Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_18-cv-02555/USCOURTS-casd-3_18-cv-02555-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1332nr Diversity-Notice of Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

LAWRENCE A. MACDONALD, et 

al.,

Plaintiffs,

v.

U.S. BANK NATIONAL 

ASSOCIATION, et al.,

Defendants.

Case No.: 18cv2555-LAB (MSB)

ORDER GRANTING JOINT 

MOTION TO EXTEND TIME TO 

ANSWER; AND

ORDER TO SHOW CAUSE RE: 

JURISDICTION

Defendants U.S. Bank National Association and Nationstar Mortgage, LLC 

removed this action from state court, citing diversity jurisdiction, and the parties 

jointly moved to extend the time for them to answer. These two Defendants then 

filed their answer. The joint motion (Docket no. 4) is GRANTED and the answer is 

accepted as filed. The claims concern an allegedly unlawful and fraudulent 

foreclosure.

The notice of removal identified Plaintiffs Lawrence and Meredith MacDonald 

as California citizens. There are three named Defendants: U.S. Bank, Nationstar 

Mortgage, LLC, and Affinia Default Services, LLC. 

The notice of removal identified U.S. Bank as a citizen of Ohio. It did not 

identify the citizenship of Affinia Default Services, LLC, arguing instead that Affinia 

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is a nominal Defendant only. It also attempted to identify the citizenship of 

Nationstar Mortgage, LLC (Notice of Removal, ¶ 10), but was ineffective in doing 

so.

The complaint alleges Affinia is a loan servicing institution, and makes 

substantive allegations against it. For example, it alleges that Affinia and the other 

two Defendants misled the MacDonalds in 2004 during the lending process. 

(Compl., ¶¶ 7–8, 15.) It alleges that although the MacDonalds sent each of the 

three Defendants a notice of dispute and request for accounting, none of them 

responded. (Id., ¶ 13.) It alleges that each of the three Defendants made various 

fraudulent representations to the MacDonalds. Among other things, it alleges that 

each of the three Defendants made representations to the MacDonalds to the 

effect that they were acting as the MacDonalds’ agents and would help them find 

the most suitable loans for them. (Id., ¶¶ 25–28, 32.) The complaint also alleges 

that all three Defendants were engaged in a conspiracy to defraud the 

MacDonalds, by arranging for an inflated appraisal and making loans to the 

MacDonalds based on it that they knew the MacDonalds could not afford to pay 

off. (Compl., ¶¶ 43–47.)

When a defendant has filed an unopposed declaration of non-monetary 

status in state court, district courts generally treat the trustee as a nominal party. 

See Couture v. Wells Fargo Bank, N.A., 2011 WL 3489955, at *3 (S.D. Cal., Aug. 

9, 2011). Although the notice of removal alleges that Affinia filed such a notice and 

says the notice is attached as “Exhibit 2,” the notice does not appear to be among 

the attachments.1 A printout of the state court docket (Docket no 1-4 at 2) shows 

Affinia filed some kind of declaration on October 2, 2018, but does not say what 

kind.

 

1 The notice of removal attaches a copy of the state court complaint, summons, 

and docket printout. 

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Accepting the allegations as true, Affinia was more than a trustee, and the 

complaint is bringing substantial claims against it for misrepresenting itself as a 

fiduciary for the MacDonalds, and conspiring to defraud them. If Affinia is more 

than a nominal Defendant, its citizenship must be considered when determining 

whether the parties are completely diverse. See Prasad v. Wells Fargo Bank, N.A., 

2011 WL 4074300, at *3 (W.D. Wash., Sept. 13, 2011); Couture, 2011 WL 

3489955, at *3.

The citizenship of Nationstar Mortgage, LLC is also inadequately identified. 

The notice of removal correctly recognizes that a limited liability company is a 

citizen of every state of which its owners/members are citizens. See Johnson v. 

Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). It then 

concludes that Nationstar Mortgage, LLC is a “wholly-owned subsidiary” of a 

Delaware corporation, Mr. Cooper Group, Inc. (Compl., ¶ 10.) Mr. Cooper Group, 

Inc.’s principal place of business is not identified, but that defect appears not to 

matter. Nationstar Mortgage, LLC is actually owned by two other LLCs: Nationstar 

Sub1 LLC and Nationstar Sub2 LLC. (Id.) They are both wholly owned by 

Nationstar Mortgage Holdings, Inc., whose citizenship is not identified at all. As a 

corporation, Nationstar Holdings, Inc. is a citizen of the state where it is 

incorporated and the state where it has its principal place of business. See 28 

U.S.C. §§ 1332(c)(1). Neither of these is identified. Instead, the Complaint 

incorrectly treats Nationstar Holdings, Inc. as taking on the citizenship of its owner, 

Mr. Cooper Group, Inc. Accepting as true the notice of removal’s representations, 

Nationstar Mortgage, LLC is a citizen of the states where Nationstar Holdings, Inc. 

is incorporated and has its principal place of business; the citizenship of Mr. 

Cooper Group, Inc. is irrelevant.

Defendants are ORDERED TO SHOW CAUSE why this action should not 

be remanded. They may do so by filing a memorandum of points and authorities, 

not longer than seven pages, showing that the Court can exercise diversity 

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jurisdiction. They must do this within 18 calendar days of the date this order is 

issued. If they agree diversity is lacking, they should file a notice so stating. If they 

fail to show cause, this action will be remanded. See Gaus v. Miles, Inc., 980 F.2d 

564, 566 (9th Cir. 1992).

IT IS SO ORDERED.

Dated: March 22, 2019

Hon. Larry Alan Burns

Chief United States District Judge

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