CIVIL MINUTES - GENERAL
DAVID O. CARTER, District Judge.
PROCEEDINGS (IN CHAMBERS): ORDER DENYING PLAINTIFFS' MOTION TO REMAND AND ORDERING PLAINTIFFS TO OPPOSE DEFENDANT'S MOTION TO DISMISS
Before the Court are Plaintiffs' Motion to Remand and Defendant's Motion to Dismiss. After reviewing the motion, opposition, and reply, the Court herby DENIES Plaintiffs' Motion to Remand and orders Plaintiffs to oppose Defendant's Motion to Dismiss.
The facts alleged by Alejandaro and Sylvia Canas ("Plaintiffs") are as follows:
a. The Loan
On March 8, 2005, Plaintiffs executed a $632, 000 loan from Citimortgage, Inc. ("Defendant") secured by a deed of trust against the subject property. Compl. ¶¶ 9-10. Defendant's loan representative rushed Plaintiffs through signing so that Plaintiffs were deprived of an opportunity to carefully read the loan documents. Id. ¶ 10. During this process, Defendant's loan representatives assured Plaintiffs that they would receive a fully amortized prime rate loan. Id. ¶¶ 9-10. Instead, Defendant put Plaintiffs in a sub-prime loan with higher loan payments. Id. ¶¶ 11-12.
b. Loan Modification
Due to these higher payments, Plaintiffs sought a loan modification from Defendant in March 2010. Id. ¶ 12. Plaintiffs complied with instructions to submit loan modification applications. Id. However, Defendant's representatives falsely claimed that they had lost or never received such documents and required Plaintiffs to resubmit applications. Id. ¶¶ 12, 15. Defendant set short expiration dates for submitted documents, thus requiring Plaintiffs to continuously resubmit documents. Id. ¶ 15. Defendant's loan representative told Plaintiffs that Defendant would give them a temporary workout agreement in which Plaintiffs had to make three modified payments for three consecutive months. Id. ¶ 12. If Plaintiffs successfully made these payments in a timely manner, Defendant's representative assured, Plaintiff's loan modification would be permanent and Defendant would stop pursuing foreclosure. Id. Plaintiffs successfully made the three modified payments. Id. ¶ 14. Defendant then told Plaintiffs that they would not even be considered for a permanent modification. Id.
On June 15, 2012, Cal-Western Reconveyance Corp. ("Cal-Western"), acting as Defendant's agent, recorded a Notice of Default indicating incorrect arrearages of $106, 439.13. On September 27, 2012, Cal-Western recorded a Notice of Trustee Sale, which indicated an incorrect unpaid balance of $757, 598.67.
On January 16, 2013, Plaintiffs filed this action in Orange County Superior Court. Notice of Removal ("Removal") (Dkt. 1) at Ex. A; Alejandro Canas and Sylvia Canas v. CitiMortgage, Inc. et al., 30-2013-00624891-CU-OR-CJC. On February 21, 2013, Cal-Western filed a Declaration of Non-monetary Status, stating that it was only a nominal party to the action. Removal at Ex. B. The next day, Defendant removed the case to this Court. Removal (Dkt. 1). Defendant then filed its Motion to Dismiss on March 1, 2013. Mot. (Dkt. 5). On March 5, 2013, Plaintiffs filed a Motion to Remand (Dkt. 8), arguing that Cal-Western was not a nominal party and, therefore, complete diversity did not exist. Mot. to Remand at 4-5. Defendant then filed an Opposition, alleging that Plaintiffs' failure to timely oppose Cal-Western's declaration meant that they were precluded from arguing it was not a nominal party. Opp'n. at 3-5.
On April 5, 2013, this Court ordered the parties to further brief the issue of whether Cal-Western is a nominal party. Dkt. 15. Specifically, the Court directed the parties to discuss (1) whether Plaintiffs' failure to oppose Cal-Western's declaration of nonmonetary status under Cal. Civ. Code § 29241 means Cal-Western is a nominal party; and (2) whether Cal-Western is a nominal party irrespective of the outcome of issue (1).
II. Legal Standard
Federal diversity jurisdiction requires that the parties be "citizens of different states" and that the amount in controversy exceed $75, 000. 28 U.S.C. § 1332. For diversity jurisdiction purposes, a corporation is "deemed to be a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business." 28 U.S.C. § 1332(c)(1). The presence of any single plaintiff from the same state as any single defendant destroys "complete diversity" and strips the federal courts of original jurisdiction ...