Naqvi v. U.S. Medical Home Inc et al

Filing 49

ORDER GRANTING PLAINTIFF'S MOTION TO REMAND AND VACATING HEARINGS. Signed by Judge Alsup on 3/31/2014. (whalc2, COURT STAFF) (Filed on 3/31/2014).

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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SYED S. NAQVI,

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For the Northern District of California

United States District Court

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Plaintiff,

No. C 14-00168 WHA

v.
US MEDICAL HOME, INC., HARVARD
BUSINESS SERVICES, INC., MICHAEL
KESELICA, GRACE KULIK, SEAN HEALEY
(in their individual and official capacities), and
DOES 1 through 50, inclusive,

ORDER GRANTING
PLAINTIFF’S MOTION
TO REMAND AND
VACATING HEARINGS

Defendants.
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INTRODUCTION

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In this fraud action, plaintiff moves to remand to state court based on lack of consent

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of all defendants to the removal. To the extent stated below, plaintiff’s motion is GRANTED.

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The hearings on the remaining motions in this action, set for April 10, May 1, and May 8, are

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hereby VACATED AS MOOT.

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STATEMENT
Pro se plaintiff, Syed Naqvi, filed this action in state court in November 2013 seeking

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damages for intentional misrepresentation and negligence allegedly arising from a $40,000

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investment in US Medical Home, Inc. (“USMH”). Defendants in this action are (1) USMH;

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(2) Harvard Business Services, Inc.; (3) Michael Keselica; (4) Grace Kulik; (5) Sean Healey;

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and (6) Does 1–50. The action was removed on January 13, 2014, by defendant Keselica on the

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basis of diversity jurisdiction. 28 U.S.C. 1332.

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Plaintiff moves to remand this action to the Superior Court of California for the County

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of Contra Costa in January 2014. The motion is premised on the grounds that: (1) Keselica

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failed to obtain the unanimous consent of all defendants; (2) USMH’s consent to removal was

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improper; (3) the amount in controversy is only $40,000; and (4) the removal was untimely.

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Oppositions were due by March 11. None were filed. This order need only address whether

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Keselica’s notice of removal was procedurally defective with regard to the unanimity

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requirement.

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For the Northern District of California

United States District Court

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ANALYSIS
The central issue is whether all defendants properly consented to the removal. “If the

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district court discovers that all defendants have not joined or consented to removal, it must

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remand the case.” Hafiz v. Greenpoint Mortg. Funding, Inc., 652 F. Supp. 2d 1050, 1052 (N.D.

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Cal. 2009). Section 1446(b) of the United States Code states:

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The notice of removal of a civil action or proceeding shall be filed
within 30 days after the receipt by the defendant, through service
or otherwise, of a copy of the initial pleading . . . When a civil
action is removed solely under section 1441(a), all defendants who
have been properly joined and served must join in or consent to the
removal of the action.

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“In the Ninth Circuit, removal is procedurally defective if there is a lack of ‘unanimity’ between
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co-defendants.” Hafiz, 652 F. Supp. 2d at 1052. A narrow exception to the unanimity rule is
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recognized where removal consent is not obtained from “nominal, unknown or fraudulently
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joined parties.” United Computer Sys., Inc. v. AT & T Corp., 298 F.3d 756, 762 (9th Cir. 2002).
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Barring this exception, all defendants must either join or consent within thirty days to the
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removal notice. 28 U.S.C. 1446(b). The removing party must exercise due diligence to
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determine whether other defendants have been served and has the burden of affirmatively
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explaining the absence of any co-defendants in the event that fewer than all co-defendants have
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joined in a removal action. Orozco v. EquiFirst Corp., No. 08-8064, 2008 WL 5412364, at *1
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(C.D. Cal. 2008); Prize Frize, Inc. v. Matrix (U.S.) Inc., 167 F.3d 1261, 1266 (9th Cir. 1999),
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overruled on other grounds by Abrego Abrego v. Dow Chemical Co., 443 F.3d 676, 680 (9th Cir.

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2006).

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On the record, the removal was defective because Keselica failed to obtain joinder or

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consent of all defendants who had been served at the time of removal. Harvard Business

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Services never joined or consented to the removal. This alone is enough to remand.

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In the notice of removal, Keselica alleges that service has yet to be sought for defendants

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Kulik, Healey and Harvard Business Services. Not so. A proof of service of summons indicates

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that Harvard Business Services (who also allegedly acts as USMH’s agent for service) was

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served on December 2, more than a month before Keselica filed his notice of removal (Dkt.
No. 25, Exh. 4). Keselica does not allege what due diligence he undertook, if any, to determine

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For the Northern District of California

United States District Court

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whether other defendants had been served. As a purported director and shareholder of USMH,

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Keselica should have first attempted to contact USMH’s agent for service, Harvard Business

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Services, to determine whether it had been served. Given these facts — and the lack of

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opposition to plaintiff’s motion for remand — this order finds that Keselica did not perform

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the requisite due diligence to ascertain if other defendants had been served.

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In addition to Harvard Business Services’ lack of consent, USMH’s “consent” was

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improper because it was submitted by Keselica, allegedly in his capacity as a USMH director

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and shareholder. There are two problems. One is a matter of corporate governance. A

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shareholder and a director do not have authority to act for the corporation. A duly adopted board

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resolution or an action by an officer within the scope of his or her authority is required. Another

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is who can represent a corporation in court. Local Rule 3-9(b) states that “[a] corporation,

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unincorporated association, partnership or other such entity may appear only through a member

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of the bar of this Court.” Non-attorneys are barred from representing a corporation. Here,

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defendant USMH is a corporation within the meaning of Local Rule 3-9(b), and only a member

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of this district’s bar may represent USMH. Nothing in the record indicates that Keselica is an

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attorney or may represent USMH by filing a consent to removal on its behalf.

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As for defendant Kulik, she consented to the removal. Her consent, however, is moot
because all defendants must consent to the removal.
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The parties dispute whether Healey was served. Plaintiff provided a proof of service of

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summons on Healey at USMH’s address in Washington, D.C., but Keselica alleges that Healey

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is not in Washington and cannot be found or served at USMH’s Washington address as he is no

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longer affiliated with USMH. Regardless, the order bases its finding on the procedural defect

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on Keselica’s failure to obtain Harvard Business Services’ joinder or consent to the notice of

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removal and Keselica’s improper representation of USMH. Accordingly, the motion to remand

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is GRANTED.

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CONCLUSION

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To the extent stated above, plaintiff’s motion to remand is GRANTED. The hearings
on the remaining motions in this action, set for April 10, May 1, and May 8, are hereby

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For the Northern District of California

United States District Court

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VACATED AS MOOT. The action shall be remanded to the Superior Court of California for the

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County of Contra Costa.

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IT IS SO ORDERED.

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Dated: March 31, 2014.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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