Clapick et al v. First National Bank of Arizona et al

Filing 20

ORDER granting 10 Motion to Remand and remanding this action to the Superior Court of Arizona in Maricopa County for lack of federal subject matter jurisdiction. Signed by Judge Frederick J Martone on 6/20/12. (Attachments: # 1 Copy of Remand Letter)(LAD)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 12 13 14 15 16 ) ) ) Plaintiffs, ) ) vs. ) ) First National Bank of Arizona; Bank of) New York Mellon; Bank of America N.A.;) Mortgage Electronic Registration Systems) Incorporated; ReconTrust Company N.A.;) ) John Does, ) ) Defendants. ) ) Bari E. Clapick; Kuma & Cash, LLC, No. CV 12-00666-PHX-FJM ORDER 17 18 We have before us plaintiffs' motion to remand (doc. 10), plaintiff's notice of errata 19 (doc. 15), defendants' response (doc. 16), and plaintiffs' reply (doc. 18). Plaintiffs filed this 20 action in the Superior Court of Arizona in Maricopa County on February 21, 2012. Their 21 amended special action complaint asserts claims for violation of A.R.S. § 33-420, violation 22 of the Arizona Consumer Fraud Act, and quiet title. Defendants The Bank of New York 23 Mellon Corporation, Bank of America, N.A., ReconTrust Company, N.A., and Mortgage 24 Electronic Registration Systems, Inc. removed on the basis of diversity on March 28, 2012. 25 Plaintiff Clapick purchased a house in Scottsdale, Arizona in August 2004. She 26 financed the purchase with a loan for $520,800 from the First National Bank of Arizona 27 ("FNBA"). FNBA was one of three banks owned by First National Bank Holding Company. 28 FNBA was merged into a sister bank, First National Bank of Nevada ("FNBN"), on June 30, 1 2008. FNBN was soon closed and its assets sold to Mutual of Omaha Bank ("MOB"), a 2 federal savings association. 3 "[R]emoval statutes are strictly construed against removal." Libhart v. Santa Monica 4 Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979). "Federal jurisdiction must be rejected if 5 there is any doubt as to the right of removal in the first instance." Gaus v. Miles, Inc., 980 6 F.2d 564, 566 (9th Cir. 1992). When a case has been removed to federal court under 28 7 U.S.C. § 1441 on the basis of diversity, "the proponent of federal jurisdiction – typically the 8 defendant in the substantive dispute – has the burden to prove, by a preponderance of the 9 evidence, that removal is proper." Geographic Expeditions, Inc. v. Estate of Lhotka ex rel. 10 Lhotka, 599 F.3d 1102, 1106-07 (9th Cir. 2010). Defendants purport to base jurisdiction on 11 diversity of citizenship. 12 Plaintiffs claim that an unserved defendant, FNBA, destroys diversity because it was 13 an Arizona citizen and its successor MOB is a national citizen. Defendants contend that 14 FNBN was a citizen of Nevada and, because it acquired FNBA before being closed and 15 placed into a receivership, the last state of citizenship of FNBA was Nevada. Defendants fail 16 to discuss the effect of MOB's acquisition of FNBN's assets. MOB, a federally chartered 17 savings association, was the successor to FNBA before plaintiffs filed their complaint and 18 apparently continues to be FNBA's successor. "In determining whether a Federal court has 19 diversity jurisdiction over a case in which a Federal savings association is a party, the Federal 20 savings association shall be considered to be a citizen only of the State in which such savings 21 association has its home office." 12 U.S.C. § 1461(x). Defendants have made no allegations 22 regarding the state of MOB's citizenship in general or home office under this statute. 23 In addition, one of the plaintiffs is a limited liability company ("LLC"). An LLC "is 24 a citizen of every state of which its owners/members are citizens." Johnson v. Columbia 25 Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). The parties fail to discuss the 26 citizenship of the members of plaintiff Kuma & Cash, LLC. Defendants have not overcome 27 the "strong presumption" against federal jurisdiction and have not met their burden of 28 proving that removal was proper. -2- 1 IT IS ORDERED GRANTING plaintiff's motion to remand and remanding this 2 action to the Superior Court of Arizona in Maricopa County for lack of federal subject matter 3 jurisdiction. (Doc. 10). 4 DATED this 20th day of June, 2012. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3-

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