Manikan v. Pacific Ridge Neighborhood Homewoners Association et al

Filing 20

ORDER Denying 5 Motion to Remand. Signed by Judge Roger T. Benitez on 7/10/2017. (knb)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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VINCENT MANIKAN,

Case No.: 17-cv-00467-BEN-BLM
Plaintiff,

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v.

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ORDER DENYING MOTION FOR
REMAND

PACIFIC RIDGE NEIGHBORHOOD
HOMEOWNERS ASSOCIATION, N.N.
JAESCHKE, INC., PETERS &
FREEDMAN, L.L.P., AND DOES 1-10,

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Defendants.

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Before the Court is Plaintiff’s Motion to Remand to San Diego County Superior

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Court. Specifically, Plaintiff argues that the Notice of Removal filed by Defendants

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Pacific Ridge Neighborhood Homeowners Association (“Pacific Ridge”) and N.N.

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Jaeschke, Inc. (“Jaeschke”) is procedurally defective, and that this Court lacks subject

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matter jurisdiction over Plaintiff’s claims. Defendants Pacific Ridge and Jaeschke

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contest both of these assertions. Defendant Peters & Freedman, L.L.P. (“Peters &

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Freedman”) did not join in the motion. Upon consideration of the arguments and law, the

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Court DENIES Plaintiff’s Motion to Remand.

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///

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17-cv-00467-BEN-BLM

I. BACKGROUND1

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On July 20, 2012, Plaintiff filed a bankruptcy case in the U.S. Bankruptcy Court

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for the Southern District of California. (Compl. ¶ 21, ECF No. 1). Plaintiff scheduled a

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claim held by Pacific Ridge in his bankruptcy case, with Pacific Ridge alleging arrears

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owed in the amount of $3,047.04. (Id. ¶ 22). Defendant Jaeschke filed a Proof of Claim

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in the bankruptcy case as a collection agent for Pacific Ridge. (Id. ¶ 25). On November

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24, 2015, the Chapter 13 Trustee in Plaintiff’s bankruptcy case filed a Notice of Final

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Cure Payment and Completion of Payments Under the Plan, and the parties were notified

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that Plaintiff had repaid all arrears due. (Id. ¶ 28).
Plaintiff’s instant claims arise from one incident which took place on September 2,

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2016, when an unknown male process server broke through Plaintiff’s back gate and

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began pounding on the windows of Plaintiff’s house. (Id. ¶¶ 32-35). The police were

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called and, after their arrival, the unknown male identified himself as an off-duty police

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officer hired to serve Plaintiff with a Notice of Default (“NOD”) on behalf of Pacific

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Ridge. (Id. ¶¶ 36-37). The NOD had a stamped recordation date of April 9, 2012 and

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cited a balance owed of $2,597.04. (Id. ¶¶ 38, 40). Across the top of the document, the

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NOD identified Peters & Freedman as “acting in the function of a debt collector.” (Id. ¶

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39).

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A few days later, Plaintiff spoke to a representative from Peters & Freedman. (Id.

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¶ 42). Plaintiff explained that he had repaid all pre-bankruptcy arrears due to Pacific

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Ridge. (Id.) The representative explained that, according to her records, the arrears

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balance on the NOD was correct and that amount was still due to Pacific Ridge.

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Plaintiff filed a complaint in San Diego County Superior Court on February 1,

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2017, alleging two claims for relief. The first claims alleges a violation of the Fair Debt

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Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., against Defendant Peters

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The Court is not making any findings of fact, merely summarizing the relevant factual
and procedural information to evaluate the motion at hand.
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& Freedman. The second claim alleges a violation of the Rosenthal Fair Debt Collection

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Practices Act (“RFDCPA”), California Civil Code §§ 1788-1788.32, against all

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Defendants.

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Defendants Pacific Ridge and Jaeschke filed a Notice of Removal on March 7,

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2017, based on 28 U.S.C. §§ 1331, 1441, and 1446. Paragraph seven of the Notice states:

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“On information and belief, after conferring with counsel for Peters & Freedman, L.L.P.

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regarding the grounds for removal, Pacific Ridge and N.N. Jaeschke have no reason to

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believe that Peters & Freedman, L.L.P. opposes the instant notice of removal.” (Notice

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of Rem., ECF No. 1) (emphasis added).

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On April 6, 2017, Plaintiff filed the instant Motion for Remand. Plaintiff argues

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that Defendants’ Notice of Removal is defective because Peters & Freedman, L.L.P. did

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not affirmatively consent to the removal. Plaintiff further argues that this Court does not

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have original subject matter jurisdiction over Plaintiff’s claims against Defendants Pacific

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Ridge and Jaeschke because those claims were based in California law. Id. Defendants

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Pacific Ridge and Jaeschke oppose the motion. Defendants contend that the Notice of

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Removal is not defective because Peters & Freedman never objected to removal and have

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implicitly consented to federal jurisdiction by filing a motion to dismiss under Federal

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Rule of Civil Procedure 12(b)(6). Defendants further argue that this Court has original

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subject matter jurisdiction because Plaintiff included a federal claim in his complaint.

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II. ANALYSIS
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Procedural Defects in the Notice of Removal
The right of a defendant to remove a civil action to federal court is based in statute.

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Libhart v. Santa Monica Diary Co., 592 F.2d 1062, 1064 (9th Cir. 1979). The removal

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statute, 28 U.S.C. § 1441, allows defendants to remove when a case presents a federal

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question or is between citizens of different states. 28 U.S.C. §§ 1441(a), (b). However,

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the removing party must comply with certain procedural mandates. At issue here is the

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“rule of unanimity,” which requires that all properly served and joined defendants “must

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join in or consent to the removal.” 28 U.S.C § 1446(b)(2)(A). Where fewer than all the
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defendants have joined in a removal action, the removing party has the burden under §

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1446(a) to explain affirmatively the absence of any co-defendants in the notice of

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removal. Prize Frize, Inc. v. Matrix (U.S.) Inc., 167 F.3d 1261, 1266 (9th Cir. 1999),

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superseded by statute on other grounds in Abrego v. The Dow Chem. Co., 443 F.3d 676,

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681 (9th Cir. 2006). The party invoking the court’s jurisdiction bears the burden of

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demonstrating that removal was proper. Prize Frize, 167 F.3d at 1266. The removal

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statute is strictly construed against removal, and all doubts regarding jurisdiction are

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resolved in favor of remand. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

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In Proctor v. Vishay Intertechnology Inc., 584 F.3d 1208, 1224 (9th Cir. 2009), the

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Ninth Circuit first considered how the unanimity requirement could be met. There, one

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defendant filed a timely notice a removal indicating that “[a]ll defendants consent to the

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removal of this action,” but the other defendant failed to timely file a written notice

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stating its joinder. The court noted that no federal rule or statute specifically explains the

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particular manner in which a co-defendants’ joinder must be expressed and, as such, it

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looked to the general principles that govern procedures for removal and attorney

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representations to district courts under Federal Rule of Civil Procedure 11. The Ninth

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Circuit concluded that “the filing of a notice of removal can be effective without

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individual consent documents on behalf of each defendant.” Id. at 1225. “One

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defendant’s timely removal notice containing an averment of the other defendants’

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consent and signed by an attorney of record is sufficient.” Id.

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In this case, Plaintiff contends that paragraph seven of Pacific Ridge and

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Jaeschke’s Notice of Removal is insufficient to meet the Proctor standard. Plaintiff

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asserts that the Notice’s language stating that Pacific Ridge and Jaeschke have “no reason

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to believe that Peters & Freedman opposes the instant notice of removal” is not sufficient

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because it is not an affirmative statement that all defendants consent to removal. This

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argument is not without merit.

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Defendants Pacific Ridge and Jaeschke could have simply made the averment of
consent in the language prescribed by the Ninth Circuit. Plaintiff also points out, and this
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Court takes note, that Peters & Freedman have not joined in the instant motion or made

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any declarations to support its co-Defendants’ contention that Peters & Freedman

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consented to removal. An averment that the defendant has “no reason to believe” that its

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co-defendant objects is not an averment of consent. Accordingly, the Court finds that the

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Notice of Removal is facially deficient. This, however, is not the end of the analysis.

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Even where a notice of removal is technically deficient, remand is not

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automatically required. The rule of unanimity in 28 U.S.C. § 1446(b)(2)(A) is a

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procedural requirement, not a jurisdictional prerequisite. See Soliman v. Philip Morris,

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311 F.3d 966, 970 (9th Cir. 1998). “Procedural requirements exist primarily for the

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protection of the parties.” Corona-Contreras v. Gruel, 857 F.3d 1025, 1028-29 (9th Cir.

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2017) (citing Kelton Arms Condo. Owners Ass’n, Inc. v. Homestead Ins. Co., 346 F.3d

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1190, 1192 (9th Cir. 2003)). “[A] procedural defect existing at the time of removal but

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cured prior to entry of judgment does not warrant reversal and remand of the matter to

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state court.” Soliman, 311 F.3d at 970-71 (citing Parrino v. FHP, Inc., 146 F.3d 699, 703

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(9th Cir. 1998)).

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Where consent is not explicit, courts have considered other indications of non-

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removing defendants’ consent to removal. In Hernandez v. Six Flags Magic Mountain,

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Inc., 688 F. Supp. 560, 562 (C.D. Cal. 1988), the district court found that by filing an

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answer to the complaint in federal court, the non-removing defendant “manifested its

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assent” to removal. In another case, the district court again took note that the non-

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removing defendant filed an answer after removal, rather than oppose removal. Gerawan

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Farming, Inc., v. Worrel & Worell, No. 1:10-cv-02011, 2011 WL 202453, at *2 (E.D.

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Cal. Jan. 20, 2011). The non-removing defendant’s “consent to removal was further

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evidence[d] by discussions between counsel weeks prior to filing of the Notice of

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Removal,” in which its counsel notified removing defendant’s counsel that his client

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consented to removal. Id. at *3. Furthermore, in Cardroom International LLC v.

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Scheinberg, Inc., No. CV 12-02870, 2012 WL 263330, at *6 (C.D. Cal. June 18, 2012),

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the district court did not find fault with the unanimity requirement where one of the non5
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removing defendants filed a Rule 12(b)(1) motion after removal. And, in Proctor, the

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Ninth Circuit considered the lack of objection from the non-removing defendant

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important in denying remand. Proctor, 584 F.3d at 1225.

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Here, Peters & Freedman did not join in the Notice of Removal, nor has it joined

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its co-Defendants’ Opposition to Motion for Remand. However, Pacific Ridge and

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Jaeschke indicated in their Notice of Removal that they “conferred” with counsel from

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Peters & Freedman before filing their Notice of Removal and that Peters & Freedman did

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not oppose removal. Pacific Ridge and Jaeschke’s counsel signed that Notice under

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threat of Rule 11 sanctions. Furthermore, Peters & Freedman never objected to the

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removal and, instead, filed a motion to dismiss under Rule 12(b)(6) within the time

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period given to oppose removal. Given these circumstances, Peters & Freedman has

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manifested its consent to removal. See Proctor, 584 F.3d at 1225 (explaining that the

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availability of sanctions and opportunity to object to removal “mitigate concerns that one

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defendant might falsely state the other defendants’ consent, or that one defendant might

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game the system by silently allowing another to remove and, if the federal forum proves

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disadvantageous, belatedly object that he had not consented.”).

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II.

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Subject Matter Jurisdiction
With the issue of consent resolved, the remaining issue is whether the Court has

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subject matter jurisdiction. Plaintiff argues that the Court lacks jurisdiction because the

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complaint does not allege any federal claims against removing Defendants Pacific Ridge

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and Jaeschke and, instead, only alleges claims against them based in California law. The

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Court disagrees and finds that it has subject matter jurisdiction over Plaintiff’s claims.

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The existence of federal question jurisdiction is determined from the face of the

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complaint. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). Federal courts hold

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original jurisdiction over those cases in which the complaint establishes that federal law

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creates the cause of action for plaintiff’s claims, thereby conferring original jurisdiction

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under 28 U.S.C. § 1441. Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust

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for S. Cal., 463 U.S. 1, 22 (1983). Once federal court jurisdiction is established,
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supplemental jurisdiction is also established over state law claims that are “so related to

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the claims in the action within original jurisdiction that they form part of the same case or

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controversy.” 28 U.S.C. § 1367(a).

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Although Plaintiff rightfully argues that his California state law claims do not

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create subject matter jurisdiction, his claim based on federal law does. “The threshold

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requirement for removal jurisdiction under 28 U.S.C. § 1441 is a finding that the

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complaint contains a cause of action that is within the original jurisdiction of the district

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court.” Ansley v. Ameriquest Mortg. Co., 340 F.3d 858, 861 (9th Cir. 2003). The

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plaintiff is the “master of his complaint” and may avoid federal jurisdiction by relying

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exclusively on state law. Balcorta v. Twentieth Century-Fox Film Corp., 208 F.3d 1102,

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1106 (9th Cir. 2000). Plaintiff alleges only two claims: one based in federal law under

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15 U.S.C. § 1692 and one based in California law under California Civil Code § 1788.

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Thus, this is a straightforward example of a complaint that “contains a cause of action

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that is within the original jurisdiction of the district court.” Ansley, 340 F.3d at 861. In

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turn, the Court exercises supplemental jurisdiction over Plaintiff’s state law claims.

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III. CONCLUSION

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For the reasons set forth above, Plaintiff’s Motion for Remand is DENIED.

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IT IS SO ORDERED.

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Dated: July 10, 2017

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