Mora v. U.S. Bank, N.A. et al

Filing 23

Order by Hon. Samuel Conti denying 16 Motion to Remand, overruling 18 objection to filing of First Amended Complaint, and denying as moot 5 Motion to Dismiss.(sclc2, COURT STAFF) (Filed on 3/15/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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For the Northern District of California

United States District Court

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TARCICIO MORA, an individual, and
REMEDIOS MORA, an individual,

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)
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Plaintiffs,
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v.
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U.S. BANK N.A., as Trustee for the )
holders of the First Franklin
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Mortgage Loan Trust Mortgage Pass- )
Through Certificates, Series 2005- )
FF9, SELECT PORTFOLIO SERVICING,
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INC., and NATIONAL DEFAULT
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SERVICING CORPORATION,
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Defendants.
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)

Case No. 11-6598 SC
ORDER DENYING PLAINTIFFS'
MOTION TO REMAND AND
DENYING DEFENDANTS' MOTION
TO DISMISS

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I.

INTRODUCTION
On December 21, 2011, this action was removed to this Court

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from a California state court.

Now this Court must decide a motion

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to remand brought by Plaintiffs Tarcicio and Remedios Mora

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(collectively, "Plaintiffs").

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dismiss the original state court complaint, brought by Defendants

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U.S. Bank N.A., Select Portfolio Servicing, Inc., and National

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Default Servicing Corporation (collectively, "Defendants").

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Lastly, Defendants have objected to Plaintiffs' filing of both a

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First Amended Complaint and a "corrected" First Amended Complaint.

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Pursuant to Civil Local Rule 7-1(b), the Court determines that

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these matters are suitable for decision without oral argument.

Also before the Court is a motion to

For

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the reasons set forth below, the Court DENIES Plaintiffs' motion to

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remand, OVERRULES Defendants' objection to Plaintiffs' amended

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pleadings, and DENIES AS MOOT Defendants' motion to dismiss the

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original complaint.

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II.

BACKGROUND

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On October 28, 2011, Plaintiff Tarcicio Mora filed a Complaint

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against Defendants in the Superior Court of the State of California

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in and for the County of Sonoma.

ECF No. 1 ("Not. of Removal") Ex.

United States District Court

For the Northern District of California

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A ("Compl.").1

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arising under California state law: (1) violation of California

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Civil Code § 2923.5, (2) violation of California Civil Code §

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17200, (3) breach of contract, (4) promissory estoppel, and (5) a

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cause of action styled "declaratory relief."

The Complaint alleges five causes of action, all

On December 21, 2011, all three Defendants timely removed this

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action to the United States District Court for the Northern

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District of California, availing themselves of this Court's removal

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jurisdiction over diversity cases.

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later, on December 28, 2011, Defendants filed a Motion to Dismiss

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the Complaint.

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January 11, 2012 to file a responsive brief; he did not do so.

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Additionally, because this case was initially assigned to a

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magistrate judge, Civil Local Rule 73-1(a)(1) obligated Mora either

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to consent to the magistrate judge's jurisdiction or affirmatively

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request reassignment to a district judge.

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sent the appropriate forms to Mora's counsel.

Not. of Removal at 2.

ECF No. 5 ("Mot. to Dismiss").

A week

Mora had until

The Clerk of the Court
ECF No. 8.

Mora did

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Plaintiff Remedios Mora had not yet joined the case. This
Section's references to "Mora" refer to Tarcicio Mora individually.

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not respond.

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reassigned to the judge now presiding.

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2012, Defendants renoticed their Motion to Dismiss, placing it

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before the judge now presiding.

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filed a brief noting that Mora had not opposed the Motion to

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Dismiss and asking the Court to consider an additional reason for

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dismissal: failure to prosecute.

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Accordingly, on January 13, 2012, this case was
ECF No. 11.

ECF No. 12.

On January 18,

On the same day, they

ECF No. 13 at 2-3.

On January 23, 2012, Tarcicio Mora, now joined by Remedios
Mora, filed their First Amended Complaint, ECF No. 15 ("FAC"),

United States District Court

For the Northern District of California

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along with a Motion to Remand this action back to California

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Superior Court, ECF No. 16 ("Mot. to Remand").

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on January 24, 2012, Plaintiffs filed a Corrected First Amended

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Complaint.

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objected to both the FAC and the CFAC as untimely and asked the

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Court to strike them.

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alternative, Defendants requested leave to file another motion if

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the Court permitted the amended pleadings to stand.

ECF No. 17 ("CFAC").

The following day,

Later that day, Defendants

ECF No. 18 ("Obj.") at 2-3.

In the

Id. at 3.

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III. DISCUSSION

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A.

Defendants' Removal Was Proper

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If a federal court would have had subject-matter jurisdiction

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over a civil action which a plaintiff chooses to file in state

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court instead, a defendant may remove the case to federal court.

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28 U.S.C. § 1441(a).

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diversity jurisdiction when there is complete diversity between the

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parties and the amount in controversy exceeds $75,000.

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1441(b) (citing id. § 1332(a)).

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behest; the proper procedure for challenging removal is for a

A case is removable pursuant to federal

Id. §

Removal occurs at the defendant's

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plaintiff to file a motion to remand the case back to state court.

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See 28 U.S.C. § 1447(c); Moore–Thomas v. Alaska Airlines, Inc., 553

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F.3d 1241, 1244 (9th Cir. 2009).

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challenge removal on jurisdictional grounds.

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Defendants, who removed in diversity, have failed to show that more

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than $75,000 is in controversy.

In the instant case, Plaintiffs
They maintain that

Plaintiffs' argument rests on the faulty premise that the

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Court may use the FAC, rather than the original Complaint, to

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decide this Motion.

See Mot. to Remand at 3, 5.

The original

United States District Court

For the Northern District of California

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Complaint requests monetary relief but does not supply a dollar

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figure.

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Court using the value of the Plaintiffs' home (the "Subject

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Property") to calculate the amount in controversy.

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amended complaint, however, prays for monetary relief in the

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jurisdictionally insufficient amount of $65,000.2

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Plaintiffs invite the Court to find that only that amount is in

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controversy here.

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dispute that a court deciding a motion to remand may base its

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decision only on the complaint that was operative at the time of

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removal.

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Inc., 159 F.3d 1209, 1213 (9th Cir. 1998).

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not compel remand by amending a complaint to eliminate" the basis

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of the Court's removal jurisdiction.

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As explained below, this results in the

The Court declines to do so.

Plaintiffs'

Id. at 5.

It is beyond

See Sparta Surgical Corp. v. Nat'l Ass'n of Sec. Dealers,
And "a plaintiff may

Id.

The operative pleading at the time of removal was Plaintiffs'

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Compl. at 17.

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Plaintiffs nowhere attempt to justify why they are entitled to
damages in the precise amount of $65,000, as opposed to a figure
that would clearly support removal. Plaintiffs' omission supports
an inference that the $65,000 figure was contrived to defeat
removal. The Court reminds Plaintiffs' counsel of Rule 11(b)'s
prohibition on presenting a pleading to the Court for any improper
purpose.

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original state court Complaint.

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monetary relief but contains no dollar amounts, Defendants bear the

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burden of showing by a preponderance of the evidence that more than

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$75,000 is in controversy here.

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Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997).

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Defendants draw the Court's attention to the Complaint's fifth

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cause of action.

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contends that "Defendants' security interest in the Subject

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Property has been rendered void . . . ."

United States District Court

For the Northern District of California

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Because the Complaint requests

See Singer v. State Farm Mut.
To this end,

Titled "Declaratory Relief," this cause of action

ECF No. 20 ("Defs.' Opp'n

to MTR") at 5 (quoting Compl. ¶ 81).
When a plaintiff seeks declaratory relief, "it is well

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established that the amount in controversy is measured by the value

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of the object of the litigation."

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Trust Co., 651 F.3d 1039, 1045 n.2 (9th Cir. 2011) (quotation marks

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omitted).

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or to remove a cloud from title, the object of the litigation is

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the real estate itself.

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this case is clearly the Subject Property, since Plaintiffs seek

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postponement of the foreclosure sale and a declaration that

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Defendants' interest in the Subject Property is void, which would

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extinguish Defendants' power to seek foreclosure.

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Chapman v. Deutsche Bank Nat.

In actions to enjoin foreclosure sales, to quiet title,

See id.

Thus, the object of litigation in

The only question left, then, is whether a preponderance of

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the evidence shows that the Subject Property is worth more than

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$75,000.

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notice of the Deed of Trust for the Subject Property.

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Ex. 1 ("DOT").

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that the Subject Property acts as security for a loan in the

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original principal amount of $400,000.

The Court finds that it does.

The Court takes judicial
ECF No. 6

This document, as Defendants point out, indicates

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Defs.' Opp'n to MTR at 5

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(citing DOT at 1).

Plaintiffs have presented no opposing evidence.

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Although it is possible that a $400,000 loan might be secured by a

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property worth less than $75,000 -- secured, that is, by pennies on

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the dollar -- such an arrangement is highly unlikely.

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the Subject Property is a family home in Petaluma, California, and

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the Court takes judicial notice of the fact, generally known in

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this District, that few if any residential properties there sell

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for less than $75,000.

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Court finds that it is more likely than not that the Subject

Fed. R. Evid. 201(b).

Moreover,

Accordingly, the

United States District Court

For the Northern District of California

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Property was worth in excess of $75,000 at the time of removal.3

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Because the Court determines that the amount in controversy here

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exceeds the jurisdictional amount, the Court DENIES Plaintiffs'

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Motion to Remand.

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B.

The FAC Was Timely Filed

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Because the Court retains jurisdiction over this matter, it

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must decide Defendants' pending Motion to Dismiss.

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Court must rule on Defendants' Objection to Plaintiffs' filing of

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the FAC and CFAC.

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Obj. at 2-3.

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Procedure 15 provides:

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But first, the

Defendants challenge the FAC as untimely.

The Court does not agree.

See

Federal Rule of Civil

A party may amend its pleading once as a matter of course
within: (A) 21 days after serving it, or (B) if the
pleading is one to which a responsive pleading is

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The Court need not reach Defendants' arguments seeking to bring
other amounts into controversy (e.g., attorney fees). However, the
Court pauses to note that Defendants summarily state that attorney
fees and costs "count[] toward the jurisdictional amount" for
diversity. Defs.' Opp'n to MTR at 5. That is a misstatement of
the law. See Dukes v. Twin City Fire Ins. Co., No. CV-09-2197-PHXNVW, 2010 WL 94109, at *2 (D. Ariz. Jan. 6, 2010) (observing that
there is "disagreement within [the Ninth Circuit's District Courts]
as to whether attorneys' fees incurred after the date of removal
are properly included in the amount in controversy").

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required, 21 days after service of a responsive pleading
or 21 days after service of a motion under Rule 12(b) . .
. , whichever is earlier.

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Here, Plaintiff's Complaint is one "to which a responsive pleading

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is required" -- namely, an Answer.

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filed the instant Rule 12(b) Motion to Dismiss instead.

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represent that they served this Motion on Plaintiffs on December

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28, 2011.

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until January 18, 2012, to amend the Complaint.

Obj. at 2-3.

Defendants, as is their right,
Defendants

Therefore, under Rule 15, Plaintiffs had

United States District Court

Rule 6(d) gives a party three extra days to respond if the

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For the Northern District of California

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party is served in certain ways, for example, by mail or electronic

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means.

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in one of those ways.

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extended Plaintiffs' January 18 deadline by three days, to January

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21, 2012.

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due date that falls on a Saturday "until the end of the next day

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that is not a Saturday, Sunday, or legal holiday."

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the rule extended Plaintiffs' time to amend its pleading to Monday,

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January 23, 2012, and it was on that date that Plaintiffs filed the

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FAC.

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filing of the FAC.

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Plaintiffs represent that they were served with the Motion
See Pls.' Resp. to Obj. 2.

That day was a Saturday.

Thus, Rule 6(d)

Rule 6(a)(1)(C) extends any

In this case,

Accordingly, the Court OVERRULES Defendants' Objection to the

The CFAC warrants separate examination.

Plaintiffs,

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unhelpfully, failed to file a Notice of Errata along with the CFAC,

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so it is not apparent to the Court what in the FAC they corrected,

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why correction was needed, or, significantly, why the purported

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correction is not an amendment unto itself within the meaning of

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Rule 15.

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4302974, at *1 (E.D. Cal. Dec. 06, 2007) (construing correction

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filed two days after FAC to be the operative pleading where

See Thomas v. Hickman, No. 1:06-cv-00215-AWI-SMS, 2007 WL

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correction was filed along with Notice of Errata).

Nevertheless,

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"[u]nless undue prejudice to the opposing party will result, a

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trial judge should ordinarily permit a party to amend its

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complaint."

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Thus, even if the Court were to construe the CFAC as an amendment

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made under Rule 15(b) rather than a correction to an amendment made

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under Rule 15(a), it still would grant leave to amend in the

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absence of undue delay, bad faith, futility, or, most importantly,

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prejudice to Defendants.

Howey v. U.S., 481 F.2d 1187, 1190 (9th Cir. 1973).

See Eminence Capital, LLC v. Aspeon,

United States District Court

For the Northern District of California

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Inc., 316 F.3d 1048, 1051-52 (9th Cir. 2003) (citing Foman v.

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Davis, 371 U.S. 178, 182 (1962)).

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to Defendants resulting from stylistic amendments made one day

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after an earlier filing.

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The Court discerns no prejudice

Accordingly, the Court OVERRULES Defendants' objection to

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Plaintiffs' filing of the CFAC.

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The CFAC is the operative

complaint in this case.

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C.

Defendants' Motion to Dismiss Is Moot

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Having determined that the CFAC is the operative complaint,

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the Court observes that Defendants' pending Motion to Dismiss

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addresses only the original state court Complaint.

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never filed a brief in opposition to that Motion, instead amending

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their pleading as a matter of right.

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original state court Complaint and the CFAC, though slight, have

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enough substance that the Court cannot say at this juncture that

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the pleadings are materially identical.

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Sacramento Mortg., Inc., No. S–10–2600 KJM DAD, 2011 WL 4591098, at

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*1-2 (E.D. Cal. Sept. 30, 2011) (applying motion to dismiss

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original complaint to claims in amended complaint that were

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Plaintiffs

The differences between the

Cf. Williamson v.

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"substantially similar").

Moreover, Plaintiffs should have the

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chance to defend their pleading now that amendment as a matter of

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course is off the table.
The Court therefore DENIES the pending Motion to Dismiss as

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moot.

The Court grants Defendants fourteen (14) days from the date

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of this Order to file a motion responding to the CFAC.

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IV.

CONCLUSION
The Court DENIES Plaintiffs' Motion to Remand this action back

United States District Court

For the Northern District of California

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to California state court and retains jurisdiction over the case.

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The Court OVERRULES Defendants' Objection to the filing of the

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First Amended Complaint, as well as the Corrected First Amended

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Complaint.

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operative complaint in this case.

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MOOT Defendants' Motion to Dismiss the earlier, unamended

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Complaint.

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date of this Order to file a motion responding to the Corrected

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First Amended Complaint.

The Corrected First Amended Complaint is now the
Accordingly, the Court DENIES AS

The Court grants Defendants fourteen (14) days from the

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IT IS SO ORDERED.

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Dated: March 15, 2012
UNITED STATES DISTRICT JUDGE

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