Argued: June 13, 2016 [*]
Robert W. Melina ("Melina") appeals from an August
31, 2015 memorandum and order of the United States District
Court for the Eastern District of New York (Gleeson,
J.) granting a motion for summary judgment by
Plaintiff-Appellee OneWest Bank, N.A. ("OneWest"),
which had filed a foreclosure action, and denying
Melina's cross-motion to dismiss for lack of subject
matter jurisdiction. Melina seeks review of the District
Court's holdings that (1) a national bank is a citizen
only of the state in which its main office is located; and
(2) OneWest had standing to foreclose Melina's mortgage.
We hold that a national bank is a citizen only of the state
in which its main office is located-not also the state of its
principal place of business-and that OneWest had standing to
foreclose Melina's mortgage under both holder and
assignment principles. We thus AFFIRM the judgment of the
MICHAEL BRUK, Law Office of Michael Bruk, New York, NY, for
ALLISON J. SCHOENTHAL, Hogan Lovells U.S. LLP, Washington,
D.C. (Nicole E. Schiavo, Hogan Lovells U.S. LLP, New York,
NY; Chava Brandriss, Sean Marotta, Hogan Lovells U.S. LLP,
Washington, D.C., on the brief), for Plaintiff-Appellee.
Before: Newman, Wesley, and Droney, Circuit Judges.
we join our sister circuits in holding that, for purposes of
subject matter jurisdiction, a national bank is a citizen
only of the state in which its main office is located.
facts underlying this case are straightforward. On February
26, 2007, Defendant-Appellant Robert W. Melina
("Melina") obtained and memorialized in a note (the
"Note") a loan from Wall Street Mortgage Bankers
Ltd. for $591, 000 in principal. As security for this loan,
Melina executed a mortgage on his property at 1245 77th
Street in Brooklyn, New York. Wall Street Mortgage Bankers
indorsed the Note to the order of IndyMac Bank, F.S.B.
("IndyMac"), and IndyMac later indorsed the Note in
2008, the Office of Thrift Supervision closed IndyMac and
appointed the Federal Deposit Insurance Corporation
("FDIC") as its receiver. That same day, the Office
of Thrift Supervision created a new entity, IndyMac Federal
Bank, F.S.B. ("IndyMac Federal"), transferred
IndyMac's assets to IndyMac Federal, and appointed FDIC
as IndyMac Federal's conservator. FDIC later also became
IndyMac Federal's receiver.
March 19, 2009, FDIC as IndyMac Federal's receiver
entered into a Loan Sale Agreement ("LSA") to sell
substantially all of IndyMac Federal's assets to
Plaintiff-Appellee OneWest Bank, N.A. ("OneWest").
Section 2.05 of the LSA, titled "Closing, "
contemplates that transfer of the subject notes
"shall" take place at some future time.
See App. 76. Section 3.04(b) of the LSA requires
that all notes subject to transfer pursuant to the LSA bear a
specific form of endorsement.
the same time that OneWest acquired Melina's loan,
OneWest contracted with Deutsche Bank National Trust Company
for Deutsche Bank to serve as document custodian for
Melina's original Note and mortgage. In that capacity,
Deutsche Bank had physical possession of Melina's
original Note and mortgage from 2009 until April 2011, at
which point Deutsche Bank sent them to OneWest. OneWest
returned Melina's Note and mortgage to Deutsche Bank in
May 2011, and Deutsche Bank sent them back to OneWest in June
2014. OneWest then transmitted Melina's original Note and
mortgage to its foreclosure counsel at Gross Polowy, LLC, on
June 19, 2014.
August 1, 2009, Melina defaulted on his loan by failing to
make the payment due that day. He did not cure the default
after receiving notice from OneWest.
21, 2014, CIT Group Inc. entered into a definitive Agreement
and Plan of Merger between CIT Group and IMB HoldCo LLC, the
parent company of OneWest. CIT Group is a Delaware
corporation with its principal place of business located at
11 West 42nd Street, New York, New York. Article V, Section
5.2 of the Agreement and Plan of Merger requires that, during
the period between the date of the agreement and the actual
closing, OneWest seek CIT Group's written permission
prior to undertaking almost two dozen significant corporate
decisions. These decisions include opening, closing, or
relocating a branch.
September 10, 2014, OneWest commenced a foreclosure action
against Melina in the United States District Court for the
Eastern District of New York, invoking the court's
diversity jurisdiction. On that day, Melina's original
Note and Mortgage were in the physical possession of
OneWest's counsel at Gross Polowy. On October 13, 2014,
OneWest filed an amended complaint containing substantively
the same allegations as the original complaint. On February
3, 2015, Melina filed an answer, and on April 2, 2015, he
filed an amended answer. OneWest thereafter moved for summary
judgment, and Melina cross-moved to dismiss for lack of
subject matter jurisdiction.
18, 2015, the District Court heard oral arguments on the
motions. In a memorandum and order dated August 31, 2015, the
District Court denied Melina's cross-motion to dismiss
and granted OneWest's motion for summary judgment. The
District Court held that a national bank such as OneWest is a
citizen only of the state in which its main office is
located-not also of the state of its principal place of
business-and that OneWest's main office is indisputably
in California. The District Court concluded further that,
even if the principal place of business of a national bank
mattered for jurisdictional purposes, OneWest's was
District Court also disagreed with Melina's standing
arguments on the basis of its finding that OneWest was the
legal "holder" of Melina's Note and entitled to
enforce it under the New York Uniform Commercial Code. This
finding was based on the affidavits of OneWest's
corporate representative and counsel, which established that
OneWest was in physical possession of Melina's original
Note at the time it commenced its lawsuit. Additionally, the
District Court found that OneWest had proven it was entitled
to enforce Melina's loan as the loan's assignee.
timely appealed the District Court's memorandum and order
and sought review of the District Court's holdings on