United States District Court, W.D. Washington, Seattle
ORDER OF REMAND
L. ROBART, UNITED STATES DISTRICT JUDGE
the court is Plaintiff Boy oon Choi's motion for a
temporary restraining order ("TRO"). (TRO Mot.
(Dkt. # 28).) Defendants Ocwen Loan Servicing, LLC
("Ocwen"), and Wilmington Trust, N.A.
("Wilmington"), oppose the motion.
(Ocwen/Wilmington Br. (Dkt. # 42).) Defendants Quality Loan
Service Corporation ("QLS") and Bank of America,
N.A. ("BANA") take no position on Ms. Choi's
motion. (QLS Br. (Dkt. # 33); BANA Br. (Dkt. # 35).) In
response to the court's order to show cause (2/9/17 Order
(Dkt. # 32)), Ms. Choi filed additional briefing
regarding subject matter jurisdiction (Choi Br. (Dkt. # 36)).
Having considered the parties' briefing, the relevant
portions of the record, and the applicable law,
court REMANDS this case to Snohomish County Superior Court
for lack of subject matter jurisdiction and DENIES the
remainder of the pending motions as moot.
BACKGROUND & ANALYSIS
Choi filed this case in Snohomish County Superior Court on
October 6, 2016. (Compl.; St. Ct. Dkt. (Dkt. # 1-2).) Ms.
Choi seeks to quiet title to the property at 2022 151st Way
SE, Mill Creek, Washington ("the Property") and
asserts violations of Washington's Deed of Trust Act
("DTA"), RC W ch. 61.24, and Consumer Protection
Act ("CPA"), RCW ch. 19.86. (Compl. ¶¶
24-51.) Ms. Choi asserts these state law claims j
j against Defendants, each of which
allegedly played a role in Ms. Choi's default on her
mortgage and the imminent nonjudicial foreclosure. (See
generally id.) QLS serves as the foreclosing trustee.
(Id. ¶ 6.) QLS and Ms. Choi are both Washington
(Id. ¶ 5-6, 12.)
November 10, 2016, BANA removed this case from Snohomish
County Superior Court. (Not. of Rem. (Dkt. # 1).) BANA
asserted that the court had subject I matter jurisdiction
based on complete diversity between the parties.
(Id. ¶ 5.) BANA acknowledged that Ms. Choi and
QLS are both Washington domiciliaries. (Id. ¶
5(c).) However, BANA contended that QLS's Washington
domicile does not destroy complete diversity "because
QLS has been named in this action solely in its capacity as
Trustee under the Deed of Trust" and is therefore a
nominal defendant. (Id. (citing S.E.C. v.
Collello, 139 F.3d 674, 676 (9th Cir. 1998);
Prudential Real Estate Affiliates, Inc. v. PPR Realty,
Inc., 204 F.3d 867, 873 (9th Cir. 2000)).) To support
this assertion, BANA posited that Ms. Choi "is not
seeking money damages against QLS" and that Ms. Choi and
QLS "have agreed that QLS is not required to participate
in the litigation." (Id.) Neither Ms. Choi nor
Defendants objected to BANA's assertions.
BANA filed its notice of removal, however, several filings
called into question the accuracy of the assertions on which
BANA based its argument that QLS is a nominal defendant.
(See Not. of Rem. ¶ 5(c).) First, QLS filed a
motion to dismiss in which it argues that Ms. Choi fails to
state a CPA claim against QLS. (QLS MTD (Dkt. # 12).) Second,
in response to that motion, Ms. Choi argues that QLS violated
the DTA and committed a CPA violation. (Resp. to QLS MTD
(Dkt. # 16) at 4-5.) Third, in the section of her TRO motion
addressing the likelihood of success on the merits, Ms. Choi
argues that "QLS breached it [sic] duty of impartiality
by failing to respond or provide any explanation to
Plaintiffs demand letter, and thus did not exercise
independent discretion as required by the DTA." (TRO
Mot. at 11.) Ms. Choi further argues that QLS violated the
CPA. (Id. at 11-12.)
on those filings, the court ordered the parties to brief the
court's basis for subject matter jurisdiction over this
matter. (See 2/9/17 Order); see Gaus v. Miles,
Inc., 980 F.2d 564, 566 (9th Cir. 1992) (placing the
burden on the defendant to overcome the strong presumption
against removal jurisdiction). QLS takes no position
regarding subject matter jurisdiction. (QLS Br. at 1.) BANA
responded by defending its initial notice of removal as
proper based on the allegations in the complaint. (BANA Br.
at 2-6.) However, BANA "does not oppose remand" to
the extent "facts have come to light since the removal
from which" the court determines that it lacks subject
matter jurisdiction. (Id. at 7.) Ocwen and
Wilmington join in BANA's response regarding subject
matter jurisdiction. (Ocwen/Wilmington Br. at 2.)
Choi responded to the court's order by invoking the
court's equitable powers. (See Choi Br. at 1-2
("[I]n the interest of justice and in order to afford
Plaintiff an opportunity to prevent her home from unjust
foreclosure, Plaintiff respectfully requests that the [c]ourt
exercise its inherent powers of equity ...."); see
also Ocwen/Wilmington Br. at 2 ("Plaintiff herself
consents to this [c]ourt's jurisdiction ....").)
Specifically, Ms. Choi asks the court to take one of three
actions that would remedy the lack of subject matter
jurisdiction: (1) allow Ms. Choi to amend her complaint to
assert a Fair Debt Collection Practices Act
("FDCPA") claim against QLS (Choi Br. at 2-4); (2)
grant QLS's motion to dismiss and afford Ms. Choi leave
to amend the complaint to state an FDCPA claim (id.
at 4); and (3) dismiss QLS as a defendant without prejudice
(id. at 4-5). The first two options would confer
federal question jurisdiction on the court, 28 U.S.C. §
1331, whereas the third would remedy the diversity
deficiency, 28 U.S.C. § 1332; see also Lincoln Prop.
Co. v. Roche, 546 U.S. 81, 89 (2005) (explaining the
complete diversity requirement).
court's subject matter jurisdiction inheres in Article
III of the United States Constitution and the jurisdictional
statutes that Congress has enacted. See Ins. Corp. of
Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456
U.S. 694, 702 (1982). The court has no authority to expand
its subject matter jurisdiction based on equitable
considerations. See Id. Ms. Choi does not dispute
the court's inference that she seeks to recover monetary
damages from QLS. (See Choi Br.) QLS is therefore
not a nominal defendant in this action, as BANA asserted in
its notice of removal. (See Not. of Rem. ¶
5(c); see also Corr. Not. of Rem. ¶ 5(c).)
Furthermore, the court rejects Ms. Choi's
dilatory and procedurally improper methods of
curing the defect in subject matter jurisdiction by amending
the complaint or dismissing QLS (see Choi Br. at
2-5) because "at [this] time, " 28 U.S.C. §
1447(c), QLS is a named defendant that destroys complete
diversity and thereby deprives the court of subject matter
jurisdiction, cf. Colello, 139 F.3d at 676; PPR
Realty, 204 F.3d at 873. Lacking subject matter
jurisdiction at this time, the court must remand the action
to state court. 28 U.S.C. § 1447(c).
on the foregoing analysis, the court ORDERS that:
1. Pursuant to 28 U.S.C. § 1447(c), all further
proceedings in this case are REMANDED to the Snohomish ...