June H. Mulleneaux v. Wells Fargo Bank, N.A.
5:17-cv-00780
C.D. Cal.Jun 15, 2017Background
- Plaintiff June H. Mulleneaux, a California resident, alleges wrongful foreclosure-related conduct concerning her Palm Desert property after she applied for a loan modification with Wells Fargo.
- Wells Fargo (national bank headquartered in Sioux Falls, SD) and Quality Loan Service Corp. (California corporation; trustee) are defendants; plaintiff alleges state-law claims including violations of Cal. Civ. Code §§ 2923.6, 2923.55, 2923.7, UCL, and negligence, and seeks monetary damages.
- Wells Fargo removed the action to federal court on diversity grounds; Quality Loan consented to removal. Plaintiff moved to remand. Plaintiff filed the remand motion pro se after substituting counsel; the Court considered that procedural issue.
- Wells Fargo argued federal jurisdiction exists because it is diverse (South Dakota) and Quality Loan’s California citizenship should be disregarded as nominal or fraudulently joined.
- The district court examined (1) whether to accept the pro se filing, (2) federal-question jurisdiction (none), (3) Wells Fargo’s citizenship (diverse), and (4) whether Quality Loan is a nominal or sham (fraudulent) defendant. The court found it lacked subject-matter jurisdiction and remanded the case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Court should consider plaintiff’s pro se filing | Mulleneaux proceeded pro se and filed the remand motion herself | Wells Fargo noted plaintiff had appeared by counsel when removed | Court allowed consideration because substitution to pro se was pending/approved and no prejudice shown; court construed pro se filings liberally |
| Existence of federal-question jurisdiction | Complaint raises only state-law claims; no federal question | Defendants did not assert federal-question jurisdiction (relied on diversity) | No federal-question jurisdiction; §1331 not implicated |
| Wells Fargo’s citizenship for diversity | Mulleneaux argued Wells Fargo has California presence so not diverse | Wells Fargo relied on corporate/main-office rule; main office in South Dakota | Wells Fargo is a South Dakota citizen for §1332 purposes (diverse from plaintiff) |
| Whether Quality Loan’s citizenship is disregarded (nominal or fraudulently joined) | Plaintiff alleges substantive claims and seeks damages from Quality Loan | Defendants argued Quality Loan is a nominal/formal trustee or fraudulently joined (no viable claims) | Court found Quality Loan not nominal or sham; its citizenship counts and destroys diversity; removal improper; case remanded |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (federal courts have limited jurisdiction)
- Caterpillar Inc. v. Lewis, 519 U.S. 61 (complete diversity required for §1332)
- Hunter v. Philip Morris USA, 582 F.3d 1039 (9th Cir.) (fraudulent-joinder inquiry may consider facts beyond pleadings)
- McCabe v. Gen. Foods Corp., 811 F.2d 1336 (9th Cir.) (standards for fraudulent joinder)
- Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir.) (removal statute construed strictly against removal)
- Wachovia Bank v. Schmidt, 546 U.S. 303 (national banks are citizens of the state where their main office is located)
- Rouse v. Wachovia Mortg., FSB, 747 F.3d 707 (9th Cir.) (applying main-office rule to national banks)
- Erickson v. Pardus, 551 U.S. 89 (pro se filings must be liberally construed)