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The Board of St. Mary's Holy Apostolic Catholic Church of v. Mar Addai Ii

October 4, 2012



This case involves a dispute between members of a church. Specifically, it appears that there is a dispute among the parties as to whom has the lawful authority to act on behalf of, and to control, St. Mary's Holy Apostolic Church. On August 30, 2012, Plaintiff filed suit in the Fresno County Superior Court and alleged state law claims for declaratory and injunctive relief, breach of fiduciary duty, and California Civil Code § 953 for destruction of property. On September 5, 2012, Defendants removed the case to this Court on the basis of diversity and federal question jurisdiction. *fn1

On September 7, 2012, the Court ordered Defendants to show cause why this case should not be remanded to the Fresno County Superior Court. The Court established a briefing schedule that provided for a response by Defendants, a response by Plaintiff, and a reply by Defendants. All briefing has now been received. For the reasons that follow, the Court will remand.

Defendants' Arguments

Defendants argue that the Court has diversity jurisdiction. Defendants contend that Mar Addai II and Mar Zaia Koshaba are citizens of Iraq, Plaintiff purports to be a California citizen, and the remaining Defendants are all California citizens ("California Defendants"). *fn2 However, the California Defendants are sham defendants. The California Defendants each acted as agents of Mar Addai II or Mar Zaia Koshaba in doing the acts complained of. That is, the acts were all done in a representative capacity. The California Defendants are only nominal parties, and the real defendants in this lawsuit are Mar Addai II and Mar Zaia Koshaba. Plaintiff's cause of action against the California Defendants for violation of California Civil Code § 953 based on damage done to church property is not properly pled, and the facts as alleged do not implicate § 953.

Defendants also argue that Plaintiff does not have standing to sue for damage done to church property. There are no allegations of ownership in the church property by Plaintiff, or any allegations that show a right to control church property. Further, despite the allegation in the Complaint, Plaintiff is not a California corporation. Plaintiff does not exist in the California Secretary of State's database. In fact, based on the allegations in the Complaint, Plaintiff "The Board of St. Mary's Holy Apostolic Catholic Church of the East" is one and the same as named Defendant "St. Mary's Holy Apostolic Catholic Church of the East, Inc."

Legal Standard

A district court has "a duty to establish subject matter jurisdiction over the removed action sua sponte , whether the parties raised the issue or not." United Investors Life Ins. Co. v. Waddell & Reed, Inc., 360 F.3d 960, 967 (9th Cir. 2004). The removal statute (28 U.S.C. § 1441) is strictly construed against removal jurisdiction. Geographic Expeditions, Inc. v. Estate of Lhotka, 599 F.3d 1102, 1107 (9th Cir. 2010); Provincial Gov't of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009). It is presumed that a case lies outside the limited jurisdiction of the federal courts, and the burden of establishing the contrary rests upon the party asserting jurisdiction. Geographic Expeditions, 599 F.3d at 1106-07; Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009). "The strong presumption against removal jurisdiction" means that "the court resolves all ambiguity in favor of remand to state court." Hunter, 582 F.3d at 1042; Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). That is, federal jurisdiction over a removed case "must be rejected if there is any doubt as to the right of removal in the first instance." Geographic Expeditions, 599 F.3d at 1107; Gaus, 980 F.2d at 566. "If at any time prior to judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c); Gibson v. Chrysler Corp., 261 F.3d 927, 932 (9th Cir. 2001). Remand under 28 U.S.C. § 1447(c) "is mandatory, not discretionary." Bruns v. NCUA, 122 F.3d 1251, 1257 (9th Cir. 1997); see also Albingia Versicherungs A.G. v. Schenker Int'l, Inc., 344 F.3d 931, 938 (9th Cir. 2003).

A federal court may exercise jurisdiction over a case through diversity jurisdiction if the amount in controversy is at least $75,000.00 and there is diversity of citizenship. 28 U.S.C. § 1332(a). The diversity of citizenship must be complete, that is, "each of the plaintiffs must be a citizen of a different state than each of the defendant." Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001) (citing Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68 (1996)). The court "must disregard nominal or formal parties and rest jurisdiction only upon the citizenship of real parties to the controversies." Navarro Sav. Ass'n v. Lee, 446 U.S. 458, 461 (1980); Kuntz v. Lamar Corp., 385 F.3d 1177, 1183 (9th Cir. 2004).

An exception to the complete diversity requirement is where a non-diverse defendant has been "fraudulently joined." Morris, 236 F.3d at 1067. "Fraudulent joinder" is a term of art. *fn3 Id.; Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998); McCabe v. General Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987). The joinder or inclusion of a non-diverse defendant is deemed "fraudulent," and the non-diverse defendant's presence will be ignored for diversity purposes, if the "plaintiff fails to state a cause of action against [the non-diverse] defendant, and the failure is obvious according to the settled rules of the state." Hamilton Materials Inc. v. Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007); Morris, 236 F.3d at 1067; Ritchey, 139 F.3d at 1313; McCabe, 811 F.2d at 1339. The defendants bear the burden of proving fraudulent joinder and are entitled to present facts that show the joinder or inclusion of the non-diverse defendant is fraudulent, i.e. that the non-diverse defendant cannot be liable on any theory. See Morris, 236 F.3d at 1067; Ritchey, 139 F.3d at 1318; McCabe, 811 F.2d at 1339; Meisel v. Allstate Indem. Co., 357 F.Supp.2d 1222, 1225-26 (E.D. Cal. 2005). There is a general presumption against fraudulent joinder, and fraudulent joinder must be proven by clear and convincing evidence. Hamilton, 494 F.3d at 1206. All material ambiguities in state law will be resolved in favor of the plaintiff. Gray v. Beverly Enterprises-Miss., Inc., 390 F.3d 400, 405 (5th Cir. 2004); Green v. Wyeth, 344 F.Supp.2d 674, 681 (D. Nev. 2004). Remand will be required "if there is a possibility that a state court would find that the complaint states a cause of action against any of the resident defendants . . . ." Hunter, 582 F.3d at 1046; see also Ritchey, 139 F.3d at 1318; Meisel, 357 F.Supp.2d at 1225. Stated differently, if there is a "non-fanciful possibility that the plaintiffs can state a claim against the non-diverse defendant, the [district] court must remand." Mireles v. Wells Fargo Bank, N.A., 845 F.Supp.2d 1034, 1062 (C.D. Cal. 2012); Vu v. Ortho-McNeill Pharm., Inc., 602 F.Supp.2d 1151, 1154 (N.D. Cal. 2009); Green, 344 F.Supp.2d at 681. "In deciding whether a cause of action is stated . . . [courts] will look only to a plaintiff's pleadings to determine removability." Gardner v. UICI, 508 F.3d 559, 561 n.3 (9th Cir. 2007); Ritchey, 139 F.3d at 1318.


1. Remand

Plaintiff's third cause of action alleges in part that the California Defendants are liable for property damage. The relevant allegation reads: "[The California Defendants] through their own personal actions, or direction, have caused damage to St. Mary's, by destroying the locks, damaging security cameras, and damag[ing] electrical wiring while attempting to break into St. Mary's outside of the normal public church hours." Complaint at ¶ 30. Plaintiff indicates that the cause of action is under California Civil Code § 953. Civil Code § 953 reads: "A thing in action is a right to recover money or other personal property by a judicial proceeding."

Based on the plain language of § 953, it is not apparent that this code section is the proper basis for recovering property damage. Nevertheless, putting aside the citation to § 953, it is apparent that what Plaintiff is complaining about is the damage and improper destruction of property by the intentional acts of the California Defendants. See Complaint ¶ 30. The tort of conversion is supported by the allegations. See Judicial Council of California Civil Jury Instructions (2012 Ed.) -- § 2100 ("CACI").

There is no evidence before the Court that the California Defendants cannot be liable for conversion. To be sure, Defendants contend that they were acting under legitimate authority, but whether their authority was in fact legitimate is the key controverted issue in this case. It is equally possible at this point that the California Defendants did not have proper authority when they destroyed/damaged Plaintiff's property. Because the allegations indicate a non-fanciful possibility that Plaintiff may recover against the California Defendants for the tort of conversion, ...

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