IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

MERITAGE HOMEOWNERS' 

ASSOCIATION, 

Plaintiff, 

v. 

OCWEN LOAN SERVICING, LLC 

Defendant. 

COFFIN, Magistrate Judge: 

Case No. 6·:14-cv-01747-TC 

FINDINGS & RECOMMENDATION 

Plaintiff, Meritage Homeowners' Association (HOA), moves the 

court for an order to remand the case back to Lincoln County 

Circuit Court. Plaintiff argues that this court lacks subject 

matter jurisdiction due to an amount in controversy less than 

$75,000. Plaintiff also seeks attorney's fees and costs from 

defendant, Ocwen Loan Servicing, LLC. Having considered the 

motions and related materials, plaintiff's motion should be denied. 

FACTUAL BACKGROUND 

The underlying dispute in this case arose out of the purchase 

of a townhome in Newport, Oregon, by two individuals (the 

1 - FINDINGS AND RECOMMENDATION 

Case 6:14-cv-01747-TC Document 19 Filed 03/25/15 Page 1 of 10
Borrowers) who obtained a loan to purchase the townhome. Plaintiff 

claims that defendant took complete and exciusive control of the 

property on tvlarch 12, 2 014, by changing the locks after the 

Borrowers filed for bankruptcy, quit making payments on their 

mortgage that was secured by a deed of trust held by defendant, and 

vacated the property. Pl.'s Mem. in Supp. of Mot. for Remand, 2. 

Plaintiff further asserts that to date, defendant has not initiated 

any foreclosure action on the property or paid any HOA dues or 

assessments to plaintiff. Id. at 3. 

Plaintiff asserts that "because the unit is in a townhome 

development, the HOA has no choice but to continue to provide 

services to the unit or other units in the project will be 

devalued." Id. Plaintiff argues that by locking everyone out of 

the townhome and, thus, taking exclusive control of the property, 

by taking no action to. foreclose on the property, and by not paying 

HOA dues, defendant is receiving the benefit of its services 

without paying for them. Id. Consequently, on September 26, 2014, 

plaintiff filed an action for declaratory judgment in the Lincoln 

County Circuit Court seeking a determination that defendant is the 

owner of the townhome as of March 12, 2014 the date it changed the 

locks. Id. at 1. Plaintiff's complaint also seeks to have 

"[defendant's] liability to the HOA [become] effective March 12, 

· 2013, regardless of the date of any foreclosure or subsequent 

transfer of the property." Pl.'s Compl. 'II 33. 

2 - FINDINGS AND RECOMMENDATION 

Case 6:14-cv-01747-TC Document 19 Filed 03/25/15 Page 2 of 10
Plaintiff's complaint also includes claims of quantum meruit 

for past due HOA dues beginning on the date defendant changed the 

locks, interest on the unpaid HOA dues, and default collection 

fees. Pl. ' s Mem. at 2 . Moreover, plaintiff's complaint seeks 

damages for devaluation of the property. Specifically, 

plaintiff's complaint states that "the windows installed on the 

property are defective, resulting in water intrusion and damage to 

the property [and] pursuant to [the] CCRs, individual owners are 

responsible for the maintenance of the windows." Pl.'s Compl. ~ 

14. Finally, plaintiff's complaint seeks attorney's fees; costs, 

and disbursements, pursuant to the HOA's covenants, conditions, and 

restrictions (CCR) section 11.3 and ORS 94.719. Id. at~ 34. 

On November 4, 2014, defendant filed a Notice of Removal (#1) 

based on diversity jurisdiction and an amount in controversy 

exceeding $75,000. On November 21, 2014, plaintiff filed the 

Motion to Remand (#7) that is presently before this court. 

DISCUSSION 

Plaintiff claims that this court lacks subject matter 

jurisdiction due to an amount in controversy less than $75,000. 

Pl. ' s Mem. at 2 . Plaintiff claims that through the date of 

removal, November 4, 2014, defendant owes $60,361.76 for past HOA 

dues, collection fees and interest on the unpaid dues, a special 

assessment, and damages for devaluation of the property. Id. 

3 - FINDINGS AND RECOMMENDATION 

Case 6:14-cv-01747-TC Document 19 Filed 03/25/15 Page 3 of 10
Plaintiff asserts, however, that the amount in controversy 

does not include attorney's fees, the value of the townhome it 

seeks to attribute to defendant by way of the declaratory judgment, 

or the cost of the windows that plaintiff argues are "defective and 

need to be replaced" by defendant if found to be the owner of the 

townhome. Id. at 7-9. Finally, plaintiff seeks attorney's fees 

and costs incurred as a result of its present motion to remand 

because, defendant had "no objectively reasonable basis for 

removal." Id. at 10. 

Defendant argues that this court has subject matter 

jurisdiction because "the amount in controversy is more than just 

what is prayed for by plaintiff, and the court should look at the 

entirety of the claims at issue." Def.'s Opp'n to Pl.'s Mot. to 

Remand, 6. Specifically, defendant asserts that the court should 

consider the property, collateral, and interest in the property in 

determining the value of the claim and the amount at issue. Id. 

Moreover, defendant argues that "because this is an action to 

determine an interest in property, the value of the property alone 

puts the amount in controversy over the jurisdictional 

requirement." Id. at 6. In support of its contention that the 

property alone satisfies the jurisdictional requirement, defendant 

points to the Borrower's Chapter 13 bankruptcy petition from 

October 2012, which lists the value of the townhome at $134,000. 

Id., citing Decl. of Carlos Rasch, 3. 

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Case 6:14-cv-01747-TC Document 19 Filed 03/25/15 Page 4 of 10
Defendant also argues that if found to be the owner of 

townhome, pursuant to plaintiff's complaint, it could be held 

. responsible for $126,000 in repairs to the windows under the 

covenants, conditions and restrictions (CCR). Id., citing Pl.'s 

Compl. 'li 14-19. Moreover, defendant points to an invoice it 

received from plaintiff's counsel on September 3, 2014, that 

demands $183,037.02 for HOA dues, special assessments, window 

assessments, interest, fees, and fines. Id. at 3. Defendant also 

argues that "statutory or contractual fees are included in [the] 

amount in controversy since plaintiff is alleging th [ese] fees 

pursuant to the CCR's section 11.3 and ORS 94.719." 

citing Pl.'s Compl., 'li 34. 

Id. at 7, 

Federal courts "shall have original [diversity] jurisdiction 

of all civil action where the amount in controversy exceeds the sum 

or value of $75,000, exclusive of interest and costs, and between 

citizens of different states." 28 U.S.C. § 1332(a) Any 

civil action brought in a state court of which the United States 

District Courts have original jurisdiction, may be removed by the 

defendant to the District Court. 28 U.S.C. § 1441(a). When a 

plaintiff originally files in federal court, "the amount in 

controversy is determined from the face of the pleadings." 

Geographic Expeditions, Inc. v. Estate of Lhotka ex rel., 599 F.3d 

1102, 1106 (9th Cir. 2010) (citing Crum v. Circus Circus Enters., 

231 F. 3d 1129, 1131 (9th Cir. 2000)). Further, when a plaintiff 

5 - FINDINGS AND RECOMMENDATION 

Case 6:14-cv-01747-TC Document 19 Filed 03/25/15 Page 5 of 10
originally files in federal court, "courts are reluctant to dismiss 

or remand a case unless it appears 'to a legal certainty' that the 

claim is really for less than the jurisdictional amount." Cohn v. 

Petsmart, 281 F.3d 830, 837 (9th Cir. 2002) (quoting Hunt v. Wash 

State Apple Adver. Comm'n, 432 U.S. 333, 347 (1997)). 

However, when a case has been removed from state to federal 

court under 28 U.S.C. § 1441 on the basis of diversity 

jurisdiction, the party seeking removal has to burden to prove, by 

a preponderance of the evidence, that removal is proper and the 

amount in controversy exceeds $75,000. Cohn, 281 F. 3d at 837. 

"The preponderance of the evidence standard applies because removal 

jurisdiction ousts state-court jurisdiction and 'must be rejected 

if there is any doubt as to the right of removal in the first 

instance.'" Geographic Expeditions, Inc., 599 F. 3d at 1106, 

quoting Gaus v. Miles, Inc., 980 F.2d 564, 566, (9th Cir. 1992). 

This gives rise to a "strong presumption against removal 

jurisdiction [which] means that the defendant always has the burden 

of establishing that removal is proper." Gaus, 980 F.2d at 566. 

Consequently, courts "strictly construe the removal statute against 

removal jurisdiction." Id. 

When a removed lawsuit seeks declaratory and injunctive 

relief, "it is well established that the amount in controversy is 

measured by the value of the object of the litigation." Hunt 432 

6 - FINDINGS AND RECOMMENDATION 

Case 6:14-cv-01747-TC Document 19 Filed 03/25/15 Page 6 of 10
U.S. at 347. Moreover, the value of injunctive relief depends on 

"the value of the right to be protected or the extent of the injury 

to be prevented." Jackson v. Am. Bar Ass'n, 538 F.2d 829, 831 (9th 

Cir. 1976). Also, "where an underlying statute authorizes an award 

of attorney's fees, either with mandatory or discretionary 

language, such fees may be included in the amount in controversy." 

Galt v. JSS Scandinavia et al., 142 F. 3d 1150, 1155 (1998). 

Finally, the amount in controversy is to be determined at the date 

of removal. Abrego v. Dow Chern. Co., 443 F.3d 676, 690 (9th Cir. 

2006) . 

Here, plaintiff's complaint seeks to have defendant declared 

the owner of townhome and have defendant's liability to the HOA 

become effective the day it changed the locks, March 12, 2013, 

regardless of the date of any foreclosure or subsequent transfer of 

the property. If declared owner of the townhome, plaintiff claims 

that defendant is responsible for past due HOA dues, collection 

fees, interest on the unpaid HOA dues, a special assessment, and 

damages for devaluation of the property, which plaintiff concedes 

totaled $60,361.76 through the date of removal. Therefore, 

defendant needs to prove, by a preponderance of the evidence, that 

there was $14,638.25 more in controversy at the time of removal 

than plaintiff conceded to in order to satisfy 28 U.S.C. § 1332(a). 

The court finds that defendant met its burden for the following 

reasons. 

7 - FINDINGS AND RECOMMENDATION 

Case 6:14-cv-01747-TC Document 19 Filed 03/25/15 Page 7 of 10
First, the value of the townhome is included in the amount in 

controversy. Defendant correctly asserts that the object of 

litigation in plaintiff's Motion for Declaratory Judgment is the 

townhome, which the Borrowers estimated was worth $134,000 in their 

October 2012 bankruptcy petition. Although the valuation of the 

townhome from the Borrower's 2012 bankruptcy petition may have 

changed over the past two years, this court finds that the value of 

the home, when combined with the $60,361.76 that plaintiff concedes 

was in controversy at the date of removal, exceeds $75,000. 

Second, even if the court was to assume arguendo that 

defendant failed to established the requisite jurisdictional amount 

in controversy above, the court finds that the cost of repairing 

the windows of the townhome is in controversy and, alone, exceeds 

$75,000. Plaintiff's complaint states that individual owners are 

responsible for the maintenance of the windows in their townhome. 

Plaintiff seeks to have defendant declared the owner of townhome 

and to have defendant's liability to the HOA become effective the 

day it changed the locks, March 12, 2013. Consequently, 

plaintiff's complaint seeks to have defendant's liability to the 

HOA, and, thus, its liability for the window repairs, become 

effective retroactively on March 12, 2013. Further, defendant has 

submitted invoices it received from plaintiff, which state that the 

window repairs will cost $126,000. As such, the cost of repairing 

8 - FINDINGS AND RECOMMENDATION 

Case 6:14-cv-01747-TC Document 19 Filed 03/25/15 Page 8 of 10
the windows, $126,000, was in controversy at the date of removal 

and alone exceeds $75,000. 

Finally, the cost of attorney's fees, up to the date of 

removal, are included in the amount in controversy. Plaintiff's 

complaint seeks attorney's fees pursuant to ORS 94.719. ORS 94.719 

states that "in any suit brought by an [HOA] to collect 

delinquent assessments or in any suit . to enforce compliance 

with the ... rules or regulations adopted by the association, the 

prevailing party shall be entitled to recover reasonable attorney 

fees therein." ORS 94.719. Because the underlying statute 

plaintiff relies on authorizes an award of attorney fees, 

plaintiff's attorney's fees, up to the date of removal, may be 

included in the amount in controversy. Galt, 142 F.3d at 1155. 

However, the record before the court fails to specify the amount of 

attorney's fees that would be due to plaintiff through the date of 

removal and this court declines to speculate what that amount might 

be. This point, however, is moot because, as stated above, 

defendant has proved by a preponderance of the evidence that the 

amount in controversy exceeded $75,000. 

CONCLUSION 

For the reasons stated above, plaintiff's Motion to ~emand 

(#7) should be DENIED. 

9 - FINDINGS AND RECOMMENDATION 

Case 6:14-cv-01747-TC Document 19 Filed 03/25/15 Page 9 of 10
This recommendation is not an order that is immediately 

appealable to the Ninth Circuit Court of Appeals. Any notice of 

appeal pursuant to Rule 4(a) (1), Federal Rules of Appellate 

Procedure, should not be filed until entry of the district court's 

judgment of appealable order. The parties shall have fourteen (14) 

days from the date of service of a copy of this recommendation 

within which to file specific written objections with the court. 

Thereafter, the parties shall have fourteen (14) days within which 

to file a response to the objections. Failure to timely file 

objections to any factual determination of the Magistrate Judge 

will be considered a waiver of a party's right to de novo 

consideration of the factual issues and will constitute a waiver of 

a party's right to appellate review of the findings of fact in an 

order or judgment entered pursuant to this recommendation 

Dated this JS r day of rv1arch 201s. 

THOM S M. COFFIN 

United States Magistrate Judge 

10 - FINDINGS AND RECOMMENDATION 

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