United States District Court, D. Arizona
Andrew K. Forbes, et al., Plaintiffs,
Bank of America NA, et al., Defendants.
Honorable G. Murray Snow United States District Judge.
before the Court is the Motion to Remand of Plaintiffs Andrew
and Julia Forbes. (Doc. 9). For the following reasons, the
Court denies the motion.
August 22, 2017, Plaintiffs Andrew and Julia Forbes of
Arizona filed a Complaint, pro se, in Maricopa County
Superior Court against Defendants Bank of America, N.A.
(BANA) and Leonard J. McDonald. (Doc. 1-1). In 2006,
Plaintiffs executed a promissory note with BANA in the amount
of $399, 900.00 in order to purchase real property in
Wittmann, Arizona. This note was secured by a deed of trust
on the land, with BANA as the beneficiary. Plaintiffs
defaulted on the loan in 2009, and were unable to agree on
loan modification programs with BANA. After default, the
trustee sent notice to Plaintiffs of a sale of the property.
Plaintiffs realized that BANA was foreclosing on the wrong
property and informed the trustee of this mistake. Plaintiffs
received no further correspondence from BANA or the trustee,
causing them to believe the property has been foreclosed.
Notice of Substitution of Trustee was recorded on May 31,
2017 and Mr. McDonald was appointed the successor trustee.
Plaintiffs then received a notice of trustee's sale
referencing a renewed effort to foreclose on the property.
Plaintiffs' Complaint asserts wrongful foreclosure,
claiming that the statute of limitations has expired.
Additionally, Plaintiffs allege that BANA breached their
fiduciary duties of good faith and fair dealing.
Plaintiff's Complaint seeks injunctive relief to stop the
foreclosure and alleges injuries in excess of $150, 000.
BANA removed the action to federal court on September 22,
2017. BANA, a citizen of North Carolina, alleges that
Defendant McDonald, a citizen of Arizona, has been
fraudulently joined to the lawsuit. BANA asserts that Arizona
law and the Complaint provide no basis for relief against
Defendant McDonald as Trustee. BANA also states that the
amount in controversy exceeds $75, 000. Plaintiffs filed a
Motion to Remand on October 17, 2017.
civil action brought in a State court of which the district
courts of the United States have original jurisdiction, may
be removed by the defendant or the defendants, to the
district court of the United States for the district and
division embracing the place where such action is
pending.” 28 U.S.C. § 1441(a). A party may remove
an action from state court only if the action could have been
brought in the district court originally. Ramirez v. Fox
Television Station, Inc., 998 F.2d 743, 747 (9th Cir.
1993). The party asserting federal jurisdiction has the
burden of proof on a motion to remand to state court, and the
removal statute is strictly construed against removal
jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566
(9th Cir. 1992) (noting a “strong presumption”
against removal jurisdiction, and stating that
“[f]ederal jurisdiction must be rejected if there is
any doubt as to the right of removal in the first
jurisdiction is proper in all cases that present a federal
question on the face of the complaint. 28 U.S.C. § 1331.
In addition, the Court has subject-matter jurisdiction to
rule on cases in which defendants and plaintiffs are citizens
of different states and the amount in controversy is greater
than $75, 000. 28 U.S.C. § 1332. The Supreme Court has
interpreted § 1332 to require complete diversity between
parties, such that “the citizenship of each plaintiff
is diverse from the citizenship of each defendant.”
Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996).
However, if a plaintiff “fails to state a cause of
action against a resident defendant, and the failure is
obvious according to the settled rules of the state, ”
the district court may claim that the party is fraudulently
joined, and assert jurisdiction. McCabe v. General Foods
Corp., 811 F.2d 1336, 1339 (9th Cir. 1987).
Diversity of Citizenship
Arizona citizens, have filed suit against BANA, a citizen of
North Carolina, and Mr. McDonald, a citizen of Arizona. On
its face, the presence of Mr. McDonald destroys diversity
between the parties. However, if the “settled rules of
the state” prevent Plaintiffs from “stat[ing] a
cause of action” against Mr. McDonald, then Mr.
McDonald is considered fraudulently joined and his presence
would not preclude removal on diversity grounds.
McCabe, 811 F.2d at 1339. Under Arizona law, the
“trustee need only be joined as a party in legal
actions pertaining to a breach of the trustee's
obligation.” A.R.S. § 33-807(E). A court order
“entered against the beneficiary [BANA] is binding upon
the trustee with respect to any actions that the trustee is
authorized to take by the trust deed or by this chapter.
Id. A trustee joined in an action “is entitled
to be immediately dismissed.” Id. Three
elements must be established for a trustee to fall under
§ 33-807(E)'s protections: the trustee is a
defendant in the action, the claim “relates to the