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Cooks v. Wells Fargo Bank, N.A.

United States District Court, N.D. California

July 24, 2017

LINDA COOKS, Plaintiff,
v.
WELLS FARGO BANK, N.A., et al., Defendants.

          ORDER GRANTING PLAINTIFF'S MOTION FOR REMAND; DENYING PLAINTIFF'S REQUEST FOR RULE 11 SANCTIONS Re: Dkt. No. 13

          MAXINE M. CHESNEY United States District Judge

         Before the Court is plaintiff Linda Cooks' (“Cooks”) Motion for Remand, filed May 17, 2017. On May 31, 2017, defendant Wells Fargo Bank, N.A. filed opposition, [1] and on June 7, 2017, Cooks filed a reply, after which, on June 29, 2017, with leave of Court, Wells Fargo Bank, N.A. filed a surreply. Having considered the parties' written submissions, the Court rules as follows.[2]

         BACKGROUND

         Cooks alleges that defendants Wells Fargo Bank, N.A., Wells Fargo Home Mortgage, and Wells Fargo & Company collectively engaged in unlawful conduct in relation to a Wells Fargo “home loan” encumbering Cooks' “family home.” (See Compl. at 2:1-4, ¶¶ 1, 10.) In particular, Cooks alleges, defendants engaged in a “predatory lending scheme[] and ‘pick-a-pay' payment program which negatively amortized her loan” (see id. ¶ 2), “strung her along” during a loan modification process” (see id. ¶ 3), and “recorded a Notice of Default on [her] home” while “a decision was pending” on her “loan modification application” (see id. ¶ 4).

         On May 3, 2017, Wells Fargo Bank, N.A. removed the above-titled action on the asserted basis of diversity jurisdiction, contending the parties were “entirely diverse” in citizenship. (See Not. Removal at 2:12.) In particular, Wells Fargo Bank, N.A. asserted that (1) Cooks is a California citizen; (2) Wells Fargo Bank, N.A. is a South Dakota citizen; (3) Wells Fargo Home Mortgage “no longer exists as a separate and independent legal entity, having been merged into Wells Fargo Bank, N.A. in 2004” (see id. at 4:8-9); and (5) Wells Fargo & Company was fraudulently joined as a defendant to the action.

         By the instant motion, Cooks argues that the parties are not diverse in citizenship and that Rule 11 sanctions should be imposed on Wells Fargo Bank, N.A. for removing the action.

         LEGAL STANDARD

         Where a case has been removed from state court and “at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” See 28 U.S.C. § 1447(c). The Court is required to “strictly construe the removal statute against removal jurisdiction, ” and “[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.” See Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The removing defendant “always has the burden of establishing that removal is proper.” See id.

         DISCUSSION

         District courts have diversity jurisdiction over all civil actions between “citizens of different [s]tates” where the amount in controversy exceeds “$75, 000, exclusive of interest and costs.” See 28 U.S.C. § 1332. Diversity jurisdiction requires “complete diversity of citizenship”; diversity jurisdiction applies only where “the citizenship of each plaintiff is diverse from the citizenship of each defendant.” See Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68 (1996).

         Here, as noted above, Cooks contends remand is appropriate because the parties are not diverse in citizenship. In particular, Cooks argues that (1) Wells Fargo Bank, N.A. is a citizen of California and (2) Wells Fargo & Company, although a citizen of California, is not fraudulently joined.

         A. Wells Fargo Bank, N.A.'s Citizenship

         In its Notice of Removal, Wells Fargo Bank, N.A. asserts it is a citizen of South Dakota and, as such, is diverse in citizenship from Cooks, a citizen of California. In particular, Wells Fargo Bank, N.A. argues that, as a national banking association, it “is a citizen of the [s]tate in which its main office, as set forth in its articles of association, is located, ” see Wachovia Bank v. Schmidt, 546 U.S. 303, 307 (2006), and, in support thereof, attaches a copy of its Articles of Association, which state that its main office “shall be in the City of Sioux Falls, County of Minnehaha, State of South Dakota” (see Not. Removal Ex. F at 2).

         Cooks, in her motion for remand, agrees that Wells Fargo Bank, N.A. is a citizen of South Dakota, but argues such defendant is also a citizen of California, the state in which, Cooks contends, Wells Fargo Bank, N.A. has its principal place of business. In support thereof, Cooks cites to two cases, namely, American Surety Co. v. Bank of Cal., 133 F.2d 160 (9th Cir. 1943), a Ninth Circuit case that held national banking associations are citizens of the “states in which their principal places of business are maintained, ” see id. at 162, and Taheny v. Wells Fargo Bank, N.A., 878 F.Supp.2d 1093 (E.D. Cal. ...


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