Moreno v. Select Portfolio Servicing, Inc., No. 1:2010cv00503 - Document 35 (E.D. Cal. 2010)
Court Description: ORDER GRANTING 22 Motion to Remand; CASE REMANDED to Tulare County Superior Court; Copy of remand order sent to Tulare County Superior Court, Visalia-County Civic Center, 221 South Mooney Blvd., Visalia, CA 93291, signed by Judge Oliver W. Wanger on 06/23/2010. (Martin, S)
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Moreno v. Select Portfolio Servicing, Inc. Doc. 35 1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT FOR THE 7 EASTERN DISTRICT OF CALIFORNIA 8 9 ANTHONY MORENO, 10 Plaintiff, 11 vs. 12 13 14 SELECT PORTFOLIO SERVICING, INC., et al., 15 Defendants. 16 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) No. CV-F-10-503 OWW/SKO MEMORANDUM DECISION GRANTING PLAINTIFF'S MOTION TO REMAND AND DENYING PLAINTIFF’S REQUEST FOR ATTORNEY’S FEES (Doc. 22) 17 Before the Court is Plaintiff Anthony Moreno’s motion to 18 remand this action to the Tulare County Superior Court.1 19 Plaintiff filed a Verified Complaint for: (1) Fraud, (2) 20 Deceit, (3) Unfair Business Practices under California Business 21 and Professions Code § 17200, (4) Breach of Contract, (5) 22 Declaratory Relief, (6) Specific Performance, and (7) Injunction. 23 24 1 25 26 Plaintiff’s counsel did not appear at the hearing set for 10:00 a.m. on June 21, 2010. Plaintiff’s counsel called the Court after the hearing and explained that he mistakenly believed the hearing was set for 1:30 p.m. 1 Dockets.Justia.com 1 Defendants are Select Portfolio Servicing, Inc. (“SPS”), and Does 2 1-25. 3 4 5 6 7 The Complaint alleges: 1. This is a ‘trial plan fraud’ case which involves a homeowner who was promised a loan modification, and a Defendant (the Loan Servicing Company), SELECT PORTFOLIO SERVICING, INC. ... that fraudulently, deceptively, maliciously, and oppressively offered a loan modification and then refused to honor the agreement after SIX LOAN PAYMENTS were made under a string of THREE Deceptive Contracts. 8 Plaintiff is alleged to be a citizen of California and the owner 9 of property at 31866 Road 138 #B, Visalia, California, and SPS is 10 alleged to be a citizen of Utah. As the “Statement of Facts,” 11 the Complaint alleges: 12 13 9. Plaintiff fell behind on his loan payments and sought out a loan modification from his loan servicer, SPS. 14 15 16 17 18 19 20 21 22 23 24 25 26 10. On or around July 2009, Plaintiff spoke with a representative of Defendant Loan Servicer, (Mr. Tony Rasmussen - Phone # 801313-2161), and others in the loss mitigation department, who took Plaintiff’s financial information over the phone, including Plaintiff’s gross monthly income and monthly expenses, and then explained to Plaintiff that Plaintiff qualified for loan modification given his income, expenses, and hardship, and that all Plaintiff had to do was submit their [sic] financial documentation to SPS to confirm the data given over the phone and a loan modification would be thereafter and in due course provided. 11. Following this conversation, and based upon reliance of the statements made by Mr. Rasmussen, (who on information and belief is an employee acting within the course and scope of his employment, and who is authorized by Defendant to make such statements and assertions, which ultimately 2 1 2 3 proved to be false, deceptive, manipulative, and misleading) Plaintiff did thereby submit his financial documentation to Defendant as requested, including income and expenses and hardship information and all other information requested. 4 5 6 7 8 12. In response to this financial submission, Defendant thereafter, on or around August 6, 2009, did deliver to Plaintiff a ‘HOME AFFORDABLE MODIFICATION TRIAL PERIOD PLAN’ (for Investor Loan #412444593). Again, the true beneficiary/investor has never been identified, but once identified will be added as a defendant to this complaint. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 13. The Modification agreement stated that it had ‘an effective date of 9/01/2009).’ (See Attached Exhibit ‘A’ for a true and correct copy of the loan modification agreement which is incorporated herein by reference. 14. The first paragraph of the contract stated: ‘If I am in compliance with this trial period plan (‘the Plan’) and my representations in Section 1 continue to be true in all material respects THEN THE LENDER WILL PROVIDE ME WITH A HOME AFFORDABLE MODIFICATION AGREEMENT’ [sic] AS SET FORTH IN SECTION 3 ... that would amend and supplement the mortgage ... and note.’ 15. Section 3 of the agreement stated: ‘If I comply with the requirements in Section 2 and my representations in Section 1 continue to be true in all material respects THE LENDER WILL SEND ME A MODIFICATION AGREEMENT FOR MY SIGNATURE WHICH WILL MODIFY MY LOAN DOCUMENTS ... [‘]. 16. It is not clear by this agreement who the ‘Lender’ is that SPS is referring to, and the true nature of the investor/beneficiary of the loan has been intentionally concealed. 24 25 26 17. The Trial Plan agreement also contained Section 1. ‘My representations’ which contained a list of items Plaintiff certifies in regards to his finances, and his property. 3 1 2 18. The payment under the trial plan agreement was $678.74 per month, and the agreement called for three payments beginning in (/1/09) [sic] and ending 11/01/09. 3 4 5 19. Plaintiff agreed to the terms and conditions of this loan modification trial plan agreement, and made all three payments in a timely manner as required by the agreement. 6 7 8 9 20. Plaintiff executed the loan modification agreement on 8-10-09. 21. Defendant accepted and cashed each and every payment which finalized the contract by full performance and the alleged loan default was thereby cured. 10 11 12 13 14 15 16 17 18 22. In making the payments under this agreement, Plaintiff was lead [sic] to believe, informed and intentionally induced to make these three loan payments based on Plaintiff’s income and expenses which were submitted to Defendant’s representative (which income was approximately $3,800 per month, and monthly expenses which were approximately $3,000 per month) which Plaintiff was deceptively lead [sic] to believe were sufficient for the Obama Making Home Affordable Loan Modification (HAMP). 23. However, the under the President’s HAMP modification program, a borrower does not qualify for a modification if their ‘backend’ debt-to-income ratio exceeds 55%. 19 20 21 24. Plaintiff’s back-end debt ratio at the time of this trial plan agreement was approximately 79% which exceeds the guidelines outlined in the President’s modification program. 22 23 25. Defendant should have therefore informed Plaintiff that he did not qualify for the HAMP modification program. 24 25 26 26. The Trial Plan agreement Cover Page [sic] that was also sent to Plaintiff, referenced the President’s making Home Affordable Loan Modification Symbol, which 4 1 2 3 4 5 6 7 8 9 10 was further used as a false inducement to induce Plaintiff to sign the Loan Modification Agreement. 27. Defendant, by and through their [sic] agents, employees, and contractors, did therefore make false statements of fact, which were made to induce Plaintiff’s justifiable reliance that Plaintiff qualified for a loan modification under HAMP, and that by sending in three trial plan payments, Plaintiff would receive an additional modification agreement. 28. Plaintiff relied on these false statements of fact to his detriment, and suffered damages as a result, including outof-pocket expenses, pain and suffering, mental distress and other damages to be proven at trial. 11 12 13 14 15 16 17 18 19 29. To make matters worse, Defendant’s [sic] refused to honor the above-referenced loan modification, and instead, issued a second MAKING HOME AFFORDABLE LOAN MODIFICATION AGREEMENT to Defendant on or around October 7, 2009. 30. This Second [sic] agreement was similar to the first agreement, but the ‘trial plan’ payments were now nearly doubled to $1,288.98 (on information and belief this was done to force a default of the loan since Defendant realized that Plaintiff could afford a reasonable monthly payment of $678.74 (which is in line with the 31% front-end ratio contemplated by HAMP as a reasonable housing ratio). 20 21 31. The 31% housing ration [sic] must include and cover principal, interest, tax, insurance and association dues (‘PITIA’). 22 25 32. The $1,288.98 payment was for include [sic] principal and interest (but not tax, insurance, and/or association dues) and even at this figure the payment alone creates a 33.98% housing ratio which exceeds the guidelines set forth under HAMP. 26 33. 23 24 Therefore, the Defendant intentionally 5 1 2 sought to induce Plaintiff to make loan payments that they thought Plaintiff would be unable to afford, and which would result in his default of the mortgage loan. 3 4 5 6 7 8 9 34. On information and belief, Defendant is incentivized under certain agreements, including a pooling and servicing agreement, to lead homeowners toward foreclosure, rather than to legitimately modify their loans, and Defendant acted intentionally, fraudulently, intentionally [sic], willfully, wantonly, callously, and with a plan and design to induce Plaintiff into making additional ‘trial plan’ loan payments, under the guise that they qualified for President Obama’s HAMP program when in fact that was blatantly false. 10 11 12 13 14 15 35. The Trial plan agreement (for this second modification agreement) was executed by Plaintiff on 10/26/09 and the contract was completed by full performance - as was the first agreement - after Plaintiff made the three requested payments in a timely manner. 36. See Attached ‘Exhibit B’ for a true and correct copy of the SECOND loan modification agreement which is incorporated herein by reference. 16 17 18 37. Defendant accepted and cashed each and every payment under this SECOND AGREEMENT which finalized the contract by full performance and the alleged loan default was thereby cured, for the second time. 19 20 21 22 23 24 25 26 38. Plaintiff’s material representations as set forth in Section 1 of the loan modifications agreement never changed in any material respect, and Plaintiffs [sic] income and expenses did not materially change during this period of ‘bait and switch.’ 39. Instead of honoring either the first or second agreement, which had been fully executed and completed by full performance, Defendant’s [sic] once again breached the second agreement as they had breached the first agreement, and failed to provide the agreed-upon modification. 6 1 40. Defendant has no defense to its failure to perform its end of the bargain. 2 3 4 5 6 7 8 9 10 11 12 13 41. Both parties provided valuable consideration for the agreement in that Defendant agreed to forebear from foreclosure efforts, and Plaintiff agreed to pay a reduced loan amount while lead to believe this would provide a reasonable modification and thereby forebear from leaving the house or pursuing a short sale which it [sic] could have done had they [sic] truthfully been informed they did not qualify for HAMP. 42. In pouring gasoline on the flame, Defendant then caused to be issued a THIRD TRIAL PLAN MODIFICATION AGREEMENT, (on or around December 29, 2009) which again bears the Making Home Affordable symbol which was intended to induce Plaintiff’s justifiable reliance that he qualified for a loan modification, and THREE ADDITIONAL loan payments were again requested. See Attached Exhibit ‘C’ for a true and correct copy of the SECOND [sic] loan modification agreement which is incorporated herein by reference. 14 15 43. This is false, deceptive, unfair, and acted as an anticipatory repudiation of the earlier contracts. 16 18 44. Defendants [sic] therefore have breached two agreements and have acted in a manner to intentionally defraud Plaintiff into parting with their [sic] money. 19 45. 20 46. Defendant [sic] acts, omissions, false representations, breach of contract, and other deceptive acts and practices are the proximate cause of Plaintiff’s injuries and although the alleged breach of the loan documents have been cured, not once but twice, Defendant has continued to threaten foreclosure, which acts Plaintiff seeks to enjoin. 17 21 22 23 24 25 26 It must be asked, WHAT IS GOING ON HERE? 47. On or about November 11, 2009, Plaintiff, through its [sic] undersigned counsel, submitted to Defendant a written 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Qualified Written Request (Under RESPA Section 6) challenging the application of trial plan payments. Defendant has acknowledged the request within 20 days, but has not otherwise responded except to write on 12/10/09 ‘if you have an alleged error in servicing, we will contact you.’ This clearly violates RESPA and is nonresponsive to Plaintiff’s concerns, and Plaintiff reserves the right to amend the complaint to add a RESPA violation. 48. In addition, this letter of 11/11/09 also requested that Defendant identify the holder to the Note pursuant to Federal trust in [sic] Lending law (15 U.S.C. 1641(f). Likewise, the indifferent loan servicer has failed to respond to which Plaintiff also reserves the right to amend the complaint alleging the breach and violation of this federal statute. 49. This letter also indicated that Plaintiff, by making additional loan payments following Defendants [sic] fraud and breach of the previously mentioned loan agreements, did not waive their [sic] rights to sue Defendant for Fraud [sic], breach of contract, false and deceptive practices, etc., and such rights have never been waived at any time. See attached Exhibit ‘D’ for a true and correct copy of the 11/19/2009 [sic] demand letter .... 50. It is clear from the foregoing that Defendant has absolutely no concern or interest for the Plaintiff, and in addressing their [sic] financial hardship, and refuses to follow various Federal Laws that are established for the protection of borrowers across the Country. This has become a pandemic across the nation which can only be addressed through a court of law. 51. Defendant owes a duty to modify Plaintiff’s loan in accordance with California Civil Code Section 2923.6 which states that the loan servicer has a duty to all borrower’s [sic] in a loan pool. Plaintiff’s loan, on information and belief, is part of a loan pool of which Defendant 8 1 profits by servicing loans, some of them predatory loans. 2 3 4 52. WHEREFORE, given the foregoing, Plaintiff hereby asserts the following causes of action and seeks its [sic] actual, compensatory and punitive damages in an amount to be proven at trial. 5 The First Cause of Action is for fraud and alleges that SPS knew 6 that Plaintiff “did not qualify from [sic] the Obama Making Home 7 Affordable program because it knew Plaintiff’s front-end (housing 8 ratio) and back-end (debt-to-income ratio) do not meet the 9 guidelines for Making Home Affordable (HAMP)”; that even though 10 the guidelines for HAMP were not met, SPS stated to Plaintiff in 11 July 2009 that Plaintiff did qualify for the HAMP program and 12 only needed to submit his financial documentation to receive the 13 modification; that on three occasions Defendant represented that 14 Plaintiff qualified for a loan modification, when Defendant knew 15 the representations were false and “were intentionally made to 16 induce Plaintiff’s justifiable reliance (that they [sic] 17 qualified for a loan modification,” that Plaintiff relied on the 18 representations and suffered “both out-of-pocket, and other 19 pecuniary damages as well as mental anguish,” and that Plaintiff 20 is entitled to punitive damages. 21 The Second Cause of Action is for deceit and makes the same 22 allegations as the First Cause of Action. 23 The Third Cause of Action is for unfair competition in 24 violation of California Business and Professions Code § 17200 and 25 alleges that Defendant’s acts as set forth herein violate 26 9 1 California statutes for Fraud and Deceit and therefore violate 2 California statutes which will serve as the underlying offense 3 for an Unfair Competition and Deceptive Acts and Practices 4 statute,” that such acts are “unfair,” that “[t]he utility of 5 Defendant’s conduct is hard to identify and the hard [sic] to 6 Plaintiff (in potentially losing their [sic] family home) is 7 incredible in comparison” and “‘shock the conscience’” and serve 8 no worthwhile purpose other than to harass, intimidate, 9 embarrass, mislead, and defraud Plaintiff of his personal and 10 real property,” resulting in Plaintiff’s damages and entitling 11 Plaintiff to punitive damages. 12 13 14 15 16 17 18 19 20 The Fourth Cause of Action is for breach of contract and alleges: 68. Defendant offered Plaintiff two separate loan modifications (the first on or around 8/6/09 and the second on or around 10/7/09). 69. Defendant [sic] accepted each of these offers and fully performed its obligations under each agreement by making full and complete payments as requested in a timely manner. 70. Plaintiff’s financial condition and representations as set forth in Section 1. Of [sic] each agreement and no time [sic] altered or changed in any material respect. 21 22 23 24 25 71. Each party provided legally sufficient consideration as set forth herein and the contract is not otherwise illegal or subject to non-enforcement. 72. Defendant breached its agreements, on both occasions, by failing to provide the agreed-upon loan modification as set forth in the respective agreements. 26 10 1 2 3 4 5 73. Defendant has not [sic] defense to such breach, and by submitting each subsequent loan modification offer, Defendant anticipatorily repudiated the earlier agreement. 74. Such breach of contract has proximately and actually caused Plaintiff’s damages (which are foreseeable) and which will be proven at trial. 6 7 8 9 10 11 12 13 75. Plaintiff’s Subject Property is his primary residence and is unique. Money damages will not adequately remedy the breach of contract, and Plaintiff therefore seeks SPECIFIC PERFORMANCE OF THE 8/16/09 agreement. 76. In addition, Defendants [sic] acts and material omission (and breach of contract) were willful, wanton, intentional, egregious, reckless and oppressive wherefore Plaintiff seeks actual and compensatory damages, as well as exemplary (punitive damages), attorney fees, and costs of suit and other relief deemed just and proper. 14 The Complaint also seeks declaratory relief “that the 15 original contract of 8/06/09 is fully enforceable, and was breach 16 [sic] by Defendant and that the Court should thereby order 17 Specific Performance of this Agreement to remedy the wrongful and 18 deliberate conduct of Defendant,” specific performance of the 19 8/06/09 loan modification agreement, and injunctive relief to 20 enjoin SPS “to market and/or sell or otherwise convey or transfer 21 the Subject Property without Court approval.” The prayer for 22 relief seeks, inter alia, “monetary damages, including actual, 23 and compensatory in an amount no less than $25,000 and in an 24 amount to be proven at trial.” 25 SPS removed the action, stating as grounds in the Notice of 26 11 1 Removal: 1. This action is a civil action of which this Court has original jurisdiction under 28 U.S.C. Section 1331, and is one which may be removed to this Court by SPS pursuant to the provisions of 28 U.S.C. Section 1441(b) in that is arises under the ‘Making Home Affordable Loan Modification Program.’ Supplemental jurisdiction exists with respect to any remaining claims pursuant to 28 U.S.C. § 1367. 2 3 4 5 6 7 4. Alternatively, this action is a civil action of which this Court has original jurisdiction under 28 U.S.C. Section 1332, and is one which may be removed to this Court by SPS pursuant to the provisions of 28 U.S.C. § 1441(b) in that it is a civil action between citizens of different states and the manner [sic] in controversy exceeds the sum of $75,000.00, exclusive of interests and costs because Plaintiff seeks relief related to a loan of the real property subject to the action. 8 9 10 11 12 13 14 Plaintiff moves to remand this action. 15 A. 16 The party seeking to invoke removal jurisdiction bears the GOVERNING STANDARDS. 17 burden of supporting its jurisdictional allegations with 18 competent proof. 19 Cir.1982); Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th 20 Cir.1988). 21 case originally could have been filed in federal court.” 22 v. International College of Surgeons, 522 U.S. 156, 163 (1997); 23 28 U.S.C. § 1441(a). 24 analyzed on the basis of the pleadings at the time of removal. 25 See Sparta Surgical Corp. v. National Ass’n of Sec. Dealers, 159 26 F.3d 1209, 1213 (9th Cir.1998). Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th “The propriety of removal thus depends on whether the Chicago A court’s removal jurisdiction must be District courts must generally 12 1 construe the removal statutes strictly against removal and 2 resolve any uncertainty in favor of remanding the case to state 3 court. 4 815, 818 (9th Cir.1985). Takeda v. Northwestern Nat’l. Life Ins. Co., 765 F.2d 5 B. ARTICLE III STANDING. 6 Plaintiff asserts that remand is required because Plaintiff 7 “has no ‘standing’ to invoke federal court jurisdiction and is 8 not a ‘real party in interest’ to this action,” relying on 9 Article III to the United States Constitution. In order to 10 satisfy Article III’s standing requirements, a plaintiff must 11 show (1) he has suffered an “injury in fact” that is (a) concrete 12 and particularized and (b) actual or imminent, not conjectural or 13 hypothetical; (2) the injury is fairly traceable to the 14 challenged action of the defendants; and (3) it is likely, as 15 opposed to merely speculative, that the injury will be redressed 16 by a favorable decision. 17 U.S. 555, 560-561 (1992). 18 19 20 21 22 23 Lujan v. Defenders of Wildlife, 504 Plaintiff contends: In this case, SPS has suffered no injury in fact, as it is not the owner of Plaintiff’s loan (rather it is acting as a ‘loan servicer’ on behalf of some unknown lender or a MERS loan as referenced in Plaintiff’s deed of trust). There is absolutely no proof offered that Defendant is acting on behalf of any ‘lender’ who has an actual right to enforce Plaintiff’s loan, or any lender that would otherwise have standing to pursue such claims in a Bankruptcy court as a legitimate ‘creditor’ of the loan. 24 25 26 Where MERS loans are involved (MERS acts as the ‘beneficiary’ of the loan pursuant to the Deed of Trust), it is common knowledge that there is likely NO TRUE LENDER than [sic] can 13 PROVE THEY HAVE THE RIGHT TO ENFORCE the debt alleged to be owed to that particular creditor. Consequently, before this Court can/should hear this case, Plaintiff should be required to identify the ‘lender’ of this loan (the true ‘real party in interest”) and the Court should require this lender, if such exists, to prove it has an original copy of Plaintiff’s promissory note with proper endorsements and assignment of the deed of trust. 1 2 3 4 5 6 7 Plaintiff contends that without proof that SPS is a valid agent 8 of the lender: SPS has absolutely no standing to seek Federal Court jurisdiction, and has no grievance to redress, has suffered no injury in fact, and is not a real party in interest to this action (See F.R.C.P. 17 which states that ‘an action must be prosecuted in the name of the real party in interest), but rather Defendant seeks to advance third party standing on behalf of some unknown and unidentified lender, which attempt herein to invoke federal court jurisdiction should be denied. 9 10 11 12 13 14 15 Plaintiff seriously misunderstands Article III and cites no 16 authority that removal is precluded based on the contention that 17 the removing Defendant must have Article III standing. 18 Plaintiff’s motion to remand on this ground is DENIED. 19 C. DIVERSITY JURISDICTION - AMOUNT IN CONTROVERSY. 20 Plaintiff moves to remand this action to the extent removal 21 is based on diversity of citizenship, contending that SPS cannot 22 establish that the amount in controversy “exceeds the sum or 23 value of $75,000, exclusive of interests and costs,” the 24 jurisdictional minimum. 28 U.S.C. § 1332(a). 25 “[W]here a plaintiff’s state court complaint does not 26 14 1 specify a particular amount of damages, the removing defendant 2 bears the burden of establishing, by a preponderance of the 3 evidence, that the amount in controversy exceeds [$75,000]. 4 Under this burden, the defendant must provide evidence 5 establishing that it is ‘more likely than not’ that the amount in 6 controversy exceeds that amount.” 7 Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). 8 Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir.2004), the Ninth 9 Circuit remanded for a determination of the amount in controversy Sanchez v. Monumental Life In Valdez v. 10 where the only discrete sum requested in the complaint was 11 “general damages ... in excess of $50,000.00: 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Since ‘it [was] not facially evident from the complaint that more than $75,000 [was] in controversy,’ Allstate should have ‘prove[n], by a preponderance of the evidence, that the amount in controversy [met] the jurisdictional threshold.’ ... Allstate did not. Its only effort was the statement in its ‘Petition for Removal’ that ‘upon information and belief, [it] submit[s] that the amount in controversy ... exceeds $75,000.00.’ ‘[I]nformation and belief’ hardly constitutes proof ‘by a preponderance of the evidence.’ ... To discharge its burden, Allstate needed to ‘provide evidence establishing that it is “more likely than not” that the amount in controversy exceeds that amount.’ .... ... [W]e reiterate that the amount-incontroversy inquiry in the removal context is not confined to the face of the complaint ... Nor does it present an insurmountable obstacle to quantify the amount at stake when intangible harm is alleged; the parties need not predict the trier of fact’s eventual award with one hundred percent accuracy ... Instead, ‘[a]lthough we have not addressed the types of evidence defendants may rely upon to satisfy the preponderance of the 15 1 2 3 evidence test for jurisdiction, we have endorsed the Fifth Circuit’s practice of considering facts presented in the removal petition as well as any “summary-judgmenttype evidence relevant to the amount in controversy at the time of removal.”’ ... 4 See also Conrad Associates v. Hartford Acc. & Indem. Co., 994 5 F.Supp. 1196, 1198-1199 (N.D.Cal. 1998): 6 19 In cases in which the existence of diversity jurisdiction depends on the amount in controversy, ‘[t]he district court may consider whether it is “facially apparent” from the complaint that the jurisdictional amount is in controversy.’ Singer v. State Farm Mutual Auto Ins. Co., 116 F.3d 373, 377 (9th Cir. 1987), citing Allen v. R & H Oil & Gas Co., 63 F.3d 1326 (5th Cir. 1995). If the complaint is silent on the amount of damages claimed, ‘the court may consider facts in the removed petition and may “require the parties to submit summaryjudgment type evidence relevant to the amount in controversy at the time of removal.’ Singer, 116 F.3d at 377. A speculative argument regarding the potential value of the award is insufficient. Id. at 376; Gaus v. Miles, 980 F.2d 564, 567 (9th Cir. 1992). The amount in controversy includes claims for general and special damages (excluding costs and interests), including attorneys’ fees, if recoverable by statute or contract, and punitive damages, if recoverable as a matter of law. See Richmond v. Allstate Ins. Co., 897 F.Supp. 447 (S.D.Cal. 1995) .... 20 Plaintiff, noting that the Complaint seeks, inter alia, 7 8 9 10 11 12 13 14 15 16 17 18 21 “monetary damages, including actual, and compensatory in an 22 amount no less than $25,000 and in an amount to be proven at 23 trial,” and that the Notice of Removal merely states that “the 24 manner [sic] in controversy exceeds the sum of $75,000.00, 25 exclusive of interests and costs because Plaintiff seeks relief 26 related to a loan of the real property subject to the action,” 16 1 contends that SPS has not established that the amount in 2 controversy exceeds the statutorily required amount. 3 asserts that the gravamen of his Complaint is that SPS 4 fraudulently induced Plaintiff to enter into loan modification 5 agreements, that SPS breached the agreement it provided to 6 Plaintiff and should be liable for breach of contract and 7 specific performance, and that it should not be entitled to 8 foreclose on Plaintiff’s property. 9 10 11 12 13 14 15 16 17 18 Plaintiff Plaintiff argues: [T]he fact that this case is ‘related to a loan’ (modification agreement) which by its terms was to reduce Plaintiff’s monthly payment, this still does not create a situation wherein the $75,000 amount in controversy requirement can be automatically and certainly satisfied. Even if Plaintiff were to receive its reduced loan payment, it is not clear how loan [sic] Plaintiff would actually maintain such loan as modified (for example the agreement could be specifically enforced, and the loan modification reduced payment be applied, but yet Plaintiff might only retain the property for a year or so, as an example). Such reduced payments for a one year period also fail to reach a $75,000 amount in controversy requirement and any such argument by Defendant in this regard would be purely speculative and would confer no subject matter jurisdiction. 19 SPS argues that the amount in controversy is satisfied 20 because Plaintiff is seeking relief regarding a loan in the 21 principal amount of $448,000.00 by seeking an injunction to 22 enjoin any foreclosure sale of the property: 23 24 25 26 An injunction of a foreclosure sale on the Property would prevent the lien holder from obtaining a payoff by way of the security. Here, Plaintiff admits he defaulted on a 2007 loan in 2009. Thus, Plaintiff is seeking to prevent SPS from pursuing exercising [sic] 17 its right under the deed of trust to collect the entirety of the $448,000.00 loan through the security. 1 2 3 SPS refers to its Request for Judicial Notice filed in support of 4 its motion to dismiss and strike. 5 recorded on Plaintiff’s property on February 26, 2007 securing a 6 loan of $440,000.00 from New Century Mortgage Company. 7 is a deed of trust and request for notice of default recorded 8 against Plaintiff’s property on February 26, 2007 securing a loan 9 of $56,000.00 from New Century Mortgage Company. Exhibit C is a deed of trust Exhibit D SPS notes that 10 the Complaint alleges that Plaintiff “fell behind on his loan 11 payments and sought out a loan modification from his loan 12 servicer, SPS.” 13 SPS has not established by a preponderance of the evidence 14 that the amount in controversy exceeds $75,000.00. 15 motion to remand on this ground is GRANTED. Plaintiff’s 16 D. FEDERAL QUESTION JURISDICTION. 17 Plaintiff moves to remand on the ground that his Complaint 18 alleges no federal question over which this Court may exercise 19 subject matter jurisdiction. 20 SPS argues that federal claims are alleged in the Complaint 21 that support federal question jurisdiction. 22 allegations in Paragraphs 47-48:2 47. 23 SPS relies on the On or about November 11, 2009, 24 2 25 26 SPS does not argue that the Home Affordable Modification Program raises federal question jurisdiction. The HAMP is described in Williams v. Geithner, 2009 WL 3757380 at *1-3 (D.Minn., Nov. 9, 2009). 18 Plaintiff, through its [sic] undersigned counsel, submitted to Defendant a written Qualified Written Request (Under RESPA Section 6) challenging the application of trial plan payments. Defendant has acknowledged the request within 20 days, but has not otherwise responded except to write on 12/10/09 ‘if you have an alleged error in servicing, we will contact you.’ This clearly violates RESPA and is nonresponsive to Plaintiff’s concerns, and Plaintiff reserves the right to amend the complaint to add a RESPA violation. 1 2 3 4 5 6 7 12 48. In addition, this letter of 11/11/09 also requested that Defendant identify the holder to the Note pursuant to Federal trust in [sic] Lending law (15 U.S.C. 1641(f). Likewise, the indifferent loan servicer has failed to respond to which Plaintiff also reserves the right to amend the complaint alleging the breach and violation of this federal statute. 13 Plaintiff argues that the Complaint does not allege any 8 9 10 11 14 claim involving a federal right. Plaintiff cites Lippett v. 15 Raymond James Financial Services, Inc., 340 F.3d 1033, 1042 (9th 16 Cir.2003): [T]he artful pleading doctrine allows federal courts to retain jurisdiction over state law claims that implicate a substantial federal question. A state law claim falls within this ... category when: (1) ‘a substantial, disputed question of federal law is a necessary element of ... the well-pleaded state claim,’ ... or the claim is an ‘inherently federal claim’ articulated in state-law terms. 17 18 19 20 21 22 Plaintiff asserts that he has not alleged any federal questions 23 and has not raised any causes of action relying on any federal 24 law. Plaintiff contends that “[a]n important corollary to the 25 well-established well-pleaded complaint rule is that the 26 19 1 essential federal element of the plaintiff’s complaint must be 2 supported under one construction of federal law and defeated 3 under another.” 4 F.Supp. 636, 641 (D.N.J.1997): Plaintiff cites Bauchelle v. AT&T Corp., 989 15 If a disputed question of federal law exists as part of Plaintiff’s state law cause of action, federal question jurisdiction might still be found. In such a circumstance, the existence of a ‘substantial, disputed question of federal law’ is a threshold issue to support federal question jurisdiction ... A federal question is substantial when the federal issue is decisive because vindication of rights depends on construction of federal law ... Jurisdiction exists ‘only if that question also “is a necessary element of one of the well-pleaded state claims.”’ ... A substantial disputed federal question, however, is insufficient by itself to confer jurisdiction. Thus, where Plaintiff’s causes of action are created by state law, and no disputed question of federal law is a necessary element of one of those state law claims, there is no federal jurisdiction over the matter. 16 The conditions for federal question jurisdiction were set out by 17 the Supreme Court in Grable & Sons Metal Prods., Inc. v. Darue 18 Eng’g & Mfg., 545 U.S. 308 (2005). 19 claims “necessarily raise a stated federal issue, actually 20 disputed and substantial, which a federal forum may entertain 21 without disturbing any congressionally approved balance of 22 federal and state responsibilities.” 23 there is federal jurisdiction is determined by analyzing 24 Plaintiff’s complaint. 25 arising under federal law must be ascertained by the legal 26 construction of [the plaintiff’s] allegations, and not by the 5 6 7 8 9 10 11 12 13 14 Those conditions are that the Id. at 314. Deciding if “Whether the complaint states a claim 20 1 effect attributed to those allegations by the adverse party.” 2 Ultramar America Ltd. v. Dwelle, 900 F.2d 1412, 1414 (9th 3 Cir.1990). 4 Although the Complaint does not allege any federal causes of 5 action, SPS argues that it could be found to have waived its 6 right to remove this action if it waited until Plaintiff actually 7 amended his complaint to state causes of action for violations of 8 RESPA and TILA. 9 10 11 12 13 14 15 16 17 18 19 20 21 28 U.S.C. § 1446(b) provides: The notice of removal of a civil action... shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action ... is based, or within thirty days after the service of summons upon the defendant is such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter. If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through summons or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which or has become removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title [diversity of citizenship] more than 1 year after commencement of the action. 22 “A party ... may waive the right to remove to federal court 23 where, after it is apparent that the case is removable, the 24 defendant takes actions in state court that manifest his or her 25 intent to have the matter adjudicated there, and to abandon his 26 21 1 or her right to a federal forum.” 2 Bayside Developers, 43 F.3d 1230, 1240 (9th Cir.1994). 3 [for there to be a waiver,] it must [have] be[en] unequivocally 4 apparent that the case [was] removable [before the defendant 5 engaged in the litigation conduct], [] the intent to waive the 6 right to remove to federal court and to submit to state court 7 jurisdiction must [have been] clear and unequivocal, and the 8 defendant’s actions must be inconsistent with the right to 9 remove.” 10 Resolution Trust Corp. v. “However, 16 Moore’s Federal Practice § 107.18[3][a]. Given these standards, Plaintiff’s Complaint does not assert 11 any federal claims. Although the Complaint refers to potential 12 violations of RESPA and TILA, the Complaint does not actually 13 allege that these federal statutes have been violated; rather, 14 the Complaint suggests that they may have been and that Plaintiff 15 might seek leave to amend to assert such claims. 16 SPS violated RESPA or TILA is not an essential element of any of 17 Plaintiff’s state law causes of action. 18 failure to remove the action based on the allegations in 19 Paragraphs 47-48 would result in the waiver of its right to 20 remove is misplaced because it is not unequivocally clear from 21 these allegations that the action is removable on the ground of 22 federal question subject matter jurisdiction. 23 remand of this action, Plaintiff amends his complaint to allege 24 violations of RESPA, TILA, or any other applicable federal law, 25 SPS can file a successive notice of removal based on these 26 federal questions within the time period set forth in Section 22 Whether or not SPS’s concern that its If, following 1 1446(b). See 16 Moore’s Federal Practice, § 107.30[4]; Mattel, 2 Inc. v. Bryant, 441 F.Supp.2d 1081, 1089 (C.D.Cal.2005), aff’d, 3 446 F.3d 1011 (9th Cir.2006). 4 Plaintiff’s motion to remand on this ground is GRANTED. 5 E. 6 Plaintiff couples his motion to remand with a request for ATTORNEY’S FEES. 7 its attorneys’ fees in connection with the motion to remand. 8 Plaintiff does not assert any specific amount of attorney’s fees 9 or provide any documentation supporting this request. 10 28 U.S.C. § 1447(c) provides that “[a]n order remanding the 11 case may require payment of just costs and any actual expenses, 12 including attorney fees, incurred as a result of the removal.” 13 The decision to award such fees is within the district court’s 14 discretion and does not require a finding of bad faith removal 15 because the purpose of such an award is not punitive, but rather 16 to reimburse a plaintiff for wholly unnecessary litigation costs 17 caused by defendant. 18 981 F.2d 443, 446-447 (9th Cir. 1992). 19 attorney’s fees when removal is wrong as a matter of law. 20 v. Ameriquest Mortg. Co., 340 F.3d 858, 864 (9th Cir.2003). 21 However, “absent unusual circumstances, attorney’s fees should 22 not be awarded when the removing party has an objectively 23 reasonable basis for removal.” 24 546 U.S. 132, 136 (2005).3 Moore v. Permanente Medical Group, Inc., A court may award Ansley Martin v. Franklin Capital Corp., 25 3 26 SPS miscited this case as Martin v. First Franklin Capital Corp., 536 U.S. 132 (2005). 23 Plaintiff argues that his attorney’s fees should be awarded 1 2 for SPS’s “knee-jerk improvident removal which appears designed 3 to consume Plaintiff’s time, money, and resources, and delay this 4 case from being heard on its merit in Tulare Superior Court.” However, as SPS responds, based on the Notice of Removal and 5 6 its opposition to the motion to remand, “it is clear that at a 7 minimum, SPS has an objectively reasonable basis for removing 8 this matter in light of Plaintiff’s allegations regarding 9 violations of federal laws and relief requesting amounts in 10 excess of $75,000.00.” Plaintiff’s request for attorney’s fees 11 pursuant to Section 1447(c) is DENIED. CONCLUSION 12 13 For the reasons stated: 14 1. 15 Plaintiff’s motion to remand is GRANTED and Plaintiff’s request for attorney’s fees is DENIED; 2. 16 Counsel for Plaintiff shall prepare and lodge a form of 17 order consistent with this Memorandum Decision within five (5) 18 court days following service of this Memorandum Decision. IT IS SO ORDERED. 19 20 Dated: 668554 June 23, 2010 /s/ Oliver W. Wanger UNITED STATES DISTRICT JUDGE 21 22 23 24 25 26 24
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