Lawrence J. O'Neill, UNITED STATES CHIEF DISTRICT JUDGE.
On March 16, 2018, Deborah Barefield ("Plaintiff") filed a pro se complaint (First Amended Complaint, or "FAC"
On August 19, 2005, decedent, Thomas W. Hatch, executed a loan in the amount of $477,000.00 to purchase a home located at 11301 Darlington Avenue, Bakersfield, California 93312 (the "Property"). SAC ¶ 7; ECF No. 34, Request for Judicial Notice, Ex. A. The loan was secured by a deed of trust, which identified the lender as Crevecor Mortgage Inc. ECF No. 34, Ex. A. The deed of trust further identified Mortgage Electronic Registration Systems, Inc. ("MERS") as the beneficiary. Id. According to the SAC, the decedent faced "financial difficulties" and ceased making payments on the subject loan in 2006. SAC ¶ 7. The SAC states that decedent had been "promised a monthly payment in the amount of $1800.00, [but that] the monthly payment was in fact $3400.00" and decedent was unable to obtain a loan modification. Id. ¶ 8. The deed of trust was subsequently assigned to HSBC Mortgage Services, Inc. ("HSBC") in an assignment recorded July 1, 2008. ECF No. 34, Ex. B. On October 23, 2017, HSBC recorded its assignment of the deed of trust to U.S. Bank, N.A., as Trustee for LSF10 Master Participation Trust. Id., Ex. D. Caliber Home Loans ("Caliber") took over servicing the loan. Id. In a document recorded on November 22, 2017, Summit Management Company, LLC ("Summit") was substituted as the trustee of record. ECF No. 34, Ex. E. Caliber initiated foreclosure proceedings by recording a notice of default on December 15, 2017, which stated that the decedent-borrower owed $497,255.30. Id., Ex. F. On March 13, 2018, Caliber recorded a notice of trustee's sale and set the date of sale for April 9, 2018. ECF No. 7, Ex. G. The notice stated that the amount of the unpaid balance and other charges was $994,009.90. Id. Plaintiff filed the FAC three days later. Defendants Caliber and Summit removed to this Court on April 18, 2018. ECF No. 1.
Following the filing of the motion to remand, motion to dismiss the FAC, motion for judgment on the pleadings, and motion to expunge notice of pendency of action, the Court issued an order to show cause why Plaintiff, proceeding pro se as administrator of the Estate of Thomas W. Hatch, may continue to prosecute the action. ECF No. 20. Plaintiff responded, ECF No. 25, and satisfied the Court that as the sole beneficiary of the Estate, she is entitled to represent the estate pro se, ECF No. 26.
In an order dated August 2, 2018, the Court granted the motion to dismiss the FAC and the motion for judgment on the pleadings, denied the motion to remand, and held in abeyance the motion to expunge notice of pendency of action. ECF No. 28. Plaintiff then filed the SAC, which adds allegations concerning the effectiveness of the assignment of the deed of trust. In particular, Plaintiff raises questions about the transfer based on the allegation that Crevecor did not assign the deed of trust to HSBC until 2008, while HSBC received taxes from Hatch in 2004. SAC ¶ 9. The SAC alleges upon information and belief that the assignment from MERS to HSBC that was attempted in 2005 failed to transfer "any legal rights of ownership of the trust deed to HSBC" and that the failure was the reason that HSBC did not follow through on attempts to foreclose on the property. SAC ¶ 10.
Defendants again moved to dismiss. On October 12, 2018, during the pendency of the motions to dismiss, Plaintiff filed another complaint in California Superior Court for the County of Kern against the same defendants and involving the same mortgage as in this case. ECF No. 41.
A case is removable if it is one over which the district court has jurisdiction. 28 U.S.C. § 1441(a). There is a strong presumption against removal jurisdiction, and "the defendant always has the burden of establishing that removal is proper." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). District courts have federal question jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. Determination of federal question jurisdiction "is governed by the `well-pleaded complaint rule,' which provides that federal jurisdiction exists only when a federal question is presented on the face of plaintiff's properly pleaded complaint." Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). To invoke federal question jurisdiction, a complaint must establish "either that (1) federal law creates the cause of action or that (2) plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law." Williston Basin Interstate Pipeline Co. v. An Exclusive Gas Storage Leasehold & Easement, 524 F.3d 1090, 1100 (9th Cir. 2008). The well-pleaded complaint rule "makes a plaintiff the master of his complaint: it allows him to avoid federal jurisdiction by relying exclusively on state law." Balcorta v. Twentieth Century-Fox Film Corp., 208 F.3d 1102, 1107 (9th Cir. 2000). See also Caterpillar, 482 U.S. at 399, 107 S.Ct. 2425 ("the plaintiff may, by eschewing claims based on federal law, choose to have the cause heard in state court"). The existence of federal jurisdiction is determined by the complaint at the time of removal. Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1065 (9th Cir. 1979). See also Williams v. Costco Wholesale Corp., 471 F.3d 975, 976 (9th Cir. 2006) ("We have long held that post-removal amendments to the pleadings cannot affect whether a case is removable, because the propriety of removal is determined solely on the basis of the pleadings filed in state court.").
Civil actions not involving a federal question are removable to a federal district court only if there is diversity of citizenship between the parties. 28 U.S.C. § 1332(a)(1). Section 1332 requires that there be complete diversity; that is, each plaintiff's citizenship must be diverse as to each defendant's citizenship. Id. Diversity jurisdiction exists in all civil actions where there is complete diversity of citizenship of the parties and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332.
In the opposition to Plaintiff's first motion to remand, Defendants stated that this Court had both federal-question and diversity jurisdiction. ECF No. 23. As to federal-question jurisdiction, Defendants point to the original complaint's cause of action for violation of the federal Fair Debt Collection Practices Act and cite case law for the proposition that courts look to the original complaint filed in state court to determine whether removal was proper. Where a court has only federal-question jurisdiction, jurisdiction over the state-law claims is supplemental. See 28 U.S.C. § 1367(a). "[D]istrict courts may decline to exercise supplemental jurisdiction over a claim ... if the district court has dismissed all claims over which
Diversity jurisdiction based on 28 U.S.C. § 1332 "requires that the parties be in complete diversity and the amount in controversy exceed $75,000." Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). "Where it is not facially evident from the complaint that more than $75,000 is in controversy, the removing party must prove, by a preponderance of the evidence, that the amount in controversy meets the jurisdictional threshold." Id. The federal removal statute provides that "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). "[F]ederal courts permit individual plaintiffs, who are the masters of their complaints, to avoid removal to federal court, and to obtain a remand to state court, by stipulating to amounts at issue that fall below the federal jurisdictional requirement." Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 595, 133 S.Ct. 1345, 185 L.Ed.2d 439 (2013). In denying Plaintiff's first motion to remand, the Court found that the parties are completely diverse and that the amount in controversy exceeded $75,000, based on the complaint's claims concerning fraud and quiet title. Those claims have now been dismissed with prejudice, leaving only Plaintiff's claim for violation of the RFDCPA.
The amount in controversy related to the RFDCPA claim is unclear. California Courts of Appeal and federal district courts in California have acknowledged that punitive damages are unavailable under the RFDCPA. See, e.g., Alford
Plaintiff's complaint seeks an unspecified amount of damages for emotional distress. Damages for emotional distress are properly included in the amount in controversy. Kroske v. U.S. Bank Corp., 432 F.3d 976, 980 (9th Cir. 2005) (including damages for emotional distress as part of the amount in controversy), as amended on denial of reh'g and reh'g en banc (Feb. 13, 2006). Plaintiff indicated in a filing that she did not intend to add further facts to the operative complaint to demonstrate that the amount now in controversy exceeds $75,000 and requested that the case be remanded to state court. ECF No. 21.
In denying the initial motion to remand, the Court found that there was both federal-question jurisdiction, because Plaintiff brought suit under a federal statute, and diversity jurisdiction, because the defendants are citizens of states other than California and more than $75,000 was in controversy. ECF No. 28. The Court was initially inclined to remand this case to state court following the dismissal of all but the single claim that Plaintiff has represented is worth less than the jurisdictional threshold. See, e.g., Ayala v. Infinity Ins. Co., No. CV-09-03744 RSWL 2010 WL 2607162 (C.D. Cal. June 28, 2010) (declining to exercise supplemental jurisdiction after granting summary judgment on one of two claims, leaving only claim that did not meet the $75,000 jurisdictional threshold in case where subject-matter jurisdiction rested on diversity of parties, and remanding case to state court); Verner v. Swiss II, LLC, No. CV 09-5701 PA CTX, 2010 WL 99084, at *3 (C.D. Cal. Jan. 6, 2010) (remanding case after striking class allegations from complaint, leaving amount in controversy in doubt and finding that defendant had failed to prove by preponderance of the evidence that remaining amount in controversy exceeded $75,000).
There is, however, a split of authority within the circuits concerning whether "diversity jurisdiction can lapse after dismissal of claims necessary to reach the required amount in controversy." Connolly
Two circuits have held that post-removal events lowering the amount in controversy below the jurisdictional threshold can result in remand. Shanaghan v. Cahill, 58 F.3d 106, 112 (4th Cir. 1995) ("[I]f some event subsequent to the complaint reduces the amount in controversy, such as the dismissal of one count based on the defendant's answer, the court must then decide in its discretion whether to retain jurisdiction over the remainder of the case. Here, courts should be guided by the same kind of factors that inform decisions in the supplemental jurisdiction context when the federal basis of a case disappears."); Stevenson v. Severs, 158 F.3d 1332, 1334 (D.C. Cir. 1998) (holding that following grant of summary judgment on two of the three claims, the case "consists entirely of a claim over which the district court would not have had jurisdiction had it been the sole basis for the original claim" and leaving to the district court's discretion whether to exercise supplemental jurisdiction over the remaining claim or remand the case). See also Turner v. State Farm Mut. Auto. Ins. Co., No. 09-cv-01926-CMA-KLM, 2010 WL 3239270, at *4 (D. Colo. Aug. 12, 2010) (granting partial summary judgment, leaving only one claim, for which "there [wa]s no evidence before the Court that the amount in controversy on this claim exceeds $75,000," and remanding to state court based on lack of subject-matter jurisdiction); Charvat v. GVN Michigan, Inc., 531 F.Supp.2d 922, 929-30 (S.D. Ohio 2008) (remanding to state court after granting partial summary judgment because amount in controversy for remaining claims fell below jurisdictional threshold of $75,000).
The weight of authority is that "the existence or nonexistence of the amount in controversy required for subject matter jurisdiction purposes is determined on the basis of the facts and circumstances as of the time that an action is commenced in a federal court or arrives there from a state court by way of removal" and that "even if part of the plaintiff's claim is dismissed, for example, on a motion for summary judgment, thereby reducing the plaintiff's remaining claim below the requisite amount in controversy, the district court retains jurisdiction to adjudicate the balance of the claim." Charles Alan Wright & Arthur R. Miller, 14AA Fed. Prac. & Proc. § 3702.4 (4th ed. 2018). "There are a number of cases, however, that take a more accepting view of post-removal events such as legal or factual determinations, damage claim reductions, disclaimers, and stipulations limiting recovery and allow them to defeat the amount in controversy requirement." Id.
The Ninth Circuit has repeated the refrain that jurisdiction is determined at the time of removal and has not signaled that later events allow a court to determine whether the exercise supplemental jurisdiction if the amount in controversy is reduced. See Hill v. Hill-Love, 509 F. App'x 605 (9th Cir. 2013) (invoking "this circuit's longstanding rule that the propriety of removal is determined solely on the basis of the pleadings filed in state court" and rejecting the plaintiff's contention that the case should have been remanded to state court based on the plaintiff's "belated attempt to avoid federal jurisdiction" by stipulating to a lower amount in controversy); Williams, 471 F.3d at 976 ("We have long held that post-removal amendments to the pleadings cannot affect whether a case is removable, because the propriety of removal is determined solely on the basis of the pleadings filed in state court."); Hill
The Court is persuaded that the dismissal of claims bringing the total amount in controversy below $75,000 did not dissolve the Court's original jurisdiction over the suit. The Second Circuit in Wolde-Meskel v. Vocational Instruction Project Cmty. Servs., Inc., 166 F.3d 59 (2d Cir. 1999), concluded that the Fourth Circuit's opinion permitting a district court to remand a case once the amount in controversy had decreased to less than $75,000, in Shanaghan v. Cahill, 58 F.3d 106, 112 (4th Cir. 1995), had confused state-law claims that are supplemental to the court's original jurisdiction and state-law claims that are aggregated to satisfy the amount in controversy. Id. at 64-65. The Second Circuit panel found that when examining a complaint in a diversity case that includes state-law claims that together exceed $75,000,
Id. at 65. The Court finds this reasoning persuasive and holds that the Court cannot decline to exercise supplemental jurisdiction over Plaintiff's sole remaining claim because the claim, as part of the bundle of claims that put more than the jurisdictional amount at issue and established original jurisdiction, was not supplemental at all. See also Purple Passion, Inc. v. RCN Telecom Servs., Inc., 406 F.Supp.2d 245, 247 (S.D.N.Y. 2005) (finding that the "strong weight of authority" and policy both favor the "traditional rule" that courts are not divested of jurisdiction when the amount in controversy drops below the jurisdictional threshold).
Accordingly, Plaintiff's motion to remand (to the extent that it applies to this case) and informal request to remand made in her filing indicating that she would not supplement her RFDCPA claims are
For the foregoing reasons, the motion to remand is
IT IS SO ORDERED.