Enriquez et al v. Bank of America NA et al

Filing 45

ORDER DENYING DEFENDANTS' MOTION TO DISMISS; VACATING HEARING. Signed by Judge Maxine M. Chesney on September 25, 2015. (mmclc1, COURT STAFF) (Filed on 9/25/2015)

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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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ROMUALDO ENRIQUEZ and OLIVIA
ENRIQUEZ,

No. C-15-0940 MMC
ORDER DENYING DEFENDANTS’
MOTION TO DISMISS; VACATING
HEARING

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Plaintiffs,
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v.
BANK OF AMERICA, N.A., et al.,
Defendants.

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Before the Court is the “Motion to Dismiss Second Amended Complaint for Lack of

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Subject Matter Jurisdiction,” filed August 24, 2015, on behalf of defendants Bank of

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America, N.A. and The Bank of New York Mellon f/k/a The Bank of New York as trustee for

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the Structured Asset Mortgage Investments II Trust 2006-AR7 Mortgage Pass-Through

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Certificates, Series 2006-AR7. Plaintiffs Romualdo and Olivia Enriquez have filed

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opposition, to which defendants have replied. Having read and considered the papers filed

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in support of and in opposition to the motion, the Court deems the matter appropriate for

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determination on the parties’ respective written submissions, VACATES the hearing

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scheduled for October 16, 2015, and rules as follows.

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BACKGROUND

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In the initial complaint, filed March 2, 2015, plaintiffs, alleging the Court had diversity

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jurisdiction, asserted against defendants a total of six counts, titled, respectively, “Wrongful

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Foreclosure,” “Quiet Title,” “Breach of Contract,” “Fraud,” “Violation of Cal. Civ. Code

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Section 2924.17,” and “Violation of Bus. and Profs. Code, Section 17200, et seq.” By order

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filed May 20, 2015, the Court granted defendant’s motion to dismiss the initial complaint for

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failure to state a claim, dismissing without leave to amend the counts titled “Wrongful

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Foreclosure,” “Quiet Title” and “Violation of Cal. Civ. Code Section 2924.17,” and

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dismissing with leave to amend the counts titled “Breach of Contract,” “Fraud” and

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“Violation of Bus. and Profs. Code, Section 17200, et seq.”
On June 3, 2015, plaintiffs filed their First Amended Complaint (“FAC”). In the FAC,

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plaintiffs amended the three counts that had been dismissed with leave to amend, and, in

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addition, alleged two new counts, titled, respectively, “Negligent Infliction of Emotional

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Distress” and “Intentional Infliction of Emotional Distress.” By order filed July 23, 2015, the

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Court granted defendants’ motion to dismiss the FAC for failure to state a claim, dismissing

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without leave to amend the counts titled “Fraud,” “Negligent Infliction of Emotional Distress”

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and “Intentional Infliction of Emotional Distress,” and dismissed with leave to amend the

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counts titled “Breach of Contract” and “Violation of Bus. and Profs. Code, Section 17200, et

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seq.”
On August 6, 2015, plaintiffs filed their Second Amended Complaint (“SAC). In the

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SAC, plaintiffs amended the two counts that had been dismissed with leave to amend,

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namely, “Breach of Contract” and “Violation of Bus. and Profs. Code, Section 17200, et

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seq.”

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DISCUSSION
Defendants seek dismissal of the SAC on grounds different from that asserted in

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their prior motions to dismiss. At this juncture, defendants do not contend plaintiffs fail to

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state a claim, as they did with respect to the initial complaint and the FAC, but, rather, that

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the Court lacks diversity jurisdiction. In particular, according to defendants, the requisite

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amount in controversy cannot be established.

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A district court has diversity jurisdiction where “the matter in controversy exceeds the
sum or value of $75,000, exclusive of interest and costs,” and the matter is “between
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. . . citizens of different States.” See 28 U.S.C. § 1332(a). Federal courts “use the ‘legal

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certainty’ test to determine whether the complaint meets § 1332(a)’s amount in controversy

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requirement.” Naffe v. Frey, 789 F.3d 1030, 1039 (9th Cir. 2015). Under this test, “the sum

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claimed by the plaintiff controls if the claim is apparently made in good faith.” See St. Paul

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Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288 (1938). “It must appear to a

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legal certainty that the claim is really for less than the jurisdictional amount to justify

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dismissal.” Id.

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Here, plaintiffs allege in the SAC, as they did in the initial complaint and in the FAC,

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that “[t]he amount in controversy exceeds $75,000.” (See SAC ¶ 5; see also Compl. ¶ 6;

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FAC ¶ 5.)1 If plaintiffs were to prevail on the two counts asserted in the SAC, defendants

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argue, the only cognizable damages plaintiff could recover would total $13,245.61.

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Plaintiffs respond that a determination as to whether the amount in controversy has been

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shown is made with reference to their initial complaint, not the SAC. The Court agrees.2

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The Supreme Court has made clear that “[e]vents occurring subsequent to the

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institution of suit which reduce the amount recoverable below the statutory limit do not oust

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jurisdiction.” See St. Paul Mercury Indemnity, 303 U.S. at 289-90; see also Mullan v.

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Torrance, 22 U.S. 537, 539 (1824) (holding, with respect to requirement that parties be

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diverse, “the jurisdiction of the Court depends upon the state of things at the time of the

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action brought, and . . . after vesting, it cannot be ousted by subsequent events”).

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Consequently, where an initial complaint seeks damages meeting the jurisdictional

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minimum, a subsequent reduction of the amount in controversy, even if to an amount below

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the jurisdictional minimum, will not deprive the district court of jurisdiction. See St. Paul

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Mercury Indemnity, 303 U.S. at 295.

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Here, defendants do not contend plaintiffs’ initial complaint did not meet the amount

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in controversy required under § 1332(a). Indeed, the value of the relief sought in the initial

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Defendants do not challenge plaintiffs’ allegations as to diversity of citizenship.

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In light of such finding, the Court need not resolve the parties’ dispute as to the
amount in controversy attributable to the two claims in the SAC.
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complaint plainly exceeded the sum of $75,000, as, in that pleading, plaintiffs sought, inter

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alia, to quiet title to a residence located in Brentwood, California (see Compl. ¶¶ 1, 64), a

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property for which plaintiffs had obtained a mortgage loan in the amount of $647,500 (see

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id. Ex. A), and which property, according to plaintiffs, has been appraised at $925,000 (see

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id. Ex. B). In light of such allegations alone, the Court cannot “declare to a legal certainty”

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that, at the time the initial complaint was filed, the amount in controversy did not exceed

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$75,000. See Naffe, 789 F.3d at 1040 (holding district court “must accept the amount in

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controversy claimed by the plaintiff unless it can declare to a legal certainty that the case is

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worth less”).

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Accordingly, the motion to dismiss for lack of jurisdiction will be denied.
CONCLUSION

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For the reasons stated above, defendants’ motion to dismiss the Second Amended
Complaint is hereby DENIED.
IT IS SO ORDERED.

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Dated: September 25, 2015
MAXINE M. CHESNEY
United States District Judge

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