Carew et al v. Bank of America, N.A. et al

Filing 21

ORDER TO SHOW CAUSE terminating 6 MOTION to Dismiss and Motion for More Definite Statement filed by Bank of America NA, 10 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM filed by Northwest Trustee Services, Inc; Show Cause Response due by 8/11/2014, by Judge Richard A Jones. (RS)cc pro se parties

HONORABLE RICHARD A. JONES

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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RODNEY E. CAREW,

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ORDER TO SHOW CAUSE

v.
BANK OF AMERICA, N.A., et al.,
Defendants.

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CASE NO. C14-413RAJ

Plaintiff,

I. INTRODUCTION

The court orders Defendants Bank of America, N.A. (“BofA”) and Northwest

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Trustee Services, Inc. (“NW Trustee”) to show cause why the court should not remand

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this action to Snohomish County Superior Court because the court lacks subject matter

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jurisdiction. Defendants’ response to this order is due no later than August 11, 2014. If

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Defendants do not respond, the court will remand this action. The clerk shall

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TERMINATE Defendants’ motions to dismiss (Dkt. ## 6, 10), although the court will

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resolve them in the event that Defendants demonstrate that this court has subject matter

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jurisdiction.

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II. BACKGROUND & ANALYSIS

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Plaintiffs Rodney and Marie Carew, acting without the assistance of an attorney,

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filed this suit in Snohomish County Superior Court in February 2014. Their complaint

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reflects that they are not attorneys. Among other things, it demands that the court “set

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aside a void wrongful foreclosure process and sale date,” but it contains no allegations

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ORDER – 1

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describing this foreclosure process or explaining the sale date. The complaint is a

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meandering document that includes allegations of criminal wrongdoing that a court

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cannot resolve in a civil suit and lengthy citations to case law that have no place in a

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complaint.

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What the complaint unmistakably reveals, however, is that the Carews have sued

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just two Defendants: BofA and NW Trustee. BofA knows at least the subject matter of

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the dispute: a $25,000 loan, secured by a deed of trust to the Carews’ Woodinville

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residential property, that BofA purports to have acquired in July 2011. The Carews also

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may have a $459,000 home equity line of credit secured by another deed of trust, but

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there is no allegation that BofA acquired that loan or has any interest in it. Although

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BofA’s notice of removal implied that it held an interest in the larger loan, its motion to

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dismiss dispels that implication. Def.’s Mot. (Dkt. # 6) (“BANA only had an interest in

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the $25,000 loan, not the HELOC.”).

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BofA also knows that on several occasions in the past few years, NW Trustee

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(who BofA purports to have appointed as the successor trustee) has initiated foreclosure

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proceedings against the Carews. On at least two occasions (in July 2012 and June 2013),

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NW Trustee provided notices of scheduled trustee sales, although it discontinued those

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sales, and there is no indication that any trustee’s sale is currently scheduled. The notices

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of trustee’s sale, however, make clear that the only deed of trust on which NW Trustee

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initiated foreclosure proceedings is the one securing the $25,000 loan.

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Although BofA knew these facts, and knew that NW Trustee was a Washington
corporation, it filed a notice of removal in March.
Federal courts are courts of limited jurisdiction. Putting aside less-frequently-

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invoked bases for federal jurisdiction that have no applicability here, a federal court has

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jurisdiction over only two types of civil cases: those “arising under the Constitution,

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laws, or treaties of the United States” (28 U.S.C. § 1332) and those arising among parties

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of diverse citizenship where the amount in controversy exceeds $75,000 (28 U.S.C.

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§ 1332). The Carews’ complaint states no claim arising under federal law, and no

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Defendant contends otherwise. The court thus focuses on whether the court has diversity

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jurisdiction.

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Defendants falter first on the amount in controversy. As noted, the only loan on

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which Defendants claim an interest is for $25,000. The court observes that the July 2012

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notice of trustee’s sale stated a total arrearage (including late charges, trustee expenses,

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and more) of about $23,750. The June 2013 notice of trustee’s sale stated essentially the

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same sum due. BofA’s notice of removal states no basis upon which it can credibly

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claim more than $75,000 in controversy in a dispute worth less than $25,000. The

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Carews mention the much larger home equity loan, and they also claim that they wish to

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quiet title to the property, but Defendants know that the Carews have not sued anybody

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holding an interest in the larger loan. Thus, even if Plaintiffs prevail in quieting title (and

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the court in no way suggests that they will), they will quiet an interest worth less than

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$25,000. That is the object of this litigation. Even if the Carews hope to obtain relief as

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to the larger loan, Defendants know that they cannot do so without (at a minimum) suing

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someone who holds an interest in that loan.

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Second, Defendants have failed to establish diversity of citizenship. As

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Defendants know, the court can exercise diversity jurisdiction in a case like this only

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when no defendant is a citizen of the same state as any plaintiff. 28 U.S.C. § 1332(a)(1).

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When BofA removed this case, it admitted that NW Trustee and the Carews are citizens

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of Washington. But BofA characterized NW Trustee as a “nominal defendant,”

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suggesting that NW Trustee plays a purely ministerial role here. BofA is mistaken.

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Among other allegations, the Carews insist that NW Trustee has no authority to act as

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trustee, because BofA never became the holder of the $25,000 note, and thus had no

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authority to appoint NW Trustee as a successor trustee. Trustees are not “nominal

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defendants,” in such cases, they are potentially liable via either the Washington Deed of

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Trust Act or Washington Consumer Protection Act. See, e.g., Walker v. Quality Loan

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Serv. Corp., 308 P.3d 716, 724 (Wash. Ct. App. 2013) (“[W]e hold that a borrower has an

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actionable claim against a trustee who, by acting without lawful authority or in material

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violation of the D[eed of Trust Act], injures the borrower, even if no foreclosure sale

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occurred.”); id. at 727-28 (reversing dismissal of CPA claim against trustee and purported

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note holder).
III. CONCLUSION

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For the reasons previously stated, the court orders BofA and NW Trustee to show

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cause why the court should not remand this action to Snohomish County Superior Court

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because the court lacks subject matter jurisdiction. Defendants’ response to this order is

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due no later than August 11, 2014. If they do not respond, the court will remand this

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action. The clerk shall TERMINATE Defendants’ motions to dismiss (Dkt. ## 6, 10),

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although the court will resolve them in the event that Defendants demonstrate that this

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court has subject matter jurisdiction.

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For the benefit of Plaintiffs, the court explains that it cannot consider the merits of

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this case (or Defendants’ motions to dismiss) unless it has jurisdiction over this case. It

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has issued this order to require Defendants to show that the court has jurisdiction. If

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Defendants do not demonstrate jurisdiction, the court will send this case back to

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Snohomish County Superior Court, where it was originally filed. Nothing in this order

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should be read to suggest that the court has any opinion on the merits of this case. The

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court merely questions whether it has jurisdiction to consider the merits of this case.

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DATED this 28th day of July, 2014.

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The Honorable Richard A. Jones
United States District Court Judge

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ORDER – 4