Bush v. Quality Loan Service Corp of Washington et al, No. 2:2023cv00109 - Document 11 (E.D. Wash. 2023)
Court Description: ORDER denying Plaintiff's 6 Motion to Remand and granting Defendants' 7 Motion to Dismiss. Plaintiff's claims are dismissed with prejudice. Signed by Judge Thomas O. Rice. (BF, Paralegal)
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Bush v. Quality Loan Service Corp of Washington et al Case 2:23-cv-00109-TOR ECF No. 11 Doc. 11 filed 07/12/23 PageID.258 Page 1 of 9 1 2 3 4 UNITED STATES DISTRICT COURT 5 EASTERN DISTRICT OF WASHINGTON 6 7 LEONARD BUSH, NO. 2:23-CV-0109-TOR Plaintiff, 8 9 10 11 12 ORDER DENYING MOTION TO REMAND AND GRANTING MOTION TO DISMISS v. QUALITY LOAN SERVICE CORP OF WASHINGTON; FAY SERVICING, LLC; U.S. BANK TRUST NATIONAL ASSOCIATION; LSF10 MASTER PARTICIAPTION TRUST, 13 Defendants. 14 15 BEFORE THE COURT are Plaintiff’s Motion to Remand (ECF No. 6) and 16 Defendants’ Motion to Dismiss (ECF No. 7). These matters were submitted for 17 consideration without oral argument. The Court has reviewed the record and files 18 herein, the completed briefing, and is fully informed. For the reasons discussed 19 below, Plaintiff’s Motion to Remand (ECF No. 6) is denied and Defendants’ 20 Motion to Dismiss (ECF No. 7) is granted. ORDER DENYING MOTION TO REMAND AND GRANTING MOTION TO DISMISS ~ 1 Dockets.Justia.com Case 2:23-cv-00109-TOR 1 2 ECF No. 11 filed 07/12/23 PageID.259 Page 2 of 9 BACKGROUND This case concerns a non-judicial foreclosure. ECF No. 1. On February 15, 3 2023, Plaintiff filed the Complaint in Spokane County Superior Court for 4 declaratory relief and to quiet title under a promissory note. See ECF No. 1-4. On 5 April 21, 2023, Defendants filed the notice of removal to this Court, alleging 6 diversity jurisdiction. ECF No. 1. On May 21, 2023, Plaintiff filed the present 7 motion to remand the case. ECF No. 6. The next day, Defendants filed the present 8 motion to dismiss. ECF No. 7. The following facts are drawn from Plaintiff’s 9 Complaint and are accepted as true for the purpose of the motion to dismiss. 10 Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012). 11 Plaintiff owns real property located in Spokane County in which Defendant 12 LSF10 Master Participation Trust shares an interest. ECF No. 1-4 at 2, ¶ 1. On or 13 about November 12, 2002, Plaintiff signed a promissory note naming Beneficial 14 Mortgage Corporation as the payee. Id., ¶ 4. Plaintiff signed a Deed of Trust 15 naming Beneficial Mortgage Corporation as the beneficiary, the interest of which 16 was later assigned to Defendant LFS10 Master Participation Trust. Id., ¶ 4. In 17 2008 and 2009, Plaintiff became delinquent in payments. Id., ¶ 5. The last 18 payment Plaintiff made was in January 2009. Id., ¶ 5. Plaintiff has made no 19 payments on the loan since. Id., ¶ 6. 20 ORDER DENYING MOTION TO REMAND AND GRANTING MOTION TO DISMISS ~ 2 Case 2:23-cv-00109-TOR 1 ECF No. 11 filed 07/12/23 PageID.260 Page 3 of 9 On August 9, 2022, Defendant Quality Loan Service caused a notice of 2 trustee sale to be recorded on August 9, 2022, with the sale set for February 24, 3 2023. Id. at 4, ¶ 7. 4 DISCUSSION 5 I. 6 A court may judicially notice a fact that is not subject to reasonable dispute 7 where it is either (1) generally known within the territorial jurisdiction of the trial 8 court or (2) capable of accurate and ready determination from sources whose 9 accuracy cannot reasonably be questioned. Fed. R. Evid. 201(b). Courts take Judicial Notice 10 judicial notice of undisputed matters of public record, such as documents filed in 11 state courts. Harris v. Cnty. of Orange, 682 F.3d 1126, 1131–32 (9th Cir. 2012). 12 Defendants request the Court take judicial notice of public records relating 13 to the foreclosure and previous litigation involving the real property and parties at 14 issue. ECF No. 7. The Court takes judicial notice of the public records filed with 15 the Spokane County Recorder’s Office and the state court judicial proceedings. 16 II. 17 Pursuant to 28 U.S.C. § 1441(a), a defendant may remove an action from Motion to Remand 18 state to federal court only if the federal court has original subject matter 19 jurisdiction over the action. “In civil cases, subject matter jurisdiction is generally 20 conferred upon federal district courts either through diversity jurisdiction, 28 ORDER DENYING MOTION TO REMAND AND GRANTING MOTION TO DISMISS ~ 3 Case 2:23-cv-00109-TOR ECF No. 11 filed 07/12/23 PageID.261 Page 4 of 9 1 U.S.C. § 1332, or federal question jurisdiction, 28 U.S.C. § 1331.” Peralta v. 2 Hispanic Bus., Inc., 419 F.3d 1064, 1068 (9th Cir. 2005). Diversity jurisdiction 3 exists when the matter in controversy is between “citizens of different States.” 28 4 U.S.C. § 1332(a). 5 If the complaint seeks only nonmonetary relief, a notice of removal may 6 assert the amount in controversy. 28 U.S.C. § 1446(c)(2)(A)(1). “In actions 7 seeking declaratory or injunctive relief, it is well established that the amount in 8 controversy is measured by the value of the object of the litigation.” Hunt v. 9 Washington State Apple Adver. Comm’n, 432 U.S. 333, 347 (1977); see also Cohn 10 11 v. Petsmart, Inc., 281 F.3d 837, 840 (9th Cir. 2002). Plaintiff contends that Defendants have failed to establish diversity 12 jurisdiction in the notice of removal by only relying on the underlying promissory 13 note of $131,653.92. ECF No. 6. Plaintiff contends the promissory note is not the 14 object of the litigation. Id. at 2–3. Rather, Plaintiff asserts the Defendants must 15 identify how many payments would be subject to the statute of limitations defense 16 and the sum of those payments as well as the value of the security interest created 17 by the deed of trust. Id. at 3. 18 Plaintiff sets the bar too high. Defendant is not required to identify the 19 number of payments subject to the applicable statute of limitations to calculate the 20 amount in controversy. See Lewis v. Verizon Communications, Inc., 627 F.3d 395, ORDER DENYING MOTION TO REMAND AND GRANTING MOTION TO DISMISS ~ 4 Case 2:23-cv-00109-TOR ECF No. 11 filed 07/12/23 PageID.262 Page 5 of 9 1 400 (9th Cir. 2010) (“The amount in controversy is simply an estimate of the total 2 amount in dispute, not a prospective assessment of defendant’s liability.”); Korn v. 3 Polo Ralph Lauren Corp., 536 F. Supp. 2d 1199, 1204 –05 (E.D. Cal. 2008) (A 4 defendant “is not obligated to research, state, and prove the plaintiff’s claims for 5 damages.”). 6 Plaintiff has put the loan amount in controversy in this declaratory action. 7 Here, the object of the action is to prevent the sale of Plaintiff’s property via 8 foreclosure. Although Plaintiff is not seeking monetary damages, the object of the 9 litigation is to quiet title to the property. Though the exact amount is unclear, the 10 original loan was for $131,652. Without researching or calculating the effect of 11 any statute of limitations arguments, the value of the litigation exceeds the 12 jurisdictional minimum of $75,000. Therefore, Defendants established diversity 13 jurisdiction. Plaintiff’s motion for remand is denied. 14 III. 15 A defendant may move to dismiss a complaint for lack of subject matter Motion to Dismiss 16 jurisdiction. Fed. R. Civ. P. 12(b)(1). The Ninth Circuit has recognized motions 17 premised on res judicata grounds may be brought under a Rule 12(b)(1) motion. 18 See Villegas v. United States, 963 F. Supp. 2d 1145, 1158 (E.D. Wash. 2013) 19 (citing Gupta v. Thai Airways Inter. Ltd., 487 F.3d 759, 763 (9th Cir. 2007)). On a 20 Rule 12(b)(1) motion, the Court may “consider affidavits or any other evidence ORDER DENYING MOTION TO REMAND AND GRANTING MOTION TO DISMISS ~ 5 Case 2:23-cv-00109-TOR ECF No. 11 filed 07/12/23 PageID.263 Page 6 of 9 1 properly before the court, even material extrinsic to the pleadings.” Id. at 1158 2 (citing Ass’n. of Am. Med. Colls. v. United States, 217 F.3d 770, 778 (9th Cir. 3 2000)). 4 The doctrine of res judicata protects “litigants from the burden of 5 relitigating an identical issue” and promotes “judicial economy by preventing 6 needless litigation.” Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 (1979). 7 Res judicata bars claims in a subsequent action when there is: (1) an identity of 8 claims; (2) a final judgment on the merits; and (3) an identity or privity between 9 parties. Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning Agency, 322 10 F.3d 1064, 1077 (9th Cir. 2003). When met, res judicata “bar[s] all grounds for 11 recovery which could have been asserted, whether they were or not, in a prior suit 12 between the same parties … on the same cause of action.” Constantini v. Trans 13 World Airlines, 681 F.2d 1199, 1201 (9th Cir. 1982) (internal citation omitted). 14 a. Identity of Claims 15 As to the first element, a court considers: 16 (1) whether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether substantially the same evidence is presented in the two actions; (3) whether the two suits involve infringement of the same right; and (4) whether the two suits arise out of the same transactional nucleus of facts. 17 18 19 20 ORDER DENYING MOTION TO REMAND AND GRANTING MOTION TO DISMISS ~ 6 Case 2:23-cv-00109-TOR ECF No. 11 filed 07/12/23 PageID.264 Page 7 of 9 1 Harris v. Cty. of Orange, 682 F.3d 1126, 1132 (9th Cir. 2012) (internal citation 2 omitted). The fourth consideration is the most important. Id. “A plaintiff need not 3 bring every possible claim. But where claims arise from the same factual 4 circumstances, a plaintiff must bring all related claims together or forfeit the 5 opportunity to bring any omitted claim in a subsequent proceeding.” Turtle Island 6 Restoration Network v. U.S. Dep’t of State, 673 F.3d 914, 918 (9th Cir. 2012). 7 Here, Plaintiff contends that the prior state court proceedings brought a 8 different claim, i.e., Plaintiff first filed suit under RCW 7.28.300 and now brings 9 suit under RCW 4.16.020. See ECF No. 9 at 5–6. Plaintiff’s claim, even where 10 not identical to those brought in the first state court proceeding, come out of the 11 same nucleus of facts and could have been raised in the earlier action. Turtle 12 Island, 673 F.3d at 918; see also United States ex. Rel. Barajas v. Northrop Corp., 13 147 F.3d 905, 909 (9th Cir. 1998). Plaintiff seeks to quiet title on property that he 14 has not made payments towards the loan on since 2009. Regardless of a change in 15 legal theory, the Court finds there is a common nucleus of facts with the prior state 16 court proceeding to satisfy the identity of claims element. 17 b. Final Judgment on the Merits 18 As to the second element, a “final judgment on the merits is synonymous 19 with dismissal with prejudice.” Hells Canyon Pres. Council v. U.S. Forest Serv., 20 403 F.3d 683, 686 (9th. Cir. 2005) (internal quotation marks and citation omitted). ORDER DENYING MOTION TO REMAND AND GRANTING MOTION TO DISMISS ~ 7 Case 2:23-cv-00109-TOR ECF No. 11 filed 07/12/23 PageID.265 Page 8 of 9 1 For purposes of res judicata, the final judgment on the merits inquiry is claim- 2 specific. Id. In Hells Canyon, the Ninth Circuit recognized that a district court’s 3 granting of summary judgment on a specific claim constitutes a final judgment on 4 the merits for the purposes of that claim. Id. at 686, 690. 5 A court granted summary judgment in favor of Defendants in the state court 6 proceeding, dismissing Plaintiff’s case with prejudice. See ECF Nos. 7-10–7-12. 7 This satisfies the final judgment element. 8 c. Identity or Privity of Parties 9 As to the third element, privity of parties exists when “a person [is] so 10 identified in interest with a party to former litigation that he represents precisely 11 the same right in respect to the subject matter involved.” United States v. Bhatia, 12 545 F.3d 757, 759 (9th Cir. 2008) (internal quotation marks and citation omitted). 13 Here, Plaintiff was the same in both actions and Defendant LSF10 is the 14 same in both actions, with the applicable loan servicer sued. ECF No. 7 at 10. 15 Defendants contend the current loan servicer is in privity with the prior loan 16 servicer because both were loan servicers on behalf of LSF10 for Plaintiff’s loan. 17 Plaintiff does not challenge the identity or privity of parties. Therefore, there is no 18 dispute that the identity of parties is met. 19 20 ORDER DENYING MOTION TO REMAND AND GRANTING MOTION TO DISMISS ~ 8 Case 2:23-cv-00109-TOR 1 ECF No. 11 filed 07/12/23 PageID.266 Page 9 of 9 Finding all elements met, the Court concludes that res judicata bars 2 Plaintiff’s action. As a result, the action must be dismissed. The Court declines to 3 reach Defendants’ alternative bases for dismissal. 4 ACCORDINGLY, IT IS HEREBY ORDERED: 5 1. Plaintiff’s Motion to Remand (ECF No. 6) is DENIED. 6 2. Defendants’ Motion to Dismiss (ECF No. 7) is GRANTED. Plaintiff’s 7 8 9 10 claims are DISMISSED with prejudice. The District Court Executive is directed to enter this Order and Judgment, furnish copies to counsel, and CLOSE the file. DATED July 12, 2023. 11 12 THOMAS O. RICE United States District Judge 13 14 15 16 17 18 19 20 ORDER DENYING MOTION TO REMAND AND GRANTING MOTION TO DISMISS ~ 9
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