Pascua v. Option One Mortgage Corporation et al
Filing
36
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS AND DENYING MOTION FOR SANCTIONS 29 . Signed by CHIEF JUDGE SUSAN OKI MOLLWAY on 12/31/2014. Excerpt of Conclusion: "Defendants' moti on to dismiss is granted in part and denied in part. Pascua's slander of title claim (Count II) and quiet title claim (Count III) are dismissed with prejudice for lack of jurisdiction, leaving Pascua's FDCPA claim for further adjudication.& quot; Written order follows hearing held December 9, 2014 on Defendants' Motion to Dismiss and for Sanctions. Minutes of hearing: doc. no. 35 . (afc)CERTIFICATE OF SER VICEParticipants 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
ARSENIO AGUILAR PASCUA,
)
)
Plaintiff,
)
)
vs.
)
)
OPTION ONE MORTGAGE
)
CORPORATION, et al.,
)
)
Defendants.
)
_____________________________ )
CIVIL NO. 14-00248 SOM/KSC
ORDER GRANTING IN PART AND
DENYING IN PART MOTION TO
DISMISS AND DENYING MOTION
FOR SANCTIONS
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS
AND DENYING MOTION FOR SANCTIONS
I.
INTRODUCTION.
Defendants Homeward Residential, Inc. (“Homeward”),
Wells Fargo Bank, National Association as Trustee for Soundview
Home Loan Trust 2007-OPT5, Asset-Backed Certificates, Series
2007-OPT5 (“Wells Fargo”), Ocwen Loan Servicing, LLC (“Ocwen”),
and Sand Canyon Corporation (“Sand Canyon”) (collectively,
“Defendants”), move: (1) to dismiss Plaintiff Arsenio Aguilar
Pascua’s Complaint; and (2) for sanctions against Pascua and
Pascua’s counsel, Robert L. Stone of Property Rights Law Group of
Hawai’i, Inc.
The motion to dismiss is granted in part and
denied in part and the motion for sanctions is denied.
II.
FACTUAL BACKGROUND.
Defendants’ motions are based on the contention that
Pascua, in his Complaint filed on May 28, 2014, is seeking to
religitate an issue that this court decided in a previous action.
ECF No. 29-1, PageID # 354-55.
The previous action, Pascua v. Option One Mortgage
Corp., Civ. No. 13-00406 SOM/KSC (“Pascua I”), filed on August
21, 2013, was dismissed for lack of subject matter jurisdiction.
See Pascua I, Civ. No. 13-00406 SOM/KSC, 2014 WL 806226 (D. Haw.
Feb. 28, 2014).1
At the time the court entered its dismissal
order in Pascua I, the court had before it only a quiet title
claim.
Id.
The court determined that Pascua had failed to show
that his only alleged injury (i.e., his alleged uncertainty about
which entity he was indebted to) equated with an amount in
controversy in excess of $75,000, as required to establish
diversity jurisdiction.
Id.
Prior to this court’s ruling as to the quiet title
claim in Pascua I, Pascua voluntarily dismissed claims under the
Fair Debt Collections Practices Act (“FDCPA”) and Hawaii’s Unfair
Competition and Practices Act (“UDAP”).
Id. at *1.
Pascua’s
dismissal of those claims came in response to Defendants’
contention that Pascua’s FDCPA claim was so patently frivolous
1
Pascua I is one of several previously rejected actions
containing nearly identical allegations and claims filed by
plaintiffs represented by Robert L. Stone of Property Rights Law
Group of Hawai’i, Inc. See, e.g., Dimitrion v. Morgan Stanley
Credit Corp., No. 13-00125 DKW/BMK, 2014 WL 2439631 (D. Haw. May
29, 2014); Broyles v. Bank of Am., N.A., No. 13-00540 LEK/KSC,
2014 WL 1745097 (D. Haw. Apr. 30, 2014); Moore v. Deutsche Bank
Nat. Trust Co., No. 13-00506 DKW/RLP, 2014 WL 1745076 (D. Haw.
Apr. 30, 2014); Wegesend v. Envision Lending Grp., Inc., No.
13-00493 DKW/KSC, 2014 WL 1745340 (D. Haw. Apr. 30, 2014); Dicion
v. Mann Mortgage, LLC, No. 13-00533 JMS/KSC, 2014 WL 1366151 (D.
Haw. Apr. 4, 2014).
2
that it should not be treated as conferring federal question
jurisdiction.
Pascua’s offer to dismiss his FDCPA claim in
Pascua I rendered moot the issue of whether the FDCPA claim was
frivolous and was asserted merely to obtain jurisdiction.
Although cognizant that jurisdiction is ordinarily determined
based on circumstances existing at the time suit commences, this
court deemed it prudent, given Defendants’ allegations concerning
the FDCPA claim, to look at whether there was an independent
basis for federal jurisdiction for the remaining quiet title
claim.
The court additionally examined the quiet title claim for
an independent basis for federal jurisdiction with respect to
Defendant Option One because the quiet title claim was the only
claim asserted against that Defendant.
That is, because Option
One had not been sued in the withdrawn counts, it was not clear
that there was subject matter jurisdiction with respect to Option
One.
On May 28, 2014, Pascua filed a Complaint in this new
action (“Pascua II”) against the same parties he had sued in
Pascua I.
See ECF No. 1.
Based on the same factual
circumstances outlined in this court’s order in Pascua I, the
Pascua II Complaint asserts claims for violation of the FDCPA
(Count I), for slander of title (Count II), and for quiet title
(Count III).
Id.
Pascua did not assert a slander of title claim
in Pascua I, but the FDCPA and quiet title claims in Pascua II
3
are nearly identical to those in Pascua I.
III.
STANDARD.
A.
Rule 12(b)(1).
Under Rule 12(b)(1) of the Federal Rules of Civil
Procedure, a complaint may be dismissed for lack of subject
matter jurisdiction.
An attack on subject matter jurisdiction “may be facial
or factual.”
Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039
(9th Cir. 2004).
A facial attack asserts that “the allegations
contained in a complaint are insufficient on their face to invoke
federal jurisdiction.”
Id.
A factual attack, on the other hand,
“disputes the truth of the allegations that, by themselves, would
otherwise invoke federal jurisdiction.”
Id.
If the moving party makes a facial challenge, the
court’s inquiry is “confin[ed] . . . to allegations in the
complaint.”
Savage v. Glendale Union High Sch., Dist. No. 205,
Maricopa Cnty., 343 F.3d 1036, 1040 (9th Cir. 2003).
allegations are taken by the court as true.
Such
Courthouse News
Serv. v. Planet, 750 F.3d 776, 780 (9th Cir. 2014).
B.
Rule 12(b)(6).
Under Rule 12(b)(6) of the Federal Rules of Civil
Procedure, the court’s review is generally limited to the
contents of the complaint.
Sprewell v. Golden State Warriors,
266 F.3d 979, 988 (9th Cir. 2001); Campanelli v. Bockrath, 100
4
F.3d 1476, 1479 (9th Cir. 1996).
If matters outside the
pleadings are considered, the Rule 12(b)(6) motion is treated as
one for summary judgment.
See Keams v. Tempe Tech. Inst., Inc.,
110 F.3d 44, 46 (9th Cir. 1997); Anderson v. Angelone, 86 F.3d
932, 934 (9th Cir. 1996).
Courts may “consider certain
materials--documents attached to the complaint, documents
incorporated by reference in the complaint, or matters of
judicial notice--without converting the motion to dismiss into a
motion for summary judgment.”
United States v. Ritchie, 342 F.3d
903, 908 (9th Cir. 2003).
On a Rule 12(b)(6) motion to dismiss, all allegations
of material fact are taken as true and construed in the light
most favorable to the nonmoving party.
Fed’n of African Am.
Contractors v. City of Oakland, 96 F.3d 1204, 1207 (9th Cir.
1996).
However, conclusory allegations of law, unwarranted
deductions of fact, and unreasonable inferences are insufficient
to defeat a motion to dismiss.
Sprewell, 266 F.3d at 988; Syntex
Corp. Sec. Litig., 95 F.3d 922, 926 (9th Cir. 1996).
Additionally, the court need not accept as true allegations that
contradict matters properly subject to judicial notice or
allegations contradicting the exhibits attached to the complaint.
Sprewell, 266 F.3d at 988.
Dismissal under Rule 12(b)(6) may be based on either:
(1) lack of a cognizable legal theory, or (2) insufficient facts
5
under a cognizable legal theory.
Balistreri v. Pacifica Police
Dept., 901 F.2d 696, 699 (9th Cir. 1988) (citing Robertson v.
Dean Witter Reynolds, Inc., 749 F.2d 530, 533-34 (9th Cir.
1984)).
“[T]o survive a Rule 12(b)(6) motion to dismiss,
factual allegations must be enough to raise a right to relief
above the speculative level, on the assumption that all the
allegations in the complaint are true even if doubtful in fact.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal
quotation marks omitted); accord Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (“[T]he pleading standard Rule 8 announces does not
require ‘detailed factual allegations,’ but it demands more than
an unadorned, the-defendant-unlawfully-harmed-me accusation”).
“While a complaint attacked by a Rule 12(b)(6) motion to dismiss
does not need detailed factual allegations, a plaintiff’s
obligation to provide the ‘grounds’ of his ‘entitlement to
relief’ requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will
not do.”
Twombly, 550 U.S. at 555.
The complaint must “state a
claim to relief that is plausible on its face.”
Id. at 570.
“A
claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.”
556 U.S. at 678.
6
Iqbal,
IV.
ANALYSIS.
A.
Motion to Dismiss.
1.
Pascua Lacks Standing to Pursue His Quiet
Title and Slander of Title Claims.
Under Article III of the United States Constitution,
the jurisdiction of federal courts is limited to cases and
controversies.
(1992).
Lujan v. Defenders of Wildlife, 504 U.S. 555, 559
One of the means by which a federal court determines
whether a dispute is a justiciable case or controversy is the
doctrine of standing.
Id. at 560.
Standing may be raised
through a motion to dismiss under Rule 12(b)(1) because it bears
on a federal court’s subject matter jurisdiction.
White v. Lee,
227 F.3d 1214, 1242 (9th Cir. 2000).
To establish standing under Article III, “a plaintiff
must show (1) an injury in fact that is (a) concrete and
particularized and (b) actual or imminent . . . ; (2) that 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.”
Covington v. Jefferson Cnty., 358 F.3d 626, 637-38
(9th Cir. 2004) (internal quotation marks omitted).
The plaintiff has the burden of establishing standing
based on the complaint.
Raines v. Byrd, 521 U.S. 811, 818
(1997); Lujan, 504 U.S. at 561.
“Since they are not mere
pleading requirements but rather an indispensable part of the
7
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.
Pascua has not demonstrated that he has standing to
pursue his quiet title and slander of title claims.
With respect
to his quiet title claim, Pascua asks this court for a judgment
“declaring the rights of the parties” because “[o]nly with a
declaratory judgment can [Pascua] know to which party to make his
future mortgage payment.”
ECF No. 1, PageID # 34.
Pascua “does
not dispute that he owes a debt under the Note and Mortgage,” but
alleges that he is unsure of which party is entitled to payment.
Id.
As noted in Pascua I, Pascua’s asserted injury to support
his quiet title claim is apparently the possibility of being
“liable for double payments” if he pays the wrong party.
Id.
With respect to Pascua’s slander of title claim, this
court asked Pascua’s counsel to come to the hearing on the
present motion prepared to discuss how the slander of title claim
differs from the quiet title claim.
See ECF No. 34.
At the
hearing, Pascua’s counsel explained that the slander of title
claim differs from the quiet title claim by including allegations
that Option One, appearing in this action as Sand Canyon
Corporation, undertook specific action to intentionally harm
8
Pascua.
The specific action alleged was Option One’s recordation
of a mortgage after the mortgage had allegedly already been
assigned to another entity.
However, Pascua’s counsel conceded
that no two entities had recorded the same secured interest in
Pascua’s property for overlapping time periods.
The court was
thus at a loss as to how Pascua had suffered an actual injury
through Option One’s recordation of the mortgage.
Pressed at the
hearing on the present motion to identify what the alleged injury
to Pascua really was in light of counsel’s acknowledgment that no
two entities had recorded the same interest for the same time
period, Pascua’s counsel said that Pascua’s injury was his
inability to determine with whom he could negotiate, which entity
had the right to foreclose on his property, and which entity was
entitled to receive monthly mortgage payments.
Pascua’s
counsel’s statement demonstrates that the only injury really
being alleged in support of Pascua’s slander of title claim is
the same injury underlying his quiet title claim.
Contrary to Pascua’s contentions, this injury does not
support Article III standing.
The potential for double liability
relating to alleged uncertainty as to Defendants’ various
interests does not suffice as an injury-in-fact.
Pascua’s
counsel confirmed at the hearing on this motion that no two
entities have simultaneously demanded payment from Pascua.
Absent multiple demands or any allegation that foreclosure
9
proceedings have been commenced against him, the double liability
Pascua fears cannot reasonably be characterized as “imminent,” as
required for this court to find an injury-in-fact.
See Schmier
v. U.S. Court of Appeals for Ninth Circuit, 279 F.3d 817, 821
(9th Cir. 2002) (“[The] injury must have actually occurred or
must occur imminently; hypothetical, speculative or other
‘possible future’ injuries do not count in the standings
calculus.”).
Pascua’s injury is, at best, his confusion and
uncertainty as to which party can properly demand payment and,
correspondingly, which party he should pay.
Pascua fails to
demonstrate that this injury is sufficiently concrete or
particularized to support an injury-in-fact.
See Dicion, 2014 WL
1366151, at *4 (“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.”);
see also City of Los Angeles v. Lyons, 461 U.S. 95, 107 n.8
(1983) (“It is the reality of the threat of [objective] injury
that is relevant to the standing inquiry, not the plaintiff’s
subjective apprehensions.”).
Further, even assuming that
Pascua’s alleged uncertainty as to Defendants’ interests, or as
to which party is entitled to payment, constituted an injury-infact, Pascua’s alleged injury does not appear fairly traceable to
10
wrongful conduct by Defendants.
In his opposition to Defendants’ motion to dismiss,
Pascua appears to argue that his injury-in-fact is the
possibility of being “subjected to a wrongful foreclosure” as a
result of his alleged uncertainty regarding the parties’
respective interests.
ECF No. 32, PageID # 32.
Even if such a
purported injury had been alleged in the Complaint, it would not
constitute an injury-in-fact considering the absence of any
allegation that any Defendant has actually commenced foreclosure
proceedings against Pascua and considering that the possibility
of a wrongful foreclosure is premised on the same alleged
uncertainty that this court has already determined is
insufficient to confer standing.
Under these circumstances,
Pascua’s concern about a wrongful foreclosure is not “imminent.”
See Krottner v. Starbucks Corp., 628 F.3d 1139, 1143 (9th Cir.
2010) (“If a plaintiff faces a credible threat of harm, and that
harm is both real and immediate, not conjectural or hypothetical,
the plaintiff has met the injury-in-fact requirement for standing
under Article III.”); Schmier, 279 F.3d at 821 (“[The] injury
must have actually occurred or must occur imminently;
hypothetical, speculative or other ‘possible future’ injuries do
not count in the standings calculus.”).
Pascua also contends in his opposition that “the title
to his home has been clouded” and “[t]hat alone is an injury-in-
11
fact.”
ECF No. 32, PageID # 431.
This purported injury is
nothing but an unsupported legal conclusion insufficient to
establish an injury-in-fact.
See Maya v. Centex Corp., 658 F.3d
1060, 1068 (9th Cir. 2011).
A homeowner’s alleged uncertainty as
to the identity of a note holder does not create a cloud on
title.
See Klohs v. Wells Fargo Bank, N.A., 901 F. Supp. 2d
1253, 1261 (D. Haw. 2012) (“[E]ven assuming some yet unknown
entity is the true Note Holder entitled to receive payments, the
fact that the entity is unknown is not a cloud on the title.”
(quoting Homeyer v. Bank of Am., No. 1:12-cv-00021-EJL-CWD, 2012
WL 4105132, at *6 (D. Idaho Aug. 27, 2012) (internal quotation
marks omitted))).
Pascua’s allegations fail to establish his standing to
pursue the quiet title claim and slander of title claim.
Accordingly, this court lacks subject matter jurisdiction to hear
those claims.
2.
Pascua Appears to Have Standing to Pursue His
FDCPA Claim.
Defendants also argue that Pascua lacks standing to
pursue his FDCPA claim.
Defendants contend that Pascua’s
counsel’s admission that there was no damage associated with
Pascua’s FDCPA claim in Pascua I precludes Pascua from asserting
damages with respect to his FDCPA claim in this action and
prevents him from establishing an injury-in-fact to support
standing for the claim.
ECF No. 29-1, PageID # 366.
12
However, it
is not clear to this court that Pascua’s counsel’s statement
regarding the FDCPA claim in Pascua I precludes Article III
standing.
Counsel stated, “Counts 1 and 2 [the FDCPA and state
UDAP claims] were made in good faith because we’re alleging-we’re alleging deceptive behavior, but he’s right that there is
no damage on there.”
675-76.
Civ. No. 13-00406, ECF No. 36, PageID #
Viewed in the light most favorable to Pascua, that
statement, made just before voluntary dismissal of the claim,
appears to have concerned at most only actual damages, not every
injury-in-fact, which may involve other damages, such as
statutory damages.
The FDCPA allows for a maximum of $1,000 in statutory
damages even in the absence of actual injury.
See 15 U.S.C.
§ 1692k(a)(2)(A).
Pascua requests an award of statutory damages
in his Complaint.
See ECF No. 1, PageID # 31.
An alleged
violation of a statutory right not requiring actual damages
constitutes an injury-in-fact for standing purposes.
See
Tourgeman v. Collins Fin. Servs., Inc., 755 F.3d 1109, 1116 (9th
Cir. 2014); see also Robey v. Shapiro, Marianos & Cejda, L.L.C.,
434 F.3d 1208, 1212 (10th Cir. 2006).
Therefore, Pascua’s
counsel’s statement in Pascua I is insufficient to establish that
Pascua lacks standing to pursue his FDCPA claim in the present
action.
13
3.
Judicial Estoppel Does Not Apply.
Defendants argue alternatively that, even if Pascua has
standing, he is judicially estopped from asserting damages with
respect to his FDCPA claim given his counsel’s statement at the
hearing in Pascua I.
This court disagrees.
The crux of the judicial estoppel doctrine is “whether
the party has succeeded in persuading a court to accept that
party’s earlier position, so that judicial acceptance of an
inconsistent position in a later proceeding would create the
perception that either the first or the second court was misled.”
New Hampshire v. Maine, 532 U.S. 742, 750-51 (2001) (internal
quotation marks omitted).
No such concern arises in this case.
Pascua’s counsel discussed the absence of damage with respect to
the FDCPA and UDAP claims in Pascua I as a prelude to voluntarily
dismissing those counts of the Complaint.
This court took no
action premised on Pascua’s counsel’s representation that there
was no damage.
That is, the court did no more and no less as a
result of Pascua’s counsel’s statement regarding damages.
As a
result, there is no risk of inconsistent determinations here.
See id. (“Absent success in a prior proceeding, a party’s later
inconsistent position introduces no risk of inconsistent court
determinations, and thus poses little threat to judicial
integrity.” (internal quotation marks and citation omitted)).
Even if judicial estoppel applied, it would restrict
14
only a claim for actual damages, not a claim for up to $1,000 in
statutory damages even in the absence of actual damages under the
FDCPA.
At this point, this court is not persuaded that judicial
estoppel applies at all and therefore places no restriction on
the relief Pascua seeks under the FDCPA.
4.
Issue Preclusion Applies to Only the Quiet
Title Claim Against Option One.
Defendants also contend that the Complaint in Pascua II
is barred by issue preclusion because “the Court decided the same
jurisdictional issue in Pascua I.”
ECF No. 29-1, PageID # 358.
Issue preclusion “preclude[s] relitigation of both
issues of law and issues of fact if those issues were
conclusively determined in a prior action.”
Wolfson v. Brammer,
616 F.3d 1045, 1064 (9th Cir. 2010) (internal quotation marks
omitted).
Issue preclusion bars relitigation of an issue “if
four requirements are met: (1) there was a full and fair
opportunity to litigate the issue in the previous action; (2) the
issue was actually litigated; (3) there was final judgment on the
merits; and (4) the person against whom [issue preclusion] is
asserted was a party to or in privity with a party in the
previous action.”
Id. (internal quotation marks omitted).
A dismissal based on a curable defect in jurisdiction
is not generally considered an adjudication on the merits for the
purposes of issue preclusion, thus permitting a “second action on
the same claim . . . after correction of the deficiency.”
15
Id.
However, the dismissal does operate as a bar to relitigation of
the jurisdictional issue actually decided.
See Dicion v. Mann
Mortgage, LLC, Civ. No. 14-00252 JMS-KSC, 2014 WL 5827137, at *56 (D. Haw. Nov. 10, 2014); see also 18A Wright, Miller & Cooper,
Federal Practice & Procedure § 4436 (“[T]he dismissal permits a
second action on the same claim that corrects the deficiency
found in the first action.
The judgment remains effective to
preclude relitigation of the precise issue of jurisdiction or
venue that led to the initial dismissal.”).
As explained in Perry v. Sheahan, 222 F.3d 309 (7th
Cir. 2000), a decision cited by Defendants:
Although only judgments on the merits
preclude parties from litigating the same
cause of action in a subsequent suit, that
does not mean that dismissals for lack of
jurisdiction have no preclusive effect at
all. A dismissal for lack of jurisdiction
precludes relitigation of the issue actually
decided, namely the jurisdictional issue.
The difference is in the type of preclusion,
not the fact of preclusion. A judgment on
the merits precludes relitigation of any
ground within the compass of the suit, while
a jurisdictional dismissal precludes only
relitigation of the ground of that dismissal
. . . and thus has collateral estoppel (issue
preclusion) effect rather than the broader
res judicata effect that nowadays goes by the
name of claim preclusion.
Id. at 318 (internal quotation marks and brackets omitted).
Defendants seek dismissal based on issue preclusion
under Rule 12(b)(1) of the Federal Rules of Civil Procedure.
Having determined that Pascua has no injury-in-fact giving rise
16
to standing to pursue his quiet title or slander of title claims,
this court may, of course, examine alternative jurisdictional
bars to those claims under Rule 12(b)(1).
However, this court
questions whether issue preclusion is a jurisdictional matter at
all.
Issue preclusion appears more appropriately addressed under
Rule 12(b)(6).
See, e.g., Holcombe v. Hosmer, 477 F.3d 1094,
1097 (9th Cir. 2007) (analyzing preclusion under Rule 12(b)(6)).
This court does not normally assume jurisdiction and address Rule
12(b)(6) issues when it knows it lacks jurisdiction.
Even if Defendants are correct in viewing issue
preclusion as a jurisdictional issue, issue preclusion does not
have the far-reaching impact Defendants posit.
At most, issue
preclusion applies only to the portion of the quiet title claim
asserted against Option One.
That is, assuming this court’s
standing analysis does not suffice to deny jurisdiction over the
quiet title claim against Option One and the court searches for
an independent basis for federal jurisdiction over that claim
against Option One, the court would note the absence of federal
question jurisdiction (as Option One is not sued for an FDCPA
violation) and of diversity jurisdiction (because there is not
more than $75,000 in controversy).
The quiet title claim against
Option One in this action is the same as the quiet title claim
against Option One in Pascua I.
As this court determined in
17
Pascua I that more than $75,000 was not in controversy, that
issue has already been litigated and cannot be relitigated here.
By contrast, the quiet title claim against Homeward,
Wells Fargo, and Ocwen is not in the same posture as the quiet
title claim against those Defendants in Pascua I.
In the present
case, the FDCPA claim against those Defendants has not been
dismissed, and gives rise to federal question jurisdiction.
As a
result, this court has no need to determine whether diversity
jurisdiction exists with respect to those Defendants.
The
presence of federal question jurisdiction obviates the need for
Pascua to meet the amount-in-controversy diversity requirement
with respect to those Defendants.
Instead, with respect to those
Defendants, the court may exercise supplemental jurisdiction over
both the quiet title and slander of title claims under 28 U.S.C.
§ 1367.
As a result, the amount-in-controversy jurisdictional
issue actually decided in Pascua I is irrelevant with respect to
those Defendants named in the FDCPA claim asserted in the present
case.
5.
Leave to Amend.
When a complaint is dismissed, “[l] eave to amend may
be denied if a court determines that allegation of other facts
consistent with the challenged pleading could not possibly cure
the deficiency.”
Abagninin v. AMVAC Chem. Corp., 545 F.3d 733,
742 (9th Cir. 2008) (internal quotation marks omitted).
18
The
allegation of additional facts consistent with the Complaint in
this matter could not possibly establish Pascua’s standing to
pursue his quiet title claim or his slander of title claim.
Therefore, this court dismisses those claims without leave to
amend.
B.
Motion for Sanctions.
The Ninth Circuit has established that a court may
impose sanctions, including attorneys’ fees, when a party has
“acted in bad faith, vexatiously, wantonly, or for oppressive
reasons,” and that sanctions may issue “against counsel who
willfully abuse judicial processes.”
Fink v. Gomez, 239 F.3d
989, 991 (9th Cir. 2001) (internal quotation marks omitted).
While the court’s inherent power “extends to a full range of
litigation abuses,” to issue sanctions a court must find bad
faith or “conduct tantamount to bad faith.”
Id. at 991, 994.
“Sanctions are available for a variety of types of willful
actions, including recklessness when combined with an additional
factor such as frivolousness, harassment, or an improper
purpose.”
Id. at 994.
Defendants argue that this court should issue sanctions
against Pascua and his counsel pursuant to its inherent power.
This court does not find that Pascua or his counsel acted in bad
faith or engaged in conduct tantamount to bad faith.
the court denies Defendants’ request.
19
Therefore,
V.
CONCLUSION.
Defendants’ motion to dismiss is granted in part and
denied in part.
Pascua’s slander of title claim (Count II) and
quiet title claim (Count III) are dismissed with prejudice for
lack of jurisdiction, leaving Pascua’s FDCPA claim for further
adjudication.
Defendants’ motion for sanctions is denied.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, December 31, 2014.
/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge
Pascua v. Option One Mortgage Corporation, et al., Civ. No. 14-00248 SOM/KSC;
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS AND DENYING
MOTION FOR SANCTIONS
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