Nationstar Mortgage LLC v. Delaney et al

Filing 19

ORDER by Judge Edward M. Chen granting 12 Plaintiff's Motion to Remand Case to State Court (emclc2, COURT STAFF) (Filed on 1/6/2014)

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1 2 3 4 5 UNITED STATES DISTRICT COURT 6 NORTHERN DISTRICT OF CALIFORNIA 7 8 NATIONSTAR MORTGAGE, LLC, 9 Plaintiff, ORDER GRANTING PLAINTIFF'S MOTION TO REMAND CASE TO STATE COURT v. 11 For the Northern District of California United States District Court 10 No. C-13-4857 EMC CHARLES J. DELANEY, et al., 12 Defendants. ___________________________________/ 13 14 I. INTRODUCTION 15 Before the Court is Plaintiff Nationstar Mortgage LLC’s motion to remand this action to state 16 court. The Court finds this matter suitable for disposition without a hearing and thus VACATES the 17 hearing on the motion set for January 2, 2014. The Court hereby GRANTS the motion to remand 18 and REMANDS this case to the Superior Court of California for the County of Contra Costa. 19 Nationstar’s request for attorneys’ fees is DENIED. 20 21 II. FACTUAL & PROCEDURAL BACKGROUND Nationstar filed a verified complaint for unlawful detainer against the Defendants on July 12, 22 2013. Dkt. No. 1, at 10. The complaint involves a piece of property in San Ramon, California. 23 Compl. ¶ 2. Nationstar alleges that the property was sold to them pursuant to the power of sale 24 provision contained in the deed of trust Defendants executed on the property, and in accordance with 25 California Civil Code §§ 2923.5 and 2924. Id. ¶ 4. Nationstar alleges that they became the owner of 26 the property effective on March 22, 2013. Id. 27 On May 22, 2013, Nationstar served on Defendants a written notice requiring them to vacate 28 the property within 3 days after service of the notice. Id. ¶ 6. Nationstar alleges that Plaintiffs have 1 failed to vacate the property and continue to possess the property without its permission or consent. 2 Id. 3 Defendants filed an answer to the verified complaint on September 18, 2013. Dkt. No. 1, at 27. The answer consisted of a general denial as permitted under California law. One month later, on 5 October 18, 2013, Defendants filed a notice of removal to this Court. Dkt. No. 1, at 1. On 6 November 14, 2013, Nationstar filed the instant motion to remand this action to state court. Dkt. 7 No. 12. Nationstar asserts that removal was improper on two grounds: (1) The notice of removal 8 was untimely, and (2) There is no federal subject matter jurisdiction over this suit. Defendants’ 9 opposition to this motion was due December 9, 2013, but no opposition was filed. 10 III. 11 For the Northern District of California United States District Court 4 DISCUSSION Defendants improperly removed this action. First, and most fundamentally, this Court lacks 12 jurisdiction over this action. Second, the notice of removal was untimely. Finally, as citizens of 13 California, the “forum defendant” rule precludes Defendants from removing this action from 14 California state court. 15 A. Diversity Jurisdiction Does Not Exist Over this Action 16 “If a district court lacks subject matter jurisdiction over a removed action, it has the duty to 17 remand it, for ‘removal is permissible only where original jurisdiction exists at the time of removal 18 or at the time of removal . . . .” Sparta Surgical Corp. v. Nat’l Ass’n of Securities Dealers, Inc., 159 19 F.3d 1209, 1211 (9th Cir. 1998) (quoting Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 20 523 U.S. 26 (1998)). Here, remand is required because this Court lacks subject matter jurisdiction of 21 this action. 22 In their notice of removal, Defendants assert that this Court has original jurisdiction under 28 23 U.S.C. § 1332. Dkt. No. 1, at 2. In addition to requiring complete diversity of the parties, § 1332 24 requires that the “matter in controversy exceed[] the sum or value of $75,000, exclusive of interest 25 and costs.” 28 U.S.C. § 1332(a). When an action is removed on the basis of diversity jurisdiction, 26 “the sum demanded in good faith in the initial pleading shall be deemed to be the amount in 27 controversy.” 28 U.S.C. § 1446(c)(2). However, if it is “not facially evidence from the complaint 28 that more than $75,000 is in controversy, the removing party must prove, by a preponderance of the 2 1 evidence, that the amount in controversy meets the jurisdictional threshold.” Matheson v. 2 Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (per curiam). 3 In the notice of removal, Defendants do no more than state, without supporting factual 4 allegations, that “[f]rom the face of the Complaint . . . it is apparent the amount in controversy more 5 likely than not exceeds $75,000, exclusive of interest and costs.” Dkt. No. 1, at 3. The Court 6 disagrees. Rather, it is apparent from the face of Nationstar’s complaint that this action does not 7 exceed $75,000. First, Nationstar filed its action as a “Limited Civil Case.” Under California law, 8 an unlawful detainer action brought as a “Limited Civil Case” is one where the “whole amount of 9 damages claimed is twenty-five thousand dollars . . . or less.” Cal. Code of Civ. P. 86(a)(4); see also Shoreline Assets Group, LLC v. Shin, No. C 13-1681 MMC, 2013 WL 3243909, at *1 (N.D. Cal. 11 For the Northern District of California United States District Court 10 June 26, 2013) (finding the amount in controversy not satisfied, in part, because “plaintiff filed the 12 action as a ‘Limited Civil Case’ and plaintiff is thereby limited to an award of no more than 13 $25,000.” (citation omitted)). Second, Nationstar clearly states on the first page of the complaint 14 that the “Amount Demanded Does Not Exceed $10,000.” Dkt. No. 1, at 10. Finally, in the body of 15 the complaint, Nationstar sought “[t]he reasonable value for the use and occupancy of the Property” 16 which it alleged to be “$60.00 per day.” Compl. ¶ 9. Further, in their prayer for relief, Nationstar 17 also sought “restitution and possession of the Property.” Dkt. No. 1, at 12. 18 In the face of the allegations in Nationstar’s complaint, the Court finds that Defendants have 19 failed to show by a preponderance of the evidence that the jurisdictional threshold is met. It is true 20 that this action involves the right to use and possess a piece of property and that the property itself is 21 likely worth more than $75,000. However, “in unlawful-detainer actions, the title to the property is 22 not the object of the litigation—only the right to possession.” HSBC Bank USA, Nat’l Ass’n v. 23 Jacob, No. 5:13-cv-02191-ODW, 2013 WL 6328840, at *2 (C.D. Cal. Dec. 4, 2013). Thus, in Litton 24 Loan Servicing, L.P. v. Villegas, No. C10-05478 PJH, 2011 WL 204322 (N.D. Cal. Jan. 21, 2011), 25 the Court noted that since the “unlawful detainer cause of action is concerned only with the 26 possession of the Property, damages are limited to those incident to the unlawful detention of said 27 Property.” Id. at *2. There, the Court noted that the plaintiff was only seeking $60 per day from the 28 date the notice to vacate expired through the date that the defendant relinquished possession. Id. 3 1 Accordingly, the Court found that the amount in controversy did not exceed $75,000 and that 2 diversity jurisdiction was lacking. 3 The same result obtains here. Defendants have failed to show that the amount in controversy 4 exceeds $75,000. Accordingly, there is no diversity jurisdiction over this action and removal was 5 improper. 6 B. 7 Defendants’ Notice of Removal is Defective Under 28 U.S.C. § 1446(b), a defendant “shall have 30 days after receipt by or 8 service on that defendant of the initial pleading or summons . . . to file the notice of 9 removal.” Id. § 1446(b)(2)(B). “Remand is required if a notice of removal is not filed within 30 days after the defendant receives a copy of the complaint.” Newtop v. Rhenquist, 11 For the Northern District of California United States District Court 10 No. C-94-4068-VRW, 1995 WL 23929, at *1 (N.D. Cal. Jan. 17, 1995). This requirement is 12 not jurisdictional; if a party does not move to remand the action to state court within 30 days 13 of the notice of removal, any untimeliness in the notice of removal is waived. See id. § 14 1447(c) (“A motion to remand the case on the basis of any defect other than lack of subject 15 matter jurisdiction must be made within 30 days after the filing of the notice of removal 16 under section 1446(a).”); see also Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1315 n.3 17 (9th Cir. 1998) (“Ritchey now suggests that the case was not removed within the required 18 30 day period. He waived that issue when he failed to raise it within 30 days after 19 removal.” (citation omitted)). 20 In this action, it is apparent that Defendants received Nationstar’s verified complaint 21 no later than August 9, 2013. On that date, Defendants filed a demurrer to the verified 22 complaint in state court. Dkt. No. 14-3.1 Thus, notice of removal was due on September 9, 23 2013 at the absolute latest. In fact, Defendants waited until October 18, 2013 to file the 24 notice of removal—after their demurrer was denied on September 12, 2013 (Dkt. No. 14-4, 25 26 27 28 1 Nationstar has requested that this Court take judicial notice of documents filed in the state court action showing (1) their service of the complaint; (2) Defendants’ demurrer to that complaint; (3) the state court denying the demurrer, (4) Defendants’ answer; and (5) Nationstar’s motion for summary judgment. Dkt. No. 14. This request is GRANTED. See Nextdoor.Com, Inc. v. Abhyanker, No. C-12-5667 EMC, 2013 WL 3802526, at *8 (N.D. Cal. July 19, 2013). 4 1 at 2), after they filed their answer on September 18, 2013 (Dkt. No. 14-4, at 30), and four 2 days before the state court was set to hear Nationstar’s motion for summary judgment (Dkt. 3 No. 14-6, at 2). Defendants timely raised their objection by filing a motion to remand 4 within 30 days. Dkt. No. 12-1, at 3. Because the notice of removal is clearly untimely, 5 remand is required. 6 Further, even if timely filed, Defendants’ removal of this action was still improper. jurisdiction under 28 U.S.C. § 1332 may not be removed “if any of the parties in interest 9 properly joined and served as defendants is a citizen of the State in which such action is 10 brought.” 28 U.S.C. § 1441(b)(2). “This ‘forum defendant’ rule ‘reflects the belief that 11 For the Northern District of California Under 28 U.S.C. § 1441(b), an action which otherwise meets the criteria for diversity 8 United States District Court 7 [federal] diversity jurisdiction is unnecessary because there is less reason to fear state court 12 prejudice against the defendants if one or more of them is from the forum state.’” Spencer v. 13 U.S. Dist. Court for N. Dist. of Ca., 393 F.3d 867, 870 (9th Cir. 2004) (quoting Erwin 14 Chemerinsky, Federal Jurisdiction § 5.5, at 345 (4th ed. 2003)). It is “thus clear that the 15 presence of a local defendant at the time removal is sought bars removal.” Id. Defendants 16 in their notice of removal clearly state that “Defendants Karmina J. Delaney and Charles J. 17 Delaney are individuals and residents of Contra Costa County, California.” Dkt. No. 1, at 2. 18 As a result, the notice of removal is deficient on its face. 19 /// 20 /// 21 /// 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// 5 1 2 V. CONCLUSION Because this Court lacks subject matter of this dispute and because Defendants’ 3 notice of removal was deficient, Defendant’s motion to remand is GRANTED. 4 Defendants’ motion for attorneys’ fees is DENIED. See HSBC Bank USA, N.A. v. Bryant, 5 No. 09-CV-1659-IEG, 2009 WL 3787195 (S.D. Cal. Nov. 10, 2009) (recognizing that pro se 6 litigants are “entitled to more leeway in [their] attempt to comply with the removal statute, 7 as long as it was not objectively unreasonable”). 8 9 IT IS SO ORDERED. 11 For the Northern District of California United States District Court 10 Dated: January 6, 2014 12 13 _________________________ EDWARD M. CHEN United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6

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