Toledo et al v. Bank of New York Mellon et al
Filing
45
ORDER DISMISSING COMPLAINT FOR LACK OF SUBJECT MATTER JURISDICTION. Signed by JUDGE DERRICK K. WATSON on 5/2/2014. ~ The Court hereby dismisses the Toledos complaint for lack of subject matter jurisdiction. The Clerk of Court is direct ed to close the case. (ecs, )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 HAWAI`I
ANTONY TOLEDO and ANNIE
TOLEDO,
Plaintiffs,
vs.
BANK OF NEW YORK MELLON, as
trustee on behalf of the
certificateholders of the CWHEQ
Revolving Home Equity Loan Trust,
Series 2006-H, et al.
CIVIL NO. 13-00539 DKW-KSC
ORDER DISMISSING
COMPLAINT FOR LACK OF
SUBJECT MATTER
JURISDICTION
Defendants.
ORDER DISMISSING COMPLAINT FOR LACK OF
SUBJECT MATTER JURISDICTION
This matter is nearly identical in relevant part to three other cases in
this district, brought by the same counsel, which have recently been dismissed for
lack of subject matter jurisdiction. See Broyles v. Bank of America, et al., CV 13540 LEK-KSC, Dkt. No. 30 (D. Haw. April 30, 2014); Dicion v. Mann Mortgage,
LLC, 2014 WL 1366151 (D. Haw. April 4, 2014); Pascua v. Option One Mortgage
Corp., 2014 WL 806226 (D. Haw. Feb. 28, 2014). The result here is no
different—because the Toledos lack standing and have not satisfied the amount in
controversy requirement, this Court lacks subject matter jurisdiction, mandating
dismissal of the complaint.
BACKGROUND
The Toledos have two mortgages on their primary residence.
Although they have been making payments on these mortgages for years, they now
allege an uncertainty regarding whom to pay. They assert a single cause of action
that they refer to as “quiet title,” seeking to “obtain a declaratory judgment
identifying the true mortgagees so that they do not face double or triple liability for
their debt.” Complaint ¶ 1.
Defendants, the mortgagees and loan servicers on the Toledos’
mortgages, move to dismiss.
STANDARD OF REVIEW
Although Defendants’ motions are filed pursuant to Fed. R. Civ. P.
12(b)(6) and 8(a), the Court “must determine that [it] ha[s] jurisdiction before
proceeding to the merits.” Lance v. Coffman, 549 U.S. 437, 439 (2007). Thus, the
Court is “obligated to consider sua sponte whether [it] ha[s] subject matter
jurisdiction.” Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1116 (9th Cir. 2004). “If
the court determines at any time that it lacks subject-matter jurisdiction, the court
must dismiss the action.” Fed. R. Civ. P. 12(h)(3).
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A suit brought by a plaintiff without Article III standing is not a “case
or controversy,” and an Article III federal court therefore lacks subject matter
jurisdiction over the suit. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 102
(1998). In order to establish standing, three requirements must be met:
First and foremost, there must be alleged (and ultimately
proved) an injury in fact—a harm suffered by the plaintiff that
is concrete and actual or imminent, not conjectural or
hypothetical. Second, there must be causation—a fairly
traceable connection between the plaintiff’s injury and the
complained-of conduct of the defendant. And third, there must
be redressability—a likelihood that the requested relief will
redress the alleged injury. This triad of injury in fact,
causation, and redressability constitutes the core of Article III’s
case-or-controversy requirement, and the party invoking federal
jurisdiction bears the burden of establishing its existence.
Id. at 102–04 (internal citations and quotation marks omitted). See Takhar v.
Kessler, 76 F.3d 995, 1000 (9th Cir. 1996) (“A plaintiff has the burden of
establishing the elements required for standing.”).
Even where a plaintiff has standing, subject matter jurisdiction must
also be established. Jurisdiction founded on diversity (the basis for jurisdiction
alleged by the Toledos here) “requires that the parties be in complete diversity and
the amount in controversy exceed $75,000.” Matheson v. Progressive Specialty
Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (per curiam); see 28 U.S.C. § 1332.
Where, as here, 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
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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”).
“[T]he party asserting diversity jurisdiction bears the burden of
proof.” Lew v. Moss, 797 F.2d 747, 749 (9th Cir. 1986).
DISCUSSION
The Toledos lack standing and have failed to satisfy the amount in
controversy requirement necessary to establish diversity jurisdiction. Accordingly,
the Court dismisses the complaint for lack of subject matter jurisdiction.
First, the Toledos have not alleged an injury in fact to sufficiently
establish standing. Although the Toledos assert their general concern that they
could “face double or triple liability for their debt” without the Court’s assistance
in ascertaining to whom they should pay, the Toledos do not allege that any
Defendant has actually initiated foreclosure proceedings or that more than one
party has actually demanded payment on the same loan—allegations necessary to
show actual injury. Consequently, as Judge Seabright concluded in Dicion:
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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. Thus,
Plaintiff's injury is no more than his own uncertainty regarding
which Defendant is entitled to his mortgage payments. Such a
subjective uncertainty is neither sufficiently concrete nor
particularized to constitute an injury-in-fact.
2014 WL 1366151, at *4 (internal citations omitted); see also Pascua, 2014 WL
806226, at *4 (“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 Pascua’s purported injury, such
as it is, is caused by Defendants’ conduct rather than by Pascua’s own apparent
inability to discern the nature of his obligations.” (internal citation omitted));
Broyles, Dkt. No. 30 at 8–9 (“[S]ince Plaintiff does not face foreclosure or multiple
liability, any possible future injury is too conjectural or hypothetical, and her
uncertainty of whom to pay is not sufficiently concrete or particularized, to
constitute an injury-in-fact.”). Indeed, the Defendants agree that there is no dispute
as to the roles of each Defendant entity, and there is nothing to even suggest that
the Toledos would be subject to double or triple liability, as they apparently fear.
Having alleged no injury in fact, and the Court declining to allow the Toledos to
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manufacture one, Plaintiffs lack standing, depriving the Court of subject matter
jurisdiction. Steel Co., 523 U.S. at 102.1
Second, the Court also lacks subject matter jurisdiction because the
amount in controversy requirement to establish diversity jurisdiction has not been
satisfied. The Toledos allege that “the amount in controversy is $387,000, which
is the fair market value of the Subject Property.” Complaint ¶ 13. However, as
Judge Mollway discussed in Pascua:
Here, the matter Pascua says he wants to accomplish does not
implicate the entire debt or the value of the property. Although
he styles his claim as one to “quiet title,” Pascua does not allege
that he holds title to the property free and clear of any debt
obligation. Nor does Pascua seek to enjoin a foreclosure. In
either such situation, the full debt or the property itself would
be the object of the litigation, because the claimant would be
trying to prevent paying the debt or losing the property.
Pascua, by contrast, asks for a declaration to prevent him from
feeling uncertainty as to whom to pay. He is not actually being
asked to pay his acknowledged debt more than once. The
amount in controversy is therefore the subjective value to
Pascua of freeing him from that risk. Courts are often
disinclined to speculate as to the monetary value of something
so vague and amorphous as a feeling of uncertainty.
1
The Court also adopts the same reasoning and conclusion reached by Judge Seabright in Dicion
for the second and third requirements of 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 Defendants. Nor is Plaintiff's uncertainty likely to be
redressed by a favorable decision.
2014 WL 1366151, at *5 (alterations, quotation marks, and citation omitted).
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In any event, it is implausible to suggest that the subjective
value to Pascua of such a declaration is greater than $75,000.
Pascua’s primary fear appears to be that he will accidentally
pay the wrong party $41,139.92, which is the amount Wells
Fargo is currently requesting he pay to avert foreclosure. The
harm to Pascua of his fear that he might lose a second payment
of $41,139.92 cannot plausibly be worth in excess of $75,000.
2014 WL 806226, at *5 (internal citations omitted).
Similarly here, the Toledos ask for a declaration to clarify their
alleged confusion as to whom to pay. Therefore, the object of the litigation is not
the value of the property, but is instead the value in relieving the Toledos’
uncertainty. See Dicion, 2014 WL 1366151, at *6; Broyles, Dkt. No. 30 at 11–12.
However, the Toledos have not even attempted to prove what the value of that
uncertainty is and the Court will not speculate. Even if it could be quantified, the
account statements attached to the complaint suggest that the amount the Toledos
actually owe (and thus could theoretically double- or even triple-pay based on their
alleged uncertainty) is only a few thousand dollars, less than what was at issue in
Dicion and far less than what was at issue in Pascua. See Complaint Ex. E (2007
Account Statement from HomeEq Servicing listing amount due as $845.21);
Complaint Ex. F (2013 Account Statement from Bank of America listing the
amount needed to bring the account current as $1,827.13); Complaint Ex. G (2011
Account Statement from Ocwen Servicing listing the amount due as $779.10). In
short, “because the true purpose of this action is neither to quiet title in favor of
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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.” Dicion, 2014 WL 1366151, at *6 n.6.
Finally, the Court notes that even if the Court had subject matter
jurisdiction, “Plaintiffs’ contention that they do not know to whom their debt is
owed is not a basis to ‘quiet title.’” Klohs v. Wells Fargo Bank, N.A., 901
F.Supp.2d 1253, 1261 n.4 (D. Haw. 2012).
CONCLUSION
The Court hereby dismisses the Toledos’ complaint for lack of subject
matter jurisdiction. The Clerk of Court is directed to close the case.
IT IS SO ORDERED.
DATED: HONOLULU, HAWAI‘I, May 2, 2014.
Toledo v. Bank of New York Mellon, et al.; CV 13-00539 DKW/KSC; ORDER
DISMISSING COMPLAINT FOR LACK OF SUBJECT MATTER
JURISDICTION
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