Bank of America NA v. Rice et al

Filing 30

ORDER ADOPTING IN PART REPORT AND RECOMMENDATIONS (Doc. 26 ) and REMANDING case to Twentieth Judicial Circuit Court, St. Clair County, Illinois, for lack of federal subject matter jurisdiction. The Clerk of Court is directed to transmit a certified copy of this Order to the clerk of the state court. Signed by Judge Michael J. Reagan on 12/03/2013. (bak)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS

BANK OF AMERICA, N.A,
Plaintiff,
vs.
LARITA RICE, VILLAGE OF SAUGET,
U.S. BANK NATIONAL ASSOCIATION,
AND UNKNOWN PARTIES,
Defendants.

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Case No. 12-CV- 916-MJR-DGW

MEMORANDUM AND ORDER
REAGAN, District Judge:
This matter is before the Court on the Report and Recommendation of United
States Magistrate Judge Donald G. Wilkerson (Doc. 26), recommending that this case be
dismissed with prejudice. The Report and Recommendation was entered on September
17, 2013, and included a Notice that any objections were due within fourteen days of
service. Plaintiff filed an objection to the Report and Recommendation on October 10,
2013 (Doc. 29).
Background
In this foreclosure action, Plaintiff, Bank of America, seeks to foreclose on a
mortgage executed by Defendant Rice. In addition to naming Rice, Plaintiff also named
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four lien holders with respect to the property, two of which were the Secretary of
Housing and Urban Development (“HUD”) and the United States of America (“USA”).
On August 16, 2012, this case was removed to this Court from St. Clair County by HUD
and USA (Doc. 5). HUD and USA have since been voluntarily dismissed by Plaintiff
pursuant to Rule 41(a)(2) (See Doc. 23). HUD and USA were the only defendants that
have answered or appeared in this action (Doc. 13), however, Plaintiff has not sought
default as to any defendant.
On September 17, 2013, Magistrate Judge Donald G. Wilkerson held a settlement
conference in which Plaintiff failed to appear (Doc. 25). In light of this, Magistrate
Judge Wilkerson issued an Order to Show Cause directing Plaintiff to explain why the
case should not be dismissed (See Doc. 24). Plaintiff did not respond to the show cause
order.
On September 1, 2013, Magistrate Judge Wilkerson issued a Report &
Recommendation, recommending that we dismiss this matter with prejudice due to
Plaintiff’s failure to appear at the settlement conference, failure to respond to the show
cause order, and failure to timely serve the remaining defendants. On October 4, 2013,
however, Plaintiff filed an objection to the Report & Recommendation (Doc. 29). In the
objection, Plaintiff explains that it has timely served each of the remaining defendants in
this action, attaching supporting documentation (Doc. 29-1). Plaintiff further explains
that it missed the previous hearings and court deadlines because its former counsel,

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Robert Deisinger, left the law firm of Pierce & Associates and no one was substituted in
as counsel.
New counsel, attorney Nickolas A. Schad, has now been assigned to Plaintiff’s
case and he entered his appearance on October 4, 2013 (Doc. 27). Plaintiff requests that
the Court permit the matter to proceed, in order to allow Plaintiff to move for default
against the remaining defendants. Plaintiff further requests that, in the alternative and
given the dismissal of HUD, that the case be remanded back to St. Clair County. Lastly,
Plaintiff requests that if the Court deems dismissal warranted, to dismiss without
prejudice to allow Plaintiff to re-file in state court.
Discussion
Where timely objections are filed, this Court must undertake a de novo review of
the Report and Recommendation. 28 U.S.C. § 636(b)(1)B), (C), FED. R. CIV. P.72(b);
SDIL-LR 73(1)(b); Harper v. City of Chicago Heights 824 F. Supp. 786, 788 (N.D. Ill.
1993); see also Govas v. Chalmers, 965 F.2d 298, 301 (7th Cir. 1992). The Court “may
accept, reject, or modify the magistrate judge’s recommended decision.” Harper, 824 F.
Supp. at 788. In making this determination, the Court must look at all of the evidence
contained in the record and “give ‘fresh consideration to those issues to which specific
objections have been made.’” Id., quoting 12 Charles Alan Wright et al., Federal
Practice and Procedure § 3076.8 at p.55 (1st ed. 1973) (1992 Pocket Part) (emphasis
added).

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On August 16, 2012, HUD removed the action to this Court under 28 U.S.C. § 1442
(federal officers or agencies sued or prosecuted) (Doc. 5). An action affecting property
on which the United States has a lien may be removed by the United States. 28 U.S.C.
§§ 1444 and 2410; see also City of Joliet, Ill. v. New West, L.P., 562 F.3d 830, 833 (7th Cir.
2009) (“[T]he presence of the national government as a party with a security interest in
the real estate supplies jurisdiction.”). Specifically, a civil action commenced in state
court against the United States or any agency thereof may be removed by the United
States pursuant to 28 U.S.C. § 1442(a). Thus, the only basis for removal here was the
existence of the United States as a defendant and its lien on the property at issue.
As a general principle, jurisdiction once properly invoked is not lost by
developments after a suit is filed. See Cunningham Charter Corp. v. Learjet, Inc., 592
F.3d 805, 807 (7th Cir. 2010). However, when all of the federal claims that authorized
removal drop out of the case before trial, under 28 U.S.C. § 1367(c)(3) it is within the
Court's discretion whether to remand the existing state-law claims to state court. See
Helms v. Atrium Health Care & Rehab. Ctr. of Cahokia, LLC, Civil No. 10–547, 2010 WL
3937606, at *5 (S.D. Ill. Oct. 5, 2010). Thus, when the United States' presence as a party
to the case was the basis for removal, and is later dismissed as a party, then it is within
the Court's discretion whether to remand the existing state-law claims to state court.
See U.S. Bank Nat. Ass’n v. Maggio, No. 11-cv-846, 2011 WL 6180454, at *2 (S.D. Ill. Dec.
13, 2011). In deciding whether to decline jurisdiction over remaining claims when no

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original jurisdiction claims remain pending, a district court should consider judicial
economy, convenience, fairness and comity. Wright v. Associated Ins. Cos., 29 F.3d
1244, 1251 (7th Cir. 1994) (citing Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350, 108
S.Ct. 614, 98 L.Ed.2d 720 (1988)).
The Court has considered the relevant factors and determines that none of them
favor the retention of jurisdiction.

For example, the United States, the only party

requesting a federal forum, has been dismissed as a party and none of the other parties
have opposed a remand. Plaintiff will not be time-barred if the Court declines to
exercise jurisdiction as Plaintiff’s claims will simply to return to state court where they
were filed and proceed in that court. Further, due to Plaintiff’s failure to participate in
this litigation, this case is still in an early stage, and thus the Court finds that remand is
proper.
Conclusion
The Court ADOPTS in part Magistrate Judge Wilkerson’s Report and
Recommendation (Doc. 26). Rather than dismissing the case with prejudice, the Court
REMANDS this action, pursuant to 28 U.S.C. § 1447(c), to the Circuit Court of the
Twentieth Judicial Circuit, St. Clair County, Illinois, for lack of federal subject matter
jurisdiction. The Clerk of the Court is directed to transmit a certified copy of this Order
to the clerk of the state court and to close the file of this case on the Court’s docket.
IT IS SO ORDERED.
DATED: December 3, 2013
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s/Michael J. Reagan _________
MICHAEL J. REAGAN
United States District Judge

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