William Larkin v. Bank of America, N.A., et al

Filing 25

MINUTES (IN CHAMBERS) Order REMANDING Case by Judge Philip S. Gutierrez granting 18 MOTION to Remand Case to State Court: The Court thus finds that Ocwen has failed to prove the amount in controversy is above $75,000 by a preponderance of the evidence. As Ocwen has offered no other basis for federal jurisdiction, the Court REMANDS the case to state court. (see document for further details) MD JS-6. Case Terminated. (bm)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

JS-6

CIVIL MINUTES - GENERAL
Case No.

EDCV 16-852 PSG (SKx)

Title

William Larkin v. Bank of America, N.A., et al.

Present: The Honorable

Date

August 4, 2016

Philip S. Gutierrez, United States District Judge

Wendy Hernandez

Not Reported

Deputy Clerk

Court Reporter

Attorneys Present for Plaintiff(s):

Attorneys Present for Defendant(s):

Not Present

Not Present

Proceedings (In Chambers):

Order REMANDING Case

Before the Court is Plaintiff William Larkin’s motion to remand. Dkt. #18. The Court
finds the matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78(b); L.R.
7–15. After considering the moving, opposing, and reply papers, the Court GRANTS the
motion.
I.

Background

Plaintiff purchased a home in Rancho Mirage, California. Compl. ¶ 10. In 2009, Plaintiff
attempted to get a loan modification. Id. ¶ 11. Plaintiff alleges that in the ensuing years, he has
had a number of problems with Defendants Bank of America, N.A. (“BANA”) and Ocwen Loan
Servicing, LLC’s (“Ocwen”) loan modification processes. Id. ¶¶ 11–26. On March 29, 2016,
Plaintiff filed suit against BANA and Ocwen in the Superior Court for the County of Riverside.
Dkt. #1, Ex. 1. Plaintiff included causes of action for fraud, promissory estoppel, wrongful
foreclosure, violations of California Civil Code § 2923.6, violations of California Civil Code
§ 2923.7, and unfair business practices under California law. See generally Compl.
On April 28, 2016, Ocwen (with BANA’s consent) removed the case to this Court. Dkt.
#1 (“NOR”). Ocwen alleged that the Court had diversity jurisdiction because Plaintiff is a
citizen of California, Ocwen is a citizen of Florida and Georgia, BANA is a citizen of North
Carolina, and the amount in controversy, which included the $460,000 loan and the damages
requested in the complaint, totaled well over the $75,000 jurisdictional minimum. Id. 3–7. On
June 15, 2016, Plaintiff moved to remand the case for lack of subject matter jurisdiction. Dkt.
#18.
II.

Legal Standard

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

EDCV 16-852 PSG (SKx)

Date

Title

August 4, 2016

William Larkin v. Bank of America, N.A., et al.

Generally, subject matter jurisdiction is based on the presence of a federal question, see
28 U.S.C. § 1331, or on complete diversity of citizenship between the parties, see 28 U.S.C. §
1332. For a federal court to exercise diversity jurisdiction, there must be “complete” diversity
between the parties and the $75,000 amount in controversy requirement must be met. See
Strawbridge v. Curtis, 7 U.S. (3 Cranch) 267, 267 (1806); 28 U.S.C. § 1332(a). If at any time
before the entry of final judgment it appears that the Court lacks subject matter jurisdiction over
a case removed from state court, it must remand the action to state court. See 28 U.S.C. §
1447(c); Int’l Primate Prot. League v. Adm’rs of Tulane Educ. Fund, 500 U.S. 72, 87 (1991).
There is a “strong presumption” against removal jurisdiction, and the party seeking removal
always has the burden of establishing that removal is proper. Hunter v. Philip Morris USA, 582
F.3d 1039, 1042 (9th Cir. 2009). If there is any ambiguity as to the propriety of removal, federal
jurisdiction must be rejected. See id.
III.

Discussion

Diversity jurisdiction is only proper if the amount in controversy is over $75,000. See 28
U.S.C. § 1332(a). When, as here, a complaint does not state the amount in controversy, the
defendant must establish the amount in controversy by a preponderance of the evidence. See
Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 403–04 (9th Cir. 1996). Defendants’
argument that the amount in controversy is satisfied is based almost entirely on the $460,000
loan amount. See NOR 5–7.
Courts have repeatedly found that the amount in controversy cannot be established by the
price of the loan or the value of the property when a plaintiff merely seeks to temporarily enjoin
foreclosure. See, e.g., Recio v. Bank of Am., N.A., No. CV161196PSGPLAX, 2016 WL
1643716, at *2 (C.D. Cal. Apr. 26, 2016); Mendoza v. Ocwen Loan Servicing, LLC, No.
EDCV152281VAPDTBX, 2015 WL 9093559, at *2 (C.D. Cal. Dec. 15, 2015); Walker v. Wells
Fargo Bank, NA, 2015 U.S. Dist. LEXIS 127003 (C.D. Cal. Sept. 22, 2015); Steele v. J.P.
Morgan Chase Bank, N.A., No. EDCV15657JGBDTBX, 2015 WL 4272276, at *3 (C.D. Cal.
July 14, 2015); Jauregui v. Nationstar Mortg. LLC, No. EDCV 15-00382-VAP, 2015 WL
2154148, at *3–4 (C.D. Cal. May 7, 2015); Olmos v. Residential Credit Sols., Inc., No. SACV
14-1202 AG MRWX, 2015 WL 1240347, at *2 (C.D. Cal. Mar. 17, 2015); Vergara v. Wells
Fargo Bank, N.A., No. SACV 15-00058-JLS, 2015 WL 1240421, at *2 (C.D. Cal. Mar. 17,
2015). In contrast, the value of the loan can be used to establish the amount in controversy
where a plaintiff seeks to quiet title or requests an injunction that will forever bar a defendant
from foreclosing. See Recio, 2016 WL 1643716, at *2–3; Mendoza, 2015 WL 9093559, at *3.

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

EDCV 16-852 PSG (SKx)

Date

Title

August 4, 2016

William Larkin v. Bank of America, N.A., et al.

Plaintiff argues that he is mainly seeking damages from Defendants’ allegedly improper
conduct, and only seeks an injunction to prevent foreclosure while his loan modification
application is pending. Mot. 7. Plaintiff explicitly states that he is not seeking to invalidate or
rescind the underlying loan. Id. Ocwen disputes this assertion, contending that the complaint
requests a “permanent injunction” without a temporal limitation, and that the primary object of
the complaint is to permanently prevent foreclosure. Opp. 4–10.
The Court agrees with Plaintiff. Although the complaint’s request for injunctive relief
can be read broadly, the Court is persuaded by Plaintiff’s argument that the complaint is really
focused on obtaining damages for past conduct, and only seeks an injunction to force Defendants
to comply with the law before seeking foreclosure. See generally Compl.; cf. Jerviss v. Select
Portfolio Servicing, Inc., No. 215CV01904MCEKJN, 2015 WL 7572130, at *4 (E.D. Cal. Nov.
25, 2015) (denying a motion to remand where the request for injunctive relief lacked temporal
limitation and a review of the complaint indicated that the primary motive was to prevent
foreclosure). Moreover, the complaint is at best ambiguous, and the strong presumption against
removal jurisdiction requires the court to resolve all ambiguities in favor of remand. See
Cephas-Boyd v. Shellpoint Partners, LLC, No. EDCV16386JGBKKX, 2016 WL 1600828, at
*3–4 (C.D. Cal. Apr. 21, 2016) (remanding under similar circumstances as those in this case).
But see Canas v. Ocwen Loan Servicing LLC, No. SACV151100JVSJCGX, 2015 WL 5601838,
at *3 (C.D. Cal. Sept. 21, 2015) (denying a motion to remand where the injunctive relief had no
temporal limit). The Court will not, therefore, look to the value of the loan in determining
whether the amount in controversy is met.
Because Plaintiff does not seek to permanently enjoin Defendants from foreclosing, the
question is whether the pecuniary results of granting a temporary injunction would exceed the
statutory minimum. See Jauregui, 2015 WL 2154148, at *4; Olmos, 2015 WL 1240347, at *2.
General statements about damages are insufficient. See Jauregui, 2015 WL 2154148, at *4.
Here, Ocwen has not made any showing about the amount in controversy for the temporary
period for which a foreclosure sale would be enjoined.
Plaintiff also requests general, compensatory, and punitive damages. See generally
Compl. Although the complaint does not specify the amount of these damages, Defendants can
still use them to satisfy the amount in controversy if they provide evidence that the damages
could exceed $75,000. See Jauregui, 2015 WL 2154148, at *5; Campbell v. Costco Wholesale
Corp., No. CV 11-229 PA PLAX, 2011 WL 103963, at *2 (C.D. Cal. Jan. 11, 2011). Ocwen
notes the existence of these damages in the notice of removal, see NOR 7 (“In addition to
injunctive relief, Plaintiff seeks general, compensatory, and punitive damages, which combined

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

EDCV 16-852 PSG (SKx)

Date

Title

August 4, 2016

William Larkin v. Bank of America, N.A., et al.

with the value of the Property well-exceeds $75,000.”), but does not even attempt to explain how
the damages listed in the complaint could reach the $75,000 threshold in its opposition.
The Court thus finds that Ocwen has failed to prove the amount in controversy is above
$75,000 by a preponderance of the evidence. As Ocwen has offered no other basis for federal
jurisdiction, the Court REMANDS the case to state court.
IT IS SO ORDERED.

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