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Williams v. American Equity Mortgage

January 29, 2009

CASSANDRA KAY WILLIAMS, CHARLES KINWORTHY, AND JUDY KINWORTHY, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
AMERICAN EQUITY MORTGAGE, INC., A CORPORATION, AND ABN AMRO MORTGAGE GROUP, INC., A CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Reagan, District Judge

MEMORANDUM AND ORDER

A. Introduction and Background

On February 17, 2005, one day before the revised jurisdictional provisions of the Class Action Fairness Act (CAFA) went into effect, Plaintiff Williams filed a complaint against Defendants in the Third Judicial Circuit, Madison County, Illinois (see Doc. 16-2, Exh. A). Williams asserted a putative class action, alleging breach of contract and unjust enrichment claims against both Defendants, claiming that they improperly placed mortgage payments in suspense, and thereby failed to apply the payments toward the principal and interest owed on the mortgage.

On August 9, 2005, Williams amended her complaint to add the Kinworthys as additional named Plaintiffs (see Doc. 2-3, Exh. 1). The named Plaintiffs' claims against American Equity were essentially the same as those in Williams's original complaint, but only Williams raised breach of contract and unjust enrichment claims as to ABN AMRO in the amended complaint.

After over two years of state court proceedings, Plaintiffs filed a motion for class certification, wherein they defined two putative nationwide classes (Doc. 2-3, Exh. 1, pp. 53--56). Proposed Class A includes

All persons in the United States who: (a) executed a mortgage or deed of trust that (i) names as beneficiary American Equity Mortgage, Inc., ABN AMRO Mortgage Group, Inc., or their respective parents, subsidiaries, or affiliates, and (ii) that contains the following, or substantially similar, language: "Application of Payments. Unless applicable law provides otherwise, all payments received by Lender under paragraphs 1 and 2 shall be applied: first, to any prepayment charges due under the Note; second, to amounts payable under paragraph 2 (escrow items); third, to interest due; fourth, to principal due; and last, to any late charges due under the Note"; and (b) whose payment or payments made pursuant to the mortgage or deed of trust were held in suspense or unapplied status on or after February 17, 1995.

The motion also seeks certification of Proposed Class B, which includes

All person in the United States who: (a) executed a mortgage or deed of trust that contains the following, or substantially similar, language: "Application of Payments. Unless applicable law provides otherwise, all payments received by Lender under paragraphs 1 and 2 shall be applied: first, to any prepayment charges due under the Note; second, to amounts payable under paragraph 2 (escrow items); third, to interest due; fourth, to principal due; and last, to any late charges due under the Note"; and (b) whose payment or payments made pursuant to the mortgage or deed of trust were held in suspense or unapplied status by American Equity Mortgage, Inc, ABN AMRO Mortgage Group, Inc., or their respective parents, subsidiaries or affiliates on or after February 17, 1995.

On May 28, 2008,*fn1 Defendant ABN AMRO removed the case to federal court, claiming that federal jurisdiction now lies under CAFA, on the grounds that the motion for class certification includes new claims which commence a new action (Doc. 2).

On June 26, 2008, Plaintiffs filed a motion to remand (Doc. 10). Defendants filed a response in opposition on August 1, 2008 (Doc. 16) and Plaintiffs submitted a reply on August 15, 2008 (Doc. 18). Having fully reviewed the parties' filings, the Court hereby GRANTS Plaintiffs' motion to remand (Doc. 10).

B. Analysis

28 U.S.C. § 1441 provides that: any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.

Where the initial pleading does not indicate that the case is removable, ยง 1446(b) provides that "a notice of removal may be filed within thirty 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 . . ." The party seeking removal bears the burden of establishing that all ...


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