PNC Bank, National Association v. Rencher American Manor LLC et al

Filing 10

MEMORANDUM DECISION AND ORDER granting 3 Motion to Remand to State Court; finding as moot 4 Motion to Expedite; finding as moot 9 Motion for TRO; finding as moot 9 Motion for Temporary Injunction. This case shall be REMANDED to state court. T he Court will retain jurisdiction in this matter for the sole purpose of determining that amount of fees and costs awarded to Plaintiff. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by cjm)

PNC Bank, National Association v. Rencher American Manor LLC et al

Doc. 10

UNITED STATES DISTRICT COURT F O R THE DISTRICT OF IDAHO

P N C BANK, National Association, C a s e No. 4:10-cv-00421-BLW Plaintiff, v. R E N C H E R / AMERICAN MANOR, LLC, a n Idaho limited liability company; 151 F A M IL Y TRUST; PACIFIC COAST IN V E S T M E N T COMPANY; INTERNAL R E V E N U E SERVICE; CITY OF R E X B U R G ; and MADISON COUNTY TR EA SU R ER, Defendants. M E M O R A N D U M DECISION A N D ORDER

B e f o re the Court is Plaintiff PNC Bank's Motion to Remand (Docket No. 3), and D e f e n d a n t Rencher / American Manor's Motion for Temporary Restraining Order (D o c k e t No. 9). The Court has determined that oral argument would not significantly a s s is t the decisional process. Therefore, the Court will address the motion without a h e a rin g . BACKGROUND D e f e n d a n t Rencher / American Manor entered into a loan agreement and borrowed m o n e y from Plaintiff PNC Bank. The loan agreement encumbers real property in
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Dockets.Justia.com

Rexburg, Madison County, Idaho. On or around March 5, 2010, PNC sent a letter to R e n c h e r declaring Rencher in default under the loan agreement. PNC also initiated a n o n -ju d ic ia l foreclosure action against Rencher, with a trustee sale scheduled for October 5 , 2010. On July 27, 2010, PNC filed a petition for appointment of a receiver in Madison C o u n ty district court, in an effort to collect on amounts owed by Rencher. In that p e titio n , PNC named Defendants Rencher / American Manor, 151 Family Trust, Pacific C o a s t Investment Company, the Internal Revenue Service, the City of Rexburg, and the M a d is o n County Treasurer. On August 20, 2010, Defendant Rencher removed the matter to this Court, citing federal question jurisdiction. On August 26, 2010, PNC filed a Motion to Remand or for Appointment of R e c e iv e r and Motion for Expedited Consideration. (Docket No. 3). Although Tamla R e n c h e r has indicated she was unaware that the Motion to Remand (Docket No. 3) was f ile d in this matter, the docket reflects that PNC did properly file and serve the Motion on a ll parties. (Docket No. 3-1 at 11.) Defendant Rencher's response to PNC's motion to re m a n d was due September 20, 2010. No such response has been filed. ANALYSIS 1. R e n c h e r / American Manor Is Not Properly Represented.

As an initial matter, the Court notes that Defendant Rencher is not properly represented in this matter. Pursuant to Local Rule 83.4, "[w]henever an entity other than an individual desires or is required to make an appearance in this Court,
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the appearance shall be made only by an attorney of the bar of this Court or an attorney permitted to practice under these rules." Rencher, the sole defendant named in the removal to this Court, is a limited liability company. Tamla Rencher participated in a telephone conference with the Court's staff, on behalf of Defendant; PNC was represented by counsel. At the conference, conducted September 21, 2010, Ms. Rencher indicated that she was unaware of the requirement that an entity be represented by counsel, but that she had spoken with an attorney who would file a notice of appearance shortly. Ms. Rencher also indicated she had not received PNC's motion to remand the matter. Counsel for PNC indicated that a copy had been sent to Rencher, but another courtesy copy would be provided. 2. The Action Was Improperly Removed Because No Federal Question is Presented.
"Removal jurisdiction is statutory and strictly construed." Gould v. Mutual Life In s . Co. Of New York, 790 F.2d 769, 773 (9th Cir. 1986). An action filed in state court m a y be removed where the district court could have exercised jurisdiction over the action if originally filed there. Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996); 28 U .S .C . § 1441. Federal district courts have original jurisdiction in cases "arising under th e Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. In completing th e cover sheet for its Notice of Removal, Rencher indicated that the basis for jurisdiction
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is federal question, and cited 12 U.S.C. § 2605(e) and (f). T h e federal statute cited by Rencher in support of removal addresses the servicing o f federally related mortgage loans. See 12 U.S.C. § 2605. A "federally related mortgage lo a n " is defined by the statute as a loan secured by a lien on residential real property d e s ig n e d for the occupancy of one to four families, made by a lender whose deposits or a c c o u n ts are insured by, or who is regulated by, any agency of the Federal Government. 12 U.S.C. § 2602(1). The underlying petition in this matter is a request for appointment o f a receivership to facilitate management of the property encumbered by the loan to w h ic h PNC and Rencher are parties. The records before this Court demonstrate that the s ta tu te cited by Rencher is not at issue here1 ; rather, the applicable statutes are state laws o v e r which this court lacks federal question jurisdiction. The Court thus finds that re m o v a l was improper. 3. T h e Action Was Improperly Removed Because less than All Defendants J o in e d in the Notice of Removal. A "rule of unanimity" is imposed in cases removed to federal court such that all n a m e d and served defendants must join in the notice of removal unless such defendants a re nominal, unknown, or fraudulently joined. See Mitchell v. Paws Up Ranch, LLC, 597 F .S u p p .2 d 1132, 1135 (D. Mont. 2009), citing Hewitt v. City of Stanton, 798 F.2d 1230,

PNC's brief indicates that the loan at issue here was a commercial loan secured by multiple-unit student housing apartment complex and, thus, does not fall within federal statutory protections afforded to loans secured by residential real property designed for the occupancy of one to four families. Rencher has not filed a memorandum disputing this assertion. MEMORANDUM DECISION AND ORDER - 4

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1233 (9th Cir. 1986); Salveson v. Western States Bankcard Ass'n, 731 F.2d 1423, 1429 (9 th Cir. 1984). It does not appear, from Rencher's notice (Docket No. 1), that D e f e n d a n ts who were served in PNC's state court proceedings have joined in the removal to this Court. 4. A tto r n e y Fees P N C seeks attorney fees on grounds that Rencher improperly removed the case to f e d e ra l court. An order of remand may require the defendant to pay the plaintiff's "just c o s ts and any actual expenses, including attorney fees, incurred as a result of the re m o v a l." 28 U.S.C. § 1447(c). "Absent unusual circumstances, courts may award a tto rn e y's fees under § 1447(c) only where the removing party lacked an objectively re a s o n a b le basis for seeking removal. Conversely, when an objectively reasonable basis e x is ts , fees should be denied." Gardner v. UICI, 508 F.3d 559, 561 (9th Cir. 2007). Thus, although district courts retain discretion to determine whether such unusual c irc u m s ta n c e s exist as to depart from the rule, the reasons for departing from this general ru le "should be faithful to the purposes of awarding fees under § 1447." Id. (internal q u o ta tio n and citation omitted). In this case, PNC has established it is entitled to an award of attorney fees and c o s ts incurred in seeking remand. The United States Supreme Court has recognized the c o s t to parties and the court due to improper removals, noting, "[a]ssessing costs and fees o n remand reduces the attractiveness of removal as a method for delaying litigation and

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imposing costs on the plaintiff." Martin v. Franklin Capital Corp., 546 U.S. 132, 140 (2 0 0 5 ). The Martin Court added "the standard for awarding fees should turn on the re a s o n a b le n e s s of the removal." Id. The Court finds no objectively reasonable basis for f e d e ra l question jurisdiction, and thus no justification for removal. Counsel for PNC shall file an affidavit within fourteen (14) days setting forth the f e e s and costs which it has incurred in obtaining a remand to state court, and shall include th e following: (1) the services rendered, (2) the dates those services were rendered, (3) th e hourly rate charged, (4) hours expended, (5) a description of the attorney fee contract w ith the client, and (6) any information, where appropriate, as to other factors which m ig h t assist the Court in determining the dollar amount of the fee and costs to be allowed. Rencher shall within fourteen (14) days thereafter file its objections, if any, to the a m o u n ts claimed. ORDER I T IS ORDERED THAT: 1. P la in tif f PNC's Motion to Remand (Docket No. 3) is GRANTED. This c a s e shall be REMANDED to state court. 2. T h e Court will retain jurisdiction in this matter for the sole purpose of d e te rm in in g the amount of fees and costs awarded to Plaintiff. 3. T h e Motion to Expedite (Docket No. 4) is DEEMED MOOT.

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4.

T h e Application for Temporary Restraining Order (Docket No. 9) is D E E M E D MOOT.

DATED: September 23, 2010

Honorable B. Lynn Winmill Chief U. S. District Judge

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