Rene Avila et al v. CitiMortgage et al

Filing 26

MINUTES (IN CHAMBERS) Order GRANTING Motion to Remand by Judge Philip S. Gutierrez granting 17 MOTION to Remand Case to State Court: For the foregoing reasons, the Court GRANTS Plaintiff's motion to remand. (see document for further details) MD JS-6. Case Terminated. (bm)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

#17/19/20/21 (7/6 HRG OFF)

JS-6

CIVIL MINUTES - GENERAL

ED
Case No.

CV 15-713 PSG (DTBx)

Title

Rene Avila, et al. v. CitiMortgage, et al.

Present: The Honorable

Date

June 30, 2015

Philip S. Gutierrez, United States District Judge

Wendy Hernandez

Not Reported

Deputy Clerk

Court Reporter

Attorneys Present for Plaintiff(s):

Attorneys Present for Defendant(s):

Not Present

Not Present

Proceedings (In Chambers):

Order GRANTING Motion to Remand

Before the Court is Plaintiffs Rene Avila and Nancy Avila’s (“Plaintiffs”) motion to
remand. Dkt. # 17. The Court finds the matter appropriate for decision without oral argument.
See Fed. R. Civ. P. 78; L.R. 7-15. After considering the moving, opposing, and reply papers, the
Court GRANTS the motion.
I.

Background

Plaintiffs bring their cause of action against Defendants CitiMortgage, Inc. (“CMI”) and
Quality Loan Services Corporation (“Quality”) (collectively, “Defendants”). Dkt. # 1. Plaintiffs
financed the subject property on August 23, 2006 with a loan obtained from CMI and secured by
a deed of trust for the property. Compl. ¶ 11. On June 25, 2010, Quality was substituted in as
the trustee under the deed of trust. Id. ¶ 12. On April 26, 2012, Defendants recorded a notice of
default on the property. Id. ¶ 13. Plaintiffs allege that CMI and Quality did not satisfy required
compliance standards prior to filing the notice of default. Id. ¶ 14.
Plaintiffs filed this case on March 12, 2015 in Riverside Superior Court. Dkt. # 1. The
case was removed on April 13, 2015. Id. Plaintiffs assert claims for: (1) violation of Cal. Civil
Code § 2923.55; (2) violation of Cal. Civil Code § 2923.6; (3) violation of Cal. Civil Code §
2923.7; (4) violation of Cal. Civil Code § 2924.11; (5) injunctive relief pursuant to Cal. Civil
Code § 2924.12; and (6) unfair business practices. Compl. ¶¶ 15-48. Plaintiff now moves to
remand this case. Dkt. # 17.
II.

Legal Standard

Generally, subject matter jurisdiction is based on the presence of a federal question, see
28 U.S.C. § 1331, or on complete diversity between the parties, see 28 U.S.C. § 1332. For a
federal court to exercise diversity jurisdiction, there must be “complete” diversity between the
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 15-713 PSG (DTBx)

Date

Title

June 30, 2015

Rene Avila, et al. v. CitiMortgage, et al.

parties and the amount in controversy must exceed $75,000. See Strawbridge v. Curtis, 7 U.S.
267, 267 (3 Cranch) (1806); 28 U.S.C. § 1332(a). The diversity of citizenship requirement does
not apply to “nominal or formal parties who have no interest in the action and are merely joined
to perform the ministerial act of conveying the title if adjudged to the complainant.” Prudential
Real Estate Affiliates, Inc. v. PPR Realty, Inc., 204 F.3d 867, 873 (9th Cir. 2000) (internal
quotations omitted); see also Navarro Sav. Ass'n v. Lee, 446 U.S. 458, 461, (1980) (“[A] federal
court must disregard nominal or formal parties and rest jurisdiction only upon the citizenship of
real parties to the controversy.”).
If at any time before the entry of final judgment it appears that the Court lacks subject
matter jurisdiction over a case removed from state court, it must remand the action to state court.
See 28 U.S.C. § 1447(c); Int’l Primate Prot. League v. Adm’rs of Tulane Educ. Fund, 500 U.S.
72, 87 (1991). Removal jurisdiction “is determined (and must exist) as of the time the complaint
is filed and removal is effected.” Strotek Corp. v. Air Transp. Ass'n of America, 300 F.3d 1129,
1131 (9th Cir. 2002). There is a “strong presumption” against removal jurisdiction and the party
seeking removal always has the burden of establishing that removal is proper. Hunter v. Philip
Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009). If there is any ambiguity as to the propriety
of removal, federal jurisdiction must be rejected. See id.
III.

Discussion

Although Plaintiffs and Quality are citizens of California, Removal ¶ 8, Compl. ¶ 3,
Defendants assert that Quality is a nominal defendant and, therefore, its citizenship should be
disregarded when considering the diversity requirement under 28 U.S.C. § 1332. Removal ¶ 6.
If the Court were to disregard Quality’s citizenship, complete diversity would be satisfied
because CMI is incorporated in New York and has its principal place of business in Missouri.
Id. ¶ 7; see 28 U.S.C. § 1332(c)(1) (“[A] corporation shall be deemed to be a citizen of every
State and foreign state by which it has been incorporated and of the State or foreign state where
it has its principal place of business.”). Thus, the Court must determine whether Quality was a
nominal defendant at the time of removal.
Under California Civil Code § 2924l, a trustee may file for a declaration of nonmonetary
status if the trustee “maintains a reasonable belief that it has been named in the action . . . solely
in its capacity as a trustee, and not arising out of any wrongful acts or omissions” in performing
its duties as a trustee. Cal. Civ. Code § 2924l (a) (2005). If a trustee files for non-monetary
status and “no objection is served within the 15-day objection period, the trustee shall not be
required to participate any further in the action or proceeding” and shall not be subject to
damages. Cal. Civ. Code § 2924l (d).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 15-713 PSG (DTBx)

Date

Title

June 30, 2015

Rene Avila, et al. v. CitiMortgage, et al.

Although district courts recognize non-monetary status defendants as nominal parties and,
therefore, exclude those defendants from diversity consideration, “[c]ourts refuse to ignore [a]
‘nominal’ party’s citizenship for purposes of diversity jurisdiction when the case is removed to
federal court before the fifteen-day objection period has expired.” Jenkins v. Bank of America,
N.A., No. CV 14–04545 MMM (JCx), 2015 WL 331114, at *7 (C.D. Cal. Jan. 26, 2015)
(citation omitted); see also, e.g., Silva v. Wells Fargo Bank, N.A., No. CV 11–3200 GAF
(JCGx), 2011 WL 2437514, at *4 (C.D. Cal. June 16, 2011) (holding that, because the removing
defendant filed for removal before the 15 days had expired, “[a]t the time of removal, the
declaration of non-monetary status had not rendered [defendant] a nominal party whose
citizenship was irrelevant for diversity purposes”); Wise v. Suntrust Mortgage, Inc., No.
11–CV–01360–LHK, 2011 WL 1466153 at *4 (N.D. Cal. Apr. 18, 2011).
Here, Defendant Quality’s citizenship cannot be excluded from diversity consideration
because, at the time of removal, Plaintiffs could still object to Quality’s filing of non-monetary
status. Quality filed for non-monetary status on April 3, 2015, Removal ¶ 5, and Defendants
filed for removal ten days later, on April 13, 2015, Dkt. # 1. Thus, when Defendants removed,
the fifteen-day objection period had not expired.
Defendant additionally asserts that Plaintiff has insufficiently pled the citizenship of
Defendant Quality. Opp. 4:26-27. However, the burden rests on the removing party to “prov[e]
the facts to support jurisdiction.” Gaus v. Miles, 980 F.2d 564, 567 (9th Cir. 1990). Defendant
has not established diversity of citizenship. Accordingly, the Court lacks subject matter
jurisdiction over this action and must remand the action to state court.1
IV.

Conclusion
For the foregoing reasons, the Court GRANTS Plaintiff’s motion to remand.
IT IS SO ORDERED.

1

Defendant asserts that the motion to remand should be denied according to Local Rule 7-3
because Plaintiffs did not meet and confer before filing the motion. See Opp. 3:12-14.
However, regardless of Plaintiffs’ motion or any of its alleged procedural shortcomings, the
Court must remand the case for lack of subject matter jurisdiction. See 28 U.S.C. § 1447(c);
Int’l Primate Prot. League, 500 U.S. at 87.

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