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Huyer v. Njema

United States Court of Appeals, Eighth Circuit

February 3, 2017

Edward Huyer; Connie Huyer; Carlos Castro; Hazel P. Navas Plaintiffs - Appellees
v.
Kenneth M. Njema Movant - Appellant Wells Fargo & Company; Wells Fargo Bank, N.A. Defendants-Appellees

          Submitted: January 10, 2017

         Appeal from United States District Court for the Southern District of Iowa - Des Moines

          Before SMITH, GRUENDER, and SHEPHERD, Circuit Judges.

          GRUENDER, CIRCUIT JUDGE.

          Kenneth Njema appeals the district court's[1] orders denying Njema's motion to join a trespass claim to this class action and approving the class action settlement. Because the district court did not abuse its discretion in denying joinder or in approving the settlement, we affirm.

         I. BACKGROUND

         In 2008, plaintiffs filed this class action against Wells Fargo & Co. and Wells Fargo Bank, N.A. ("Wells Fargo"), alleging eight counts, including two violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"). The plaintiffs' claims related to Wells Fargo's practice of automatically ordering and charging fees for drive-by property inspections when customers fell behind on their mortgage payments. In 2015, the parties participated in mediation and reached a settlement agreement, which provides that Wells Fargo will pay $25, 750, 000 in exchange for dismissal of the lawsuit and a release of all related claims. The release provision of the settlement agreement requires an injunction against prosecution by class members of any "Released Claims, " which the provision defines as any claims "based upon, arising out of, or relating to, in any way, property inspection fees assessed on a mortgage serviced by Wells Fargo, or Wells Fargo's practices in ordering or charging borrowers for property inspections."

         On September 2, 2015, the district court preliminarily approved the settlement agreement, scheduled a fairness hearing for January 21, 2016, and entered an injunction prohibiting class members from maintaining any action asserting Released Claims against Wells Fargo in any other court. Afterward, more than 2.7 million notices were sent to class members.

         Separately, in 2013, Kenneth Njema brought an individual action against Wells Fargo in the United States District Court for the District of Minnesota ("Minnesota district court").[2] In his individual action, Njema raised a claim for trespass, arguing that Wells Fargo's agents entered his property and changed the locks even though Wells Fargo knew that he still resided there. The Minnesota district court denied Wells Fargo's motion for summary judgment as to Njema's trespass claim, and it scheduled a trial on December 14, 2015.

         In October 2015, Njema received notice that he was a member of this class action. Njema then attempted to join his individual action with the class action by filing a series of motions. On November 14, 2015, Njema filed a motion with the Judicial Panel on Multidistrict Litigation ("JPML"), seeking to transfer his individual action under 28 U.S.C. § 1407 to the district court for consolidation with the class action. The same day, Njema filed a motion with the Minnesota district court to stay his individual action pending resolution of the JPML transfer motion. Njema later filed a transfer motion with the district court. The following events then occurred.

         First, the Minnesota district court denied Njema's motion to stay his individual action, noting that there was "no basis for transferring this action for consolidation." After Njema requested reconsideration of this denial, the Minnesota district court asked Wells Fargo whether the injunction entered in the class action against prosecuting any "Released Claim" would bar Njema from proceeding on his trespass claim. Wells Fargo responded that Njema's trespass claim was not within the scope of the "Released Claims" described in the class action settlement agreement and that, even if it were, Wells Fargo "should be able to waive that protection" so that Njema's trespass claim could proceed to trial in the Minnesota district court. In light of this response, the Minnesota district court denied Njema's request for reconsideration.

         Second, the district court denied Njema's transfer motion. The district court held that "[b]ecause Plaintiff's trespass claim in the District of Minnesota does not in any way relate to property inspection fees charged by Wells Fargo, he is not precluded from pursuing that claim while also remaining a class member in the class action suit in this Court." Third, before the JPML could consider Njema's transfer motion, the Minnesota district court dismissed Njema's individual action for failure to prosecute.

         Lastly, Njema filed an objection to the settlement agreement in the district court, arguing that the settlement terms were unfair. On the morning of the fairness hearing, Njema also filed a motion to certify trespass as a related claim under Federal Rule of Civil Procedure 23 and to add himself as a named class representative of this new subclass under Rule 19. Six days later, the district court denied Njema's motion to certify trespass as a related claim, explaining that "the questions of law and fact related to trespass are not common to those raised in the property inspection fee claims." The following month, the court determined that the settlement agreement was fair, overruled all objections, and granted final approval of the settlement. The court also awarded attorneys' fees to class counsel and granted each named plaintiff an incentive award of $10, 000. Njema now appeals the court's denial of his motion to certify trespass as a related claim and its approval of the settlement.

         II. ...


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