United States District Court, D. Nevada
C. JONES UNITED STATES DISTRICT JUDGE
case arises out of a foreclosure of real property. Now
pending before the Court are a motion to remand, (ECF No. 6),
a motion for recusal, (ECF No. 7), and two motions to quash
service, (ECF Nos. 9, 10). For the reasons given herein, the
Court grants the motion to remand and denies the remaining
motions as moot.
FACTS AND PROCEDURAL HISTORY
Jewel Shepard alleges she entered into an agreement with
Defendant Akerman LLP, a law firm hired by Defendant Bayview
Loan Servicing, LLC, to short sell her home at 2190 S. Marsh
Avenue in Reno, Nevada ("the Property"). Ms.
Shepard alleges she was punctual in filling out all related
paperwork and was fully cooperative throughout the short sale
approval process. Ultimately, however, Bayview foreclosed on
the Property rather than approve Ms. Shepard's request
for a short sale.
result of the foreclosure, Ms. Shepard brought this action in
state court against Bayview; prior loan servicer, Bank of
America ("BANA"); BANA's predecessor,
Countrywide; the initial trustee under the deed of trust,
Recontrust; Bayview's attorneys, Akerman, LLP and Tenesa
Scaturro; and two alleged "squatters" who were
occupying the Property, Kevin Cloutier and Scott
McDuffie. She alleged causes of action arising under
state law for breach of contract, conversion, "account
stated," and unjust enrichment. (Compl. 7-10, ECF No.
2-2 at 8.)
April 26, 2018, Bayview timely removed the case to this Court
under 28 U.S.C. § 1332. Bayview concedes that complete
diversity does not exist among the named parties. However,
Bayview argues that Countrywide, Recontrust, Akerman, and
Scaturro are sham defendants, and their citizenship should be
ignored for purposes of diversity jurisdiction.
MOTION TO REMAND (ECF NO. 6)
federal jurisdiction based on diversity of citizenship
requires that the claim satisfy the jurisdictional amount,
$75, 000, and that there be complete diversity among the
parties, i.e., that no defendant shares citizenship with any
plaintiff, and that no defendant is a citizen of the state in
which the suit was filed. 28 U.S.C. § 1332. However,
when suit is brought against a fraudulent or "sham"
defendant for the purposes of defeating diversity
jurisdiction, the citizenship of that defendant may be
disregarded for purposes of establishing jurisdiction.
Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th
Cir. 1998) ("It is a commonplace that fraudulently
joined defendants will not defeat removal on diversity
defendant is fraudulently joined if the plaintiff fails to
state a claim against him and that failure is "obvious
according to the settled rules of the state." McCabe
v. General Foods Corp., 811 F.2d 1336, 1339 (9th Cir.
1987). Thus, the removing party bears the burden of proving,
by clear and convincing evidence, that (1) plaintiff has not
stated a claim against the non-diverse party, and (2)
plaintiff cannot state a claim against the non-diverse party.
See Hamilton Materials, Inc. v. Dow Chem. Corp., 494
F.3d 1203, 1206 (9th Cir. 2007); Greene v. Wyeth,
344 F.Supp.2d 674, 682 (D. Nev. 2004).
issue of whether removal was proper is generally determined
on the pleadings as they existed at the time of removal.
Eagle v. American Tel. & Tel. Co., 769 F.2d 541,
545 (9th Cir. 1985) (citing Pullman Co. v. Jenkins,
305 U.S. 534, 537 (1939)). In cases where there is a question
of whether the non-diverse defendant was fraudulently joined,
the district court is allowed to "pierce the
pleadings" and consider additional evidence of a summary
judgment nature. See Ritchey, 139 F.3d at 1318
(stating that "a defendant must have the opportunity to
show that the individuals joined in the action cannot be
liable on any theory"). Nevertheless, consideration of
the legitimacy of removal should be limited to evidence
available at the time of removal and "not on possible
future evidence that may be obtained through further
discovery." Kite v. Zimmer, 2006 WL 3386765, *1
(D. Nev. 2006) (Jones, J.). Examining this evidence, the
court must resolve "all disputed questions of fact and
all ambiguities in the controlling state law in favor of the
non-removing party." Plute v. Roadway Package Sys.,
Inc., 141 F.Supp.2d 1005, 1008 (N.D. Cal. 2001)
(internal citations omitted).
Ms. Shepard Is a Citizen of Nevada, Not California
parties do not dispute the alleged citizenship of the various
defendants. Bayview is a citizen of Delaware and Florida.
(Resp. 2, ECF No. 14.) BANA is a citizen of North Carolina.
(Id. at 3.) Countrywide and Recontrust are alleged
to be citizens of California. (Am. Compl. ¶ 6, ECF No.
2-2 at 46; Resp. 4.) Lastly, Akerman is alleged to be a
citizen of Florida, and Ms. Scaturro a citizen of Nevada.
(Am. Compl. ¶ 7; Resp. 4 n.3.) The parties also do not
dispute the alleged citizenship of Ms. Shepard, who claims in
her Complaint and Amended Complaint to reside in California.
However, a closer look at the pleadings and motion briefs
reveals that Ms. Shepard cannot be treated as a citizen of
California for purposes of determining diversity.
very well established in the federal courts that
"[r]esidence and citizenship are not the same
thing." Mantin v. Broad. Music, Inc., 244 F.2d
204, 206 (9th Cir. 1957). A "natural person's state
citizenship is ... determined by her state of domicile, not
her state of residence. A person's domicile is her
permanent home, where she resides with the intention to
remain or to which she intends to return." Kanter v.
Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001)
(emphasis added). Here, Ms. Shepard's own filings make
her intentions quite clear. In her original Complaint, filed
March 20, 2018, she stated that she was residing "at
various locations in Southern California, attempting to
gain entrance to her home located at 2190 S. Marsh Ave.,
Reno, Nevada." (Compl. ¶ 2, ECF No. 2-2 at 3
(emphasis added).) When she filed her Amended Complaint on
April 18, she changed this language slightly:
"Plaintiff... resides at various locations in Southern
California, and uses a mail drop in Burbank, California, due
to issues arising from property located at 2190 S. Marsh
Ave., Reno, Nevada 89509." (Am. Compl. ¶ 3, ECF No.
2-2 at 45.) Finally, in her motion to remand of May 3, Ms.
Shepard represented that she has returned to Nevada and is
once again occupying the Property. (Mot. Remand 16
("Plaintiff has finally taken control of the Marsh
property."), 18 ("Plaintiff is here at 2190 S.
Marsh Ave."), ECF No. 6.)
because it is clear that Ms. Shepard does not have a
permanent residence in California and always intended to
return to her home in Reno, she must be considered domiciled
in and a ...