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Wells Fargo Bank, N.A. v. Paul

United States District Court, N.D. New York

May 15, 2017

WELLS FARGO BANK, N.A., Plaintiff,
v.
CAROLE M. PAUL, individually and as surviving spouse of Edward C. Paul, JOHN PAUL, TINA PAUL, CAPITAL ONE BANK, ST. JOSEPH'S HOSPITAL CENTER, Defendants.

          GROSS POLOWY, LLC, Attorneys for Plaintiff.

          STEPHEN J. VARGAS, ESQ.

          MEMORANDUM-DECISION AND ORDER

          Mae A. D'Agostino U.S. District Judge.

         Plaintiff Wells Fargo Bank, N.A., commenced this action on June 13, 2016, pursuant to Article 13 of the New York Real Property Actions and Proceedings Law ("R.P.A.P.L.") to foreclose a mortgage encumbering 177 Pinnacle Hill Road, Fulton, New York 13069, together with the land, buildings, and other improvements located on the property (the "Mortgaged Property"). See Dkt. No. 1 at ¶ 1. Defendants Carole M. Paul, John Paul, Tina Paul, Capital One Bank ("Capital One"), [1] and St. Joseph's Hospital Center ("St. Joseph's")[2] have not appeared in this action.

         Presently before the Court is Plaintiff's motion for default judgment and for judgment of foreclosure and sale of the Mortgaged Property. See Dkt. No. 26 at 1.

         II. BACKGROUND

         According to the complaint, Defendant Carole M. Paul executed and delivered a note promising to pay $101, 000.00 plus interest to the lender, Wells Fargo. See Dkt. No. 1 at ¶ 12. Defendants Carole M. Paul, John Paul, and Tina Paul (the "Paul Defendants") also executed and delivered a mortgage on the property as security for payment of the note. See Id. at ¶ 13. The Paul Defendants defaulted under the terms of the note and mortgage by failing to tender the monthly payment due on July 1, 2015, and all subsequent monthly payments. See Id. at ¶ 14. Pursuant to the terms of the note and mortgage, Plaintiff accelerated the payments and declared due the entire amount owed on the note. See Id. At the time of the complaint, Plaintiff claimed that the Paul Defendants owed a principal balance of $86, 559.11 with interest at the rate of 6.625% accruing from June 1, 2015. See Id. at ¶ 15.

         On July 7, 2016, Plaintiff filed affidavits of service attesting that the summons and complaint, together with the notice required by R.P.A.P.L. section 1303, a debt validation letter, and a certificate of merit were properly served on the Paul Defendants, Capital One, and St. Joseph's. See Dkt. No. 11. Capital One and St. Joseph's were served by a process server delivering a copy of the summons, complaint, and certificate of merit on a registered agent authorized to accept service. See Dkt. No. 7. The Paul Defendants were also served with copies of the summons, complaint, and certificate of merit. See Dkt. Nos. 8, 9, 10. All Defendants have failed to respond to the complaint or otherwise appear in this action. On July 20, 2016, Plaintiff requested that the Clerk of the Court enter a certificate of entry of default against all Defendants pursuant to Rule 55(a) of the Federal Rules of Civil Procedure and Local Rule 55.1. See Dkt. No. 13. On July 20, 2016, the Clerk of the Court entered the requested default. See Dkt. No. 14. Plaintiff now moves for default judgment and judgment of foreclosure and sale. See Dkt. No. 26 at 1.

         III. DISCUSSION

         A. Subject Matter Jurisdiction

         Wells Fargo asserts federal subject matter jurisdiction on the basis of diversity of citizenship pursuant to 28 U.S.C. § 1332. Dkt. No. 1 at ¶ 11. "Under the standard diversity jurisdiction statute, 28 U.S.C. § 1332(a), there must be 'complete' diversity among the parties, meaning that each defendant must be a citizen of a different state from each plaintiff." U.S. Bank Tr., N.A. v. Dupre, No. 15-CV-558, 2016 WL 5107123, *2 (N.D.N.Y. Sept. 20, 2016) (citing Caterpillar Inc. v. Lewis, 519 U.S. 61, 67-68 (1996)). In this case, however, the complaint does not sufficiently allege Wells Fargo's citizenship, and the Court therefore cannot determine whether complete diversity exists.

         The complaint attempts to establish Wells Fargo's citizenship by asserting that its principal place of business is in South Dakota. See Dkt. No. 1 at ¶ 2. But because Wells Fargo is a national banking association, its citizenship is not determined by its principal place of business. See U.S. Bank Tr., N.A. v. Monroe, No. 15-CV-1480, 2017 WL 923326, *4 (N.D.N.Y. Mar. 8, 2017) ("[T]he Second Circuit has expressly held that the principal place of business is not to be considered when determining the citizenship of a national banking association.") (citing OneWest Bank, N.A. v. Melina, 827 F.3d 214, 218-21 (2d Cir. 2016)). Instead, Wells Fargo's citizenship is determined by the location of its main office as designated in its articles of association. See Melina, 827 F.3d at 218 ("The Supreme Court has held unequivocally that a national bank is 'located, ' for diversity jurisdiction purposes, in the state designated in its articles of association as the locus of its main office . . . .") (citing Wachovia Bank v. Schmidt, 546 U.S. 303, 307 (2006)).

         Plaintiff's counsel-Gross Polowy, LLC-should be well aware of the requirements for pleading the citizenship of a national banking association. In just the past year, Gross Polowy has had multiple default judgment motions denied in this district for failure to properly allege the citizenship of a national banking association. See Monroe, 2017 WL 923326, at *4; U.S. Bank Tr., N.A. v. Dupre, No. 15-CV-558, 2016 WL 5107123, *3 (N.D.N.Y. Sept. 20, 2016). Since Plaintiff has failed to establish that the Court has subject matter jurisdiction over this action, the complaint is dismissed without prejudice. See Receivables Exch., LLC v. Hotton, No. 11-CV-292, 2011 WL 239865, *1 (E.D.N.Y. Jan. 21, 2011) ("[W]hen a complaint fails to plead subject matter jurisdiction, the Court is obligated to dismiss is sua sponte.") (citing Fed.R.Civ.P. 12(h)(3)).

         B. ...


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