IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

MEDFORD DIVISION 

GERALD KIRSTEIN, 

Plaintiff, 

v. 

DEUTSCHE BANK NATIONAL TRUST 

COMP ANY, as Trustee for the Certificate Holders 

ofixis Real Estate Capital Trust 2004-HE4 

Mortgage Pass-Through Certificates, Series 

2004-HE4, and QUALITY LOAN SERVICE 

CORPORATION OF WASHINGTON, 

Defendants. 

CLARKE, Magistrate Judge. 

No. 1: l 5-CV-02329-CL 

REPORT& 

RECOMMENDATION 

Plaintiff Gerald Kirstein ("Plaintiif') filed this action to challenge the non-judicial 

foreclosure of his property. Defendant Quality Loan Service Corporation of Washington 

("Quality Loan") moves to dismiss (#5) Plaintiffs Complaint pursuant to FED. R. C1v. P. 

12(b)(I) for lack of subject matter jurisdiction. For the reasons set forth below, Quality Loan's 

motion should be DENIED. 

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BACKGROUND 

Plaintiff is the fee simple owner of 1425 Pleasant Street in Medford, Oregon. Comp!. ii 6. 

On August 19, 2004, Plaintiff received an $180,800 loan for the property which was secured by a 

deed of trust recorded in Jackson County. Comp!. Ex. A, ii 7. The beneficial interest in the trust 

deed was assigned multiple times. Comp!. ii 10. Those transfers were not recorded as required by 

Oregon law. Comp!. ii 10. Plaintiff is now facing a non-judicial foreclosure action. Comp!. iJ 15. 

He seeks an order from this Court declaring the foreclosure to be wrongful and enjoining 

Defendants from foreclosing the deed of trust without duly recording all necessary assignments. 

Comp!. ii 15. 

STANDARD 

The federal courts are courts of limited jurisdiction. Exxon Mobil Corp. v. Allapattah 

Servs., 545 U.S. 546, 552 (2005). As such, the courts presume that causes of action "lie[ ] 

outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party 

asserting jurisdiction." Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 

(1994). 

When deciding a motion to dismiss for lack of subject-matter jurisdiction under Rule 

l 2(b )(! ), the Court may consider affidavits and other evidence supporting or attacking the 

Complaint's jurisdictional allegations. Rivas v. Napolitano, 714 F.3d 1108, 1114 n. l (9th Cir. 

2013). When a defendant's motion to dismiss for lack of jurisdiction "is based on written 

materials rather than an evidentiary hearing, the plaintiff need only make a prima facie showing 

of jurisdictional facts to withstand the motion to dismiss." Mavrix Photo, Inc. v. Brand Tech .. 

Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). 

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Case 1:15-cv-02329-CL Document 17 Filed 03/17/16 Page 2 of 6
"Defective allegations of jurisdiction may be amended, upon terms, in trial or appellate 

courts." 28 U.S.C. § 1653. It is improper to dismiss an action based on a defective allegation of 

jurisdiction without leave to amend "unless it is clear, upon de novo review, that the complaint 

could not be saved by amendment." Snell v. Cleveland, Inc., 316 F.3d 822, 828 n.6 (9th Cir. 

2002). 

DISCUSSION 

Plaintiff invokes diversity jurisdiction, 28 U.S.C. § 1332. Comp!. ~ 1. For this Court to 

exercise diversity jurisdiction over Plaintiffs action, the opposing parties must be citizens of 

different states and the matter in controversy must exceed "the sum or value of $75,000[.]" 28 

U.S.C. § 1332(a). Quality Loan does not dispute the parties' diversity of citizenship. Its motion 

focuses strictly on Plaintiffs satisfaction of the amount in controversy requirement. 

Courts look to the pleadings to determine whether the amount in controversy requirement 

1s met. Crnm v. Circus Circus Enters., 231 F.3d 1129, 1131 (9th Cir. 2000). "To justify 

dismissal, it must appear to a legal certainty that the claim is really for less than the jurisdictional 

amount." Id. It must be obvious from the face of the complaint that a "rnle of law or limitation of 

damages [makes] it virtually impossible" for the suit to involve a sum in excess of $75,000. 

Pachinger v. MGM Grand Hotel-Las Vegas, Inc., 802 F.2d 362, 364 (9th Cir. 1986); see also 

Geographic Expeditions, Inc. v. Estate of Lhotka ex rel. Lhotka, 599 F.3d 1102, 1106 (9th Cir. 

20 I 0). Dismissal is also permitted if the plaintiff alleges an amount in "bad faith" in order to 

invoke diversity jurisdiction. See Crnm, 231 F.3d at 1131 ("The sum claimed by the plaintiff 

controls so long as the claim is made in good faith."). To defeat a motion to dismiss challenging 

the amount in controversy, the burden is on the plaintiff to set forth facts which, if true, would 

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prevent the trier-of-fact from concluding that the damages arc below the jurisdictional limit. 

Barrett v. Lombardi, 239 F.3d 23, 30-31 (!st Cir. 2001). 

Here, Plaintiff asks the Court to declare the foreclosure of his property to be wrongful, 

and to enjoin Defendants from proceeding forward until they comply with ORS Chapter 86. 

Comp!. 'if 11. In addition, Plaintiff seeks $1,000 in damages to compensate him for resources 

spent "researching the transfers and assignments of the relevant loan and deed of trust[,]" and 

attorney's fees and costs ifhe prevails. Comp!. 'if'il 14-15. Attached to the Complaint is a deed of 

trust securing an $180,800 Joan to Plaintiff for the property. Comp!. Ex. A. 

"In actions seeking declaratory or injunctive relief, it is well established that the amount 

in controversy is measured by the value of the object of the litigation." Hunt v. Wash. State 

Apple Adver. Comm'n, 432 U.S. 333, 347 (1977). Herc, the parties dispute the "object" of 

Plaintiff's suit. Plaintiff maintains it is the property itself. Quality Loans contends "the object of 

the lawsuit is to protect Plaintiff's right to keep possession of his real property from being 

foreclosed." Def.'s Mem. in Supp. of Mot., at 6. Because Plaintiff only prayed for $1,000 in 

money damages, Quality Loans argues that the value of this right does not meet the jurisdictional 

threshold. The Court disagrees. In similar actions, courts in the Ninth Circuit have consistently 

interpreted the "object of the litigation" to be the at-issue property and, therefore, incorporated 

the property's value into the amount in controversy. See Chapman v. Deutsche Bank Nat. Trust 

Co., 651F.3d1039, 1045 n.2 (9th Cir. 2011), certified question answered sub nom., Chapman v. 

Deutsche Bank Nat'! Trust Co., 129 Nev. Adv. Op. 34 (2013) (federal district court properly 

determined that the object of a quiet title action was the value of the property); Garfinkle v. 

Wells Fargo Bank, 483 F.2d 1074, 1076 (9th Cir. 1973) (treating entire value of real property as 

amount in controversy in action to enjoin foreclosure sale); Woodside v. Ciceroni, 93 F. I, 4 (9th 

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Case 1:15-cv-02329-CL Document 17 Filed 03/17/16 Page 4 of 6
Cir. 1899) ("In a suit to quiet title, or to remove a cloud therefrom, it is not the value of the 

defendant's claim which is the amount in controversy, but it is the whole of the real estate to 

which the claim extends."); Meritage Homeowners' Ass'n v. Ocwen Loan Servicing, LLC., No. 

6:14 CV 01747-TC, 2015 WL 1810230, at *3 (D. Or. Apr. 17, 2015) ("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."); Schickling v. Moynihan, No. 6: 12-CV-385-AA, 2012 WL 5398394, at* 1 

n.l (D. Or. Oct. 31, 2012) (noting "the court presumes the value of plaintiffs' property exceeds 

$75,000" when discussing subject matter jurisdiction over a wrongful foreclosure claim). 

Following this guiding case law, the Court finds that the amount in controversy here includes 

Plaintiff's $180,800 deed of trust. As such, the Court cannot say that it appears "to a legal 

certainty" that Plaintiff's claims are for less than the jurisdictional threshold. See Pachinger, 802 

F.2d at 363 ("Generally speaking, the legal certainty test makes it very difficult to secure a 

dismissal of a case on the ground that it does not appear to satisfy the jurisdictional amount 

requirement."). There are no allegations of bad faith. Therefore, dismissal is not appropriate. 

RECOMMENDATION 

For the reasons stated above, Quality Loan's motion to dismiss (115) should be DENIED. 

This Report and Recommendation will be referred to a district judge. Objections, if any, 

arc due no later than fourteen (14) days after the date this recommendation is filed. If objections 

are filed, any response is due within fourteen (14) days after the date the objections are filed. See 

I I I 

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Case 1:15-cv-02329-CL Document 17 Filed 03/17/16 Page 5 of 6
FED. R. CIV. P. 72, 6. Parties are advised that the failure to file objections within the specified 

time may waive the right to appeal the District Court's order. Martinez v. Ylst, 951 F.2d 1153 

(9th Cir. 1991). 

DATED this !:Y?'day oflylar~6. 

/~~ MARKD. CLARKE 

United States Magistrate Judge 

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