DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR IXIS REAL ESTATE CAPITAL TRUST 2005- HE4 MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2005-HE4 v. LINDSEY et al

Filing 10

MEMORANDUM OPINION. Signed by Chief Judge Jerome B. Simandle on 6/24/2013. (TH, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

DEUTSCHE BANK NATIONAL TRUST
COMPANY, AS TRUSTEE FOR IXIS
REAL ESTATE CAPITAL TRUST 2005
- HE4 MORTGAGE PASS THROUGH
CERTIFICATES, SERIES 2005-HE4,

HON. JEROME B. SIMANDLE
Civil No. 13-2040 (JBS/JS)
MEMORANDUM OPINION

Plaintiff,
v.
LORRAINE LINDSEY and RAYMOND
LINDSEY,
Defendants.

SIMANDLE, Chief District Judge:
This matter is before the Court upon the motion of Plaintiff
Deutsche Bank National Trust Company, as Trustee for IXIS Real
Estate Capital Trust 2005 - HE4 Mortgage Pass Through
Certificates, Series 2005-HE4 ("Plaintiff") for reconsideration
of this Court's order denying default judgment. [Docket Item 9.]
Specifically, Plaintiff argues that this Court did not consider
Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303, 306 (2006), in
analyzing whether Plaintiff's complaint properly alleged
diversity of citizenship.
1.

The Court finds as follows:

The Plaintiff is suing in its capacity as trustee and

the Complaint alleges that "Plaintiff Deutsche Bank is a national
banking association with its main place of business located in
the State of California."

(Compl. ¶ 1.)

The Defendants Lorraine

and Raymond Lindsey failed to answer or otherwise respond to the

Complaint.

The Plaintiff promptly requested default which was

entered by the Clerk.

[Docket Items 5 and 6.]

then moved for default judgment.

The Plaintiff

[Docket Item 7.]

2. In denying Plaintiff's motion for default judgment, this
Court held that the Plaintiff had not sufficiently pled its
citizenship in order to establish the Court's diversity
jurisdiction.

The Court specifically noted that it was unclear

from Plaintiff's allegation that it was "a national banking
association with its main place of business" in California
whether Plaintiff was a corporation, an unincorporated
association or a trust. [Docket Item 8.]

The Court then cited

Hunt v. Acromed, 961 F.2d 1079, 180, 1082 n.7 (3d Cir. 1992),
Carden v. Arkoma Assocs., 494 U.S. 185, 195-96 (1990), and
Emerald Investors Trust v. Gaunt Parsippany Partners, 492 F.3d
192, 205 (3d Cir. 2007) to illustrate the various pleading
requirements to establish citizenship for these distinct
entities.

Since the Plaintiff's singular allegation did not meet

any of these standards, the Court denied Plaintiff's motion for
default judgment and granted Plaintiff leave to file an amended
complaint.
3.

[Docket Item 8.]

Plaintiff now moves for reconsideration and argues that

the Court did not consider the Supreme Court's decision in
Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303, 306 (2006) in
analyzing whether the Plaintiff sufficiently pled diversity of

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citizenship.
4.

Local Civil Rule 7.1(i) governs the Court’s review of

Plaintiff’s motion for reconsideration.

Rule 7.1(i) requires the

moving party to set forth the factual matters or controlling
legal authorities it believes the Court overlooked when rendering
its initial decision.

L. Civ. R. 7.1(i).

To prevail on a motion

for reconsideration, the movant must show:
(1) an intervening change in the controlling law; (2)
the availability of new evidence that was not
available when the court . . . [rendered the judgment
in question]; or (3) the need to correct a clear error
of law or fact or to prevent manifest injustice.
Max’s Seafood Café ex rel. Lou-Ann, Inc., v. Quinteros, 176 F.3d
669, 677 (3d Cir. 1999); see also Tehan v. Disability Management
Services, Inc., 111 F. Supp. 2d 542, 549 (D.N.J. 2000).

Because

the Court did not consider the Supreme Court's decision in
Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303, 306 (2006), the
Court will grant Plaintiff's motion for reconsideration.
However, even considering Schmidt, the Court still finds that the
Plaintiff has failed to properly plead its citizenship in order
to establish diversity jurisdiction.
5.

In Schmidt, the Supreme Court held that a national bank,

i.e., a corporate entity chartered not by any State, but by the
Comptroller of the Currency of the U.S. Treasury, "is a citizen
of the State in which its main office, as set forth in its
articles of association, is located."
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546 U.S. at 306.

While

Plaintiff alleges that it is a "national banking association,"
Plaintiff's Complaint fails to allege where its main office is
located pursuant to its articles of association.

Plaintiff's

allegation that its "main place of business" is "located in the
State of California" is insufficient.

Plaintiff must allege

where its main office is located pursuant to its articles of
association in order to establish citizenship under Schmidt.
6.

Further, Plaintiff argues in its motion for

reconsideration that as trustee, it possesses substantial control
of the assets of the trust and therefore, the citizenship of the
beneficiaries of the trust are irrelevant for diversity
jurisdiction.

In support of this argument, Plaintiff attaches

its Pooling and Servicing Agreement for the trust at issue and
relies on Navarro Sav. Ass'n v. Lee, 446 U.S. 458, 4462 (1980).
The Plaintiff's Complaint, however, lacks any factual allegations
to support Plaintiff's assertion that it possesses substantial
control of the assets of the trust and therefore the citizenship
of the beneficiaries is irrelevant to determining diversity
jurisdiction.

The Plaintiff will be granted leave to amend its

complaint to include these allegations.1
7.

Accordingly, the Defendant's motion for reconsideration

1

The Plaintiff should also include more specific
allegations as to the circumstances surrounding the withdrawal of
the foreclosure complaint in Gloucester County and whether the
state court approved the loan modification agreement at issue in
this case.
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will be granted.

However, the Court still concludes that the

Plaintiff's Complaint fails to provide a proper factual basis to
establish diversity jurisdiction.

Consequently, Plaintiff's

motion for default judgment will be denied.

The Plaintiff will

be given fourteen (14) days from the entry of this order to file
an amended complaint which properly sets forth the basis for this
Court's jurisdiction.

The accompanying Order will be entered.

June 24, 2013
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge

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