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Hestrin v. CitiMortgage, Inc.

United States District Court, C.D. California

February 25, 2015

Mark Hestrin,
v.
Citimortgage, Inc., et al.

CIVIL MINUTES - GENERAL

STEPHEN V. WILSON, District Judge.

Proceedings: IN CHAMBERS ORDER RE: MOTIONS TO REMAND, DISMISS, AND STRIKE [5] [7] [8]

Mark Hestrin sued CitiMortgage for alleged violations of the California Homeowner's Bill of Rights. CitiMortgage removed the case from state court, asserting diversity jurisdiction. Hestrin moved to remand while CitiMortgage moved to strike and dismiss.[1]

Background

According to the complaint, Hestrin took out a $1.2 million mortgage on his home. In July 2014, he submitted a loan modification application to his loan servicer, CitiMortgage. CitiMortgage then assigned him a "point of contact, " Monica Lopez, who advised him that the modification review would not stop the pending foreclosure.

About a week later, CitiMortgage notified Hestrin it received his "documents" but needed additional "documents." (The complaint does not identify what documents CitiMortgage referred to.) CitiMortgage gave Hestrin a month to supplement his file. A day before that deadline, however, CitiMortgage recorded a Notice of Default against Hestrin's home. Hestrin also says he "contacted CitiMortgage several times and was given many unjustified delays and inconsistent and vague status updates on [his] file."

Hestrin filed suit in state court. He alleged that CitiMortgage violated multiple provisions of California's Homeowner's Bill of Rights. He sought compensatory damages, statutory damages, costs, fees, punitive damages, and an injunction preventing CitiMortgage "from taking any action to sell, encumber, transfer or alienate the Property." CitiMortgage removed the case.

Discussion

I. Subject Matter Jurisdiction

A defendant may remove an action on the basis of diversity of citizenship if there is complete diversity among the parties, no defendant is a citizen of the forum state, and the amount in controversy exceeds $75, 000. Lincoln Property Co. v. Roche, 546 U.S. 81, 84 (2005); see also 28 U.S.C. §§ 1332, 1441, 1446. The presumption against removal requires the defendant to bear the burden. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). Where, as here, the complaint contains a request for equitable relief, the defendant must prove the facts supporting jurisdiction by a preponderance of the evidence. 28 U.S.C. §§ 1446(c)(2)(A)(i), (c)(2)(B).

The parties agree that they are diverse - Hestrin is a California citizen and CitiMortgage is a citizen of New York and Missouri - but they contest the amount in controversy. "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." Hunt v. Washington State Apple Adver. Comm'n, 432 U.S. 333, 347 (1977) (citations omitted); accord Chapman v. Deutsche Bank Nat. Trust Co., 651 F.3d 1039, 1045 n.2 (9th Cir. 2011); Cohn v. Petsmart, Inc., 281 F.3d 837, 840 (9th Cir. 2002) (per curiam). Here, Hestrin seeks to enjoin Citimortgage from "taking any action to sell, encumber, transfer or alienate the Property." In doing so, he put the value of his property at issue. Diamos v. Specialized Loan Servicing LLC, No. 13-cv-04997 NC, 2014 WL 3362259, at *2 (N.D. Cal. July 8, 2014) ("Diamos brings two actions for injunctive relief under Cal. Civ. Code § 2924.12 to enjoin material violations of § 2923.6 (dual-tracking) and § 2923.7 (single point of contact). To measure the amount in controversy for these injunctive claims, the Court looks to the value of the property Diamos seeks to protect."); see also Garfinkle v. Wells Fargo Bank, 480 F.2d 1074, 1076 (9th Cir. 1973) (finding that plaintiff put the real property's value in controversy by seeking to enjoin a foreclosure sale). Because Hestrin's mortgage places over a million dollars in controversy, Section 1332's requirements are met. See Major v. Wells Fargo Bank, N.A., No. 14-CV-998-LAB-RBB, 2014 WL 4103936, at *1 (S.D. Cal. Aug. 18, 2014) ("[T]he amount in controversy may be established by the value of the property or by the value of the loan.").

Hestrin contends that notwithstanding the value of his mortgage, the complaint's damages waiver controls. This argument conflates damages and amount-in-controversy. Hestrin's waiver, by its own terms, applies only to damages - it does nothing to affect the value of the injunction he seeks. E.g., Holcombe v. Smithkline Beecham Corp., 272 F.Supp.2d 792, 795, 798-99 (E.D. Wisc. 2003) (finding sufficient amount in controversy from requested injunctions even though the complaint disclaimed damages exceeding $75, 000); see also Guglielmino v. McKee Foods Corp., 506 F.3d 696, 700-01 (9th Cir. 2007). Since the Court must consider the value of potential equitable relief, which itself exceeds the jurisdictional threshold, the complaint's limitation is immaterial.[2]

II. The Legal Sufficiency of the Complaint

A motion to dismiss under Rule 12(b)(6) challenges the legal sufficiency of the claims stated in the complaint. Fed. R. Civ. Proc. 12(b)(6). To survive a motion to dismiss, a complaint "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "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." Id. "Allegations in the ...


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