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Wilson v. JPMorgan Chase Bank, N.A.

United States District Court, C.D. California

September 6, 2017

Graham and Tammie A. Wilson
v.
JPMorgan Chase Bank, N.A., et al.

          Present: Honorable JESUS G. BERNAL, UNITED STATES DISTRICT JUDGE

          CIVIL MINUTES-GENERAL

         Proceedings: Order: (1) GRANTING Plaintiffs' Motion to Remand and REMANDING the matter to Riverside Superior Court (Dkt. No. 11); (2) DENYING Plaintiffs' Request for Attorney's Fees (id.); and (3) VACATING the September 11, 2017 Hearing (IN CHAMBERS)

         Before the Court is Plaintiffs' Motion to Remand the action to Riverside Superior Court and Plaintiffs' request for attorney's fees. (Dkt. No. 11.) These matters are appropriate for resolution without a hearing. See Fed.R.Civ.P. 78; L.R. 7-15. After considering all papers timely filed in support of, and in opposition to the matters, the Court: (1) GRANTS Plaintiffs' Motion to Remand, and (2) DENIES Plaintiffs' Request for Attorney's Fees. (Dkt. No. 11.) The matter is hereby REMANDED to Riverside Superior Court, and the September 11, 2017 hearing is VACATED.

         I. BACKGROUND

         A. Procedural History

         On March 27, 2017, Graham and Tammie A. Wilson (“Plaintiffs”) filed a complaint in Riverside Superior Court against JPMorgan Chase Bank, N.A. (“Chase”), MTC Financial, Inc. dba Trustee Corps. (“MTC”), Preeminent Investment Corporation (“Preeminent”), and Does 1 through 20 (collectively, “Defendants”), alleging thirteen causes of action pertaining to Defendants' alleged failure to properly follow the pre-foreclosure procedures established in the California Homeowner's Bill of Rights. (“Complaint, ” Dkt. No. 1-1.)

         On June 7, 2017, Defendants filed a Notice of Removal based on diversity jurisdiction, 28 U.S.C. § 1332. (Notice of Removal, Dkt. No. 1 at ¶ 11.) On July 7, 2017, Plaintiffs filed a Motion to Remand the matter to Riverside Superior Court, arguing that Defendants have not met their burden to show complete diversity exists between the parties and that the amount in controversy has been met. (“Motion, ” Dkt. No. 11.) On August 23, 2017, Defendants filed an Opposition to Plaintiffs' Motion. (“Opposition, ” Dkt. No. 17.) Plaintiffs filed their Reply on August 24, 2017, which attached an accompanying exhibit. (“Reply, ” Dkt. No. 18; Ex. A, Dkt. No. 18-1.)

         B. Factual Allegations and Claims

         Plaintiffs allege that they obtained a loan in the amount of $435, 350 on April 27, 2007 secured by a Deed of Trust on 35929 Lexi Lane, Wildomar, California 92595 (“subject property”). (Compl. at ¶ 9.) The Deed of Trust identifies Chase as the lender and beneficiary, Chicago Title Company as the trustee, and the Wilsons as the borrowers. (Id.) Plaintiffs allegedly experienced financial difficulties and defaulted on their loan sometime in 2008. (Id.) Plaintiffs allege that on April 29, 2009, a Notice of Default and Election to Sell Under Deed of Trust was recorded with the Riverside County Recorder's Office. (Id.) On June 4, 2009, a Substitution of Trustee was recorded, naming NDEx West LLC (“NDEx”) the new trustee. (Id. at ¶ 10.) On August 3, 2009, a Notice of Trustee's sale was allegedly recorded. (Id. at ¶ 11.) Thereafter, a series of Notices of Trustees Sales and Substitutions of Trustees were recorded with the Riverside County Recorder's Office spanning November 2010 to July 2012. (Id. at ¶¶ 12-14.) Plaintiffs allege that on August 31, 2012, a Trustee's Deed Upon Sale conveyed title to the subject property to Preeminent for a sale price of $253, 200. (Id. at ¶ 15.) Plaintiffs allege, however, that on April 25, 2013, a Notice of Rescission of Trustee's sale was recorded conveying the property back to NDEx. (Id. at ¶ 16.) A Notice of Rescission of Notice of Default was allegedly recorded by NDEx on February 21, 2014, and then by MTC on March 29, 2016. (Id. at ¶¶ 17, 18.)

         As a result of the foregoing, Plaintiffs allege that the conveyance to Preeminent, which triggered a reassessment of the subject property, “more than doubled their mortgage payment, to an amount the Wilson's could not afford to pay.” (Id. at ¶ 19.) Plaintiffs allege that during this time, they continued making monthly mortgage and escrow payments until their lender started rejecting payments. (Id. at ¶ 20.) Plaintiffs allege that when their lender started rejecting payments, they were $32, 000 in arrears. (Id.)

         In December 2015, Plaintiffs allegedly entered into an agreement with Chase to pay all arrears in exchange for reinstating the loan at $1, 300 per month (“Reinstatement Agreement”). (Id. at ¶21.) Still, two months later, Chase allegedly increased Plaintiffs' monthly payment to $2, 800 per month, adding an additional $7, 500 in arrears. (Id. at ¶ 22.) Plaintiffs allege that Chase never responded to their efforts to work out more affordable terms, and Chase was aware of the negative balance in the Escrow account when it calculated the reinstatement amount. (Id. at ¶ 24, 26.) Plaintiffs, therefore, maintain that Chase failed to conduct proper due diligence and “[b]ut for Chase's wrongful foreclosure of the property the county never would have had cause to reassess the property.” (Id. at ¶ ¶ 27, 31.) On January 26, 2017, a Notice of Trustee Sale was recorded. (Id. at ¶ 33.)

         The Notice of Default allegedly contained a false declaration of compliance under California Civil Code section 2923.55 because it stated that Plaintiffs were contacted and assessed for foreclosure prevention and 30 days had passed even though Plaintiffs allege they were never contacted. (Id. at ¶ 32.) Plaintiffs also allege that Defendants: (a) failed to properly record a substitution of trustee under California Civil Code 2934, (b) failed to, at any point, assign a single point of contact despite Plaintiffs' requests, (c) initiated unlawful non-judicial foreclosure proceedings, yet failed to consider Plaintiffs for foreclosure prevention alternatives, and then, (d) denied Plaintiffs any foreclosure alternatives without any explanation. (Id. at ¶ 32.) Plaintiffs further allege that they had to pay penalties, interest, and back dues that they would not have owed but for Defendants' breach of California Civil Code section 2924. (Id. at ¶ 40.) On those bases, Plaintiffs bring six claims under the California Homeowner's Bill of Rights, Cal. Civ. Code § 2924, et seq., and claims for unfair business practices, Cal. Bus. & Profs. Code § 17200, breach of implied covenant of good faith and fair dealing, injunctive relief, negligence, quiet title, negligent misrepresentation, and breach of contract loan modification agreement.[1]

         II. DISCUSSION

         A. ...


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