Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-03861/USCOURTS-cand-3_15-cv-03861-1/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1332 Diversity-Petition for Removal

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United States District Court 

Northern District of California 

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ELENA ASTURIAS AND CARLOTA DEL 

PORTILLO, 

 Plaintiffs, 

 v. 

NATIONSTAR MORTGAGE, LLC, VERIPRISE 

PROCESSING SOLUTIONS, et al., 

 Defendants. 

Case No.: 15-CV-3861 YGR

ORDER DENYING MOTION TO REMAND;

ORDER GRANTING MOTION TO DISMISS 

COMPLAINT WITH LEAVE TO AMEND 

DKT. NOS. 6, 15 

Plaintiffs Elena Asturias and Carlota Del Portillo (“Plaintiffs”) bring this foreclosure-related 

action against Defendants Nationstar Mortgage LLC (“Nationstar”) and Veriprise Processing 

Solutions LLC (“Veriprise”) regarding the real property located at 176 Randall Street, San 

Francisco, California 94131 (the “Property”). Plaintiffs allege claims for: (1) violation of Cal. Civil 

Code § 2923.5; (2) violation of Cal. Civil Code § 2923.6; (3) violation of Cal. Civil Code § 2923.7; 

(4) declaratory relief pursuant to Cal. Civil Code § 2924.11; (5) unfair business practices; (6) set 

aside trustee’s sale; (7) cancellation of trustee’s deed upon sale; and (8) quiet title. The complaint 

in this action was originally filed in the Superior Court of the State of California, in and for the 

County of San Francisco on July 22, 2015, and was removed to this Court on September 4, 2015. 

Plaintiffs have filed a motion to remand this action to the San Francisco Superior Court 

(Dkt. No. 15), which Defendants oppose. Defendants have filed a Motion to Dismiss the complaint 

for failure to state a claim upon which relief can be granted. (Dkt. No. 6.) Plaintiffs oppose the 

motion to dismiss. 

Having carefully considered the papers submitted and the pleadings in this action, and for 

the reasons set forth below, the Court hereby Orders that: (1) the Motion to Remand is DENIED; and 

(2) the Motion to Dismiss the complaint is GRANTED WITH LEAVE TO AMEND.

1

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 Pursuant to Federal Rule of Civil Procedure 78(b) and Civil Local Rule 7-1(b), the Court 

finds this motion appropriate for decision without oral argument. Accordingly, the Court VACATES

the hearing set for November 3, 2015. 

Case 3:15-cv-03861-RS Document 24 Filed 10/30/15 Page 1 of 6
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United States District Court 

Northern District of California 

I. MOTION TO REMAND 

A federal court has diversity jurisdiction if the action is between citizens of different states 

and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). In the instant action, 

Plaintiffs concede that there is diversity of citizenship, but contend that Defendants cannot establish 

that the amount in controversy exceeds the jurisdictional limit. In assessing the amount in 

controversy, a court must “assume that the allegations of the complaint are true and assume that a 

jury will return a verdict for the plaintiff on all claims made in the complaint.” Kenneth Rothschild 

Trust v. Morgan Stanley Dean Witter, 199 F.Supp.2d 993, 1001 (C.D.Cal.2002). “[T]he party 

seeking removal under diversity bears the burden of showing, by a preponderance of the evidence, 

that the amount in controversy exceeds the statutory amount.” Lewis v. Verizon Commc’ns, Inc., 

627 F.3d 395, 397 (9th Cir. 2010). The propriety of jurisdiction is determined by the facts at the 

time of removal. Rea v. Michaels Stores Inc., 742 F.3d 1234, 1237 (9th Cir. 2014) (generally, the 

amount in controversy is determined from the pleadings as they exist at the time a petition for 

removal is filed). 

As part of claims alleged in their Complaint, Plaintiffs seek to set aside and cancel the 

trustee’s sale of the Property and to quiet title. They also pray for injunctive, equitable, and 

declaratory relief respecting title to the Property, as well as damages for the alleged wrongdoing. 

In a case where the central matter at issue in the litigation is title to a piece of real property, 

the valuation of the property is the appropriate measure of the amount in controversy. Reyes v. 

Wells Fargo Bank, N.A., No. C-10-01667JCS, 2010 WL 2629785, at *4-6 (N.D. Cal. June 29, 

2010) (citing Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 347 (1977)); see also 

Garfinkle v. Wells Fargo Bank, 483 F.2d 1074, 1076 (9th Cir. 1973) (where title to property was 

the object of the litigation, market value or value of secured interest in property were both 

appropriate measures of amount in controversy). Here, the original amount of the deed of trust was 

$1,000,000.00 and the property sold at a trustee’s sale for $1,277,739.99. (Dkt. No. 1, Notice of 

Removal, Exh. A [verified Complaint] at Exh. A [deed of trust]; Dkt. No. 7, Request for Judicial 

Case 3:15-cv-03861-RS Document 24 Filed 10/30/15 Page 2 of 6
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United States District Court 

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Notice at Exh. 6 [Trustee’s Deed Upon Sale].)2 Thus, the amount in controversy exceeds 

$75,000.00.

Plaintiffs assert that the exclusive jurisdiction doctrine, applicable to cases in which a state 

court has taken in rem jurisdiction over a piece of real property, warrants remand. See Chapman v. 

Deutsche Bank Nat’l. Trust Co., 651 F.3d 1039, 1043 (9th Cir. 2011) (when “one court is 

exercising in rem jurisdiction over a res, a second court will not assume in rem jurisdiction over the 

same res.”). The doctrine, without more, does not aid their motion to remand. Plaintiffs argue that 

there is an unlawful detainer case concerning the Property, pending in San Francisco Superior 

Court. However, Plaintiffs offer no evidence of the pendency of that case, when it was filed, and 

whether the question of title having been “duly perfected” was raised in that action. Cf. Malkoskie 

v. Option One Mortgage Corp., 188 Cal. App. 4th 968, 974 (2010) (in an unlawful detainer 

proceeding under California Civil Code 1161a, limited issues pertaining to the validity of title 

obtained in a trustee’s sale can be raised and conclusively resolved).3

 Absent evidence that title 

was at issue in an unlawful detainer proceeding pending at the time of removal, Plaintiffs have not 

established a basis for the exclusive jurisdiction doctrine to apply here. 

Likewise, Plaintiffs’ argument that the court should remand this action to the state court 

based upon abstention under Colorado River Water Conserv. Dist. v. United States, 424 U.S. 800 

(1976), is without merit. A court has authority under the Colorado River doctrine to abstain from 

exercise of its jurisdiction if the controversy presented can be resolved more expeditiously in 

pending state court proceedings concerning the same subject matter. Will v. Calvert Fire Ins. Co.,

437 U.S. 655, 662-63 (1978). The Colorado River doctrine is only invoked upon demonstration of 

“exceptional circumstances,” given the primary obligation of the federal courts to exercise the 

jurisdiction given to them. Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25-

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 Defendants seek judicial notice of documents recorded with the San Francisco AssessorRecorder regarding the Property, some of which duplicate the documents attached to Plaintiffs’ 

Complaint. (Dkt. No. 7.) The documents are an appropriate subject for judicial notice. 

Defendants’ Request for Judicial Notice is GRANTED. 

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 The Court is unable to ascertain the status of alleged unlawful detainer proceedings 

through a search of public dockets. Public access to filings and dockets in unlawful detainer 

proceedings is restricted by Cal. Code of Civil Proc. section 1161.2(a). 

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26 (1983); see Colorado River, 424 U.S. 817. Plaintiffs’ have not shown that the state court action 

here concerns the same subject matter, i.e., title to the Property. 

The motion to remand is therefore DENIED.

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II. MOTION TO DISMISS 

Defendants move to dismiss the Complaint5

 on the grounds that: (1) Plaintiffs’ claims 

arising under the California Homeowners’ Bill of Rights (“HBOR”), including the claims under 

Civil Code sections 2923.5, 2923.6, and 2923.7, all fail because the subject loan is not covered by 

the statutory scheme; and (2) Plaintiffs’ have not alleged facts to support their claims. 

The Complaint attaches documents showing that the loan on the Property was secured by a 

deed of trust in the name of Plaintiff Del Portillo. However, as the Complaint alleges, Del Portillo 

does not reside at the Property. The judicially noticeable documents indicate that a notice of 

default (“NOD”) was recorded on the Property in 2010, and a notice of trustee’s sale (“NOTS”) 

was recorded in 2013. (RJN, Exh. 2 and 3.) Thereafter, the 2010 NOD and 2013 NOTS were 

rescinded. (RJN, Exh. 2). A new NOD was recorded January 14, 2015, on the Property, and a new 

NOTS was recorded April 20, 2015. (RJN, Exh. 4 and 5.) Thereafter, the Property was sold at a 

trustee’s sale, on July 10, 2015, and title transferred to the foreclosing beneficiary, U.S. Bank, N.A., 

as Trustee for Structured Adjustable Rate Mortgage Loan Trust, Mortgage Pass-Through 

Certificates, Series 2005-23. (RJN, Exh. 6.) The Complaint alleges that “Plaintiff” submitted a loan 

modification application in December 2014 and did not receive any communications from 

defendants in response. (Complaint ¶31, 35.) 

A. HBOR Limited to Owner-Occupied Properties 

However, the HBOR is limited in its application to only foreclosures of first liens on owneroccupied, one-to-four unit properties. Cal. Civ. Code § 2924.15( a). Under the HBOR, “owneroccupied” means that the home “the principal residence of the borrower and is security for a loan 

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 Plaintiffs’ citation to 28 U.S.C. § 1452(b) as a basis for equitable remand of this action 

also fails, as that statute only applies to removal of claims related to bankruptcy cases. This action 

was not removed under section 1452. 

5

 The Court notes that Defendants’ motion did seek dismissal of the eighth claim for relief 

in the Complaint to quiet title, which was alleged only against an unnamed Doe defendant. 

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made for personal, family, or household purposes.” Cal. Civ. Code § 2924.15; see also Agbowo v. 

Nationstar Mortg. LLC, 14-cv-1295 LLB, 2014 WL 1779367, at *5 (N.D.Cal. May 5, 2014) 

(dismissing HBOR claim because plaintiffs failed to allege subject property was owner-occupied). 

The only borrower on the loan is Del Portillo, but the Complaint does not allege that she 

lives at the Property. Only Asturias is alleged to reside at the Property. (Complaint ¶ 1.) In their 

opposition to the motion, Plaintiffs assert that Del Portillo negligently failed to allege that she 

“permanently resides” at the Property, and seeks leave to amend to so allege. (Oppo. at 7:12-16.) 

Given Plaintiffs’ concession that they have failed to plead coverage by the HBOR statutes they 

invoke, the Court Orders that the motion to dismiss Plaintiffs’ claims under California Civil Code 

sections 2923.55, 2923.6, 2923.7, as well as the derivative claim for unfair business practices under 

California Business & Professions Code section 17200 which relies on these alleged violations is 

GRANTED WITH LEAVE TO AMEND. Plaintiffs must allege facts to show that the HBOR applies to 

the loan at issue if they are able to do so consistent with their Rule 11 obligations.6 

Defendants raised additional arguments for dismissal of the HBOR claims, contending that 

they are insufficiently and vaguely alleged. In their opposition, Plaintiffs assert that the allegations 

are minimally sufficient, though at the same time offering additional information to clarify the 

merits of those claims. Given the Court’s ruling granting dismissal based on the threshold issue 

above, the Court need not and does not rule on the specifics of Defendants’ additional arguments. 

However, Plaintiffs are given leave to amend their HBOR claims to allege facts to clarify the basis 

of their claims thereunder. 

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 Defendants, in addition to filing a reply brief, filed an “Opposition to Plaintiffs’ Request 

for Leave To Amend Claims Under California’s Homeowner Bill of Rights,” urging the Court to 

consider evidence in the form of a declaration of counsel and attached exhibits. Defendants argue 

that this evidence establishes Del Portillo’s primary residence is 84 Berkeley Way, San Francisco, 

and that the Property at issue in this litigation is a rental property occupied by Asturias, her 

daughter. (Dkt. No. 17.) Thus Defendants contend the Court should either dismiss the Complaint 

without leave to amend based on the evidence, or should require Plaintiffs to submit evidence that 

she resides at the Property with any amended complaint. Even if the evidence offered by 

Defendants were presented in an admissible form, which it is not, the Court cannot consider 

evidence in connection with a motion to dismiss. The Court hereby STRIKES Docket No. 17 as 

improperly filed. 

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United States District Court 

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B. Sixth and Seventh Claims to Set Aside Trustee’s Sale and Cancel Trustee’s 

Deed 

Defendants seek dismissal of Plaintiffs’ claims to set aside trustee’s sale and to cancel the 

trustee’s deed upon sale, arguing that Plaintiffs have failed to state with specificity the facts 

demonstrating their supposed misrepresentations about postponing the foreclosure sale of the 

Property. Defendants also contend that Plaintiffs must allege unconditional tender of the full 

amount owed in order to proceed. 

Plaintiffs respond that they have alleged facts to show that they fall into “recognized 

exceptions to the tender requirement under California law.” (Oppo. at 12:22-23.) They contend 

that, in addition to the HBOR violations in connection with the foreclosure on the Property, 

Defendants conducted the Trustee’s sale of the property without notice and contrary to 

representations and agreements to postpone the sale. However, no facts regarding such 

misrepresentations or agreements are alleged. To the extent Plaintiffs rely on an agreement, they 

must allege the terms of the agreement. To the extent that they rely on a misrepresentation, the 

heightened pleading requirements of Federal Rule of Civil Procedure 9(b) would apply. 

The Court GRANTS the motion to dismiss the sixth and seventh claims WITH LEAVE TO 

AMEND to allege the factual basis for the relief with the required specificity. 

III. CONCLUSION 

Based upon the foregoing, the Motion to Remand is DENIED and the Motion to Dismiss the 

Complaint is GRANTED WITH LEAVE TO AMEND. Plaintiffs shall file their amended complaint no 

later than November 17, 2015. Defendants shall have 21 days thereafter to file their response. 

This terminates Docket Nos. 6 and 15. 

IT IS SO ORDERED.

Date: October 30, 2015 _______________________________________ 

 YVONNE GONZALEZ ROGERS

 UNITED STATES DISTRICT COURT JUDGE

Case 3:15-cv-03861-RS Document 24 Filed 10/30/15 Page 6 of 6