# Dean v. SN Servicing Corp

> District Court, N.D. West Virginia · March 22, 2023

URL: https://www.frixlaw.com/law-library/cases/10726497

## Case

- **Court:** District Court, N.D. West Virginia
- **Decided:** March 22, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA

GENEVA ANN DEAN,

Plaintiff,

v. CIVIL ACTION NO. 1:22-CV-28
(KLEEH)

SN SERVICING CORP, and
U.S. BANK TRUST NATIONAL ASSOCIATION
AS TRUSTEE OF THE IGLOO SERIES IV TRUST,

Defendants.

MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
On November 30, 2021, the plaintiff, Geneva Dean
(“Plaintiff”), commenced this action against the defendants, SN
Servicing Corp, and U.S. Bank Trust National Association
(collectively, “the Defendants”),1 in the Circuit Court of Marion
County, West Virginia [ECF Nos. 1-1 at 4-15]. She asserted claims
for violations of the West Virginia Consumer Credit Protection
Act, breach of contract, and unconscionability related to the
Defendants’ abusive mortgage loan lending and servicing. Id. The
Defendants timely removed the case to this Court based on diversity
of citizenship [ECF No. 1].
The Plaintiff moved to remand the case to state court [ECF

1 Although the Plaintiff initially included Fay Servicing, LLC as a defendant
in this action, she dismissed her claims against it with prejudice on November
10, 2022 [ECF No. 36].
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
No. 8] and later moved for leave to file an amended complaint [ECF
No. 24]. Thereafter, SN Servicing Corp (“SN Servicing”) moved to
amend its answer and assert a counterclaim [ECF No. 38]. The
parties’ motions are fully briefed and ripe for review. For the
reasons that follow, the Court DENIES the Plaintiff’s motion to
remand [ECF No. 8] and GRANTS the parties’ motions to amend their
pleadings [ECF Nos. 24, 38].
I. Factual Allegations
As it must, the Court construes the following facts in the
light most favorable to the Plaintiff. See De’Lonta v. Johnson,
708 F.3d 520, 524 (4th Cir. 2013). This case relates to the
alleged wrongful actions of U.S. Bank Trust National Association
as trustee of the Igloo Series IV Trust (“US Bank”), in originating
the Plaintiff’s mortgage (“the Loan”) and SN Servicing’s actions
in servicing the Loan [ECF No. 1-1].
On June 23, 2008, the Plaintiff and her husband sought a loan
from Wells Fargo Financial (“Wells Fargo”) to buy out her brother’s
interest in a home located in Marion County. Id. at ¶¶ 2, 6-7.
Although they needed only $20,000 to complete the transaction,
Well Fargo employees pressured the Plaintiff and her husband to
obtain a loan for twice that amount to pay off their outstanding,
unsecured debts. Id. at ¶ 7. They agreed and executed a Deed of

Trust, securing a fifteen-year mortgage loan for the principal sum
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
of $44,636 with an 11.5% interest rate. Id. at ¶¶ 6, 8. Wells
Fargo misrepresented that this was the best interest rate for which
the Plaintiff could qualify. Id. at ¶ 10.
Fay Servicing, LLC (“Fay Servicing”) became the loan servicer
in 2019. Id. at ¶ 12. Sadly, the Plaintiff’s husband passed away
on June 5, 2019, causing her to fall behind on the Loan. Id. at ¶
13. She requested payment assistance from Fay Servicing but, in
April 2020, it denied her request and informed her that she would
be required to make a lump sum payment if she wished to reinstate
the Loan. Id. at ¶ 15. Although Fay Servicing gave the Plaintiff
conflicting information about the amount of the payment required,
she paid $6,508.4 as directed in June 2020. Id. at ¶¶ 16-17. Fay
Servicing applied $4,268.49 to the principal and interest,
$1,309.06 to escrow, and the remaining $930.89 to “illegal late
fees and other illegal loan charges.” Id. at ¶¶ 18-19. The
Plaintiff then resumed her monthly payments. Id. at ¶ 20. SN
Servicing thereafter became her loan servicer in December 2020.
Id. at ¶ 21.
The Plaintiff contends that both Fay Servicing and SN
Servicing miscalculated the interest due on the Loan, causing her
to unknowingly fall further and further behind. Id. at ¶¶ 22-27.
“As a result, when the Loan reaches maturity in two years,

Plaintiff will likely still owe a large sum of principal, and if
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
she is unable to pay the amount, she will lose her home to
foreclosure.” Id. at ¶ 28. The Plaintiff also alleges that these
servicers have charged her illegal attorneys’ fees and late fees
and have not properly applied her payments to the Loan. Id. at ¶¶
29-36. Finally, she asserts that SN Servicing has sent her
confusing and misleading billing statements that misrepresented
the amount she owed on the Loan and threatened her with
unauthorized fees. Id. at ¶¶ 37-42.
On September 1, 2021, the Plaintiff sent a letter to the
Defendants notifying them that they had violated the West Virginia
Consumer Credit and Protection Act (“WVCCPA”), W. Va. Code 46A-2-
115, et seq. and giving them an opportunity to cure the alleged
violations. Id. at ¶ 43. U.S. Bank and SN Servicing received
this letter on September 8, 2021, and September 9, 2021,
respectively. Id.
After the Defendants failed to cure their violations within
forty-five (45) days, the Plaintiff commenced this lawsuit
asserting three causes of action. In Count I, she contends that
the Defendants’ illegal debt collection practices violate the
WVCCPA. Id. at ¶¶ 46-52. She requests “[a]ctual damages and
appropriate civil penalties for each violation.” Id. In Count
II, she alleges that the Defendants breached the Deed of Trust and

seeks “a declaration that Defendants violated the contract by
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
calculating interest in a manner not authorized by contract, and
recalculation of the amount owed on the loan had interest been
properly calculated” as well as actual damages. Id. at ¶¶ 53-64.
Finally, in Count III, the Plaintiff asserts the common law
contract defense of unconscionability and asks the Court to declare
the Deed of Trust unenforceable. Id. at ¶¶ 65-71. The Plaintiff
also generally alleges that she “suffered annoyance and
inconvenience; stress and worry; and fear of loss of home,” id. at
¶ 45, and seeks attorneys’ fees, costs and any other relief as the
Court deems appropriate.
II. Plaintiff’s Motion to Remand
A party may remove to federal court any state “civil action
where the matter in controversy exceeds the sum or value of $75,000
. . . and is between citizens of different States.” 28 U.S.C. §§
1332(a), 1441(a). When an action is removed from state court, a
federal district court must determine whether it has original
jurisdiction over the plaintiff’s claims. Kokkonen v. Guardian
Life Ins. Co. of Am., 511 U.S. 375, 377 (4th Cir. 1994). “Federal
courts are courts of limited jurisdiction. They possess only that
power authorized by the Constitution and statute, which is not to
be expanded by judicial decree.” Id. Federal courts have original
jurisdiction over primarily two types of cases: (1) those involving

federal questions under 28 U.S.C. § 1331 and (2) those involving
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
diversity of citizenship under 28 U.S.C. § 1332.
When a party seeks removal based upon diversity of
citizenship, that party bears the burden of establishing “the
amount in controversy exceeds the sum or value of $75,000,
exclusive of interests and costs, and is between citizens of
different states.” 28 U.S.C. § 1332. “Because removal jurisdiction
raises significant federalism concerns, [courts] must strictly
construe removal jurisdiction,” Mulcahey v. Columbia Organic
Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994) (citation omitted),
and must resolve all doubts about the propriety of removal in favor
of remanding the case to state court. Hartley v. CSX Transp.,
Inc., 187 F.3d 422, 425 (4th Cir. 1999).
Here, the parties do not dispute that the Defendants timely
removed this case from state court or that the parties are diverse
[ECF Nos. 1 at 3; 1-1 at ¶¶ 2-3, 5; 9 at 1-3]. Thus, the only
question for the Court is whether the amount in controversy
requirement has been satisfied.
A. Applicable Law
An action must be fit for federal adjudication at the time
the removal petition is filed. See 28 U.S.C. § 1441(a); Moffitt
v. Residential Funding Co., LLC, 604 F.3d 156, 159 (4th Cir. 2010).

If the complaint does not contain a specific amount of damages or
amount in controversy, “the removing defendant must prove by a
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
preponderance of the evidence that the amount in controversy
exceeds [$75,000].” Francis v. Allstate Ins. Co., 709 F.3d 362,
367 (4th Cir. 2013) (quotation omitted); see also Zink v. Doe,
2014 WL 1725812, at *2 (N.D.W. Va. May 1, 2014) (“In order to meet
the preponderance of the evidence standard and establish that
removal is proper, a defendant must show that it is more likely
than not that the amount in controversy exceeds the jurisdictional
amount.”).
“Evidence establishing the amount is required . . . only when
the plaintiff contests, or the court questions, the defendant's
allegation.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574
U.S. 81, 89 (2014). “To resolve doubts regarding a defendant’s
asserted amount in controversy, ‘both sides submit proof and the
court decides, by a preponderance of the evidence, whether the
amount-in-controversy requirement has been satisfied.’” Scott v.
Cricket Commc’ns, LLC, 865 F.3d 189, 194 (4th Cir. 2017) (quoting
Dart, 574 U.S. at 88). The determination of whether
the amount in controversy is satisfied is left to the Court's
“common sense.” Mullins v. Harry’s Mobile Homes, Inc., 861 F.
Supp. 22, 24 (S.D.W. Va. 1994).
“The question is not what damages the plaintiff will recover,
but what amount is in controversy between the parties.” Lanier v.

Norfolk S. Corp., 256 F. App’x 629, 631–32 (4th Cir. 2007). “When
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
a plaintiff’s complaint leaves the amount of damages unspecified,
the defendant must provide evidence to show what the stakes of
litigation are given the plaintiff’s actual demands.” Scott, 865
F.3d at 194. A plaintiff’s claims can be aggregated when
calculating the amount in controversy, regardless of whether the
claims are related to each other. See Synder v. Harris, 394 U.S.
332, 335 (1969).
B. Amount in Controversy
Because the Plaintiff’s complaint does not allege a specific
amount of damages, the Defendants must prove that the amount in
controversy exceeds the jurisdictional threshold by a
preponderance of the evidence. The Plaintiff seeks statutory
penalties, actual damages, attorneys’ fees and costs, reformation
of the Deed of Trust, and/or a declaration that the Deed of Trust
is unenforceable. The Court turns to consider whether the
aggregate amount in controversy exceeds $75,000.
1. WVCCPA Civil Penalties
The Plaintiff’s request for civil penalties for the
Defendants’ violations of the WVCCPA make up a major portion of
the monetary relief available to her. While the parties do not
dispute that the Plaintiff can recover $1,000 for each violation,

they disagree as to the total number of WVCCPA violations alleged
in her complaint. The Defendants estimate that the complaint
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
contains fifty-two (52) alleged violations, which would allow her
to recover $52,000 [ECF No. 1 at 5-6]. The Plaintiff, on the other
hand, contends that her complaint contains only forty (40) alleged
violations, which would allow her to recover $40,000 [ECF No. 9 at
6-7]. Thus, the civil penalty amount at issue for the Plaintiff’s
WVCCPA claims is between $40,000 and $52,000. But, ultimately,
the total number of WVCCPA violations alleged does not determine
whether the amount in controversy exceeds the jurisdictional
threshold. Because the Court would reach the same conclusion
regardless of whether the Plaintiff has alleged forty (40) or
fifty-two (52) violations, there is no need to resolve the parties’
dispute on this issue.
2. Attorneys’ Fees
The Court may consider attorneys’ fees in its amount in
controversy calculation only if they are specifically provided for
in the state statute at issue. Mo. State Life Ins. Co. v. Jones,
290 U.S. 199, 202 (1933). In this case, attorney fees are
available pursuant to WVCCPA,2 and the Defendants suggest that a
reasonable estimate of the Plaintiff’s fee award under this statute
would be between $10,000 and $25,000.3 Although statutory attorney

2 Specifically, § 46A-5-104 allows the court to award “reasonable attorney fees”
for any WVCCPA claim alleging “illegal, fraudulent or unconscionable conduct or
any prohibited debt collection practice.”
3 The Defendants base their estimate on several cases from the Southern District
of West Virginia. See ECF No. 1 at 7-8 (citing Maxwell v. Wells Fargo Bank,
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
fees might be available in this case, “[a]t this stage of
litigation, . . . an estimate of attorneys’ fees is pure
speculation, and thus, on this record, cannot be used to augment
the amount-in-controversy calculation.” See Bartnikowski v. NVR,
Inc., 307 F. App'x 730, 736 n.12 (4th Cir. 2009). Accordingly,
the Court does not include the Defendants’ estimation of attorneys’
fees its determination of the amount in controversy.
3. Actual Damages for WVCCPA Violations and Breach of
Contract
The Plaintiff may also recover actual damages for the
Defendants’ violations of the WVCCPA and alleged breach of
contract. In her complaint, she alleges that the servicers
miscalculated the interest on the Loan by using a daily accrual
method, rather than the standard pre-computed interest rate, which
reduced the amount of her payments applied to the principal [ECF
No. 1-1 at ¶¶ 22-28, 57, 64]. She estimates that she owes $4,000
more on the Loan due to their miscalculation of interest [ECF No.
9 at 8]. She also alleges that the Defendants improperly charged
her $930.89 in fees at the time she reinstated the Loan, $435 in
attorneys’ fees in February 2020, and $156.42 in late fees between

N.A., 2009 WL 3293871, at *4 (S.D.W. Va. Oct. 9, 2009), and Patton v. Fifth
Third Bank, 2006 WL 771924, at *3 (S.D.W. Va. Mar. 24, 2006). More recent cases
from that district, however, have found that an estimate of attorneys’ fees
unsupported by evidence is too speculative to be considered as part of the
amount in controversy. See e.g., Woodfell v. Gateway Mortg. Grp., LLC, 2020 WL
3964758, at *7 (S.D.W. Va. July 13, 2020).
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
December 2019 and September 2020 [ECF No. 1 at ¶¶ 30, 32, 60].
The Plaintiff also seeks damages for “annoyance and inconvenience;
stress and worry; and fear of loss of home” [ECF No. 1-1 at ¶ 45].
The Defendants contend that this claim alone satisfies the amount
in controversy requirement. But their estimate lacks any factual
support and is based purely on speculation. The Court therefore
notes that this request for relief would increase the amount in
controversy but does not include any estimate of damages for these
alleged harms in its calculation. The Court therefore concludes
that the Plaintiff seeks approximately $5,522.31 in actual damages
for the Defendants’ alleged violations of the WVCCPA and breach of
contract.
The Defendants argue that the actual damages at issue in this
case significantly exceed $5,522.31 because (1) the Plaintiff has
asked the Court to reduce the Loan’s interest rate from 11.5% to
5.91%, the average interest rate at the time she executed the Deed
of Trust, and (2) the Plaintiff seeks $24,636 in actual damages as
reimbursement for the amount Wells Fargo employees pressured her
to take out above the $20,000 she initially sought [ECF No. 25 at
3-4]. But this misstates the relief sought in the complaint. The
Plaintiff does not request a declaration limiting the maximum
interest rate or reducing the amount of the Loan. Nor does she

seek reimbursement for any amount above the $20,000 needed to buy
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
out her brother’s share of the property. Accordingly, the Court
does not include the Defendants’ estimates for potential damages
related to these harms in its amount in controversy calculation.
4. Equitable Relief
Finally, in Count III, the Plaintiff alleges that the Deed of
Trust is “procedurally and substantively unconscionable, and thus
cannot be enforced as written” [ECF No. 1-1 at 14]. She “requests
that the Court declare the deed of trust unenforceable and all
such other equitable relief to which Plaintiff may be entitled.”
Id. The Defendants contend that the amount at issue in this claim
is the principal sum of the Loan, $44,636; while the Plaintiff
asserts that the amount at issue is the principal balance remaining
on the Loan, approximately $12,700.
Where an action seeks declaratory or injunctive relief,
the amount in controversy is measured by the “value of the object
of the litigation.” Hunt v. Wash. State Apple Advert. Comm’n, 432
U.S. 333, 347 (1977). This is measured by “the pecuniary result
to either party which [a] judgment would produce.” Dixon v.
Edwards, 290 F.3d 699, 710 (4th Cir. 2002) (quoting Gov’t Employees
Ins. Co. v. Lally, 327 F.2d 568, 569 (4th Cir. 1964)).
Under West Virginia law, “[t]he doctrine of unconscionability
means that, because of an overall and gross imbalance, one-

sidedness or lop-sidedness in a contract, a court may be justified
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
in refusing to enforce the contract as written.” Brown v. Genesis
Healthcare Corp., 729 S.E.2d 217, 226 (W. Va. 2012). “If a
contract or term thereof is unconscionable at the time the contract
is made a court may refuse to enforce the contract, or may enforce
the remainder of the contract without the unconscionable term, or
may so limit the application of any unconscionable term as to avoid
any unconscionable result.” Id., at 227.
“[W]hen a plaintiff asks a court to declare a contract null
and void, the focus of the amount in controversy inquiry is the
value of the contract to either party.” Lang v. Wells Fargo Home
Mortg., Inc., 2013 WL 12210772, at *3 (N.D.W. Va. Sept. 23, 2013)
(citing Dixon, 290 F.3d at 710–11); see also Smalls v. Credit
Acceptance Corp., 2017 WL 11311516, at *8 (D.S.C. Mar. 23, 2017)
(“[T]he Court measures the amount in controversy with respect to
the unconscionability claim by the value of the contracts at
issue.”). In other words, “the Deed of Trust is the object of the
litigation for determining the amount in controversy” when the
plaintiff seeks equitable relief declaring the contract null and
void. Wright v. Fannie Mae, 2013 WL 5276554, at *3 (D. Md. Sept.
16, 2013).
Here, by requesting that the Court declare the Deed of Trust
unenforceable, the Plaintiff has put the value of the Loan in

controversy. The amount of principal the Plaintiff is obligated
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
to pay under the Deed of Trust is $44,636. If the Court were to
find the Loan unconscionable, it could invalidate the entire
agreement. Such relief would cost the Defendants at least the
total value of the principal. Other courts in this Circuit have
reached the same conclusion. See e.g., Smalls v. Credit Acceptance
Corp., 2017 WL 11311516, at *8 (D.S.C. Mar. 23, 2017) (denying
motion to remand because the total amount of principal and interest
that the plaintiff was obligated to pay over the life of the loan
exceeded $75.000 and the court could invalidate the entire loan
agreement based on the plaintiff’s unconscionability claim);
O'Neal v. Quicken Loans, Inc., 2016 WL 3597593, at *3 (D.S.C. July
5, 2016) (same); Lang, 2013 WL 12210772, at *3 (explaining that
the plaintiffs put the total amount of their loans at issue when
they asked the Court to invalidate them, alleging unconscionable
inducement).
5. Summary of Damages
As explained, the Plaintiff has alleged at least $40,000 in
civil penalties, $5,522.31 in actual damages, and $44,636 in
equitable relief. Thus, because the amount in controversy is at
least $90,158.31, the Court FINDS the exercise of removal
jurisdiction to be appropriate and DENIES the Plaintiff’s motion
to remand [ECF No. 8].
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
III. Motions to Amend
The Court next considers the Plaintiff’s motion to amend her
complaint and SN Servicing’s motion to amend its answer.
A. Federal Rule of Civil Procedure 15
Federal Rule of Civil Procedure 15 permits a plaintiff to
amend a complaint “once as a matter of course” within either 21
days after serving the complaint, or 21 days after service of a
responsive pleading or a motion under Rule 12(b), (e), or (f),
whichever is earlier. Fed. R. Civ. P. 15(a)(1). “In all other
cases, a party may amend its pleading only with the opposing
party’s written consent or the court’s leave. The Court should
freely give leave when justice so requires.” Fed. R. Civ. P.
15(a)(2).
The decision to grant or deny a motion to amend is within the
discretion of the Court. See Scott v. Family Dollar Stores, Inc.,
733 F.3d 105, 121 (4th Cir. 2013). Nonetheless, the Supreme Court
of the United States has set forth factors that courts should weigh
when applying Rule 15(a)(2). See Foman v. Davis, 371 U.S. 178,
182 (1962); Johnson v. Oroweat Foods Co., 785 F.2d 503, 509 (4th
Cir. 1986). Courts should grant leave to amend unless the
amendment (1) “would be prejudicial to the opposing party,” (2)
“there has been bad faith on the part of the moving party,” or (3)

“the amendment would have been futile.” Johnson, 785 F.2d at 509
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
(citing Foman, 371 U.S. at 182) (“the Foman factors”).
The first factor, whether there is prejudice to the opposing
party, can result where a proposed amendment raises a new legal
theory that would require the gathering and analysis of facts not
already considered by the opposing party. Johnson, 785 F.2d at
510. An amendment's level of prejudice “will often be determined
by the nature of the amendment and its timing.” Laber v. Harvey,
438 F.3d 404, 427 (4th Cir. 2006)).
The second factor is whether the party seeking to amend is
doing so in bad faith. Bad faith amendments are “abusive” or “made
in order to secure some ulterior tactical advantage.” GSS Props.,
Inc. v. Kendale Shopping Center, Inc., 119 F.R.D. 379, 381
(M.D.N.C. Mar. 15, 1988) (citing 6 C. Wright & Miller, Federal
Practice and Procedure, § 1487 (updated Apr. 2015))). In assessing
this factor, the court may consider the movant’s delay in seeking
the amendment but delay alone “is an insufficient reason to deny
the plaintiff's motion to amend.” Hart v. Hanover Cty Sch. Bd.,
495 Fed. App’x 314 (4th Cir. 2012) (citations omitted)).
The third factor weighs against granting leave to amend when
that amendment would be futile. Johnson, 785 F.2d at 509-10. Even
in the absence of prejudice and bad faith, a court should still
deny leave to amend on the basis of futility when the amended

complaint would not survive a motion to dismiss, Perkins v. United
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
States, 55 F.3d 910, 917 (4th Cir. 1995), or “when the proposed
amendment is clearly insufficient or frivolous on its face.”
Johnson, 785 F.2d at 510.
B. Plaintiff’s Motion to Amend Complaint
The Plaintiff seeks leave to amend her complaint to clarify
her breach of contract allegation and to add facts relating to her
claims against SN Servicing, including allegations related to
conduct that occurred following the filing of the complaint [ECF
No. 24]. Because SN Servicing opposes the Plaintiff’s motion, she
may only amend her complaint with leave. Upon careful consideration
of the Foman factors, the Court finds her motion should be granted.
First, the Plaintiff’s proposed amendment is not prejudicial
due to its nature and timing. In the Fourth Circuit,
[w]hether an amendment is prejudicial will often be
determined by the nature of the amendment and its timing.
A common example of a prejudicial amendment is one that
raises a new legal theory that would require the
gathering and analysis of facts not already considered
by the [defendant, and] is offered shortly before or
during trial. An amendment is not prejudicial, by
contrast, if it merely adds an additional theory of
recovery to the facts already pled and is offered before
any discovery has occurred.

Laber, 438 F.3d at 427 (alteration in original). This litigation
is in its earliest stages as the Court has not yet entered a
Scheduling Order. Furthermore, the proposed amendment adds
factual support for the Plaintiff’s existing causes of action and
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
does not raise any new legal theory.
Second, nothing in the record suggests that the Plaintiff’s
amendment is sought in bad faith. Although SN Servicing takes
issue with the fact that there was a delay of six (6) months
between the Plaintiff’s filing of her initial complaint and her
motion to amend, this delay alone is an insufficient reason to
deny her request to amend. Hart, 495 Fed. App’x at 314.
Finally, the Plaintiff’s proposed amendment would not be
futile. SN Servicing asserts that some of Plaintiff’s new
allegations are unsupported by the facts of the case. But such
facts must be developed through formal discovery. Based on the
record before it, the Court cannot say that the Plaintiff’s claims
would not survive a motion to dismiss or that her proposed amended
complaint is insufficient or frivolous on its face.
Because all three Foman factors weigh in favor of the
Plaintiff, the Court grants her motion for leave to amend the
complaint.
C. SN Servicing’s Motion to Amend Answer
SN Servicing seeks leave to amend its answer to add a
counterclaim [ECF No. 38]. It contends that the Plaintiff has
breached the Deed of Trust by failing to make monthly payments on
the Loan and by failing to submit funds for the payment of property

taxes and homeowner’s insurance. The Plaintiff’s opposition to SN
DEAN V. SN SERVICING CORP, ET AL. 1:22CV28
MEMORANDUM OPINION AND ORDER DENYING MOTION TO REMAND [ECF NO.
8], GRANTING MOTION TO AMEND COMPLAINT [ECF NO. 24], AND
GRANTING MOTION TO AMEND ANSWER [ECF NO. 38]
Servicing’s motion is not based on any of the Foman factor but
rather, on its argument that the Court lacks removal jurisdiction.
As discussed above, the amount in controversy exceeds $75,000 and
the Court has diversity jurisdiction over this case. Because SN
Servicing’s proposed amendment would not be prejudicial or futile
and is not sought in bad faith, the Court grants its motion for
leave to amend its answer.
Iv. Conclusion
For the reasons discussed, the Court DENIES the Plaintiff’s
motion to remand [ECF No. 8] and GRANTS the parties’ motions to
amend their pleadings [ECF Nos. 24, 38]. The parties shall submit
their amended pleadings in accordance with the Court’s forthcoming
Scheduling Order.
It is so ORDERED.
The Clerk shall transmit copies of this Order to counsel of
record by electronic means.
Dated: March 22, 2023
Ton 8 Kl
THOMAS §&. KLEEH, CHIEF JUDGE
NORTHERN DISTRICT OF WEST VIRGINIA

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10726497. Public record. Not legal advice.