Countryside Bank v. Naseer et al

Filing 15

OPINION AND ORDER: For the reasons set forth in the Opinion and Order, the 3 motion to remand is GRANTED, and this case is REMANDED back to the Lake County Superior Court, Indiana. Additionally, Plaintiff is AWARDED its just costs and actual expen ses, including attorneys' fees, as a result of the removal. Countryside Bank may submit a request for reimbursement for the costs as a result of the removal on or before 6/12/2018. Sheikh may file a response on or before 6/26/2018. Signed by Judge Rudy Lozano on 5/15/2018. (Copy mailed to pro se party; cert copy with docket sheet mailed to Lake County Superior Court)(jss)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
COUNTRYSIDE BANK,
Plaintiff,
vs.
BUSHRA NASEER, et al.,
Defendants.

)
)
)
)
) CAUSE NO. 2:18-cv-132
)
)
)
)

OPINION AND ORDER
This matter is before the Court on the Motion to Remand and
For Costs and Expenses Caused by Improper Removal, filed by
Plaintiff, Countryside Bank, on April 6, 2018 (DE #3). For the
reasons set forth below, the motion to remand (DE #3) is GRANTED
and this case is REMANDED back to the Lake County Superior Court,
Indiana.

Additionally, Plaintiff is AWARDED its just costs and

actual expenses, including attorneys’ fees, as a result of the
removal.

Countryside Bank may submit a request for reimbursement

for the costs as a result of the removal on or before June 12,
2018.

Sheikh may file a response on or before June 26, 2018.

BACKGROUND
Plaintiff, Countryside Bank, filed this mortgage foreclosure
action on December 27, 2017, in the Lake County Superior Court. (DE
#2.)

The

loan

was

guaranteed

by

the

U.S.

Small

Business

Administration (“SBA”).

Defendant, Zafar Sheikh, is neither a

borrower nor a guarantor of the defaulted loan.
asserts

a

state

law

claim

against

transferring the bank’s collateral.

Sheikh

The complaint
for

improperly

(Compl. ¶¶ 27-29, 63-67.)

Sheikh filed a notice of removal on April 4, 2018 (DE #1),
asserting federal question jurisdiction due to Countryside Bank’s
alleged failure to adhere to standard operating procedures for SBAguaranteed loans.

He asserts that Countryside Bank violated

Federal Regulations, 13 CFR 101-147 “in approving, disbursing,
servicing and dealing with the troubled loans [which] gives rise to
federal questions.”

(DE #1 at 4.)

Countryside Bank now moves to remand, arguing the complaint
does not plead any federal claims, the Federal Regulations do not
create a private right of action, and the case was never removable.
Further, it requests an award of costs and expenses pursuant to 28
U.S.C. § 1447.

To date, no response has been filed.

DISCUSSION
A case may be removed from state court to federal court if it
is based on statutorily permissible grounds and if it is timely.
Boyd v. Phoenix Funding Corp., 366 F.3d 524, 529 (7th Cir. 2004).
See also 28 U.S.C. § 1441; 28 U.S.C. § 1446.

The Seventh Circuit

has directed that, “[c]ourts should interpret the removal statute
narrowly and presume that the plaintiff may choose his or her
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forum.

Any doubt regarding jurisdiction should be resolved in

favor of the states, and the burden of establishing federal
jurisdiction falls on the party seeking removal.”

Doe v. Allied-

Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993)(citations omitted).
The party seeking removal must demonstrate that removal is proper.
Boyd, 366 at 529.

When challenged, the party seeking federal

jurisdiction bears the burden of proving by a preponderance of the
evidence that a case belongs in federal court.

Meridian Sec. Ins.

Co. v. Sadowski, 441 F.3d 536, 540-43 (7th Cir. 2006).
A defendant can remove “any civil action brought in a State
court of which the district courts of the United States have
original jurisdiction.” 28 U.S.C. § 1441(a). The district court has
original jurisdiction over claims arising under federal law. 28
U.S.C. § 1331. “[T]he presence or absence of federal-question
jurisdiction is governed by the ‘well-pleaded complaint rule,’
which provides that federal jurisdiction exists only when a federal
question is presented on the face of the plaintiff’s properly
pleaded complaint.”

Citadel Sec., LLC v. Chi. Bd. Options Exch.,

Inc., 808 F.3d 694, 701 (7th Cir. 2015)(citations omitted).
“In considering a motion for remand, the court must examine
the plaintiffs’ complaint at the time of the defendant’s removal
and assume the truth of all factual allegations contained within
the original complaint.”

Scouten v. MNL-FTS, LLC, 708 F.Supp.2d

729, 731 (N.D. Ill. 2010)(quotations and citation omitted).
3

Plaintiffs’ Motion to Remand
Federal question jurisdiction arises where the well-pleaded
complaint contains a federal cause of action or, alternatively,
“requires resolution of a substantial question of federal law in
dispute between the parties.”

Baker v. Johnson & Johnson, 709

F.Supp.2d 677, 682 (S.D. Ill. 2010)(quoting Franchise Ta Bd. Of
State of Cal. v. Construction Laborers Vacation Trust for S. Cal.,
463 U.S. 1, 13 (1983)).
Here, the complaint alleges only state law claims arising from
breaches of loan contracts and improper disposition of collateral
that secured the loan.

None of the claims in the complaint

implicate the SBA’s guaranty or federal regulations.

Sheikh has

recently moved for leave to file a counterclaim (DE ##6, 9) for
violations of the SBA, Truth in Lending Act, and RICO, but the
Court

looks

at

the

complaint

at

the

time

it

was

filed

in

determining whether it has subject matter jurisdiction. Coffman v.
Dutch Farms, Inc., 2:16-CV-157, 2017 WL 1217238, at *2 (N.D. Ind.
Feb. 24, 2017).

“The Court must look to the original complaint as

it existed at the time of removal.”

Brokaw v. Boeing Co., 137

F.Supp.3d 1082, 1107 (N.D. Ill. 2015); see also Gossmeyer v.
McDonald, 128 F.3d 481, 487 (7th Cir. 1997) (“[W]hether subject
matter jurisdiction exists is a question answered by looking at the
complaint as it existed at the time the petition for removal was
filed.”).
4

Moreover,

courts

that

have

considered

the

question

have

unanimously agreed that the Small Business Act does not create a
private right of action for individuals.

See, e.g., Crandal v.

Ball, Ball & Brosamer, 99 F.3d 907, 909 (9th Cir. 1996) (collecting
cases); Mallett v. Wisconsin Div. of Vocational Rehabilitation, 130
F.3d 1245, 1250 (7th Cir. 1997).

Where there is no private cause

of action, an alleged violation of federal regulations does not
create federal question jurisdiction.

Int’l Union of Operating

Eng’rs, Local 150 v. Ward, 563 F.3d 276, 281-82 (7th Cir. 2009).
Finally, Sheikh has not relied upon diversity jurisdiction.
He has not offered any evidence to disprove allegations that
Countryside Bank, and several defendants, are citizens of the State
of Illinois.

(DE #2 ¶¶ 1-2, 8, 9.)

See McCready v. eBay, Inc.,

453 F.3d 882, 891 (7th Cir. 2006) (for a case to be within a
federal

court’s

diversity

jurisdiction,

diversity

must

be

“complete,” meaning no plaintiff may be a citizen of the same state
as

any

defendant.).

For

all

of

these

reasons,

remand

is

appropriate.

Request for Attorneys’ Fees
Finally, Countryside Bank has asked the Court to award it
attorneys’ fees and costs under 28 U.S.C. § 1447(c), as a result of
Sheikh’s improper removal. As the Supreme Court has stated, “[t]he
process of removing a case to federal court and then having it
5

remanded back to state court delays resolution of the case, imposes
additional costs on both parties, and wastes judicial resources.”
Martin v. Franklin Capital Corp., 546 U.S. 132, 140 (2005).
“Absent unusual circumstances, courts may award attorney’s fees
under § 1447(c) only where the removing party lacked an objectively
reasonable basis for seeking removal.”

Id. at 141.

Under Seventh

Circuit law, “if, at the time the defendant filed his notice in
federal court, clearly established law demonstrated that he had no
basis for removal, then the district court should award a plaintiff
his attorneys’ fees.”

Lott v. Pfizer, Inc., 492 F.3d 789, 793 (7th

Cir. 2007).
In

this

case,

when

Sheikh

filed

his

notice

of

removal

asserting that unpleaded violations of SBA regulations was the sole
basis for federal jurisdiction, it had been settled for a long time
that “the Small Business Act does not create a private right of
action in individuals.”

Mountain State Mech. Insulation, Inc. v.

Bell Constructors, LLC, No. 1:11 CV 180, 2012 WL 2995213, at *2
(N.D.W. Va. July 23, 2012) (citations omitted).

Because the

clearly established law shows there is no basis for removal, the
Court awards Countryside Bank just costs and actual expenses,
including attorneys’ fees, as a result of the removal. Countryside
Bank may submit a request for reimbursement for the costs of the
removal on or before June 12, 2018.
or before June 26, 2018.
6

Sheikh may file a response on

CONCLUSION
For the reasons set forth below, the motion to remand (DE #3)
is GRANTED and this case is REMANDED back to the Lake County
Superior Court, Indiana.

Additionally, Plaintiff is AWARDED its

just costs and actual expenses, including attorneys’ fees, as a
result of the removal.

Countryside Bank may submit a request for

reimbursement for the costs as a result of the removal on or before
June 12, 2018.

Sheikh may file a response on or before June 26,

2018.

DATED: May 15, 2018

/s/ RUDY LOZANO, Judge
United States District Court

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