G. MURRAY SNOW, District Judge.
Before the Court is Plaintiff's Motion to Remand (Doc. 17) and the Motion to Dismiss filed by MTC Financial, Inc. ("Trustee Corps") (Doc. 6.) For the following reasons, the Court denies Plaintiff's Motion to Remand and grants the Motion to Dismiss.
In 2006, Plaintiff, Julie M. Vawter, took out a loan from Countrywide Home Loans, Inc. The loan was evidenced by a promissory note and secured by a Deed of Trust, and gave Countrywide a security interest in the real property owned by Plaintiff on East Happy Road in Queen Creek, Arizona. Subsequently, a variety of assignments of the Deed of Trust and Substitutions of Trustee were recorded. On November 19, 2014, Trustee Corps, the current Trustee under the Deed of Trust, instituted non-judicial foreclosure proceedings on the Happy Road residence.
Plaintiff filed the instant action in Maricopa County Superior Court in February
The removal statute, 28 U.S.C. § 1441, provides that "any civil action brought in a State court of which the district courts of the United States have original jurisdiction[] may be removed by the defendant ... to the district court of the United States for the district and division embracing the place where such action is pending." The grounds for removal must be evident from the four corners of the complaint filed in state court. Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694 (9th Cir.2005). The removing party bears the burden of establishing federal subject matter jurisdiction, and there is a strong presumption against removal jurisdiction. Luther v. Countrywide Home Loans Servicing LP, 533 F.3d 1031, 1034 (9th Cir.2008). If at any time before final judgment it appears that the district court lacks subject matter jurisdiction over a case removed from state court, the case must be remanded. 28 U.S.C. § 1447(c).
The district courts have original jurisdiction over "all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between ... citizens of different states." Id. § 1332(a)(1). If a complaint filed in state court does not, on its face, allege damages sufficient to meet the federal jurisdictional minimum, the removing defendant bears the burden of proving, by a preponderance of the evidence, that the amount in controversy exceeds $75,000. Id. § 1446(c)(2)(B); Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir.1996). Under this burden, the defendant must provide evidence establishing that it is "more likely than not" that the amount in controversy exceeds $75,000. Sanchez, 102 F.3d at 404. Where a plaintiff seeks declaratory and injunctive relief, "the amount in controversy is measured by the value of the object of the litigation." Cohn v. Petsmart, 281 F.3d 837, 840 (9th Cir.2002).
The Parties do not dispute that diversity of citizenship exists. (See Doc. 17 at 5.) Accordingly, federal jurisdiction in this case turns on whether Plaintiff's claims satisfy the amount in controversy requirement of § 1332(a). The Complaint in this case does not demand a dollar amount and Plaintiff seeks injunctive relief preventing Defendants from foreclosing on her property. (Doc. 1, Ex. A.) Accordingly, Plaintiffs' home is the object of litigation in this case. See Cohn, 281 F.3d at 840. Courts who have addressed the issue in the anti-foreclosure-action context have concluded that the amount of the loan, or at a minimum the market value of the property minus the Plaintiff's equity, is the amount to be considered when a Plaintiff seeks injunctive relief. See Sekhon v. BAC Home Loans Servicing LP, 519 Fed.Appx. 971, 972 (9th Cir.2013) ("That object is properly measured by the $505,000 face value of the notes that Appellees stand to
Here, the original principal balance on Plaintiff's loan was $164,500, while the unpaid principal currently totals $178,204.67. (Doc. 25, Ex. A, at 6.) To the extent that Defendants' recovery of this balance is limited to the current market value of the property, the Maricopa County Assessor's Office has assessed the property's value for 2015 at $121,300, and at $143,800 for 2016. (Id., Ex. B.) Given the amount of the loan in question, as well as Plaintiffs' claims for punitive damages, Defendants have sufficiently demonstrated that the amount in controversy in this action exceeds the statutory minimum. Accordingly, this Court has jurisdiction under 28 U.S.C. § 1332, and Plaintiff's Motion to Remand is denied.
Claim preclusion, also known as res judicata, bars all claims "which could have been asserted, whether they were or not, in a prior suit between the same parties (or their privies) on the same cause of action, if the prior suit concluded in a final judgment on the merits." Ross v. Int'l Bhd. of Elec. Workers, 634 F.2d 453, 457 (9th Cir.1980). For a claim to be precluded under this doctrine, the moving party must show that (1) the initial and subsequent suits involve the same claims or causes of action, (2) both suits involve the same parties or their privies, and (3) the initial suit resulted in a final judgment on the merits. Cell Therapeutics, Inc. v. Lash Group, Inc., 586 F.3d 1204, 1212 (9th Cir.2009); Mpoyo v. Litton Electro-Optical Sys., 430 F.3d 985, 987 (9th Cir.2005). Preclusion is normally an affirmative defense, and dismissal on the grounds that a plaintiff is estopped from litigating its claims as a matter of law is appropriate only when the preclusive effect is clear from either the face of the Complaint or matters of which the Court may take judicial notice. See Fed.R.Civ.P. 12(b), (d); cf. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir.2001) (explaining that, when deciding a motion brought pursuant to Rule 12, a court may not rely on materials outside of the pleadings or take judicial notice of disputed factual matters).
Here, there is an identity of claims between the instant case and the prior action of Vawter v. Recontrust Company, N.A. The court examines four factors to determine whether there the same claim is being asserted:
ProShipLine Inc. v. Aspen Infrastructures Ltd., 609 F.3d 960, 968 (9th Cir.2010). "Whether two suits arise out of the same transactional nucleus depends upon whether they are related to the same set of facts and whether they could conveniently be tried together." Id. (citations, quotation marks, and emphasis omitted).
In her first action, Plaintiff sought to obtain declaratory and injunctive relief based on the purported invalidity of recorded assignments of the Deed of Trust. (See Doc. 7, Ex. 8.) Her claims were all aimed at establishing that Bank of New York Mellon, the beneficiary under the Deed of Trust, and Recontrust Company, the entity that preceded Trustee Corps as
There is also identity or privity of parties. Generally stated, "`[p]rivity'... is a legal conclusion designating a person so identified in interest with a party to former litigation that he represents precisely the same right in respect to the subject matter involved." Headwaters Inc. v. U.S. Forest Serv., 399 F.3d 1047, 1052-53 (9th Cir.2005). Privity arises from "legal relationships in which two parties have identical or transferred rights with respect to a particular legal interest" as well as "circumstances in which `[a] person who is not a party to an action ... is represented by a party,' including trustees and beneficiaries, other fiduciary relationships and consensual or legal representational relationships." Id. (quoting Restatement (Second) of Judgments § 41(1)). Ms. Vawter is the Plaintiff in both cases. The defendants who obtained a judgment against Ms. Vawter in the first case were the named trustee and beneficiary under the Deed of Trust at the time and the current defendant — Trustee Corp — is the current trustee of the loan and, therefore, a successor and an agent, respectively, of the prior defendants. The weight of authority in the federal courts holds that a trustee and beneficiary under the note are in privity for purposes of claim preclusion because their interests with respect to the relevant loan and the collection of payments thereunder are identical. As the First Circuit has noted, "it would be a rare case in which those ... parties are not perfectly identical with respect to successive suits arising out of a single mortgage transaction." R.G. Fin. Corp. v. Vergara-Nunez, 446 F.3d 178, 187 (1st Cir.2006). A sufficiently significant legal relationship is present between Recontrust Co., Bank of New York Mellon, and Trustee Corps to warrant the invocation of protection under the principles of preclusion.
The final element of claim preclusion is also met. A dismissal with prejudice entered pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted is a "judgment on the merits" to which the doctrine of claim preclusion applies. Stewart v. U.S. Bancorp, 297 F.3d 953, 957 (9th Cir.2002). The final order in the first Vawter action granted Defendants' motion to dismiss with prejudice. Accordingly, the third factor also supports dismissal on claim preclusion grounds.
In this case, Plaintiff has not pleaded that Trustee Corps failed to comply with its obligations under Arizona's non-judicial foreclosure statutes or in the DOT, and Trustee Corps was under no obligation to independently verify the accuracy of the mortgage documents provided to it or the validity of its appointment as Trustee. See Cervantes, 656 F.3d at 1045. Consequently, no civil liability can attach, and any claim Plaintiff may have pleaded against Trustee Corps is additionally barred by section 33-807(E).
For the foregoing reasons, Plaintiffs' claims against Trustee Corps are precluded by the doctrine of res judicata and section 33-807(E). Where an action is dismissed on the basis of claim preclusion, any amendment is necessarily futile since curing this deficiency is, by definition, not possible. Accordingly, because the Court dismisses Plaintiff's complaint on preclusion grounds, the dismissal is with prejudice.
Section 33-807(E) provides that a trustee who is improperly joined as a party in an action is entitled to "recover costs and reasonable attorney fees from the person joining the trustee." Ariz.Rev.Stat. § 33-807(E). Therefore, Trustee Corps may file a motion for attorney fees and costs in accordance with L.R. Civ. 54.2. See Cervantes v. Countrywide Home Loans, Inc., 2009 WL 3157160, at *13 (D.Ariz. Sept. 24, 2009), aff'd by Cervantes, 656 F.3d 1034.