Milyakov et al v. JP Morgan Chase Bank, N.A. et al

Filing 81

ORDER DENYING MOTION TO REMAND by Hon. William Alsup denying 58 Motion to Remand.(whalc2, COURT STAFF) (Filed on 12/1/2011)

1
2
3
4
5
6
7

IN THE UNITED STATES DISTRICT COURT

8
FOR THE NORTHERN DISTRICT OF CALIFORNIA
9

11
For the Northern District of California

United States District Court

10

12

Plaintiffs,

13
14
15
16
17
18

No. C 11-2066 WHA

EMIL P. MILYAKOV; MAGDALENA A.
APOSTOLOVA,

ORDER DENYING
MOTION TO REMAND

v.
JP MORGAN CHASE, N.A.; HSBC BANK USA,
N.A.; CALIFORNIA RECONVEYANCE
COMPANY; PAUL FINANCIAL, LLC;
MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC.
Defendants.
/

19
20

INTRODUCTION

21

In this foreclosure action, pro se plaintiffs move to remand this case to San Francisco

22

County Superior Court. For the reasons stated below, the motion to remand is DENIED.

23

STATEMENT

24

Pro se plaintiffs Emil Milyakov and Magdalena Apostolova filed this action in San

25

Francisco County Superior Court on April 20, 2011. The complaint alleges federal and state

26

claims all arising from the same set of operative facts relating to defendants’ alleged failure to

27

disclose the details of a mortgage loan. Defendants JP Morgan Chase Bank, N.A., California

28

Reconveyance Company, and Mortgage Electronic Registration Systems, Inc., removed the action
to federal court on April 27, 2011, based on federal-question jurisdiction, pursuant to 28 U.S.C.

1

1331, and supplemental jurisdiction pursuant to 28 U.S.C. 1367(a). Plaintiffs’ first, seventh, and

2

eighth claims for relief state claims under the Truth in Lending Act, 15 U.S.C. 1601–66, and the

3

Home Ownership and Equity Protection Act, 15 U.S.C. 1639. Claims two, three, four, five, six,

4

and nine state claims under California law, arising from the same set of operative facts as the

5

federal claims.

6

On June 29, 2011, plaintiffs filed a first amended complaint containing seven state claims

on August 2. By order dated September 2, the motion to dismiss was granted in part and denied

9

in part (Dkt. No. 35). Plaintiffs’ claims for slander of title and injunctive relief were dismissed.

10

Plaintiffs’ claims for violation of California Civil Code Section 2923.5 and Section 17200 of the

11
For the Northern District of California

and no federal claims. Defendants filed a motion to dismiss plaintiffs’ first amended complaint

8

United States District Court

7

California Business and Professions Code survived. The order converted defendants’ motion to

12

dismiss plaintiffs’ claims for wrongful foreclosure, cancellation of deed instrument, and unjust

13

enrichment into a motion for summary judgment and gave plaintiffs ten weeks from the date of

14

the order to “take expedited discovery or make some showing in which to defeat defendants’

15

demonstration of the right to foreclose and the chain of title” (Dkt. No. 35 at 8).

16

Plaintiffs took discovery. Defendants produced approximately 1900 pages of documents

17

related to the loan, including a copy of the original promissory note (Dkt. No. 69-1 at ¶ 6).

18

On September 23, 2011, plaintiffs filed a motion for leave to file a second amended

19

complaint. And on October 27, 2011, plaintiffs filed a motion to remand.

20

ARGUMENT

21

A defendant may remove a civil action from state court to federal court if original

22

jurisdiction would have existed at the time the complaint was filed, without reference to

23

subsequent amendment to the complaint. 28 U.S.C. 1441(a); see Sparta Surgical Corp. v. Nat’l

24

Ass’n of Securities Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 1998) (stating “a plaintiff may not

25

compel remand by amending a complaint to eliminate the federal question upon which removal

26

was based”). If jurisdiction existed at the time of removal, a “district court retains discretion

27

whether to exercise supplemental jurisdiction over state law claims even after all federal claims

28

are dismissed.” Lacey v. Maricopa Cnty., 649 F.3d 1118, 1137 (9th Cir. 2011).
2

1

A district court that has subject-matter jurisdiction over an action may decline to exercise
supplemental jurisdiction over that action if one of the factors enumerated in 28 U.S.C. 1367(c)

3

exists. Acri v. Varian Assoc., Inc. 114 F.3d 999, 1000 (9th Cir. 1997). When considering

4

whether to exercise supplemental jurisdiction, a court may consider judicial economy,

5

convenience and fairness to litigants, and comity. Carnegie-Mellon Univ. v. Cohill, 484 U.S 343,

6

349–50 (1998); United Mine Workers of America v. Gibbs, 383 U.S. 715, 726 (1966). A district

7

court may also “consider whether the plaintiff has engaged in any manipulative tactics when it

8

decides whether to remand a case . . . [such as] deleting all federal-law claims from the complaint

9

and requesting that the district court remand the case.” Carnegie-Mellon Univ., 484 U.S. at 357.

10

This Court has subject-matter jurisdiction over this action under 28 U.S.C. 1331. At the

11
For the Northern District of California

United States District Court

2

time the complaint was filed, it alleged claims under the Truth in Lending Act, 15 U.S.C.

12

1601–66, and the Home Ownership and Equity Protection Act, 15 U.S.C. 1639 (Compl. ¶¶ 36–39,

13

61–67). Subject-matter jurisdiction remains, even in light of plaintiffs’ amendment to the

14

complaint to omit all federal claims. Pursuant to 28 U.S.C. 1367(a), at the time of removal, the

15

Court also had supplemental jurisdiction over the related state claims which arose from the same

16

set of operative facts relating to the alleged failure to properly disclose the details of the mortgage

17

loan.

18

The question, then, is whether supplemental jurisdiction should be exercised over the

19

remaining state claims, given that no federal claims remain. Judicial economy and convenience

20

and fairness are served by this Court’s retention of jurisdiction. The undersigned judge is already

21

familiar with the facts and legal issues involved in this case and has already issued a ruling on the

22

merits. Two claims were dismissed; two claims survived, and defendants’ motion to dismiss

23

three claims was converted into a motion for summary judgment. That motion is currently

24

pending. Plaintiffs were permitted to take expedited discovery for a ten-week period,

25

commencing on September 2, 2011. Plaintiffs have taken discovery. Defendants have submitted

26

a declaration stating they spent “approximately 70 hours and billed almost $17,000.00 in fees

27

reviewing and responding to plaintiffs’ discovery requests” (Dkt. No. 69-1 at ¶ 9).

28
3

1

Plaintiffs urge that judicial economy, fairness and convenience do not weigh in favor of

2

retaining jurisdiction because the state court is competent to address the legal issues involved, the

3

majority of discovery propounded by plaintiffs has been objected to by defendants, and the case is

4

only six months old (Br. 4). The order disagrees. Judicial economy will best be served by

5

resolving the pending motion for summary judgment, the facts and legal argument, of which are

6

already familiar to the undersigned judge and not allowing the resources expended during the

7

period of expedited discovery to go to waste. This will also facilitate a timely resolution of the

8

action. If the action is remanded, the state judge will have to start all over again at square one.

9

Moreover, the undersigned is concerned that plaintiffs’ effort to remand this action after a
ruling on the motion to dismiss, discovery, and filing of a second amended complaint, may be a

11
For the Northern District of California

United States District Court

10

strategic attempt to avoid an adverse decision on the pending dispositive motion. This would be

12

improper and a waste of scarce judicial resources. The principle of comity is not violated, when,

13

as here, the balance of factors of judicial economy, fairness, and convenience tip in favor of

14

retaining jurisdiction.

15

For the foregoing reasons, the motion to remand is DENIED.

16
17

IT IS SO ORDERED.

18
19

Dated: December 1, 2011.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

20
21
22
23
24
25
26
27
28
4