McCormick et al v. U.S. Bank N.A., et al

Filing 27

ORDER denying 8 Motion to Remand. Signed by Judge Anthony J. Battaglia on 8/20/12. (cge)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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CHARLENE MCCORMICK, an individual;
DOUGLAS KIDD, an individual;
SYLINA KIDD, an individual;
DOUGLAS KIDD, an individual;
ROBERT CROCKER, an individual;
WILLIAM CROCKER, an individual;
VINCENT CHAMBERS, an individual;
GERALD SCHIFF, an individual;

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Plaintiff,
v.

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U.S. Bank, N.A., a national banking
association; Temecula Valley Bank, N.A.;
Mortgage Electronic Registration Systems,
Inc.; and DOES I-XX inclusive,
Defendants.

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Civil No. 12cv00433 AJB (WMC)
ORDER DENYING PLAINTIFFS’
MOTION TO REMAND
[Doc. No. 8]

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Presently before the Court is the Plaintiffs’ Motion to Remand. (Doc. No. 8.) For the reasons set
forth below, the Court DENIES the motion.

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I.

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BACKGROUND

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On January 13, 2012, the Plaintiffs, Charlene McCormick, Douglas Kidd, Sylina Kidd, Douglas

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Kidd, Robert Crocker, William Crocker, Vincent Chambers, and Gerald Schiff (“Plaintiffs”), filed a

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Complaint against Defendant U.S. Bank. (Doc. No. 1 at 12.) They alleged various causes of action in
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12cv433

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relation to the Plaintiffs’ individual mortgage loans. These causes of action include privity of contract,

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rescission, negligence, intentional misrepresentation, conspiracy to commit civil tort, and violation of

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the business and professional code § 17200. (Id.)

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On February 17, 2012, the Defendants removed this action to federal court on the basis of

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diversity jurisdiction and federal question jurisdiction. (Id. at 3-4.) On March 9, 2012, the Plaintiffs filed

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the instant motion to remand. (Doc. No. 8.) They then filed a First Amended Complaint (“FAC”) on

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March 16, 2012. (Doc. No. 11.) In the FAC, the Plaintiffs added Temecula Valley Bank (a non-diverse

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party) and Mortgage Electronic Registration Systems as Defendants. (Id. at 5.) The FAC also removed

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the § 17200 cause of action, which had been the basis for federal question jurisdiction. (Doc. No. 1 at 4.)

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On June 27, 2012, the Defendants filed an opposition arguing that remand was not warranted.

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(Doc. No. 18.) The Plaintiffs failed to file a reply before the Court’s July 9, 2012 deadline. However,

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upon review of the parties’ arguments, the Court required more information regarding whether the

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action had retained its diversity jurisdiction after the addition of a non-diverse Defendant in the FAC.

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Accordingly, the Court ordered the Plaintiffs to file a reply addressing diversity jurisdiction. (Doc. No.

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22.) The Court specifically asked the Plaintiffs to demonstrate why Defendant Temecula Valley Bank

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was a proper party and why it had not been included in the original Complaint. (Id. at 2.) The Defen-

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dants were given leave to file a sur-reply if they so chose. (Id. at 2.) On July 30, 2012, the Plaintiffs filed

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their reply (Doc. No. 24), and on August 8, 2012, the Defendants filed their sur-reply. (Doc. No. 26.)

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II.

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LEGAL STANDARD

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An action is removable to federal court if it might have been brought there originally. See 28

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U.S.C. § 1441(a) (2009). The propriety of the removal may be tested in federal court by a motion to

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remand. See 28 U.S.C. § 1447(c). Remand of a case to state court after removal is appropriate when

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removal is procedurally improper or when there are no grounds for federal jurisdiction, whether

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federal-question or diversity. Id.; Baker v. BDO Seidman, L.L.P., 390 F. Supp. 2d 919, 920 (N.D. Cal.

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2005) (noting that federal jurisdiction is “traditionally predicated upon diversity jurisdiction or federal

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question jurisdiction”). The removal statute is strictly construed against removal jurisdiction, and the

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court must reject federal jurisdiction if there is any doubt as to whether removal was proper. Matheson
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v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (“Where doubt regarding the

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right to removal exists, a case should be remanded to state court.”). The party seeking removal bears the

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burden of proving the propriety of removal. Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996).

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III.

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DISCUSSION

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A.

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Abstention
The Plaintiffs argue that the action should be remanded based upon abstention principles. (Doc.

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No. 24 at 1.) They say that the Colorado River doctrine of abstention requires the Court to remand the

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action back to state court. (Doc. No. 8 at 13.) The Plaintiffs cite authority that, where the jurisdiction of

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one court has first attached, a second court cannot have simultaneous jurisdiction over the same

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property. (Id. at 4.) The Plaintiffs argue that since this action was brought in state court originally and

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deals with property, the Court cannot have jurisdiction because the action has already attached to state

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court. (Id. at 4-5.)

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The Plaintiffs misunderstand the Colorado River doctrine of abstention. In the interest of wise

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judicial administration, federal courts may stay a case involving a question of federal law where a

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concurrent state action is pending in which the identical issues are raised. Colorado River Water

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Conservation Dist. v. United States, 424 U.S. 800, 815 (1976). Here, the Plaintiffs have failed to identify

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any such parallel proceeding. The instant action was originally filed in state court, and the Defendants

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removed the action to federal court based on diversity and federal question jurisdiction. The Court is

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unaware of any remaining parallel action in the state court with identical issues.

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“Abstention from the exercise of federal jurisdiction is the exception, not the rule.” Id. at 813.

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The doctrine of abstention is “an extraordinary and narrow exception.” Id. at 813. “Abdication of the

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obligation to decide cases can be justified under this doctrine only in the exceptional circumstances

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where the order to the parties to repair to the state court would clearly serve an important countervailing

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interest.” Id. at 813. The Court therefore declines to remand the action based on the abstention doctrine.

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B.

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Diversity Jurisdiction
As noted above, on February 17, 2012, the Defendants removed this action to federal court on

the basis of diversity jurisdiction and federal question jurisdiction. (Doc. No. 1 at 3-4.) Shortly after
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filing their instant motion to remand, the Plaintiffs filed a First Amended Complaint adding Temecula

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Valley Bank—a non-diverse party—as a Defendant and removing the § 17200 claim that had been the

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basis of federal question jurisdiction. (Doc. No. 11 at 5.) The Court, concerned with the possibility that

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the Plaintiffs added Temecula Valley Bank solely to destroy diversity jurisdiction, ordered the Plaintiffs

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to file a reply explaining why Temecula Valley Bank was a proper party and why it was not included in

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the original Complaint. (Doc. No. 22.)

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In their reply, Plaintiffs argue that diversity jurisdiction is not an issue and that the action should

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instead be remanded based on the abstention principles discussed above. (Doc. No. 24 at 1.) The

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Plaintiffs nonetheless explain that they added Defendant Temecula Valley Bank “out of an abundance of

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caution” due to their confusion over the true parties in the matter. (Id. at 2.) However, the Plaintiffs

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neglect to explain why the Defendant was not included in the original Complaint.

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Because the Plaintiffs do not refute the existence of diversity jurisdiction and fail to give

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adequate reasons why their newly added, non-diverse Defendant is a proper party, the Court finds that

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diversity jurisdiction remains intact.

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IV.

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CONCLUSION

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For reasons stated herein, the Court DENIES the Plaintiffs’ motion to remand.

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IT IS SO ORDERED.

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DATED: August 20, 2012

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Hon. Anthony J. Battaglia
U.S. District Judge

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