MEMORANDUM AND ORDER RE: MOTION TO REMAND AND MOTION TO DISMISS
Plaintiff Donna Ruth O'Connor-Rose brought action against defendant J.P. Morgan Chase ("Chase") in state court, stating claims for breach of contract, fraud, violation of California Civil Code section 1788.2, violation of California Business and Professions Code section 17200 et seq., accounting, and injunctive relief arising from Chase's allegedly wrongful conduct related to a residential loan. After Chase removed the proceeding to this court on the basis of diversity jurisdiction, plaintiff brought a motion to remand. (Docket No. 8.) Chase has filed a motion to dismiss plaintiff's claims for fraud, violation of the Rosenthal Act, accounting, and injunctive relief for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6). (Docket No. 5.)
I. Factual and Procedural Background In approximately January of 2006, plaintiff purchased a home located at 3794 Mario Ave, Redding, California (the "Mario Avenue property") with a loan of $349,400 from Chase. (Notice of Remand Ex. A ("Compl.") ¶ 6 (Docket 1).) In connection with the loan, plaintiff executed a Promissory Note in favor of Chase, which was secured by a Deed of Trust encumbering the property. (Def.'s Req. for Judicial Notice Ex. A (Docket No. 6).) As of November of 2011, the principle balance on the loan was $321,581.93. (Compl. ¶ 9.)
Plaintiff alleges that she had cured a prior deficiency on her loan, and was current with required payments as of December 2010. (Id. ¶ 10.) She further alleges that although she made payments that were more than adequate to cover the monthly installments due under her loan, defendant failed to properly credit payments to her account throughout 2011. (Id. ¶¶ 11-46.). As a result of defendant's "crooked accounting," she claims that defendant repeatedly falsely represented that her loan was in default when in fact she had paid more than was due on the loan. (Id.)
According to plaintiff, in November of 2011, she received a Notice of Default from Chase falsely indicating that $5,185.58 was past due on her loan. (Id. ¶ 39.) In reality, plaintiff contends that as of November 2011 she had paid approximately $5,000 more than was due on her loan. (Id. ¶ 40.) When she alerted Chase to its accounting errors, Chase allegedly continued to misrepresent the amount due on her loan. (Id. ¶¶ 43-44.)
On December 6, 2011, plaintiff claims that another notice of default in the amount of $5,185.58 was served on her, when in fact she had paid "at least through February 2012." (Id. ¶¶ 45-46.) When plaintiff again complained to Chase about its alleged failure to properly credit her payments to her account, she contends that it responded that it was "investigating" the matter. (Id. ¶ 47.)
Plaintiff filed her Complaint on December 28, 2011, and the proceeding was removed to this court on January 27, 2012. (Docket No. 1.) Plaintiff has filed a motion to remand and Chase has filed a motion to dismiss.
A. Remand to State Court "[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district . . . where such action is pending." 28 U.S.C. § 1441(a). The Ninth Circuit strictly construes the removal statute against removal jurisdiction, and the party seeking removal bears the burden of establishing federal jurisdiction. Geographic Expeditions, Inc. v. Estate of Lhotka, 599 F.3d 1102, 1107 (9th Cir. 2010) (citing Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)). Any questions regarding the propriety of removal are resolved in favor of the party moving for remand. Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). If removal was improper, "the district court lack[s] subject matter jurisdiction, and the action should [be] remanded to the state court." Toumajian v. Frailey, 135 F.3d 648, 653 (9th Cir. 1998) (citing 28 U.S.C. § 1447(c)).
Federal courts have original jurisdiction over cases where complete diversity exists between the parties and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332. Here, the parties do not dispute that diversity exists between all parties. The remaining issue, therefore, is whether the amount in controversy exceeds $75,000.
One of the remedies requested by plaintiff is a permanent injunction barring Chase from initiating or completing any foreclosure proceedings related to the Mario Avenue property. "In actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured by the value of the object of the litigation." Cohn v. Petsmart, 281 F.3d 837, 840 (9th Cir. 2002) (citing Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 347 (1977)). Where the state court complaint does not specify an exact damages figure, the defendant must establish that the amount in controversy exceeds the statutory minimum by a preponderance of the evidence. Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996).
In cases where, as here, plaintiff seeks to enjoin a foreclosure sale, "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." Reyes v. Wells Fargo Bank, N.A., No. C-10-01667, 2010 WL 2629785, at *5 (N.D. Cal. June 29, 2010); see also Garcia v. Citibank, N.A., No. 2:09--CV--03387, 2010 WL 1658569, at *2 (E.D. Cal. Apr. 23, 2010); Cabriales v. Aurora Loan Servs., No. C 10-161, 2010 WL 761081, at *4 (N.D. Cal. Mar. 2, 2010).
Chase has shown that the Mario Avenue property was used to secure a loan of $349,000. (Def.'s Req. for Judicial Notice Ex. A.) Although its property value may have decreased somewhat since then, it is likely that the Mario Avenue property's current value exceeds $75,000. See Cabriales, 2010 WL 761081, at *3 (absent evidence to the contrary, property used to secure a loan of $465,000 satisfied amount-in-controversy). The court also notes that as of November 2011, the total principle balance on the loan is over $300,000. See Reyes, 2010 WL 2629785, at *5 (noting that in foreclosure cases, some courts determine the amount in controversy according to the amount of indebtedness on the loan). This is sufficient to suggest by a preponderance of the evidence that the amount in controversy is above $75,000.
In arguing that the statutory minimum is not met, plaintiff represents that she has abandoned her requests for injunctive relief, so that the value of the house should no longer be considered in calculating the amount in controversy.*fn1
This argument fails to demonstrate that remand would be appropriate for two primary reasons. First, plaintiff has not amended the complaint or otherwise taken steps to eliminate her request for injunctive relief. Second, "diversity jurisdiction is determined at the time the action commences, and a federal court is not divested of jurisdiction . . . if the amount in controversy subsequently drops below the minimum jurisdictional level." Hill v. Blind Indus. & Servs. of Md., 179 F.3d 754, 757 (9th Cir. 1999). Plaintiff cannot rely on "[e]vents occurring subsequent to the institution of suit which reduce the amount recoverable below the statutory limit" to show that removal was improper because such events "do not oust jurisdiction." Budget Rent-A-Car, Inc. ...