Barefield v. HSBC Holdings PLC

• Decision Date: 07 December 2018
• Docket Number: 1:18-cv-00527-LJO-JLT
• Citation: 356 F.Supp.3d 977
• Court: U.S. District Court — Eastern District of California
• Parties: Deborah BAREFIELD, as Administrator of the Estate of Thomas W. Hatch, Plaintiff, v. HSBC HOLDINGS PLC; Caliber Home Loans, Inc.; Summit Property Management, Inc., a California Corporation; Does 1-20, Inclusive; Defendants.

356 F.Supp.3d 977

Deborah BAREFIELD, as Administrator of the Estate of Thomas W. Hatch, Plaintiff,

v.HSBC HOLDINGS PLC; Caliber Home Loans, Inc.; Summit Property Management, Inc., a California Corporation; Does 1-20, Inclusive; Defendants.

1:18-cv-00527-LJO-JLT

United States District Court, E.D. California.

Signed December 7, 2018

Deborah Barefield, Bakersfield, CA, pro se.

David T. Biderman, Aaron Robert Goldstein, Perkins Coie LLP, San Francisco, CA, for Defendants.

MEMORANDUM DECISION AND ORDER DENYING MOTION TO REMAND

(ECF No. 42)

Lawrence J. O'Neill, UNITED STATES CHIEF DISTRICT JUDGE

I. INTRODUCTION

On March 16, 2018, Deborah Barefield ("Plaintiff") filed a pro se complaint (First Amended Complaint, or "FAC"¹ ) in California Superior Court in and for the County of Kern against HSBC Mortgage Services Inc. (erroneously named as HSBC Holdings PLC); Caliber Home Loans, Inc.; Summit Property Management, LLC (erroneously named as Summit Property Management, Inc.); and Doe defendants (collectively, "Defendants"). The FAC alleged violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, and state law claims for quiet title, fraud, constructive fraud, intentional infliction of emotional distress, violation of California's Rosenthal Fair Debt Collection Practices Act, and breach of the implied covenant of good faith and fair dealing. Defendants Caliber Home Loans and Summit Property Management's moved to dismiss the FAC, ECF No. 6, and moved to expunge notice of pendency of action, ECF No. 9. Defendant HSBC Mortgage Services, Inc. moved for judgment on the pleadings. ECF No. 15. The Court denied Plaintiff's motion to remand and granted the Defendants' motions to dismiss the FAC and for judgment on the pleadings, while granting Plaintiff an opportunity to amend her complaint. ECF No. 28. Plaintiff filed a Second Amended Complaint ("SAC") on August 16, 2018. ECF No. 30. Defendants each moved to dismiss. ECF Nos. 31, 33. During the pendency of the briefing on the motion to dismiss, Plaintiff moved to remand a related case that had been removed to this Court. ECF No. 42. In a written order dated November 1, 2018, the Court dismissed with prejudice all of Plaintiff's claims in this case, save one. ECF No. 44. Plaintiff's sole surviving claim was a claim for violation of the Rosenthal Fair Debt Collection Practices Act ("RFDCPA"), California Civil Code § 1788 et seq. Plaintiff represented that she did not intend to amend the complaint to make clear that the amount at issue exceeded the jurisdictional threshold of $75,000 in this diversity action. ECF No. 51. Plaintiff again requested that the case be remanded to state court.

II. BACKGROUND

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.

Defendants removed that case to this Court on October 17, 2018, and on October 31, 2018, the Court dismissed it under the duplicative case doctrine. Case No. 18-cv-01442-LJO-JLT (E.D. Cal.). The Court granted the Defendants' motions to dismiss with the exception of Plaintiff's RFDCPA claim.

III. STANDARD OF DECISION

A. Motion To Remand

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.

IV. DISCUSSION

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 it has original jurisdiction." 28 U.S.C. § 1367(c)(3). "[I]n the usual case in which all federal-law claims are eliminated before trial, the balance of factors to be...