Opinion
Louise Gentry, Plaintiff, Pro se, North Hollywood, CA.
For The Bank of New York Mellon, as Trustee for CWALT, Inc., Altenative Loan Trust 2005-18CB, Mortgage Pass-Throught Certificates Series 2005-Trust 2005-18CB, Mortgage Pass-Through Certificates, Series 2005-18CB formerly known as, The Bank of New York, The Certificateholders of CWALT, Inc., Alternative Loan Trust 2005-18CB, Mortgage Pass-Through Certificates, Series 2005-18CB, ReconTrust Company NA, Mortgage Electronic Registration Systems Inc, CWALT Inc, Alternative Loan Trust 2005-18CB, Mortgage Pass-Through Certificates, Series 2005-18CB Defendants: Dane Harrison Taylor, Severson and Werson, Irvine, CA.
PROCEEDINGS: ORDER DISMISSING COMPLAINT FOR LACK OF SUBJECT MATTER JURISDICTION
MARGARET M. MORROW, UNITED STATES DISTRICT JUDGE.
I. BACKGROUND
On December 10, 2014, Louise Gentry filed this action against The Bank of New York Mellon (f/k/a The Bank of New York) as trustee for CWALT, Inc., Alternative Loan Trust 2005-18CB, Mortgage Pass-Through Certificates, Series 2005-18CB, CWALT, Inc., Alternative Loan Trust 2005-18CB, Mortgage Pass-Through Certificates, Series 2005-18CB, the Certificate Holders of CWALT, Inc., Alternative Loan Trust 2005-18CB, Mortgage Pass-Through Certificates, Series 2005-18CB, ReconTrust Company, N.A., Mortgage Electronic Registration Systems, Inc. (collectively, " defendants"), and certain fictitious defendants. The complaint alleged claims for violation of the Truth in Lending Act (" TILA"), 15 U.S.C. § 1641, et seq., and Fair Debt Collection Practices Act (" FDCPA"), 15 U.S.C. § 1692, et seq., as well as seven state law claims.
Complaint, Docket No. 1 (Dec. 10, 2014).
Id.
On March 25, 2015, Gentry filed a first amended complaint, which did not replead the TILA and FDCPA claims, and alleged only state law claims.
First Amended Complaint (" FAC"), Docket No. 16 (March 23, 2015). Rule 15(a)(1)(B) of the Federal Rules of Civil Procedure permitted Gentry to file an amended complaint as a matter of right given that defendants filed a motion to dismiss on March 4, 2015. See Fed.R.Civ.Proc. 15(a)(1)(B) (providing that a party may amend as a matter of course, inter alia, " 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b)").
II. DISCUSSION
A. Whether the Court Has Subject Matter Jurisdiction to Adjudicate This Case
Gentry's original complaint alleged that the court had subject matter jurisdiction to hear the action because she had alleged TILA and FDCPA claims. As she has abandoned those claims, and no federal claims remain, the court must consider whether it has diversity jurisdiction to adjudicate this case.
See Complaint, Docket No. 1 (Dec. 10, 2014), ¶ 17.
The court concludes that it lacks diversity jurisdiction, as it appears that both Gentry and ReconTrust Company, N.A. (" ReconTrust") are California citizens. Gentry alleges that she is a resident of California, that the subject property located in Los Angeles is her primary residence, and that she has resided in California since at least February 9, 2005, when she obtained the mortgage that forms the basis for her claims in this case. The court therefore concludes that she is a California citizen. See Lew v. Moss, 797 F.2d 747, 750 (9th Cir. 1986) (" The courts have held that the determination of an individual's domicile involves a number of factors (no single factor controlling), including: current residence, voting registration and voting practices, location of personal and real property, location of brokerage and bank accounts, location of spouse and family, membership in unions and other organizations, place of employment or business, driver's license and automobile registration, and payment of taxes").
FAC, ¶ 12.
Id., ¶ 123.
Id., Exh. A (Deed of Trust).
Likewise, although Gentry does not allege ReconTrust's citizenship, for purposes of diversity jurisdiction, national banking associations are " deemed citizens of the States in which they are respectively located." 28 U.S.C. § 1348. A national banking association is " located" in " the State in which its main office, as set forth in its articles of association, is located." Wachovia Bank v. Schmidt, 546 U.S. 303, 307, 126 S.Ct. 941, 163 L.Ed.2d 797 (2006). " Here, ReconTrust is a national banking association with its designated main office in Simi Valley, California." Bedalla v. Bank of Am., N.A., No. CV 12-02307 RMW, 2012 WL 5464635, *1 (N.D. Cal. Nov. 8, 2012); Rodriguez v. Bank of Am. Corp., No. CV 11-01877 ECR, 2012 WL 2375833, *3 (D. Nev. June 21, 2012) (" Because ReconTrust is a national banking association, it is deemed a citizen of California, where it is headquartered"). Indeed, ReconTrust has repeatedly admitted, and California district courts have concluded, that it is a California citizen. See Patino v. ReconTrust Co., No. CV 11-00345 CW, 2012 WL 381206, *2 (N.D. Cal. Feb. 6, 2012) (" Plaintiff argues that, because she and ReconTrust are citizens of California, the Court lacks diversity jurisdiction over her action. Defendants do not dispute that ReconTrust is a California citizen"); Sun v. Bank of Am. Corp., No. CV 10-0004 AG (MLGx), 2010 WL 454720, *1 (C.D. Cal. Feb. 8, 2010) (" Because Plaintiff and ReconTrust are both California citizens, the Court ordered the Defendants to show cause in writing why this action should not be remanded to state court for lack of subject matter jurisdiction"); Delgado v. Bank of Am. Corp., No. CV 09-01638 AWI DLB, 2009 WL 4163525, *3 (E.D. Cal. Nov. 23, 2009) (" Defendants admit that ReconTrust Co., N.A. is a citizen of California"). Because both Gentry and ReconTrust are California citizens, the court appears to lack diversity jurisdiction to hear the case.
See also Office of the Comptroller of the Currency, List of National Banks Active as of 4/30/2015, WWW.OCC.GOV (Apr. 30, 2015), http://www.occ.gov/topics/licensing/national-bank-lists/national-by-name-pdf.pdf (listing ReconTrust as located in Simi Valley, California). In Wachovia, the Supreme Court cited to the then-current records of the Comptroller of the Currency as evidence of the main office of a national banking association. See 546 U.S. at 307 n. 1.
" Circuit law teaches[, however, ] that courts should 'ignore the citizenship of nominal or formal parties who have no interest in the action, and are merely joined to perform the ministerial act of conveying the title if adjudged to the complainant.'" See Silva v. Wells Fargo Bank NA, No. CV 11-3200 GAF (JCGx), 2011 WL 2437514, *3 (C.D. Cal. June 16, 2011) (citing Prudential Real Estate Affiliates, Inc. v. PPR Realty, Inc., 204 F.3d 867, 873 (9th Cir. 2000)); Wise v. Suntrust Mortgage, Inc., No. CV 11-01360-LHK, 2011 WL 1466153, *4 (N.D. Cal. Apr. 18, 2011) (" A[n] . . . exception to the complete diversity requirement applies to nominal parties. 'Defendants who are nominal parties with nothing at stake may be disregarded in determining diversity, despite the propriety of their technical joinder, '" quoting Strotek Corp. v. Air Transport Ass'n of America, 300 F.3d 1129, 1133 (9th Cir. 2002)); see also Daniels v. Wells Fargo Bank, N.A., No. CV 12-5289 PSG (FMOx), 2012 WL 10649202, *4 (C.D. Cal. Sept. 11, 2012) (citing Navarro Sav. Ass'n v. Lee, 446 U.S. 458, 461, 100 S.Ct. 1779, 64 L.Ed.2d 425 (1980) (" [A] federal court must disregard nominal or formal parties and rest jurisdiction only upon the citizenship of real parties to the controversy")). " [ReconTrust's] status as a trustee[, however, ] is not itself sufficient to render it a nominal party." Jenkins v. Bank of Am., N.A., No. CV 14-04545 MMM (JCx), 2015 WL 331114, *8 (C.D. Cal. Jan. 26, 2015); see also Natividad v. Ocwen Loan Servicing, LLC, No. 14-cv-01670-MCE-DAD, 2014 WL 6611054, *4 (E.D. Cal. Nov. 19, 2014) (citing Couture v. Wells Fargo Bank, N.A., No. 11-CV-1096-IEG (CAB), 2011 WL 3489955, * 3 (S.D. Cal. Aug. 9, 2011)).
California Civil Code § 2924(b) provides that a " trustee shall incur no liability for any good faith error resulting from reliance on information provided in good faith by the beneficiary regarding the nature and amount of the default under the secured obligation, deed of trust, or mortgage." A plaintiff can overcome a trustee's assertion that it is not liable under § 2924(b) by alleging and showing malice or the fact that the trustee exceeded the scope of its duties. Vasquez v. Bank of Am., N.A., No. SA CV 15-0006 DOC JC, 2015 WL 794545, *3 (C.D. Cal. Feb. 23, 2015); Canas v. Citimortgage, Inc., No. SA CV 13-00322-DOC, 2013 WL 2468676, *3 (C.D. Cal. June 7, 2013) (citation omitted). Gentry alleges that defendants, including ReconTrust, acted maliciously by filing forged or fraudulent documents concerning her home. (FAC, ¶ ¶ 82-83.) Section 2924(b) thus does not apply, and ReconTrust is not immune based on its status as a trustee.
California Civil Code § 2924l permits a trustee to file a declaration of non-monetary status if it is named in an action concerning a deed of trust, and has a reasonable belief that it has been named solely in its capacity as trustee, and not as a result of any wrongful acts or omissions in the performance of its duties. Cal. Civ. Code § 2924l (a). In the event no objection is served within fifteen days of the date the declaration is served, the trustee is not required to participate in the action and is not required to respond to any damages award. Cal. Civ. Code § 2924l (c), (d). " 'District courts have recognized that defendants who file a declaration of non-monetary status to which plaintiffs do not object are merely nominal parties whose citizenship does not count for diversity jurisdiction purposes, ' so long as the fifteen-day period for objections passed prior to removal of the action to federal court and no timely objection was filed." Jenkins, 2015 WL 331114 at *6. ReconTrust, however, did not file a declaration of non-monetary status, and even were it to do so now, the court would have to assess whether the filing would be procedurally improper at this point.
" In federal court, procedure is governed by federal law." Bever v. Cal-Western Reconveyance Corp., No. 11-cv-01584-AWI-SKO, 2012 WL 662336, *3 (E.D. Cal. Feb.28, 2012) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)). " The Federal Rules of Civil Procedure apply irrespective of the source of subject matter jurisdiction, and irrespective of whether the substantive law at issue is state or federal." Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1102 (9th Cir. 2003) (citing Hanna v. Plumer, 380 U.S. 460, 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965)). Where an issue is directly covered by the Federal Rules of Civil Procedure, federal law controls; it is immaterial whether the state court would have reached a different result had state procedural law been applied. Id.; see also Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009).
" Federal courts in California considering declarations of non-monetary status under Civil Code § 2924l have concluded that § 2924l is a state procedural rule, and that declarations of non-monetary status conflict with Rule 7(a) of the Federal Rules of Civil Procedure, which governs the filing of pleadings in federal court." Jenkins, 2015 WL 331114 at *9. As Judge William Alsup of the Northern District of California reasoned in Kennedy v. PLM Lender Services, Inc., No. C 10-04942 WHA, 2012 WL 1038632, *6 (N.D. Cal. Mar. 27, 2012):
" Under the Erie doctrine, federal law governs procedure in the federal courts, irrespective of whether the substantive law at issue is state or federal. Where an issue is directly covered by the FRCP, federal law controls. 'It is immaterial whether a different result would have been reached in a state court action if state procedural law had been applied.' Whether Section 2924l may properly be applied in federal court depends on whether such an application would result in a 'direct collision' with the FRCP.
Section 2924l directly collides with FRCP 7(a), which specifies the only pleadings allowed in federal court. A declaration of non-monetary status is not listed under FRCP 7(a). Section 2924l governs a pleading: It sets the procedure for filing and serving, the time for objections and result of a party's failure to timely object. These procedural requirements directly conflict with the exclusive list of pleadings allowed and governed by the FRCP. Accordingly, Section 2924l is here inapplicable under the Erie doctrine."
" The court agrees with Judge Alsup's reasoning and joins the majority of courts that have concluded that § 2924l is a state procedural rule and thus [that] a declaration [of non-monetary status] is barred by the Federal Rules of Civil Procedure." Jenkins, 2015 WL 331114 at *9. See, e.g., Daniels, 2012 WL 10649202 at *4 (" Although it may be recognized in federal court, nonmonetary status under California Civil Code § 2924l is a state procedural rule and, thus, 'nonmonetary status may not be granted in federal court.' Moreover, 'interpreting this provision in the context of determining complete diversity in a removal action, courts in this circuit have held that because nominal status is not achieved until 15 days after filing, the allegedly nominal party remains an active participant in the lawsuit whose citizenship must be considered where removal is sought during the 15-day window.' . . . Therefore, non-monetary status must be granted by passage of the 15-day window before the case is removed to federal court"); Bever, 2012 WL 662336 at *4 (" Thus, relying on the reasoning in Tran that Section 2924l is a California state procedural law, and the fact that pleadings are controlled in federal court under Rule 7, the Court finds in the instant case that Cal-Western's filing of its Declaration of Non-Monetary Status is not a sufficient pleading since this case was initially filed in federal court"); Tran v. Washington Mutual Bank, No. CIV S-09-3277 LKK/DAD, 2010 WL 520878, *1-2 (E.D. Cal. Feb.11, 2010) (" It appears to this court, however, that California Civil Code § 2924l is a state procedural rule, and not state substantive law. Accordingly, nonmonetary status may not be granted in federal court. Moreover, even if this court were to construe Quality's declaration of nonmonetary status as a declaration of the status of a nominal defendant, such a status is not warranted here where plaintiff objects to the declaration. Specifically, plaintiff argues that Quality is liable of wrongful conduct and thereby may be subject to damages as well as injunctive relief. For the foregoing reasons, defendant Quality shall not be considered a nonmonetary or a nominal defendant").
Consequently, the court concludes that ReconTrust is not a nominal party whose California citizenship can be disregarded. Nor can its citizenship be disregarded under Civil Code § 2924l. Because Gentry and ReconTrust are both citizens of California, Gentry cannot invoke diversity jurisdiction.
B. Whether the Court Can Exercise Jurisdiction over Gentry's State Law Claims
As noted, Gentry has dismissed her federal claims, and the court does not have diversity jurisdiction to adjudicate her state law claims. Under these circumstances, several circuit courts have held that the court may not exercise jurisdiction over the state law claims. See, e.g., Pintando v. Miami-Dade Housing Agency, 501 F.3d 1241, 1243-44 (11th Cir. 2007) (" we must look to Pintando's amended complaint to determine whether we have subject-matter jurisdiction. When Pintando amended his complaint and failed to include a Title VII claim or any other federal claim, the basis for the district court's subject-matter jurisdiction ceased to exist, and the district court should have dismissed Pintando's state claims without prejudice"); Wellness Community-National v. Wellness House, 70 F.3d 46, 48-49 (7th Cir. 1995) (noting that an amended complaint supersedes the original complaint, that it was thus necessary to determine jurisdiction on the basis of the amended complaint, and that the district court could not exercise supplemental jurisdiction over plaintiff's state law claims after federal claims were abandoned); Boelens v. Redman Homes, Inc., 759 F.2d 504, 506-08 (5th Cir. 1985) (jurisdiction must be determined by looking at a plaintiff's amended complaint and " the plaintiff must be held to the jurisdictional consequences of a voluntary abandonment of claims that would otherwise provide federal jurisdiction"). These decisions are consistent with the Supreme Court's direction in Rockwell International Corp. v. United States, 549 U.S. 457, 127 S.Ct. 1397, 167 L.Ed.2d 190 (2007). There, the Court held unequivocally that " when a plaintiff files a complaint in federal court and then voluntarily amends the complaint, courts look to the amended complaint to determine jurisdiction." Id. at 1409. See also Connectu LLC v. Zuckerberg, 522 F.3d 82, 91 (1st Cir. 2008) (citing Rockwell for the proposition that jurisdiction must be determined on the face of an amended complaint when plaintiff initiated the action in federal court).
As the court lacks jurisdiction on the face of the amended complaint, it dismisses Gentry's state law claims without prejudice.
III. CONCLUSION
For the reasons stated, the court lacks subject matter jurisdiction to adjudicate Gentry's remaining claims. It therefore dismisses those claims without prejudice.
JUDGMENT FOR DEFENDANTS
On March 23, 2015, plaintiff Louise Gentry filed a first amended complaint, omitting her federal claims for violations of the Truth in Lending Act (" TILA"), 15 U.S.C. § 1641, et seq., and Fair Debt Collection Practices Act (" FDCPA"), 15 U.S.C. § 1692, et seq. On June 11, 2015, the court entered an order dismissing plaintiff's state law claims for lack of subject matter jurisdiction, observing that it no longer had federal question jurisdiction; that the parties' citizenship was not diverse; and that the court could not exercise supplemental jurisdiction in light of plaintiff's abandonment of her federal claims . Accordingly, IT IS ORDERED AND ADJUDGED
1. That plaintiff's TILA and FDCPA claims be dismissed with prejudice;
2. That plaintiff's state law claims be dismissed without prejudice; and
3. That the action be, and it is hereby, dismissed.