Sundby et al v. The Bank of New York Mellon et al

Filing 20

ORDER granting 14 Motion to Remand. Signed by Judge Dana M. Sabraw on 5/3/11. (All non-registered users served via U.S. Mail Service)(certified copy sent to Superior Ct)(lao)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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DALE SUNDBY, et al.,

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CASE NO. 11CV627 DMS (RBB)
Plaintiff,

ORDER GRANTING MOTION TO
REMAND

vs.
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THE BANK OF NEW YORK MELLON, et
al.,
Defendant.

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Pending before the Court is Plaintiffs’ motion to remand the action to State Court. (Doc. 14.)

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On April 27, 2011, the Court issued an Order shortening the time on the motion and requiring

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Defendants to file an opposition to Plaintiffs’ motion to remand on or before May 2, 2011. (Doc. 18.)

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Defendants did not timely file an opposition. For the following reasons, Plaintiffs’ motion to remand

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this action is granted.

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As an initial matter, under United States District Court, Southern District of California Local

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Rule 7.1.f.3.c, “[i]f an opposing party fails to file the papers in the manner required by Civil Local

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Rule 7.1.e.2., that failure may constitute a consent to the granting of a motion or other request for

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ruling by the court.” Accordingly, the Court finds Defendants’ failure to file an opposition to

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Plaintiffs’ motion to remand constitutes their consent to the granting of the motion.

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Furthermore, the Court finds it does not have jurisdiction over this action and remand is

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appropriate. Defendant The Bank of New York Mellon (“BNY Mellon”) removed this action to this
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Court on March 28, 2011, with the consent of Defendants Wells Fargo and Company and First

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American Loanstar Trustee Services. (Doc. 1.) The removal was based upon this Court’s purported

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jurisdiction due to the diversity of the parties pursuant to 28 U.S.C. § 1332(a). It is uncontested that

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Plaintiffs are citizens of California. It is also uncontested that BNY Mellon is a Delaware corporation

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with its principal place of business in New York. In its notice of removal, however, BNY Mellon

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argued the citizenship of Defendant Wells Fargo and Company should be disregarded for purposes of

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determining jurisdiction because it “is a holding company that does not make or service loans with the

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public” and is a “sham” defendant. (Removal at 3.) The following day, Defendants BNY Mellon and

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Wells Fargo and Company filed a motion to drop Wells Fargo and Company as a Defendant. (Doc.

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3.) In its notice of removal, BNY Mellon further stated it “is informed and believes, and on that basis

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alleges, that defendant First American Financial Corporation is improperly named, and that the proper

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defendant . . . is ‘First American Loanstar Trustee Services.’” (Removal at 3-4.) BNY Mellon alleges,

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without submitting the filing to the Court, that Defendant First American Loanstar Trustee Services

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filed a Declaration of Nonmonetary Status pursuant to California Civil Code § 2924l in State Court

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prior to removal and its citizenship should therefore be disregarded for purposes of determining

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jurisdiction. (Id. at 4.) Plaintiffs filed a motion to remand this action on April 26, 2011. (Doc. 14.)

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As to Defendant First American Loanstar Trustee Services, Plaintiffs challenge that First

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American Financial Corporation was improperly named in this action. However, even assuming First

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American Loanstar Trustee Services is the proper Defendant, Plaintiffs timely filed an opposition to

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the Declaration of Nonmonetary Status with this Court and First American Loanstar Trustee Services

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is therefore required to participate in this action and its citizenship should properly be considered for

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purposes of determining jurisdiction. Cal. Civ. Code § 2924l(e). In the Second Amended Complaint

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(“SAC”), filed by Plaintiffs as a matter of right on April 22, 2011, Plaintiffs allege “Defendant First

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American Title Insurance Company, also known as First American Trustee Servicing Solutions LLC

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and formerly known as First American LoanStar Trustee Services LLC, a California company with its

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home office in Santa Ana, CA, is a subsidiary of Defendant First American Financial Corporation, a

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Delaware company with corporate headquarters in Santa Ana, CA.” (SAC ¶ 4.) Defendants do not

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challenge that Defendant First American Loanstar Trustee Services is a citizen of California for
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purposes of determining this Court’s jurisdiction over the action. BNY Mellon has failed to meet its

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burden of demonstrating this Court’s jurisdiction over this action upon removal and remand is

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warranted.

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The Court further notes that the removal of this action, which was done on the eve of a pending

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motion for a temporary restraining order by Plaintiffs in State Court and was relayed to Plaintiffs at

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the beginning of the hearing on that motion, appears to have been done for the purpose of delay in the

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hope that the Court presiding over Defendant BNY Mellon’s separate unlawful detainer action against

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Plaintiffs may resolve that action before another court has the opportunity to reach the merits of

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Plaintiffs’ claims in the present action. In removing this action, Defendants argued the citizenship of

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two named Defendants should be disregarded for purposes of determining jurisdiction and then

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Defendants failed to oppose Plaintiffs’ motion for remand. If in fact the removal of this action was

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done for the purpose of delay, the Court strongly disapproves of such gamesmanship of the legal

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system and waste of judicial resources. Rule 11 states, “[b]y presenting to the court a pleading, written

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motion, or other paper . . . an attorney or unrepresented party certifies that to the best of the person’s

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knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: (1)

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it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or

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needlessly increase the cost of litigation.” Fed. R. Civ. P. 11(b). Counsel should be mindful of this

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and cautious in pursuing such tactics in the future.

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IT IS SO ORDERED.
DATED: May 3, 2011

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HON. DANA M. SABRAW
United States District Judge

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