Liu v. Shellpoint Mortgage Servicing
- James Donato
- 3:23-cv-04887
- U.S. District Court · Northern District of California
- 2
In Liu v. Shellpoint Mortgage Servicing, Judge Donato dismissed Liu’s second amended complaint for lack of diversity jurisdiction and allowed a third amendment.
Amy Liu’s federal lawsuit against Shellpoint Mortgage Servicing and the other named defendants was affected. The order dismissed Liu’s second amended complaint for lack of diversity jurisdiction but allowed her to amend again by October 18, 2024.
What happened
In Liu v. Shellpoint Mortgage Servicing, Amy Liu alleged that the amount involved in her case was $159,683.98. The court said $130,680 of that amount came from a refinance apparently taken out by Liu’s sons, and that Liu could not claim losses suffered by them.
The court also found that Liu had not provided a good-faith basis for adding nearly $90,000 in additional damages based on tripling her claimed mortgage overpayments. As a result, she did not show that the amount in controversy met the requirement for diversity jurisdiction. The court also declined to hear related state-law claims because it had previously dismissed Liu’s federal claims.
Judge James Donato dismissed the second amended complaint for lack of diversity jurisdiction but allowed Liu to file a third amended complaint by October 18, 2024. The court warned that failing to meet the deadline or follow the order would result in dismissal under Federal Rule of Civil Procedure 41(b), and said this would almost certainly be Liu’s last opportunity to amend.
The detailed version
- Liu v. Shellpoint Mortgage Servicing · No. 3:23-cv-04887
- James Donato
- Sept. 27, 2024
Background
Amy Liu filed a second amended complaint against Shellpoint Mortgage Servicing and other defendants. She alleged that the amount in controversy was $159,683.98. The court stated that $130,680 of that amount was attributed to a refinance apparently taken out by Liu’s sons. The court relied on its prior ruling that Liu could not claim injury from losses suffered by her sons.
Liu also requested nearly $90,000 in additional damages, representing three times the amount she said she overpaid on her mortgage. The court found that Liu had not suggested a good-faith basis for tripling the alleged overpayments.
Jurisdictional ruling
The court dismissed the second amended complaint for lack of diversity subject-matter jurisdiction. Diversity jurisdiction is federal-court authority based on the parties’ legally relevant connection to different states and an amount in controversy exceeding the statutory threshold. The court concluded that Liu had not carried her burden of establishing that the amount in controversy exceeded that threshold under 28 U.S.C. § 1332.
The court declined to exercise supplemental jurisdiction over related claims because it had previously dismissed Liu’s federal-law claims. Supplemental jurisdiction is a court’s authority to hear related claims that would not independently qualify for federal jurisdiction.
Leave to amend and next steps
The court allowed Liu to file a third amended complaint by October 18, 2024. It stated that, to establish the amount in controversy, Liu should allege losses that she herself suffered as a result of the conduct she attributed to defendant Selene. Alternatively, by the same deadline, Liu could dismiss the case without prejudice in favor of pursuing a claim in state court, as circumstances warranted.
The court warned that failure to meet the deadline or otherwise comply with the order would result in dismissal under Federal Rule of Civil Procedure 41(b). It also stated that this would almost certainly be Liu’s last opportunity to amend.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.