Maurice Becnel v. Wells Fargo Bank N A et al

Filing 7

ORDER REMANDING ACTION TO LOS ANGELES COUNTY SUPERIOR COURT by Judge S. James Otero. This matter is before the Court on Defendant Wells Fargo Bank, N.A. ("Wells Fargo") Notice of Removal ("Notice"), filed on October 4, 2013. For the following reasons, the Court REMANDS this action to the Superior Court of California, County of Los Angeles ("Los Angeles County Superior Court"). Case Terminated. Made JS-6 (Attachments: # 1 Remand letter) (bp)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

JS-6

CIVIL MINUTES - GENERAL

DATE: October 17, 2013

CASE NO.: CV 13-07365 SJO (MANx)
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Maurice Becnel v. Wells Fargo Bank, N.A., et al.

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PRESENT: THE HONORABLE S. JAMES OTERO, UNITED STATES DISTRICT JUDGE
Victor Paul Cruz
Courtroom Clerk

Not Present
Court Reporter

COUNSEL PRESENT FOR PLAINTIFFS:

COUNSEL PRESENT FOR DEFENDANTS:

Not Present

Not Present

========================================================================
PROCEEDINGS (in chambers): ORDER REMANDING ACTION TO LOS ANGELES COUNTY
SUPERIOR COURT [Docket No. 1]
This matter is before the Court on Defendant Wells Fargo Bank, N.A., ("Wells Fargo") Notice of
Removal ("Notice"), filed on October 4, 2013. For the following reasons, the Court REMANDS this
action to the Superior Court of California, County of Los Angeles ("Los Angeles County Superior
Court").
I.

FACTUAL AND PROCEDURAL BACKGROUND

On August 26, 2013, Plaintiff Maurice Becnel ("Plaintiff") initiated the instant action against Wells
Fargo and Defendant Recontrust Company, N.A. in Los Angeles County Superior Court. (Notice
Ex. A ("Compl.").) Plaintiff's Complaint alleges the following against Wells Fargo: (1) violation of
California Civil Code section 2923.6(c) ("Homeowner's Bill of Rights"); (2) violation of California
Civil Code section 2923.6(d); and (3) violation of California Civil Code section 2923.6(e). (Compl.
¶¶ 25-51.) Plaintiff's claims are all state law claims related to Plaintiff's mortgage loan account
with Wells Fargo and Plaintiff's attempts to modify that loan. (See generally Compl.) On October
4, 2013, Wells Fargo removed the case to the Central District of California on the basis of diversity
jurisdiction. (Notice 1.)
II.

DISCUSSION

Wells Fargo's Notice asserts that removal is proper based on diversity jurisdiction. (See generally
Notice.) A defendant may remove an action to federal court on the basis of diversity jurisdiction
if (1) there is complete diversity between the adverse parties in the action; and (2) the amount in
controversy exceeds $75,000.00, exclusive of interest and costs. 28 U.S.C. § 1332(a); Matheson
v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003). "If at any time before final
judgment it appears that the district court lacks subject matter jurisdiction," the district court must
remand the case. 28 U.S.C. § 1447(c). A district court may raise the issue of subject matter
jurisdiction sua sponte any time during the pendency of an action. Snell v. Cleveland, Inc., 316
MINUTES FORM 11
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

DATE: October 17, 2013

CASE NO.: CV 13-07365 SJO (MANx)

F.3d 822, 826 (9th Cir. 2002). The Court finds it proper to determine whether there is federal
subject matter jurisdiction over this action.
Federal courts only have subject matter jurisdiction where the parties are completely
diverse—where "the citizenship of each plaintiff is diverse from the citizenship of each defendant."
Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). Wells Fargo contends that there is complete
diversity because Plaintiff is a citizen of Los Angeles, California, while Wells Fargo is a citizen of
South Dakota. (Notice 2-3.)
For diversity purposes, an individual is a citizen of the state where he or she is domiciled. Kanter
v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001). A person's residence can be prima
facie evidence of domicile. State Farm Mut. Auto. Ins. Co. v. Dyer, 19 F.3d 514, 520 (10th Cir.
1994). Plaintiff states that he resides in California. (Compl. ¶ 1.) The Court finds that Plaintiff is
a citizen of California based on this uncontroverted pleading.
Thus, complete diversity will only exist if Wells Fargo is not a citizen of California. Wells Fargo
avers that it is a citizen of South Dakota because "its main office is located in Sioux Falls, South
Dakota." (Notice 3.) However, Wells Fargo "has regularly described its principal place of business
as San Francisco, California." Stewart v. Wachovia Mortg. Corp., et al., No. 11-CV-06108, 2011
WL 3323115, at *4 (C.D. Cal. Aug. 2, 2011) abrogated by Mireles v. Wells Fargo Bank, N.A., 845
F. Supp. 2d 1034 (C.D. Cal. 2012). The Court must determine whether Wells Fargo is only a
citizen of the state where it has its main office or whether it is also a citizen in the state where it
has its principal place of business.
28 U.S.C. § 1348 provides that "[a]ll national banking associations shall, for the purposes of all
[actions brought by private citizens] . . ., be deemed citizens of the States in which they are
respectively located." In Wachovia Bank v. Schmidt, 546 U.S. 303 (2006), the United States
Supreme Court confronted the question of whether the word "located" in § 1348 means that the
citizenship of national banking associations is determined solely by the place designated in the
bank's articles of association as its main office or whether the bank is also a citizen of every state
in which it maintains a branch. The Court first noted that "'located' is not a word of 'enduring
rigidity,' but one that gains its precise meaning from context." Schmidt, 546 U.S. at 307. The
Court then engaged in a review of the historical circumstances giving rise to the adoption of
§ 1348, finding that:
[A] national bank, for § 1348 purposes, is a citizen of the State in
which its main office, as set forth in its articles of association, is
located. Were we to hold, as the Court of Appeals did, that a national
bank is additionally a citizen of every State in which it has established
a branch, the access of a federally chartered bank to a federal forum
would be drastically curtailed in comparison to the access afforded
state banks and other state-incorporated entities.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

JS-6

CIVIL MINUTES - GENERAL

DATE: October 17, 2013

CASE NO.: CV 13-07365 SJO (MANx)

Id. Thus, the Court struck down the court of appeals’ ruling that a national bank is a citizen of
every state in which it maintains a branch. The Court did not institute a rule that a national bank
is a citizen only of the state where its main office is located. Nor did the Court confront the precise
issue of whether a national bank is also a citizen of the state where it maintains its principal place
of business. Rather, it found that question unnecessary to answer. Id. at 317 n.9 ("The absence
of a 'principal place of business' reference in § 1348 may be of scant practical significance for, in
almost every case, as in this one, the location of a national bank's main office and of its principal
place of business coincide.").
Moreover, the Supreme Court "signaled that the definitional content it provided for the word did
not foreclose the possibility that further context would support an expanded definition." Stewart,
2011 WL 3323115, at *5. Additionally, the Court determined that Congress's goal in adopting
§ 1348 was to provide parity for state-chartered banks and national banks. Schmidt, 546 U.S. at
307, 310; see also 28 U.S.C. § 1332(c)(1); Goodman v. Wells Fargo Bank, N.A., No. 11-CV-2685,
2011 WL 2372044, at *2 (C.D. Cal. June 1, 2011); Mount v. Wells Fargo Bank, N.A., No. 08-CV6298, 2008 WL 5046286, at *2 (C.D. Cal. Nov. 24, 2008). State-chartered banks are citizens of
their state of incorporation and also the state where their principal place of business is located.
In order to accomplish the state-federal parity envisioned by Congress, national banks must also
have this dual citizenship for the purpose of diversity jurisdiction.
The Court is aware that other cases from this District have held that Wells Fargo is not a citizen
of California for diversity purposes. As these decisions are not from the United States Supreme
Court or the Ninth Circuit, they are not binding on this Court. Other cases from this District have
applied the principal place of business test and determined that Wells Fargo is a California citizen
for diversity purposes. See, e.g., Rouse v. Wachovia Mortgage, FSB, No. 11-CV-0928, 2012 WL
174206, *8-14 (C.D. Cal. Jan. 13, 2012); Goodman, 2011 WL 2372044, at *2; Mount, 2008 WL
5046286, at *1-2. Furthermore, other districts have published opinions holding that both the home
office test and the principle place of business test satisfy § 1348. See, e.g., Taheny v. Wells
Fargo Bank, N.A., 878 F. Supp. 2d 1093 (E.D. Cal. 2012). The Court concludes that Wells Fargo
is a citizen of California because its principal place of business is in California. Because Wells
Fargo is a citizen of California, complete diversity is absent. Accordingly, the Court REMANDS
this action to Los Angeles County Superior Court for lack of subject matter jurisdiction.
III.

RULING

For the foregoing reasons, the Court REMANDS this action to Los Angeles County Superior Court.
This action shall close.
IT IS SO ORDERED.

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