Corral v. Select Portfolio Servicing, Inc., No. 15-16574 (9th Cir. 2017)
Annotate this CaseThe value of the property or amount of indebtedness are not the amounts in controversy when a complaint seeks only a temporary stay of foreclosure pending review of a loan modification application pursuant to the California Homeowners Bill of Rights (HBOR). In this case, the Ninth Circuit held that because SPS did not establish that removal was proper, the district court should have granted Corral's motion to remand and was without subject matter jurisdiction to consider SPS's motion to dismiss for failure to state a claim. Accordingly, the panel reversed the district court's denial of the motion to remand, vacated the order granting SPS's motion to dismiss, and remanded to state court.
Court Description: Diversity Jurisdiction. The panel reversed the district court’s denial of a motion to remand, vacated the district court’s order granting Select Portfolio Servicing, Inc.’s motion to dismiss, and directed that the case be remanded to state court, because the district court was without subject matter jurisdiction where the removing party, Select Portfolio, did not satisfy its burden of establishing the amount in controversy exceeded $75,000 for purposes of diversity jurisdiction. Plaintiffs’ complaint sought only a temporary stay of foreclosure pending review of a loan modification application pursuant to the California Homeowners Bill of Rights. The panel held that the value of the property or amount of indebtedness were not the amounts in controversy in such a circumstance. Because Select Portfolio only asserted these amounts in its notice of removal, the panel concluded that it had not established the requisite amount in controversy. The panel noted that parties seeking to establish diversity jurisdiction over such cases may still demonstrate that the amount in controversy requirement was satisfied using other measures, such as the transactional costs to the lender of delaying foreclosure or a fair rental value of the property during the pendency of the injunction; and possibly adding such amounts to any other compensatory damages sought by the plaintiff. CORRAL V. SELECT PORTFOLIO SERVICING 3 Judge Kleinfeld dissented, and would affirm the district court. Judge Kleinfeld would hold that the district court correctly followed the rule in Garfinkle v. Wells Fargo Bank, 483 F.2d 1074, 1076 (9th Cir. 1973), that in a suit to enjoin foreclosure, the amount in controversy is the value of the property sought to be foreclosed.
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