Luis Jauregui v. Nationstar Mortgage LLC, et al.

Filing 22

MINUTES (IN CHAMBERS) ORDER by Judge Virginia A. Phillips GRANTING 17 Motion to Remand: (see document image for further details). The Court GRANTS the Motion and REMANDS this case to the California Superior Court, County of San Bernardino. IT IS SO ORDERED. MD JS-6. Case Terminated. (ad)

                                                                    PRIORITY
JS-6
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

SEND

CIVIL MINUTES -- GENERAL
Case No. EDCV 15-00382-VAP (KKx)

Date: May 7, 2015

Title:

LUIS JAUREGUI -v- NATIONSTAR MORTGAGE LLC, NBS DEFAULT
SERVICES, LLC, AND DOES 1-50, INCLUSIVE
===============================================================
PRESENT:
HONORABLE VIRGINIA A. PHILLIPS, U.S. DISTRICT JUDGE
Marva Dillard
Courtroom Deputy
ATTORNEYS PRESENT FOR
PLAINTIFFS:

None Present
Court Reporter
ATTORNEYS PRESENT FOR
DEFENDANTS:

None
PROCEEDINGS:

None
MINUTE ORDER GRANTING MOTION TO REMAND (DOC.
NO. 17) (IN CHAMBERS)

Plaintiff Luis Jauregui filed a Complaint in California Superior Court for the
County of San Bernardino on January 29, 2015. Defendants timely removed his
Complaint to this Court. On April 1, 2015, Plaintiff filed the instant Motion to
Remand. (Doc. No. 17 ("Motion").) The Court finds the Motion appropriate for
resolution without a hearing, and accordingly, VACATES the May 11, 2015 hearing
date. See Fed. R. Civ. P. 78; L.R. 7-15.
After considering the papers filed in support of, and in opposition to, the
Motion, the Court GRANTS the Motion and REMANDS this case to the California
Superior Court, County of San Bernardino.

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EDCV 15-00382-VAP (KKx)
LUIS JAUREGUI v. NATIONSTAR MORTGAGE LLC, NBS DEFAULT SERVICES, LLC, AND DOES 1-50, INCLUSIVE
MINUTE ORDER of May 7, 2015

I. BACKGROUND
Plaintiff filed a Complaint against Defendants Nationstar Mortgage, LLC
("Nationstar"), NBS Default Services, LLC ("NBS"), and Does 1-50 in the California
Superior Court, County of San Bernardino, on January 29, 2015. (Doc. No. 4, Exh.
A ("Complaint").) In it, Plaintiff alleges twelve claims. (See id.)1 His claims arise out
of his failed attempts to obtain a loan modification in connection with the residential
property located at 13526 Becraft Street, Chino, California 91710 (the "Property").
(Id. ¶¶ 1, 15, 19-22.)
In 2006, Plaintiff refinanced the Property through a $376,000 loan secured by
a Deed of Trust. (Id. ¶ 12.) "[D]ue to Defendants' improper process and handling of
[his] loan modification application," Plaintiff alleges, he "f[ell] behind on his monthly
mortgage payments" and was facing non-judicial foreclosure. (Id. ¶¶ 22, 125.) He
alleges a Trustee's Sale of the Property "is currently set for January 27, 2015." (Id. ¶
25.) It is not clear whether the Trustee's Sale took place or not; Plaintiff does not
allege that a trustee's deed upon sale has been recorded. Plaintiff seeks, inter alia,
an injunction prohibiting Defendants "from conducting further foreclosure activity."
(Id. ¶ 125.)
Plaintiff served the Complaint on Defendants on January 30, 2015. (Doc. No.
1 ("Removal") ¶ 2; see also Doc. No. 4, Exhs. C-D.) On March 2, 2015, Defendants
timely removed to this court on the basis of diversity jurisdiction, 28 U.S.C. §
1332(a). (See Removal at 1.)
On March 30, 2015, Nationstar filed a motion to dismiss Plaintiff's Complaint,
and set it for hearing on June 8, 2015. (See Doc. No. 14.) In an apparent attempt to

1

He alleges the following claims: (1) Violation of California Civil Code §
2923.55; (2) Violation of California Civil Code § 2923.6; (3) Violation of California
Civil Code § 2923.7; (4) Violation of California Civil Code § 2924.17; (5) Violation of
California Civil Code § 2924.18; (6) Breach of Contract; (7) Breach of Covenant of
Good Faith and Fair Dealing; (8) Negligent Misrepresentation; (9) Negligence; (10)
Promissory Estoppel; (11) Violation of California Business & Professions Code §
17200; and (12) Injunctive Relief Under California Civil Code § 2924.19.
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EDCV 15-00382-VAP (KKx)
LUIS JAUREGUI v. NATIONSTAR MORTGAGE LLC, NBS DEFAULT SERVICES, LLC, AND DOES 1-50, INCLUSIVE
MINUTE ORDER of May 7, 2015

head off that hearing date, Plaintiff filed the instant Motion on April 2, 2015, and set it
for hearing on May 11, 2015. Defendants state in their opposition that Plaintiff did
not meet and confer before filing the Motion (Doc. No. 19 ("Opposition") at 2),2 and
the Motion itself does not indicate any attempts to meet and confer.
II. LEGAL STANDARD
Federal law allows a state-court defendant to remove a case from state to
federal court if the case is one over which the federal courts could exercise their
original jurisdiction. 28 U.S.C. § 1441(a). To accomplish this task, the removing
defendant files a notice of removal in the federal district court in the district and
division within which the state court action was pending. 28 U.S.C. § 1446(a). The
notice must contain "a short and plain statement of the grounds for removal" – in a
case relying on diversity jurisdiction, that the parties are citizens of different states
and the amount in controversy exceeds $75,000, see 28 U.S.C. § 1332(a) –
"together with a copy of all process, pleadings, and orders" served previously on the
removing defendant. 28 U.S.C. § 1446(a).
The plaintiff may then challenge the removal, for example, on the basis that
the amount in controversy is insufficient to invoke the federal court's subject-matter
jurisdiction. In that case, "both sides submit proof and the court decides, by a
preponderance of the evidence, whether the amount-in-controversy requirement has
been satisfied." Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547, 554
(2014); see 28 U.S.C. § 1446(c)(2)(B). If it has not, the court must remand the
matter to state court. 28 U.S.C. § 1447(c).

2

Although only Defendant Nationstar submitted the Opposition, Defendant
NBS's counsel submitted a declaration in support of it. For purposes of this Order,
therefore, the Court refers to Defendants as having opposed the Motion collectively.
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LUIS JAUREGUI v. NATIONSTAR MORTGAGE LLC, NBS DEFAULT SERVICES, LLC, AND DOES 1-50, INCLUSIVE
MINUTE ORDER of May 7, 2015

III. DISCUSSION
Although Plaintiff failed to meet and confer with opposing counsel as required
by this District's Local Rules, the Court finds little – if any – prejudice to Defendants
due to that failure, and therefore considers the Motion. After considering the Motion,
the Court finds Defendants have not satisfied their burden as to the amount in
controversy.
A.

Plaintiff's Failure to Follow Local Rule 7-3
Local Rule 7-3 requires "counsel contemplating the filing of any motion [to] first
contact opposing counsel to discuss thoroughly, preferably in person, the substance
of the contemplated motion and any potential resolution."3 The conference must
take place at least seven days before filing the motion. L.R. 7-3. If the parties are
not able to reach a resolution, "the moving party [must] include in the notice of
motion a statement to" that effect. Id.
Plaintiff did not comply with this requirement. He does not state anywhere in
his Motion that he complied or attempted to comply with it, and Nationstar affirms
that he did not (Opposition at 2-3).
Courts can, in their discretion, refuse to consider a motion for failing to comply
with Local Rule 7-3. Reed v. Sandstone Prop., L.P., No. 12-5021, 2013 WL
1344912, at *6 (C.D. Cal. Apr. 2, 2013). Generally, courts exercise this discretion
when the failure to meet and confer prejudiced opposing counsel. See id. If there is
little or no prejudice, courts will sometimes consider the motion despite the failure to
meet and confer. See id.
Defendants suffer little prejudice from the failure to meet and confer on a
motion to remand, where they necessarily researched and investigated the issues
before removing the case. Defendant Nationstar, furthermore, was able to prepare
and submit an Opposition, with a supporting declaration from Defendant NBS's
counsel. These facts suggest Defendants suffer little prejudice from Plaintiff's failure

3

Local Rule 7-3 has a number of exceptions; none of those apply to the instant
Motion.
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LUIS JAUREGUI v. NATIONSTAR MORTGAGE LLC, NBS DEFAULT SERVICES, LLC, AND DOES 1-50, INCLUSIVE
MINUTE ORDER of May 7, 2015

to meet and confer in connection with his Motion. See Wilson-Condon v. Allstate
Indem. Co., No. 11-5538, 2011 WL 3439272, at *1 (C.D. Cal. Aug. 4, 2011)
(considering motion to remand despite failure to meet and confer because of lack of
prejudice). The Court therefore considers the Motion despite Plaintiff's failure to
comply with Local Rule 7-3.
B.

Defendants Did Not Remove this Case on the Basis of Federal Question
Jurisdiction
Plaintiff contends Defendants could not have based removal on federal
question jurisdiction. See 28 U.S.C. § 1331. Plaintiff is correct; Defendants' only
basis for removal was diversity jurisdiction. (See generally, Removal; Opposition.)
C.

Defendants Have Not Met Their Burden to Show the Amount-inControversy Requirement Is Met
In their papers, the parties focus their attention on whether complete diversity
of citizenship exists between Plaintiff and Defendants. (See Motion at 6-11;
Opposition at 3-7.) The parties address the amount-in-controversy requirement, but
devote far less attention to it. (See Motion at 11-12; Opposition at 8-9.) The Court
does not discuss the parties' citizenship, however, because it holds Defendants
have not established the amount-in-controversy requirement.
1.

Defendants Have the Burden of Establishing, by a Preponderance
of the Evidence, that the Amount in Controversy Exceeds $75,000
On its face, Plaintiff's Complaint does not allege an amount in controversy
sufficient to meet the $75,000 threshold. See Wilder v. Bank of Am., N.A., No. 14670, 2014 WL 6896116, at *4 (C.D. Cal. Dec. 5, 2014) (quoting Guglielmino v.
McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007)). Defendants, therefore,
"bear[] the burden of establishing, by a preponderance of the evidence, that the
amount in controversy exceeds $[75],000. Under this burden, [Defendants] must
provide evidence establishing that it is 'more likely than not' that the amount in
controversy exceeds that amount." Sanchez v. Monumental Life Ins. Co., 102 F.3d
398, 404 (9th Cir. 1996). Defendants fail to meet this burden.
In their Opposition, Defendants cite two reasons why the amount-incontroversy requirement is met. First, they argue, "Plaintiff seeks injunctive relief to
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LUIS JAUREGUI v. NATIONSTAR MORTGAGE LLC, NBS DEFAULT SERVICES, LLC, AND DOES 1-50, INCLUSIVE
MINUTE ORDER of May 7, 2015

enjoin the non-judicial foreclosure of the Subject Property," and alleges he
refinanced the Property through a $376,000 loan secured by a Deed of Trust.
(Opposition at 8.) Moreover, Plaintiff alleges the loan and Deed of Trust "were
improperly transferred and assigned to Nationstar," thereby contesting Nationstar's
interest in the loan amount. (Id. at 9.) The entire amount of the loan should count
toward the amount-in-controversy requirement, Defendants contend.
Second, Plaintiff seeks to recover "'treble actual damages or $50,000'
pursuant to Civil Code Section 2924.12(b)," (id. at 9 (quoting Complaint ¶ 36)), "civil
penalties of $7,500" for multiple, repeated violations of the California Homeowners'
Bill of Rights, (id. (quoting Complaint ¶ 36)), late fees and penalties, a reformation of
the loan, and other "compensatory, special and general damages," (id. (quoting
Complaint ¶ 3)). Added together, Defendants argue, the amount in controversy
exceeds the $75,000 jurisdictional threshold.
2.
The Entire Value of the Loan Is Not in Controversy
A few courts have determined, as Defendants point out, that the entire amount
of the loan is at issue when a plaintiff requests injunctive relief to enjoin a
foreclosure sale. See Rose v. J.P. Morgan Chase, N.A., No. 12-225, 2012 WL
892282, at *2 (E.D. Cal. Mar. 14, 2012) ("In cases where, as here, plaintiff seeks to
enjoin a foreclosure sale, the value of the property is the object of the litigation for
purposes of determining whether the amount-in-controversy requirement has been
met."); Zepeda v. U.S. Bank, N.A., No. 11-909, 2011 WL 4351801, at *3-4 (C.D. Cal.
Sept. 16, 2011); Cabriales v. Aurora Loan Services, No. 10-161, 2010 WL 761081,
at *3-4 (N.D. Cal. Mar. 2, 2010) ("[S]ince Plaintiffs seek injunctive relief, the amount
in controversy is measured by the value of the object of the litigation.").
After examining Plaintiff's Complaint, however, the Court finds Plaintiff does
not seek to enjoin Defendants permanently from conducting foreclosure activity, but
instead "demands all foreclosure activity be ceased until a written determination on
[his] loan modification application is conveyed to [him] in accordance with the
provisions of Ca. Civ. Code § 2924.18." (See Complaint ¶ 66.) Moreover, Plaintiff
only "demands civil penalties" in connection with any alleged fraudulent recording or
assignment of, inter alia, the deed of trust (see, id. ¶ 62); he does not challenge
entirely Defendant Nationstar's right to collect on the outstanding loan amount.
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LUIS JAUREGUI v. NATIONSTAR MORTGAGE LLC, NBS DEFAULT SERVICES, LLC, AND DOES 1-50, INCLUSIVE
MINUTE ORDER of May 7, 2015

"Courts have roundly rejected the argument that the amount in controversy is
the entire amount of the loan" in cases where the plaintiff seeks only to enjoin a
foreclosure sale pending a loan modification application – such as in this case. See,
e.g., Vergara v. Wells Fargo Bank, N.A., No. 15-58, 2015 WL 1240421, at *2 (C.D.
Cal. Mar. 17, 2015) (citing cases); cf. Rose, 2012 WL 892282, at *2 (using value of
loan to determine amount in controversy because "[o]ne of the remedies requested
by plaintiff [wa]s a permanent injunction"); Zepeda, 2011 WL 4351801, at *3
("[B]ecause Plaintiff expressly seeks to enjoin Defendants from enforcing their power
of sale, Plaintiff is effectively precluding Defendants from recouping any losses
incurred as a result of Plaintiff's failure to keep current on the mortgage loan.").
Were Plaintiff's request granted, Defendants "would presumably incur costs to
process the loan modification," and "might also lose interest on the loan accrued
while the relief was pending," as "just two possible pecuniary results." See Olmos v.
Residential Credit Solutions, Inc., No. 14-1202, 2015 WL 1240347, at *2 (C.D. Cal.
Mar. 17, 2015). Defendants have not provided any evidence to show how much
such pecuniary results could be.
As the entire loan amount is not placed in issue by Plaintiff's Complaint,
Defendants cannot satisfy the amount-in-controversy requirement by relying on that
figure.
3.

Plaintiff Cannot Recover "Treble Actual Damages or $50,000"
Pursuant to Section 2924.12(b)
Defendants also contend, because Plaintiff requests $50,000 pursuant to
California Civil Code section 2924.12(b) along with various other types of damages,
the amount in controversy easily exceeds $75,000. Plaintiff, however, is not entitled
to damages under section 2924.12(b).
That section provides "the borrower the greater of treble actual damages or
statutory damages of [$50,000]" only if "a trustee's deed upon sale has been
recorded." Cal. Civ. Code § 2924.12(b). Plaintiff's Complaint "contains no
allegations indicating that Defendants[] have sold the Property or recorded a
trustee's deed upon sale." Gardenswartz v. SunTrust Mortgage, Inc., No. 14-8548,
2015 WL 900638, at *5-6 (C.D. Cal. Mar. 3, 2015); see Sanchez, 102 F.3d at 405
(holding argument in opposition to motion to remand – that amount in controversy
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LUIS JAUREGUI v. NATIONSTAR MORTGAGE LLC, NBS DEFAULT SERVICES, LLC, AND DOES 1-50, INCLUSIVE
MINUTE ORDER of May 7, 2015

was met where plaintiff "sought treble punitive damages pursuant to" a statute –
failed because the statute did not apply).
Although Plaintiff alleges the trustee's sale was scheduled for January 27,
2015 (Complaint ¶ 25), and that date has long passed, the Court determines the
amount in controversy from the allegations in the Complaint – not by considering
whether events could or could not have occurred since. Plaintiff does not allege that
the sale has occurred or that a trustee's deed upon sale has been recorded. Section
2924.12(b), therefore, does not apply.
Defendants cannot rely on a damages request based on an inapplicable
statute to satisfy the amount-in-controversy requirement.
4.

Defendants Do Not Provide Any Evidence that Plaintiff's Remaining
Damages Claims Exceed the $75,000 Amount-in-Controversy
Requirement
Finally, Defendants tally up Plaintiff's other, general requests for damages, and
one specific request for $7,500, as evidence that the amount-in-controversy
requirement is met. Such general statements cannot establish that the jurisdictional
threshold of $75,000 is met by a preponderance of the evidence, however. See
Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090-91 (9th Cir. 2003)
("Conclusory allegations as to the amount in controversy are insufficient."); Atias v.
Platinum HR Management, LLC, No. 14-1877, 2014 WL 3536557, at *9 (C.D. Cal.
July 16, 2014) ("Defendants' assertion that the amount in controversy is satisfied
merely because Atias seeks to recover general, special, and punitive damages,
however, is far too speculative to support a finding that Atias' complaint does, in fact,
place more than $75,000 in controversy.").
Defendants, therefore, have failed to meet their burden as to the amount-incontroversy requirement.

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EDCV 15-00382-VAP (KKx)
LUIS JAUREGUI v. NATIONSTAR MORTGAGE LLC, NBS DEFAULT SERVICES, LLC, AND DOES 1-50, INCLUSIVE
MINUTE ORDER of May 7, 2015

IV. CONCLUSION
The Court GRANTS the Motion and REMANDS this case to the California
Superior Court, County of San Bernardino.
IT IS SO ORDERED.

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