Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-00627/USCOURTS-casd-3_11-cv-00627-0/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

DALE SUNDBY, et al.,

Plaintiff,

CASE NO. 11CV627 DMS (RBB)

ORDER GRANTING MOTION TO

vs. REMAND

THE BANK OF NEW YORK MELLON, et

al.,

Defendant.

Pending before the Court is Plaintiffs’ motion to remand the action to State Court. (Doc. 14.)

On April 27, 2011, the Court issued an Order shortening the time on the motion and requiring

Defendants to file an opposition to Plaintiffs’ motion to remand on or before May 2, 2011. (Doc. 18.)

Defendants did not timely file an opposition. For the following reasons, Plaintiffs’ motion to remand

this action is granted.

As an initial matter, under United States District Court, Southern District of California Local

Rule 7.1.f.3.c, “[i]f an opposing party fails to file the papers in the manner required by Civil Local

Rule 7.1.e.2., that failure may constitute a consent to the granting of a motion or other request for

ruling by the court.” Accordingly, the Court finds Defendants’ failure to file an opposition to

Plaintiffs’ motion to remand constitutes their consent to the granting of the motion. 

Furthermore, the Court finds it does not have jurisdiction over this action and remand is

appropriate. Defendant The Bank of New York Mellon (“BNY Mellon”) removed this action to this

Case 3:11-cv-00627-DMS-RBB Document 20 Filed 05/03/11 Page 1 of 3
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Court on March 28, 2011, with the consent of Defendants Wells Fargo and Company and First

American Loanstar Trustee Services. (Doc. 1.) The removal was based upon this Court’s purported

jurisdiction due to the diversity of the parties pursuant to 28 U.S.C. § 1332(a). It is uncontested that

Plaintiffs are citizens of California. It is also uncontested that BNY Mellon is a Delaware corporation

with its principal place of business in New York. In its notice of removal, however, BNY Mellon

argued the citizenship of Defendant Wells Fargo and Company should be disregarded for purposes of

determining jurisdiction because it “is a holding company that does not make or service loans with the

public” and is a “sham” defendant. (Removal at 3.) The following day, Defendants BNY Mellon and

Wells Fargo and Company filed a motion to drop Wells Fargo and Company as a Defendant. (Doc.

3.) In its notice of removal, BNY Mellon further stated it “is informed and believes, and on that basis

alleges, that defendant First American Financial Corporation is improperly named, and that the proper

defendant . . . is ‘First American Loanstar Trustee Services.’” (Removal at 3-4.) BNY Mellon alleges,

without submitting the filing to the Court, that Defendant First American Loanstar Trustee Services

filed a Declaration of Nonmonetary Status pursuant to California Civil Code § 2924l in State Court

prior to removal and its citizenship should therefore be disregarded for purposes of determining

jurisdiction. (Id. at 4.) Plaintiffs filed a motion to remand this action on April 26, 2011. (Doc. 14.)

As to Defendant First American Loanstar Trustee Services, Plaintiffs challenge that First

American Financial Corporation was improperly named in this action. However, even assuming First

American Loanstar Trustee Services is the proper Defendant, Plaintiffs timely filed an opposition to

the Declaration of Nonmonetary Status with this Court and First American Loanstar Trustee Services

is therefore required to participate in this action and its citizenship should properly be considered for

purposes of determining jurisdiction. Cal. Civ. Code § 2924l(e). In the Second Amended Complaint

(“SAC”), filed by Plaintiffs as a matter of right on April 22, 2011, Plaintiffs allege “Defendant First

American Title Insurance Company, also known as First American Trustee Servicing Solutions LLC

and formerly known as First American LoanStar Trustee Services LLC, a California company with its

home office in Santa Ana, CA, is a subsidiary of Defendant First American Financial Corporation, a

Delaware company with corporate headquarters in Santa Ana, CA.” (SAC ¶ 4.) Defendants do not

challenge that Defendant First American Loanstar Trustee Services is a citizen of California for

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purposes of determining this Court’s jurisdiction over the action. BNY Mellon has failed to meet its

burden of demonstrating this Court’s jurisdiction over this action upon removal and remand is

warranted.

The Court further notes that the removal of this action, which was done on the eve of a pending

motion for a temporary restraining order by Plaintiffs in State Court and was relayed to Plaintiffs at

the beginning of the hearing on that motion, appears to have been done for the purpose of delay in the

hope that the Court presiding over Defendant BNY Mellon’s separate unlawful detainer action against

Plaintiffs may resolve that action before another court has the opportunity to reach the merits of

Plaintiffs’ claims in the present action. In removing this action, Defendants argued the citizenship of

two named Defendants should be disregarded for purposes of determining jurisdiction and then

Defendants failed to oppose Plaintiffs’ motion for remand. If in fact the removal of this action was

done for the purpose of delay, the Court strongly disapproves of such gamesmanship of the legal

system and waste of judicial resources. Rule 11 states, “[b]y presenting to the court a pleading, written

motion, or other paper . . . an attorney or unrepresented party certifies that to the best of the person’s

knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: (1)

it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or

needlessly increase the cost of litigation.” Fed. R. Civ. P. 11(b). Counsel should be mindful of this

and cautious in pursuing such tactics in the future. 

IT IS SO ORDERED.

DATED: May 3, 2011

HON. DANA M. SABRAW

United States District Judge

Case 3:11-cv-00627-DMS-RBB Document 20 Filed 05/03/11 Page 3 of 3