Renfroe v. Citibank National Association et al

Filing 27

ORDER DENYING PLAINTIFF'S MOTION TO REMAND, denying 11 Motion to Remand. Signed by Judge Salvador Mendoza, Jr. (LR, Case Administrator)

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON

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JAN M. RENFROE,

No. 2:17-cv-00194-SMJ

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Plaintiff,
ORDER DENYING PLAINTIFF’S
MOTION TO REMAND

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v.
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QUALITY LOAN SERVICE CORP.
OF WASHINGTON; BANK OF
AMERICA, N.A., successor by merger
to BAC Home Loans Servicing, LP,
f/k/a Countrywide Home Loans
Servicing, LP; CITIBANK, N.A., as
trustee of NRZ Pass-Through Trust VI;
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.;
and BANK OF NEW YORK
MELLON, as trustee on behalf of the
Certificateholders of the CWHEQ Inc.,
CWHEQ, Revolving Home Equity
Loan Trust Series 2006-C,
Defendants.

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Before the Court, without oral argument, is Plaintiff Jan M. Renfroe’s
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Motion to Remand to Washington State Court, ECF No. 11. Through this motion,
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Renfroe seeks an order from this Court remanding the case back to the Superior
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Court for the State of Washington in and for the County of Okanogan. Id. at 1.
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Defendants oppose the motion. ECF Nos. 17, 21 and 22. Having reviewed the

ORDER DENYING PLAINTIFF’S MOTION TO REMAND- 1

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pleadings and the file in this matter, the Court is fully informed and denies the

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motion.

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I.

RELEVANT BACKGROUND

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Plaintiff Jan M. Renfroe initiated this lawsuit in the Okanogan County

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Superior Court on April 3, 2017. ECF No. 1-1. She named Quality Loan Services

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Corp. of Washington, Bank of America, Citibank, and Mortgage Electronic

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Registration Systems, as defendants, and the Bank of New York Mellon as

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nominal defendant (collectively “Defendants”). ECF No. 1-1 at 1. She seeks

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declaratory, injunctive, and monetary relief arising out of a dispute over a loan she

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acquired that was secured by her home. ECF No. 1-1 at 3–11. Renfroe asserts only

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state law claims, under the Washington State Deed of Trust Act and Consumer

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Protection Act, and for quiet title. ECF No. 1-1 at 6–10.

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While this action was in state court, Renfroe and Quality Loan Service

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entered into a stipulated agreement on May 2, 2017, in which Quality Loan

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Service was to be considered a nominal defendant, subject to certain conditions.

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ECF No. 1-2. On or about June 2, 2017, Renfroe received a Notice of Continuance

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of Trustee’s Sale of her home indicating the Quality Loan Service rescheduled the

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sale of her home to July 28, 2017. ECF No. 12-1. About two weeks later,

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Renfroe’s attorney sought, and Judge Christopher E. Culp of Okanogan Superior

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ORDER DENYING PLAINTIFF’S MOTION TO REMAND- 2

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Court granted, a temporary restraining order enjoining Quality Loan Service from

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proceeding with the Trustee’s Sale. ECF No. 13-1.

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Defendants removed the case from Okanogan Superior Court to this Court
on June 1, 2017. ECF No. 1.
II.

APPLICABLE LEGAL PRINCIPLES

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Removal of a civil action from state to federal court is governed by 28

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U.S.C. § 1446. Cases removed on the basis of diversity jurisdiction must present

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parties whose citizenship is completely diverse and contest an amount greater than

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$75,000. 28 U.S.C. § 1332(a). Given the strong presumption against removal,

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defendants bear the burden of establishing by a preponderance of the evidence that

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removal is proper. Adrain v. Wells Fargo Bank, N.A., No. 2:16-cv-00142-SAB,

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2016 WL 4059231, at *1 (E.D. Wash. July 27, 2016) (citing Gaus v. Miles, Inc.,

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980 F.2d 564, 566 (9th Cir. 1992)).

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For diversity jurisdiction purposes when removing a case from state to

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federal court, whether the parties are diverse to each other “is determined (and

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must exist) as of the time the complaint is filed and removal is effected.” Strotek

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Corp. v. Air Transp. Ass’n of Am., et al, 300 F.3d 1129, 1131 (9th Cir. 2002)

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(citations omitted). Once jurisdiction attaches, a party cannot destroy diversity by

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changing its citizenship. Id. at 1132 (citation omitted).

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ORDER DENYING PLAINTIFF’S MOTION TO REMAND- 3

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Moreover, federal courts disregard formal or nominal parties’ citizenship

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when considering citizenship for subject matter jurisdiction purposes. Batson v.

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Deutsche Bank Tr. Ams., No. 2:15-cv-00193, 2015 WL 5316869, at *1 (E.D.

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Wash. Sept. 11, 2015). Courts have defined a nominal defendant as “one ‘who

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holds the subject matter of the litigation in a subordinate or possessory capacity

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and to which there is no dispute.’” Id. (citing SEC v. Colello, 139 F.3d 674, 676

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(9th Cir. 1998)). The Batson court noted that “[m]ost courts consider trustees in

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foreclosure suits nominal parties, unless plaintiffs have alleged direct claims

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against them.” Id. (citations omitted).

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As to meeting the amount in controversy requirement, when the amount of

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damages a plaintiff seeks is unclear from the complaint, the defendant bears the

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burden of proving facts supporting the jurisdictional amount. Gaus, 980 F.2d at

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566–67; Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004). To

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discharge its burden, a defendant must “provide evidence establishing that it is

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more likely than not that the amount in controversy exceeds [$75,000].” Valdez,

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372 F.3d at 1117 (citations and quotations omitted). The amount in controversy

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must be established as of the time of removal. Grieff v. Brigandi Coin. Co., No.

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C14-214, 2014 WL 2608209, *1 (W.D. Wash. June 11, 2014). Defendants may

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rely on claims of general and specific damages, punitive damages, and attorney’s

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fees to satisfy the amount in controversy requirement. Colvin v. Conagra Foods,

ORDER DENYING PLAINTIFF’S MOTION TO REMAND- 4

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Inc., No. C07-1376, 2007 WL 3306746, *2 (W.D. Wash. Nov. 5, 2007). In

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determining whether the jurisdictional amount is met, a reviewing court evaluates

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the complaint and “may consider any evidence submitted by the parties including

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affidavits or declarations, or other [relevant] summary-judgment-type evidence.”

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Coleman v. American Commerce Ins. Co., No. C16-5096, 2016 WL 2586636, *2

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(W.D. Wash. May 5, 2016) (citations and quotations omitted). Defendants cannot

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rely on “speculation and conjecture” or “unreasonable assumptions” to meet their

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burden. Id.

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III.

DISCUSSION

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At the outset, the Court notes that Renfroe’s argument regarding the fact

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that she tailored her claims for state court is unclear. ECF No. 11 at 3–4. Renfroe

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seems to argue that because she is the plaintiff and master of her claims and

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complaint, and she does not raise any federal law questions, she may avoid federal

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jurisdiction by relying exclusively on state law. Id. To the extent she asserts that

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she can avoid her case’s removal from state court into federal court by relying

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exclusively on state law claims, that argument is unavailing. First, the Court notes

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that the authorities she cites in support of this proposition, ECF No. 11 at 3–4, are

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inapposite here. Those cases dealt with federal question jurisdiction. Here,

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Defendants removed on the basis of diversity jurisdiction. ECF No. 1 at 1.

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Accordingly, this argument does not help Renfroe resist removal. Whether the

ORDER DENYING PLAINTIFF’S MOTION TO REMAND- 5

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court has jurisdiction in this case turns on whether the diversity and amount in

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controversy requirements of 28 U.S.C. § 1332(a) are met.

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A.

Complete diversity of citizenship exists between the parties.

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As to the parties’ state of citizenship, the Court must determine whether

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they are all diverse to each other as of June 1, 2017, the date Defendants removed

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to federal court. The parties dispute whether Quality Loan Service is a nominal

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defendant. ECF No. 11 at 5–7; ECF No. 17. Renfroe argues that though she signed

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the agreement making Quality Loan Service a nominal defendant in this matter,

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ECF No. 1-2, at the very least it is contested whether Quality Loan Service is a

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nominal defendant because Quality Loan Service allegedly breached the

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conditions of that agreement by moving ahead with the sale of the disputed

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property. ECF No. 11 at 5–7; ECF No. 17. At this time, the Court need not decide

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whether Quality Loan Service remains a nominal defendant. The Court must only

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determine whether Quality Loan Service was a nominal defendant as of June 1,

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2017. By Renfroe’s own admission, she received notice of the sale that allegedly

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breached her agreement with Quality Loan Service on or about June 2, 2017. ECF

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Nos. 12 and 12-1. Therefore, any dispute she has with Quality Loan Service that

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would affect its status as a nominal defendant necessarily began after June 1,

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2017.

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ORDER DENYING PLAINTIFF’S MOTION TO REMAND- 6

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Additionally, to the extent Renfroe asserts that the Court need only look at

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the complaint’s four corners to establish whether Quality Loan Service is a

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nominal defendant, the Court disagrees. ECF No. 11 at 4–5. Relying on Harris v.

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Bankers Life and Cas. Co., 425 F.3d 689 (9th Cir. 2005), Renfroe argues that

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because the complaint does not name Quality Loan Service as a nominal

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defendant and nominal status has not yet been applied to Quality Loan Service,

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the removal notice is premature. ECF No. 11 at 5. Renfroe misreads Harris. The

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question before the court in Harris was whether “under 28 U.S.C. § 1446(b), the

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burden lies with the defendant to investigate the necessary jurisdictional facts

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within the first thirty days of receiving an indeterminate complaint, or whether the

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determination be limited to the face of the initial pleading.” Id. at 693. That is,

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where it is not apparent from the face of a complaint, do defendants have a duty to

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investigate facts within the first 30 days of receiving a state court complaint that

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would establish the jurisdictional requirements for removing a case to federal

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court. Id. In deciding that, no, defendants are not obligated to undertake such

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investigation, the court explained that defendants can rely on the four corners of

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the complaint to determine whether or not the case is removable when they

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receive a state court complaint. Id. at 694 (“If no ground for removal is evident in

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that pleading, the case is ‘not removable’ at that stage.”) It is only after an

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amended pleading, motion, order, or other document makes it clear that removal is

ORDER DENYING PLAINTIFF’S MOTION TO REMAND- 7

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proper, that the 30-day period for removal begins. Id. That is what Defendants did

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here. Within 30 days of agreeing with Renfroe that Quality Loan Service is a

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nominal defendant in this case, Defendants filed their notice of removal. See ECF

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Nos. 1 and 1-2.
Accordingly, the Court finds that Quality Loan Service is a nominal

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defendant for the purpose of determining diversity.

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Moreover, as to the citizenship of the parties, the Court finds that: Renfroe

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is a citizen of Washington State; Citibank is a citizen of South Dakota; Bank of

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America is a citizen of North Carolina; Mortgage Electronic Registration Systems

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is a citizen of Delaware and Virginia; and Bank of New York Mellon and Quality

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Loan Service are nominal defendants. ECF No. 1 at 2; ECF No. 1-2 at 1–2; see,

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e.g., Prosight Specialty Mgmt. Co., Inc. v. Jobs Films LLC, No. 15-08843-BRO,

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2015 WL 12655696, at *1 (C.D. Cal. Nov. 17, 2015) (“Under § 1332(c), a

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corporation is a citizen of each state in which it is incorporated and in the state

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where is [sic] has its principal place of business.”). Since two parties are nominal

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defendants and the Court does not consider their citizenship for diversity

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purposes, and none of the remaining parties are citizens of the same state,

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complete diversity between the parties exists.

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B.

The amount in controversy is sufficient for diversity jurisdiction.

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ORDER DENYING PLAINTIFF’S MOTION TO REMAND- 8

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In foreclosure suits, courts have held that the amount in controversy may be

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established by the loan amount at issue when a plaintiff does not quantify the

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amount of damages in the complaint. See, e.g., Adrain, 2016 WL 4059231 at *2.

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Defendants have the burden of proving that the amount in controversy is met.

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Gaus, 980 F.2d at 566–67; see also Valdez, 372 F.3d at 1117. Defendants can

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discharge their burden by submitting “summary-judgment-type evidence” for the

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Court to consider. Coleman, 2016 WL 2586636 at *2. Here, Defendants submitted

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a document showing that the unpaid principle balance of the loan at issue here is

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$139,963.87. ECF No. 21-1 at 2 (Notice of Trustee’s Sale recorded under

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Okanogan County Recorder’s No. 3213654.). Accordingly, the amount in

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controversy is also met.
IV.

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CONCLUSION

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Having determined that complete diversity exists and the amount in

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controversy is met, this Court has subject matter jurisdiction and therefore

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DENIES the motion to remand.

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Accordingly, IT IS HEREBY ORDERED:

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1.

Plaintiff’s Motion to Remand to Washington State Court, ECF No.
11, is DENIED.

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//

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//

ORDER DENYING PLAINTIFF’S MOTION TO REMAND- 9

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IT IS SO ORDERED. The Clerk’s Office is directed to enter this Order
and provide copies to all counsel.
DATED this 3rd day of August 2017.

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__________________________
SALVADOR MENDOZA, JR.
United States District Judge

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ORDER DENYING PLAINTIFF’S MOTION TO REMAND- 10