Dicion v. Mann Mortgage, LLC et al
ORDER DISMISSING COMPLAINT FOR LACK OF SUBJECT MATTER JURISDICTION. Signed by JUDGE J. MICHAEL SEABRIGHT on 4/4/2014. (afc) [Order follows hearing held March 10, 2014. Minutes of hearing: doc no. 39 . Order terminates defendants Bank of America, N.A. and Martha Munoz's MOTION to Dismiss Complaint, doc no. 18 , defendant Mann Mortgage LLC's MOTION for Joinder, doc no. 25 , and defendants Mortgage Electronic Registration Systems, Inc., Nationstar Mortgage LLC, and Federal National Mortgage Association's MOTION for Joinder, doc no. 30 ]CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
EDISON S. DICION,
MANN MORTGAGE, LLC;
BANKERS TRUST COMPANY;
REGISTRATION SYSTEMS, INC.;
BANK OF AMERICA, N.A.; BAC
HOME LOANS SERVICING, L.P.;
NATIONSTAR MORTGAGE LLC;
MARTHA MUNOZ; JOHN DOES
1-10; JANE DOES 1-10; DOE
CORPORATIONS 1-10; DOE
ENTITIES 1-10; DOE
GOVERNMENTAL UNITS 1-10,
CIV. NO. 13-00533 JMS-KSC
ORDER DISMISSING COMPLAINT
FOR LACK OF SUBJECT MATTER
ORDER DISMISSING COMPLAINT FOR LACK OF SUBJECT
On October 15, 2009, Plaintiff Edison S. Dicion (“Plaintiff”) filed this
action in connection with a promissory note and mortgage on real property located
at 67-160 Kuoha Street, Waialua, Hawaii (the “subject property”). Plaintiff seeks a
declaration from this court “identifying the true mortgagee so that he does not face
double or triple liability for his debt.” Doc. No. 1, Compl. ¶ 1. Plaintiff names as
Defendants: Mann Mortgage, LLC (“Mann”); Bankers Trust Company (“BTC”);
Mortgage Electronic Registration Systems, Inc. (“MERS”); Bank of America, N.A.
(“BANA”); BAC Home Loans Servicing, L.P. (“BAC”); Nationstar Mortgage LLC
(“Nationstar”); Federal National Mortgage Association (“Fannie Mae”); Corelogic
Default Information Services (“Corelogic”); and Martha Munoz (“Munoz”)
Currently before the court is Defendants BANA and Munoz’ Motion
to Dismiss, to which the remaining Defendants joined. The court determines that
Plaintiff lacks standing and that the amount in controversy is not sufficient to
invoke diversity jurisdiction. Accordingly, the Complaint is DISMISSED for lack
of subject matter jurisdiction.
As alleged in the Complaint, on May 15, 2009, Plaintiff obtained a
loan for $230,500 from Mann, secured by the subject property, as evidenced in a
mortgage executed that same day. Doc. No. 1, Compl. ¶ 17; Doc. Nos. 1-1, 1-2,
Exs. A, B. Both the note and mortgage identify Mann as the Lender. Id. In
addition, the mortgage identifies MERS as “a separate corporation that is acting
soley as a nominee for Lender and Lender’s successors and assigns. MERS is the
mortgagee under this Security Instrument.” Doc. No. 1-2, Ex. B ¶ C. The note
provides that “the Lender may transfer this Note. The Lender or anyone who takes
this Note by transfer and who is entitled to receive payments under this Note is
called the ‘Note Holder.’” Doc. No. 1-1, Ex. A ¶ 1.
The mortgage provides that “[t]he Note or a partial interest in the Note
(together with this Security Instrument) can be sold one or more times without
prior notice to Borrower.” Doc No. 1-2, Ex. B ¶ 20. In addition, the mortgage
defines the role of the Loan Servicer -- an “entity . . . that collects Periodic
Payments due under the Note and this Security Instrument and performs other
mortgage loan servicing obligations under the Note, this Security Instrument, and
Applicable Law” -- and provides that “[i]f there is a change of the Loan Servicer,
Borrower will be given written notice of the changes which will state the name and
address of the new Loan Servicer [and] the address to which payments should be
On February 24, 2012, Munoz executed an Assignment of Mortgage
on behalf of MERS, as nominee for Mann, to BANA, which was recorded in the
State of Hawaii Bureau of Conveyances on April 13, 2012. Doc. No. 1-3, Ex. C.
The Complaint alleges that this assignment, “drafted and recorded” by Corelogic,
was “false and deceptive” because MERS “never owned the Note.” Doc. No. 1,
Compl. ¶ 19. The Complaint further alleges that Munoz, who “signed the false and
deceptive Assignment,” was not the “Vice President of MERS,” as indicated on the
Assignment, but is “actually an employee of [BANA].” Id. ¶¶ 20-21.
On May 9, 2013, Nationstar allegedly sent Plaintiff an email message
claiming that it “owns the servicing rights to [Plaintiff’s] Mortgage.” Id. ¶ 24; see
Doc. No. 1-5, Ex. E. On October 7, 2013, Plaintiff allegedly searched MERS’
ServicerID website which indicated that his note is owned by Fannie Mae. Doc.
No. 1, Compl. ¶ 22; see Doc. No. 1-4, Ex. D (providing a “MIN” number for
Plaintiff’s loan, specifying “MIN Status: Inactive,” and identifying BANA as the
loan “Servicer” and Fannie Mae as the loan “Investor”). Fannie Mae allegedly has
not provided any documentation to this effect to Plaintiff, has not responded to
Plaintiff’s correspondence, and has not recorded any document in connection with
the subject property. Doc. No. 1, Compl. ¶ 23.
The Complaint alleges that “[Plaintiff] has [both] a legal duty to pay
his mortgage to the correct party[, and] the right to negotiate with the owner of his
mortgage to obtain a modification.” Id. ¶ 31. The Complaint further alleges that
“absent a declaration by this Court” determining the true mortgagee, Plaintiff “will
be liable to double or triple liability for his mortgage debt.” Id.
The Complaint asserts diversity jurisdiction pursuant to 28 U.S.C.
§ 1332, alleging that all “Defendants are diverse from Plaintiff, and the amount in
controversy is $484,000.00, which is the fair market value of the Subject
Property.” Id. ¶ 12.
On October 15, 2012, Plaintiff filed his Complaint, styled as a
declaratory action, alleging one Count for quiet title to “clarify the legal relations
between the parties.” Id. ¶ 33. On January 21, 2014, Corelogic was dismissed
from this action by stipulation. Doc. No. 31.
On January 10, 2014, BANA (for itself and as successor to BAC) and
Munoz filed their Motion to Dismiss Complaint, Doc. No. 18. Mann, MERS,
Nationstar, and Fannie Mae filed joinders. Doc. Nos. 25, 30. On February 17,
2014, Plaintiff filed a Memorandum in Opposition, Doc. No. 34, and on February
24, 2014, Replies were filed. Doc. Nos. 35, 36. On March 6, 2014, and pursuant
to Local Rule 7.8, MERS, Nationstar, and Fannie Mae provided notice of reliance
on uncited authority -- Pascua v. Option One Mortgage Corp., 2014 WL 806226
(D. Haw. Feb. 28, 2014) -- which dismissed a similar complaint for lack of subject
matter jurisdiction and was issued after the briefing on the instant Motion had
closed. Doc. No. 38. A hearing on the Motion to Dismiss was held on March 10,
2014, during which the court focused on the jurisdictional issues of standing and
amount in controversy, and granted Plaintiff leave to file a Supplemental Response
to Pascua addressing both of these jurisdictional issues. On March 17, 2014,
Plaintiff filed his Supplemental Response. Doc. No. 40.
III. STANDARDS OF REVIEW
Article III Standing
Article III of the United States Constitution limits jurisdiction of
federal courts to cases and controversies. Lujan v. Defenders of Wildlife, 504 U.S.
555, 560-61 (1992). To establish Article III standing, the complaint “must show
[that] (1) [the plaintiff] has suffered an ‘injury in fact’ that is (a) concrete and
particularized and (b) actual or imminent, not conjectural or hypothetical;
(2) the injury is fairly traceable to the challenged action of the defendant; and (3) it
is likely, as opposed to merely speculative, that the injury will be redressed by a
favorable decision.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC) Inc.,
528 U.S. 167, 180-81 (2000); see also Lopez v. Candaele, 630 F.3d 775, 789 (9th
Cir. 2010) (explaining that an injury-in-fact sufficient to establish standing requires
“a threat of specific future harm” that is not too attenuated or remote); Whitmore v.
Arkansas, 495 U.S. 149, 158 (1990) (collecting cases that demonstrate “what we
have said many times before and reiterate today: Allegations of possible future
injury do not satisfy the requirements of Art. III. A threatened injury must be
certainly impending to constitute injury in fact.”) (citations and quotation marks
“A plaintiff has the burden of establishing the elements required for
standing.” Takhar v. Kessler, 76 F.3d 995, 1000 (9th Cir. 1996). As an
indispensable part of the plaintiff’s case, “each element [of standing] must be
supported in the same way as any other matter on which the plaintiff bears the
burden of proof, i.e., with the manner and degree of evidence required at the
successive stages of the litigation.” Lujan, 504 U.S. at 561. At the pleading stage,
the court “must accept as true all material allegations of the complaint, and must
construe the complaint in favor of the complaining party.” Graham v. FEMA, 149
F.3d 997, 1001 (9th Cir. 1998) (quoting Warth v. Seldin, 422 U.S. 490, 501
(1975)). However, a plaintiff may not rely on a “bare legal conclusion to assert
injury-in-fact, or engage in an ‘ingenious academic exercise in the conceivable’ to
explain how defendants’ actions caused his injury.” Maya v. Centex Corp., 658
F.3d 1060, 1068 (9th Cir. 2011). “As with all questions of subject matter
jurisdiction except mootness, standing is determined as of the date of the filing of
the complaint. The party invoking the jurisdiction of the court cannot rely on
events that unfolded after the filing of the complaint to establish its standing.”
Wilbur v. Locke, 423 F.3d 1101, 1107 (9th Cir. 2005), abrogated on other grounds
by Levin v. Commerce Energy, Inc., 560 U.S. 413 (2010).
Amount in Controversy Required to Establish Diversity Jurisdiction
If a Plaintiff can establish Article III standing, federal courts have
“subject matter jurisdiction over [actions] . . . when there is complete diversity of
citizenship between the parties and the amount in controversy exceeds $75,000.”
Tosco Corp. v. Cmtys. for a Better Env’t, 236 F.3d 495, 499 (9th Cir. 2001); see 28
U.S.C. §§ 1331, 1332. And where declaratory or injunctive relief is sought, it is
“‘well established that the amount in controversy is measured by the value of the
object of the litigation.’” Cohn v. Petsmart, Inc., 281 F.3d 837, 840 (9th Cir. 2002)
(quoting Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 347 (1977)).
The object of the litigation is “the value of the right to be protected or the extent of
the injury to be prevented.” Jackson v. Am. Bar. Ass’n, 538 F.2d 829, 831 (9th Cir.
1976); see also Ridder Bros., Inc. v. Blethen, 142 F.2d 395, 399 (9th Cir. 1944)
(stating that the “required amount [in controversy is] the value of the particular and
limited thing sought to be accomplished by the action”).
Although Defendants filed the instant Motion pursuant to Rule
12(b)(6), the court must first determine whether it has subject matter jurisdiction
and does so sua sponte. See Lance v. Coffman, 549 U.S. 437, 439 (2007) (“Federal
courts must determine that they have jurisdiction before proceeding to the
merits.”); see also Atalig v. United States, ___ Fed. Appx. ___, 2014 WL 709561,
at *1 (9th Cir. Feb. 25, 2014) (“A federal court has an obligation to assure itself of
jurisdiction before proceeding to the merits by, in addition to other things,
inquiring into whether the plaintiff has standing to sue under Article III of the
Constitution.”); Snell v. Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002) (“[A]
court may [address] subject matter jurisdiction, sua sponte[.]”).
Plaintiff Lacks Standing
The Complaint asserts a claim for quiet title, styled as a declaratory
action, to identify “the true mortgagee” of Plaintiff’s loan. Doc. No. 1, Compl.
¶ 1. The Complaint alleges that at various points in time, each of the Defendants
has “claimed to be the mortgagee or [has] acted as the mortgagee” of Plaintiff’s
loan. Id. The Complaint suggests that Plaintiff has not paid off the amount due
under the note and mortgage, and asserts that Plaintiff “has a legal duty to pay his
mortgage to the correct party.” Id. ¶ 31. Thus, Plaintiff filed suit to avoid the
possibility of facing “double or triple liability for his debt” if he pays the wrong
party. Id.1 The Complaint seeks a declaration of “the interest (if any) of the
Defendants and the Petitioner [sic] in the Subject Property and in the Mortgage
therein;” the removal of “all clouds on the title of the Subject Property[;]” and a
“[s]tay of any and all legal proceedings in rem against the Subject Property until
this Court can determine the status of” said title. Id. at 10.
Neither the Complaint nor Plaintiff’s counsel alleges, however, that
Plaintiff’s loan is in default; that any Defendant, let alone multiple Defendants, has
demanded payment from Plaintiff; or that any Defendant has initiated foreclosure
proceedings against the subject property. See Doc. No. 41-2, Tr. at 7 (confirming
during the hearing that “[n]o one at present” is asking him to pay his mortgage
twice, but that “if [he] paid the wrong party that would be the inevitable result”).
Absent such factual allegations, the potential for multiple liability or foreclosure is
no more than mere speculation and falls far short of constituting an Article III
injury-in-fact. See Friends of the Earth, Inc., 528 U.S. at 167 (requiring a showing
of an injury that is “actual or imminent, not conjectural or hypothetical” to
establish Article III standing); see also Lopez, 630 F.3d at 789 (explaining that
During the hearing, when asked why Plaintiff filed this action, Plaintiff’s counsel
responded that Plaintiff has “a right to know to whom [he] should pay the mortgage[, and is] not
trying to get out of any obligation[.]” Doc. No. 41-2, Tr. at 5.
Article III standing requires “a threat of specific future harm” that is not too
attenuated or remote). Thus, Plaintiff’s injury is no more than his own uncertainty
regarding which Defendant is entitled to his mortgage payments.2 Such a
subjective uncertainty is neither sufficiently concrete nor particularized to
constitute an injury-in-fact. See Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138,
1148-51 (2013) (determining that plaintiffs’ subjective fear of possible injury -government interception of private communications between plaintiffs and foreign
contacts suspected of terrorism -- was too speculative to confer Article III standing
for their challenge to the law authorizing such government surveillance because
realization of the harm alleged was dependent on a variety of events and actions
that might never come to pass); see also Friends of the Earth, Inc., 528 U.S. at 184
(stating that “subjective apprehensions that [a particular event] would [transpire]
are not enough to support standing”) (internal quotation marks omitted); see, e.g.,
Williams v. Governor of Pa., 2014 WL 44034, at *3 (3d Cir. Jan. 7, 2014)
Plaintiff cannot establish an injury-in-fact based on the Complaint’s prayer for removal
of “clouds on the title of the Subject Property,” Doc. No. 1, Compl. at 10, because the implied
assertion that such clouds exist is merely an erroneous legal conclusion. See Klohs v. Wells
Fargo Bank, N.A., 901 F. Supp. 2d 1253, 1261 n.4 (D. Haw. 2012) (citing Homeyer v. Bank of
Am., 2012 WL 4105132, at *6 (D. Idaho Aug. 27, 2012) (rejecting quiet title claim because “the
fact that the [note holder’s identity] is unknown is not a cloud on the title”) (Findings and
Recommendation adopted Sept. 17, 2012)); see also id. at 1262 (“[R]outine loan servicing by
itself does not constitute a cloud on title.”) (collecting cases); Maya, 658 F.3d at 1068 (stating
that at the pleading stage, the plaintiff may not rely on a “bare legal conclusion to assert injuryin-fact”).
(explaining that potential future injury to city council members that would occur
only if various contingencies occurred, including the council’s failure to comply
with a state court order, was too speculative to establish Article III standing).
Furthermore, in the absence of a demand for payment from multiple
Defendants, Plaintiff’s uncertainty is not “fairly traceable to [any] challenged
action of the [D]efendant[s].” Id. at 180. Nor is Plaintiff’s uncertainty “likely” to
be “redressed by a favorable decision.” Id. at 181. Despite Plaintiff’s claimed
uncertainty regarding the identity of the “true mortgagee,” Defendants agree that
BANA is the current mortgagee, Nationstar is the loan servicer, MERS does not
claim to have assigned the mortgage to Fannie Mae, and Fannie Mae does not
claim to be the mortgagee. See Doc. No. 41-2, Tr. at 6, 9-10; see also Doc. Nos. 11 - 1-3, 1-5, Exs. A-C, E.
The court’s conclusions are consistent with Pascua v. Option One
Mortgage Corp., 2014 WL 806226 (D. Haw. Feb. 28, 2014).3 In that case, Judge
Susan Oki Mollway recently determined that a plaintiff lacked Article III standing
based on nearly identical facts. The plaintiff in Pascua also asserted a claim for
quiet title, styled as a declaratory action, in which he sought a ruling “declar[ing]
which of the defendants, if any, is the owner of [his] Mortgage.” 2014 WL
Plaintiffs in both the instant action and Pascua were represented by the same counsel.
806226, at *3 (quoting the Complaint ¶ 1).4 Pascua noted that although the
plaintiff claimed “to be confused as to which party to pay,” the defendants
apparently agreed as to which entity owned the debt and which entity serviced the
debt on behalf of the owner. Id. n.2. Thus, Pascua determined that:
At most, the injury-in-fact that Pascua suffers is the
“uncertainty” he says he has regarding what entity he is
supposed to pay. It is not clear that this subjective
feeling of uncertainty is sufficiently concrete and
particularized to constitute an injury-in-fact. It is also not
clear that [the plaintiff’s] purported injury, such as it is, is
caused by Defendants’ conduct rather than by [the
plaintiff’s] own apparent inability to discern the nature of
Id. at *4 (internal citations omitted). Moreover, because “only one party claim[ed]
to be the owner of [the] debt, the possibility of double payment [was] not ‘certainly
impending.’” Id. at *3.5
Plaintiff’s attempts to distinguish Pascua utterly fail. First, Plaintiff
contends that he is “not merely seeking relief from the uncertainty as to whom he
The plaintiff had obtained a home mortgage from one entity, which later sold and
assigned the mortgage to another bank. Pascua, 2014 WL 806226, at *1. The new owner hired
a third entity to service the loan. Id. Sometime thereafter, the plaintiff defaulted on the loan and
was directed by the note holder to remit $41,139.92 to the loan servicer in order to avoid
foreclosure. Id. Several months later, the loan servicer sent a letter indicating that it was
transferring the servicing of the plaintiff’s loan to a fourth entity. Id. at *2.
During the hearing, Plaintiff’s counsel refused an offer to have Defendants sign a joint
declaration saying what they represent -- that BANA is the sole mortgagee.
owes a debt, he is disputing each Defendants’ purported interest in the Subject
Property.” Doc. No. 41, Pl.’s Suppl. Resp. at 6. Plaintiff’s distinction is illusory.
The exact same declaratory relief that Plaintiff now seeks was also sought in
Pascua. See 2014 WL 806226, at *3 (stating that the plaintiff sought a
“declaratory judgment . . . declaring . . . the interest (if any) of the Defendants and
the Plaintiff in the Subject Property and in the Mortgage”). Moreover, the
defendants’ purported interests in the subject property were also disputed in
Pascua. See id. at *1-2 (setting forth the plaintiff’s (1) allegations that the
assignment of mortgage was improper; and (2) extended correspondence with the
loan servicer challenging the rights and interests of the purported owner and loan
Second, Plaintiff contends that unlike Pascua, “multiple parties claim
to be the Note holder, and multiple parties claim to be the mortgage servicer.”
Doc. No. 41, Pl.’s Suppl. Resp. at 7. Again, Plaintiff is mistaken. As set forth
above, neither the documents attached to the Complaint, nor representations made
in court, support Plaintiff’s conclusory allegation that Defendants claim conflicting
interests in the loan documents and subject property. Rather, Plaintiff appears to
have made up a dispute without supporting facts.
Based on the foregoing, the court finds that Plaintiff lacks Article III
The Amount in Controversy Is Insufficient to Invoke Diversity
Alternatively, even if Plaintiff had Article III standing, the amount in
controversy is not sufficient to invoke diversity jurisdiction. Plaintiff contends that
the amount in controversy should be the value of the subject property because he
seeks “declaratory relief . . . as to the ownership of the Subject Property.” Doc.
No. 41, Suppl. Resp. at 6. Thus, Plaintiff argues that the object of the litigation is
the subject property. Id. The court disagrees. As explained above, Plaintiff filed
this action to determine “the true mortgagee” so as to avoid the possibility of
facing “double or triple liability for his debt” if he pays the wrong party. Doc. No.
1, Compl. ¶¶ 1, 31. The object of the litigation, therefore, is to relieve Plaintiff of
his uncertainty as to which Defendant he should remit his future mortgage
And because the true purpose of this action is neither to quiet title in favor of Plaintiff
and against all Defendants, nor to stop an imminent foreclosure sale, simply requesting such
relief cannot transform the object of litigation to the subject property. See generally Chapman v.
Deutsche Bank Nat’l Trust Co., 651 F.3d 1039, 1045 n.2 (9th Cir. 2011) (stating that generally,
the object of litigation in actions to quiet title or enjoin a foreclosure sale is the subject property)
(citing Woodside v. Ciceroni, 93 F. 1, 4 (9th Cir. 1899) (regarding claim to quiet title) and
Garfinkle v. Wells Fargo Bank, 483 F.2d 1074, 1076 (9th Cir. 1973) (regarding claim to enjoin
foreclosure sale)); see also Martinez v. BAC Home Loans Servs., LP, 777 F. Supp. 2d 1039,
1047-48 (W.D. Tex. 2010) (“[R]egardless of whether the property at issue has been sold in
Assigning an exact value to Plaintiff’s relief from such uncertainty
would be difficult. See Jackson, 538 F.2d at 831 (noting the difficulty of
measuring the monetary value of something that is “intangible[ and] speculative”).
Nevertheless, because Plaintiff is not in default, Defendants agree that Nationstar is
the current loan servicer to which Plaintiff’s mortgage payments are due, and no
Defendant has demanded duplicate payment of any amount, that value cannot
plausibly exceed $75,000. See also Pascua, 2014 WL 806226, at *5 (finding that
the subjective value to the plaintiff of freeing him from the fear that he might pay
double the amount requested ($41,139.92) to avoid foreclosure should he pay the
wrong party could not plausibly exceed $75,000).
Based on the foregoing, the court finds that Plaintiff lacks Article III
standing and that the amount in controversy is not sufficient to invoke diversity
foreclosure or is still held by the lender, the value of the property is the object of the litigation
for the purposes of determining whether the amount-in-controversy requirement has been met so
long as the plaintiff is seeking injunctive relief to prevent or undo the lender’s sale of the
property.”) (emphasis added).
jurisdiction. Accordingly, the Complaint is DISMISSED for lack of subject matter
jurisdiction. The Clerk of Court is directed to close the case file.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, April 4, 2014.
/s/ J. Michael Seabright
J. Michael Seabright
United States District Judge
Dicion v. Mann Mortg., LLC, et al., Civ No. 13-00533 JMS-KSC, Order Dismissing Complaint
for Lack of Subject Matter Jurisdiction
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?