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Duwe v. Bank of America, N.A.

United States District Court, E.D. Missouri, Southeastern Division

May 3, 2017

JOHNNY LEE DUWE, Plaintiff,
v.
BANK OF AMERICA, N.A., And MILLSAP & SINGER, P.C., Defendants.

          MEMORANDUM AND ORDER

          ABBIE CRITES-LEONI, UNITED STATES MAGISTRATE JUDGE

         This matter is before the Court on Plaintiff Johnny Lee Duwe's Motion to Remand[1] (Doc. 11), and Defendant Bank of America, N.A. (“BANA”)'s Motion to Dismiss (Doc. 12). Duwe has also filed a Motion to Amend (Doc. 23), Motion to Add Parties (Doc. 24), and Motion to Strike (Doc. 29), in response to BANA's Motion to Dismiss. This case has been assigned to the undersigned United States Magistrate Judge pursuant to the Civil Justice Reform Act and is being heard by consent of the parties. See 28 U.S.C. § 636(c).

         I. Background

         On November 9, 2016, Duwe filed a “Petition for Injunctive Relief & Redress of Grievances” (“Petition”) in the Circuit Court of Ste. Genevieve County, Missouri, seeking to enjoin a foreclosure sale and naming as Defendants Bank of American, N.A. (“BANA”) and Millsap & Singer, P.C. (“Millsap”). (Doc. 5.) Duwe alleges that the foreclosure sale, which occurred on November 10, 2016, was based on fraud. He contends that he “served various communications” upon Defendants “contesting the validation of the alleged debt, ” but Defendants failed to produce the requested documents. Id. at p. 2.

         Complete diversity was lacking on the face of the Petition as Plaintiff Duwe and Defendant Millsap are both citizens of the State of Missouri. BANA removed the case to federal court on the basis of diversity jurisdiction, 28 U.S.C. § 1332(a)(1), claiming that Millsap was a nominal party fraudulently joined to defeat diversity, whose citizenship should be disregarded for purposes of diversity jurisdiction. (Doc. 1.) BANA is a national banking association with its principal place of business and main office, as set forth in its articles of association, in the State of North Carolina. Id. at p. 2. BANA is therefore a citizen of North Carolina. See 28 U.S.C. § 1348; Wachovia Bank v. Schmidt, 546 U.S. 303, 307 (2006) (“a national bank, for ' 1348 purposes, is a citizen of the State in which its main office, as set forth in its articles of association, is located”).

         Duwe filed a Motion to Remand, in which he argues that Millsap's citizenship should be considered, and disputes that the amount of controversy requirement is met. (Doc. 11.) BANA opposes Duwe's Motion to Remand. (Doc. 20.)

         On the same date, BANA filed a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), which Duwe opposes. (Docs. 12, 19.) Duwe subsequently filed a Motion to Amend his Petition (Doc. 23), Motion to Add Parties (Doc. 24), and Motion to Strike Defendants' Response to his Motion to Amend (Doc. 29).

         The Court will address the pending motions in turn, beginning with Duwe's Motion to Remand.

         II. Motion to Remand

         “The propriety of removal to federal court depends on whether the claim comes within the scope of the federal court's subject matter jurisdiction.” Peters v. Union Pacific R. Co., 80 F.3d 257, 260 (1996) (citing 28 U.S.C. § 1441(b)). “A claim may be removed only if it could have been brought in federal court originally.” Id. “Critically, the party seeking removal has the burden to establish federal subject matter jurisdiction; all doubts about federal jurisdiction must be resolved in favor of remand.” Central Iowa Power Co-op. v. Midwest Indep. Transmission Sys. Operator, Inc., 561 F.3d 904, 912 (8th Cir. 2009) (internal citation and cited case omitted). To invoke the district court's original diversity jurisdiction, the parties must be citizens of different states and the amount in dispute must exceed $75, 000. 28 U.S.C. § 1332(a).

         A. Diversity of Citizenship

         For diversity jurisdiction to exist under 28 U.S.C. § 1332(a)(1), there must be complete diversity of citizenship between plaintiffs and defendants. Buckley v. Control Data Corp., 923 F.2d 96, 97, n.6 (8th Cir. 1991). “It is settled, of course, that absent complete diversity a case is not removable because the district court would lack original jurisdiction.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 564 (2005) (cited case omitted). Where complete diversity of citizenship does not exist, 28 U.S.C. § 1447(c) requires a district court to remand the case to state court for lack of subject matter jurisdiction.

         In determining whether complete diversity of citizenship exists, a federal court “must disregard nominal or formal parties and rest jurisdiction only upon the citizenship of real parties to the controversy.” Navarro Sav. Ass'n v. Lee, 446 U.S. 458, 460-61 (1980). “Nominal parties are generally those without a real interest in the result of the suit or an ownership interest in the funds at issue, or those named merely as the holder of the stakes between the plaintiff and the defendant.” Caranchini v. Kozeny & McCubbin, LLC, 2011 WL 5921364, at *3 (W.D. Mo. Nov. 28, 2011). “The ‘real party in interest' is the person who, under governing substantive law, is entitled to enforce the right asserted, and in a diversity case, the governing substantive law is ordinarily state law[.]” Iowa Pub. Serv. Co. v. Medicine Bow Coal Co., 556 F.2d 400, 404 (8th Cir. 1977). “A defendant's citizenship may be disregarded when it is clear that the defendant (1) is neither necessary nor indispensable, (2) has no stake in the litigation, and (3) has no real, present claims for relief sought against it.” Mundle v. Linde, LLC, 2011 WL 1526965, at *2 (E.D. Mo. Apr. 20, 2011); see 15 James Wm. Moore, et al., Moore's Federal Practice § 102.15 (3d ed. 2013).

         The Court must therefore determine whether Millsap is a nominal party whose citizenship must be disregarded for purposes of diversity jurisdiction or was fraudulently joined in this action.

         The Petition alleges by implication that Millsap is the trustee that conducted the foreclosure sale. In his Motion to Remand, Duwe contends that he “rescinded” the loan documents due to fraud but Millsap “proceeded with the unlawful foreclosure sale in spite of said rescission and declaration.” (Doc. 11 at p. ...


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