common Pleas of Philadelphia County to avoid having the case placed in the court's mandatory arbitration program. See Phila. R. Civ. P. 1301.

         In St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283 (1938), the Supreme Court many years ago outlined the standard for determining whether the amount in controversy requirement has been met. The sum claimed by plaintiff controls “if the claim is apparently made in good faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal.” Id. at 288-89. In making its decision, the court may review the face of the pleadings. ...


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