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Evans Tire & Service Centers, Inc., A v. Bank of America

March 14, 2012

EVANS TIRE & SERVICE CENTERS, INC., A CALIFORNIA CORPORATION,
PLAINTIFF,
v.
BANK OF AMERICA, A CALIFORNIA CORPORATION; DOES 1THROUGH 10, DEFENDANTS.



The opinion of the court was delivered by: Hayes, Judge:

ORDER

The matters before the Court are the Motion to Dismiss filed by Defendant Bank of America (ECF No. 5) and the Motion to Remand filed by Plaintiff Evans Tire & Service Centers, Inc. (ECF No. 6).

I. Background

On August 5, 2011, Plaintiff Evans Tire & Service Centers, Inc. ("Evans Tire") initiated this action by filing a Complaint in the Superior Court of California for the County of San Diego. (ECF No. 1-1 at 2). On September 14, 2011, Defendant Bank of America ("Bank of America") removed the matter to this Court. (ECF No. 1).

On September 21, 2011, Bank of America filed a Motion to Dismiss the Complaint for failure to state a claim. (ECF No. 5). On October 17, 2011, Evans Tire filed an Opposition. (ECF No. 7). On October 24, 2011, Bank of America filed a Reply. (ECF No. 8).

On October 11, 2011, Evans Tire filed a Motion to Remand. (ECF No. 6). On October 31, 2011, Bank of America filed an Opposition. (ECF No. 9).

II. Motion to Remand

Evans Tire seeks remand on the grounds that: "Although [Bank of America] is claiming diversity jurisdiction, the Court has the authority to remand a case by looking at what is in the best interest of all parties." (ECF No. 6-1 at 3). Evans Tire contends that Bank of America "alleges no facts establishing why removing to federal court provides any type of relief." Id. Evans Tire contends that it will "suffer great prejudice" if the case is not remanded to state court. Id.

Bank of America removed the matter to this Court pursuant to 28 U.S.C. § 1332, diversity jurisdiction. Bank of America contends that diversity jurisdiction exists on the grounds that Bank of America is a citizen of North Carolina, Evans Tire is a citizen of California, and the amount in controversy exceeds $300,000.

Federal courts "possess only that power authorized by Constitution and statute." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). "The strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (quotation omitted). "Where doubt regarding the right to removal exists, a case should be remanded to state court." Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003).

Diversity jurisdiction under § 1332 requires that each plaintiff be diverse from each defendant--known as the "complete diversity" or "diversity of citizenship" requirement--and that the amount in controversy exceeds $75,000, exclusive of interest and costs. See Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 553 (2005). "[T]he removing defendant bears the burden of establishing, by a preponderance of the evidence, that the amount in controversy exceeds [the jurisdictional amount]." Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir.1996).

In this case, the Complaint alleges that Evans Tire is a California corporation. The Complaint alleges that Bank of America is a "national banking association ... with its principal place of business in Dallas, Texas."*fn1 (ECF No. 1-1 at 3). The Complaint seeks to recover compensatory damages in the amount of $304,392.22, punitive damages, and attorney's fees. The Court finds that Bank of America has shown that diversity jurisdiction exists. Plaintiff's Motion to Remand is DENIED.

III. Motion to Dismiss

Evans Tire alleges that it maintained a large commercial bank account with Bank of America conducting transactions in excess of $25,000,000 annually. Evans Tire alleges that, "[d]ue to the type and size of [the] account, [Bank of America] assigned multiple individuals to personally manage the account." (ECF No. 1-1 at 4). Evans Tire alleges that Bank of America was "responsible for tracking the movements of the account daily, offering [Evans Tire] new services, and meeting frequently with [Evans Tire] staff accountant [Angela Nelson] at [Evans Tire] headquarters to analyze deposits, withdrawal fees, and to ensure [Bank of America] was providing competitive banking services." Id. Evans Tire alleges that "[Bank of America] represented to [Evans Tire] that the account management team would protect [Evans Tire's] account, as the account management team was responsible for tracking account movements on a daily basis." Id. at 5. Evans Tire alleges that "[Bank of America] represented ... [that it would] provide the maximum level of service to the account [to] alleviate [Evans Tire] from the burden of handling the day-to-day account management." Id. at 5-6. Evans Tire alleges that it paid an additional fee to Bank of America for "its private account management team, and paid a monthly fee for a monthly account analysis prepared by its private account management team." Id. at 4.

Evans Tire alleges that "[Bank of America] was the drawee of [the Evans Tire checking account] and was required to pay out money when a check or draft was legally presented." Id. at 6. Evans Tire alleges that "[f]rom May 1, 2006 to April 2011, [Evans Tire] employed Angela Nelson ... as its staff accountant." Id. Evans Tire alleges that "[d]uring her employment with [Evans Tire], Nelson embezzled $304, 392.22." Id. Evans Tire alleges that Nelson was not an authorized signatory on the account, but that Nelson would create a check to benefit herself or her family and forge the signature of the authorized signatory on the account. Evans Tire alleges that Bank of America never notified Evans Tire of the embezzlement. Evans Tire alleges that it first discovered Nelson's activity when it hired a new staff accountant in May 2011. Evans Tire alleges that "[t]hrough this scheme, in 2006, 2007, 2008, 2009, 2010, and 2011, [Bank of America] permitted Nelson to embezzle $304,392.22 ...." Id. at 7.

Evans Tire asserts the following claims against Bank of America: (1) fraud; (2) breach of fiduciary duty; (3) breach of contract; (4) unfair business practices; (5) negligence; ...


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