Donna O'Connor-Rose v. JPMorgan Chase Bank, N.A.

Filing 15

ORDER signed by Judge William B. Shubb on 3/13/12 DENYING 8 Motion to Remand and GRANTING in part and DENYING in part 5 Motion to Dismiss; Amended Complaint due within 20 days. (Manzer, C)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 DONNA RUTH O’CONNOR ROSE, an individual, NO. CIV. 2:12-225 WBS CMK 13 Plaintiff, MEMORANDUM AND ORDER RE: MOTION TO REMAND AND MOTION TO DISMISS 14 v. 15 16 17 J.P. MORGAN CHASE, N.A., a corporation, Defendant. / 18 19 20 ----oo0oo---Plaintiff Donna Ruth O’Connor-Rose brought action 21 against defendant J.P. Morgan Chase (“Chase”) in state court, 22 stating claims for breach of contract, fraud, violation of 23 California Civil Code section 1788.2, violation of California 24 Business and Professions Code section 17200 et seq., accounting, 25 and injunctive relief arising from Chase’s allegedly wrongful 26 conduct related to a residential loan. 27 proceeding to this court on the basis of diversity jurisdiction, 28 plaintiff brought a motion to remand. 1 After Chase removed the (Docket No. 8.) Chase has 1 filed a motion to dismiss plaintiff’s claims for fraud, violation 2 of the Rosenthal Act, accounting, and injunctive relief for 3 failure to state a claim upon which relief can be granted 4 pursuant to Rule 12(b)(6). 5 I. (Docket No. 5.) Factual and Procedural Background 6 In approximately January of 2006, plaintiff purchased a 7 home located at 3794 Mario Ave, Redding, California (the “Mario 8 Avenue property”) with a loan of $349,400 from Chase. 9 Remand Ex. A (“Compl.”) ¶ 6 (Docket 1).) (Notice of In connection with the 10 loan, plaintiff executed a Promissory Note in favor of Chase, 11 which was secured by a Deed of Trust encumbering the property. 12 (Def.’s Req. for Judicial Notice Ex. A (Docket No. 6).) 13 November of 2011, the principle balance on the loan was 14 $321,581.93. 15 As of (Compl. ¶ 9.) Plaintiff alleges that she had cured a prior deficiency 16 on her loan, and was current with required payments as of 17 December 2010. 18 she made payments that were more than adequate to cover the 19 monthly installments due under her loan, defendant failed to 20 properly credit payments to her account throughout 2011. 21 11-46.). 22 claims that defendant repeatedly falsely represented that her 23 loan was in default when in fact she had paid more than was due 24 on the loan. 25 (Id. ¶ 10.) She further alleges that although (Id. ¶¶ As a result of defendant’s “crooked accounting,” she (Id.) According to plaintiff, in November of 2011, she 26 received a Notice of Default from Chase falsely indicating that 27 $5,185.58 was past due on her loan. 28 plaintiff contends that as of November 2011 she had paid 2 (Id. ¶ 39.) In reality, 1 approximately $5,000 more than was due on her loan. 2 When she alerted Chase to its accounting errors, Chase allegedly 3 continued to misrepresent the amount due on her loan. 4 43-44.) 5 (Id. ¶ 40.) (Id. ¶¶ On December 6, 2011, plaintiff claims that another 6 notice of default in the amount of $5,185.58 was served on her, 7 when in fact she had paid “at least through February 2012.” 8 ¶¶ 45-46.) 9 alleged failure to properly credit her payments to her account, 10 she contends that it responded that it was “investigating” the 11 matter. 12 (Id. When plaintiff again complained to Chase about its (Id. ¶ 47.) Plaintiff filed her Complaint on December 28, 2011, and 13 the proceeding was removed to this court on January 27, 2012. 14 (Docket No. 1.) 15 has filed a motion to dismiss. 16 II. 17 18 Plaintiff has filed a motion to remand and Chase Discussion A. Remand to State Court “[A]ny civil action brought in a State court of which 19 the district courts of the United States have original 20 jurisdiction, may be removed by the defendant or the defendants, 21 to the district court of the United States for the district . . . 22 where such action is pending.” 23 Circuit strictly construes the removal statute against removal 24 jurisdiction, and the party seeking removal bears the burden of 25 establishing federal jurisdiction. 26 v. Estate of Lhotka, 599 F.3d 1102, 1107 (9th Cir. 2010) (citing 27 Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)). 28 questions regarding the propriety of removal are resolved in 28 U.S.C. § 1441(a). 3 The Ninth Geographic Expeditions, Inc. Any 1 favor of the party moving for remand. 2 Speciality Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). 3 removal was improper, “the district court lack[s] subject matter 4 jurisdiction, and the action should [be] remanded to the state 5 court.” 6 (citing 28 U.S.C. § 1447(c)). 7 Matheson v. Progressive If Toumajian v. Frailey, 135 F.3d 648, 653 (9th Cir. 1998) Federal courts have original jurisdiction over cases 8 where complete diversity exists between the parties and the 9 amount in controversy exceeds $75,000. 28 U.S.C. § 1332. Here, 10 the parties do not dispute that diversity exists between all 11 parties. 12 in controversy exceeds $75,000. 13 The remaining issue, therefore, is whether the amount One of the remedies requested by plaintiff is a 14 permanent injunction barring Chase from initiating or completing 15 any foreclosure proceedings related to the Mario Avenue property. 16 “In actions seeking declaratory or injunctive relief, it is well 17 established that the amount in controversy is measured by the 18 value of the object of the litigation.” 19 F.3d 837, 840 (9th Cir. 2002) (citing Hunt v. Wash. State Apple 20 Adver. Comm’n, 432 U.S. 333, 347 (1977)). 21 complaint does not specify an exact damages figure, the defendant 22 must establish that the amount in controversy exceeds the 23 statutory minimum by a preponderance of the evidence. 24 Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). 25 Cohn v. Petsmart, 281 Where the state court Sanchez v. In cases where, as here, plaintiff seeks to enjoin a 26 foreclosure sale, “the value of the property is the object of the 27 litigation for the purposes of determining whether the 28 amount-in-controversy requirement has been met.” 4 Reyes v. Wells 1 Fargo Bank, N.A., No. C-10-01667, 2010 WL 2629785, at *5 (N.D. 2 Cal. June 29, 2010); see also Garcia v. Citibank, N.A., No. 3 2:09–CV–03387, 2010 WL 1658569, at *2 (E.D. Cal. Apr. 23, 2010); 4 Cabriales v. Aurora Loan Servs., No. C 10-161, 2010 WL 761081, at 5 *4 (N.D. Cal. Mar. 2, 2010). 6 Chase has shown that the Mario Avenue property was used 7 to secure a loan of $349,000. 8 Ex. A.) 9 since then, it is likely that the Mario Avenue property’s current (Def.’s Req. for Judicial Notice Although its property value may have decreased somewhat See Cabriales, 2010 WL 761081, at *3 10 value exceeds $75,000. 11 (absent evidence to the contrary, property used to secure a loan 12 of $465,000 satisfied amount-in-controversy). 13 notes that as of November 2011, the total principle balance on 14 the loan is over $300,000. 15 (noting that in foreclosure cases, some courts determine the 16 amount in controversy according to the amount of indebtedness on 17 the loan). 18 the evidence that the amount in controversy is above $75,000. 19 The court also See Reyes, 2010 WL 2629785, at *5 This is sufficient to suggest by a preponderance of In arguing that the statutory minimum is not met, 20 plaintiff represents that she has abandoned her requests for 21 injunctive relief, so that the value of the house should no 22 longer be considered in calculating the amount in controversy.1 23 24 25 26 27 28 1 In her Motion to Remand, plaintiff also suggests that the court should not consider the value of the Mario Avenue property in determining the amount in controversy in light of the fact that her request to enjoin foreclosure proceedings is no longer relevant because there is no current Notice of Default or other “foreclosure document” filed. (Mot. to Remand at 9:15-21.) This is clearly in contradiction with the allegations in her Complaint suggesting that her property is in jeopardy of being wrongfully foreclosure upon absent judicial action. It also does 5 1 This argument fails to demonstrate that remand would be 2 appropriate for two primary reasons. 3 amended the complaint or otherwise taken steps to eliminate her 4 request for injunctive relief. 5 is determined at the time the action commences, and a federal 6 court is not divested of jurisdiction . . . if the amount in 7 controversy subsequently drops below the minimum jurisdictional 8 level.” 9 (9th Cir. 1999). First, plaintiff has not Second, “diversity jurisdiction Hill v. Blind Indus. & Servs. of Md., 179 F.3d 754, 757 Plaintiff cannot rely on “[e]vents occurring 10 subsequent to the institution of suit which reduce the amount 11 recoverable below the statutory limit” to show that removal was 12 improper because such events “do not oust jurisdiction.” 13 Rent-A-Car, Inc. v. Higashiguchi, 109 F.3d 1471, 1473 (9th Cir. 14 1997) (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303 15 U.S. 283, 289 (1938)). 16 plaintiff’s motion to remand. 17 B. 18 Budget Accordingly, the court will deny Motion to Dismiss To survive a motion to dismiss, a plaintiff must plead 19 “only enough facts to state a claim to relief that is plausible 20 on its face.” 21 (2007). 22 than a sheer possibility that a defendant has acted unlawfully,” 23 Ashcroft v. Iqbal, 556 U.S. 662, ---, 129 S. Ct. 1937, 1949 24 (2009), and “[w]here a complaint pleads facts that are ‘merely 25 consistent with’ a defendant’s liability, it ‘stops short of the Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 This “plausibility standard,” however, “asks for more 26 27 28 nothing to change the fact that plaintiff’s Complaint is drafted to include a request for a permanent injunction barring Chase from foreclosing on the Mario Avenue property. 6 1 line between possibility and plausibility of entitlement to 2 relief.’” 3 whether a plaintiff has stated a claim, the court must accept the 4 allegations in the complaint as true and draw all reasonable 5 inferences in favor of the plaintiff. 6 U.S. 232, 236 (1974), overruled on other grounds by Davis v. 7 Scherer, 468 U.S. 183 (1984); Cruz v. Beto, 405 U.S. 319, 322 8 (1972). 9 Id. (quoting Twombly, 550 U.S. at 557). In deciding Scheuer v. Rhodes, 416 In general, a court may not consider items outside the 10 pleadings upon deciding a motion to dismiss, but may consider 11 items of which it can take judicial notice. 12 F.3d 1370, 1377 (9th Cir. 1994). 13 notice of facts “not subject to reasonable dispute” because they 14 are either “(1) generally known within the territorial 15 jurisdiction of the trial court or (2) capable of accurate and 16 ready determination by resort to sources whose accuracy cannot 17 reasonably be questioned.” 18 Barron v. Reich, 13 A court may take judicial Fed. R. Evid. 201(b). Chase requests that the court judicially notice several 19 publically recorded documents. 20 Notice Exs. A-E.) 21 documents, since they are matters of public record whose accuracy 22 cannot be questioned. 23 668, 689 (9th Cir. 2001). (See Def.’s Request for Judicial The court will take judicial notice of these See Lee v. City of Los Angeles, 250 F.3d 24 1. Fraud 25 In California, the elements of a claim for fraud are 26 “(a) a misrepresentation (false representation, concealment, or 27 nondisclosure); (b) knowledge of falsity (or ‘scienter’); ©) 28 intent to defraud, i.e., to induce reliance; (d) justifiable 7 1 reliance; and (e) resulting damage.” 2 Cal. App. 4th 62, 79 (4th Dist. 2008) (quoting Lazar v. Super. 3 Ct., 12 Cal. 4th 631, 638 (1996)) (internal quotation marks 4 omitted). 5 of fraud under Federal Rule of Civil Procedure 9(b), “a party 6 must state with particularity the circumstances constituting 7 fraud or mistake.” 8 include the “who, what, when, where, and how” of the fraud. 9 v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) 10 In re Estate of Young, 160 Under the heightened pleading requirement for claims Fed. R. Civ. P. 9(b). A plaintiff must Vess (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997)). Plaintiff claims that Chase engaged in fraud by making 11 12 various misrepresentations related to the amount due on her 13 mortgage. 14 facts indicating that Chase had any knowledge of the falsity of 15 these misrepresentations or that Chase acted with an intent to 16 defraud her. 17 for fraud. Nowhere in her Complaint, however, does she allege any Accordingly, plaintiff has failed to state a claim 18 2. 19 Plaintiff’s third cause of action alleges that Chase Violation of the Rosenthal Act 20 violated the Rosenthal Fair Debt Collection Practices Act 21 (“Rosenthal Act”). 22 unfair and oppressive methods of collecting debt, but to be 23 liable under the act, a defendant must fall under its definition 24 of a “debt collector.” 25 2d 1193, 1199 (C.D. Cal. 2008). 26 Rosenthal Act is “any person who, in the ordinary course of 27 business, regularly, on behalf of himself or herself or others, 28 engages in debt collection.” The Rosenthal Act prohibits a variety of Izenberg v. ETS Servs., LLC, 589 F. Supp. A “debt collector” under the Cal. Civ. Code § 1788.2(c) (2008). 8 1 A residential home loan, however, is not a “debt” under 2 the Rosenthal Act. Morgera v. Countrywide Home Loans, Inc., No. 3 2:09-cv-1476, 2010 WL 160348, at *3 (E.D. Cal. Jan. 11, 2010); 4 see also Ricon v. Recontrust Co., No. 09-937, 2009 WL 2407396, at 5 *4 (S.D. Cal. Aug. 4, 2009) (dismissing with prejudice 6 plaintiff’s unfair debt collection claims in foreclosure case); 7 Rosal v. First Fed. Bank of Cal., No. C 09-1276, 2009 WL 2136777, 8 at *18 (N.D. Cal. July 15, 2009) (dismissing Rosenthal Act claim 9 as to all defendants in foreclosure case); Pittman v. Barclays 10 Capital Real Estate, Inc., No. 09-0241, 2009 WL 1108889, at *3 11 (S.D. Cal. Apr. 24, 2009) (dismissing with prejudice plaintiff’s 12 Rosenthal Act claim in foreclosure case because a “residential 13 mortgage loan does not qualify as a ‘debt’ under the statute”). 14 Since residential mortgage loans are not covered by the Rosenthal 15 Act, the court will grant Chase’s motion to dismiss plaintiff’s 16 claim for violations of the Rosenthal Act. 17 3. 18 Plaintiff’s fifth and sixth causes of action are for Claims for Accounting and Injunctive Relief 19 accounting and injunctive relief. 20 for accounting is not considered a stand-alone claim. 21 City & Cnty. of S.F., 155 Cal. App. 4th 65, 82 (1st Dist. 2007) 22 (Accounting “is not an independent cause of action but merely a 23 type of remedy, an equitable remedy at that.”). 24 plaintiff’s accounting claim is related to her breach of contract 25 claim, which defendant does not address in its motion to dismiss, 26 the court will interpret this claim as a prayer for relief 27 attached to her breach of contract claim and will not dismiss it 28 at this time. 9 Under California law, a claim Batt v. Because 1 Claims for injunctive relief have been consistently 2 classified under California law as remedies and not valid causes 3 of action in their own rights. 4 Richter, 52 Cal. App. 2d 164, 168 (4th Dist. 1942) (“Injunctive 5 relief is a remedy and not, in itself, a cause of action.”). 6 Accordingly, the court will dismiss plaintiff’s sixth cause of 7 action. 8 9 See e.g., Shell Oil Co. v. IT IS THEREFORE ORDERED that plaintiff’s motion to remand be, and the same hereby is, DENIED. 10 IT IS FURTHER ORDERED that Chase’s motion to dismiss 11 be, and the same hereby is, GRANTED as to plaintiff’s claims for 12 fraud, violation of the Rosenthal Act, and injunctive relief and 13 DENIED as to plaintiff’s claim for accounting. 14 Plaintiff has twenty days from the date of this Order 15 to file an amended complaint, if she can do so consistent with 16 this Order. 17 DATED: March 13, 2012 18 19 20 21 22 23 24 25 26 27 28 10

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