Daisy Trust v. Wells Fargo Bank, N.A. et al
Filing
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ORDER that this case is remanded to the Eighth Judicial District Court. Signed by Judge Gloria M. Navarro on 5/7/13. (Copies have been distributed pursuant to the NEF - MMM)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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DAISY TRUST,
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Plaintiff,
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vs.
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WELLS FARGO BANK, N.A.; MTC FINANCIAL, )
INC., doing business as TRUSTEE CORPS,
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DONALD K. BLUME and CYNTHIA S. BLUME, )
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Defendants.
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Case No.: 2:13-cv-00777-GMN-VCF
ORDER
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I.
BACKGROUND
This case arises from a dispute over the ownership of real property located at 10209 Dove
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Row Avenue, Las Vegas, Nevada (“Subject Property”). (Compl ¶ 1, ECF No. 1-2.) Plaintiff
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claims that it obtained title to the Subject Property by way of a foreclosure deed stemming from
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“a delinquency in assessments due from the former owner to the Westminster at Providence
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Association, pursuant to NRS Chapter 116.” (Id. ¶ 3.) Plaintiff’s Complaint recognizes that
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Defendant Wells Fargo Bank NA (“Wells Fargo”) is the assignee of a deed of trust that was
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recorded as an encumbrance on the Subject Property (id. ¶ 4), Defendant MTC Financial doing
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business as Trustee Corps (“MTC”) is the trustee on the deed of trust (id. ¶ 5), and Defendants
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Donald K. Blume and Cynthia S. Blume (“Blume Defendants”) are the former owners of the
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Subject Property (id. ¶ 8). However, Plaintiff’s Complaint further alleges that “[t]he interest of
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each of the defendants has been extinguished by reason of the foreclosure sale resulting from a
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delinquency in assessments due from the former owners . . . pursuant to NRS Chapter 116.” (Id.
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¶ 9.)
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After the alleged passage of title to Plaintiff, Wells Fargo “recorded a notice of default
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and election to sell under it’s [sic] deed of trust pursuant to NRS 107.08.” (Id. ¶ 10.) In
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response, Plaintiff filed the instant action in Nevada state court seeking (1) an injunction
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prohibiting the foreclosure sale from proceeding (id. ¶ 12); (2) “a determination from this
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[C]ourt, pursuant to NRS 40.010 that the plaintiff is the rightful owner of the property and that
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the defendants have no right, title, interest or claim to the subject property (id. ¶ 15); and (2) a
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declaration from this [C]ourt, pursuant to NRS 40.010, that title in the property vested in
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plaintiff free and clear of all liens and encumbrances, that the defendants herein have no estate,
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right, title or interest in the property, and that defendants are forever enjoined from asserting any
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estate, title, right, interest, or claim to the subject property adverse to the plaintiff” (id. ¶ 18).
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Subsequently, pursuant to 28 U.S.C. § 1441(a), Wells Fargo removed the action to this Court
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claiming that this Court has subject matter jurisdiction under 28 U.S.C. § 1332(a). (See Notice
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of Removal 2:15-20, ECF No. 1.) Specifically, Wells Fargo claims that complete diversity
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exists among the parties because Plaintiff is a citizen of Nevada and because “none of the
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properly joined Defendants are citizens of Nevada.” (Id. at 2:22-28.) Additionally, Wells Fargo
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asserts that the amount in controversy requirement is met because the value of the Subject
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Property exceeds $75,000. (Id. at 6:4-18.)
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II.
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DISCUSSION
If a plaintiff files a civil action in state court, the defendant may remove that action to a
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federal district court if the district court has original jurisdiction over the matter. 28 U.S.C.
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§ 1441(a). Removal statutes are strictly construed against removal jurisdiction. Ritchey v.
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Upjohn Drug Co., 139 F.3d 1313, 1317 (9th Cir. 1998). “Federal jurisdiction must be rejected if
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there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, 980 F.2d 564,
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566 (9th Cir. 1992) (quoting Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir.
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1979)). The defendant always has the burden of establishing that removal is proper. Gaus, 980
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F.2d at 566.
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“If at any time before final judgment it appears that the district court lacks subject matter
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jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). District courts have jurisdiction
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in two instances. First, district courts have subject matter jurisdiction over civil actions that
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arise under federal law. 28 U.S.C. § 1331. Second, district courts have subject matter
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jurisdiction over civil actions where no plaintiff is a citizen of the same state as a defendant and
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the amount in controversy exceeds $75,000.00. 28 U.S.C. § 1332(a). In this case, Wells Fargo
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asserts only that this Court has subject matter jurisdiction over this case pursuant to 28 U.S.C.
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§ 1332(a). District courts have subject matter jurisdiction over civil actions where no plaintiff is
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a citizen of the same state as a defendant and the amount in controversy exceeds $75,000.00.
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28 U.S.C. § 1332(a).
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Here, neither party disputes that the amount in controversy requirement is met. However,
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Wells Fargo has failed to establish diversity of citizenship between the Plaintiff and all of the
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Defendants. In its Notice of Removal, Wells Fargo recognized that both Plaintiff and the Blume
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Defendants are citizens of Nevada. (Notice of Removal 2:23-25, 3:6-8, ECF No. 1.)
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Nevertheless, Wells Fargo argues that the citizenship of the Blume Defendants should not be
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considered in the diversity calculus because they are fraudulently joined defendants. (Id. at 3:11-
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12.)
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It is well established that “fraudulently joined defendants will not defeat removal on
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diversity grounds.” Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998). There are
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two ways to establish fraudulent joinder: (1) the defendant may facially attack plaintiff’s
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complaint by showing the inability of the plaintiff to establish a cause of action against the non-
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diverse defendant based on the plaintiff’s allegations or (2) the defendant may attempt to
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disprove jurisdictional facts alleged in the plaintiff’s pleadings. See Hunter v. Philip Morris
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USA, 582 F.3d 1039, 1044 (9th Cir.2009) (citing Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568,
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573 (5th Cir. 2004) (en banc)).
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Here, Wells Fargo asserts that each of the three claims fail as a matter of law as asserted
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against the Blume Defendants. As to Plaintiff’s first cause of action for injunctive relief, the
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Court agrees that it fails as a matter of law. First, injunctive relief is a remedy and not a
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cognizable cause of action. Second, even if it was a cognizable cause of action, this claim is
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directed solely at enjoining Wells Fargo from conducting the pending foreclosure sale. In
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contrast, Wells Fargo has not carried its burden in establishing that Plaintiff’s second and third
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causes of action fail as to the Blume Defendants. Plaintiff’s second cause of action is essentially
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a quiet title claim and Plaintiff’s third cause of action seeks a declaration that Plaintiff is vested
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with title to the Subject Property free and clear of all liens and encumbrances. The Blume
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Defendants owned the property prior to Plaintiff’s alleged acquisition of the property through
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the foreclosure that resulted due to the Blume Defendants’ delinquency on assessments.
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Accordingly, in order to quiet title to the Subject Property, the Blume Defendants are an
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important party. The fact that Plaintiff asserts in its Complaint that the Blume Defendants no
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longer have an ownership interest is irrelevant in determining whether they are fraudulently
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joined defendants. This statement is merely an allegation that is consistent with Plaintiff’s claim
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that it holds title to the Subject Property.
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For these reasons, Wells Fargo has failed to carry its burden of establishing that this
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Court has subject matter jurisdiction over this case.
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III.
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CONCLUSION
IT IS HEREBY ORDERED that this case is remanded to the Eighth Judicial District
Court.
DATED this 7th day of May, 2013.
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______________________________
Gloria M. Navarro
United States District Judge
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