Canzoni v. Bank of America NA

— 1 — — 2 — — 3 — — 4 — — 5 — UNITED STATES DISTRICT COURT — 6 — WESTERN DISTRICT OF WASHINGTON 7 AT SEATTLE — 8 — AMAS CANZONI, Case No. C23-5489 — 9 — 10 Plaintiff, ORDER OF REMAND 11 v. 12 BANK OF AMERICA N.A., SHELLPOINT MORTGAGE SERVICING, and NORTH 13 STAR TRUSTEE, LLC, — 14 — Defendants. — 15 — 16 This matter comes before the Court on defendants’ “Notice of Removal” (Dkt. # 1) and 17 “Motion for Extension of Time to Respond to Plaintiff’s Complaint” (Dkt. # 5). Having 18 reviewed the filings and the remainder of the record, the Court finds as follows: 19 I. Background 20 Plaintiff filed the instant suit on April 24, 2023 in Thurston County Superior Court. Dkt. 21 # 1-1. The complaint alleges state law claims including trespass to land, constructive fraud, 22 conversion, breach of fiduciary duty, unjust enrichment, and slander of title against defendants 23 Bank of America, Shellpoint Mortgage Servicing, and North Star Trustee LLC in relation to a 24 scheduled foreclosure sale of plaintiff’s residence. Id. 25 On May 25, 2023, defendant Bank of America filed a notice of removal,1 asserting that 26 this Court has jurisdiction over the matter based on diversity of citizenship. Dkt. # 1 at 3-7. — 27 — 28 1 Both Shellpoint Mortgage Servicing LLC and North Star Trustee LLC consent to removal. See 1 Specifically, defendants allege that plaintiff is a citizen of Washington, that Bank of America is 2 a citizen of North Carolina, and that Shellpoint Mortgage Servicing LLC is a citizen of 3 Delaware and New York. Id. at 4-5. Defendants further allege that although North Star Trustee 4 LLC (“North Star”) is a citizen of Washington, its citizenship should not be considered for the 5 purposes of establishing diversity jurisdiction as North Star is a “nominal defendant” that has no 6 interest in the action. Id. at 5. 7 II. Analysis 8 Under 28 U.S.C. § 1441 (a), a defendant may timely remove a state-court action to federal 9 court if the federal court has original jurisdiction over the dispute. As the removing party, a 10 defendant has the burden of establishing that removal is proper, and “[f]ederal jurisdiction must 11 be rejected if there is any doubt as to the right of removal in the first instance.” Gaus v. Miles 12 Inc., 980 F.2d 564, 566 (9th Cir. 1992). “If at any time . . . it appears that the district court lacks 13 subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447 (c). 14 Where, as here, removal is based on diversity of citizenship, the relevant statute requires 15 that the matter in controversy exceed $75,000 and that all parties to the action are “citizens of 16 different states.” 28 U.S.C. § 1332 (a)(1). Diversity jurisdiction requires “complete diversity”— 17 i.e., that each plaintiff is diverse from each defendant. Teledyne v. Kone Corp., 892 F.2d 1404 , 18 1408 (9th Cir. 1990). However, “[c]ircuit law teaches that courts should ‘ignore the citizenship 19 of nominal or formal parties who have no interest in the action, and are merely joined to perform 20 the ministerial act of conveying the title if adjudged to the complainant.’” Silva v. Wells Fargo 21 Bank N.A., No. C11–32GAF-JCGX, 2011 WL 2437514 , at *2 (C.D. Cal. June 16, 2011) 22 (quoting Prudential Real Estate Affiliates, Inc. v. PPR Realty, Inc., 204 F.3d 867, 873 (9th Cir. 23 2000)); see also Strotek Corp. v. Air Transp. Ass’n. of Am., 300 F.3d 1129, 1133 (9th Cir.2002) 24 (“Defendants who are nominal parties with nothing at stake may be disregarded in determining 25 diversity . . . .”). “The paradigmatic nominal defendant is a trustee, agent, or depositary who is 26 joined purely as a means of facilitating collection.” S.E.C. v. Colello, 139 F.3d 674, 676 (9th 27 Cir. 1998) (internal punctuation and citation omitted). In light of this, many courts have found 28 that a trustee under a deed of trust is a nominal defendant in an action challenging the 1 foreclosure or threatened foreclosure of property. Prasad v. Wells Fargo Bank, N.A., No. C112 894-RSM, 2011 WL 4074300 , at *2 (W.D. Wash. Sept. 13, 2011) (collecting cases). 3 However, a defendant’s status as a trustee, standing alone, is not dispositive. See Couture 4 v. Wells Fargo Bank, N.A., No. C11-1096IEG-CAB, 2011 WL 3489955 , at *3 (S.D. Cal. Aug. 5 9, 2011). Where, for example, plaintiffs have asserted causes of actions or requests for relief 6 directly against the trustee, courts have held that a trustee under a deed of trust is not a nominal 7 defendant. See, e.g., id.; Silva v. Wells Fargo Bank NA, No. C11-32GAF JCGX, 2011 WL 8 2437514 (C.D. Cal. June 16, 2011); Leem v. Bank of Am. Home Loans, No. C13-1517RSL, 2014 9 WL 897378 (W.D. Wash. Mar. 6, 2014). The claims asserted against the trustee need not be 10 meritorious to preclude a finding that the trustee is a “nominal” defendant. See Floyd v. Nw. Tr. 11 Servs., Inc., No. C16-581RBL, 2016 WL 7407228 , at *2 (W.D. Wash. Dec. 22, 2016) 12 (explaining that because plaintiffs made specific claims and sought money damages against 13 trustee, it was not a “nominal defendant,” noting that while “the claims may be without merit 14 [that] does not mean that they have not been asserted”); Cervantes v. Wells Fargo Bank, N.A., 15 No. C15-178JLS-DTBX, 2015 WL 2127215 , at *4 (C.D. Cal. May 6, 2015) (noting that “while 16 [defendant] may believe Plaintiffs cannot state a claim against [trustee], it has failed to show that 17 [trustee] has been joined in a merely nominal capacity”). The inquiry instead turns on whether 18 the trustee truly lacks any interest in the outcome of plaintiff’s claims. See Prudential Real 19 Estate, 204 F.3d at 873 . Removing defendants bear the burden of proving a defendant is a 20 nominal party. Silva, 2011 WL 2437514 , at *3. 21 Here, the Court finds that defendants have not demonstrated that North Star is merely a 22 nominal defendant. While the Court passes no comment on the merit of plaintiff’s claims, the 23 complaint alleges that North Star has breached its fiduciary duty to plaintiff – in part by failing 24 to act as a “neutral party” – as well as committed the torts of trespass, fraud, and conversion. 25 See, e.g., Dkt. # 1 at 25, 27. The complaint further seeks monetary damages and injunctive relief 26 against all defendants, including North Star. Id. at 34 . Given that defendants shoulder the burden 27 of affirmatively demonstrating that North Star is not a real party in interest and that plaintiff’s 28 complaint – construed liberally given his pro se status – appears to raise claims directly against 1 North Star for monetary damages and injunctive relief, the Court is not satisfied that North Star 2 is merely a “neutral” party with “no interest in the outcome,” Prasad, 2011 WL 4074300 , at *3, 3 nor is it convinced that North Star is being sued “merely to perform [a] ministerial act,” 4 Prudential Real Estate, 204 F.3d at 873 . 5 Because both plaintiff and North Star are citizens of Washington, defendants cannot 6 establish the complete diversity of citizenship required to invoke this Court’s jurisdiction under — 7 — 28 U.S.C. § 1332 and the case must be remanded. Accordingly, the Court declines to rule on 8 defendants’ motion for extension of time to respond to plaintiff’s complaint. 9 III. Conclusion 10 Because defendants have failed to demonstrate that complete diversity exists in this 11 matter, the Court REMANDS this matter to Thurston County Superior Court. The Clerk is 12 respectfully directed to strike defendants’ motion for extension of time (Dkt. # 5) and close the 13 case. 14 IT IS SO ORDERED. — 15 — 16 DATED this 5th day of June, 2023. — 17 — 18 A — 19 — Robert S. Lasnik 20 United States District Judge — 21 — — 22 — — 23 — — 24 — — 25 — — 26 — — 27 — — 28 —