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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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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NATIONSTAR MORTGAGE, LLC,

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Plaintiff,
ORDER GRANTING PLAINTIFF'S
MOTION TO REMAND CASE TO
STATE COURT

v.

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For the Northern District of California

United States District Court

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No. C-13-4857 EMC

CHARLES J. DELANEY, et al.,

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Defendants.
___________________________________/

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I.

INTRODUCTION

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Before the Court is Plaintiff Nationstar Mortgage LLC’s motion to remand this action to state

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court. The Court finds this matter suitable for disposition without a hearing and thus VACATES the

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hearing on the motion set for January 2, 2014. The Court hereby GRANTS the motion to remand

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and REMANDS this case to the Superior Court of California for the County of Contra Costa.

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Nationstar’s request for attorneys’ fees is DENIED.

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II.

FACTUAL & PROCEDURAL BACKGROUND

Nationstar filed a verified complaint for unlawful detainer against the Defendants on July 12,

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2013. Dkt. No. 1, at 10. The complaint involves a piece of property in San Ramon, California.

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Compl. ¶ 2. Nationstar alleges that the property was sold to them pursuant to the power of sale

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provision contained in the deed of trust Defendants executed on the property, and in accordance with

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California Civil Code §§ 2923.5 and 2924. Id. ¶ 4. Nationstar alleges that they became the owner of

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the property effective on March 22, 2013. Id.

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On May 22, 2013, Nationstar served on Defendants a written notice requiring them to vacate

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the property within 3 days after service of the notice. Id. ¶ 6. Nationstar alleges that Plaintiffs have

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failed to vacate the property and continue to possess the property without its permission or consent.

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Id.

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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

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October 18, 2013, Defendants filed a notice of removal to this Court. Dkt. No. 1, at 1. On

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November 14, 2013, Nationstar filed the instant motion to remand this action to state court. Dkt.

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No. 12. Nationstar asserts that removal was improper on two grounds: (1) The notice of removal

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was untimely, and (2) There is no federal subject matter jurisdiction over this suit. Defendants’

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opposition to this motion was due December 9, 2013, but no opposition was filed.

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III.

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For the Northern District of California

United States District Court

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DISCUSSION

Defendants improperly removed this action. First, and most fundamentally, this Court lacks

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jurisdiction over this action. Second, the notice of removal was untimely. Finally, as citizens of

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California, the “forum defendant” rule precludes Defendants from removing this action from

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California state court.

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A.

Diversity Jurisdiction Does Not Exist Over this Action

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“If a district court lacks subject matter jurisdiction over a removed action, it has the duty to

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remand it, for ‘removal is permissible only where original jurisdiction exists at the time of removal

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or at the time of removal . . . .” Sparta Surgical Corp. v. Nat’l Ass’n of Securities Dealers, Inc., 159

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F.3d 1209, 1211 (9th Cir. 1998) (quoting Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach,

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523 U.S. 26 (1998)). Here, remand is required because this Court lacks subject matter jurisdiction of

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this action.

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In their notice of removal, Defendants assert that this Court has original jurisdiction under 28

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U.S.C. § 1332. Dkt. No. 1, at 2. In addition to requiring complete diversity of the parties, § 1332

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requires that the “matter in controversy exceed[] the sum or value of $75,000, exclusive of interest

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and costs.” 28 U.S.C. § 1332(a). When an action is removed on the basis of diversity jurisdiction,

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“the sum demanded in good faith in the initial pleading shall be deemed to be the amount in

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controversy.” 28 U.S.C. § 1446(c)(2). However, if it is “not facially evidence from the complaint

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that more than $75,000 is in controversy, the removing party must prove, by a preponderance of the

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evidence, that the amount in controversy meets the jurisdictional threshold.” Matheson v.

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Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (per curiam).

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In the notice of removal, Defendants do no more than state, without supporting factual

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allegations, that “[f]rom the face of the Complaint . . . it is apparent the amount in controversy more

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likely than not exceeds $75,000, exclusive of interest and costs.” Dkt. No. 1, at 3. The Court

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disagrees. Rather, it is apparent from the face of Nationstar’s complaint that this action does not

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exceed $75,000. First, Nationstar filed its action as a “Limited Civil Case.” Under California law,

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an unlawful detainer action brought as a “Limited Civil Case” is one where the “whole amount of

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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.

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For the Northern District of California

United States District Court

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June 26, 2013) (finding the amount in controversy not satisfied, in part, because “plaintiff filed the

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action as a ‘Limited Civil Case’ and plaintiff is thereby limited to an award of no more than

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$25,000.” (citation omitted)). Second, Nationstar clearly states on the first page of the complaint

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that the “Amount Demanded Does Not Exceed $10,000.” Dkt. No. 1, at 10. Finally, in the body of

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the complaint, Nationstar sought “[t]he reasonable value for the use and occupancy of the Property”

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which it alleged to be “$60.00 per day.” Compl. ¶ 9. Further, in their prayer for relief, Nationstar

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also sought “restitution and possession of the Property.” Dkt. No. 1, at 12.

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In the face of the allegations in Nationstar’s complaint, the Court finds that Defendants have

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failed to show by a preponderance of the evidence that the jurisdictional threshold is met. It is true

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that this action involves the right to use and possess a piece of property and that the property itself is

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likely worth more than $75,000. However, “in unlawful-detainer actions, the title to the property is

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not the object of the litigation—only the right to possession.” HSBC Bank USA, Nat’l Ass’n v.

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Jacob, No. 5:13-cv-02191-ODW, 2013 WL 6328840, at *2 (C.D. Cal. Dec. 4, 2013). Thus, in Litton

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Loan Servicing, L.P. v. Villegas, No. C10-05478 PJH, 2011 WL 204322 (N.D. Cal. Jan. 21, 2011),

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the Court noted that since the “unlawful detainer cause of action is concerned only with the

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possession of the Property, damages are limited to those incident to the unlawful detention of said

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Property.” Id. at *2. There, the Court noted that the plaintiff was only seeking $60 per day from the

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date the notice to vacate expired through the date that the defendant relinquished possession. Id.

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Accordingly, the Court found that the amount in controversy did not exceed $75,000 and that

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diversity jurisdiction was lacking.

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The same result obtains here. Defendants have failed to show that the amount in controversy

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exceeds $75,000. Accordingly, there is no diversity jurisdiction over this action and removal was

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improper.

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B.

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Defendants’ Notice of Removal is Defective
Under 28 U.S.C. § 1446(b), a defendant “shall have 30 days after receipt by or

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service on that defendant of the initial pleading or summons . . . to file the notice of

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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,

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For the Northern District of California

United States District Court

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No. C-94-4068-VRW, 1995 WL 23929, at *1 (N.D. Cal. Jan. 17, 1995). This requirement is

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not jurisdictional; if a party does not move to remand the action to state court within 30 days

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of the notice of removal, any untimeliness in the notice of removal is waived. See id. §

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1447(c) (“A motion to remand the case on the basis of any defect other than lack of subject

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matter jurisdiction must be made within 30 days after the filing of the notice of removal

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under section 1446(a).”); see also Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1315 n.3

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(9th Cir. 1998) (“Ritchey now suggests that the case was not removed within the required

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30 day period. He waived that issue when he failed to raise it within 30 days after

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removal.” (citation omitted)).

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In this action, it is apparent that Defendants received Nationstar’s verified complaint

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no later than August 9, 2013. On that date, Defendants filed a demurrer to the verified

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complaint in state court. Dkt. No. 14-3.1 Thus, notice of removal was due on September 9,

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2013 at the absolute latest. In fact, Defendants waited until October 18, 2013 to file the

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notice of removal—after their demurrer was denied on September 12, 2013 (Dkt. No. 14-4,

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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).

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at 2), after they filed their answer on September 18, 2013 (Dkt. No. 14-4, at 30), and four

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days before the state court was set to hear Nationstar’s motion for summary judgment (Dkt.

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No. 14-6, at 2). Defendants timely raised their objection by filing a motion to remand

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within 30 days. Dkt. No. 12-1, at 3. Because the notice of removal is clearly untimely,

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remand is required.

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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

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properly joined and served as defendants is a citizen of the State in which such action is

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brought.” 28 U.S.C. § 1441(b)(2). “This ‘forum defendant’ rule ‘reflects the belief that

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For the Northern District of California

Under 28 U.S.C. § 1441(b), an action which otherwise meets the criteria for diversity

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United States District Court

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[federal] diversity jurisdiction is unnecessary because there is less reason to fear state court

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prejudice against the defendants if one or more of them is from the forum state.’” Spencer v.

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U.S. Dist. Court for N. Dist. of Ca., 393 F.3d 867, 870 (9th Cir. 2004) (quoting Erwin

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Chemerinsky, Federal Jurisdiction § 5.5, at 345 (4th ed. 2003)). It is “thus clear that the

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presence of a local defendant at the time removal is sought bars removal.” Id. Defendants

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in their notice of removal clearly state that “Defendants Karmina J. Delaney and Charles J.

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Delaney are individuals and residents of Contra Costa County, California.” Dkt. No. 1, at 2.

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As a result, the notice of removal is deficient on its face.

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V.

CONCLUSION

Because this Court lacks subject matter of this dispute and because Defendants’

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notice of removal was deficient, Defendant’s motion to remand is GRANTED.

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Defendants’ motion for attorneys’ fees is DENIED. See HSBC Bank USA, N.A. v. Bryant,

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No. 09-CV-1659-IEG, 2009 WL 3787195 (S.D. Cal. Nov. 10, 2009) (recognizing that pro se

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litigants are “entitled to more leeway in [their] attempt to comply with the removal statute,

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as long as it was not objectively unreasonable”).

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IT IS SO ORDERED.

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For the Northern District of California

United States District Court

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Dated: January 6, 2014

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_________________________
EDWARD M. CHEN
United States District Judge

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