Derrick Florence v. Wells Fargo Bank NA et al

Filing 10

ORDER REMANDING ACTION TO STATE COURT by Judge George H. Wu. Given that this dispute is based on neither federal law nor diversity of citizenship, the Court lacks subject matter jurisdiction over Plaintiff's claims. Therefore, the Court REMANDS this matter back to state court BC528998 Case Terminated. Made JS-6 (Attachments: # 1 Remand letter) (bp)

REMAND/JS-6
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 14-14-GW(FFMx)

Title

Derrick Florence v. Wells Fargo Bank N.A., et al.

Present: The Honorable

Date

February 11, 2014

GEORGE H. WU, UNITED STATES DISTRICT JUDGE

Javier Gonzalez

None Present

Deputy Clerk

Court Reporter / Recorder

Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

None Present

None Present

PROCEEDINGS (IN CHAMBERS):

ORDER REMANDING ACTION TO STATE COURT

I. Background
Plaintiff Derrick Florence (“Plaintiff”) commenced this Action against Wachovia Mortgage FSB
(“Wachovia”)1 and its successor Wells Fargo Bank, N.A. (“Wells Fargo” or “Defendant”) in state court on
November 27, 2013. See generally Compl., Docket No. 1. Defendant removed the Action to this Court.
See generally Notice of Removal, Docket No. 1. Plaintiff filed a First Amended Complaint (“FAC”) in this
Court on January 27, 2014. See generally FAC, Docket No 8. Plaintiff’s claims arise from Defendant’s
purportedly wrongful conduct surrounding a $294,000 home loan that Plaintiff obtained from World Savings
Bank, FSB (“World Savings”) in April of 2007. FAC ¶ 19.2 In the FAC, Plaintiff alleges one cause of
action for negligence. Id. ¶¶ 29-35.
In its Notice of Removal, Defendant argued that the Court had federal question jurisdiction over
Plaintiff’s claims pursuant to 28 U.S.C. §1331 because the original Complaint alleged that Wells Fargo
violated the federal government’s Home Affordable Modification Program (“HAMP”). See Notice of
Removal at 3-4. In other words, given that Plaintiff’s original breach of contract claim was premised on

1

Plaintiff erroneously sued Wachovia as “Wachovia Mortgage Corporation.” Compl. at 1.

2

After the loan was funded, World Savings changed its name to Wachovia Mortgage, FSB, effective December 31,
2007; in November of 2009, Wachovia Mortgage, FSB converted to Wells Fargo Bank Southwest, N.A., which
merged into Wells Fargo Bank, N.A. that same day. See generally Def. Request for Judicial Notice (“RJN”), Docket
No. 5, Exs. B, C, D, and E. The authenticity of these documents is capable of accurate and ready determination by
resort to sources whose accuracy cannot be reasonably questioned. See Marder v. Lopez, 450 F.3d 445, 448 (9th
Cir. 2006); Gamboa v. Tr. Corps & Cent. Mortg. Loan Servicing Co., No. 09-0007, 2009 U.S. Dist. LEXIS 19613, at
*4-*10 (N.D. Cal. Mar. 12, 2009), Hite v. Wachovia Mortgage, No. 09-02884, 2010 U.S. Dist. LEXIS 57732, at
*6-*9 (E.D. Cal. June 10, 2010).

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REMAND/JS-6
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 14-14-GW(FFMx)

Date

Title

February 11, 2014

Derrick Florence v. Wells Fargo Bank N.A., et al.

Defendant’s “refusal to comply with HAMP guidelines and FDIC directives” as well as Defendant’s
purportedly wrongful “dual tracking” practice (Compl. ¶ 16), Wells Fargo argued that federal questions
were presented on the face of the Complaint. Notice of Removal at 5-6. Alternatively, Defendant argued
that because the amount in controversy exceeds $75,000 and Plaintiff is a California citizen and Wells Fargo
is solely “a citizen of South Dakota,” the Court had diversity jurisdiction pursuant to 28 U.S.C. § 1332.3
Defendant filed a motion to dismiss the original Complaint on January 9, 2014, after which Plaintiff
filed the FAC. See generally Docket Nos. 4, 8. Having determined that the Court lacks subject matter
jurisdiction over this Action, the Court would vacate all pending hearings in this case and REMAND the
matter to state court.
II. Analysis
Federal courts are courts of limited jurisdiction and “can adjudicate only those cases which the
Constitution and Congress authorize them to adjudicate[.]” Schwarzer, Tashima, et al., Cal. Practice Guide:
Fed. Civ. Proc. Before Trial (2011) (“Schwarzer & Tashima”) § 2:2; see also Kokkonen v. Guardian Life
Ins. Co. of Am., 511 U.S. 375, 377 (1994). It is this Court’s duty to always examine its own subject matter
jurisdiction, see Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006), and the Court may remand a case
summarily if there is an obvious jurisdictional issue.  Cf. Scholastic Entm’t, Inc. v. Fox Entm’t Grp., Inc.,
336 F.3d 982, 985 (9th Cir. 2003) (“While a party is entitled to notice and an opportunity to respond when
a court contemplates dismissing a claim on the merits, it is not so when the dismissal is for lack of subject
matter jurisdiction.”) (internal citations omitted).
Under 28 U.S.C. § 1331, district courts have subject matter jurisdiction over civil actions “arising
under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. A claim “arises under”
federal law if “federal law creates the cause of action” or if “plaintiff’s right to relief necessarily depends
on resolution of a substantial question of federal law.” Schwarzer & Tashima § 2:586; see also Vaden v.
Discover Bank, 556 U.S. 49, 50 (2009) (“Under the well-pleaded complaint rule, a suit ‘arises under’ federal
law for 28 U.S.C § 1331 purposes ‘only when the plaintiff’s statement of his own cause of action shows that
it is based upon [federal law].’”) (quoting Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152
(1908)). Under 28 U.S.C. § 1332, federal courts also have subject matter jurisdiction based on diversity of
citizenship when all plaintiffs are of different citizenship than all defendants and the amount in controversy
exceeds $75,000. 28 U.S.C. § 1332; Schwarzer & Tashima § 2:1405; see also Exxon Mobil Corp. v.
Allapattah Servs., Inc., 545 U.S. 546, 553-54 (2005).
The citizenship of a national bank is governed by 28 U.S.C. § 1348, which states that “[a]ll national
banking associations shall, for the purposes of all other actions by or against them, be deemed citizens of

3

Defendant also claimed – and Plaintiff did not dispute – that Wachovia’s citizenship was irrelevant, because it no
longer exists. Notice of Removal at 12.

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REMAND/JS-6
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 14-14-GW(FFMx)

Date

Title

February 11, 2014

Derrick Florence v. Wells Fargo Bank N.A., et al.

the States in which they are respectively located.” In Wachovia Bank v. Schmidt, the Supreme Court
interpreted the statute to mean 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.” 546 U.S. 303, 307 (2006). However,
the Supreme Court did not address the issue of whether a national bank may also be a citizen of the state
in which it has its principal place of business, as the location of the national bank’s main office and its
principal place of business coincided in Schmidt. Id. at 315 nn. 8-9.
Here, the Court would conclude that there is no basis for federal question jurisdiction. In the FAC,
Plaintiff asserts a single claim for common law negligence. See generally FAC. Even assuming the FAC
could somehow be construed as alleging claims premised on Defendant’s purported breaches of HAMP
(e.g., FAC ¶ 16), Defendant correctly acknowledges that “[n]umerous district courts have interpreted
identical HAMP agreements and have come to the conclusion that a borrower [such as Plaintiff] is not a
third party beneficiary” to those agreements. Docket No. 4 at 30-31. “As a result, a borrower does not have
standing to sue its lender for alleged violation of the lender’s HAMP agreement.” Id.; see also Meyer v.
Wells Fargo Bank, N.A., No. 13-03727 WHA, 2013 U.S. Dist. LEXIS 172418, at *5 (N.D. Cal. Dec. 6,
2013) (“While our court of appeals has not yet addressed this question, courts in this district have held that
a borrower does not have standing to sue, as intended third-party beneficiaries, its lender for violation of
the lender’s HAMP agreement with the United States”). Thus, no federal question is presented “on the face
of plaintiff’s properly pleaded complaint.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987).4
Nor does diversity jurisdiction exist. Plaintiff is a citizen of California, and this Court has taken the
position that Defendant Wells Fargo is a citizen of both South Dakota and California. See, e.g., Mojica v.
Wells Fargo Bank, N.A., et al., CV 12-1608-GW, Docket No. 12 at 2 (Mar. 12, 2012). Other California
district courts have also found that a national bank has dual citizen-ship in the state where its main office
is located and its principal place of business.5 See, e.g., Martinez v. Wells Fargo Bank, No. 12-6006-EMC,
2013 U.S. Dist. LEXIS 72075, at *40 (N.D. Cal. May 21, 2013); Adams v. Wells Fargo Bank, N.A., No. 13256-MCE, 2013 U.S. Dist. LEXIS 65353, at *6 (E.D. Cal. May 3, 2013); Ortiz v. Wells Fargo Bank, N.A.,

4

The Court notes that Plaintiff does not allege he entered into or was offered any Trial Payment Plan (“TPP”) with Defendant.
Cf. Corvello v. Wells Fargo Bank, N.A., 728 F.3d 878, 884 (9th Cir. 2013) (“Where, as here, borrowers allege . . . that they
have fulfilled all their obligations under the TPP, and the loan servicer has failed to offer a permanent modification, the
borrowers have valid claims for breach of the TPP agreement.”).
5
The Ninth Circuit has yet to definitively rule on this question, and Rouse, et al. v. Wachovia Mortgage, FSB remains
pending before the Court of Appeals. See generally Rouse, et al. v. Wachovia Mortg., FSB, Case No. 12-55278. This Court
recognizes that some district courts within the Ninth Circuit have reached a contrary conclusion and found that a national
banking association’s principal place of business does not give rise to citizenship for the purposes of jurisdictional analysis.
See, e.g., Kim v. Wells Fargo Bank, N.A., No. 12-2066-EJD, 2012 U.S. Dist. LEXIS 108596, at *10 (N.D. Cal. Aug. 2, 2012);
Flores v. Wells Fargo Bank, N.A., No. 11-6619-JSC, 2012 U.S. Dist. LEXIS 32648, at *6 (N.D. Cal. Mar. 12, 2012).

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REMAND/JS-6
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 14-14-GW(FFMx)

Date

Title

February 11, 2014

Derrick Florence v. Wells Fargo Bank N.A., et al.

No. 13-60-GPC, 2013 U.S. Dist. LEXIS 56661, at *13 (S.D. Cal. Apr. 19, 2013). 6 Absent further direction
from the Ninth Circuit or the Supreme Court, the Court finds that Plaintiff is a citizen of the same state as
Defendant, and complete diversity is therefore lacking. See 28 U.S.C. § 1332.
III. Conclusion
Given that this dispute is based on neither federal law nor diversity of citizenship, the Court lacks
subject matter jurisdiction over Plaintiff’s claims. Therefore, the Court REMANDS this matter back to state
court (bc528998).

6

The Court is also aware that some judges in the Central District have recently changed their positions. See Mireles v. Wells
Fargo Bank, N.A., 845 F. Supp. 2d 1034, 1061 (C.D. Cal. 2012) (acknowledging that the Court had previously concluded that
Wells Fargo was a California citizen, but nevertheless altering its position to find that Wells Fargo is not a California citizen
because “[a]t the time Congress attempted to create jurisdictional parity between state and national banks, state banks could
be sued only where they were incorporated”); Kasramehr v. Wells Fargo Bank, N.A., 2011 U.S. Dist. LEXIS 52930, at *5
(C.D. Cal. May 17, 2011) (reversing the Court’s earlier position in Mount v. Wells Fargo Bank, N.A. and concluding that a
national banking association is not also a citizen of the state of its principal place of business).

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