and Submitted March 6, 2019 Pasadena, California
from the United States District Court for the Central
District of California, No. 2:16-cv-05088-AB-E André
Birotte Jr., District Judge, Presiding
Richard Lawrence Antognini (argued), Law Office of Richard L.
Antognini, Grass Valley, California, for Plaintiff-Appellant.
K. Edling (argued) and Robert W. Norman Jr., Houser &
Allison APC, Portland, Oregon, for Defendants-Appellees.
Before: FERDINAND F. FERNANDEZ and MILAN D. SMITH, JR.,
Circuit Judges, and DANA L. CHRISTENSEN, [*] Chief District Judge.
panel affirmed the district court's exercise of diversity
jurisdiction over an action stemming from the foreclosure of
mortgage loan was securitized and the deed of trust assigned
to HSBC Bank USA N.A., as trustee for a trust. Defendants
removed the action to federal court based on diversity
panel held that the Supreme Court's decision in
Americold Realty Trust v. ConAgra Foods, Inc., 136
S.Ct. 1012 (2016), did not upset the holding in Navarro
Ass'n v. Lee, 446 U.S. 458, 458 (1980) (holding that
"a trustee is a real party to the controversy for
purposes of diversity jurisdiction when he possesses certain
customary powers to hold, manage, and dispose of assets for
the benefit of others"), nor other precedent where, as
here, HSBC-the trustee of a traditional trust-was sued in its
own name. The panel concluded that because HSBC and the other
defendants were not, like plaintiff, citizens of California,
there was complete diversity, and the district court properly
exercised diversity jurisdiction.
D. SMITH, CIRCUIT JUDGE:
Joan Demarest initiated an action in state court stemming
from the foreclosure of her property. The defendants removed
the action to federal district court based on diversity
jurisdiction. The district court granted the defendants'
motion for summary judgment and entered final judgment.
appeal, Demarest challenges for the first time the district
court's subject matter jurisdiction over the action. She
argues that the Supreme Court's decision in Americold
Realty Trust v. ConAgra Foods, Inc., 136 S.Ct. 1012
(2016), changed the law for determining the citizenship of a
trust in such a way that complete diversity of citizenship
might not have existed in this case. We hold that prior
authority regarding a traditional trust's citizenship
still controls, and conclude that the district court properly
exercised subject matter jurisdiction.
AND PROCEDURAL BACKGROUND
filed the underlying complaint in this case in Los Angeles
County Superior Court on May 27, 2016, naming as defendants
HSBC Bank USA N.A. (HSBC), Ocwen Loan Servicing, LLC (Ocwen),
Western Progressive, LLC (Western Progressive), and Mortgage
Electronic Registration Systems, Inc. (MERS) (collectively,
Defendants). The dispute concerned a loan Demarest had taken
out on her West Hills, California home in 2005; the
loan's promissory note and deed of trust were purportedly
"pooled into a securitized trust labeled NORMA [sic]
HOME EQUITY LOAN, INC., ASSET-BACKED CERTIFICATES, SERIES
2006-HE2 . . ." Demarest alleged that HSBC acted as
trustee for this investment trust.
fact, Demarest's loan had been securitized and the deed
of trust assigned to HSBC, as trustee for the Registered
Holders of Nomura Home Equity Loan, Inc., Asset-Backed
Certificates, Series 2006-HE2 (the Trust). The Trust was
governed by a contract entitled "Pooling and Servicing
Agreement Dated as of April 1, 2006" (the Agreement),
entered into between HSBC and various other parties. Among
other things, the Agreement established the Trust, enumerated
its assets, and appointed HSBC as trustee, and it described
the Trust as a common law trust governed by New York law.
Under the Agreement, all "right, title and
interest" in the assets of the Trust were conveyed to
the "Trustee [HSBC] for the use and benefit of the
Certificateholders," and the trustee was given the power
to hold the Trust's assets, sue in its own name, transact
the Trust's business, terminate servicers, and engage in
other necessary activities.
complaint (which she filed following her default on the loan
and multiple initial actions aimed at combatting the
foreclosure of her property), Demarest asserted various
causes of action under California law, including wrongful
foreclosure. Defendants removed the case to the district
court. The notice of removal specifically stated that it was
filed on the behalf of, among others, "HSBC Bank USA,
N.A., as Trustee for the registered holders of Nomura Home
Equity Loan, Inc., Asset-Backed Certificates, Series 2006-HE2
. . . incorrectly sued herein as HSBC Bank USA N.A."
Diversity jurisdiction pursuant to 28 U.S.C. § 1332 was
the only basis for federal jurisdiction claimed in the
notice. It asserted that Demarest was a citizen of
California, Ocwen was a citizen of Florida and Georgia, MERS
was a citizen of Delaware and Virginia, and Western
Progressive was a nominal defendant and was therefore
disregarded for diversity purposes. As for HSBC, the notice
HSBC is a national banking association organized under the
laws of the United States with its main office in McLean,
Virginia. . . . Since its main office is located in
Virginia, HSBC is a citizen of Virginia for diversity
purposes. At the present time and at the commencement ...