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Potocki v. Wells Fargo Bank, N.A.

United States District Court, E.D. California

June 30, 2014

THADDEUS J. POTOCKI and KELLY R. DAVENPORT, Plaintiffs,
v.
WELLS FARGO BANK, N.A.; U.S. BANK, N.A.; FIRST AMERICAN SERVICING SOLUTIONS, LLC; and DOES 1-100, inclusive, Defendants.

MEMORANDUM AND ORDER RE: MOTION TO REMAND

WILLIAM B. SHUBB, District Judge.

Plaintiffs Thaddeus J. Potocki and Kelly R. Davenport brought this action against defendants Wells Fargo Bank, N.A. ("Wells Fargo"), U.S. Bank, N.A., and First American Servicing Solutions, LLC ("FASS"), arising out of the foreclosure of plaintiffs' home. Defendants removed this action from Sacramento County Superior Court on the basis of diversity jurisdiction, 28 U.S.C. § 1332, and plaintiffs now move to remand pursuant to 28 U.S.C. § 1447(c).

"[A]ny 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... where such action is pending." 28 U.S.C. § 1441(a). However, if "it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c). On a motion to remand, the defendant bears the burden of showing by a preponderance of the evidence that federal jurisdiction is appropriate. Geographic Expeditions, Inc. v. Estate of Lhotka , 599 F.3d 1102, 1107 (9th Cir. 2010) (citation omitted).

Federal courts have original jurisdiction over civil actions between citizens of different states in which the amount in controversy exceeds $75, 000, exclusive of interest and costs. 28 U.S.C. § 1332. "Section 1332 requires complete diversity of citizenship; each of the plaintiffs must be a citizen of a different state than each of the defendants." Morris v. Princess Cruises, Inc. , 236 F.3d 1061, 1067 (9th Cir. 2001) (citing Caterpillar Inc. v. Lewis , 519 U.S. 61, 68 (1996)).

Relying on case law from the Fifth and Seventh Circuits, plaintiffs first contend that complete diversity is absent because Wells Fargo is a citizen of California. (Pls.' Mem. at 2-3 (Docket No. 8).) In a decision published this year, the Ninth Circuit held exactly the opposite-that Wells Fargo "is a citizen only of South Dakota, where its main office is located, " and that it is therefore not a citizen of California for purposes of assessing diversity jurisdiction. Rouse v. Wachovia Mortg., FSB , 747 F.3d 707, 715 (9th Cir. 2014).

Plaintiffs then assert that FASS is a citizen of California whose presence destroys complete diversity. (Pls.' Mem. at 1-2.) Defendants respond that a separate entity, a Texas corporation named First American Trustee Servicing Solutions, is the actual foreclosure trustee; as a result, they contend, FASS is either a sham or nominal defendant whose citizenship may be ignored for the purpose of determining diversity jurisdiction. (Defs.' Opp'n at 4-6 (Docket No. 11).) The relationship between these two entities is not entirely clear. In fact, defendants' counsel represented at oral argument that the two entities may be so closely affiliated with one another that they are actually the same company.

The court need not sort out the details of their relationship, however, because the only evidence before the court suggests that both entities are citizens of Texas. That evidence consists of two documents: a "Business Entity Detail" on FASS from the California Secretary of State's website, (see Greene Decl. Ex. A (Docket No. 8)), and a "Franchise Tax Account Status" from the Texas Office of the Comptroller's website, (see Pls.' Reply at n.1 (Docket No. 14)).[1] Those documents respectively represent that FASS and First American Trustee are incorporated in Texas and are therefore citizens of Texas. See 28 U.S.C. § 1332(c)(1) ("[A] corporation shall be deemed to be a citizen of every State... by which it has been incorporated....").

While both entities have a mailing address in Santa Ana, California, plaintiffs have not cited any other evidence, either in their briefs or at oral argument, from which the court could conclude that either FASS or First American Trustee maintains its principal place of business in California. See id. (stating that a corporation is also a citizen of the state where it maintains its principal place of business). Regardless of whether FASS or First American Trustee is the actual foreclosure trustee, the evidence before the court suggests that both entities are citizens of Texas and are therefore diverse from plaintiffs. Accordingly, the court must deny plaintiffs' motion to remand.

IT IS THEREFORE ORDERED that plaintiffs' motion to remand be, and the same hereby is, DENIED.


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