Bridge 1 LLC v. Sunstate Acquisitions LLC et al

Filing 10

ORDER: Plaintiff's Motion to Remand (Doc. #7 ) is granted and this case is remanded back to Maricopa County Superior Court. The Clerk shall terminate this case. Signed by Judge Susan M Brnovich on 11/17/2022. (Attachments: #1 Remand letter)(CLM)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Bridge 1 LLC,

No. CV-22-01839-PHX-SMB

Plaintiff,

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v.

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Sunstate Acquisitions LLC, et al.,

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ORDER

Defendants.

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Pending before the Court is Plaintiff’s Motion to Remand. (Doc. 7.) Defendant

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Sunstate Acquisitions LLC (“Defendant”) filed its Notice of Removal (Doc. 1) in

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October 2022.

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authorities, addressing whether the Court should remand this case to Maricopa County

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Superior Court. (See Doc. 5.) Both parties submitted the requested memoranda. (See

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Docs. 6; 7.) The Court will grant Plaintiff’s Motion to Remand for the reasons discussed

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below.

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I.

The Court ordered the parties to submit memoranda of points and

BACKGROUND

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Nina Luna owned real property in Avondale, Arizona that was under judicial

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foreclosure. (Doc. 1-3 at 6.) Plaintiff alleges it bought Luna’s property on March 10,

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2022, “subject to existing recorded liens.” (Id.) Plaintiff recorded a quit claim deed to

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reflect its purchase that same day. (See id. at 12–13.) Defendant is the beneficiary of a

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deed of trust over Luna’s property, which Luna signed on March 2, 2022—before

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Plaintiff allegedly bought the property—but Defendant did not record its deed of trust

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until June 3, 2022. (Id. at 6.) On July 11, 2022, Defendant initiated a trustee’s sale of the

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property, prompting Plaintiff to file a quiet title action in Maricopa County Superior

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Court. (Id. at 6–7.) On October 11, 2022, Luna filed for Chapter 13 Bankruptcy and

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claimed ownership of the Avondale property in her bankruptcy case. (Doc. 6 at 1–2.)

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Defendant sought removal to this Court under federal question jurisdiction, arguing

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Plaintiff’s quiet title action is a core proceeding to Luna’s bankruptcy. (See Docs. 1 at 1;

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6 at 1.)

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II.

LEGAL STANDARD

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Removal of claims with some relation to a bankruptcy case is permissible if the

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district court has jurisdiction under 28 U.S.C. § 1334(a). 28 U.S.C. § 1452(a). More

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specifically, district courts have jurisdiction over cases “arising in or related to”

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bankruptcy cases. See 28 U.S.C. § 1334(b), (c). The “related to” test requires courts to

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consider “whether the outcome of the proceeding could conceivably have any effect on

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the estate being administered in bankruptcy.” In re Fietz, 852 F.2d 455, 457 (9th Cir.

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1988) (cleaned up). Despite seemingly broad jurisdiction over cases “related to” active

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bankruptcy cases, § 1452 also permits district courts to “remand such claim or cause of

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action on any equitable ground.” 28 U.S.C. § 1452(b). This “standard is an unusually

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broad grant of authority [that] subsumes and reaches beyond all of the reasons for remand

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under nonbankruptcy removal statutes.” In re McCarthy, 230 B.R. 414, 417 (B.A.P. 9th

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Cir. 1999). The factors courts should consider include:

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(1) the effect of the action on the administration of the bankruptcy estate;

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(2) the extent to which the issues of state law predominate; (3) the difficulty

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of applicable state law; (4) comity; (5) the relatedness or remoteness of the

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action to the bankruptcy case; (6) the existence of a right to jury trial; and

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(7) prejudice to the party involuntarily removed from state court.

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In re Baptist Found. of Ariz., No. CIV 00-557-PHX-ROS, 2000 WL 35575676, at *7 (D.

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Ariz. June 30, 2000) (quoting Williams v. Shell Oil Co., 169 B.R. 684 692–93 (S.D. Cal.

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1994)).

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III.

DISCUSSION

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Equity favors remand. The Court finds that factors one, two, and five all favor

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remand, and factors three, four, six, and seven are neutral. Resolution of Plaintiff’s quiet

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title action could affect Defendant’s status as one of Luna’s secured creditors. But Luna

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is not a party to this action, and any effect on her bankruptcy’s administration will be

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minimal. The Court finds that factor two particularly favors remand because Plaintiff’s

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state law quiet title claim is the only claim alleged in the Complaint. Most persuasively,

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Plaintiff’s claim bears little relation to Luna’s bankruptcy.

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Defendant as a secured creditor in her filing, the determination of the Avondale

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property’s owner will not significantly impact her Chapter 13 plan. Factor three is

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neutral because both the bankruptcy court and the state court are capable of interpreting

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and applying the relevant law. Factor four is neutral because this case is in its early

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stages and nothing in the party’s briefing indicates the state court made considerable

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progress before Defendant’s removal. Factor six is neutral because none of the pleadings

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or briefing indicates whether either party prefers a jury trial. And factor seven is neutral

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because the parties, counsel, and evidence are in Arizona, and thus any prejudice to

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Plaintiff would be minimal—although it would rob Plaintiff of its chosen forum. In the

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presence of factors in favor of remand, and in the absence of factors to the contrary,

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Plaintiff’s Motion to Remand will be granted on equitable grounds.

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IV.

While Luna included

CONCLUSION

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Accordingly,

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IT IS ORDERED granting Plaintiff’s Motion to Remand and therefore remanding

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this case back to Maricopa County Superior Court. (Doc. 7.)

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IT IS FURTHER ORDERED directing the Clerk of Court to terminate this case.

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Dated this 17th day of November, 2022.

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