Nichalson v. First Franklin, et al

Filing 46

MEMORANDUM ORDER signed by Judge Morrison C. England, Jr on 11/30/2010 ORDERING that the matter is hereby REMANDED to Superior Court, County of Sacramento. Defendants 32 Motion to Dismiss and 33 Motion to Strike are both DENIED as moot. The Clerk is directed to close the file. Copy of remand order sent to other court. CASE CLOSED. (Duong, D)

Nichalson v. First Franklin, et al

Doc. 46

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiff Lynn Nichalson ("Plaintiff") seeks redress from Defendants First Franklin Financial Corporation, Home Loan Services, Inc., Mortgage Technology, Inc., Mortgage Electronic Registration Systems, Inc., and U.S. Bank, National Association (collectively, "Defendants") based on various state claims, including Fraud, Conspiracy to Defraud, Negligence, and violations of the Business and Professions Code § 17200. /// /// /// 1 v. FIRST FRANKLIN FINANCIAL CORPORATION, et al., Defendants. ----oo0oo---LYNN A. NICHALSON, Plaintiff, MEMORANDUM AND ORDER No. 2:10-cv-00598-MCE-EFB UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

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Previous allegations against Defendants included violations of the Truth in Lending Act ("TILA") and the Real Estate Settlement Procedures Act ("RESPA"), which were dismissed by this Court in previous orders. See Order Def.'s Mot. Dismiss, ECF Presently before

No. 17; Order Def.'s Mot. Dismiss, ECF No. 28.

the Court is Defendant First Franklin Financial Corporation's ("Defendant") Motion to Dismiss Plaintiff's Complaint for failure to state a claim upon which relief may be granted, pursuant to Federal Rule of Civil Procedure 12(b)(6).1 Defendant asserts

that since only state law claims remain, the Court should exercise supplemental jurisdiction and rule on the merits of the motion or, in the alternative, dismiss the entire case. Defendant has concurrently filed a Motion to Strike pursuant to Rule 12(f). Plaintiff's opposition asks the Court to remand For

the case back to state court since no federal claims remain.

the reasons set forth below, the case is remanded to state court and the Defendant's Motion to Dismiss and Motion to Strike are both denied as moot.

BACKGROUND2

This action arises out of Plaintiff's 2006 residential mortgage loan transaction, secured by property located at 9527 Clarke Farms Drive, Elk Grove, California ("Property").

All further references to "Rule" or "Rules" are to the Federal Rules of Civil Procedure unless otherwise noted. The factual assertions in this section are based on the allegations in Plaintiff's Complaint unless otherwise specified. 2
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Plaintiff alleges that Defendant extended credit to her without regard to her ability to pay. She contends that she accurately

reported her income on her loan application, but that Defendant subsequently falsified her income, as well as the property's appraisal information, without Plaintiff's knowledge or consent to get the loan approved. Furthermore, Plaintiff alleges that

the loan's interest rates were subject to increase, such that the monthly payments exceeded Plaintiff's ability to pay. Nonetheless, as indicated in the Deed of Trust, Plaintiff was approved for a loan in the amount of $534,800.00. Plaintiff further alleges that Defendant awarded higher commissions to its loan officers when they sold a large volume of loans or loans with high yield spread premiums. Plaintiff states

that these practices encouraged loan officers to steer borrowers, into loans that they were unable to repay. The terms of the loan

were memorialized in a Promissory Note, which was secured by a Deed of Trust on the Property. If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded. 28 U.S.C. § 1447(c). Where an amendment eliminates

the federal claim upon which federal court jurisdiction is premised, this Court may, in its discretion, decline to exercise supplemental jurisdiction and remand the remaining state law claims. See 28 U.S.C. § 1367(c). See also Harrell v. 20th

Century Ins. Co., 934 F.2d 203, 205 (9th Cir. 1991). /// /// /// 3

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Plaintiff initially filed suit in Superior Court alleging claims under both state and federal laws, including a cause of action for violation of both TILA and RESPA. Defendant

subsequently removed the suit to this Court on the basis of federal question jurisdiction. Plaintiff has currently filed a Second Amended Complaint abandoning both federal claims. claims remain. Only Plaintiff's state law

With only Plaintiff's state law claims remaining,

this Court ceases to have subject matter jurisdiction over the suit. The Court declines to exercise pendent jurisdiction over Therefore, the matter is hereby Defendant's

the remaining state claims.

REMANDED to Superior Court, County of Sacramento.

Motion to Dismiss and Motion to Strike are both DENIED as moot. The Clerk is directed to close the file.3 IT IS SO ORDERED. Dated: November 30, 2010 _____________________________ MORRISON C. ENGLAND, JR. UNITED STATES DISTRICT JUDGE

Because oral argument will not be of material assistance, the Court deemed this matter suitable for decision without oral argument. E.D. Cal. Local Rule 230 (g). 4

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