Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_14-cv-00600/USCOURTS-casd-3_14-cv-00600-0/pdf.json

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

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

REZA A. NAMVAR, an individual,

Plaintiff,

v.

SELECT PORTFOLIO SERVICING,

INC., a Utah Corporation; JP

MORGAN CHASE BANK, an Ohio

Corporation; CALIFORNIA

RECONVEYANCE COMPANY, a

California Corporation; DEBORAH

BRIGNAC, an individual and as Vice

President of California Reconveyance

Company; CYNTHIA RILEY, as an

individual and as Vice President of

Washington Mutual Bank, F.A., AND

DOES 1-XX, inclusive,

Defendants.

 

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Case No. 3:14-cv-0600-GPC-BGS

ORDER:

1) DENYING PLAINTIFF’S

MOTION TO REMAND 

[Dkt. No. 11]

2) GRANTING PLAINTIFF’S

MOTION TO AMEND/CORRECT

THE FIRST AMENDED

COMPLAINT

[Dkt. No. 41]

3) DENYING AS MOOT

DEFENDANTS’ MOTIONS TO

DISMISS PLAINTIFF’S FIRST

AMENDED COMPLAINT

[Dkt. Nos. 17, 21, 22]

4) DENYING MOTION TO

APPEAR TELEPHONICALLY AS

MOOT; AND

[Dkt. No. 50]

5) REMANDING THIS ACTION

TO SAN DIEGO COUNTY

SUPERIOR COURT 

Presently before the Court are: (1) a motion to remand filed by Plaintiff Reza A.

Namvar (“Plaintiff”), (Dkt. No. 11); (2) three separate motions to dismiss Plaintiff’s

First Amended Complaint filed by Defendants Select Portfolio Servicing, Inc., JP

Morgan Chase Bank, California Reconveyance Company, Deborah Brignac

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(“Brignac”), and Cynthia Riley (“Riley”) (collectively, “Defendants”), (Dkt. Nos. 17,

21, 22); and (3) a motion to amend/correct the First Amended Complaint filed by

Plaintiff, (Dkt. No. 41). The motions have been fully briefed. (Dkt. Nos. 28, 29, 31, 32,

33, 34, 37, 38, 39, 40, 45, 46, 47, 48.) The Court finds the matters suitable for

adjudication without oral argument. Civ. L. R. 7.1(d)(1). 

For the following reasons, the Court:(1) DENIES Plaintiff’s Motion to Remand,

(Dkt. No. 11); (2) GRANTS Plaintiff’s Motion to Amend/Correct the First Amended

Complaint, (Dkt. No. 41); 3) DENIES AS MOOT Defendants’ Motions to Dismiss the

First Amended Complaint; and 4) REMANDS this action to San Diego County

Superior Court. Specifically, the Court finds that Plaintiff’s First Amended Complaint

failed to allege causes of action against newly joined diversity-destroying Defendants

and thus did not provide a basis for remand. However, the Court finds that Plaintiff is

entitled to file his proposed Second Amended Complaint, which properly alleges

causes of action against two non-diverse Defendants. Plaintiff’s Second Amended

Complaint necessitates remand of this action to San Diego County Superior Court. 

FACTUAL BACKGROUND

I. Allegations in Plaintiff’s First Amended Complaint

On March 24, 2006, Plaintiff executed a Deed of Trust and Note securing a loan

(“Loan”) for the property located at 17221 Silver Gum Way, San Diego, California

92127 (“Subject Property”), in the amount of $1,242,500.00. (Dkt. No. 10, FAC ¶ 56,

Ex. B.) The Deed of Trust, recorded on March 30, 2006, listed the “Borrower” as “Reza

A. Namvar,” the “Lender” as “Washington Mutual Bank, FA,” and the “Trustee” as

“California Reconveyance Company.” (Id. Ex. B.)

Plaintiff alleges Washington Mutual Bank, FA Vice President, Defendant

Cynthia Riley, produced “blank endorsements” for the original notes securing

Plaintiff’s Loan; meanwhile, the original notes “have either been lost or destroyed.”

(Id. ¶¶ 30, 31.) Plaintiff alleges the note securing his Loan is therefore void. (Id. ¶ 34.)

Plaintiff further alleges falling on hard times in 2009, whereby he “was unable

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to keep up with the payments.” (Id. ¶ 39.) Plaintiff alleges the then-Trustee of his Deed

of Trust, Defendant California Reconveyance Company (“CRC”), filed a Notice of

Default and Notice of Trustee’s Sale that contained a forged signature of Deborah

Brignac. (Id. ¶¶ 39-40.) Plaintiff alleges the forged signature renders the Notice void.

(Id. ¶ 40.) 

Plaintiff filed for Chapter 7 bankruptcy between May 24, 2011 and December

2013. (Id. ¶ 42.) Plaintiff alleges receiving a notice of transfer of “the void Deed of

Trust” to Defendant Select Portfolio Servicing, Inc,” (id. ¶ 43); as well as a Notice of

Substitution of Trustee from CRC to “ALAW,” (id. ¶ 44). Plaintiff alleges that on

January 24, 2014, he received a Notice of Trustee’s Sale set for February 19, 2014. (Id.

¶ 46.) 

Plaintiff’s First Amended Complaint alleges five causes of action: (1) Violation

of the California Homeowner Bill of Rights, Cal. Civ. Code § 2329 et seq., for

Defendants’ failure to explore meaningful alternatives to foreclosure, failure to

establish a single point of contact, lack of due dilligence, and dual tracking; (2)

Declaratory and injunctive relief seeking “a judicial determination of[Plaintiff’s] rights

and duties and a declaration to prevent a sale of his home”; (3) Cancellation of

instruments due to the lack of a valid transfer of interest in the subject real property;

and (4) Unfair practices under the California Business & Professions Code section

17200, et seq. (Id.) 

II. Allegations in Plaintiff’s Second Amended Complaint

Plaintiff’s Requestfor Leave ofCourt to File Second Amended Complaint, (Dkt.

No. 41), seeks to add one cause of action against Defendants Deborah Brignac

(“Brignac”) and CRC. Specifically, Plaintiffseeks to allege a cause of action for “Fraud

and Intentional Misrepresentation” for CRC and Brignac’s alleged misrepresentation

to Plaintiff that Brignac signed the Notice of Trustee’s Sale for Plaintiff’s property. (Id.

at 2-3.) 

//

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PROCEDURAL HISTORY

Plaintiff filed the present action on February 13, 2014 before the San Diego

County Superior Court. (Dkt. No. 1-1, Notice of Removal Ex. 1.) Plaintiff’s initial

Complaint alleged four causes of action against named Defendants Select Portfolio

Servicing, Inc. and JP Morgan Chase Bank. (Id.) On March 14, 2014, Defendant Select

Portolio Servicing, Inc. removed this action to federal court, invoking this Court’s

diversity jurisdiction under 28 U.S.C. § 1332. (Dkt. No. 1.) On April 1 and April 2,

2014, Defendants Select Portfolio Servicing, Inc. and JP Morgan Chase Bank filed

respective motions to dismiss Plaintiff’s Complaint. (Dkt. Nos. 6, 8.)

On May 8, 2014, Plaintiff concurrently filed a First Amended Complaint, (Dkt.

No. 10); a motion to amend Plaintiff’s Complaint, (Dkt. No. 12); and a motion to

remand this action to state court, (Dkt. No. 11). Plaintiff also filed a “Joint Motion to

Amend Plaintiff’s Complaint” as a “supplement” to Plaintiff’s Motion to Amend

Plaintiff’s Complaint. (Dkt. No. 12-3.) The “Joint Motion” is signed by all Parties,

memorializing a stipulation to allow Plaintiff to “amend his Complaint no later than

May 8, 2014 pursuant to the Federal Rules of Civil Procedure, Rule 15(a)(2).” (Id.) 

On May 12, 2014, the Court granted the Parties’ motion and joint stipulation to

allow Plaintiff to file a First Amended Complaint pursuant to Federal Rules of Civil

Procedure 15(a)(2). (Dkt. No. 14) (citing Fed. R. Civ. P. 15(a)(2) (“[A] party may

amend its pleading only with the opposing party’s written consent or the court’s

leave.”). Accordingly, the Court denied Defendants’ motions to dismiss Plaintiff’s

Complaint as moot. (Id.)

Plaintiff’s First Amended Complaint adds allegations against Defendants

California Reconveyance Company, Deborah Brignac, and Cynthia Riley. (Dkt. No.

10.) Plaintiff has filed a motion to remand this action to state court on the ground that

the Parties in this action are no longer completely diverse. (Dkt. No. 11) (citing 28

U.S.C. § 1447 (“If at any time before final judgment it appears that the district court

lacks subject matter jurisdiction, the case shall be remanded.”)). Removing Defendant

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Select Portfolio Servicing, Inc. as well as California resident Defendants Deborah

Brignac and Cynthia Riley oppose remand. (Dkt. No. 28, 29.) Defendants argue that

Plaintiff’s First Amended Complaint fails to add causes of action against California

resident Defendants DeborahBrignac and Cynthia Riley, and claims that the California

resident Defendants were added to this action as “shamdefendants” solely to divest this

Court of diversity jurisdiction. (Id.) On July 21, 2014, Plaintiff filed a reply brief

claiming that this failure was an oversight. (Dkt. No. 40.) Plaintiff concurrently filed

a motion to amend/correct the First Amended Complaint seeking Court permission to

file a Second Amended Complaint alleging a cause of action against Defendants

Deborah Brignac and Cyntha Riley. (Dkt. No. 41.) 

In addition, Defendants Select Portfolio Services, Inc., JP Morgan Chase Bank,

California Reconveyance Company, Deborah Brignac, and Cynthia Riley

(“Defendants”) have filed three separate motions to dismiss Plaintiff’s First Amended

Complaint. (Dkt. Nos. 17, 21, 22.) 

DISCUSSION

Prior to addressing the merits of Plaintiff’s claims, this Court must confirm its

subject matter jurisdiction over this action. Steel Co. v. Citizens for a Better

Environment, 523 U.S. 83, 84 (1998) (“[W]ithout proper jurisdiction, a court cannot

proceed at all, but can only note the jurisdictional defect and dismiss the suit.”). The

Court therefore first addresses Plaintiff’s motion to remand, (Dkt. No. 11), and

Plaintiff’s motion to amend/correct the First Amended Complaint, (Dkt. No. 41). 

I. Motion to Remand

A. Legal Standard

Pursuant to 28 U.S.C. § 1441(a), a defendant may remove to federal court a 

claim filed in state court that could have initially been brought in federal court. 28

U.S.C. § 1441(a); Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). A district

court must remand a case to state court “if at any time before the final judgment it

appears that the district court lacks subject matter jurisdiction.” 28 U.S.C. §

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1447(c). As federal courts have limited jurisdiction, they are presumed to lack

jurisdiction unless the contrary is established. Gen. Atomic Co. v. United Nuclear

Corp., 655 F.2d 968, 968-69 (9th Cir. 1981).

Accordingly, the removal statute further provides that “[i]f after removal a

plaintiff seeks to join additional defendants whose joinder would destroy subject

matter jurisdiction, the court may deny joinder, or permit joinder and remand the

action to the State court.” 28 U.S.C. § 1447(e). In other words, “when a party

attempts to amend a complaint in a manner that destroys a federal court’s

jurisdiction, § 1447(e) gives the court discretion to consider the propriety and

fairness of allowing that amendment.” Clinco v. Roberts, 41 F. Supp. 2d 1080, 1088

(C.D. Cal. 1999) (Pregerson, J.); see also IBC Aviation Services, Inc. v. Compania

Mexicana de Aviacion, S.A. de C.V., 125 F. Supp. 2d 1008, 1011 (N.D. Cal. 2000)

(Conti, J.) (recognizing that diversity-destroying amendment is analyzed under §

1447(e) and requires higher scrutiny than does amendment generally).

B. Analysis

Plaintiff’s motion to remand seeks remand of this action due to Plaintiff’s

attempts to add allegations to his Complaint against diversity-destroying California

resident Defendants Deborah Brignac, Cynthia Riley, and CRC. (Dkt. No. 11.) At

the time Plaintiff filed the motion to remand, the Court had before it Plaintiff’s First

Amended Complaint. Defendants opposed remand on the ground that Plaintiff

failed to assert any viable claims, let alone any claims, against fraudulently joined

“sham defendants” Deborah Brignac and Cynthia Riley. (Dkt. No. 28 at 3.) In reply,

Plaintiff claims the failure to add “particular causes of action involving Brignac and

CRC” was an “oversight on Plaintiff’s part.” (Dkt. No. 40 at 2.) Plaintiff

concurrently filed a Request for Leave of Court to File Second Amended

Complaint, seeking to amend the First Amended Complaint to add causes of action

against Defendants Brignac and CRC. (Dkt. No. 41.) 

The Court finds that Plaintiff’s First Amended Complaint does not meet the

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requirements for post-removal joinder of Defendants Deborah Brignac, Cynthia

Riley, and CRC, and that joinder of these Defendants in Plaintiff’s First Amended

Complaint is inappropriate under 28 U.S.C. section 1447(e). Cf. McGrath v. Home

Depot USA, Inc., 298 F.R.D. 601, 606 (2014) (recognizing a split in authority and

adopting the approach of “many courts” whereby “once a case has been removed to

federal court, the court must scrutinize a diversity-destroying amendment to ensure

that it is proper under 28 U.S.C. section 1447(e)” irrespective of plaintiff’s right to

amend under Federal Rules of Civil Procedure 15(a)) (citing cases). Whether to

permit joinder of a party that will destroy diversity jurisdiction under section

1447(e) remains “in the sound discretion of the court,” in consideration of six

factors:

(1) whether the party sought to be joined as needed for just adjudication

and would be joined under Federal Rule of Civil Procedure 19(a); (2)

whether the statute of limitations would preclude an original action

against the new defendants in state court; (3) whether there has been

unexplained delay in requesting joinder; (4) whether joinder is intended

solely to defeat federal jurisdiction; (5) whether the claims against the

new defendant appear valid; and (6) whether denial of joinder will

prejudice the plaintiff. 

IBC Aviation Servs., Inc. v. Compania Mexicana de Aviacion, S.A. de C.V., 125 F.

Supp. 2d 1008, 1011 (N.D. Cal. 2000) (citing Newcombe v. Adolf Coors Co., 157

F.3d 686, 691 (9th Cir. 1998); Palestini v. General Dynamics Corp., 193 F.R.D.

654, 658 (S.D. Cal. 2000)). “Any of the factors might prove decisive, and none is an

absolutely necessary condition of joinder.” Yang v. Swissport USA, Inc., No. C 09-

03823 SI, 2010 WL 2680800 at *3 (N.D. Cal. July 6, 2010). 

Here, Plaintiff concedes that his First Amended Complaint named Defendants

Brignac, Riley, and CRC, but failed to allege causes of action against these

Defendants. (Dkt. No. 40 at 2.) The Court therefore finds that, as the First Amended

Complaint states no claims against Defendants Brignac, Riley, or CRC, the IBC

Aviation factors weigh in favor of denying joinder under section 1447(e) for the

purposes of considering Plaintiff’s Motion to Remand. Specifically, joinder of these

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non-resident Defendants against whom no causes of action are asserted in the First

Amended Complaint is not needed for just adjudication of this matter; Plaintiff has

asserted no valid claims against these Defendants; and denial of joinder will not

prejudice Plaintiff. IBC Aviation, 125 F. Supp. 2d at 1011. Accordingly, the Court

DENIES joinder of the non-diverse Defendants based on the allegations against

them in the First Amended Complaint and DENIES Plaintiff’s Motion to Remand

based on the joinder of these non-diverse diversity-destroying Defendants. (Dkt.

No. 11.) 

II. Motion to Amend/Correct First Amended Complaint

The Court next considers Plaintiff’s Motion to Amend/Correct his First

Amended Complaint to add causes of action against Defendants Brignac and Riley.

(Dkt. No. 41.) 

A. Legal Standard

Under Federal Rule of Civil Procedure 15(a), leave to amend a complaint

after a responsive pleading has been filed may be allowed by leave of the court and

“shall freely be given when justice so requires.” Foman v. Davis, 371 U.S. 178, 182

(1962); Fed. R. Civ. P. 15(a). Granting leave to amend rests in the sound discretion

of the trial court. Int’l Ass’n of Machinists & Aerospace Workers v. Republic

Airlines, 761 F.2d 1386, 1390 (9th Cir. 1985). This discretion must be guided by

the strong federal policy favoring the disposition of cases on the merits and

permitting amendments with “extreme liberality.” DCD Programs Ltd. v. Leighton,

833 F.2d 183, 186 (9th Cir. 1987). “This liberality in granting leave to amend is not

dependent on whether the amendment will add causes of action or parties.” Id.; but

see Union Pacific R.R. Co. v. Nevada Power Co., 950 F.2d 1429, 1432 (9th Cir.

1991) (In practice, however, courts more freely grant plaintiffs leave to amend

pleadings in order to add claims than new parties). 

Because Rule15(a) favors a liberal amendment policy, the nonmoving party

bears the burden of demonstrating why leave to amend should not be granted. 

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Genentech, Inc. v. Abbott Labs., 127 F.R.D. 529, 530-31 (N.D. Cal. 1989). In

assessing the propriety of an amendment, courts consider several factors: (1) undue

delay, (2) bad faith or dilatory motive; (3) repeated failure to cure deficiencies by

amendments previously permitted; (4) prejudice to the opposing party; and (5)

futility of amendment. Foman, 371 U.S. at 182; United States v. Corinthian

Colleges, 655 F.3d 984, 995 (9th Cir. 2011). These factors are not equally

weighted; the possibility of delay alone, for instance, cannot justify denial of leave

to amend, DCD Programs, 833 F.2d at 186, but when combined with a showing of

prejudice, bad faith, or futility of amendment, leave to amend will likely be denied. 

Bowles v. Reade, 198 F.2d 752, 758 (9th Cir. 1999). The single most important

factor is whether prejudice would result to the non-movant as a consequence of the

amendment. William Inglis & Sons Baking Co. v. ITT Continental Baking Co., 668

F.2d 1014, 1053 (9th Cir. 1981). 

B. Analysis

1. Amendment of Pleadings 

Defendants argue that Plaintiff has delayed in alleging causes of action

against Defendants Brignac, Riley, and CRC, and that Plaintiff’s proposed

amendments are futile. (See Dkt. No. 45; 46.) As to delay and dilatory motive,

Defendants Brignac, Riley, and JPMorgan Chase Bank, N.A. argue “[t]here is no

reason why Plaintiff could not have included the claim for fraud and intentional

misrepresentation when he filed the FAC.” (Dkt. No. 46 at 4.) Defendants argue the

timing of Plaintiff’s filing of his request for leave to amend on the day that

Defendants filed their reply briefs in support of their motions to dismiss the First

Amended Complaint suggests that Plaintiff’s request to amend “is merely a tactic to

delay resolution of this action on the merits.” (Id. at 4) (citing Larios v. Nike Retail

Servs., Inc., 11cv1600-GPC-NLS, 2013 WL 4046680 (S.D. Cal. Aug. 9, 2013)). 

The Court disagrees that this is one of the “occasional” circumstances in

which “delay in itself may be evidence of bad faith sufficient to justify denial of

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leave to amend.” Larios, 2013 WL 4046680 at *3 (citing Adams v. Gould Inc., 739

F.2d 858, 868 (3d Cir. 1984)). Although Defendants correctly note that Plaintiff

filed his motion to amend/correct the First Amended Complaint on the same day

Defendants filed their reply briefs in support of their respective Motions to Dismiss

Plaintiff’s First Amended Complaint, Plaintiff’s counsel states he neglected to add

the causes of action at issue “merely due to an oversight.” (Dkt. No. 41 at 2.)

Although the Court agrees that Plaintiff could have sought to allege the new causes

of action along with earlier amendments, the Court is not convinced that any delay

was either intentional or favorable to Plaintiff. 

As to futility, Defendants argue Plaintiff’s “forgery” claim against Defendant

Brignac is self-defeating; that Plaintiff’s new claims for fraud and intentional

misrepresentation are devoid of factual support; and that Plaintiff’s proposed

amendments do not state a claim for Fraud or intentional misrepresentation. (Dkt.

No. 45 at 4-5; Dkt. No. 46 at 2-4.) Plaintiff responds that his amendments are not

futile because “Plaintiff has proof that the Notice on his property was forged and

such fraudulent activity goes to the heart of Plaintiff’s damages.” (Dkt. No. 48 at 3.)

A motion for leave to amend will be denied for futility only if the proposed

amendment sets forth no set of facts which “can be proved under the amendment to

the pleadings that would constitute a sufficient and valid claim.” Miller v.

Rykoff–Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988). Denial of leave to amend

on this ground is rare. Netbula, LLC v. Distinct Corp., 212 F.R.D. 534, 539 (N.D.

Cal. 2003); accord Green Valley Corp. v. Caldo Oil Co., No. 09-cv-04028-LHK,

2011 WL 1465883, at *6 (N.D. Cal. April 18, 2011) (noting the “general preference

against denying a motion for leave to amend based on futility”). “Ordinarily, courts

will defer consideration of challenges to the merits of a proposed amended pleading

until after leave to amend is granted and the amended pleading is filed.” Fair Hous.

Council of Cent. California, Inc. v. Nunez, No. 1: 10CV02073 LJO DLB, 2012 WL

217479 at *4 (E.D. Cal. Jan. 24, 2012) (citations omitted).

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Drawing all reasonable inferences in Plaintiff’s favor and assuming the truth

of his new allegations, the Court does not find the proposed amendments are futile.

In particular, the Court finds that the new cause of action Plaintiff seeks to allege

flows from the factual allegations against Brignac and CRC alleged against them in

the First Amended Complaint, and that Plaintiff may yet prove facts under his

proposed amendments that would constitute a sufficient and valid claim. In light of

the Ninth Circuit’s liberal policy favoring granting leave to amend, the Court

declines to convert Plaintiff’s motion to amend into a premature motion to dismiss.

See Miller, 845 F.2d at 214; see also Foman, 371 U.S. at 182 (“If the underlying

facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he

ought to be afforded an opportunity to test his claims on the merits.”). Because

Defendants have established neither prejudice nor a strong showing of any other

factor, it fails to meet its burden in opposing Plaintiff’s Motion to Amend.

Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003)

(“Absent prejudice, or a strong showing of any of the remaining Foman factors,

there exists a presumption under Rule 15(a) in favor of granting leave to amend.”).

As such, the Court defers consideration of challenges to the merits of Plaintiff’s

Second Amended Complaint until it has been filed. 

Overall, the Court finds that the Foman factors weigh in favor of permitting

Plaintiff to amend his First Amended Complaint.

2. Joinder of Non-Diverse Defendants

However, as Plaintiff’s proposed amendments seek to state claims against

non-diverse Defendants, the Court must also determine whether joinder of diversitydestroying Defendants is appropriate given the allegations in Plaintiff’s proposed

Second Amended Complaint under 28 U.S.C. § 1447(e). Cf. McGrath v. Home

Depot USA, Inc., 298 F.R.D. 601, 606 (2014) (recognizing a split in authority and

adopting the approach of “many courts” whereby “once a case has been removed to

federal court, the court must scrutinize a diversity-destroying amendment to ensure

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that it is proper under 28 U.S.C. section 1447(e)” irrespective of plaintiff’s right to

amend under Federal Rules of Civil Procedure 15(a)) (citing cases). As such, the

Court again applies the six IBC Aviation factors to determine whether joinder is

appropriate.

The Court first notes that the Parties have failed to address the first, second,

third, and sixth IBC Aviation factors in relation to the allegations in Plaintiff’s

proposed Second Amended Complaint. However, the Court construes Defendants’

arguments against allowing amendment of Plaintiff’s First Amended Complaint as a

dispute as to the fourth and fifth IBC Aviation factors: in other words, the Court

interprets Defendants’ arguments as challenging whether Plaintiff seeks to join

Defendants Brignac and CRC solely to defeat federal jurisdiction and whether

Plaintiff’s claims against these defendants are valid. (See Dkt. Nos. 11, 28, 40, 41,

45, 46, 47, 48.) 

Having considered the Parties’ arguments and the applicable law, the Court

finds that the first, third, fourth, and sixth IBC Aviation factors weigh in favor of

allowing Plaintiff to join his claims against Defendants Brignac and CRC. The first

IBC Aviation factor considers the extent to which the California resident

Defendants are needed for the just adjudication of the present matter. 125 F. Supp.

2d at 1011. Under Federal Rules of Civil Procedure 19(a), a necessary party is a

person “having an interest in the controversy, and who ought to be made [a party],

in order that the court may act on that rule which requires it to decide on, and finally

determine the entire controversy, and do complete justice, by adjusting all the rights

involved in it.” CP Nat. Corp. v. Bonneville Power Admin., 928 F.2d 905, 912 (9th

Cir. 1991) (citation and internal quotations omitted). A court may find that joinder

is appropriate for the just adjudication of the controversy if there is a high degree of

involvement by the defendant in the occurrences that gave rise to the plaintiff’s

cause of action. Perryman v. Life Time Fitness, Inc., No. CV-09-452-PHX-GMS,

2009 WL 5185177 at *2 (D. Ariz. Dec. 22, 2009); Falcon v. Scottsdale Ins. Co., No.

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CV-06-122-FVS, 2006 WL 2434227 at *2 (E.D. Wash. Aug. 21, 2006); see also

Desert Empire Bank, 623 F.2d at 1373–74, 1376 (9th Cir. 1980) (permitting joinder

of an insurer who denied the existence of an insurance contract, so that plaintiff

could pursue counts of fraud or negligent misrepresentation). 

Here, Plaintiff’s allegations against Defendants Brignac and CRC center on

his claims that the documents securing his Loan contained fraudulent endorsements

by Brignac. (Dkt. No. 10, First Amended Complaint ¶ 23, 30, 40, 63, 102a.) As

Plaintiff notes, these allegations go “to the heart” of Plaintiff’s claims, (Dkt. No. 48

at 3), which allege that Defendants have wrongfully attempted to foreclose on his

property on the basis of void documents. This factor therefore weighs in favor of

joinder.

The Third IBC Aviation factor considers whether there has been unexplained

delay in requesting joinder. 125 F. Supp. 2d at 1011. As discussed above, the Court

finds that Plaintiff has not unduly delayed in seeking joinder. Plaintiff timely sought

a stipulation to file and filed a First Amended Complaint seeking joinder of

Defendants Brignac and CRC, and has sought again to join Defendants Brignac and

CRC upon realizing that the First Amended Complaint had neglected to allege a

cause of action against them “due to an oversight.” (Dkt. No. 41 at 2.) This factor

also weighs in favor of joinder.

The fourth IBC Aviation factor considers whether joinder is intended solely

to defeat federal jurisdiction. 125 F. Supp. 2d at 1101. Defendants forcefully assert

that Plaintiff’s proposed amendment is solely for the purpose of destroying federal

diversity jurisdiction. (Dkt. No. 45 at 4.) However, Plaintiff assures the Court that

“Plaintiff wants nothing more than to expedite his case in order to get back into his

home which is subject to foreclosure at this time.” (Dkt. No. 48 at 5.) The Court

finds that the record as it currently stands does not support the conclusion that

Plaintiff’s sought amendment is intended solely to defeat federal jurisdiction. In

particular, the Parties stipulated to allow Plaintiff to file the First Amended

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Complaint that first named non-diverse Defendants Brignac and CRC as Defendants

in this action. (Dkt. No. 12-3.) Although Plaintiff now seeks to further amend the

Complaint to state a cause of action, Plaintiff could have done so in his First

Amended Complaint. The Court therefore finds that Plaintiff’s sought amendment is

not intended solely to defeat federal jurisdiction, and finds that the fourth IBC

Aviation factor weighs in favor of allowing joinder. Cf. Canich v. Pacific

Greyhound Lines, 161 F. Supp. 696, 699 (D. Ore. 1958) (“Defendant having

consented by stipulation that plaintiff amend her complaint for the purpose of

making a record for its own motion of dismissal on grounds of lack of diversity

jurisdiction, will not now be heard to complain if this case is remanded to the State

Court.”). 

The sixth IBC Aviation factor considers whether denial of joinder would

prejudice Plaintiff. 125 F. Supp. 2d at 1101. This factor weighs most heavily in

favor of allowing joinder. See Yang v. Swissport USA, Inc., No. C 09-03823 SI,

2010 WL 2680800 at *5 (“Courts have found significant prejudice where claims

against proposed non-diverse defendants are so intimately connected to those

against an original defendant that denial of joinder would force a plaintiff to choose

whether to pursue redundant litigation in another forum at the risk of inconsistent

results, or forego valid claims against the non-diverse defendants.”). Here, denial of

joinder would preclude full resolution of Plaintiff’s claims for declaratory relief on

Plaintiff’s legal theory, because Plaintiff’s challenge to his foreclosure is based on

the invalidity of the underlying documents securing his loan. This factor weighs

strongly in favor of allowing joinder.

In addition, the Court finds that the remaining IBC Aviation factors do not

dictate a contrary result. In regards to the statute of limitations, the Court notes that

Defendants claim Plaintiff’s causes of action are barred by the statute of limitations

in this Court, (Dkt. No. 45 at 1); it follows that they would argue that the statute of

limitations would also bar an original action against Defendants Brignac and CRC

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in state court. Furthermore, although Defendants argue Plaintiff’s claims are invalid

because Plaintiff has failed to meet the heightened pleading standard for claims of

fraud set forth in Federal Rules of Civil Procedure 9(b), the Court finds that

Plaintiff’s failure to meet federal pleading standards does not make Plaintiff’s

claims invalid on their face under state law. Accordingly, the Court finds that

Defendants Brignac and CRC are not improperly joined to this matter by Plaintiff’s

proposed Second Amended Complaint under 28 U.S.C. § 1447(e). The Court

GRANTS Plaintiff’s motion to file a Second Amended Complaint including causes

of action for fraud and intentional misrepresentation. Plaintiff’s proposed Second

Amended Complaint, (Dkt. No. 41-1), shall be deemed filed. 

III. Subject Matter Jurisdiction and Remaining Motions

Having granted Plaintiff’s motion to file a Second Amended Complaint, the

Court DENIES Defendants’ pending motions to dismiss the First Amended

Complaint as moot. Furthermore, having allowed Plaintiff to join non-diverse

Defendants Brignac and CRC to the present matter, the Court finds that it no longer

has diversity jurisdiction over this action and must REMAND the action to

California Superior Court. See Morris v. Princess Cruises, Inc., 236 F.3d 1061,

1068 (9th Cir. 2001) (“If diversity were the only basis for the court’s subject matter

jurisdiction, joinder of the non-diverse [defendants] would have divested the court

of jurisdiction.”). 

CONCLUSION AND ORDER

For the foregoing reasons, the Court hereby:

1) DENIES Plaintiff’s Motion to Remand, (Dkt. No. 11);

2) GRANTS Plaintiff’s Motion to Amend/Correct the First Amended

Complaint, (Dkt. No. 41); The Clerk of Court is directed to FILE Plaintiff’s

proposed Second Amended Complaint, (Dkt. No. 41-1), as a separate docket entry;

3) DENIES AS MOOT Defendants’ respective motions to dismiss Plaintiff’s

First Amended Complaint, (Dkt. Nos. 17, 21, 22);

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4) DENIES AS MOOT Defendant Select Portfolio Servicing, Inc.’s motion

to appear telephonically; and

5) REMANDS this action to San Diego County Superior Court.

IT IS SO ORDERED.

DATED: September 30, 2014

HON. GONZALO P. CURIEL

United States District Judge

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