Zyzzx2 v. Wells Fargo Bank ( 2017 )


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  •                                                                             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    NOT FOR PUBLICATION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