Thrower v. Nationstar Mortgage, LLC et al

Filing 15

MEMORANDUM and ORDER signed by Senior Judge William B. Shubb on 10/30/17 granting 3 Motion to Dismiss and denying 7 Motion to Remand. (Kaminski, H)

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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 ROBERTA THROWER, Plaintiff, 13 14 15 16 17 18 19 CIV. NO. 2:17-01627 WBS KJN MEMORANDUM AND ORDER RE: MOTION TO REMAND AND MOTION TO DISMISS v. NATIONSTAR MORTGAGE LLC; U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR LEHMAN XS TRUST MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-4N and DOES 1-10, inclusive. Defendants. 20 21 22 ----oo0oo---Plaintiff Roberta Thrower brought this action against 23 Nationstar Mortgage LLC (“Nationstar”) and U.S. Bank National 24 Association (“U.S. Bank”) alleging multiple violations of state 25 law arising out defendants’ alleged misconduct as plaintiff’s 26 mortgage servicer and beneficiary of plaintiff’s debt obligation. 27 The matter is now before the court on plaintiff’s Motion to 28 1 1 remand this action to the California Superior Court for the 2 County of Placer, where this action had originally been brought, 3 (Pl.’s Mot. (Docket No. 7)), and defendants’ Motion to dismiss 4 for failure to state a claim upon which relief can be granted 5 pursuant to Federal Rule of Civil Procedure 12(b)(6). 6 Mot. (Docket No. 3).) 7 (Defs.’ In 2006, plaintiff obtained a mortgage loan on property 8 in Rocklin, California, which was secured by a Deed of Trust 9 listing GreenPoint Mortgage Funding, Inc. as the lender. (Compl. 10 ¶ 20 (Docket No. 1).) 11 of the Deed of Trust from GMAC Mortgage LLC to Aurora Loan 12 Services LLC to Nationstar Mortgage, LLC, and finally to US BANK. 13 (Compl. ¶ 21.) 14 mortgage loan with Nationstar, US Bank, and Doe Defendants. 15 (Compl. ¶ 25.) 16 from Nationstar advising her that her request for modification 17 was denied. 18 appealed the denial and submitted all requested documents to 19 Nationstar. 20 There were several corporate assignments Plaintiff attempted several times to modify her On February 23, 2017, plaintiff received a letter (Compl. ¶ 30.) On March 21, 2017, plaintiff (Compl. ¶ 31.) On April 11, 2017, in a previous related action 21 plaintiff filed a Complaint against defendants for: (1) 22 declaratory relief; (2) negligence; (3) quasi contract; (4) 23 violation of the Fair Debt Collection Practices Act (“FDCPA”); 24 (5) accounting; (6) quiet title; (7) violation of the Unfair 25 Competition Act California Business & Professions Code §§ 17200, 26 et seq.; and (8) violation of 26 U.S.C. § 860G(d)(1).1 27 28 1 The court On September 1, 2017, the court found that the initial action, 17-cv-00766, and the action now before the court, 17-v2 1 granted defendants’ Motion to dismiss stating that plaintiff did 2 not have standing to bring her claims.2 3 On July 18, 2017, plaintiff filed a Complaint in state 4 court alleging ten separate causes of action for: (1) violation 5 of California Civil Code § 2923.6(A); (2) violation of California 6 Civil Code § 2923.5; (3) violation of California Civil Code § 7 2924.10; (4) violation of California Civil Code § 2924.17; (5) 8 violation of California Civil Code § 2924.18; (6) violation of 9 California Civil Code § 2923.6(c); (7) breach of implied covenant 10 of good faith and fair dealing; (8) violation of the Unfair 11 Competition Act California Business & Professions Code §§ 17200, 12 et seq.; (9) quiet title; and (10) wrongful foreclosure. 13 August 4, 2017, defendants removed the case under 28 U.S.C. § On 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 01627, were related within the meaning of Local Rule 123(a), because both cases involve the same parties and are based on similar claims, in that plaintiff in both cases is attempting to block the foreclosure of her home and seeks to quiet title to the same property. (Order Relating Cases at 1, Thrower v. Nationstar Mortgage, Civ. No. 2:17-00766 WBS KJN (E.D. Cal. June 29, 2017) (Docket No. 15.)). Having found that the cases were related under Local Rule 123, the instant case was reassigned. Id. 2 In the initial action, plaintiff alleged that the loan was placed in a mortgage-backed securities trust, which was governed by New York law. Thrower, 2017 WL 2813169, at *2. The Trust allegedly had a closing date—the date by which all Notes and Deeds of Trust must be transferred into the trust, and because the Deed of Trust was not allegedly transferred to the Trust by the closing date, plaintiff claimed the assignment was invalid. Id. This court found the plaintiff did not have standing to bring the action. This court explained that because under New York and California law such an alleged violation “only renders the assignment voidable and plaintiff was not a party to the assignment, plaintiff did not have standing to challenge the assignment of her Note and Deed of Trust into the 2006-4N Trust.” Id. at *3 (citing Yvanova v. New Century Mortg. Corp., 62 Cal. 4th 919, 942-43 (2016)). 3 1 1441(b) based on diversity jurisdiction under 28 U.S.C. § 1332. 2 (Defs.’ Notice of Removal. (Docket No. 1).) 3 to remand and defendants’ Motion to dismiss are now before the 4 court. 5 I. Plaintiff’s Motion Motion to Remand 6 The plaintiff argues that removal was improper because 7 removal is permitted only if a federal question appears on the 8 face of the complaint, and because none of plaintiff’s causes of 9 action pertain to a federal statute, the defendant cannot remove (Pl.’s Mot. at 4 (Docket No. 7).)3 10 the case to federal court. 11 However, defendants’ notice of removal was based on diversity of 12 citizenship jurisdiction. 13 No. 1).) (Defs.’ Notice of Removal at 1 (Docket 14 Pursuant to 28 U.S.C. § 1441(a), “any civil action 15 brought in a State court of which the district courts of the 16 United States have original jurisdiction, may be removed by the 17 defendant or the defendants . . . .” 18 However, if “it appears that the district court lacks subject 19 matter jurisdiction, the case shall be remanded.” 20 1447(c). 21 civil actions where the matter in controversy exceeds the sum or 22 value of $75,000, exclusive of interest and costs, and is between 23 citizens of different states . . . .” 28 U.S.C. § 1332. 24 party asserting diversity jurisdiction bears the burden of proof. 25 Resnik v. La Paz Guest Ranch, 289 F.2d 814, 819 (9th Cir. 1961) 28 U.S.C. § 1441(b). 28 U.S.C. § District courts “have original jurisdiction of all The 26 27 28 3 Plaintiff does not respond to defendant’s diversity jurisdiction assertion in her papers in support of her Motion to remand nor in her opposition to the Motion to dismiss. 4 1 To determine if the amount in controversy requirement 2 is met, the court looks to the amount demanded by the plaintiff 3 in the Complaint. 4 Co., 303 U.S. 283, 291-92 (1938). 5 specify the amount in controversy.4 6 specify the amount in controversy, “the removing defendant bears 7 the burden of establishing, by a preponderance of the evidence, 8 that the amount in controversy exceeds [$75,000].” 9 Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996). See St. Paul Mercury Indem. Co. v. Red Cab Here, plaintiff does not When the complaint does not Sanchez v. 10 Defendants assert the amount-in-controversy requirement is met 11 because the plaintiff received a first-lien mortgage in the 12 amount of $360,000 secured by a Deed of Trust on the property and 13 the assessed market value of the property is $378,000. 14 Notice of Removal at 6.) 15 (Defs.’ “In actions seeking declaratory or injunctive relief, . 16 . . the amount in controversy is measured by the value of the 17 object of the litigation.” 18 Comm’n, 432 U.S. 333, 347 (1977) (citations omitted). 19 plaintiff seeks both declaratory and injunctive relief.5 20 Compl. Prayer for Relief A-T.) 21 is the object of litigation. Hunt v. Wash. St. Apple Advert. Here, (See Furthermore, plaintiff’s property See Reyes v. Wells Fargo Bank, 22 23 24 25 26 27 28 4 In addition to declaratory and injunctive relief, plaintiff seeks unspecified actual, compensatory, consequential, and statutory damages as well. (Compl. Prayer for Relief A-T.) 5 Plaintiff seeks declaratory and injunctive relief that includes an order to modify the terms of the Mortgage Loan, to rescind the Notice of Default, to restrain and enjoin defendants from recording a Notice of Sale and foreclosing on the plaintiff’s property, and for a permanent or final injunction enjoining defendants from continuing to harm plaintiff. 5 1 N.A., No. C-10-01667JCS, 2010 WL 2629785, at *4 (N.D. Cal. June 2 29, 2010) (“If the primary purpose of a lawsuit is to enjoin a 3 bank from selling or transferring property, then the property is 4 the object of the litigation.”) (citations omitted). 5 first-lien mortgage received by plaintiff was in the amount of 6 $360,000. 7 Civ. No. 10-161 MEJ, 2010 WL 761081, at *3 (N.D. Cal. Mar. 2, 8 2010) (finding where plaintiffs seek injunctive relief to prevent 9 foreclosure, the amount-in-controversy requirement was met when (Compl. Ex. B) Here, the See Cabriales v. Aurora Loan Servs., 10 plaintiffs “obtained a loan, secured by a FIRST deed of trust, on 11 the subject property . . . 12 $465,000.”). 13 this case is $378,000 (Compl. Ex. H.). 14 Fargo Bank, 483 F.2d 1074, 1076 (9th Cir. 1973)6 (finding the 15 amount-in-controversy requirement satisfied by looking at both 16 the outstanding interest secured by the property and the market 17 value of the property); Delgado v. Bank of Am. Corp., Civ. No. 18 1:09-01638 AWI DLB, 2009 WL 4163525, at *6 (E.D. Cal. Nov. 23, 19 2009) (Beck, J.) (appraisal of property establishing property was 20 more than $75,000 met amount-in-controversy requirement). 21 defendant has established that the amount in controversy is over 22 $75,000. 23 in the amount of approximately Furthermore, the value of the property at issue in See Garfinkle v. Wells Thus, Moreover, defendants assert, and plaintiff does not 24 6 25 26 27 28 While Garfinkle looks at the since-modified amount-incontroversy requirement under 28 U.S.C. § 1331, the analysis is still relevant. Courts such as Reyes v. Wells Fargo Bank, N.A, Civ. No. 10-01667 JCS, 2010 WL 2629785, at *4 (N.D. Cal. June 29, 2010), have used the analysis of Garfinkle to discuss diversity amount-in-controversy requirements under 28 U.S.C. § 1332. 6 1 dispute, that Nationstar is a citizen of Delaware and US Bank is 2 a citizen of Ohio, and that plaintiff is a citizen of California. 3 Thus, there is complete diversity. 4 Because the amount in controversy is satisfied and 5 there is diversity of citizenship, defendants properly removed 6 this action to federal court, and the court will deny plaintiff’s 7 Motion to remand.7 8 II. 9 Motion to Dismiss Defendants argue plaintiff’s foreclosure lawsuit 10 against defendants is barred by res judicata.8 11 raise res judicata in a motion to dismiss under Federal Rule 12 12(b)(6). See Scott v. Kuhlmann, 746 F.2d 1377, 1378 (9th Cir. 13 1984). 14 raised or could have been raised” in a prior action. 15 U.S. Bancorp, 297 F.3d 953, 956 (9th Cir. 2002) (citations 16 omitted). “Res judicata applies when there is: (1) an identity of 17 claims; (2) a final judgment on the merits; and (3) identity or 18 privity between parties.” 19 A defendant may Res judicata prohibits lawsuits on “any claims that were Stewart v. Id. (internal quotations omitted). Defendants argue that although the claims asserted in 20 each suit are not identical, there is an identity of claims 21 between the two suits because the two suits arise out of the same 22 23 24 25 26 27 28 7 The court does not consider the diversity of “Doe” defendants in examining whether there is diversity. See 28 U.S.C. 1441(a) (“For purposes of removal under this chapter, the citizenship of defendants sued under fictitious names shall be disregarded.”); Newcombe v. Adolf Coors Co., 157 F.3d 686, 690 (9th Cir. 1998) (explaining district courts should only consider the domicile of named defendants). 8 Plaintiff does not address defendants’ argument that res judicata bars this suit. 7 1 transactional nucleus of facts.9 2 further contend the second Complaint’s allegation of additional 3 tortious conduct and other facts not included in the initial 4 action do not sufficiently avoid the bar of res judicata. 5 In determining whether there is an identity of claims for the 6 purposes of res judicata, the court considers: 7 8 9 10 11 12 13 14 17 18 19 20 21 22 23 26 27 28 (Id.) Costantini v. Trans World Airlines, 681 F.2d 1199, 1201–02 (9th Cir. 1982) (quoting Harris v. Jacobs, 621 F.2d 341, 343 (9th Cir. 1980)). The last criteria is the most important. Id. at 1202. “Whether two suits arise out of the same transactional nucleus depends upon whether they are related to the same set of facts and whether they could conveniently be tried together.” Turtle Island Restoration Network v. U.S. Dep’t of State, 673 F.3d 914, 918 (9th Cir. 2012) (quoting ProShipLine Inc. v. Aspen Infrastructures Ltd., 609 F.3d 960, 968 (9th Cir. 2010)). “Where claims arise from the same factual circumstances, a plaintiff must bring all related claims together or forfeit the opportunity to bring any omitted claim in a subsequent proceeding.” Id. In both suits, plaintiff brought a wrongful foreclosure 24 25 Defendants (1) whether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether substantially the same evidence is presented in the two actions; (3) whether the two suits involve infringement of the same right; and (4) whether the two suits arise out of the same transactional nucleus of facts. 15 16 (Defs. Mot. at 4.) complaint against the same defendants based on the same pending non-judicial foreclosure of the same property. 9 In the current Both lawsuits involve only two identical claims, quiet title and violation of California Business and Professions Code § 17200. 8 1 action plaintiff alleges new facts, additional tortious conduct, 2 and emphasizes the failure of the defendant to modify the 3 mortgage foreclosure terms, while in the initial action, she 4 emphasized the failure of defendants to transfer the Deed of 5 Trust to the 2006-4N Trust by the closing date, allegedly making 6 the assignment invalid. 7 2813169, at *2.) 8 facts that all arise from the same allegedly wrongful foreclosure 9 of the plaintiff’s property by the same defendants is not enough (See Compl. ¶ 25; Thrower, 2017 WL However, asserting additional claims and new 10 to overcome res judicata, because these additional claims and 11 facts could have been brought in the initial suit. 12 rel. Barajas v. Northrop Corp., 147 F.3d 905, 909 (9th Cir. 1998) 13 (“It is immaterial whether the claims asserted subsequent to the 14 judgment were actually pursued in the action that led to the 15 judgment; rather, the relevant inquiry is whether they could have 16 been brought.”)(citation omitted). 17 See U.S. ex Additionally, the facts relevant to this case-the 18 assignments of the Deed of Trust and the request and eventual 19 denial to modify her mortgage loan-were all evident when the 20 initial suit was filed. 21 Tahoe Reg'l Planning Agency, 322 F.3d 1064, 1078-80 (9th Cir. 22 2003) (finding the claims asserted arose from the same 23 transactional nucleus of facts and thus an identity of claims 24 where plaintiff filed a new action seeking relief from the same 25 alleged wrongs as the first suit and the facts relevant to the 26 subsequent action were all evident when the initial litigation 27 was filed and there were no new facts relevant to the new cause 28 of action). See Tahoe-Sierra Pres. Council, Inc. v. Plaintiff does not argue the new claims brought in 9 1 the subsequent action could not have been brought in the initial 2 action. 3 claims at issue were not evident by the time this suit was filed. 4 Moreover, the last alleged fact in the Complaint at issue 5 occurred March 21, 2017. 6 11, 2017. 7 could have been alleged in the initial Complaint. 8 9 Nor does plaintiff assert the facts relevant to the new The initial Complaint was filed April Therefore, every fact alleged in the current Complaint Plaintiff cannot avoid the bar of res judicata by alleging additional conduct by the same defendants or by pleading 10 a new legal theory. 11 (“[A]ppellant does not avoid the bar of res judicata merely 12 because he now alleges conduct by [the same defendant] not 13 alleged in his prior suit, nor because he has pleaded a new legal 14 theory.”); Tahoe-Sierra Pres. Council, Inc., 322 F.3d at 1078 15 (“Newly articulated claims based on the same nucleus of facts may 16 still be subject to a res judicata finding if the claims could 17 have been brought in the earlier action.”). 18 identity of claims between the prior lawsuit and the current 19 lawsuit because the claims arise out of the same nucleus of facts 20 and the additional claims and facts could have been raised in the 21 first suit. 22 See Costantini, 681 F.2d at 1201 Thus, there is an Further, there is no dispute as to the other res 23 judicata factors. As to whether the first suit was a final 24 judgment on the merits, the court granted defendants Motion to 25 dismiss for failure to state a claim and dismissed plaintiff’s 26 claims with prejudice based on lack of standing. 27 WL 2813169, at *2. 28 judgment on the merits. Thrower, 2017 A dismissal with prejudice is a final See Stewart, 297 F.3d 953 at 956. 10 (“The 1 phrase ‘final judgment on the merits’ is often used 2 interchangeably with ‘dismissal with prejudice’”) (citations 3 omitted); Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 4 399 n.3 (1981) (“The dismissal for failure to state a claim under 5 Federal Rule of Civil Procedure 12(b)(6) is a judgment on the 6 merits.”)(internal quotations and citations omitted). 7 the parties in the first suit and the second suit are the same. Moreover, 8 For the above mentioned reasons, res judicata bars 9 plaintiff’s claims in the present action, and the court will 10 grant the motion to dismiss. 11 IT IS THEREFORE ORDERED that Plaintiff’s Motion to 12 remand this action to the California Superior Court for the 13 County of Placer be, and the same hereby is, DENIED. 14 IT IS FURTHER ORDERED that defendants’ Motion to 15 dismiss be, and the same hereby is, GRANTED. Because plaintiff’s 16 claims are barred by res judicata, giving leave to amend the 17 Complaint would be futile. 18 hereby DISMISSED WITH PREJUDICE. 19 Dated: Accordingly, plaintiff’s Complaint is October 30, 2017 20 21 22 23 24 25 26 27 28 11

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