Munoz et al v. Federal National Mortgage Association et al

Filing 35

ORDER that Plaintiffs' Motion to Remand (Doc. 27 ) is denied. Signed by Judge G Murray Snow on 7/14/2014.(KMG)

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WO

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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George Munoz; Magda Reyes,

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Plaintiffs,

No. CV-13-01826-PHX-GMS
ORDER

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v.

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Federal National Mortgage Association;
Bank of America Corporation; Greentree
Servicing LLC; Unknown Parties,

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Defendants.

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Pending before the Court is Plaintiffs’ Motion to Remand. (Doc. 27.) For the
following reasons, the Motion is denied.
BACKGROUND

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George Munoz and Magda Reyes brought this action against multiple defendants

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in state court alleging various causes of actions in relation to their mortgage. (Doc. 1-1.)

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Defendants Bank of America Corporation and Greentree Servicing LLC removed to this

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Court based on diversity jurisdiction. (Doc. 1.) In the Petition for Removal, Defendants

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asserted that the requirements of 28 U.S.C. § 1332(a) were satisfied because there was

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complete diversity of the parties and the amount in controversy exceeded $75,000. (Id.)

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In asserting the amount in controversy, the Defendants argued that the Plaintiffs “seek to

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enjoin the foreclosure” and that the “original principal balance of the loan was

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$216,000.00.” (Id.) Defendants noted that Plaintiffs also seek “further damages for which

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they should be monetarily compensated.” (Id.)

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Plaintiffs now move for remand back to state court alleging that the amount in

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controversy requirement is not met because the “the relief requested, and promised by

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counsel for Green Tree, will cost defendants literally nothing.” (Doc. 27 at 2.)

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DISCUSSION

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“[A]ny civil action brought in a State court of which the district courts of the

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United States have original jurisdiction, may be removed by the defendant or the

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defendants, to the district court of the United States for the district and division

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embracing the place where such action is pending.” 28 U.S.C. § 1441(a). A party may

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remove an action from state court only if the action could have been brought in the

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district court originally. Ramirez v. Fox Television Station, Inc., 998 F.2d 743, 747 (9th

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Cir. 1993). The Court has diversity jurisdiction over an action in which the parties are not

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citizens of the same state and “the matter in controversy exceeds the sum or value of

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$75,000, exclusive of interest and costs.” 28 U.S.C. § 1332(a).

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The party asserting federal jurisdiction has the burden of proof on a motion to

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remand to state court. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). That party

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must establish the amount in controversy by a preponderance of the evidence. Cohn v.

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Petsmart, Inc., 281 F.3d 837, 839 (9th Cir. 2002). The removal statute is strictly

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construed against removal jurisdiction. Id. (citing Emrich v. Touche Ross & Co., 846 F.2d

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1190, 1195 (9th Cir. 1988)). There is a “strong presumption” against removal

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jurisdiction, and “[f]ederal jurisdiction must be rejected if there is any doubt as to the

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right of removal in the first instance.” Id.

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Defendants assert that the diversity of citizenship requirement is met and Plaintiffs

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concede that the only basis for their Motion to Remand is their argument that the amount

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in controversy requirement is not met. In regard to the amount in controversy, Plaintiffs

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argue in their motions that they only seek a loan modification or novation of their loan.

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They argue that this will cost Defendants nothing and in fact is required under federal

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programs to save Defendants money. However, this Court must determine the amount in

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controversy based on the relief sought in the complaint and not on the relief that the

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parties may be pursuing in their settlement talks. In the Amended Complaint, Plaintiffs

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do not seek a compelled loan modification or novation. Plaintiffs assert monetary

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damages and request injunctive relief. For the following reasons, Defendants have shown

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by a preponderance of the evidence that the amount in controversy is met by both the

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aggregate monetary damages sought and the value of the injunctive relief.

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Plaintiffs assert thirteen causes of action, and for each of those counts except for

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Count Eleven, Plaintiffs assert that they were damaged in an amount that exceeds the

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jurisdictional minimum. Defendants argue that this concession is enough to establish the

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amount in controversy. See Lowdermilk v. U.S. Bank Nat’l Ass’n, 479 F.3d 994, 998 (9th

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Cir. 2007) (“[I]f the complaint alleges damages in excess of the federal amount-in-

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controversy requirement, then the amount-in-controversy requirement is presumptively

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satisfied unless ‘it appears to a “legal certainty” that the claim is actually for less than the

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jurisdictional minimum.’”), implied overruling in part recognized by Rodriguez v. AT &

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T Mobility Servs. LLC, 728 F.3d 975, 977 (9th Cir. 2013) (noting that the preponderance

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of the evidence and not a legal certainty is the proper standard after Standard Fire Ins.

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Co. v. Knowles, 133 S. Ct. 1345 (2013)). Plaintiffs argue that their allegations about the

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jurisdictional minimum were in reference to the state-court requirement of $10,000 rather

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than the federal amount of over $75,000. Assuming that Plaintiffs were merely careless in

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repeating those assertions in the Amended Complaint that they filed in this Court, the

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amount in controversy is still plainly met on the face of the Amended Complaint. Even if

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the amount alleged was only the $10,000 for state court purposes, it is asserted in twelve

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separate counts, making the total amount in controversy to be in excess of $120,000.

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Therefore, the aggregate value of the monetary damages sought exceeds $75,000.

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The injunctive relief sought also satisfies the amount in controversy requirement.

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Count Ten and Eleven both seek the injunctive relief of estopping Defendants from

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foreclosing on the home. In actions seeking declaratory relief or injunctive relief, the

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amount in controversy is measured by the value of the object of the litigation. Cohn, 281

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F.3d at 840 (citing Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 347 (1977)).

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Plaintiffs do not contest that the original principal balance of the loan was $216,000.

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Plaintiffs argue instead that the full value of the mortgage has only been considered in

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actions to invalidate the loan. Although Plaintiffs do not seek invalidation, an injunction

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against foreclosure would have the same practical effect. If this Court were to enjoin

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Defendants from foreclosing on the home, they would be damaged in an amount equal to

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the mortgage on the home because they would no longer have the ability to force the sale

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of the home in order to cover damages caused by the Plaintiffs’ default. Accordingly, the

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amount in controversy is met by the value of the injunctive relief requested and by the

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aggregate value of the monetary damages sought.

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Plaintiffs argue that removal cannot be based on bare allegations by Defendants

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that the amount in controversy is met. See, e.g., Gaus v. Miles, Inc., 980 F.2d 564, 567

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(9th Cir. 1992) (“[D]efendant’s bald recitation that “the amount in controversy exceeds

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$50,000,” without the defendant identifying any specific factual allegations or provisions

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in the complaint which might support that proposition, should provoke sua sponte

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remand.”) Here, there is no such “bald recitation” because Defendants show that the

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amount in controversy is established by the complaints and exhibits. Defendants only

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have a burden to prove facts that are not clear from the complaint. See id. at 566–67.

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IT IS HEREBY ORDERED that Plaintiffs’ Motion to Remand Court (Doc. 27)
is denied.
Dated this 14th day of July, 2014.

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