Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-02103/USCOURTS-casd-3_16-cv-02103-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441ac Removal- Account Receivable

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SPIEGEL DEVELOPMENT, INC., a

California corporation,

Plaintiff,

CASE NO. 16cv2103-WQH-DHB

ORDER

v.

BANK OF AMERICA, N.A., a

Delaware corporation; TEN-X, LLC.,

a Delaware corporation; and DOES 1-

50, inclusive,

Defendants.

HAYES, Judge:

The matter before the Court is the Motion for Leave to File a Second Amended

Complaint, to Join a Defendant, and Motion to Remand filed by Plaintiff Spiegel

Development, Inc. (ECF No. 9).

I. Procedural History

On July 5, 2016, Plaintiff commenced this action by filing a complaint in the

Superior Court of California, County of San Diego. (ECF No. 1-2). On August 19,

2016, Defendant Bank of America, N.A. (“BOA”) filed a Notice of Removal pursuant

to 28 U.S.C. §§ 1332, 1441 and 1446. (ECF No. 1 at 1). In the Notice, BOA alleges

that this Court has diversity of citizenship jurisdiction over this action pursuant to

28 U.S.C. § 1332 because “Plaintiff is a citizen of California and [BOA] is a citizen of

North Carolina.” Id. at 2. On August 19, 2016, BOA filed a Notice of Party with

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Financial Interest stating that it is a Delaware corporation in the caption of the filing. 

(ECF No. 2). On August 26, 2016, BOA filed a motion to dismiss the original

complaint (ECF No. 4) and a request for judicial notice (ECF No. 5).1

 On September

16, 2016, Plaintiff filed the First Amended Complaint (“FAC”), which is the operative

complaint in this matter. (ECF No. 6).

On September 30, 2016, BOA filed a motion to dismiss the FAC. (ECF No. 8). 

On October 17, 2016, Plaintiff filed the Motion for Leave to File a Second Amended

Complaint and Motion to Remand. (ECF No. 9). On October 31, 2016, Plaintiff filed

a response in opposition to BOA’s motion to dismiss. (ECF No. 10). On November

7, 2016, BOA filed a reply to Plaintiff’s response to the motion to dismiss. (ECF No.

11).

II. Contentions of the Parties

Plaintiff contends that after it filed the Notice of Removal, a “further

investigation into Plaintiff’s claims revealed that several of the acts or omissions

complained of were committed by Auction.com, broker and agent for Defendant

[BOA.]” (ECF No. 9 at 3). Plaintiff contends that it included Ten-X, LLC in the FAC,

as “Ten-X advertises itself as the owner and operator of Auction.com, and thus its

successor in interest.” Id. Plaintiff contends that it “has now also become aware that,

though re-organized as a ‘a [sic] Ten-X company’, Auction.com, Inc., remains an active

California corporation.” Id.

Plaintiff requests this Court join Auction.com as a party to this action, pursuant

to Federal Rule of Civil Procedure 19, because Auction.com “is an indispensable party

and thus necessary for the just adjudication of Plaintiff’s claims.” Id. Plaintiff alleges

that Auction.com is indispensable “because it is the agent for [BOA,]” and “[t]hus,

Defendant [BOA] will be liable for the acts and omissions of its agent, proposed1

 Plaintiff filed the FAC on September 16, 2016. (ECF No. 6). Therefore, the Court denies BOA’s motion to dismiss the initial complaint filed on August 26, 2016 (ECF No. 4) and request for judicial notice (ECF No. 5) filed on August 26, 2016 as

moot.

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defendant Auction[.com].” Id. at 6. Plaintiff contends that if Plaintiff is not granted

leave to add Auction.com as a party to this action, Plaintiff “will be denied any forum,

and will not have an adequate remedy elsewhere as the statute of limitations has

lapsed.” Id. at 6-7. Plaintiff contends that if Auction.com is joined in this action, the

Court will no longer have diversity of citizenship jurisdiction over this matter because

Auction.com is a California corporation. Id. at 3, 5-6.

The record of this case reflects that BOA has not filed an opposition to Plaintiff’s 

Motion for Leave to File a Second Amended Complaint and Motion to Remand (ECF

No. 9).

III. Applicable Law

Federal Rule of Civil Procedure 19(a) provides that 

A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party

if:

(A) in that person’s absence, the court cannot accord complete relief among existing parties; or

(B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person’s absence may: (i) as a practical matter impair or impede the person's ability to protect the interest; or

(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent

obligations because of the interest.

Fed. Civ. P. 19(a)(1). 28 U.S.C. § 1447(e) provides that “[i]f after removal the 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). “[T]he decision regarding joinder of a diversity

destroying-defendant is left to the discretion of the district court[.]” Newcombe v. Adolf

Coors Co., 157 F.3d 686, 691 (9th Cir. 1998).

IV. Analysis

The record of this case reflects that BOA has not filed an opposition to Plaintiff’s

Motion for Leave to File a Second Amended Complaint, to Join a Defendant, and

Motion to Remand. Plaintiff’s Motion appears to be meritorious. The joinder of

Auction.com in this matter would “destroy subject matter jurisdiction” because Plaintiff

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and Auction.com are both citizens of California. 28 U.S.C. §§ 1332, 1447. Pursuant

to 28 U.S.C. § 1447(e), the Court will “permit joinder” of Auction.com “and remand

the action to the State court.” 28 U.S.C. § 1447(e).

The Court declines to rule on BOA’s motion to dismiss the FAC (ECF No. 8). 

“Article III generally requires a federal court to satisfy itself of its jurisdiction over the

subject matter before it considers the merits of a case.” Ruhrgas AG v. Marathon Oil

Co., 526 U.S. 574, 583 (1999). Given that the notice of removal in this case was based

solely on diversity of citizenship jurisdiction and the FAC alleges only state law causes

of action, the state court is the appropriate forum to litigate the merits of the motion to

dismiss.

V. Conclusion

IT IS HEREBY ORDERED that Plaintiff’s Motion for Leave to File a Second

Amended Complaint, to Join a Defendant, and Motion to Remand (ECF No. 9) is

granted. Plaintiff shall file the Proposed Second Amended Complaint (ECF No. 9-1)

in the record of this case within seven (7) days from the date of this Order. Pursuant

to 28 U.S.C. § 1447(e), after the Proposed Second Amended Complaint is filed, the

Clerk of the Court is ordered to remand this action back to the Superior Court of

California, County of San Diego, where it was originally filed and assigned the case

number 37-2016-00022537-CU-BC-CTL.

IT IS FURTHER ORDERED that the motion to dismiss (ECF No. 4) and the

request for judicial notice (ECF No. 5) filed by BOA are denied as moot.

DATED: November 30, 2016

WILLIAM Q. HAYES

United States District Judge

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