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Mamola v. JPMorgan Chase Bank, N.A.

United States District Court, E.D. California

April 1, 2015

JAMES MAMOLA, et al., Plaintiffs,
JPMORGAN CHASE BANK, N.A., an Ohio corporation, et al., Defendants.


MORRISON C. ENGLAND, Jr., Chief District Judge.

Plaintiffs James and Laurie Mamola ("Plaintiffs") initiated this action against JPMorgan Chase Bank, N.A., as successor by merger to Chase Home Finance, LLC ("Chase"), Federal National Mortgage Association ("Fannie Mae"), and Quality Loan Service Corporation ("Quality") (collectively "Defendants") on August 29, 2014, in Sacramento County Superior Court. Pls. Compl., ECF No. 1-1. Chase and Fannie Mae (together "Removing Defendants") removed the action to this Court on November 14, 2014, after which Plaintiffs filed their First Amended Complaint ("FAC"), ECF No. 5. Presently before the Court are Plaintiffs' Motion to Remand (ECF No. 6) and Removing Defendants' Motion to Dismiss (ECF No. 8). For the following reasons, Plaintiffs' Motion is DENIED, and Removing Defendants' Motion is GRANTED with leave to amend.[1]


In April 2007, Plaintiffs obtained a home loan, executing a Note secured by a Deed of Trust.[3] A little over two years later, Plaintiffs, who were then current on their mortgage payments, contacted their loan servicer, the predecessor to Defendant Chase, to attempt to negotiate a loan modification. Plaintiffs were advised they would not be considered for a modification until they had missed payments. Plaintiffs thereafter stopped making mortgage payments and, in August 2009, applied for a loan modification. Over the course of the next several months, Chase repeatedly requested financial documentation, many times requesting the same documents Plaintiffs had already previously provided. In fact, according to Plaintiffs, they submitted the same packets of documents to Chase on at least four separate occasions.

Eventually, in March 2010, Plaintiffs were offered a trial payment plan. Under that plan, Plaintiffs were required to make three consecutive timely payments, after which Chase would contact Plaintiffs to advise as to how future payments should be made. Despite Plaintiffs making the requested payments, however, they were never contact by Chase. Instead, Chase recorded a Notice of Default on Plaintiffs' loan, and, subsequently, in July 2010, recorded a Notice of Trustee's Sale.

In response, Plaintiffs filed for bankruptcy, but Plaintiffs did not schedule the claims raised here with the bankruptcy court. Defs.' Request for Judicial Notice ("RJN"), ECF No. 8-2, Exs. A-C.[4] Eventually Plaintiffs' debts were discharged. Id., Exh. D.

While the bankruptcy proceedings were ongoing, Chase continued to request from Plaintiffs additional financial documentation relevant to their modification application. During this time, Chase also purportedly foreclosed on the property, later realized that sale had been in error, rescinded it, and dismissed an unlawful detainer action it had filed against Plaintiffs. Plaintiffs thereafter were permitted to submit a new loan modification application. Overall, Plaintiffs spent approximately two years attempting to secure a modification before they were finally advised by Chase in February 2011 that they did not qualify based on their income. The property was sold at auction on September 21, 2012. According to Plaintiffs, had they known at the outset that they would not qualify for a loan modification, they could have taken steps to cure their default and would not have lost their home.

As a consequence, Plaintiffs initiated this action against Defendants on August 29, 2014, in Sacramento County Superior Court alleging only state law causes of action. That same day, Plaintiffs moved to reopen their bankruptcy proceedings to schedule their instant claims and to have those claims abandoned by the bankruptcy trustee. On approximately October 14, 2014, Quality, the only Defendant that is a citizen of California, filed a Declaration of Non-Monetary Status ("DNMS") in state court pursuant to California Civil Code section 2924l. The following month, Removing Defendants removed the action to this Court and filed their Motion to Dismiss. Plaintiffs subsequently filed their own Motion to Remand.


A. Motion to Remand

When a case "of which the district courts of the United States have original jurisdiction" is initially brought in state court, the defendant may remove it to federal court "embracing the place where such action is pending." 28 U.S.C. § 1441(a). There are two bases for federal subject matter jurisdiction: (1) federal question jurisdiction under 28 U.S.C. § 1331; and (2) diversity jurisdiction under 28 U.S.C. § 1332. A district court has federal question jurisdiction in "all civil actions arising under the Constitution, laws, or treaties of the United States." Id . § 1331. A district court has diversity jurisdiction "where the matter in controversy exceeds the sum or value of $75, 000, ... and is between citizens of different states, or citizens of a State and citizens or subjects of a foreign state...." Id . § 1332(a)(1)-(2). Diversity jurisdiction requires complete diversity of citizenship, with each plaintiff being a citizen of a different state from each defendant. Id .; Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68 (1996) (stating that complete diversity of citizenship is required).

A defendant may remove any civil action from state court to federal district court if the district court has original jurisdiction over the matter. 28 U.S.C. § 1441(a). "The party invoking the removal statute bears the burden of establishing federal jurisdiction." Ethridge v. Harbor House Rest., 861 F.2d 1389, 1393 (9th Cir. 1988) (citing Williams v. Caterpillar Tractor Co., 786 F.2d 928, 940 (9th Cir. 1986)). Courts "strictly construe the removal statute against removal jurisdiction." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (internal citations omitted). "[I]f there is any doubt as to the right of removal in the first instance, " the motion for remand must be granted. Id . Therefore, "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded" to state court. 28 U.S.C. § 1447(c).

B. Motion to Dismiss

On a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), [5] all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief" in order to "give the defendant fair notice of what the... claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint attacked by a Rule 12(b)(6) motion to dismiss does not require detailed factual allegations. However, "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." Id . (internal citations and quotations omitted). A court is not required to accept as true a "legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009) (quoting Twombly, 550 U.S. at 555). "Factual allegations must be enough to raise a right to relief ...

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