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Grace v. Wells Fargo Bank, N.A.

United States District Court, S.D. California

February 21, 2013

Bernadine R. GRACE, Plaintiff,
v.
WELLS FARGO BANK, N.A., et al., Defendants.

Page 1174

Bernadine R. Grace, San Diego, CA, pro se.

Melissa M. Coyle, Anglin Flewelling Rasmussen Campbell & Trytte, Yaw-Jiun Wu, Anglin Flewelling Rasmussen, Pasadena, CA, for Defendant.

ORDER REMANDING CASE TO STATE COURT AND DENYING AS MOOT DEFENDANT'S MOTION TO DISMISS

[DKT. NOs. 4-5]

GONZALO P. CURIEL, District Judge.

On July 18, 2012, Plaintiff filed a complaint against Wells Fargo Bank and World Savings Bank in San Diego Superior Court asserting eleven causes of action, all under California state law. On August 20, 2012, Defendant Wells Fargo removed the action to federal district court. (Dkt. No. 1.) On August 27, 2012, Defendants filed a motion to dismiss. (Dkt. No. 4.) On September 18, 2012, Plaintiff filed a motion to remand the case to state court. (Dkt. No. 5.) Based on the reasoning below, the Court GRANTS Plaintiff's motion to remand the case to state court and DISMISSES Defendant's motion to dismiss as moot.

DISCUSSION

" Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). " District courts ... have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000" and where all parties to the action are " citizens of different states." 28 U.S.C. § 1332(a). " If at any time before final judgment, it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). The Ninth Circuit " strictly construe[s] the removal statute against removal jurisdiction." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992) (citations omitted). Thus, " [f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Id. (citation omitted). " The ‘ strong presumption’ against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Id.; see also Abrego Abrego v. Dow Chemical Co., 443 F.3d 676, 685 (9th Cir.2006). Removal jurisdiction may be based on diversity of citizenship or on the existence of a federal question. 28 U.S.C. § 1441.

This case arises from the alleged wrongful foreclosure of Plaintiff's home. Defendant Wells Fargo Bank, N.A., removed

Page 1175

the action on the basis of diversity jurisdiction. For complete diversity to be present, all plaintiffs must have citizenship different from all defendants. See Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 n. 3, 117 S.Ct. 467, 136 L.Ed.2d 437 (1996). It is undisputed that Plaintiff is a citizen of California. It is also undisputed that Defendant Wells Fargo Bank, N.A. has its main office in South Dakota, and therefore is a citizen of that state. See Wachovia Bank v. Schmidt, 546 U.S. 303, 307, 126 S.Ct. 941, 163 L.Ed.2d 797 (2006) (holding that a national bank " is a citizen of the State in which its main office, as set forth in its articles of association, is located" ). Plaintiff does not contest that Wells Fargo Bank is a citizen of South Dakota. In the motion to remand, Plaintiff contends that Defendant improperly removed the action as there is no diversity of citizenship between the parties and the amount in controversy fails to meet the $75,000 threshold. (Dkt. No. 5.) Plaintiff seeks relief in the form of " compensatory, special and general damages in an amount according to proof at trial, but not less than $1,000,000." (Dkt. No., Ex. A.) Plaintiff further states that the amount of the Note on the property in question is $440,000 ( Id. ) Accordingly, the Court finds that the amount in controversy requirement is satisfied.

The question before the Court is whether, for the purposes of diversity jurisdiction, Wells Fargo is also a citizen of California.[1] See, e.g., Uriarte v. Wells Fargo Bank, N.A., 2011 U.S. Dist. LEXIS 127497 at *9, 2011 WL 5295285 at *2-3 (S.D.Cal. Nov. 3, 2011) (holding that Wells Fargo is also a citizen of California, where it has its principal place of business). But see Flores v. Wells Fargo Bank, N.A. 2012 U.S. Dist. LEXIS 32648, 2012 WL 832546 (N.D.Cal. March 12, 2012) (finding that Wells Fargo is only a citizen of the state of their main office, South Dakota, and not also of the state of their principal place of business, California.) " All national banking associations shall, for the purposes of all other actions by or against them, be deemed citizens of the States in which they are respectively located." 28 U.S.C. § 1348. While the Supreme Court held in Schmidt that a national bank is a citizen of the state in which it main office is located, it did not answer the question as to whether a bank is also " located" in, and therefore a citizen of, the state of principal place of business. Schmidt, 546 U.S. 303, 307, 126 S.Ct. 941 (2006). The Court addresses that question here.

Defendant Wells Fargo asks this Court to adopt a narrow interpretation of the Supreme Court decision in Wachovia Bank, N.A. v. Schmidt, and find that a national banking association is a citizen only of the state in which it has designated its main office. Schmidt, 546 U.S. 303, 307, 126 S.Ct. 941 (2006). Wells Fargo relies on the Eighth Circuit decision in Wells Fargo Bank, N.A. v. WMR e-PIN, LLC and other district court opinions which reject the principal place of business test for purposes of diversity jurisdiction in § 1348. Defendant further asserts that American Surety, a Ninth Circuit decision that utilized the principal place of business test to interpret § 1348, is no longer good law and has been held to be inconsistent with the Supreme Court decision in Schmidt. ...


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