Blanford v. SunTrust Mortgage, Inc.

Filing 16

ORDER Denying 10 Motion to Remand to State Court. Signed by Judge James C. Mahan on 8/9/2012. (Copies have been distributed pursuant to the NEF - SLR)

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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BRENDA BLANFORD,

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2:12-CV-852 JCM (RJJ)

Plaintiff(s),
v.
SUNTRUST MORTGAGE, INC.,

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Defendant(s).

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ORDER

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Presently before the court is plaintiff Brenda Blanford’s motion to remand this action to state

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court. Doc. #10. Defendant SunTrust Mortgage, Inc. has filed an opposition (doc. #13), to which

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Ms. Blanford has not replied.

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An action filed in state court may be removed to federal court if the federal court would have

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had original subject matter jurisdiction over the action. 28 U.S.C. § 1441(a). This court has original

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subject matter jurisdiction over two types of cases. First, pursuant to 28 U.S.C. § 1331, this court

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has federal question jurisdiction over “all civil actions arising under the Constitution, laws, or

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treaties of the United States.”

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Second, pursuant to its diversity jurisdiction, the court may preside over suits between

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citizens of different states where the amount in controversy exceeds to sum or value of $75,000. 28

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U.S.C. § 1332(a). Where the complaint does not establish the amount in controversy, the “the

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removing defendant bears the burden of establishing, by a preponderance of the evidence, that the

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amount in controversy exceeds [$75,000].” Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404

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James C. Mahan
U.S. District Judge

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(9th Cir. 1996); Guglielmino v. McKee Foods Corp., 506 F.3d 696, 701 (9th Cir. 2007). Pursuant

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to the forum defendant rule, removal on the basis of diversity jurisdiction is confined to “instances

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where no defendant is a citizen of the forum state.” 28 U.S.C. § 1441(b); see also Lively v. Wild

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Oats Markets, Inc., 456 F.3d 933, 939 (9th Cir. 2006). The removal statutes are construed

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restrictively, and doubts regarding the viability of removal are resolved in favor of remanding the

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case to state court. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941); see also

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Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

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SunTrust removed this action on the basis of diversity jurisdiction. See Petition for Removal,

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Doc. #1, pg. 2-3. Ms. Blanford has moved to remand, arguing that though SunTrust is incorporated

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under the laws of Virginia, it should be considered a citizen of Nevada because it has obtained

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several licenses to conduct business in Nevada, has a registered agent in Nevada, and granted a

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mortgage on property that exists in Nevada. Ms. Blanford’s arguments appear to speak more

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towards personal jurisdiction, as opposed to subject matter jurisdiction. Defendant has also

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misconstrued the issue, as it focuses solely on the state of incorporation to determine citizenship.

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It is well settled that in the context of diversity jurisdiction, a corporation is a citizen of (1)

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the state under whose laws it is organized or incorporated; and (2) the state of its “principal place

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of business.” 28 U.S.C. § 1332(c)(1). Recently, in Hertz Corp. v. Friend, the Supreme Court held

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that a corporation’s principal place of business is solely determined by the state of its “nerve center.”

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– U.S. – , 130 S.Ct. 1181 (2010).

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A corporation’s nerve center is “where a corporation’s officers direct, control, and coordinate

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the corporation's activities . . . [a]nd in practice it should normally be the place where the corporation

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maintains its headquarters – provided that the headquarters is the actual center of direction, control,

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and coordination.” Hertz, 130 S.Ct at 1192. Where a corporation maintains a presence in a

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plaintiff’s state of citizenship, such as here, this fact does not necessarily defeat diversity.

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Instead, courts have held that diversity of citizenship continues to exist unless the

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corporation’s “executive-level decisions” are made in the offices or facilities maintained in the

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plaintiff’s home state. See L’Garde, Inc. v. Raytheon Space and Airborne Systems, 805 F.Supp.2d

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James C. Mahan
U.S. District Judge

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932, 940-41 (C.D. Cal. 2011). Where, however, those decisions take place in another state, the

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nerve-center test dictates that the citizenship of the company falls in the other state. Id.

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It is undisputed that SunTrust is organized under the laws of Virginia. Furthermore, Ms.

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Blanford has presented no argument or evidence that the executive level decisions of SunTrust’s

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mortgage business are made in Nevada. Accordingly, this court finds Ms. Blanford’s challenge to

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SunTrust’s citizenship without merit.

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The second area of inquiry required to finding diversity jurisdiction is the amount in

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controversy. Ms. Blanford argues that the amount in controversy is lacking, because the real

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property that was the subject of this litigation has recently been sold.1 Without the real property

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remaining in issue, Ms. Blanford argues that the only remaining damages include: “damages to the

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Defendant’s [sic] credit report, attorney’s fees and punitive damages, all of which are realistically

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unlikely to exceed $75,000.” Mot. 4:11-12.

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Ms. Blanford overlooks the fact that the jurisdictional amount is determined at the time of

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removal. Sparta Surgical Corp. v. Nat’l Ass’n of Securities Dealers, Inc., 159 F.3d 1209 (9th Cir.

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1998). Accordingly, this court must look to the amount in controversy, as pleaded in the complaint.

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The subsequent sale of the property “occurr[ed] subsequent to the institution of suit” and “do[es] not

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oust jurisdiction.” Barcume, 24 Fed. Appx. at 756 (quoting St. Paul, 303 U.S. at 288-90). As

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explained by the Court in St. Paul, “events occurring subsequent to removal which reduce the

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amount recoverable, whether beyond plaintiff’s control or the result of his volition, do not oust the

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district court’s jurisdiction once it has attached.” St. Paul, 303 U.S. at 293.

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Where, as here, the parties are completely diverse from each other and the amount in

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controversy exceeds $75,000, the federal district courts retain diversity jurisdiction over the dispute.

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28 U.S.C. § 1332(a).

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...

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James C. Mahan
U.S. District Judge

Both parties have brought to the court’s attention that the subject property has been sold.
See Mot. at 4:10 and Opp. at 3:23; see also doc. #12. Accordingly, the court considers the motion
for preliminary injunction that Ms. Blanford filed in state court moot.
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Accordingly,

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Ms. Blanford’s motion to

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remand (doc. #10) be, and the same hereby is, DENIED.
DATED August 9, 2012.

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UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge

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