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Tonelli v. Wells Fargo Bank, N.A.

United States District Court, N.D. California

October 21, 2019

STEPHEN TONELLI, Plaintiff,
v.
WELLS FARGO BANK, N.A., et al., Defendants.

          ORDER GRANTING MOTION TO REMAND; DENYING MOTION TO DISMISS Re: Dkt. Nos. 8, 12

          Kandis A. Westmore United States Magistrate Judge.

         Plaintiff Stephen Tonelli filed the instant case against Defendants Wells Fargo Bank, N.A. (“Wells Fargo Bank”), Wells Fargo Clearing Services LLC dba Wells Fargo Advisors, LLC (“Wells Fargo Advisors”), and Shehzad Bhatti. (Compl., Dkt. No. 20-1.) On August 15, 2019, Defendant Wells Fargo Bank removed the case to federal court, asserting diversity jurisdiction. (Not. of Removal at 1, Dkt. No. 1.) While Defendants concede that Defendants Wells Fargo Advisors and Bhatti are California citizens, they assert that both Defendants were fraudulently joined. (Id. ¶¶ 13-15.)

         Pending before the Court are: (1) Defendant Wells Fargo Bank's motion to dismiss, and (2) Plaintiff's motion to remand. (Def.'s Mot. to Dismiss, Dkt. No. 8; Pl.'s Mot. to Remand, Dkt. No. 12.) Having considered the parties' filings, the relevant legal authorities, and the arguments presented at the October 17, 2019 hearing, the Court GRANTS Plaintiff's motion to remand and DENIES Defendant Wells Fargo Bank's motion to dismiss as moot.

         I. BACKGROUND

         On July 8, 2015, Plaintiff's brother - Kevin Tonelli - executed the Tonelli Trust - 2005 (“Trust”). (Compl. ¶ 7.) In 2018, Mr. Tonelli executed a Second Amendment which identified Mr. Tonelli's Wells Fargo checking and savings account (“Bank Accounts”) as property of the Trust. (Compl. ¶ 10.)

         On December 18, 2017, Mr. Tonelli executed a special power of attorney giving Plaintiff authority to conduct business with Defendant Wells Fargo Bank. (Compl. ¶ 12.) Using the special power of attorney, Plaintiff deposited funds into the Bank Accounts. (Compl. ¶ 13.) As of April 30, 2018, the balance in the Bank Accounts exceeded $497, 000. (Compl. ¶ 14.)

         In November 2018, Defendant Bank of America ceased sending any communications, including bank statements, to Plaintiff or Mr. Tonelli. (Compl. ¶ 15.) On February 21, 2019, Mr. Tonelli passed away, making Plaintiff the successor trustee of the Tonelli Trust - 2005. (Compl. ¶¶ 16-17.)

         On July 1, 2019, Plaintiff notified Defendant Bank of America that Mr. Tonelli had passed away. (Compl. ¶ 18.) On July 1, 2019, Defendant Bhatti, allegedly acting on behalf of Defendants, informed Plaintiff that he could not provide Plaintiff any information concerning the Bank Accounts except that the balances in the Bank Accounts was sixty cents. (Compl. ¶ 19.) On July 2, 2019, Plaintiff provided Defendants a “Certificate of the Trust.” (Compl. ¶ 20.) Nevertheless, Defendants refused to provide Plaintiff any other information about the Bank Accounts, and have continued to refuse to provide any further information or documentation about the Bank Accounts. (Compl. ¶ 21.)

         On July 12, 2019, Plaintiff filed the instant action against Defendants, asserting claims for: (1) conversion, (2) accounting, and (3) violation of California's Unfair Competition Law (“UCL”). With respect to the conversion claim, Plaintiff alleged that “Defendants have failed and refused to turn over funds from the Bank Accounts to Plaintiff, ” and asserted that “Defendants withdrew funds from the Bank Accounts without authorization, and converted these funds for their own use.” (Compl. ¶¶ 26-27.) Plaintiff's UCL claim is also based on Defendants' alleged “conver[sion of] funds from the Tonelli Trust - 2005.” (Compl. ¶ 37.)

         On August 15, 2019, Defendant Wells Fargo Bank removed the instant case based on diversity jurisdiction. (Not. of Removal at 1.) Defendant Wells Fargo Bank asserted that the citizenship of Defendants Wells Fargo Advisors and Bhatti should be disregarded because “Plaintiff has alleged no concrete facts that any Defendant committed any wrongdoing . . . .” (Id. ¶ 18.)

         Defendant also provided a declaration by Defendant Bhatti, who is a Personal Banker 2 at Defendant Wells Fargo Bank and a Brokerage Associate for Defendant Wells Fargo Advisors. (Bhatti Decl. ¶ 3, Dkt. No. 3.) Defendant Bhatti states that he has never interacted with anyone regarding the Bank Accounts, except for his interactions with Plaintiff in early July 2019. (Bhatti Decl. ¶ 7.) Specifically, on July 2, 2019, Defendant Bhatti informed Plaintiff that he was not in a position to provide Mr. Tonelli's personal account information to Plaintiff. (Bhatti Decl. ¶ 8.) On July 5, 2019, Plaintiff provided documents relating to a trust in Mr. Tonelli's name. (Bhatti Decl. ¶ 9.) Defendant Bhatti informed Plaintiff that because the Bank Accounts were not set up as trust accounts, he could not provide Mr. Tonelli's personal account information to Plaintiff. (Bhatti Decl. ¶ 10.) Defendant Bhatti states that he did not discuss Defendant Wells Fargo Advisors with Plaintiff at any time, nor did he say or do anything on behalf of Defendant Wells Fargo Advisors as to Plaintiff. (Decl. ¶ 6.) Defendant Bhatti further denies that he withdrew any funds from Mr. Tonelli's account for his personal use or any other purpose. (Decl. ¶ 11.)

         On August 22, 2019, Defendant Wells Fargo Bank filed a motion to dismiss. Plaintiff filed his opposition on September 16, 2019, and Defendant Wells Fargo Bank filed its reply on September 23, 2019. (Pl.'s Opp'n, Dkt. No. 14; Def.'s Reply, Dkt. No. 16.) On September 6, 2019, Plaintiff filed a motion to remand. Defendant Wells Fargo Bank, N.A. filed its opposition on September 19, 2019, and Plaintiff filed his reply on September 23, 2019. (Def.'s Opp'n, Dkt. No. 15; Pl.'s Reply, Dkt. No. 17.)

         II. LEGAL STANDARD

         A. ...


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