LN Management, LLC Series 5664 Divot V. JPMorgan Chase Bank N.A., No. 18-15402 (9th Cir. 2020)

Court Description: Joinder / Diversity Jurisdiction. The panel vacated the district court’s judgment in a case raising claims after a Nevada homeowners’ association (“HOA”) commenced foreclosure proceedings; held that diversity jurisdiction existed and the Federal Foreclosure Bar applied; and remanded for further proceedings. * The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). ** The Honorable Danny J. Boggs, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation. LN MGMT. V. JPMORGAN CHASE BANK 3 In March 2003, Kit Dansker obtained a home loan to purchase real property in Las Vegas, Nevada. On October 3, 2009, Dansker died. In 2011, the neighborhood HOA began foreclosure proceedings, and sold the property to LN Management, LLC. The priority lienholder was Fannie Mae, and the Federal Housing Finance Agency (FHFA). The district court held that LN Management had not identified any legal representative of Dansker’s estate, and since no such person was identified and joined, complete diversity existed. The district court then turned to the merits, and granted Fannie Mae’s loan servicer, JPMorgan Chase Bank, N.A.’s motion to dismiss on the grounds of then- prevailing precedent, Bourne Valley Court Tr. V. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016). The Nevada Supreme Court subsequently declined to endorse the holding in Bourne Valley. The panel held as an issue of first impression in this court that Dansker, as a dead person, was not a proper person to be sued. The panel held that the dead lack the capacities that litigants must have to allow for a true Article III case or controversy. The panel further held that when a dead person is named as a party, the dead person’s prior citizenship is irrelevant for diversity citizenship purposes when a controversy is between citizens of different states. The panel held that diversity did in fact exist at the time of removal where the lawsuit was against JPMorgan Chase and Kit Dansker, and Dansker, being dead, had no legal existence, and, therefore, was not a citizen of any state. The panel further held that the district court did not abuse its discretion by denying LN Management’s motion to substitute, for Dansker, the “Estate of Kit Dansker” where there was no indication in the record that probate proceedings were ever initiated by the Nevada courts in 4 LN MGMT. V. JPMORGAN CHASE BANK Dansker’s regard, nor who the correct legal representative of Dansker’s estate was or is. The panel concluded that diversity jurisdiction continued to exist. Because the theory on which the district court found in favor of JPMorgan and FHFA and Fannie Mae on summary judgment was flawed, the panel vacated the district court’s decision, and remanded.