Arellano et al v. Nationstar Mortgage, LLC et al

Filing 65

MEMORANDUM DECISION AND ORDER. Defendant's Petition to Remand (Dkt. 21 ) is DENIED. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (jp)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
JESUS G. ARELLANO and CECILIA G.
ARELLANO, husband and wife, and the
community thereof,

Case No. 1:13-cv-00316-BLW
MEMORANDUM DECISION AND
ORDER

Plaintiff/Petitioners,
v.
NATIONSTAR MORTGAGE LLC, a
Delaware limited liability company;
FEDERAL NATIONAL MORTGAGE
ASSOCIATION, a/k/a “Fannie Mae” a
corporation created by the Congress of the
United States; ALLIANCE TITLE AND
ESCROW CORP., a Delaware corporation;
SETERUS, INC., a Delaware corporation;
CITI FINANCIAL, a Maryland corporation;
FIRST HORIZONS HOME LOAN
CORPORATION, an Idaho corporation; and
FIRST TENNESSEE BANK, N.A., d/b/a
First Horizon Home Loans,

Defendant/Respondents.

INTRODUCTION
The Court has before it Plaintiff's Petition to Remand (Docket No. 21). Having
reviewed the briefs, the Court has determined that the Petition is suitable for disposition
without oral argument. The Court will also note that there has been some delay in
addressing this motion because the Court granted the parties request to extend deadlines

MEMORANDUM DECISION AND ORDER - 1

and allow the parties to participate in mediation. The Court will deny the Petition to
Remand because the Court has subject matter jurisdiction based on diversity.
LEGAL STANDARD
Under 28 U.S.C. § 1441(a), an action must be “fit for federal adjudication when
the removal petition is filed.” Sparta Surgical Corp. v. Nat'l Ass'n of Sec. Dealers, Inc.,
159 F.3d 1209, 1211 (9th Cir.1998). Whether subject matter jurisdiction exists is a
question of law. Nike, Inc. v. Comercial Iberica de Exclusivas Deportivas, S.A., 20 F.3d
987, 990 (9th Cir.1994). Removal jurisdiction is statutory and strictly construed. Gould v.
Mutual Life Ins. Co. of New York, 790 F.2d 769, 774 (9th Cir.1986). If there is any doubt
as to the right of removal, jurisdiction must be rejected. Duncan v. Stuetzle, 76 F.3d 1480,
1485 (9th Cir.1996).
A defendant bears the burden of establishing federal jurisdiction when they seek
removal to federal court and the removal statute is strictly construed against removal.
Prize Frize, Inc. v. Matrix, Inc., 167 F.3d 1261, 1265 (9th Cir.1999). The existence of
federal question or diversity jurisdiction is ordinarily determined from the face of the
complaint. Sparta Surgical Corp., 159 F.3d at 1211.
ANALYSIS
The Arellanos filed a petition to remand this matter back to the Third Judicial
Distict, State of Idaho, Canyon County. The Arellanos’ assert that removal based on
federal question jurisdiction was improper because all claims can and should be
adjudicated under Idaho State law and any reference to federal law in the complaint is

MEMORANDUM DECISION AND ORDER - 2

“purely incidental and collateral.” Petition to Remand ¶ 3, Dkt. 21. The defendants argue
that the Court has both diversity jurisdiction and federal question jurisdiction.
A.

Diversity Jurisdiction
“[A]ny civil action brought in a State court of which the district courts of the

United States have original jurisdiction, may be removed by the defendant or the
defendants, to the district court of the United States for the district and division
embracing the place where such action is pending.” 28 U.S.C. § 1441(a). Federal courts
have original jurisdiction over an action if the citizenship of the parties is completely
diverse and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). The
citizenship of the parties is completely diverse if none of the plaintiffs is a citizen of the
same state as any of the defendants. Caterpillar Inc. v. Lewis, 519 U.S. 61, 68, 117 S.Ct.
467, 136 L.Ed.2d 437 (1996). For purposes of diversity, citizenship and residence are not
the same thing. Mantin v. Broadcast Music, Inc., 244 F.3d 204, 206 (9th Cir.1957). A
corporation is a citizen of the state “by which it has been incorporated” and the state
“where is has its principal place of business.” 28 U.S.C. § 1332(c)(1). The principal place
of business is located in the “nerve center” of the corporation, where the corporation’s
high level officers direct, control, and coordinate its activities. Hertz Corp. v. Friend, 559
U.S. 77, 80–81, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010).
1.

Diversity Among the Parties

The Arellanos are citizens of Idaho. Defendant Nationstar Mortgage is a citizen of
Delaware and Texas. Def.’s Resp.at 5 Dkt. 25. Defendant Frannie Mae is a citizen of the

MEMORANDUM DECISION AND ORDER - 3

District of Columbia. Id at 4. Defendant Seterus is incorporated in Delaware with its
principal place of business in Michigan. Id at 5. Defendant Citi Financial has been
dismissed. Voluntary Dismissal Notice Dkt. 29. There is no real dispute about the
citizenship of these parties.
Alliance Title & Escrow Corp is a Delaware corporation, with their principle place
of business in Idaho. However, defendants who are nominal parties with nothing at stake
may be disregarded in determining diversity. Strotek Corp. V. Air Transport Ass’n. of
America, 300 F.3d 1129, 1133 (9th Cir 2002) (citing McCabe v. General Foods Corp.,
811 F2d 1336, at 1339 (9th Cir 1987) (the court may disregard the citizenship of nominal
parties)). Both parties confirm that Alliance Title’s participation in this case is strictly as
a trustee under the Deed of Trust. Stipulation of Alliance Title at 2, Dkt. 20. The parties’
stipulation also assures the Court that Alliance Title will not file any further responsive
pleading or any motions, and both parties have agreed not to seek any damages or
judgments against Alliance Title. Id. With nothing at stake, Alliance Title is a nominal
party and does not destroy diversity.
The complaint alleges that First Horizons Home Loan Corporation is “an Idaho
corporation.” (Comp. at 1. Dkt. 1-2). However, First Tennessee Bank National
Association is the successor in interest by merger, and a citizen of Tennessee. The
Arellanos question this merger, and ask the Court to presume that First Horizons is an
Idaho corporation. Pl.’s Reply ¶ 11 Dkt. 30. But even prior to the merger with Tennessee
Bank, First Horizons was not an Idaho corporation – it was a corporation of Kansas, with

MEMORANDUM DECISION AND ORDER - 4

its principle place of business in Tennessee. Coonts Aff. Dct. 41-1. Thus, the record
reflects that First Horizons is not an Idaho corporation. Accordingly, because Alliance
Title is a nominal party, and all other parties are diverse, complete diversity exists.
2.

Amount in Controversy

There is no real dispute that the amount in controversy exceeds $75,000. 28 U.S.C.
§ 1332(a). The Arellanos seek damages in the amount of $104,917.60. Comp. ¶K, Dkt. 12. Accordingly, because complete diversity exists, and the amount in controversy exceeds
$75,000, the Court has subject matter jurisdiction in this case based upon diversity of
citizenship. Therefore, the Court need not address whether there is a federal question, and
the Court will deny the motion to remand.
ORDER
IT IS ORDERED:
1. Defendant’s Petition to Remand (Dkt. 21) is DENIED.

DATED: September 25, 2014

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

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