CORMAC J. CARNEY, District Judge.
Plaintiffs Richard and Sheillamari Prepuse bring this action against Defendants Caliber Home Loans, Inc. ("Caliber"), Benjamin Management Group, Inc. ("BMG"), and Westcoe Realtors, Inc. ("Westcoe") for a violation of California Civil Code § 2923.6. Plaintiffs initially filed in state court, and Caliber removed. (Dkt. 1.) Before the Court is Plaintiffs' motion to remand. For the following reasons, that motion is GRANTED.
Plaintiffs took out a loan, secured by a Deed of Trust on their home, on March 22, 2006, for $529,470.00. (Dkt. 1 Exh. A ["Compl."] ¶ 7.) They subsequently defaulted on that loan, and their home was sold at a foreclosure sale on July 27, 2015. (Id. ¶ 39.) Plaintiffs allege that shortly before the foreclosure sale, they had submitted an application for a loan modification, which Caliber—their mortgage servicer—denied. (Id. ¶ 27.) Caliber subsequently told Plaintiffs that they were not eligible to appeal the denial, (id. ¶ 35), and the foreclosure sale proceeded. Plaintiffs now allege that by selling their home at the foreclosure sale, Caliber violated California Civil Code § 2923.6, which imposes certain procedural requirements on mortgage servicers in connection with processing loan modifications. Before conducting a trustee's sale, those servicers must, for example, (1) provide 30 days from the denial of a loan modification application for an appeal; (2) send a written notice to a borrower with the reasons for denial; and (3) describe "other foreclosure prevention alternatives" available to the borrower. § 2923.6. Plaintiffs believe that Caliber failed to abide by these statutory requirements and that it is now liable to Plaintiffs.
Plaintiffs also describe a conspiracy between Caliber and two California realtor agencies, BMG and Westcoe. As Plaintiffs tell it, BMG gave Caliber an inflated appraisal of Plaintiffs' home so that Plaintiffs' loan modification application would be denied and Caliber could quickly foreclose on the home, in violation of § 2923.6. (Compl. ¶ 57.) Westcoe, an agency who sent a letter to Plaintiffs after the sale asking that they tender their keys to the home—the parties refer to this request as a "cash-for-keys" offer—is also alleged to be part of a larger conspiracy, although Westcoe's participation beyond the cash-for-keys offer, as well as how that offer had anything to do with Caliber's alleged § 2923.6 violation, is not made entirely clear by the complaint. (See id. ¶ 41.)
Plaintiffs initially sued only Caliber in Riverside Superior Court. (See Dkt. 11 at 30-41.) They subsequently dismissed their complaint, (id. at 75-76), and then filed the current lawsuit against Caliber, BMG, and Westcoe in San Bernardino Superior Court. (Dkt. 1.) Caliber removed to federal court and then moved to dismiss. Plaintiffs moved to remand.
Any civil action brought in a state court but over which a district court has diversity jurisdiction may be removed. 28 U.S.C. §§ 1332, 1441(a). The defendant removing the action to federal court bears the burden of establishing that the district court has subject matter jurisdiction over the action, and the removal statute is strictly construed against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) ("Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance."). Diversity jurisdiction exists where the amount in controversy exceeds $75,000 and complete diversity exists among the parties. 28 U.S.C. § 1332.
In this case, disputes exist both as to whether the parties are completely diverse and whether § 1332's amount-in-controversy requirement has been met. The Court begins with the amount-in-controversy issue. Plaintiffs argue that because they have asserted only one violation of § 2923.6, which comes with a statutory penalty of $50,000, § 1332's amount-in-controversy requirement has not been met.
An issue not briefed by the parties, however, is whether anticipated attorneys' fees—as opposed to attorneys' fees already incurred—are properly considered as being part of the amount in controversy for the purposes of removal. Courts in this Circuit are divided on the issue. Some find that on the basis of the general principle that "federal jurisdiction depends upon the circumstances that exist at the time of removal," "anticipated, but unaccrued attorney fees" should not be included in the amount in controversy. Reames v. AB Car Rental Servs., Inc., 899 F.Supp.2d 1012, 1016 (D. Or. 2012) (emphasis in original); see also Dukes v. Twin City Fire Ins. Co., No. CV-09-2197-PHX-NVW, 2010 WL 94109, at *2 (D. Ariz. Jan. 6, 2010) ("[T]he better view is that attorneys' fees incurred after the date of removal are not properly included because the amount in controversy is to be determined as of the date of removal."). As the Reames court noted, due to the uncertain nature of pre-trial settlement, trial, and appellate proceedings, "attorney fees are extremely irregularly distributed," and any estimate of anticipated fees is "therefore necessarily speculative," rendering it inappropriate for inclusion in the amount in controversy. Reames, 899 F. Supp. 2d at 1020-21. The Seventh Circuit has taken this position as well, holding that an estimate of attorneys' fees is a "calculation [that] includes the value of legal services that have not been and may never be incurred, and are therefore not `in controversy' between the parties." Gardynski-Leschuck v. Ford Motor Co., 142 F.3d 955, 958 (7th Cir. 1998) (distinguishing between "the likely course of litigation" and "the legal rights of the parties" when discussing the appropriateness of projecting attorneys' fees).
Other district courts in this Circuit have permitted parties to include reasonable estimates of attorneys' fees that have not yet accrued. See Brady v. Mercedes-Benz USA, Inc., 243 F.Supp.2d 1004, 1011 (N.D. Cal. 2002); Simmons, 209 F. Supp. 2d at 1034. These courts have pointed out that although attorneys' fees are sometimes uncertain, so are damages, and that excluding anticipated fees "does not comport with the reality of litigation," Brady, 243 F. Supp. 2d at 1010. The Tenth Circuit has also taken this position, albeit without significant analysis. Miera v. Dairyland Ins. Co., 143 F.3d 1337, 1340 (10th Cir. 1998).
The Ninth Circuit has yet to weigh in, although recent district court cases in this Circuit tend not to permit the inclusion of anticipated attorneys' fees. Dell v. ServiceMaster Global Holdings, Inc., Case No: C 15-3326 SBA, 2015 WL 6746448, at *2 (N.D. Cal. Nov. 5, 2015) ("[T]he majority of district courts within this Circuit . . . have concluded that attorneys' fees that are anticipated but unaccrued at the time of removal are not properly in controversy for jurisdictional purposes."); Jimenez v. Menzies Aviation, Inc., No. C 10-03477 SBA, 2013 WL 1411228, at *3 (N.D. Cal. Apr. 8, 2013) ("[T]he fees that should be considered are those incurred as of the date of removal.") The Court agrees with this set of courts and holds that only those attorneys' fees which had accrued at the time of removal should be included for the purposes of measuring the amount in controversy. Attempting to estimate future attorneys' fees for the purposes of determining diversity jurisdiction, against the unpredictable backdrop of litigation, is ill-suited to the precision of jurisdictional analysis and the rule that the removal statute is "strictly construed against removal," Provincial Gov't of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009).
Here, the Plaintiffs request only damages under § 2923.6, which in the case of willful conduct, cap out at "the greater of treble actual damages or statutory damages of [$50,000]." Cal. Civ. Code § 2924.12(b). Caliber offers no reason to believe that Plaintiffs' actual damages—even if trebled—could be said to exceed $50,000, so that is properly considered the amount in controversy.
For the foregoing reasons, Plaintiffs' motion to remand, (Dkt. 6), is GRANTED. The case is REMANDED to the San Bernardino Superior Court.