Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_16-cv-00566/USCOURTS-caed-2_16-cv-00566-3/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 28:1441 Petition for Removal

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

DAVINA L. MOORE, an 

individual,

Plaintiff,

v.

WELLS FARGO BANK, NATIONAL 

ASSOCIATION; BARRETT DAFFIN

FRAPPIER TREDER & WEISS, LLP; 

and DOES 1 through 20, 

inclusive,

 Defendants.

CIV. NO. 2:16-566 WBS CKD

MEMORANDUM AND ORDER RE: MOTION 

TO REMAND; MOTION TO DISMISS

----oo0oo----

Plaintiff Davina L. Moore filed this action in the 

Superior Court of California, County of Yuba against defendants 

Wells Fargo Bank, National Association (“Wells Fargo”) and 

Barrett Daffin Frappier Treder & Weiss, LLP (“Barrett”), alleging 

wrongful foreclosure under California state law. Defendants

removed the case to this court on the basis of diversity 

jurisdiction. See 28 U.S.C. §§ 1332, 1441(b). Wells Fargo now 

moves to dismiss plaintiff’s Complaint for failure to state a 

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claim upon which relief can be granted pursuant to Federal Rule 

of Civil Procedure 12(b)(6), (Docket No. 5), and Barrett has 

filed a joinder to that motion, (Docket No. 6). Plaintiff moves 

to remand this case to state court for lack of complete diversity 

pursuant to 28 U.S.C. § 1447(c). (Docket No. 10.) For the 

reasons explained below, the court grants plaintiff’s motion to 

remand. Because this Order remands the case to state court, the 

Order does not reach the merits of defendants’ motion to dismiss.

I. Factual and Procedural Background

In May 2007, plaintiff obtained a loan from World 

Savings Bank, FSB, which was secured by a Deed of Trust on real 

property located at 7599 State Highway 70, Marysville, California 

95901 (the “Property”). (Notice of Removal (“NOR”) Ex. A 

(“Compl.”) ¶ 16 (Docket No. 1).) The Deed of Trust was recorded 

in the Yuba County Recorder’s Office and identified plaintiff as 

the borrower, World Savings Bank, FSB as the lender, and Golden 

West Savings Association Service Co. (“Golden West”) as the 

trustee. (Compl. Ex. A.) In November 2009, through a series of

name changes and mergers, Wells Fargo became the successor in 

interest to World Savings Bank, FSB. (See NOR Ex. D.) In 

October 2015, Barrett became the substitute trustee under the 

Deed of Trust. (Suppl. to NOR Ex. B ¶ 2 (Docket No. 18).)

In November 2015, Barrett, as trustee for Wells Fargo, 

recorded a Notice of Default and Election to Sell Under the Deed 

of Trust against plaintiff’s Property. (Compl. Ex. B.) The 

Notice of Default contained a declaration of compliance allegedly 

signed by a VP Loan Documentation agent of Wells Fargo and 

certified that Wells Fargo “exercised due diligence to contact 

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the borrower pursuant to California Civil Code § 2923.55(f) to 

‘assess the borrower’s financial situation and explore options 

for the borrower to avoid foreclosure.’” (Id. at 4.) Plaintiff 

claims that this declaration is false because Wells Fargo did not 

consider plaintiff’s complete loan modification application that 

plaintiff submitted earlier that year. (See Compl. ¶¶ 17-19.)

Plaintiff commenced this action in the Superior Court

on February 11, 2016, alleging that defendants engaged in unfair 

business practices and wrongfully instituted foreclosure 

proceedings on the Property in violation of California’s 

Homeowner Bill of Rights (“HBOR”), Cal. Civ. Code §§ 2923.55, 

2923.6, 2923.7, 2924.12, and California’s Unfair Competition Law

(“UCL”), Cal. Bus. & Prof. Code § 17200. (Id. ¶¶ 17-51.) 

Defendants removed the action to this court on March 17, 2016.

A “federal court generally may not rule on the merits 

of a case without first determining that it has jurisdiction over 

the category of claim in suit (subject-matter jurisdiction).” 

Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 

422, 430-31 (2007). The court therefore addresses plaintiff’s 

motion to remand first.1

II. Analysis

“[A]ny civil action brought in a State court of which 

the district courts of the United States have original 

 

1 Only Wells Fargo filed an opposition to plaintiff’s 

motion to remand. (Opp’n (Docket No. 19).) Barrett did not file 

an opposition or statement of non-opposition to plaintiff’s 

motion to remand as required by Local Rule 230(c). In Barrett’s 

joinder to Wells Fargo’s motion to dismiss, however, Barrett 

advances the same arguments that are raised in Wells Fargo’s 

opposition to plaintiff’s remand motion. (Docket No. 6.)

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jurisdiction, may be removed by the defendant or the defendants, 

to the district court of the United States for the district” 

where the action is pending. 28 U.S.C. § 1441(a). If it appears 

that the court lacks jurisdiction, it must remand the case. Id.

§ 1447(c). There is a “strong presumption” against removal and 

“the defendant always has the burden of establishing that removal 

is proper.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 

1992). The removal statute is strictly construed and doubts 

regarding the court’s jurisdiction are resolved in favor of 

remand. Luther v. Countrywide Home Loans S, LP, 533 F.3d 1031, 

1034 (9th Cir. 2008).

Title 28 U.S.C. § 1332 confers original jurisdiction on 

federal courts “over suits for more than $75,000 where the 

citizenship of each plaintiff is different from that of each 

defendant.” Hunter v. Philip Morris USA, 582 F.3d 1039, 1043 

(9th Cir. 2009) (citing 28 U.S.C. § 1332(a)). Complete diversity 

must exist at the time of removal. Newcombe v. Adolf Coors Co., 

157 F.3d 686, 690 (9th Cir. 1998). Plaintiff argues here that 

this case should be remanded because complete diversity of 

citizenship is lacking. (Mot. at 4-10 (Docket No. 10).)

A. Plaintiff’s Citizenship

The parties do not dispute that plaintiff is a citizen 

of California. However, the “fact that none of the parties 

contests the district court’s jurisdiction does not [relieve the 

court of its] responsibility to determine whether [its] exercise 

of jurisdiction [is] proper.” Morongo Band of Mission Indians v. 

Cal. State Bd. of Equalization, 858 F.2d 1376, 1380 (9th Cir. 

1988); see also id. (“The parties have no power to confer 

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jurisdiction on the district court by agreement or consent.”). 

A natural person’s citizenship is determined by the 

person’s “state of domicile.” Kanter v. Warner-Lambert Co., 265 

F.3d 853, 857 (9th Cir. 2001). A person is domiciled in the 

state “where he or she has established a fixed habitation or 

abode” and intends to remain indefinitely. Lew v. Moss, 797 F.2d 

747, 749-50 (9th Cir. 1986) (citations omitted). Factors

relevant to this determination include where the person resides, 

owns real property, and pays taxes. Id. at 750.

Plaintiff has owned the Property located in Yuba 

County, California since 2007 and currently resides there. 

(Compl. ¶ 1.) Her ownership indicates that she has paid property 

taxes on the Property to the State of California since 2007. 

Plaintiff also alleges that she has been attempting to obtain a 

first lien loan modification from Wells Fargo under HBOR. (Id.

¶¶ 14-18.)

2 HBOR provides that a first lien loan modification

applies to “owner-occupied residential real property” that “is 

the principal residence of the borrower.” Cal. Civ. Code 

§ 2924.15(a). The foregoing facts demonstrate that plaintiff is 

a California citizen for diversity purposes here.

B. Wells Fargo’s Citizenship

Though the original lender under plaintiff’s loan 

merged with Wells Fargo, the court considers Wells Fargo’s 

citizenship because it is the surviving entity from that merger. 

Meadows v. Bicrodyne Corp., 785 F.2d 670, 672 (9th Cir. 1986) 

 

2 “‘First lien’ means the most senior mortgage or deed of 

trust on the property that is the subject of the notice of 

default or notice of sale.” Cal. Civ. Code § 2920.5(d).

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(holding that only the citizenship of the surviving entity after 

a merger is considered for diversity purposes). Plaintiff argues

that Wells Fargo is a California citizen because its headquarters 

are located in San Francisco, California. (Mot. at 9.) There is 

no evidence here that Wells Fargo is headquartered in California. 

Rather, Wells Fargo is a national bank, which is a corporate 

entity “chartered not by any State, but by the Comptroller of the 

Currency of the U.S. Treasury.” Wachovia Bank v. Schmidt, 546 

U.S. 303, 306 (2006). 

Unlike state-chartered banks or other corporations 

whose citizenship is governed by 28 U.S.C. § 1332, a national 

bank’s citizenship for diversity purposes is “the State 

designated in its articles of association as its main office.” 

Id. at 318. A national bank “is a citizen only of the state in 

which its main office is located.” Rouse v. Wachovia Mortgage, 

FSB, 747 F.3d 707, 715 (9th Cir. 2014) (emphasis added). Wells 

Fargo’s articles of association state that its main office is 

located in Sioux Falls, South Dakota. (NOR Ex. D). Accordingly, 

Wells Fargo is a South Dakota citizen for diversity purposes. 

See Rouse, 747 F.3d at 715 (concluding that “Wells Fargo is a 

citizen only of South Dakota, where its main office is located”).

C. Barrett’s Citizenship

Barrett is a Texas limited liability partnership

(“LLP”) with partners located in California. (NOR at 4.) In 

Texas, a LLP is an optional registration made by an underlying, 

pre-existing partnership. See Tex. Bus. Orgs. Code Ann. 

§§ 152.801-.806, 153.351-.353. A Texas LLP is therefore treated 

like a partnership for diversity purposes. A partnership is a 

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citizen of every state “of which any of its partners is a 

citizen.” Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 

567, 569 (2004). Since at least one of Barrett’s partners is a 

California citizen, Barrett is a California citizen for diversity 

purposes. 

There is thus a lack of complete diversity between 

plaintiff and Barrett here. Wells Fargo argues that the court 

should disregard Barrett’s citizenship for diversity purposes

because (1) Barrett is a nominal defendant, and (2) Barrett was 

fraudulently joined.

1. Nominal Party

“[A] federal court must disregard nominal or formal 

parties and rest jurisdiction only upon the citizenship of real 

parties to the controversy.” Navarro Sav. Ass’n v. Lee, 446 U.S. 

458, 461 (1980). A nominal defendant is one “who holds the 

subject matter of the litigation in a subordinate or possessory 

capacity as to which there is no dispute.” SEC v. Colello, 139 

F.3d 674, 676 (9th Cir. 1998) (internal quotation marks omitted). 

Wells Fargo argues that Barrett is a nominal defendant because 

Barrett has “no financial interest in the Property” and its only 

involvement in the foreclosure proceedings is “strictly within 

its ministerial role as the Substitute Trustee under the Deed of 

Trust.” (NOR at 4.) As evidence of this, Wells Fargo points to 

the Declaration of Non–Monetary Status (“DNS”) that Barrett had 

filed in state court prior to this action’s removal. (Opp’n at 

4; see Suppl. to NOR Exs. A-B.) 

California Civil Code section 2924l permits a trustee

to file a DNS if it is named in a state-court action “solely in 

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its capacity as trustee, and not arising out of any wrongful acts 

or omissions on its part in the performance of its duties as 

trustee.” Cal. Civ. Code § 2924l(a). If a plaintiff does not 

object to the trustee’s DNS within fifteen days of service, the 

trustee becomes a nominal party in the action. Id. § 2924l(d). 

If the case is then removed to federal court, the district court 

“treat[s] the trustee as a nominal party and disregard[s] its 

citizenship for diversity purposes.” Lawrence v. Aurora Loan 

Servs. LLC, Civ. No. 1:09-1598 LJO DLB, 2010 WL 449734, at *4 

(E.D. Cal. Feb. 8, 2010). A trustee does not become a nominal 

party, however, “when the case is removed to federal court before 

the fifteen-day objection period has expired.” Jenkins v. Bank 

of Am., N.A., Civ. No. 14-4545 MMM JCX, 2015 WL 331114, at *8 

(C.D. Cal. Jan. 26, 2015) (collecting cases). “[N]onmonetary 

status may not be granted in federal court.” Tran v. Wash. Mut. 

Bank, Civ. No. S-09-3277 LKK DAD, 2010 WL 520878, at *1 (E.D. 

Cal. Feb. 11, 2010).

Plaintiff was served with Barrett’s DNS on March 11, 

2016 and defendants removed this case on March 17, 2016, six days 

later. (See NOR; Suppl. to NOR Ex. B at 4-5.) Because this case 

was removed before the fifteen-day objection period had passed, 

Barrett did not obtain nominal party status at the time of 

removal. Wells Fargo’s argument that Barrett is a nominal 

defendant because plaintiff failed to object to Barrett’s DNS 

within fifteen days therefore fails. (Opp’n at 4); e.g., Moore 

v. Wells Fargo Bank, N.A., Civ. No. 2:12-2125 LKK EFB PS, 2012 WL 

4433323, *3 (E.D. Cal. Sept. 24, 2012) (holding that the trustee 

was not a nominal party where “the 15 day objection period did 

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not run” before the action was removed); accord Boggs v. Wells 

Fargo Bank NA, Civ. No. C-11-2346 SBA, 2012 WL 2357428, at *3 

(N.D. Cal. June 14, 2012) (trustee was not a nominal party where 

defendants removed the action fourteen days after the trustee’s 

DNS was filed); Sun v. Bank of Am. Corp., Civ. No. SA-10-4 AG 

MLGX, 2010 WL 454720, at *2 (C.D. Cal. Feb. 8, 2010) (trustee was 

not a nominal party where defendants removed the action thirteen 

days after the trustee’s DNS was filed).

Wells Fargo cites four cases in arguing that “[a] 

plaintiff’s failure to object to the Trustee’s [DNS] ‘transforms 

the Trustee into a nominal party whose citizenship is disregarded 

for purposes of assessing diversity jurisdiction.’” (Opp’n at 

4.) Three of those cases are distinguishable and the fourth 

actually supports the conclusion that Barrett is not a nominal 

party here. The first case, Navarro Savings Ass’n v. Lee, 446 

U.S. 458 (1980), is distinguishable because it involves the 

individual trustees of a business trust that was organized under 

Massachusetts law. Id. at 461-66 (holding that the individual 

trustees could file suit in their own names); see Americold 

Realty Trust v. Conagra Foods, Inc., 136 S. Ct. 1012, 1016 (2016)

(stating that Navarro had nothing to do with the citizenship of a 

trust, but rather “reaffirmed a separate rule that when a trustee 

files a lawsuit in her name, her jurisdictional citizenship is

the State to which she belongs--as is true of any natural 

person”). 

The second case, Smith v. Bank of America, N.A., Civ. 

No. 1:11-141 OWW SMS, 2011 WL 1332035 (E.D. Cal. Apr. 6, 2011), 

was not removed based on diversity jurisdiction and the court

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there remanded the case after the plaintiffs dismissed their 

federal claims. Id. at *2. In the third case, Cabriales v. 

Aurora Loan Services, Civ. No. C-10-161 MEJ, 2010 WL 761081 (N.D. 

Cal. Mar. 2, 2010), the court held that the trustee was a nominal 

party because, unlike here, it filed its DNS in state court more 

than fifteen days before the action was removed. Id. at *1-2. 

The fourth case on which Wells Fargo relies, Silva v. Wells Fargo 

Bank NA, Civ. No. 11-3200 GAF JCGX, 2011 WL 2437514 (C.D. Cal. 

June 16, 2011), involves analogous circumstances to those here. 

In Silva, the court remanded the case after finding that the nondiverse trustee defendant was not a nominal party because the 

defendants removed the action before the fifteen-day objection 

period to the trustee’s DNS had expired. Id. at *4.

Wells Fargo further argues that Barrett is a nominal 

party because its only involvement in this matter is its narrow 

role in preparing for and conducting the trustee’s sale. (Opp’n 

at 5.) The court acknowledges that, under California law, a 

“trustee in nonjudicial foreclosure is not a true trustee with 

fiduciary duties, but rather a common agent for the trustor and 

beneficiary” responsible for ministerial acts that result in the 

transfer of title after the trustee’s sale. Pro Value 

Properties, Inc. v. Quality Loan Serv. Corp., 170 Cal. App. 4th 

579, 583 (2d Dist. 2009) (citation omitted). “The scope and 

nature of the trustee’s duties are exclusively defined by the 

deed of trust and the governing statutes,” and “[n]o other common 

law duties exist.” Id.

However, a party’s “status as a trustee is not itself 

sufficient to render it a nominal party.” Natividad v. Ocwen 

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Loan Servicing, LLC, Civ. No. 2:14-1670 MCE DAD, 2014 WL 6611054, 

at *4 (E.D. Cal. Nov. 19, 2014). A trustee is not considered a 

nominal party if the plaintiff pleads substantive allegations 

against and seeks to recover money damages from the trustee. 

Latino v. Wells Fargo Bank, N.A., Civ. No. 2:11-2037 MCE DAD, 

2011 WL 4928880, at *3 (E.D. Cal. Oct. 17, 2011). The Complaint 

here asserts all causes of action against both Barrett and Wells 

Fargo jointly. The Complaint alleges that “each of them, are, 

and at all times . . . were, the agents, joint venturers, 

officers, members representatives, servants, consultants or 

employees of their co-defendants, and in committing the acts 

herein alleged, were acting within the scope of such affiliation 

with the knowledge, permission, consent or subsequent 

ratification of their co-defendants.” (Compl. ¶ 5.) The 

Complaint suggests that Barrett and Wells Fargo conspired to 

include false information in the Notice of Default and to record 

the Notice of Default while plaintiff’s loan modification 

application was under review. (See id. ¶¶ 13-40.)

Plaintiff’s specific allegations of wrongdoing against 

Barrett include (1) prematurely recording the Notice of Default 

in violation of California Civil Code section 2923.55, which 

prohibits a trustee from recording a notice of default until 

certain specified requirements are met; (2) engaging in “dual 

tracking” in violation of Civil Code section 2923.6, which 

prohibits a trustee from recording a notice of default while a 

borrower’s “complete first lien loan modification application is 

pending”; (3) recording a false declaration attached to the 

Notice of Default; and (4) engaging in unfair and deceptive 

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business practices with the deliberate intent to injure 

plaintiff. (Id. ¶¶ 13-34, 46-51.) Plaintiff’s final claim is 

brought under California Civil Code section 2924.12(a)(1), which 

authorizes actions for injunctive relief against a trustee before 

a deed of sale has been recorded. (Id. ¶¶ 41-45.) Plaintiff’s 

prayer for relief against Barrett explicitly seeks compensatory, 

general, consequential, and incidental damages, restitution of 

profits, injunctive relief, and declaratory relief. (Id. at 12-

13.) Because the Complaint pleads substantive allegations 

against and seeks to recover money damages from Barrett, Barrett 

is not a nominal party here solely by virtue of its status as 

trustee. See Latino, 2011 WL 4928880, at *3.

Courts have found similar allegations sufficient to 

establish that a trustee is not a nominal party and that its 

citizenship must be considered in ascertaining whether diversity 

jurisdiction exists. See, e.g., Dejillo v. Wells Fargo Bank, 

N.A., Civ. No. 5:15-3080 RMW, 2015 WL 5187344, at *3 (N.D. Cal. 

Sept. 4, 2015) (“[P]laintiff has alleged that Barrett and Wells 

Fargo together engaged in acts to improperly initiate 

foreclosure. Moreover, plaintiff is seeking monetary damages 

against Barrett. Under these circumstances, Wells Fargo has 

failed to show that Barrett is merely a nominal party.”); see 

also Jenkins, 2015 WL 331114, at *11 & n.65 (collecting cases). 

Accordingly, Wells Fargo has not met its burden of demonstrating 

that Barrett is a nominal party and Barrett’s citizenship thus 

cannot be disregarded on this ground.

///

///

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2. Fraudulent Joinder

Wells Fargo additionally argues that Barrett’s 

citizenship should not be considered because plaintiff 

fraudulently joined Barrett in an attempt to defeat diversity. 

There is a “general presumption against fraudulent joinder” and 

“the party seeking removal bears a heavy burden of proving that 

the joinder of the in-state party was improper.” Hunter, 582 

F.3d at 1046 (citation and alterations omitted). “Joinder of a 

non-diverse defendant is deemed fraudulent, and the defendant’s 

presence in the lawsuit is ignored for purposes of determining 

diversity, if the plaintiff fails to state a cause of action 

against a resident defendant, and the failure is obvious 

according to the settled rules of the state.” Morris v. Princess 

Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001) (internal 

quotation marks and alterations omitted). If “there is any 

possibility that the state law might impose liability on a 

resident defendant under the circumstances alleged in the 

complaint, the federal court cannot find that joinder of the 

resident defendant was fraudulent, and remand is necessary.” 

Hunter, 582 F.3d at 1044 (citation omitted). “[A] plaintiff need 

only have one potentially valid claim against a non-diverse 

defendant.” Knutson v. Allis-Chalmers Corp., 358 F. Supp. 2d 

983, 993 (D. Nev. 2005).

“Fraudulent joinder must be proven by clear and 

convincing evidence.” Hamilton Materials, Inc. v. Dow Chem. 

Corp., 494 F.3d 1203, 1206 (9th Cir. 2007). The court may find 

fraudulent joinder only if, “after all disputed questions of fact 

and all ambiguities in the controlling state law are resolved in 

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the plaintiff’s favor, the plaintiff could not possibly recover 

against the party whose joinder is questioned.” Nasrawi v. Buck 

Consultants, LLC, 713 F. Supp. 2d 1080, 1084 (E.D. Cal. 2010)

(Wanger, J.) (citing Kruso v. Int’l Tel. & Tel. Corp., 872 F.2d 

1416, 1426 (9th Cir. 1989)). A case should be remanded unless 

the defendant shows that the plaintiff would not be afforded 

leave to amend its complaint in state court to cure any purported 

deficiencies. Id. at 1084-85.

Wells Fargo argues that Barrett was fraudulently joined

because plaintiff has not alleged any viable claims against 

Barrett and her claims “relate solely to her efforts to obtain a 

loan modification from Wells Fargo[] and her belief that Wells 

Fargo violated the Homeowners’ Bill of Rights.” (Opp’n at 6.) 

That is not the case. As discussed above, the Complaint contains

substantive allegations against Barrett and seeks money damages, 

restitution, and injunctive relief from Barrett. California’s 

UCL additionally “gives broad grounds for claims on the basis of 

unfairness.” Shears v. Citimortgage, Inc., Civ. No. 2:14-2689 

TLN DAD, 2015 WL 4393915, at *5 (E.D. Cal. July 15, 2015) (citing

Kasky v. Nike, Inc., 27 Cal. 4th 939, 949 (2002)).

In addition, Wells Fargo has failed to demonstrate that 

plaintiff would be prohibited from amending her Complaint to 

address any purported pleading deficiencies. See Nickelberry v. 

DaimlerChrysler Corp., Civ. No. C–06–1002 MMC, 2006 WL 997391, *1 

(N.D. Cal. Apr. 17, 2006) (finding no fraudulent joinder where 

defendant failed to show that the plaintiff would not be afforded 

leave to amend her complaint). Viewed in the light most 

favorable to plaintiff, therefore, plaintiff has at least one 

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potentially valid claim against Barrett here. See Hunter, 582 

F.3d at 1044.

Other courts have found that a trustee is not 

fraudulently joined under analogous circumstances. E.g., Shears, 

2015 WL 4393915, at *4 (“[T]he Court finds Defendant’s position 

untenable; essentially Defendant is asking this Court to believe 

that there are no possible circumstances in which [the trustee]

could be found liable to Plaintiff. However, considering the 

breadth of § 17200, the Court cannot agree.”); Dejillo, 2015 WL 

5187344, at *3 (holding that Barrett was not fraudulently joined 

because the complaint “at least implie[d] that Wells Fargo and 

Barrett acted in conspiracy to improperly initiate foreclosure by 

recording foreclosure documents without providing plaintiff with 

the required notice and opportunity to cure”); Alabastro v. Wells 

Fargo Bank, N.A., No. 5:14–CV–03469 EJD, 2015 WL 138235, at *3 

(N.D. Cal. Jan. 9, 2015) (“The potential for Plaintiff to state a 

viable claim against [the trustee], although narrow, is enough to 

raise doubt regarding the propriety of the removal.”); see also

Mireles v. Wells Fargo Bank, N.A., 845 F. Supp. 2d 1034, 1063–64 

(C.D. Cal. 2012) (holding that the trustee was not fraudulently 

joined despite being mentioned once in the 84–page complaint). 

Wells Fargo relies on California Civil Code section 

2924(d) to argue that Barrett is immune from liability for

performing statutorily-required actions in a non-judicial 

foreclosure, such as executing and recording foreclosure notices. 

(Opp’n at 6-7.) “[C]ourts ordinarily do not consider a nondiverse defendant’s defenses on the merits in determining whether 

that defendant’s joinder was fraudulent.” Moore, 2012 WL 

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4433323, at *3. Where the defendant “must resort to defenses to 

the merits of the action to demonstrate the defendant was 

fraudulently named, it cannot be said that the plaintiff’s 

failure to state a claim against the [non-diverse] defendant is 

‘obvious according to the settled rules of the state.’” D.A. ex 

rel. Wilson v. McKesson Corp., Civ. No. 1:13-1700 LJO JLT, 2014 

WL 202738, at *4 (E.D. Cal. Jan. 17, 2014); see also Castle v. 

Bank of Am., N.A., Civ. No. 15-1657 GW ASX, 2015 WL 1842726, at 

*2 (C.D. Cal. Apr. 20, 2015) (“It may be that, on the merits, 

Plaintiff cannot make out a claim against [the trustee], but the 

Court does not engage in that merits determination simply for 

purposes of assessing whether subject matter jurisdiction 

exists.”). Barrett’s qualified immunity under Civil Code section 

2924 therefore does not bear on the question of fraudulent 

joinder here.

In addition, as Wells Fargo acknowledges, Barrett’s 

qualified immunity under section 2924(d) does not apply where

there is a showing of malice. See Kachlon v. Markowitz, 168 Cal. 

App. 4th 316, 325 (2d Dist. 2008). In the non-judicial 

foreclosure context, “malice is defined as actual malice, meaning 

that the publication was motivated by hatred or ill will towards 

the plaintiff or by a showing that the defendant lacked 

reasonable grounds for belief in the truth of the publication and 

therefore acted in reckless disregard of the plaintiff’s rights.” 

Id. at 336 (citations omitted). Plaintiff here alleges that 

Barrett’s actions “were willful, oppressive, and malicious, in 

that [it] engaged in acts of unfair competition with the 

deliberate intent to injure Plaintiff.” (Compl. ¶ 50.) Courts 

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have found similar allegations to be sufficient in precluding a 

finding of fraudulent joinder based on qualified immunity under 

Civil Code section 2924. E.g., Natividad, 2014 WL 6611054, at *5 

(trustee’s joinder was not fraudulent where plaintiff alleged 

that the trustee acted knowingly and “with oppression, fraud and 

malice” toward plaintiff); Smith v. Quality Loan Serv. Corp., 

Civ. No. S-11-2108 KJM EFB, 2012 WL 202055, at *3 (E.D. Cal. Jan. 

23, 2012) (allegation that the trustee acted fraudulently was 

sufficient to overcome the qualified immunity privilege and 

precluded the conclusion that the trustee was fraudulently 

joined). Wells Fargo has thus failed to carry its heavy burden 

of showing that Barrett’s joinder was fraudulent here. See

Moore, 2012 WL 4433323, at *3 (Wells Fargo, in arguing that the 

trustee’s acts were privileged, failed to carry “its heavy burden 

of showing that the joinder of [the trustee] was fraudulent”).

Wells Fargo relies on three distinguishable cases to 

argue that Barrett was fraudulently joined as a defendant. In 

Sherman v. Wells Fargo Bank, N.A., Civ. No. S-11-0054 KJM EFB, 

2011 WL 1833090 (E.D. Cal. May 12, 2011), the court found the 

trustee was fraudulently joined because (1) the plaintiffs did 

not allege that the trustee violated any statutory duties it owed 

to them, and (2) the only factual allegation against the trustee 

was that the plaintiffs called the trustee “and learned that the 

trustee’s sale had been postponed.” Id. at *2. Unlike Sherman, 

plaintiff here alleges that Barrett violated multiple statutory 

duties owed to her under California Civil Code sections 2923.55, 

2923.6, 2923.7, and 2924.12. (Compl. ¶¶ 15-45.) Plaintiff’s

Complaint here also contains more than one factual allegation 

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against Barrett. (See id.)

Wells Fargo also relies on Moreno v. Wells Fargo, Civ. 

No. C-11-05189 EDL, 2011 WL 6372637 (N.D. Cal. Dec. 20, 2011). 

There, the plaintiffs alleged only two claims against the 

trustee: “one for violation of California Civil Code section 

2923.5 and one for violation of California Business and 

Professions Code section 17200.” Id. at *5. The court in Moreno

found the trustee was fraudulently joined because the plaintiffs 

failed to show that the trustee “acted as Wells Fargo’s agent in 

connection with obligations under section 2923.5.” Id. at *6-8. 

The court additionally reasoned that the plaintiffs failed to 

show that the trustee “did anything in connection with the loan 

. . . other than record it” or “engaged in any activities that 

would exempt it from immunity under [California Civil Code 

section 2924].” Id. at *7.

Unlike Moreno, plaintiff here does not claim that 

Barrett violated California Civil Code section 2923.5. She 

alleges, rather, that Barrett violated Civil Code sections 

2923.55, 2923.6, 2923.7, and 2924.12. Moreno did not analyze 

whether the trustee was fraudulently joined for purposes of the

specific claims that plaintiff brings here. In this case, 

plaintiff also alleges that Barrett did much more than merely 

record her loan. In addition, Moreno did not consider whether 

the trustee’s actions were exempt from immunity because, as here, 

they were alleged to be “willful, oppressive, and malicious.” 

(Compl. ¶ 50.) Moreno is therefore distinguishable from the 

facts of this case and Wells Fargo’s reliance upon it is 

unavailing.

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Lastly, Wells Fargo cites Marquez v. Wells Fargo Bank, 

N.A., Civ. No. C-13-2819 PJH (N.D. Cal. Sept. 13, 2013), in which 

the court denied the plaintiff’s motion to remand. See Sept. 13, 

2013 Order, Marquez. There, however, the court found that 

complete diversity of citizenship existed because the plaintiff 

was a California citizen and Wells Fargo was a South Dakota 

citizen. The court found that the non-diverse trustee did “not 

appear to have been served” in the action and had “made no 

appearance” in the district court. See id. at 1-4, 12. Since 

all three of Wells Fargo’s cited cases are inapplicable to the 

instant case, Wells Fargo has failed to meet its heavy burden of 

showing that Barrett was fraudulently joined as a defendant.

Because Barrett was not a nominal defendant at the time 

of removal and was not fraudulently joined, the court must 

consider Barrett’s citizenship for diversity purposes. 

Considering Barrett’s California citizenship, it is clear that 

complete diversity is lacking in this case because plaintiff and 

Barrett are both California citizens. Accordingly, because the 

court lacks subject matter jurisdiction, it must grant 

plaintiff’s motion and remand this case to state court. See 28 

U.S.C. § 1447(c).3

D. Plaintiff’s Request for Attorney’s Fees and Costs

In its motion to remand, plaintiff requests an award of 

costs and expenses, including attorney’s fees, incurred as a 

 

3 Because the court does not have subject matter 

jurisdiction for lack of complete diversity, it need not reach 

the question of whether the amount of controversy in this matter 

exceeds $75,000. (See Mot. at 9-10.)

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result of removal pursuant to 28 U.S.C. § 1447(c). (Mot. at 10-

11.) In support of its request, plaintiff simply states that 

removal was improper and that defendants are “under an obligation 

not to waste or abuse judicial resources, harass a party to an 

action, or mislead the court as to the application of law or 

facts.” (Id.) 

Section 1447(c) provides, “An order remanding the case 

may require payment of just costs and any actual expenses, 

including attorney fees, incurred as a result of the removal.” 

28 U.S.C. 1447(c). “Absent unusual circumstances, courts may 

award attorney’s fees under § 1447(c) only where the removing 

party lacked an objectively reasonable basis for seeking 

removal.” Martin v. Franklin Capital Corp., 546 U.S. 132, 141

(2005). If “an objectively reasonable basis exists, fees should 

be denied.” Id.

The Court does not find that defendants necessarily 

lacked an objectively reasonable basis for seeking removal here. 

As explained above, defendants adequately established the diverse 

citizenships of plaintiff and Wells Fargo. Although the court 

disagrees with defendants’ argument that Barrett’s citizenship 

must be disregarded, that argument is not entirely frivolous. As 

noted above, defendants who have filed declarations of nonmonetary status are often treated as nominal defendants. 

Defendants were not completely unreasonable in seeking to rely on 

such a declaration to establish Barrett’s nominal party status 

here. Nor is the argument that Barrett’s citizenship can be 

disregarded under the fraudulent joinder doctrine totally 

untenable based on this circuit’s relevant case law. And 

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plaintiff has not shown here that defendants removed this action 

in bad faith or for the purpose of delay. No award of costs or 

fees is therefore justified. Accordingly, plaintiff’s request 

for costs and fees is denied.

E. Defendants’ Motion to Dismiss

Because this case is remanded to state court, 

defendants’ motion to dismiss is hereby denied as moot.

IT IS THEREFORE ORDERED that:

(1) plaintiff’s motion to remand, (Docket No. 10), be, 

and the same hereby is, GRANTED. This action is hereby REMANDED 

to the Superior Court of the State of California, in and for the 

County of Yuba;

(2) plaintiff’s request for attorney’s fees and costs 

under 28 U.S.C. § 1447(c) be, and the same hereby is, DENIED; and

(3) defendants Wells Fargo Bank, National Association 

and Barrett Daffin Frappier Treder & Weiss, LLP’s motion to 

dismiss, (Docket No. 5), be, and the same hereby is, DENIED as 

moot.

IT IS SO ORDERED.

Dated: June 2, 2016

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