Zyzzx2 v. Wells Fargo Bank

• Court: Court of Appeals for the Ninth Circuit
• Decided: November 1, 2017
• Docket: 16-15681
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION NOV 01 2017 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

ZYZZX 2, No. 16-15681

Plaintiff-Appellant, D.C. No. 2:13-cv-01307-JCM-PAL

v. MEMORANDUM* WELLS FARGO BANK, N.A.; et al.,

Defendants-Appellees.

Appeal from the United States District Court for the District of Nevada James C. Mahan, District Judge, Presiding

Argued and Submitted October 18, 2017 San Francisco, California

Before: HAWKINS, W. FLETCHER, and TALLMAN, Circuit Judges.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Zyzzx 2 appeals the district court’s denial of its motion to remand. We have

jurisdiction pursuant to 28 U.S.C. § 1291 and we affirm. We review the district

court’s denial of a motion to remand a removed case de novo. Ritchey v.Upjohn

Drug Co., 139 F.3d 1313, 1315 (9th Cir. 1998).

Zyzzx 2 purchased real property at a foreclosure sale and filed an action in

Nevada state court to quiet title. Wells Fargo removed the case to federal court on

the basis of diversity jurisdiction. The district court found that removal was proper

because Arlene Dizon, the property’s former owner and the sole non-diverse

defendant, had been fraudulently joined. A district court may disregard the

citizenship of a fraudulently joined defendant in determining whether diversity

jurisdiction is present. Hunter v. Philip Morris USA, 582 F.3d 1039, 1043 (9th Cir.

2009) (citing Morris v. Princess Cruises Inc., 236 F.3d 1061, 1067 (9th Cir.

2001)).

The district court erred in finding that Dizon was fraudulently joined.

In Weeping Hollow Avenue Trust v. Spencer, 831 F.3d 1110 (9th Cir. 2016), we

held under analogous circumstances that a former homeowner was not fraudulently

joined to a quiet title action following a foreclosure sale. Id. at 1113–14. As in

Weeping Hollow, Dizon retained the ability to challenge the foreclosure sale in

2 equity at the time of the quiet title action. See id. Therefore, as a potential claimant

to the property, she was properly joined to Zyzzx 2’s suit. Id. at 1114.

However, a district court’s failure to remand a case that is improperly

removed is not fatal if the jurisdictional defect is cured by the time that judgment is

entered. Caterpillar Inc. v. Lewis, 519 U.S. 61, 64 (1994). In this case, Zyzzx 2

failed to serve Dizon with process within 120 days, even after the district court

directed it to do so or face dismissal pursuant to Rule 4(m) of the Federal Rules of

Civil Procedure.1 Nor did Zyzzx 2 attempt to demonstrate good cause for the

failure. Because complete diversity existed at the time the district court’s judgment

was entered, we affirm the district court.

AFFIRM.

1 Rule 4(m) was amended in 2015 to require service within 90 days. Fed. R. Civ. P. 4(m) (2015). 3