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Paulhus v. Fay Servicing, LLC

United States District Court, E.D. California

May 1, 2014



WILLIAM B. SHUBB, District Judge.

Plaintiffs Scott Paulhus and Lynette Paulhus brought this action against defendants Fay Servicing, LLC, Caliber Home Loans, Inc., formerly known as Vericrest Financial, Inc., and Summit Management Company, LLC, arising out of the foreclosure of plaintiffs' home. After plaintiffs filed this action in Placer County Superior Court, defendants removed to federal court on the basis of diversity jurisdiction. (Docket No. 1.) Plaintiffs contend that removal was improper and move to remand the action to Placer County Superior Court pursuant to 28 U.S.C. § 1447.[1]

Federal courts have original jurisdiction over civil actions between citizens of different states in which the amount in controversy exceeds $75, 000, exclusive of interest and costs. 28 U.S.C. § 1332. Under 28 U.S.C. § 1441, "civil action[s] brought in a State court of which the district courts of the United States have original jurisdiction may be removed by the defendant or defendants to federal district court." Abrego Abrego v. Dow Chem. Co. , 443 F.3d 676, 679-80 (9th Cir. 2006) (alteration in original) (citations and internal quotation marks omitted). "In addition, all defendants must agree to removal and removal must occur within one year of the commencement of the action." Id . (citing United Computer Sys., Inc. v. AT&T Corp. , 298 F.3d 756, 762 (9th Cir. 2002)).

Plaintiffs do not dispute that they are citizens of California and are therefore diverse from defendants, who are business entities incorporated under Delaware law and whose principal places of business are outside of California. (See Not. of Removal ¶ 4.) Defendants' Notice of Removal also represents that each defendant consents to removal, (id. ¶ 6), and thereby satisfies the unanimity requirement. See Proctor v. Vishay Intertechnology Inc. , 584 F.3d 1208, 1225 (9th Cir. 2009) ("One defendant's timely removal notice containing an averment of the other defendants' consent and signed by an attorney of record is sufficient.").

Plaintiffs contend that removal was nonetheless improper because the amount in controversy does not exceed $75, 000. "In actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured by the object of the litigation." Cohn v. Petsmart, Inc. , 281 F.3d 837, 840 (9th Cir. 2002) (quoting Hunt v. Wash. State Apple Advertising Comm'n , 432 U.S. 333, 347 (1977)). In actions arising out of the foreclosure of a plaintiff's home, the amount in controversy may be established by the value of the property, see, e.g., Chapman v. Deutsche Bank Nat'l Trust Co. , 651 F.3d 1039, 1045 n.2 (9th Cir. 2011) ("[T]he object in litigation is the Property, which was assessed at a value of more than $200, 000, and therefore satisfies the amount-in-controversy requirement."), or by the value of the loan, see, e.g., Ngoc Nguyen v. Wells Fargo Bank, N.A. , 749 F.Supp.2d 1022, 1028 (N.D. Cal. 2010) ("Numerous courts have held that, where a complaint seeks to invalidate a loan secured by a deed of trust, the amount in controversy is the loan amount.").

Here, the Deed of Trust indicates that plaintiffs borrowed $850, 000 against their home, which far exceeds the $75, 000 required for diversity jurisdiction. (See Compl. Ex. A (Docket No. 1-1).) Plaintiffs do not offer any evidence suggesting that the amount in controversy is below $75, 000. Instead, plaintiffs insist, without citation, that "[i]f an in-state plaintiff wishes to remain in state court, all it needs to do is to refrain from alleging any particular sum in its prayer for relief." (Pls.' Mem. at 4:18-19 (Docket No. 9).) Not so. Even if a plaintiff declines to allege a particular amount in controversy, removal is appropriate where a defendant can show by a preponderance of the evidence, as defendants have done here, that the amount in controversy exceeds $75, 000. See Sanchez v. Monumental Life Ins. Co. , 102 F.3d 398, 404 (9th Cir. 1996). And even if plaintiffs might have been able to defeat jurisdiction from the outset by stating that they would seek to recover no more than $75, 000, it is black-letter law that plaintiffs cannot do so now that jurisdiction has attached. See St. Paul Mercury Ins. Co v. Red Cab Co. , 303 U.S. 283, 292 (1938) (holding that when "the plaintiff after removal, by stipulation, by affidavit, or by amendment of his pleadings, reduces the claim below the requisite amount, this does not deprive the district court of jurisdiction"). For the foregoing reasons, the court views plaintiffs' motion to remand as frivolous.

IT IS THEREFORE ORDERED that plaintiffs' motion to remand be, and the same hereby is, DENIED.

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