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Chinese Owned Genworth Financial Suspends IPO for Private Mortgage Insurer Enact Holdings

October 2016: Genworth agreed to be acquired by China Oceanwide Holdings Group Ltd., a private financial holding company based in Beijing.

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Genworth Falls After Delaying Mortgage IPO on Volatility

MAY 13, 2021 | REPUBLISHED BY LIT: MAY 14, 2021

Genworth Financial Inc. shares declined after the company postponed a planned initial public offering for its Enact Holdings Inc. unit, citing volatility in the mortgage-insurance market.

The IPO, which was expected to raise as much as $623 million, would have been this week’s largest U.S. initial offering. Genworth dropped as much as 5.2% in New York before rebounding to $3.86 at 1:08 p.m., a 0.3% increase.

The decision to put the sale on hold follows last month’s collapse of a takeover agreement Genworth had reached with China Oceanwide Holdings Group Co. Taking the mortgage-insurance business public was initially floated as part of a plan to help pay near-term debt as progress on the merger dragged on for more than four years.

“Genworth does ultimately need the cash,”

Jeffrey Flynn, an analyst with Bloomberg Intelligence, said in an email.

“So there is some pressure on them to get it done.”

But Flynn said the company’s cash position is “workable,” and a delay might ultimately help if an improving housing market boosts second-quarter results at Enact.

Genworth’s ability to meet its obligations isn’t dependent on the IPO, the company said Thursday in a statement. The Richmond, Virginia-based firm said it had about $757 million in cash and liquid assets as of March 31.

“In light of the recent significant trading volatility in the mortgage-insurance sector, Genworth’s board of directors determined that current market pricing for the planned offering does not accurately reflect Enact’s value,”

Chief Executive Officer Tom McInerney said in the statement.

“Therefore, we have decided to postpone the IPO and will continue to evaluate our options as market conditions develop.”

The delay followed other recent stumbles in the market. An IPO from the Fortegra Group was withdrawn hours before it was expected to start trading on April 29, with parent Tiptree Inc. also citing adverse market conditions.

On May 6, James River Group Holdings Ltd. priced a secondary offering at the sector’s steepest discount ever after adjusting its expected value of outstanding insurance claims.

The next day, Chinese insurance-tech firm Waterdrop Inc. tumbled almost 20% from its IPO price in its U.S. market debut.

Genworth Financial’s planned merger with a China-based company now on indefinite hold; company pursuing contingency plan

JAN 4, 2021 | REPUBLISHED BY LIT: MAY 14, 2021

After more than four years, Genworth Financial Inc.’s plan to merge with a China-based company has been put on indefinite hold, in part because of the COVID-19 pandemic, though both companies said Monday that they still may be able to complete a deal.

In the meantime, Henrico County-based Genworth, an insurance company with thousands of employees in Virginia, said it is focusing on pursuing a contingency plan to pay its debts that could include a partial, initial public offering of stock for its U.S. mortgage insurance business.

Genworth and China Oceanwide Holdings Group Co. Ltd. said Monday that they have decided not to extend a deadline that had been set to expire Dec. 31 to complete the proposed acquisition of Genworth for $2.7 billion, or $5.43 per share.

Shares in Genworth plummeted nearly 29% in heavy trading to close Monday at $2.69 per share.

The deal was announced in October 2016 and was approved by Genworth’s shareholders the following March. Since then, the merger has been delayed 17 times as Genworth sought approvals from numerous state and federal insurance regulators.

Genworth sells home mortgage insurance that covers defaults on home loans as well as long-term care insurance, which covers nursing home and at-home care expenses.

The company has faced challenges in covering its costs for both businesses over the past 12 years, first because of the housing market collapse and then because of escalating expenses for long-term care.

All of Genworth’s regulatory approvals for the deal in the U.S. have been cleared, but China Oceanwide, which wants to expand Genworth’s long-term care insurance business to China, still needed to complete a financing package to close the deal.

A statement released by the companies on Monday indicated that China Oceanwide has not been able to complete a financing package. The company cited disruptions caused by the pandemic as one factor in failing to obtain the funding.

“However, the merger agreement remains in effect, although either party is able to terminate the merger agreement at any time,” Genworth said in a statement. “Oceanwide has shared that it will continue to work towards closing the transaction, and Genworth remains open to completing the transaction if Oceanwide completes the remaining steps.”

Genworth said its contingency plan includes raising capital to pay off about $1 billion in debt that the company owes this year. That could include a partial IPO for its U.S. mortgage insurance business.

“While we are disappointed that we could not close the transaction by the end of 2020, the parties retain the ability to ultimately complete the transaction if Oceanwide can secure the required funding and the parties can complete the remaining steps to closing, and if the transaction is still in the best interests of Genworth at that time,” said Thomas J. McInerney, Genworth’s president and CEO, in a statement.

“At the same time, we are moving forward with our contingency plan to meet our near-term obligations and maximize long-term value, which we believe is the best approach for our shareholders,” McInerney said.

Genworth’s stock price dropped 28.84%, or $1.09, to $2.69 per share on the news that the deal is uncertain. Two analysts who cover the company said Monday that they now value the stock at $1.50 to $3 a share.

“If the driving factor delaying the transaction is COVID-19, it is possible that a deal can be completed at some point as vaccinations become more widespread and the pandemic subsides,” analyst Ryan Gilbert of BTIG Capital said in a note to investors. “We see a lower probability of merger completion if financing is the primary reason for the delay.”

Lu Zhiqiang, the chairman of Oceanwide, said in a statement that his company is continuing to work toward completing the transaction with Genworth.

The two companies had most recently agreed in late November to extend the deadline for the merger to the end of the year.

James Riepe, Genworth’s nonexecutive chairman, said Monday that Genworth’s board of directors believed — based on the information available in late November — that the company could close the deal in the near term.

But the board doesn’t believe that is the case now.

“Given the most recent update, we do not believe a closing can occur in the near term,” Riepe said. “Thus, the management team will fully focus its efforts on executing our contingency plan.

“We appreciate the continuing patience of our shareholders, employees and other stakeholders as we continue to pursue steps that will maximize Genworth’s value.”

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Appellate Circuit

Judge Albert Diaz Insults Americans Who Pay His Salary With $35 Payout and $1.3M Attorney Fee Deduction

Judge Albert Diaz insults the American homeowners and Judge Stephanie Thacker endorses opinion along with lower court Judge Tim Cullen.

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By

PIA MCADAMS,

Appellant,

v.

DEMETRIUS ROBINSON; TAMARA ROBINSON,

Plaintiffs – Appellees,

v.

NATIONSTAR MORTGAGE LLC,

Defendant – Appellee.

NATIONAL CONSUMER LAW CENTER; MOUNTAIN STATE JUSTICE, INC., CONSUMERS LEAGUE OF NEW JERSEY; CONNECTICUT FAIR HOUSING CENTER; NORTHWEST CONSUMER LAW CENTER,

Amici Supporting Appellant.

Appeal from the United States District Court for the District of Maryland, at Greenbelt.
Timothy J. Sullivan, Magistrate Judge. (8:14−cv−03667−TJS)

Argued: October 28, 2021 Decided: February 10, 2022
Amended: February 10, 2022

Before DIAZ and THACKER, Circuit Judges, and Thomas T. CULLEN, United States District Judge for the Western District of Virginia, sitting by designation.

Affirmed by published opinion. Judge Diaz wrote the opinion, in which Judge Thacker and Judge Cullen joined.

ARGUED:

Michael T. Houchin, LAW OFFICES OF RONALD A. MARRON, APLC,
San Diego, California, for Appellant.

Jonathan K. Tycko, TYCKO & ZAVAREEI LLP, Washington, D.C.;

Erik Wayne Kemp, SEVERSON & WERSON, San Francisco, California, for Appellees.

ON BRIEF:

Ronald A. Marron, LAW OFFICES OF RONALD A. MARRON, APLC, San Diego, California;

Thomas J. Minton, GOLDMAN & MINTON, P.C., Baltimore, Maryland, for Appellant.

Dia Rasinariu, TYCKO & ZAVAREEI LLP, Washington, D.C., for Appellee Tamara Robinson.

Jan T. Chilton, SEVERSON & WERSON, San Francisco, California, for Appellee Nationstar Mortgage LLC.

Scott C. Borison, BORISON FIRM LLC, Baltimore, Maryland;

Jennifer S. Wagner, MOUNTAIN STATE JUSTICE, Morgantown, West Virginia, for Amici Curiae.

 

FEB 11, 2022 | REPUBLISHED BY LIT: FEB 13, 2022

DIAZ, Circuit Judge:

This case arises from a class action alleging that Nationstar Mortgage LLC violated federal and state consumer-protection laws in servicing the class members’ mortgage loans.

Following protracted litigation, Nationstar, and the Robinsons negotiated a $3,000,000 settlement.

Pia McAdams, a class member, objected to the settlement, arguing that the class notice was insufficient; the settlement was unfair, unreasonable, and inadequate; the release was unconstitutionally overbroad; and the attorneys’ fee award was improper.

A magistrate judge (acting on a referral by the district court) overruled McAdams’s objections.

On appeal, McAdams raises those same challenges and questions the magistrate judge’s jurisdiction.

We affirm.

I.

A.

Demetrius and Tamara Robinson filed a class action against Nationstar in the District of Maryland in 2014.

The Robinsons claimed Nationstar violated federal and state law by, among other things, failing to timely acknowledge receipt of class members’ loss mitigation applications,1 respond to the applications, and diligently obtain documents to process them.

The parties litigated the case for nearly six years. In 2020, the Robinsons and Nationstar filed a notice of settlement and a joint motion to proceed before a magistrate

judge.

The magistrate judge (who had mediated the settlement), granted a motion for preliminary approval of the settlement and scheduled a fairness hearing before final approval.

The negotiated settlement created a relief fund of $3,000,000.

In order of priority, the parties proposed that the fund pay for

(1) administrative expenses up to $300,000,

(2) attorneys’ fees,

(3) a service award to the class representative—Demetrius Robinson,

and

(4) class claims.

Any remainder would go to a nonprofit that advocates for consumers.

The administrative expenses included the cost of providing class members with notice of the settlement.

The settlement proposed three types of notice—Email, Postcard, and Longform.

Both the Email and Postcard Notice informed class members of the amount of the settlement fund, how to submit a claim, how to opt out of the class, and where to find the Longform Notice.

The Longform Notice notified class members of the attorneys’ fee arrangement.

The notices didn’t estimate the recovery for each class member.

As for attorneys’ fees, Nationstar agreed (in a so-called “clear sailing” provision) not to oppose class counsel’s fee request so long as it didn’t exceed $1,300,000.

Class counsel submitted records accounting for over 3,000 billable hours.

Using the District of Maryland’s presumptively reasonable rates, the records supported $1,261,547.50 in fees.

Class counsel also submitted proof of $217,657.26 in unreimbursed expenses, for a total of $1,479,204.76 in costs and fees.

But counsel requested only a $1,300,000 award.

The value of a class member’s claim is determined by a points system.

Class members receive points for answering two questions—the first about Nationstar’s treatment of their mortgage account and the second about expenses the class member incurred.

The settlement funds remaining, after deducting administrative expenses, attorneys’ fees, and the class representative’s service award, are divided by the number of points claimed.

That number is then multiplied by a class member’s points to arrive at the settlement share for each claimant.

The proposed settlement also includes a release of claims.

It provides:

Upon entry of the Final Approval Order and Judgment, each Settlement Class Member . . . will be deemed to have completely released and forever discharged the Released Parties, and each of them, from all actions . . . that were or could have been asserted by the Class Representative or Class Members in connection with the submission of loss mitigation applications during the Class Period.

J.A. 186.

B.

McAdams, an absent class member2 who had sued Nationstar in California state court,3 objected to the settlement. She argued that the class notice was insufficient; the

settlement was unfair, unreasonable, and inadequate; the release was unconstitutionally overbroad; and the attorneys’ fee award was improper.

The magistrate judge overruled McAdams’s objections.

The judge found that the distribution of the notice was sufficient because over 97% of the nearly 350,000 class members received notice.

He also found that class members “had information to make the necessary decisions and . . . the ability to even get more information if they so desired.”

J.A. 815.

In support of that finding, the judge noted the low number of objectors (2), the low opt-out rate (.04%), and the high claims rate (13.8%).4

Turning to the settlement terms, the magistrate judge found them fair, reasonable, and adequate.

The judge considered the three relevant criteria under Federal Rule of Civil Procedure 23(e)(2)(C) and addressed the five adequacy factors from In re Jiffy Lube Securities Litigation, 927 F.2d 155, 159 (4th Cir. 1991).

The judge found: (1) “plaintiffs ha[d] viable claims”; (2) “Nationstar had very strong defenses”; (3) litigating the case to trial “would have likely been lengthy and it would certainly be quite, quite expensive”; (4) “Nationstar can pay the 3 million dollars”; and (5) “[o]nly 137 class members have opted

out of the settlement, which is about 0.04 percent of the settlement class.”

See J.A. 810– 14.

The magistrate judge also addressed the breadth of the settlement’s release. He found the release was “not too broad” because a class settlement can release “claims based on the identical factual predicate[,] even if those claims” aren’t presented.

J.A. 816.

But he didn’t opine whether the release would bar class members’ pending claims in other jurisdictions, including McAdams’s California lawsuit.

Finally, the magistrate judge approved the proposed $1,300,000 attorneys’ fee request.

The fee, he said, was based on a presumptively reasonable rate, and using that rate, counsel had shown that their actual costs and fees exceeded their request.

The judge noted that concerns over Nationstar’s agreement not to object to the settlement were misplaced.

And he found “no collusion” between the parties because they negotiated the settlement “at arm’s length in the midst of contentious litigation.”

J.A. 812, 817.

This appeal followed.

II.

McAdams first attacks the magistrate judge’s jurisdiction to approve the class action settlement, alleging that she didn’t consent to have a magistrate judge hear her case.

There’s no dispute that the magistrate judge could approve the class action and enter judgment only by consent of the parties.

28 U.S.C. § 636(c).

McAdams asserts that “parties” for purposes of § 636(c) include absent class members, like her.

This is a question of first impression in this circuit.

But every other circuit to address the issue has concluded that absent class members aren’t parties.

Koby v. ARS Nat’l Servs., Inc., 846 F.3d 1071, 1076 (9th Cir. 2017); Day v. Persels & Assocs., LLC, 729 F.3d 1309, 1316 (11th Cir. 2013); Dewey v. Volkswagen Aktiengesellschaft, 681 F.3d 170, 181 (3d Cir. 2012); Williams v. Gen. Elec. Cap. Auto Lease, Inc., 159 F.3d 266, 269 (7th Cir. 1998).

We now join them, holding that the magistrate judge had jurisdiction to approve the settlement.

A.

We review questions of law de novo, including questions of statutory interpretation.

In re Lumber Liquidators Chinese-Manufactured Flooring Prods. Mktg., Sales Pracs. & Prods. Liab. Litig., 952 F.3d 471, 483 (4th Cir. 2020).

Similarly, “[w]e review . . . a lower court’s determination of its subject-matter jurisdiction[] de novo.”

Barlow v. Colgate Palmolive Co., 772 F.3d 1001, 1007 (4th Cir. 2014) (en banc).

B.

“We begin, as always in deciding questions of statutory interpretation, with the text.”

Othi v. Holder, 734 F.3d 259, 265 (4th Cir. 2013).

28 U.S.C. § 636(c) authorizes magistrate judges to “conduct any or all proceedings in a jury or nonjury civil matter and order the entry of judgment in the case . . . . [u]pon the consent of the parties.”

Congress didn’t define “parties” in § 636.

Nor has the Supreme Court said whether absent class members are parties in this context.

See Devlin v. Scardelletti, 536 U.S. 1, 9–10 (2002)

(“Nonnamed class members, however, may be parties for some purposes and not for others. The label ‘party’ does not indicate an absolute characteristic, but rather a conclusion about the applicability of various procedural rules that may differ based on context.”).

“We give the words of a statute their ordinary, contemporary, common meaning, absent an indication Congress intended them to bear some different import.”

Williams v. Taylor, 529 U.S. 420, 431 (2000) (cleaned up).

When Congress adopted the relevant language in § 636, the ordinary meaning of “party” included those whose names are designated as a plaintiff or defendant and those who can control the proceedings.

See Day, 729 F.3d at 1317.

Absent class members aren’t named parties, and they can’t control proceedings.

See Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 810 (1985)

(“Unlike a defendant in a normal civil suit, an absent class-action plaintiff is not required to do anything. He may sit back and allow the litigation to run its course, content in knowing that there are safeguards provided for his protection.”).

So absent class members aren’t within the contemporary, common meaning of the term “parties” as used in § 636.

Nor do we believe Congress intended absent class members to be parties.

Interpreting “parties” to include absent class members would prevent magistrate judges from entering judgment against absent class members who haven’t given their explicit consent.

That reading “would virtually eliminate § 636(c) referrals to magistrate judges” by hindering the judgment’s preclusive effect.

Williams, 159 F.3d at 269.

Congress has limited the preclusive effect of judgments by restricting the definition of a party in other contexts.

See, e.g., 29 U.S.C. § 216(b)

(“No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.”).

But when it has done so, Congress has spoken clearly. Nothing in § 636 suggests Congress intended to limit the preclusive effect of judgments entered by magistrate judges.

McAdams doesn’t account for the adverse practical effects of administering class actions if her reading were to prevail.

The Ninth Circuit has observed that § 636 uses the term “parties” “multiple times in a way that cannot sensibly be read to include absent class members” because “[t]he identities of all absent class members will often not be known until later in the case.”

Koby, 846 F.3d at 1076; see, e.g., 28 U.S.C. § 636(c)(2)

(“[T]he clerk of court shall, at the time the action is filed, notify the parties of the availability of a magistrate judge to exercise such jurisdiction.”).

“Even if the identities of all absent class members are known,” it would be unduly burdensome on the clerk of court to compile all their contact information and prohibitively expensive “even for the most well-funded district courts.”

Koby, 846 F.3d at 1077.

This case exemplifies the need to have a practical system for administering class actions.

The class here consists of almost 350,000 members.

McAdams’s reading of “parties” for purposes of § 636 would require notifying each of them of the intent to proceed before a magistrate judge.

“We doubt Congress would have imposed these substantial budgetary and manpower burdens on clerks’ offices across the country without making that intent explicit.”

Id. at 1077.

And to what end? In this case, over 97% of class members received notice of the settlement. 13.8% submitted claims. Only .04% opted out. So over 80% of the class received notice but didn’t act on it.

Yet under McAdams’s reading of § 636, the magistrate judge would be powerless to act.

Because the contemporary, common meaning of “parties” excludes absent class members and the statute lacks signs showing any legislative intent to classify them as such, we conclude “parties” as used in § 636 doesn’t include absent class members.

Since Nationstar and the Robinsons consented to having the magistrate judge preside over the fairness hearing, McAdams’s jurisdictional claim fails.5

III.

A.

McAdams next asserts that the settlement notice was inadequate because it didn’t include the attorneys’ fees to be deducted from the settlement fund, estimate individual class members’ recovery, or explain the distribution method.

The parties dispute our standard of review.

We haven’t spoken on this question, and our sister circuits are split.

Two circuits review a district court’s finding on the adequacy of class action notice for abuse of discretion.

Pollard v. Remington Arms Co., 896 F.3d 900, 905–06 (8th Cir. 2018); Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423, 438 (2d Cir. 2007).

Three others review the issue de novo.

In re Online DVD-Rental

Antitrust Litig., 779 F.3d 934, 946 (9th Cir. 2015); DeJulius v. New England Health Care Emp. Pension Fund, 429 F.3d 935, 942 (10th Cir. 2005); Fidel v. Farley, 534 F.3d 508, 513 (6th Cir. 2008).

But even assuming de novo review is proper, the class notice was adequate.

B.

McAdams’s challenge to the adequacy of the notice has both a constitutional and a procedural component.

To bind an absent class member, notice to the class must provide “minimal procedural due process protection.”

Phillips Petroleum Co., 472 U.S. at 811–12.

“The [absent class member] must receive notice plus an opportunity to be heard and participate in the litigation.”

Id. at 812.

That notice must be “reasonably calculated, under all the circumstances, to apprise [absent class members] of the pendency of the action and afford them an opportunity to present their objections.”

Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950).

On the procedural front, Federal Rule of Civil Procedure 23(e) governs notice to absent class members. It requires “direct notice in a reasonable manner to all class members who would be bound by the proposal.”

Fed. R. Civ. P. 23(e)(1)(B).

But it doesn’t specify what the notice must say. Rather, the notice need only “fairly apprise the prospective members of the class of the terms of the proposed settlement and of the options that are open to them in connection with the proceedings.”

Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 114 (2d Cir. 2005) (cleaned up).

Put another way, “Rule 23(e) requires notice that describes the terms of the settlement in sufficient detail to alert those with adverse viewpoints to investigate and to come forward and be heard.”

In re Online DVD-Rental Antitrust Litig., 779 F.3d at 946 (cleaned up).

Here, the magistrate judge approved three types of notice—Email, Postcard, and Longform.6

The settlement administrator emailed notice to class members for whom it had an email address.

It also mailed notice to class members for whom it had a physical address.

And it searched the National Change of Address database to update the addresses for those whose Postcard Notice was returned as undeliverable.

Both the Email and Postcard Notice informed class members that there was a $3,000,000 settlement fund, explained how to file a claim, and presented the option to opt- out.

They also listed a website and telephone number where class members could get the Longform Notice.

The Longform Notice explained the settlement in greater detail.

Among other things, it stated that class counsel intended to request up to $1,300,000 in attorneys’ fees and costs, that this amount would be deducted before any payout to the class, and that class members submitting valid claims would receive proportionate shares of the settlement fund.7

In other words, the Longform Notice included two of the three pieces of

information—the attorneys’ fees to be deducted from the settlement fund and the distribution method—which McAdams complains is missing.

Nor was the notice inadequate because it didn’t estimate the class members’ recovery.

In general, it would be difficult, if not impossible, for parties to reliably predict the number of valid claims when drafting notices.

Indeed, the Longform Notice acknowledges this difficulty:

“The amount of this payment will depend on how many Settlement Class Members file valid claims and how each Settlement Class Member answers questions in the Claim Form.”

J.A. 203.

And even if an estimated recovery is appropriate in some cases, McAdams makes no compelling argument for one here.

There’s nothing in the record suggesting the parties had a reliable method of estimating the percentage of class members who would file claims, let alone the average number of points they would claim.

Nor could the parties know that the magistrate judge would approve the proposed award of attorneys’ fees.

Without some evidence proving an average recovery calculation would be reliable, we think it inappropriate to impose such a requirement.

See, e.g, Does 1-2 v. Déjà Vu Servs., Inc., 925 F.3d 886, 901 (6th Cir. 2019)

(“Objectors cite no authority that requires a notice to state how much money each class member would receive, nor do they explain how the notice could have accurately stated the amount each [class member] was eligible to receive from the cash pool.”).

In sum, we find the methods of notice here fairly apprised class members of the proceedings as well as their options.

Class members had access to information about the total settlement, attorneys’ fees, and distribution method.

The notices also provided them with the means to find more information if they wanted it.

Thus, the notices were adequate.

IV.

McAdams next contests the magistrate judge’s finding that the settlement was fair, reasonable, and adequate. She asserts that the magistrate judge neglected to estimate the average recovery, and thus the settlement fund won’t adequately compensate the class members.

“We review a district court’s approval of a class-action settlement for an abuse of discretion.”

In re Lumber Liquidators, 952 F.3d at 483.

Rule 23 requires courts to find that class settlements are “fair, reasonable, and adequate” before approving them.

Fed. R Civ. P. 23(e)(2).

When reviewing the adequacy of a settlement, the court must consider

“(i) the costs, risks, and delay of trial and appeal;

(ii) the effectiveness of any proposed method of distributing relief to the class, including the method of processing class-member claims;

(iii) the terms of any proposed award of attorneys’ fees, including timing of payment;

and

(iv) any agreement required to be identified.”

Id. at 23(e)(2)(C).

We have identified five other factors for assessing a settlement’s adequacy:

“(1) the relative strength of the plaintiffs’ case on the merits;

(2) the existence of any difficulties of proof or strong defenses the plaintiffs are likely to encounter if the case goes to trial;

(3) the anticipated duration and expense of additional litigation;

(4) the solvency of the defendant[] and the likelihood of recovery on a litigated judgment;

and

(5) the degree of opposition to the settlement.”

In re Lumber Liquidators, 952 F.3d at 484 (citing In re Jiffy Lube, 927 F.2d at 159).

Here, the magistrate judge considered the three relevant Rule 23(e)(2) criteria.8

He found:

(i) “[t]here was a great risk [for the plaintiffs] to proceed to trial given the logistical difficulties and Nationstar’s defense”;

(ii) “[t]he point system alloc[a]tion in the settlement agreement ensure[d] that those with the greater loss will be compensated to a greater degree”;

and

(iii) “the proposed attorneys’ fees and costs in this case [were] fair and reasonable given the contentious nature of this case and the amount of time spent in litigation.”

J.A. 813–14.

The magistrate judge also weighed the five Jiffy Lube factors.

He found:

(1) “plaintiffs ha[d] viable claims”;

(2) “Nationstar had very strong defenses”;

(3) litigating the case to trial “would have likely been lengthy and it would certainly be quite, quite expensive”;

(4) “Nationstar can pay the 3 million dollars”;

and

(5) “[o]nly 137 class members have opted out of the settlement, which is about 0.04 percent of the settlement class.”

J.A. 810, 813–14.

McAdams doesn’t claim that the magistrate judge failed to address these factors; nor does she argue that he improperly weighed them.

Instead, she complains that the magistrate judge “failed to make a ‘rough estimate’ of what class members would have received had they prevailed at trial.”

Appellant’s Br. at 25.

But we have never required such an estimate.

Even the out-of-circuit cases McAdams cites don’t require an estimate in every case.

See Lusk v. Five Guys Enters. LLC, No. 17-cv-00762, 2019 WL 7048791,

at *7 (E.D. Cal. Dec. 23, 2019)

(explaining that a rough estimate of a plaintiff’s recovery is “meaningless” when one of its components lacks “factual and evidentiary foundation”).

And we’re not persuaded to impose this new requirement here.

In any event, while the magistrate judge didn’t estimate the potential recovery should the case proceed to trial, he found that most class members “probably only had nominal damages.”

J.A. 812.

That’s consistent with the resulting settlement.

At the fairness hearing, the judge said that 13.8% of the nearly 350,000 class members submitted claims.

He also noted that $1,300,000 in attorneys’ fees and costs would be deducted from the $3,000,000 fund.

Using only that information, one could roughly estimate that the average class member would recover $35, an amount that would adequately compensate a plaintiff with only nominal damages.

We’re satisfied that the magistrate judge correctly analyzed all the relevant Rule 23 criteria and thus didn’t abuse his discretion in finding the settlement agreement adequately compensated the plaintiffs.

V.

McAdams also argues that the settlement release is “ambiguous, overbroad, and beyond the permissible scope of release for class action settlements.” Appellant’s Br. at 17.

We disagree.

A court can approve a release of claims that share an “identical factual predicate” with claims alleged in a case.

Berry v. Schulman, 807 F.3d 600, 616 (4th Cir. 2015).

Claims have an “identical factual predicate” when they “depend[] upon the very same set of facts.”

TBK Partners, Ltd. v. W. Union Corp., 675 F.2d 456, 460 (2d Cir. 1982) (quoting Nat’l Super Spuds, Inc. v. N.Y. Mercantile Exch., 660 F.2d 9, 18 n.7 (2d Cir. 1981)).

We have twice held that a class action settlement can dispose of unalleged claims relying on an identical factual predicate.

In re MI Windows & Doors, Inc., Prod. Liab. Litig., 860 F.3d 218, 225 (4th Cir. 2017); Berry, 807 F.3d at 616.

Here, the release provides that “each Settlement Class Member . . . will be deemed to have . . . discharged the Released Parties . . . from all actions . . . in connection with the submission of loss mitigation applications during the Class Period.”

J.A. 186.

As the magistrate judge recognized, this is “a broad release.”

J.A. 816.

It encompasses a large swath of claims that might have been brought.

But nothing on the face of the release purports to apply to cases with a different factual predicate. Rather, the release is tied to cases arising out of a set action and time frame.

Our inquiry ends there.

Neither we nor the magistrate judge can decide the outer limit of the release’s scope. To do so would be advisory.

See Pelt v. Utah, 539 F.3d 1271, 1285 (10th Cir. 2008)

(“It is well settled that a court adjudicating a class action cannot predetermine the res judicata effects of its own judgment; that can only be determined in a subsequent suit.”).

Whether the release covers claims not alleged in the class action complaint is for a court enforcing the release to decide.

In fact, that’s exactly what happened with McAdams’s California claims.

In that case, McAdams alleges that Nationstar violated California law by falsely telling her that it was processing her loan modification application while it continued to foreclose on her home.

McAdams, 2021 WL 4462909, at *1.

The California court considered the release’s scope and found that her claims weren’t barred. Id. at *4–6.

The magistrate judge didn’t abuse his discretion in approving the release.

VI.

Finally, McAdams contends that the magistrate judge abused his discretion by approving the $1,300,000 attorneys’ fee request.

She raises three challenges to this ruling:

(1) the magistrate judge didn’t comply with Rule 23(h)(3)’s requirement that he “find the facts and state [his] legal conclusions”;

(2) the attorneys’ fee award constitutes an unacceptably large portion of the overall award;

and

(3) the “clear sailing” provision is impermissible.

All three challenges fail.

“We [] review an award of attorney’s fees for an abuse of discretion.”

In re Lumber Liquidators, 952 F.3d at 483. Thus, our “review is sharply circumscribed, and [the] fee award must not be overturned unless it is clearly wrong.”

Berry, 807 F.3d at 617 (cleaned up).

A.

McAdams’s first argument is frivolous.

True, the magistrate judge had to “find the facts and state [his] legal conclusions.”

Fed R. Civ. P. 23(h)(3).

But he did so. He stated at the fairness hearing:

“Both sides are represented by skilled counsel[,] and I have concluded that the proposed attorneys’ fees and costs in this case are fair and reasonable given the contentious nature of this case and the amount of time spent in litigation.”

J.A. 813.

The judge elaborated:

I don’t accept and I reject Ms. McAdams’ suggestion that the settlement was somehow collusive with respect to plaintiffs’ attorney fees.

The parties negotiated the settlement at arm’s length in the midst of contentious litigation.

Ms. McAdams complained that because defendants do not object to the attorneys’ fees request, the Court is deprived of the necessary adversary process to determine a reasonable award, the whole clear sailing provision.

But Ms. McAdams herself only presents general arguments about the fee award. She doesn’t cite to any work that counsel performed that was unwarranted or unnecessary or duplicative or provide evidence that the rates charged by counsel are unreasonable.

An award of 1.3 million dollars for attorneys’ fees and expenses is reasonable in this case.

Class counsels’ fee award is based on the presumptively reasonable rate set forth in our court’s local rules.

Class counsel has supported their request of [sic] billing records and other competent evidence to support their request. Lawyers routinely complain that these rates are too low, especially the rates that pertain to more experienced attorneys.

Counsel seeks 86 percent of their reasonable fee under the lodestar method. This is a significant reduction.

The Court has reviewed class counsels’ motion for attorneys’ fees and finds that the fees claimed are reasonable.

J.A. 817–18.

Because the magistrate judge “referred to Plaintiffs attorneys’ substantially uncontradicted evidence and arguments that the requested fees are justified by their work on the case,” he complied with Rule 23(h)(3).

CLRB Hanson Indus., LLC v. Weiss & Assocs., PC, 465 F. App’x 617, 619 (9th Cir. 2012).

B.

McAdams’s second argument, that the attorneys’ fees constitute an unacceptably large portion of the overall settlement, fares no better.

There are two main methods for calculating the reasonableness of attorneys’ fees—the lodestar method and the percentage- of-recovery method.

The lodestar method calculates reasonable fees “by multiplying the number of reasonable hours expended times a reasonable rate.”

McAfee v. Boczar, 738 F.3d 81, 88 (4th Cir. 2013) (cleaned up).

“[T]here is a ‘strong presumption’ that the lodestar figure is reasonable.”

Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 554 (2010).

The percentage-of-recovery method considers the portion of the total settlement fund that will go to attorneys’ fees. In re Lumber Liquidators, 952 F.3d at 481.

A district court may choose the method it deems appropriate based on its judgment and the facts of the case.

See Jones v. Dominion Res. Servs., Inc., 601 F. Supp. 2d 756, 760 (S.D. W. Va. 2009)

(“The Fourth Circuit has neither announced a preferred method for determining the reasonableness of attorneys’ fees in common fund class actions nor identified factors for district courts to apply when using the percentage method.”).

Here, the magistrate judge chose the lodestar method for assessing the fee request.

Using the presumptively reasonable rates set forth in the District of Maryland’s Local Rules, class counsel documented earned fees of $1,261,547.50. See D. Md. Local R. App. B(3).

They also proved $217,657.26 in unreimbursed expenses, for $1,479,204.76 in costs and fees.

But counsel requested only $1,300,000.

As the magistrate judge correctly recognized, we presume that figure is reasonable because it’s less than the lodestar figure.

McAdams doesn’t challenge counsel’s billing practices. Instead, she contends the fee award isn’t reasonable under the percentage-of-recovery method.

Counsel’s fees totaled $1,300,000, 43% of the common fund. We acknowledge that this percentage approaches the upper limit of a permissible recovery.

But it isn’t unheard of.

See In re SmithKline Beckman Corp. Sec. Litig., 751 F. Supp. 525, 533 (E.D. Pa. 1990)

(“Courts have allowed attorney compensation ranging from 19 to 45% of the settlement fund created.”).

Because the fee award isn’t so far afield of a standard recovery, we can’t, without more, find that the percentage-of-recovery calculation outweighs the strong presumption that the award is reasonable.

C.

Nor does McAdams’s third argument, that the fee award is unreasonable due to the “clear sailing” provision, hold water.

“[Clear sailing] agreements are troubling because they demonstrate that class counsel negotiated some aspect of their fee arrangement with the defendant, when counsel’s ethical obligation is to the class.”

Newberg on Class Actions § 13:9 (5th ed.).

But they are “not per se unreasonable.”

Bezdek v. Vibram USA, Inc., 809 F.3d 78, 84 (1st Cir. 2015).

“Rather, courts are directed to give extra scrutiny to such agreements.”

Id.; accord In re Southwest Airlines Voucher Litig., 799 F.3d 701, 712–13 (7th Cir. 2015); In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 949 (9th Cir. 2011).

That’s precisely what the magistrate judge did here.

He rejected the “suggestion that the settlement was somehow collusive” and found that the parties negotiated the settlement “at arm’s length in the midst of contentious litigation” that spanned six years and included “a Motion to Dismiss, two Motions for Summary Judgment, a contested Motion for Class Certification, numerous discovery motions, [and] numerous depositions.”

J.A. 807, 817.

And he noted that class counsel “supported their request [with] billing records and other competent evidence.”

J.A. 817.

McAdams doesn’t challenge these findings.

Offering only generalized objections to clear sailing provisions, she doesn’t point to a single example in the over 150 pages of billing records indicating class counsel breached their ethical obligations.

We reject McAdams’s challenge to the fee award.

VII.

For the reasons given, the magistrate judge’s judgment is

AFFIRMED.

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Mary Beth Trump’s Loan Modification Dispute With SPS Remanded to State Court

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MARY BETH TRUMP CANNOT REFINANCE TO WELLS FARGO, DUE TO LOAN MODIFICATION AND PAYMENT DISPUTE WITH SLS

Trump v. Select Portfolio Servicing, Inc.

(7:19-cv-00793)

District Court, W.D. Virginia

IT TOOK ONLY 12 MINUTES FOR THIS FEDERAL JUDGE TO BOOT THE REMOVED CASE BACK TO STATE COURT IN A CURT ORDER, WHICH CITED NO CASE LAW IN REACHING HIS DECISION.

NOV 27, 2019 | REPUBLISHED BY LIT: FEB 6, 2022

Michael Francis Urbanski is the Chief United States District Judge on the United States District Court for the Western District of Virginia and a former United States Magistrate Judge of the same court.

NOTICE OF REMOVAL

Defendants, Select Portfolio Servicing, Inc. (“SPS”), and DLJ Mortgage Capital Inc., (“DLJ”) (collectively, the “Defendants”), by counsel, hereby remove the above-captioned civil action, and all claims and causes of action therein, from the Circuit Court for Roanoke County, Virginia to the United States District Court for the Western District of Virginia (Roanoke Division)

pursuant to 28 U.S.C. §§ 1332, 1441 and 1446.

In support thereof, Defendants state as follows:

Background

1. On or about November 7, 2019, Plaintiff, Mary Beth Trump (“Plaintiff”), commenced the underlying state court action captioned Mary Beth Trump v. Select Portfolio Servicing, Inc., et. al. (Case No. CL19-001487) (the “State Court Action”), in the Circuit Court for Roanoke County, Virginia. Pursuant to 28 U.S.C. § 1446(a), true and correct copies of the Complaint, and Summons in the State Court Action are attached hereto as Exhibit “1,” and “2,” respectively.1

Removal is Procedurally Proper

2. 28 U.S.C. § 1441(a) provides, in pertinent part, as follows:

Except as otherwise expressly provided by Act of Congress, 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[.]

3. Venue for removal is proper in this district and division under 28 U.S.C. § 1441(a) because this district and division embrace the Circuit Court for Roanoke County, Virginia, the forum in which the removed State Court Action was pending.

4. The time to remove is triggered by the simultaneous service of the summons and complaint.

See, e.g., Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347-356 (1999).

Further, pursuant to 28 U.S.C. § 1446(b)(2)(B), “each defendant shall have 30 days after receipt by service” to file a notice of removal. Id.

5. SPS was served with the Complaint and Summons on November 19, 2019. See Ex. “3” hereto.

Upon information and belief, as of this filing, DLJ has not been served with the Complaint and Summons.

Accordingly, the time within which to remove this action has not yet run, and, therefore, this Notice of Removal is timely filed within the statutory removal period enumerated in 28 U.S.C. §1446(b).

6. There are no other defendants to this action, and all defendants consent to the removal of the State Court Action.

This Court Has Original Jurisdiction Pursuant to 28 U.S.C. § 1332, And, Therefore, Removal Is Proper

7. Removal of this case is proper under 28 U.S.C. § 1441(a) because this Court has original jurisdiction pursuant to 28 U.S.C. § 1332.

REFINANCE REDUCES RATE FROM 9.99% TO 4.25% WITH WELLS FARGO

8. This Court has original jurisdiction pursuant to 28 U.S.C. § 1332 because it is apparent on the face of Plaintiff’s Complaint that the parties are of diverse citizenship,

and the matter in controversy exceeds the sum or value of $75,000.00, exclusive of interest and costs.

See also Elliot v. Am States Ins. Co., 883 F.3d. 384, 394 (4th Cir. 2018)

(“When original jurisdiction is based on diversity of citizenship, the cause of action must be between parties of completely diverse state citizenship, that is, no plaintiff may be a citizen of the same state as any defendant, and the amount in controversy must exceed $75,000, exclusive of interests and costs.”)

9. For purposes of diversity jurisdiction, an individual’s citizenship is determined by his or her domicile.

Axel Johnson, Inc. v. Carroll Carolina Oil Co., 145 F.3d 660, 663 (4th Cir. 1998).

10. Plaintiff admits that she resides at 5450 Stearnes Avenue, Roanoke, Virginia 24018 (the “Property”) (compl. at ¶ 1.),

and, therefore, Plaintiff is a citizen of the Commonwealth of Virginia for diversity jurisdiction purposes.

11. Pursuant to 28 U.S.C. § 1332(c)(1), a corporation shall be deemed to be a citizen of every State . . . by which it has been incorporated and of the State . . . where it has a principal place of business. . . .” Id.

See also Johnson v. Advance Am., 549 F.3d 932, 936 (4th Cir. 2008) (noting that 28 U.S.C. § 1332(c)(1) provides “dual, not alternative, citizenship to a corporation”).

12. SPS is a Utah corporation with its principal place of business located at 3217 S. Decker Lake Drive, Salt Lake City, Utah 84119. See report from the State of Utah Division of Corporations and Commercial Code attached hereto as Exhibit “4.”

Accordingly, SPS is a citizen of the State of Utah for diversity jurisdiction purposes.

13. DLJ is a Delaware corporation with its principal place of business located at 11 Madison Ave., New York, New York 10010.

See report from the Delaware Department of State, Division of Corporations (Ex. “5”); and report from the New York Department of State (Ex. “6”).

Accordingly, DLJ is a citizen of the State of Delaware, and a citizen of the State of New York for diversity jurisdiction purposes.

14. Accordingly, the Plaintiff and Defendants are of completely diverse citizenship.

15. Plaintiff seeks multiple forms of relief in this proceeding, as noted below:

a. a finding that the outstanding principal balance of the home mortgage loan at issue here (the “Loan”) was $146,512.94 as of May 1, 2012 (Compl. at p. 6);

b. a finding that the current outstanding principal balance of the Loan is $126,856.39 (Id.; and Id. at Ex. J thereto);

c. a finding that $22,683.24 is not an amount properly due under the Loan; (Compl. at p. 6);

d. an order releasing the deed of trust securing Plaintiff’s Loan repayment upon SPS’ receipt of $126,856.39 (Id.);

and

e. an award of $50,000.00 plus attorneys’ fees on account of Plaintiff’s fraud claim. (Id. at p. 7.)

16. “In actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured by the value of the object of the litigation.”

Thomas v.Carmeuse Line & Stone, Inc., 2012 U.S. Dist. LEXIS 178311, *12 (W.D. Va. Dec. 17, 2012)

(quoting Hunt v. Washington State Apple Adver. Comm ‘n, 432 U.S. 333, 347 (1977)).

See also

McNutt v. Gen. Motors Acceptance Corp. of Indiana, 298 U.S. 178, 181 (1936) (noting the”principle that jurisdiction is to be tested by the value of the object or right to be protected against interference”). “That value is ascertained ‘by the larger of two figures: the injunction’s [or declaratory judgment’s] worth to the plaintiff or its cost to the defendant.’”

Thomas, supra, 2012 U.S. Dist. LEXIS 178311 at *12 (emphasis added) (citing JTH Tax, Inc. v. Frashier, 624 F.3d 635, 639 (4th Cir. 2010), and Dixon v. Edwards, 290 F.3d 699, 710 (4th Cir. 2002)).

See also Liberty Mut. Fire Ins. Co. v. Hayes, 1997 U.S. App.LEXIS 24207, *9 (4th Cir. 1997)

(recognizing that the Fourth Circuit employs the “‘either party approach,’ examining the potential pecuniary effect that a judgment would have on either party”) (citing Government Employees Ins. Co. v. Lally, 327 F.2d 568, 569 (4th Cir. 1997)).

17. In addition, in “suits involving claims to real property, the amount in controversy is the value of the real property, not simply the amount of damages the plaintiff seeks.”

Buford v. Ocwen Loan Servicing, LLC, 2018 U.S. Dist. LEXIS 149537, *13 (E.D. Va. Jul. 13, 2018 (quoting Rehbein v. CitiMortgage, Inc., 937 F. Supp. 2d 753, 758 (E.D. Va. 2013)).

See also Sherman v.Litton Loan Servicing, L.P., 796 F.Supp.2d 753, 766 (E.D. Va. 2011)

(finding the amount in controversy was met based on “the manifest fact that the value of the [p]roperty exceeds $75,000”).

The court in Rehbein also found that the principal amount on the plaintiff’s home mortgage loan, and the outstanding balance on the loan, could be properly considered in determining the value of the injunctive relief sought.

Id., 937 F.Supp.2d at 758

18. Courts may also aggregate smaller claims in order to reach the jurisdictional threshold, meaning that if plaintiffs are seeking monetary damages, the value of the injunctive relief can also be considered to satisfy 28 U.S.C. § 1332.

See Shanaghan v. Cahill, 58 F.3d 106, 109 (4th Cir. 1995).

19. Under multiple scenarios, it is clear that the matter in controversy here exceeds the sum or value of $75,000, and therefore the Court’s subject matter jurisdiction is properly established.

20. Looking only at the value of the Property, the $75,000 threshold is satisfied because the 2019 assessed value of the Property is $140,300.

See assessment report from Roanoke County, Virginia (Ex. “7” hereto).

See also Buford, supra, 2018 U.S. Dist. LEXIS 149537 at 13; and Rehbein, supra, 937 F.Supp.2d at 758.

21. Further, the outstanding principal balance due on Plaintiff’s Loan also exceeds $75,000.

Specifically, Plaintiff contends that correct amount to satisfy her Loan debt is $126,856.39 (Compl. at p. 6; and at Ex. J), while SPS maintains that the amount necessary to pay off the loan and to release the deed of trust is instead $153,042.62.

See Compl. at Ex. I.

However, either figure suffices for jurisdictional purposes under 28 U.S.C. § 1332.

22. Finally, when aggregating the value of the declaratory relief Plaintiff is seeking, along with her claim for money damages, diversity jurisdiction is also properly invoked.

Plaintiff seeks a declaration from this Court finding that the amount necessary to satisfy the Loan is $126,856.39, compared to the amounted identified in the “payoff from [SPS] which reflected a. . . total payoff amount of $153,042.62.” (Compl. at ¶ 18, and Ex. I thereto).

If awarded such relief, the Court would reduce the outstanding principal balance by $26,186.23 (not including per diem interest of $34.72 from October 25, 2019 through the present totaling $1,145.76).

That amount, aggregated with the $50,000 in monetary damages Plaintiff is requesting for her fraud claim (compl. at p. 7) totals $76,186.23 (greater than the $75,000 diversity jurisdiction threshold).

See Shanaghan, supra, 58 f.3d at 109 (permitting aggregating of smaller claims to meet diversity subject matter jurisdiction).

23. Accordingly, this action may be removed to this Court under 28 U.S.C. § 1332 because the parties are completely diverse, and the matter in controversy exceeds the sum or value of $75,000.

Conclusion

24. Pursuant to 28 U.S.C. § 1446(d), a copy of the filing of this Notice of Removal will be promptly filed with the clerk for the Circuit Court for Roanoke County and served upon Plaintiff.

A copy of the Notice of Filing of Notice of Removal (without exhibits) is attached as Exhibit “8.”

25. In filing this Notice of Removal, the Defendants do not waive, but instead specifically reserve, all defenses, objections, motions, or exceptions available to them under applicable law.

In particular, Defendants expressly reserve the right to move for dismissal pursuant to Fed. R. Civ. P. 12(b).

No statement herein or omission should be deemed to constitute an admission by Defendants of any allegation set forth in the Complaint or damages sought therein.

26. For the foregoing reasons, Defendants, Select Portfolio Servicing, Inc., and DLJ Mortgage Capital Inc., request that the above-captioned action now pending before the Circuit Court for Roanoke County be removed to the United States District Court for the Western District of Virginia (Roanoke Division).

Dated: November 27, 2019

Respectfully submitted,

/s/ John A. Nader

John A. Nader (VSB No. 73259)

Alfred D. Carry (VSB No. 81360)

McGlinchey Stafford, PLLC
1275 Pennsylvania Ave., N.W., Suite 420
Washington, D.C. 20004
Telephone: (202) 802-9958
Facsimile: (202) 217-2215
jnader@mcglinchey.com
acarry@mcglinchey.com

Counsel for Defendants,
Select Portfolio Servicing, Inc.,
and DLJ Mortgage Capital, Inc.

 

CERTIFICATE OF SERVICE

I, hereby certify that on November 27, 2019, I filed the foregoing Notice of Removal with the Clerk of the Court using the CM/ECF system, and served a copy of the same on:

George I. Vogel, III, Esq.
Vogel & Cromwell, LLC
204 McClanahan Street
P.O. Box 18188 Roanoke,
Virginia 24014

Counsel for Plaintiff,
Mary Beth Trump

/s/ John A. Nader
John A. Nader

Capital One Announces Sale of Approximately $17 billion of Mortgages to DLJ Mortgage Capital, Inc., a subsidiary of Credit Suisse AG
Capital One now expects to resume repurchasing shares of common stock through the end of the second quarter of 2018 under its existing board authorization

MCLEAN, Va., May 8, 2018 /PRNewswire/ — Capital One Financial Corporation (NYSE: COF) today announced the sale of approximately $17 Billion of first and second lien mortgages to DLJ Mortgage Capital, Inc., a subsidiary of Credit Suisse AG.  The company expects to complete the transaction and record a gain in the second quarter of 2018. The company had previously announced that it ceased new originations of residential mortgages and home equity loan products.

Capital One

As a result of the portfolio sale, the company now expects to resume repurchasing shares of common stock through the end of the second quarter of 2018 under its existing board authorization.

“Strong market demand enabled us to negotiate and sign this complex transaction more quickly than we thought possible,” said R. Scott Blackley, Chief Financial Officer of Capital One.

The timing and exact amount of any Capital One common stock repurchases will depend on various factors, including market conditions, opportunities for growth, and the company’s capital position and amount of retained earnings. Capital One’s share repurchase program does not include specific price targets, may be executed through open market purchases or privately negotiated transactions, including utilizing Rule 10b5-1 programs, and may be suspended at any time.

Wells Fargo Securities, LLC and Morgan Stanley & Co., LLC acted as financial advisors to Capital One on the transaction. Wachtell, Lipton, Rosen & Katz acted as legal advisor to Capital One on the transaction.

Forward-Looking Statements
Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Capital One cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Capital One files with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2017.

About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $250.8 billion in deposits and $362.9 billion in total assets as of March 31, 2018. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 100 index.

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/capital-one-announces-sale-of-approximately-17-billion-of-mortgages-to-dlj-mortgage-capital-inc-a-subsidiary-of-credit-suisse-ag-300644454.html

SOURCE Capital One Financial Corporation

Investor Relations, Jeff Norris, 703.720.2455, Danielle Dietz, 703.720.2455, Media Relations, Tatiana Stead, 703.720.2352, Sie Soheili, 703.720.3929

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Henry the Third Returns to the Battlefield to Protect the Roman Castle

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Roman v. U.S. Bank National Association as Trustee for GSAA Home Equity Trust 2006-12, Asset-Backed Certificates Series 2006-12

(3:21-cv-00813)

District Court, E.D. Virginia

DEC 29, 2021 | REPUBLISHED BY LIT: JAN 3, 2022

Update Feb 26, 2022

Case remanded by another intentionally scanned opinion which cannot be transcribed.

THERESA B. ROMAN, Plaintiff,

v.

U.S. BANK NATIONAL ASSOCIATION, as TRUSTEE for GSAA HOME EQUITY TRUST 2006-12, ASSET-BACKED CERTIFICATES, SERIES 2006-12, Defendant.

Civil Action No. 3:18cvl57-HEH.
United States District Court, E.D. Virginia, Richmond Division.
May 18, 2018.
Theresa B. Roman, Plaintiff, represented by Henry W. McLaughlin, III, The Law Office of Henry McLaughlin, P. C.

U.S. Bank National Association, as Trustee for GSAA Home Equity Trust 2006-12, Asset-Backed Certificates, Series 2006-12, Defendant, represented by John Alexander Nader, McGlinchey Stafford PLLC.

REPUBLISHED BY LIT: JAN 3, 2022

MEMORANDUM OPINION

HENRY E. HUDSON, District Judge.

This matter is before the Court on Plaintiff Theresa B. Roman’s (“Plaintiff”) Motion for Leave to File an Amended Complaint and Seeking Leave to File Late Opposition to Motion to Dismiss on the Pleadings;

Alternatively, Motion for Leave to Dismiss Without Prejudice(ECF No. 7), filed on April 20, 2018.

On May 7, 2018, this Court issued an Order (ECF No. 11) denying Plaintiff leave to file an amended complaint and granting Plaintiff’s alternative motion to dismiss without prejudice.

The Court’s reasoning underlying that Order is articulated below.

I. BACKGROUND

On April 28, 2006, Plaintiff’s mother Venice E. Briggs (“Briggs”) entered into a loan agreement with Madison Funding Inc. that was eventually assigned to Defendant U.S. Bank National Association (“Defendant”). (Compl. ¶¶ 4,6, ECF No. 1-3.)

The loan was secured by a deed of trust—signed by both Briggs and Plaintiff—that became a lien on the property located at 5405 Wellington Ridge Road, Richmond, Virginia 23231 (“Property”). (Id. ¶ 4.)

In August 2006, Venice Briggs died, and Plaintiff became the sole owner of the Property and the personal representative of Briggs’s estate. (Id. ¶¶ 9, 14.)

In September 2006,Plaintiff “re-executed the deed of trust to correct a technical error in the description of the residence.” (Id. ¶ 9.)

Paragraph 22 of the re-executed deed (“Deed”)contains a provision that allows for an acceleration of the loan in the event of a default. (Id. at Ex. A.)

This provision requires the Lender to send the Borrower notice prior to acceleration that provides the Borrower with information related to curing the default. (Id.)

According to paragraph 15 of the Deed, “notice to any one Borrower shall constitute notice to all Borrowers.” (Id.) The Deed also includes a page titled “Exhibit A,” which contains a handwritten message that states: “said Venice Briggs departed from this life on or around August 31, 2006.” (Id.)

However, Venice Briggs remains listed as a Borrower in the Deed. (Id.)

On July 12, 2017, Defendant sent a notice to the Property that was addressed to Venice Briggs and provided the information required by paragraph 22. (Id. ¶ 17.)

Subsequently, a foreclosure of the Property was scheduled for January 18, 2018, which Plaintiff contends is “void, alternatively voidable.” (Id. ¶ 29.)

II. STANDARD OF REVIEW

Rule 15 of the Federal Rules of Civil Procedure provides that parties should “freely” be given leave to amend their pleadings “when justice so requires.” Fed. R. Civ. P. 15(a)(2).

As the Fourth Circuit has explained,”[a] motion to amend should be denied only where it would be prejudicial, there has been bad faith, or the amendment would be futile.” Nourison Rug Corp. v. Parvizian, 535 F.3d 295, 298(4th Cir. 2008)(citing HCMF Corp. v. Allen, 238 F.3d 273, 276-77 (4th Cir. 2001)).

Amendment is futile when a proposed amended complaint fails to state a claim. U.S. ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370, 376 (4th Cir. 2008). Whether a complaint fails to state a claim, and thus whether amendment would be futile, is analyzed under Rule 12(b)(6) of the Federal Rules of Civil Procedure.

Thus, the “[f]actual allegations must be enough to raise a right to relief above the speculative level,” Bell All. Corp. v. Twombly, 550 U.S. 544, 555(2007) (citation omitted), to one that is “plausible on its face,” id. at 570, rather than merely “conceivable.” Id.

In considering a Rule 12(b)(6) motion, a Plaintiff’s well-pleaded allegations are taken as true and the complaint is viewed in the light most favorable to the plaintiff. 

T.G. Slater & Son v. Donald P. & Patricia A. Brennan, LLC, 385 F.3d 836, 841 (4th Cir. 2004) (citation omitted).

Legal conclusions enjoy no such deference. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

III. DISCUSSION

Plaintiff’s Complaint asserts two counts.

Count One alleges that Defendant breached the Deed by addressing the notice to Briggs, even though Defendant was made aware of Briggs’s death in 2006.

Count Two alleges that Trustee Services, which was not included as a party to this action, owed Plaintiff a fiduciary duty not to foreclose on the Property.

Plaintiff’s proposed Amended Complaint (ECF No. 7-1) only asserts one count for breach of the Deed and adds Trustee Services as a nominal party.

The claim for breach of the Deed in both Plaintiff’s Complaint and her proposed Amended Complaint rely on the same allegations.

In Virginia, “[t]he elements of a breach of contract action are

(1) a legally enforceable obligation of a defendant to a plaintiff;

(2)the defendant’s violation or breach of that obligation;

and

(3)injury or damage to the plaintiff caused by the breach of obligation.” 

William H. Gordon Assocs., Inc. v. Heritage Fellowship, United Church of Christ, 784 S.E.2d 265, 274 (Va. 2016).

“When the language of a deed is ‘clear, unambiguous, and explicit,’ a court interpreting it ‘should look no further than the four comers of the instmment under review.'”

Utsch v. Utsch, 581 S.E.2d 507, 509 (Va. 2003) (quoting Pyramid Dev. v. D&J Assocs., 553 S.E.2d 725, 728 (Va. 2001)).

Plaintiff’s proposed Amended Complaint is futile. Plaintiff does not contend that the substance of the notice provided by Defendant was deficient.

Instead, her sole allegation is that addressing the notice to her deceased mother breached the Deed. The Deed required notice to be given to the Borrower and stated “[n]otice to any one Borrower shall constitute notice to all Borrowers.”

Plaintiff’s mother remained listed as a Borrower on the Deed after Plaintiff re-executed it and was listed as a Borrower when Defendant sent the notice.

Accordingly, addressing the notice to Briggs was not improper based upon the plain language of the Deed.

Additionally, Plaintiff does not allege in either her Complaint or her proposed Amended Complaint that she would have been able to cure the default had the notice been addressed to her.

Notwithstanding dicta in Squire v. Va. Hous. Dev. Auth., 758 S.E.2d 55 (Va. 2014),[1] Virginia law requires a plaintiff bringing a breach of contract action to plead damages.

In this case, Plaintiff did not identify the damage she allegedly suffered due to the breach and thus did not state a claim upon which relief could be granted.

For these reasons. Plaintiff’s Motion for Leave to File an Amended Complaint and Seeking Leave to File Late Opposition to Motion to Dismiss on the Pleadings was denied.

Alternatively, Plaintiff moved for leave to dismiss the action without prejudice. After due consideration, the Court determined that a dismissal without prejudice was an appropriate resolution to this matter and granted Plaintiff’s alternative motion.

IV. CONCLUSION

Based upon the foregoing reasons. Plaintiff’s Motion for Leave to File an Amended Complaint and Seeking Leave to File Late Opposition to Motion to Dismiss on the Pleadings was denied, and Plaintiff’s altemative Motion for Leave to Dismiss Without Prejudice was granted.

Consequently, Defendant’s Motion for Judgment on the Pleadings and to Dismiss Complaint pursuant to Rule 12(c) was denied as moot, and the case was dismissed without prejudice.

The Clerk is DIRECTED to send a copy of this Memorandum Opinion to all counsel of record.

[1] The majority in Squire cites Bayview Loan Servicing, LLC v. Simmons, 654 S.E.2d 898 (Va. 2008), as a case where the Virginia Supreme Court “affirmed an award of damages against a lender in a post-foreclosure situation” in spite of the fact that “[t]he borrower did not allege what she would have done to prevent the foreclosure sale had she received notice.”

Squire, 758 S.E.2d at 61 n.2.

Importantly though, Bayview did not examine the issue of pleading damages in an action for breach of a deed of trust.

Instead, the sole assignment of error in Bayview involved interpreting Va. Code Ann. § 55-59.1(A) to determine whether a notice provided by the lender could be understood to have “effectively exercised the right of acceleration.”

Bayview, 654 S.E.2d at 900.

Moreover,the issue of damages was not present in Squire as the plaintiff in that case “had money with which to reinstate the loan and offered to pay it.”

Squire, 758 S.E.2d at 68 (Mims, J., concurring).

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