California Equity Management Group, Inc. v. McGihon

Filing 34

ORDER REMANDING ACTION TO STATE COURT. Signed by Judge Alsup on 4/24/2013. (whalc2, COURT STAFF) (Filed on 4/24/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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For the Northern District of California

United States District Court

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CALIFORNIA EQUITY MANAGEMENT
GROUP, INC,
Plaintiff,

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No. C 12-04394 WHA

ORDER REMANDING ACTION
TO STATE COURT

v.
PHYLLIS McGIHON,
Defendant.
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Following the trustee’s sale of defendant Phyllis McGihon’s residential property, the

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purchaser, California Equity Management Group, Inc. (“CEMG”), brought an unlawful detainer

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action against her in the Superior Court for the County of Contra Costa. Ms. McGihon, who is

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pro se, removed the action to this court in August 2012. An order denied as untimely plaintiff’s

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motion to remand and additionally required both parties to show cause why the action should not

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be remanded for lack of subject-matter jurisdiction (Dkt. No. 24).

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Plaintiff’s response did not address subject-matter jurisdiction (Dkt. No. 26). Ms.

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McGihon’s response purported to address the jurisdictional issue by concurrently filing a “Cross

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Complaint Pursuant to FRCP 13(g)” asserting federal and state law claims against E-Trade

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Wholesale Lending Corp., E-Trade Savings Bank, Bayview Loan Servicing, LLC, Seaside

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Trustee, Inc., MERS, and 20 unnamed Does (Dkt. No. 29). Neither the caption nor the substance

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of the “cross complaint” indicate that any claims are actually alleged against CEMG. Therefore,
instead of a “cross complaint,” this complaint will be construed as an attempt to docket a third-

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party complaint pursuant to FRCP 14 against the third-party defendants listed above. As of the

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date of this order, the putative third-party defendants have not been properly served with a

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summons and copy of the third-party complaint (see Dkt. No. 32) (providing proof of service by

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mail only).

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As the order to show cause noted, the original unlawful detainer complaint does not seem

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to present a federal question (Dkt. No. 24). Nor are the parties diverse, as both appear to be

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citizens of California. Neither party has directed the Court to any potential basis for original

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jurisdiction in the primary complaint.

federal law, provides subject-matter jurisdiction (Dkt. No. 28). Our court of appeals applies the

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For the Northern District of California

Ms. McGihon argues that her proposed third-party complaint, which brings claims under

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United States District Court

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“voluntary/involuntary rule,” providing that “a suit which, at the time of filing, could not have

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been brought in federal court must remain in state court unless a voluntary act of the plaintiff

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brings about a change that renders the case removable.” California v. Keating, 986 F.2d 346,

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348 (9th Cir. 1993) (internal quotations and citations omitted). Here, defendant attempts to

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prevent remand to state court by filing a third-party complaint with federal claims. A defendant

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may not create subject-matter jurisdiction by filing a third-party complaint — that is not a

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voluntary act by plaintiff. Id. at 348–49. This order finds that neither the original complaint nor

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Ms. McGihon’s proposed third-party complaint provide a basis for the exercise of federal

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jurisdiction. District courts “shall” remand state law claims where the court lacks removal

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subject-matter jurisdiction. 28 U.S.C. 1447(c). The action is hereby REMANDED TO THE

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SUPERIOR COURT FOR THE COUNTY OF CONTRA COSTA. The Clerk shall close the file.

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IT IS SO ORDERED.
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Dated: April 24, 2013.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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