Ortiz-Hodges v. U.S. Bank National Association et al

Filing 9

ORDER Remanding Case to the Superior Court of California for the County of San Diego - Central Division. JPMorgan Chase's pending motion to dismiss (Docket no. 5 ) is DENIED AS MOOT. Signed by Judge Larry Alan Burns on 1/6/17. (All non-registered users served via U.S. Mail Service)(cc: Superior Court)(kas)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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JOSE AMANCIO ORTIZ-HODGES,

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CASE NO. 16cv3032-LAB (NLS)

Plaintiff,

ORDER OF REMAND; AND

vs.
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ORDER DENYING AS MOOT MOTION
TO DISMISS

U.S. BANK NATIONAL ASSOCIATION,
et al.,

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Defendants.

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On December 14, 2016, Defendant JP Morgan Chase Bank, N.A. removed this action

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on the basis of diversity jurisdiction. The Court ordered JPMorgan Chase to show cause

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why the action should not be remanded, because the notice of removal did not show that the

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parties were diverse. (See Docket no. 4, “OSC”.)

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The OSC pointed out, among other things, that the notice of removal inaccurately

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characterized the complaint’s allegations. Significantly, Defendant Albertelli Law Partners

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California, P.A. (“Albertelli Law Partners California” or “ALAW”) was not alleged to be a

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citizen of Florida; its partners or owners were not identified, and their citizenship was not

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alleged.

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associations take on the citizenship of their owners or members); Nugget Hydroelectric, L.P.

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v. Pacific Gas & Elec. Co., 981 F.2d 429, 438 (9th Cir. 1992) (to establish diversity

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jurisdiction, plaintiff was required to affirmatively allege the citizenship of each partner in the

See Carden v. Arkoma Assoc., 494 U.S. 185, 195 (1990 (unincorporated

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partnership). The OSC cautioned JPMorgan Chase that it bore the burden of establishing

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diversity jurisdiction, and that if it failed to establish jurisdiction, the case would be remanded.

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See Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citations omitted) (“The ‘strong

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presumption’ against removal jurisdiction means that the defendant always has the burden

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of establishing that removal is proper.”)

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JPMorgan Chase has now filed a response (Docket no. 8, “Response”), attempting

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to establish diversity. The response, however, without explanation discussed the citizenship

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of a different entity, a Florida law firm called Albertelli Law, which refers to itself as ALAW.

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If there is any relationship between Albertelli Law Partners California and Albertelli Law, the

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Response did not say what it was. The Response is based solely on information obtained

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from the website of Albertelli Law (www.alaw.net), but even looking at that website, the

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relationship — if any — between the two entities remains unclear. What is clear is they were

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not and are not the same entity. Albertelli Law is a law firm whose lawyers practice only in

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Alabama, Florida, Georgia, South Carolina, Texas, and the U.S. Virgin Islands. By contrast,

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the complaint specifically alleges that Albertelli Law Partners California, or ALAW, is

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registered to do business in California. (See Complaint, Docket no. 1-2, at ¶ 8.) In other

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words, either Plaintiff is wrong about which entity he did business with, or there is some kind

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of explained relationship (such as parent-subsidiary, or predecessor-successor) between the

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two entities, or JPMorgan Chase has misconstrued the complaint.

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The first possibility can easily be ruled out, because Exhibit B to the Response

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confirms that the entity Plaintiff intended to sue was Albertelli Law Partners California The

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complaint alleges that Albertelli Law Partners California was based in Florida and registered

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to do business in California, and Exhibit B confirms that it had an address in California.

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The Response does not say whether JPMorgan Chase contacted either entity for

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information. Instead, it appears that JPMorgan Chase merely visited Albertelli Law’s website

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at www.alaw.net and obtained its information there. JPMorgan’s apparent failure to make

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direct inquiries is surprising in view of the fact that it has done business with Albertelli Law

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Partners California in the past, and designated it as trustee of Plaintiff’s deed of trust. (See

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Response, Ex. B.)

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Even assuming Albertelli Law is the Defendant Plaintiff is suing, it is not clear

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JPMorgan Chase correctly identified its citizenship. Looking at the website identified in the

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Response, it appears JPMorgan Chase has misunderstood what kind of entity Albertelli Law

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is. While the website does say it is a “full-service law firm,” the site also lists activities other

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than the practice of law, such as title services, title insurance, and foreclosure assistance.

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See http://alaw.net/what-we-do/. Non-attorney executives are listed on the same page as

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the law firm’s partners. See http://alaw.net/who-we-are/. And it operates or offers services

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in all 50 states. In other words, it appears to be some kind of hybrid entity: a law firm that

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owns or is connected with other related businesses. The law firm appears to be just one part

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of the entity. JPMorgan Chase has not explained why it thinks the law firm and the entity

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calling itself ALAW are coterminous, and why the law firm’s partners are the entity’s sole

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owners.

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Furthermore, the partnership in this law firm appears to change frequently. Of the

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eleven attorneys whose citizenship the Response tries to identify (see Response at

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2:25–3:4), one is no longer listed as working at the firm, and one more is listed as having

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joined. Even assuming the law firm is the relevant entity, its citizenship at the time the

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lawsuit was filed and at the time of removal is not identified. See Strotek Corp. v. Air

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Transport Ass'n of Am., 300 F.3d 1129, 1131 (9th Cir. 2002) (“[T]he core principle of federal

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removal jurisdiction on the basis of diversity [is] that it is determined (and must exist) as of

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the time the complaint is filed and removal is effected.”).

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A page on Albertelli Law’s website offers a ray of clarity. An announcement dated

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October 30, 2014 says that as of December 15, 2014, ALAW would divest itself of California

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and Arizona matters and transfer them to the firm of McCarthy Holthus (unless a client

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designated another transferee firm). See http://alaw.net/alaw_mccarthy_holthus/. Case law

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suggests that Albertelli Law Partners California continued as a separate entity in California

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after 2014. See, e.g., Saridakis v. JPMorgan Chase Bank, 2015 WL 570116 (C. D. Cal. Feb.
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11, 2015) (identifying Albertelli Law Partners California, aka “ALAW” as a Defendant); Ivey

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v. Chase Bank, 2015 WL 3452000 (N.D. Cal., May 28, 2015) (identifying Albertelli Law

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Partners California, of Chatsworth, California, as a Defendant). See also Rivkin v. JPMorgan

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Chase Bank, N.A., 14 cv2662-TLN-EFB (C.D. Cal., filed Nov. 14, 2014); see especially id.,

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Docket no. 18 (joinder filed December 18, 2014 by Albertelli Law Partners California, joining

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in motion to dismiss). And Albertelli Law Partners California apparently continued as trustee

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for Plaintiff’s deed of trust until October 27, 2016. (See Response, Exhibit C (substitution

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of trustee).) It may be that Albertelli Partners California continued, at least temporarily,

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under the auspices of McCarthy Holthus or some other local attorney or firm other than

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Antonelli Law. If so, it may have been a California citizen at the time the case was filed or

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removed.

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It was JPMorgan Chase’s obligation to show the citizenship of Albertelli Law Partners

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California, and to foreclose any reasonable possibility that it was a California citizenship at

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the time the case was filed and at the time it was removed. JPMorgan Chase has not fully

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or adequately identified the citizenship of the Defendant sued as Albertelli Partners

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California, P.A. and has not shown that the parties are diverse. Even though it is possible

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the parties are diverse, the Court is required to resolve all doubts in favor of remand. See

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Gaus, 980 F.2d at 566.

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As a fallback, JPMorgan Chase says ALAW was merely a trustee and a nominal

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party, and as such its citizenship can be ignored for purposes of diversity jurisdiction.

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Alternatively, it argues ALAW was fraudulently joined. While that argument may work in other

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cases, in this case Plaintiff has alleged ALAW’s direct involvement in the wrongs he asserts,

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and he seeks relief from ALAW. For example, the complaint alleges that ALAW actively

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participated in fraudulent mortgage payment collecting practices by mailing him inaccurate

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billing statements,1 attempting to collect mortgage payments it was not entitled to collect, and

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preparing false legal documents to induce Plaintiff to keep paying. (See Compl., ¶¶ 35, 53,

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The inaccuracy is alleged throughout the complaint. In essence, Plaintiff alleges that
JPMorgan Chase is trying to collect money on a mortgage it does not own, and that ALAW
was knowingly helping it.
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55-58, 70.) He also alleges that ALAW along with the other Defendants falsely reported him

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to national credit reporting agencies as delinquent. (Id. at ¶ 98.) While JPMorgan Chase’s

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version of events may prove to be true, at this stage the Court accepts the complaint’s

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allegations as true. And in any event, JPMorgan Chase does not appear to have any direct

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evidence about ALAW or what else it may have done beyond merely serving as trustee. The

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Court therefore cannot accept JPMorgan Chase’s unsupported assertion that ALAW is

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merely a nominal or sham Defendant whose citizenship can be ignored.

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Because JPMorgan Chase has failed to meet its burden of establishing diversity

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jurisdiction, this case is REMANDED to the Superior Court of California for the County of

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San Diego – Central Division. JPMorgan Chase’s pending motion to dismiss (Docket no. 5)

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is DENIED AS MOOT.

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IT IS SO ORDERED.
DATED: January 6, 2017

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HONORABLE LARRY ALAN BURNS
United States District Judge

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