Khan v. U.S. Bank National Association et al

Filing 30

ORDER not adopting 25 FINDINGS AND RECOMMENDATIONS; and not adopting 28 FINDINGS AND RECOMMENDATIONS, signed by Judge Kimberly J. Mueller on 3/23/15. Plaintiff is GRANTED 21 days from the date of this order to file a third amended complaint. This matter is referred back to the assigned magistrate judge for further proceedings. (Kastilahn, A)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

FOR THE EASTERN DISTRICT OF CALIFORNIA

10
11

KHALID KHAN,

12

Plaintiff,

13
14
15

v.

ORDER

U.S. BANK NATIONAL ASSOCIATION,
et al.,
Defendants.

16

This matter was referred to a United States Magistrate Judge under Local Rule

17
18

No. 2:13-cv-2596 KJM CKD PS

302(c)(21).
On July 8, 2014, the magistrate judge filed findings and recommendations

19
20

recommending dismissal of the action for lack of subject matter jurisdiction. On November 20,

21

2014, the magistrate judge filed a second set of findings and recommendations recommending

22

that this action be dismissed for lack of prosecution. Both sets of findings and recommendations

23

were served on plaintiff and contained notice that any objections should be filed within fourteen

24

days. Plaintiff has timely filed objections to both sets of findings and recommendations.
In accordance with the provisions of 28 U.S.C. § 636(b)(1)(C) and Local Rule

25
26

304, this court has conducted a de novo review of this case. Having carefully reviewed the entire

27

file, the court declines to adopt either recommendation.

28

/////
1

1

The first recommendation is based on plaintiff’s failure to plead in the first

2

amended complaint, ECF No. 9, two prerequisites to invocation of diversity jurisdiction: (1) that

3

the citizenship of all defendants is diverse from plaintiff’s citizenship; and (2) that the matter in

4

controversy exceeds the sum or value of $75,000. The magistrate judge also finds that plaintiff’s

5

second amended complaint, ECF No. 24, was filed without leave of court and that “it is apparent

6

from the allegations of the second amended complaint that plaintiff has simply omitted the non-

7

diverse defendant [T.D. Service Company] from the caption as a ploy to invoke diversity

8

jurisdiction but intends to proceed on claims against this non-diverse defendant.” ECF No. 25 at

9

2.

10

In his objections to this set of findings and recommendations plaintiff makes it

11

clear that he wants to proceed with this action solely against defendant U.S. Bank National

12

Association, as beneficiary, also known as U.S. Bank.com, N.A., and against defendant S.A.

13

Challenger, Inc., and he requests leave to amend his complaint. Both U.S. Bank National

14

Association and S.A. Challenger, Inc. are Minnesota corporations and their citizenship is

15

completely diverse from the citizenship of plaintiff, who is a California resident. While the

16

second amended complaint contains allegations referring to T.D. Service Company as a

17

defendant, this is a defect that may be cured by amendment by permitting plaintiff to file a third

18

amended complaint that omits all references to T.D. Service Company as a defendant, both in the

19

caption and in the body of the third amended complaint.1 In addition, the court is unable to

20

determine at this stage of these proceedings that plaintiff’s failure to allege that the amount in

21

controversy exceeds the sum or value of $75,000 cannot be cured by amendment. In his

22

objections to the second set of findings and recommendations plaintiff avers that his interest in

23

the property at issue is more than $500,000, suggesting amendment is possible. See ECF No. 29

24

at 3. Accordingly, for these reasons, the court declines to dismiss this action for lack of subject

25

matter jurisdiction and will grant plaintiff leave to file a third amended complaint.

26
27

1

The court makes no findings at this stage of these proceedings whether T.S. Service Company is
a necessary party to this action. See Fed. R. Civ. P. 19(a).

28
2

1

The second recommendation is based on plaintiff’s failure to serve process within

2

120 days as required by Federal Rule of Civil Procedure 4(m) and the magistrate judge’s June 11,

3

2014 order, ECF No. 18, as well as plaintiff’s failure to appear at a status conference set in that

4

order. Based on the latter failure, the magistrate judge assumes plaintiff has abandoned this

5

action. ECF No. 28 at 2. While plaintiff was properly served with notice of the status

6

conference,2 it is at this point apparent plaintiff has not abandoned this action.

7

With respect to plaintiff’s failure to serve the first amended complaint within 120

8

days, the record shows that one week after the June 11, 2014 order directing issuance of summons

9

and ordering service of the first amended complaint, the magistrate judge issued an order to show

10

cause why this action should not be dismissed for lack of subject matter jurisdiction, ECF No. 18,

11

and twenty days thereafter issued the July 8, 2014 findings and recommendations finding both the

12

first and the second amended complaint insufficient to establish diversity jurisdiction and

13

recommending dismissal for lack of subject matter jurisdiction. Under these circumstances, the

14

court will not dismiss this action based on Federal Rule of Civil Procedure 4(m). Instead, for the

15

reasons set forth in this order plaintiff will be given an opportunity to file a third amended

16

complaint. If that third amended complaint is sufficient to invoke the subject matter jurisdiction

17

of this court, the time for service of process under Federal Rule of Civil Procedure 4(m) will run

18

from the date that determination is made by the magistrate judge or by this court.

19

Plaintiff requests reassignment of this action to a new magistrate judge. That

20

request is denied as there is nothing in the record to suggest bias on the part of the assigned

21

magistrate judge.

22

2

23
24
25
26
27

In his objections, plaintiff states that he was never notified of the status conference. ECF No. 29
at 5. The record reflects that a copy of the June 11, 2014 order was served on plaintiff at his
address of record, which at that time was 1132 Sonoma Street, Sacramento, California 95815.
See ECF Nos. 11, 18. Such service constitutes adequate notice of the status conference. See
Local Rule 182(f). Plaintiff is cautioned that sanctions, including but not limited to dismissal of
this action, may be imposed for failure to comply with any court order. See Local Rule 110. The
court also notes that plaintiff has put 132 Sonoma Street, Sacramento, California 95815 as his
address on some pleadings filed with the court, including his November 26, 2014 objections. See
ECF No. 29. It is plaintiff’s responsibility to keep the court informed of his current address. See
Local Rule 182(f).

28
3

1

In accordance with the above, IT IS HEREBY ORDERED that:

2

1. The findings and recommendations filed July 8, 2014 are not adopted;

3

2. The findings and recommendations filed November 20, 2014 are not adopted;

4

3. Plaintiff is granted twenty days from the date of this order in which to file a

5

third amended complaint in accordance with this order; and

6

4. This matter is referred back to the assigned magistrate judge for further

7

proceedings.

8

DATED: March 23, 2015.

9
10

UNITED STATES DISTRICT JUDGE

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4