Stewart v. Bank of Am., N.A.

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

Case No. 16-cv-05322-JST

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

December 28, 2016

ORDER DENYING PLAINTIFFS' MOTION TO REMAND AND DENYING DEFENDANTS' MOTION TO DISMISS

Re: ECF Nos. 5, 17

Defendants Bank of America, N.A., U.S. Bank Trust Company, N.A., U.S. Bancorp,¹ and Caliber Homes Loans, Inc. (collectively, "Defendants") removed this action from the Sonoma County Superior Court on diversity jurisdiction grounds, and filed a Motion to Dismiss. ECF No. 1 ¶ 11; ECF No. 5. Plaintiffs Christopher Charles Stewart and Kara Michelle Stewart (collectively, "Plaintiffs") move to remand the action, arguing the federal "amount in controversy" requirement has not been satisfied. ECF No. 17. Plaintiffs also oppose Defendants' Motion to Dismiss. ECF No. 22. For the reasons stated below, the Court will deny both Plaintiffs' Motion to Remand and Defendants' Motion to Dismiss.

I. BACKGROUND

A. Facts and Procedural History

On August 16, 2016, Plaintiffs filed a complaint ("the Complaint") against Defendants in the Superior Court of California, County of Sonoma. See ECF No. 17-1. The gravamen of the Complaint alleges Defendants reneged on their obligations pursuant to a loan modification agreement. Id. at 8. Plaintiffs claim they applied for a loan modification with Bank of America,Bank of America approved them for a trial period, and Plaintiffs complied with the terms of the trial period by making three payments in the amount of $3,343.84 over the course of three months. Id. at 10. Bank of America then approved Plaintiffs' loan modification application and provided Plaintiffs with a loan modification agreement. Id. at 11. Bank of America ultimately denied Plaintiffs' loan modification, however, claiming that Plaintiffs failed to return signed modification documents by the specified due date - a fact Plaintiffs dispute. Id. Plaintiffs' Complaint raises three causes of action: (1) breach of contract; (2) promissory estoppel; and (3) violation of Business and Professions Code section 17200. Id. at 7. The Complaint does not allege an amount in controversy.

On September 16, 2016, Defendants removed the action to this Court, asserting diversity jurisdiction. ECF No. 1 ¶ 11. Defendants also filed a Motion to Dismiss, arguing (1) Plaintiffs fail to state a claim upon which relief can be granted and (2) judicial estoppel bars Plaintiffs' claims. See ECF No. 5. Plaintiffs contend Defendants have not proven the amount in controversy exceeds $75,000 by a preponderance of the evidence, and claim only the three trial period payments, totaling $10,031.52, are in controversy. ECF No. 17 at 7-8. Since the Motion to Remand presents a "threshold jurisdictional question," the Court will address it before turning to Defendants' Motion to Dismiss. Lowry v. Barnhart, 329 F.3d 1019, 1022 (9th Cir. 2003) (citing Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94 (1998)).

B. Requests for Judicial Notice

Pursuant to Federal Rule of Evidence 201(b), "[t]he court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." The Court may properly take judicial notice of materials attached to the complaint and of matters of public record. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). A court "must take judicial notice if a party requests it and the court is supplied with the necessary information." Fed. R. Evid. 201(c)(2). However, the Court takes judicial notice only of the existence of the document, not of the veracity of allegations or legal conclusions asserted in it. See Lee, 250 F.3d at 689-90.

The parties have filed several requests for judicial notice: two are filed by the Defendants, ECF Nos. 5-1 and 26, and one is filed by Plaintiffs, ECF No. 17-1.

In support of their Opposition to Plaintiffs' Motion to Remand, Defendants request judicial notice of the adjustable rate note, the December 2014 loan modification agreement, and the Truth-in-Lending disclosure statement for the Plaintiffs' mortgage loan. See ECF No. 26. Because a court may take judicial notice of documents whose authenticity is not contested and upon which the plaintiff's complaint relies, see Lee, 250 F.3d at 688-89, the Court grants this request for judicial notice. In support of their Motion to Dismiss, Defendants request judicial notice of the assignment of deed of trust, the docket for Plaintiffs' Chapter 13 bankruptcy petition, the second amended Chapter 13 plan ("the Plan"), the order confirming the plan ("the Order"), the debtor's opposition to one of the Defendants motions for relief from automatic stay, the motion permitting parties to enter into a loan modification agreement, the debtor's opposition to the motion to enter into a loan modification agreement, and the Bankruptcy Court for the Northern District's guidelines regarding residential loan modifications ("the Guidelines"). See ECF No. 5-1. Because the accuracy of these documents is readily determinable through sources whose accuracy cannot reasonably be questioned, the Court grants this request for judicial notice as well.

In support of their Motion to Remand, Plaintiffs request judicial notice of the Complaint, Defendants' Notice of Removal to this Court, and an order from another court in this District, denying a motion to remand to state court. See ECF No. 17-1. The Court finds the first two documents appropriate for judicial notice as documents in the public record not reasonably subject to dispute because their accuracy can readily be determined from sources whose accuracy cannot reasonably be questioned. Moreover, because a court "may take judicial notice of proceedings in other courts . . . if those proceedings have a direct relation to matters at issue," Bias v. Moynihan, 508 F.3d 1212, 1225 (9th Cir. 2007), the Court will also take judicial notice of the court order.

II. MOTION TO REMAND

A. Legal Standard

"[A]ny civil action brought in a [s]tate court of which the district courts of the United States have original jurisdiction, may be removed by a defendant . . . to [a] federal district court."28 U.S.C. § 1441(a). "A defendant may remove an action to federal court based on federal question jurisdiction or diversity jurisdiction." Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (citing 28 U.S.C. § 1441). To invoke federal diversity jurisdiction under 28 U.S.C. § 1332(a), the amount in controversy must "exceed[] the sum or value of $75,000." Urbino v. Orkin Servs. of California, Inc., 726 F.3d 1118, 1121 (9th Cir. 2013). "Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus v. Miles, 980 F.2d 564, 566 (9th Cir. 1992). The court "resolves all ambiguity in favor of remand." Hunter, 582 F.3d at 1042. "'[T]he defendant always has the burden of establishing that removal is proper.'" Geographic Expeditions, Inc. v. Estate of Lhotka ex rel. Lhotka, 599 F.3d 1102, 1107 (9th Cir. 2010) (quoting Gaus, 980 F.2d at 566).

The parties agree that complete diversity exists, as Plaintiffs are domiciled in California and Bank of America, Caliber, and U.S. Bank Trust Co. are located in North Carolina, Delaware, and Ohio, respectively. ECF No. 1 at 4. The sole dispute is whether the amount in controversy exceeds $75,000. The Complaint does not allege an amount in controversy, but seeks economic damages according to proof, general damages according to proof, attorneys' fees and costs of suit, and "[f]or such other relief and further relief as the court may deem just and proper." ECF No. 17-1 at 14.

1. Amount in Controversy

"The jurisdictional minimum may be satisfied by claims for special and general damages, punitive damages, and attorneys' fees." Simmons v. PCR Technology, 209 F. Supp. 2d 1029, 1031 (N.D. Cal. July 2, 2002). "[W]here it is unclear or ambiguous from the face of a state-court complaint whether the requisite amount in controversy is pled . . . the removing defendant bears the burden of establishing, by a preponderance of the evidence, that the amount in controversy exceeds the jurisdictional amount." Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007) (quoting Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996)). "Under this burden, the defendant must provide evidence establishing that it is 'more likely than not' that the amount in controversy" requirement is met. Sanchez, 103 F.3d at 404; see also Gaus, 980 F.2d at 566-67 ("If it is unclear what amount of damages the plaintiff has sought, . . . then thedefendant bears the burden of actually providing the facts to support jurisdiction, including the jurisdictional amount."). Importantly, the Ninth Circuit notes:

The amount-in-controversy inquiry in the removal context is not confined to the face of the complaint . . . . Nor does it present an insurmountable obstacle to quantify the amount at stake when intangible harm is alleged; the parties need not predict the trier of fact's eventual award with one hundred percent accuracy . . . . Instead, although we have not addressed the type of evidence defendants may rely upon to satisfy the preponderance of the evidence test for jurisdiction, we have endorsed the Fifth Circuit's practice of considering facts presented in the removal petition as well as any summary-judgment type evidence relevant to the amount in controversy at the time of removal.

Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004) (internal quotations, citations, and alterations omitted). A speculative argument regarding the potential value of the amount in controversy is insufficient. Singer v. State Farm Mutual Auto. Ins. Co., 116 F.3d 373, 376 (9th Cir. 1987); Gaus, 980 F.2d at 567.

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