Niki-Alexander Shetty v. The Bank of New York Mellon et al

Filing 38

Order by Judge Lucy H. Koh Granting 16 Motion to Dismiss for Lack of Jurisdiction; Denying as Moot 37 Stipulation; Denying as Moot 13 Motion to Dismiss; Denying as Moot 16 Motion to Dismiss; Denying as Moot 17 Motion to Strike ; Denying as Moot 28 Motion to Dismiss; Denying as Moot 29 Motion to Dismiss. (lhklc2S, COURT STAFF) (Filed on 8/8/2017)

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION

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United States District Court
Northern District of California

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NIKI-ALEXANDER SHETTY,

Case No. 17-CV-02980-LHK

Plaintiff,

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ORDER DISMISSING CASE FOR
LACK OF JURISDICTION

v.

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Re: Dkt. No. 13
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CWALT, INC., et al.,
Defendants.

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Plaintiff Niki-Alexander Shetty (“Shetty”) brings this action against named Defendants

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Alternative loan trust 2006-OA17; the Bank of New York Mellon (“Mellon”); Cwalt Inc.

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(“Cwalt”); and National Default Servicing Corporation (collectively, “Defendants”). Before the

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Court is Mellon’s unopposed motion to dismiss for lack of jurisdiction and for failure to state a

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claim. ECF No. 16. The Court finds that the instant motion is suitable for resolution without oral

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argument and therefore VACATES the hearing scheduled for August 10, 2017. Having considered

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the motion, the record in this case, and the relevant law, the Court hereby GRANTS Mellon’s

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motion to dismiss for lack of jurisdiction without prejudice for refiling in state court.

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I.

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BACKGROUND
A. Factual Background
Plaintiff claims title to the property located at 203 Meghann Court, Watsonville, CA 95076
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Case No. 17-CV-02980-LHK
ORDER DISMISSING CASE FOR LACK OF JURISDICTION

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(“property”). ECF No. 1 (“Compl.”) ¶ 4. Plaintiff claims title by way of a grant claim deed

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executed by Maria Castellanos in 2016. Id. On August 23, 2006, Castellanos took out a home loan

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secured by the property by way of a deed of trust. Id. ¶¶ 18–19. The deed of trust named MERS as

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Castellanos’s nominee. Compl. Ex. 1 p. 2. On May 13, 2013, MERS assigned the deed of trust to

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Mellon. Compl. Ex. 3. On December 23, 2015, Mellon substituted National Default Servicing

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Corporation (“NDSC”) as trustee under the deed of trust. Compl. Ex. 4. On June 7, 2013,

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Castellanos defaulted on the deed of trust. Compl. Ex. 5. On April 27, 2017, NDSC recorded a

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notice of trustee’s sale against the property. Compl. Ex. 6.
Plaintiff alleges six causes of action in the complaint, including negligence, wrongful

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foreclosure, cancellation and expungement of void written instruments, quiet title, injunctive relief

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United States District Court
Northern District of California

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pursuant to California Civil Code § 2924.12, and “declarative relief.” Compl. ¶¶ 83–228. These

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causes of action are all based on Plaintiff’s claim that MERS was not authorized to assign the deed

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of trust to Mellon. Compl. ¶¶ 10–15, 20–23.

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B. Procedural History

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Plaintiff filed the complaint in the instant action on May 24, 2017. ECF No. 1. The case

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was initially assigned to Magistrate Judge Howard Lloyd. ECF No. 6. On June 20, 2017, Cwalt

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filed a motion to dismiss. ECF No. 13. The same day, Mellon filed the instant motion to dismiss,

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ECF No. 16, and a motion to strike, ECF No. 17. Plaintiff did not file an opposition to any of these

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motions. By July 12, 2017, Plaintiff had not filed a document indicating whether he consented to

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magistrate judge jurisdiction despite having been ordered to do so. ECF No. 22. Therefore,

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Magistrate Judge Lloyd ordered that the case be reassigned to a district judge. Id. The same day,

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July 12, 2017, the case was reassigned to the undersigned judge. ECF No. 23.
After the case was reassigned to the undersigned judge, Defendant NDSC filed a motion

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for dismiss on July 20, 2017. ECF No. 28. NDSC filed an amended motion to dismiss on July 21,

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2017. ECF No. 29. Plaintiff did not file an opposition to either of NDSC’s motions.

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II.

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LEGAL STANDARD
A defendant may move to dismiss an action for lack of subject matter jurisdiction pursuant
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to Federal Rule of Civil Procedure 12(b)(1). A jurisdictional challenge may be facial or factual.

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See Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). Where the attack is

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facial, the court determines whether the complaint’s allegations are sufficient on their face to

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invoke federal jurisdiction, and accepts all material allegations as true and construes them in favor

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of the party asserting jurisdiction. See Warth v. Seldin, 422 U.S. 490, 501 (1975). Where the attack

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is factual, “the court need not presume the truthfulness of the plaintiff’s allegations.” Safe Air, 373

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F.3d at 1039. In resolving a factual dispute regarding subject matter jurisdiction, a court may

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review extrinsic evidence beyond the complaint without converting a motion to dismiss into one

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for summary judgment. See id.; McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988)
(holding that a court “may review any evidence, such as affidavits and testimony, to resolve

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United States District Court
Northern District of California

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factual disputes concerning the existence of jurisdiction”). Once a party has moved to dismiss for

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lack of subject matter jurisdiction under Rule 12(b)(1), the opposing party bears the burden of

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establishing the Court's jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375,

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377 (1994); Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010).

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III.

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DISCUSSION
Before the Court is Mellon’s motion to dismiss. ECF No. 16. In the motion to dismiss,

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Mellon argues that Plaintiff has not established federal jurisdiction over the instant case under 28

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U.S.C. § 1331 or 28 U.S.C. § 1332. Id. ECF No. 16. Mellon also argues that Plaintiff has failed to

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state a claim for any of Plaintiff’s causes of action. Id. As discussed below, the Court finds that the

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Court lacks jurisdiction over the instant case and therefore the Court need not consider Mellon’s

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argument that Plaintiff has failed to state a claim for any of Plaintiff’s causes of action.

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Mellon’s motion to dismiss for lack of jurisdiction argues that Plaintiff has not established

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jurisdiction under either 28 U.S.C. § 1331 or 28 U.S.C. § 1332. In support of this argument,

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Mellon requests that the Court take judicial notice of certain documents. ECF No. 16-2. The Court

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first addresses Mellon’s request for judicial notice and then addresses Mellon’s arguments under

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28 U.S.C. § 1331 and 28 U.S.C. § 1332 in turn.

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A. Request for Judicial Notice
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The Court may take judicial notice of matters that are either “generally known within the

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trial court’s territorial jurisdiction” or “can be accurately and readily determined from sources

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whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). Public records,

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including judgments and other publicly filed documents, are proper subjects of judicial notice.

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See, e.g., United States v. Black, 482 F.3d 1035, 1041 (9th Cir. 2007) (“[Courts] may take notice

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of proceedings in other courts, both within and without the federal judicial system, if those

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proceedings have a direct relation to matters at issue.”); Rothman v. Gregor, 220 F.3d 81, 92 (2d

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Cir. 2000) (taking judicial notice of a filed complaint as a public record).

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Mellon requests judicial notice for seven documents. ECF No. 16-2. Most of these
documents are relevant to Mellon’s motion to dismiss for failure to state a claim. Id. at 2. Only one

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United States District Court
Northern District of California

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of these documents is relevant to Mellon’s motion to dismiss for lack of jurisdiction. Id. However,

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because the Court finds that the Court lacks jurisdiction over the instant case, the Court need not

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take judicial notice of documents that are relevant to the merits of the case. Instead, the Court need

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only consider the single document for which Mellon requests judicial notice that is relevant to

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Mellon’s motion to dismiss for lack of jurisdiction.

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Specifically, Mellon requests judicial notice of the Statement and Designation by Foreign

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Corporation filed by CWALT, Inc. with the California Secretary of State on July 19, 2007, and

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indexed as Document Number 3008679. Id. This document is attached to Mellon’s request for

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judicial notice as Exhibit 6. Id. This document is a public record and is therefore the proper subject

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of judicial notice. Additionally, Plaintiff does not oppose Mellon’s request for judicial notice. The

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Court therefore GRANTS Mellon’s request for judicial notice of the Statement and Designation by

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Foreign Corporation filed by CWALT, Inc. with the California Secretary of State on July 19,

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2007, and indexed as Document Number 3008679.

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B. 28 U.S.C. § 1331
Mellon first argues that the Court lacks jurisdiction under 28 U.S.C. § 1331. Under 28

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U.S.C. § 1331, federal courts have original jurisdiction over civil actions “arising under the

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Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. Federal jurisdiction “is

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Case No. 17-CV-02980-LHK
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determined (and must exist) as of the time the complaint is filed . . . .” Strotek Corp. v. Air

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Transport Ass’n of Am., 300 F.3d 1129, 1133 (9th Cir.2002). Jurisdiction pursuant to § 1331 is

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governed by the “well-pleaded complaint rule,” which provides that federal question jurisdiction

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exists only when “a federal question is presented on the face of plaintiff's properly pleaded

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complaint.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987).
As Mellon points out, the complaint discloses no federal statutory or constitutional

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question. Plaintiff’s complaint alleges six causes of action in the complaint, including negligence,

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wrongful foreclosure, cancellation and expungement of void written instruments, quiet title,

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injunctive relief pursuant to California Civil Code § 2924.12, and “declarative relief” pursuant to

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the Declaratory Judgment Act. Compl. ¶¶ 83–228. The first five of these causes of action contain

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United States District Court
Northern District of California

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no mention of any federal statute, and thus cannot establish jurisdiction under 28 U.S.C. § 1331.

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The sixth cause of action, for “declarative relief,” appears to be brought primarily under

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California Code of Civil Procedure § 1060. See Compl. ¶ 218. However, the caption of the

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complaint also mentions “28 U.S.C. §§ 2201 & 2202,” the federal Declaratory Judgment Act. Id.

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at 1. Thus, the Declaratory Judgment Act may also be a ground for Plaintiff’s sixth cause of

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action. Nevertheless, even if Plaintiff’s “declarative relief” cause of action is brought pursuant to

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the Declaratory Judgment Act, this is insufficient to confer jurisdiction under 28 U.S.C. § 1331.

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“[T]he Federal Declaratory Judgment Act, 28 U.S.C. § 2201, . . . does not provide the district

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courts with an independent basis for federal question jurisdiction.” Avery v. GE Auto Ins.

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Program, 243 F. App’x 268, 269 (9th Cir. 2007); see also Skelly Oil Co. v. Phillips Petroleum

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Co., 339 U.S. 667, 671 (1950) (“The operation of the Declaratory Judgment Act is procedural

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only. Congress enlarged the range of remedies available in the federal courts but did not extend

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their jurisdiction.”) (internal citations omitted). None of the rights which Plaintiff asserts in

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Plaintiff’s “declarative relief” cause of action, or any other cause of action, arise under federal law.

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See Compl. ¶¶ (requesting declaratory relief “concerning the legal effect and true nature of [certain

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individuals’] claims, interest in and title to the subject property.”) Therefore, Plaintiff’s single

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citation to the Declaratory Judgment Act does not confer federal question jurisdiction under 28

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Case No. 17-CV-02980-LHK
ORDER DISMISSING CASE FOR LACK OF JURISDICTION

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U.S.C. § 1331.
For these reasons, the Court finds that Plaintiff has not established that the Court has
jurisdiction over the instant case under 28 U.S.C. § 1331.
C. 28 U.S.C. § 1332
Mellon also argues that Plaintiff has not established jurisdiction under 28 U.S.C. § 1332.

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Under 28 U.S.C. § 1332(a)(1), federal courts have original jurisdiction over civil actions “where

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the matter in controversy exceeds the sum or value of $75,000 . . . and is between . . . citizens of

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different States.” 28 U.S.C. § 1332. A “core principle of federal removal jurisdiction on the basis

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of diversity ... is [that it is] determined (and must exist) as of the time the complaint is filed and. . .

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. .” Strotek, 300 F.3d at 1131. “28 U.S.C. § 1332 requires that the parties be in complete diversity

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United States District Court
Northern District of California

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and the amount in controversy exceed $75,000.” Matheson v. Progressive Specialty Ins. Co., 319

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F.3d 1089, 1090 (9th Cir. 2003) (per curiam).

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Plaintiff alleges that she is “an individual residing in the County of Los Angeles, State of

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California.” Compl. ¶ 3. Plaintiff does not claim that her domicile is in any other state. Thus, for

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the purposes of diversity jurisdiction, Plaintiff is a citizen of the state of California.

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However, as Mellon points out, Defendant Cwalt is also a citizen of California. For the

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purposes of diversity jurisdiction, a corporation is a citizen both of the state in which it is

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incorporated and the state in which the corporation’s principal place of business is located. 28

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U.S.C. § 1332(c)(1). The United States Supreme Court has held that a corporation’s principal

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place of business is determined by the state in which its “nerve center” is located. Hertz Corp. v.

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Friend, 559 U.S. 77, 94 (2010). A corporation’s nerve center is “where a corporation’s officers

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direct, control, and coordinate the corporation’s activities . . . [a]nd in practice it should normally

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be the place where the corporation maintains its headquarters—provided that the headquarters is

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the actual center of direction, control, and coordination.” Id. at 93–94.

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Cwalt is incorporated in Delaware. Compl. ¶ 6. However, Cwalt’s headquarters and

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principal place of business is in Calabasas, California. See Request for Judicial Notice, Ex. 6

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(describing Calabasas, California as Cwalt’s “principal executive office.”); Compl. ¶ 6 (“CWALT,

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Inc., is a Delaware corporation, and is a limited purposes finance subsidiary of Countrywide

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Financial Corporation whose address is 4500 Park Granada, Calabasas, California 91302.”).

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Plaintiff does not contest that Cwalt’s principal place of business is in California. Thus, for

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purposes of diversity jurisdiction, Cwalt is a citizen of both Delaware and California.
Both Plaintiff and Defendant Cwalt are citizens of California. Therefore, there is not

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complete diversity between the parties and the Court lacks jurisdiction under 28 U.S.C. § 1332.

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D. Summary

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Plaintiff has not established that the Court has jurisdiction over the instant case under 28

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U.S.C. § 1331 or 28 U.S.C. § 1332. Plaintiff asserts no other ground for the Court’s jurisdiction.
See Compl. § IV (mentioning only 28 U.S.C. § 1331 and 28 U.S.C. § 1332 as grounds for original

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United States District Court
Northern District of California

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jurisdiction). Therefore, the Court GRANTS Mellon’s motion to dismiss for lack of jurisdiction.

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This dismissal is without prejudice for refiling in state court.
Because the Court has dismissed the instant case for lack of jurisdiction, the Court need

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not, and indeed lacks jurisdiction to, decide the remaining pending motions. Therefore, the Court

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DENIES AS MOOT Mellon’s motion to strike, ECF No. 17; Cwalt’s motion to dismiss, ECF No.

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13; NDSC’s motion to dismiss, ECF No. 28; NDSC’s amended motion to dismiss, ECF No. 29;

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and the parties’ stipulation regarding the motions to dismiss, ECF No. 37.

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IV.

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CONCLUSION
For the foregoing reasons, the Court GRANTS Mellon’s motion to dismiss for lack of

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jurisdiction without prejudice for refiling in state court. The Court DENIES AS MOOT Mellon’s

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motion to strike, ECF No. 17; Cwalt’s motion to dismiss, ECF No. 13; NDSC’s motion to dismiss,

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ECF No. 28; NDSC’s amended motion to dismiss, ECF No. 29; and the parties’ stipulation

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regarding the motions to dismiss, ECF No. 37. The Clerk shall close the file.

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IT IS SO ORDERED.

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Dated: August 8, 2017

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______________________________________
LUCY H. KOH
United States District Judge
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Case No. 17-CV-02980-LHK
ORDER DISMISSING CASE FOR LACK OF JURISDICTION