Diaz v. First Am. Home Buyers Prot. Corp.

Decision Date04 October 2013
Docket NumberNo. 11–57239.,11–57239.
Citation732 F.3d 948
PartiesEmily DIAZ, on behalf of herself and all others similarly situated, Plaintiff–Appellant, v. FIRST AMERICAN HOME BUYERS PROTECTION CORPORATION, a California corporation, Defendant–Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

732 F.3d 948

Emily DIAZ, on behalf of herself and all others similarly situated, Plaintiff–Appellant,
v.
FIRST AMERICAN HOME BUYERS PROTECTION CORPORATION, a California corporation, Defendant–Appellee.

No. 11–57239.

United States Court of Appeals,
Ninth Circuit.

Argued and Submitted May 6, 2013.
Filed Oct. 4, 2013.


[732 F.3d 949]


Edward D. Chapin and Francis A. Bottini (argued), Chapin Fitzgerald & Bottini LLP, San Diego, CA, for Plaintiff–Appellant.

Joel D. Siegel (argued) and Paul M. Kakuske, SNR Denton U.S. LLP, Los Angeles, CA; Charles A. Newman, SNR Denton U.S. LLP, St. Louis, MO; Edward Patrick Swan, Jones Day, San Diego, CA, for Defendant–Appellee.


Appeal from the United States District Court for the Southern District of California, Marilyn L. Huff, District Judge, Presiding. D.C. No. 3:09–cv–00775–H–WMC.
Before: HARRY PREGERSON and RAYMOND C. FISHER, Circuit Judges, and JAMES S. GWIN, District Judge.*

OPINION

FISHER, Circuit Judge:

Emily Diaz, the owner of a home warranty plan from First American Home Buyers Protection Corporation, filed a class action complaint alleging that First American refused to make timely repairs, used substandard contractors and wrongfully denied claims. She asserted state law claims for unfair competition, misrepresentation, concealment, breach of contract and breach of the implied covenant of good faith and fair dealing. The district court dismissed Diaz's unfair competition and concealment claims under Federal Rule of Civil Procedure 12(b)(6). Following denial of class certification, First American made an offer of judgment on Diaz's remaining individual claims pursuant to Federal Rule of Civil Procedure 68. When Diaz did not accept the offer, First American moved to dismiss these claims for lack of subject matter jurisdiction.

[732 F.3d 950]

Agreeing that First American's unaccepted Rule 68 offer rendered Diaz's remaining claims moot, the district court dismissed the claims under Federal Rule of Civil Procedure 12(b)(1), entering judgment in favor of neither party. Diaz appealed.

We vacate the district court's dismissal of Diaz's remaining individual claims. We hold that an unaccepted Rule 68 offer that would fully satisfy a plaintiff's claim is insufficient to render the claim moot. See McCauley v. Trans Union, L.L.C., 402 F.3d 340, 342 (2d Cir.2005). Diaz's remaining claims, therefore, were not made moot by her refusal to accept First American's Rule 68 offer, even assuming that the offer would have fully satisfied her claims. Accordingly, we vacate the Rule 12(b)(1) dismissal of Diaz's claims for misrepresentation, breach of contract and breach of the implied covenant of good faith and fair dealing.1

BACKGROUND

Emily Diaz brought this class action against First American Home Buyers Protection Corporation on behalf of a putative nationwide class consisting of all persons who made a claim under a home warranty plan obtained from First American after March 2003. After First American removed the action to federal court, the district court issued a series of orders dismissing Diaz's claims for concealment, false promise, unfair competition and violation of the California Consumer Legal Remedies Act under Rule 12(b)(6). In September 2011, the district court entered an order denying Diaz's motion for class certification.

A short time thereafter, First American made an offer of judgment to Diaz on her remaining individual claims—for misrepresentation, breach of contract and breach of the implied covenant of good faith and fair dealing—pursuant to Rule 68. First American offered to allow judgment to be entered against it and in favor of Diaz in the total amount of $7,019.32, plus costs allowed under Rule 54.2 The offer further provided that, “[i]f this Offer is not accepted ..., this Offer shall have no effect, be null and void, and be deemed withdrawn, and shall not be presented, admitted, or used for any purpose in any case or proceeding against First American.” Diaz had until October 17, 2011 to accept the offer. She did not do so.

First American then filed a motion to dismiss the action for lack of subject matter jurisdiction. First American argued that the district court “should dismiss this action pursuant to Rule[ ] 12(b)(1) of the Federal Rules of Civil Procedure because

[732 F.3d 951]

the action is moot in light of Plaintiff's refusal to accept a Rule 68 Offer of Judgment for full satisfaction of the amount she could possibly recover at trial.” Citing decisions by the Seventh and Fourth Circuits, see Thorogood v. Sears, Roebuck & Co., 595 F.3d 750, 753 (7th Cir.2010); Greisz v. Household Bank (Illinois), N.A., 176 F.3d 1012, 1015 (7th Cir.1999); Rand v. Monsanto Co., 926 F.2d 596, 598 (7th Cir.1991); Zimmerman v. Bell, 800 F.2d 386, 390 (4th Cir.1986), First American argued that “[w]here, as here, a plaintiff rejects a Rule 68 Offer of Judgment for the full amount of relief, the district court loses subject matter jurisdiction and must dismiss the action with prejudice.” Under these decisions, “[o]nce the defendant offers to satisfy the plaintiff's entire demand, there is no dispute over which to litigate, and a plaintiff who refuses to acknowledge this loses outright, under Fed.R.Civ.P. 12(b)(1), because he has no remaining stake.” Rand, 926 F.2d at 598 (citation omitted).

In ruling on First American's motion, the district court agreed with First American that the Rule 68 offer would have fully satisfied Diaz's remaining individual claims. With respect to monetary relief, First American's offer provided “the full amount of relief she is entitled to individually.” The court recognized that the Rule 68 offer did not provide for injunctive or declaratory relief, each of which Diaz had sought in her complaint. But the court found that Diaz was not entitled to either of these forms of relief. The court deemed Diaz's request for an injunction “not appropriate” because “she has been offered, and declined, an adequate remedy at law” and “she no longer holds a home warranty plan with First American.” Similarly, the court found that Diaz's claim for declaratory relief was “duplicative of her breach of contract and breach of the implied covenant claims” and “superfluous” given that she no longer had a home warranty plan with First American.

Having determined that First American's offer would have provided Diaz complete relief on her remaining individual claims, the court went on to hold that the unaccepted offer was sufficient to render those claims moot. Like First American, in the absence of Ninth Circuit authority the court reached this conclusion by relying on decisions of the Seventh and Fourth Circuits, citing Thorogood, 595 F.3d at 753,Greisz, 176 F.3d at 1015,Zimmerman, 800 F.2d at 390, and Rand, 926 F.2d at 598. Having determined that the claims were moot, the court granted First American's motion and dismissed the claims for lack of subject matter jurisdiction. The court initially entered judgment against Diaz, but subsequently vacated that judgment and declined to enter judgment or award costs for either party. Diaz appealed.

STANDARD OF REVIEW

“We apply a de novo standard for reviewing a district court's decision on subject matter jurisdiction, and, concomitantly apply that standard in reviewing questions of mootness.” Sample v. Johnson, 771 F.2d 1335, 1338 (9th Cir.1985) (citation omitted).

DISCUSSION

Diaz argues that the district court erred by dismissing her remaining individual claims for lack of subject matter jurisdiction following her refusal to accept First American's Rule 68 offer of judgment. She maintains that these claims were not moot, because: (1) an unaccepted Rule 68 offer does not render a claim moot, even if the offer would have fully satisfied the plaintiff's claim; (2) even if such an offer does moot a claim, First American's offer did not provide complete relief; and (3) her remaining claims were not moot because

[732 F.3d 952]

she retained a personal stake in appealing the denial of class certification. We agree with Diaz's first argument and therefore do not reach her second and third contentions.

Diaz's first argument requires us to decide whether an unaccepted Rule 68 offer that would have fully satisfied a plaintiff's claim is sufficient to render the claim moot. The Supreme Court has yet to address this issue. See Genesis Healthcare Corp. v. Symczyk, ––– U.S. ––––, 133 S.Ct. 1523, 1528–29, 185 L.Ed.2d 636 (2013) (“While the Courts of Appeals disagree whether an unaccepted offer that fully satisfies a plaintiff's claim is sufficient to render the claim moot, we do not reach this question, or resolve the split, because the issue is not properly before us.” (footnote omitted)). Nor have we squarely addressed the issue. In Pitts v. Terrible Herbst, Inc., 653 F.3d 1081, 1091–92 (9th Cir.2011), we held “that an unaccepted Rule 68 offer of judgment—for the full amount of the named plaintiff's individual claim and made before the named plaintiff files a motion for class certification—does not moot a class action (emphasis added), but we did not squarely address whether the offer mooted the plaintiff's individual claim. We assumed that an unaccepted offer for complete relief will moot a claim, but we neither held that to be the case nor analyzed the issue. See id. at 1090–92. In GCB Communications, Inc. v. U.S. South Communications, Inc., 650 F.3d 1257, 1267 (9th Cir.2011), we noted that a case will “become moot” when “an...

To continue reading

Request your trial
69 cases
  • Campbell-Ewald Co. v. Gomez
    • United States
    • U.S. Supreme Court
    • January 20, 2016
    ...live. Concerning Gomez's individual claim, the Court of Appeals relied on its then-recent decision in Diaz v. First American Home Buyers Protection Corp., 732 F.3d 948 (2013). Diaz held that "an unaccepted Rule 68 offer that would fully satisfy a plaintiff's [individual] claim is insufficie......
  • Ellsworth v. U.S. Bank, N.A.
    • United States
    • U.S. District Court — Northern District of California
    • March 21, 2014
    ...settlement offer that would fully satisfy a plaintiff's claim does not render that claim moot. Diaz v. First American Home Buyers Protection Corp., 732 F.3d 948, 954–55 (9th Cir.2013). This is because “a case becomes moot only when it is impossible for a court to grant any effectual relief ......
  • AL Otro Lado, Inc. v. Nielsen
    • United States
    • U.S. District Court — Southern District of California
    • August 20, 2018
    ...individual claims even when that offer would provide full relief. See Chen , 819 F.3d at 1136 ; Diaz v. First. Am. Home Buyers Prot. Corp. , 732 F.3d 948, 954–55 (9th Cir. 2013) ("[A]n unaccepted offer that would...fully satisf[y] a plaintiff's claim does not render that claim moot."). This......
  • Gomez v. Campbell-Ewald Co.
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • September 19, 2014
    ...Rule 68 offer that would fully satisfy a plaintiff's claim is insufficient to render the claim moot.” Diaz v. First Am. Home Buyers Prot. Corp., 732 F.3d 948, 950 (9th Cir.2013). Because the unaccepted offer alone is “insufficient” to moot Gomez's claim, and as Campbell–Ewald identifies no ......
  • Request a trial to view additional results
4 firm's commentaries
4 books & journal articles
  • Resolution Without Trial
    • United States
    • James Publishing Practical Law Books Litigating Employment Discrimination Cases. Volume 1-2 Volume 2 - Practice
    • May 1, 2023
    ...Cir. 2015); Stein v. Buccaneers Limited Partnership , 772 F.3d 698, 702–703 (11th Cir. 2014); Diaz v. First American Home Buyers Corp ., 732 F.3d 948, 953–955 (9th Cir. 2013). Nonetheless, based on the majority’s affirmance of the dismissal in Genesis Healthcare , some defense employment at......
  • Changing the Rule Changes the Game: a Rule 68 Offer for Complete Relief Should Never Moot an Individual's Claim
    • United States
    • Emory University School of Law Emory Law Journal No. 65-1, 2015
    • Invalid date
    ...Rule 68).4. See Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523, 1528-29 (2013); see also Diaz v. First Am. Home Buyers Prot. Corp., 732 F.3d 948, 951-53 (9th Cir. 2013).5. See 135 S. Ct. 2311 (2015) (mem.). In Gomez, the plaintiff brought personal and putative class action claims agai......
  • Mooting Unilateral Mootness.
    • United States
    • Michigan Law Review Vol. 121 No. 4, February 2023
    • February 1, 2023
    ...WL 323262. (244.) See Chen v. Allstate Ins. Co., 819 F.3d 1136, 1138 (9th Cir. 2016). (245.) Diaz v. First Am. Home Buyers Prot. Corp., 732 F.3d 948, 954-55 (9th Cir. 2013) (quoting Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 85 (2013) (Kagan, J., dissenting)); see, e.g., Rueling v. M......
  • Trial Practice and Procedure
    • United States
    • Mercer University School of Law Mercer Law Reviews No. 66-4, June 2015
    • Invalid date
    ...Eleventh Circuit noted the United States Court of Appeals for the Ninth Circuit in Diaz v. First American Home Buyers Protection Corp., 732 F.3d 948 (9th Cir. 2013), had expressly adopted the position set forth by the majority in Symczyk. Stein, 772 F.3d at 703. Although the Eleventh Circui......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT