Chiu et al v. Lincoln et al

Filing 28

ORDER AND REASONS: IT IS ORDERED that the Hu Plaintiffs' 9 Motion to Remand is GRANTED. This case is remanded to the First City Court of New Orleans for eviction proceedings, where it originated as civil action no. 17-08413. Signed by Judge Ivan L.R. Lemelle on 5/29/2018. (Attachments: # 1 Remand Letter)(mmv)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
YU-WEN CHIU, ET. AL.

CIVIL ACTION

VERSUS

NO. 17-12275

CHARLES EDWARD LINCOLN, III,
ET. AL.

SECTION “B”(1)

ORDER AND REASONS
Considering

Plaintiffs’

Yu-Wen

Chiu

and

Chih-Yang

Hu

(hereinafter, the “Hu Plaintiffs”) “Motion to Remand for Lack of
Subject Matter Jurisdiction” (Rec. Doc. 9),
IT IS ORDERED that the Hu Plaintiffs’ Motion to Remand (Rec.
Doc. 9) is GRANTED. This case is remanded to the First City Court
of New Orleans for eviction proceedings, where it originated as
civil action no. 17-08413.
FACTS AND PROCEDURAL HISTORY
The Hu Plaintiffs and Defendant Charles Edward Lincoln, III
(“Defendant Charles III”) executed a lease agreement on April 6,
2017, where Charles III would reside at the Hu Plaintiff’s 228
Walnut Street property in New Orleans, Louisiana (the “Property”).
Rec. Docs. 1 and 9. According to the parties, Third-Party Defendant
Jill Jones-Soderman (“Soderman”) represented that she would pay
the rent pursuant to Defendant Charles III’s employment with her
organization. Id. Soderman, however, is not a party to the lease
agreement. Id. Defendant Charles III moved into the Property on or
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about April 8, 2017. Rec. Doc. 9-1 at 3. A few months later, in
August 2017, Soderman informed the Hu Plaintiffs and Defendant
Charles

III

that

she

would

no

longer

pay

rent

as

she

was

terminating her employment relationship with Defendant Charles
III.

Rec.

Docs.

9-1

and

9-2.

Upon

said

information,

the

Hu

Plaintiffs offered Charles III early termination of his lease.
Rec. Doc. 9-2. Charles III declined the Hu Plaintiff’s offer. Rec.
Doc.

9-2.

After

about

three

months

of

non-payment,

the

Hu

Plaintiffs initiated eviction proceedings in state court against
Charles III for his failure to pay rent pursuant to the lease
agreement. Rec. Docs. 1 and 9. This case was removed by Defendant
Charles Edward Lincoln, III (“Charles III”) from state court on
November 13, 2017. Charles III removed the instant case, citing 28
U.S.C. §§ 1334, 1452 as grounds for federal jurisdiction. Rec.
Doc. 1.
Specifically, Defendant Charles III asserts that this Court
has jurisdiction because the subject lease between him and the Hu
Plaintiffs was part of a “grand bankruptcy and general financial
rehabilitation program” to which Soderman agreed “to underwrite”
pursuant to a “plan of long-term collaboration and partnership.”
Rec. Doc. 1 at 1-3. Charles III also vaguely asserts federal
jurisdiction based on alleged “related cases” already in federal
court, referencing civil action nos. 16-12650 in Bankruptcy Court
and 17-11111 in this Court.
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LAW AND ANALYSIS
“A party may remove an action from state court to federal
court if the action is one over which the federal court possesses
subject matter jurisdiction.” Manguno v. Prudential Prop. and Cas.
Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002)(citing 28 U.S.C. §
1441(a)).
The removing party bears the burden of showing
that federal jurisdiction exists and that
removal was proper. De Aguilar v. Boeing Co.,
47 F.3d 1404, 1408 (5th Cir. 1995); Jernigan
v. Ashland Oil Inc., 989 F.2d 812, 815 (5th
Cir. 1993) (per curiam); Willy v. Coastal
Corp., 855 F.2d 1160, 1164 (5th Cir. 1988). To
determine whether jurisdiction is present for
removal, we consider the claims in the state
court petition as they existed at the time of
removal. Cavallini v. State Farm Mut. Auto
Ins. Co., 44 F.3d 256, 264 (5th Cir. 1995).
Any ambiguities are construed against removal
because the removal statute should be strictly
construed in favor of remand. Acuna v. Brown
& Root, Inc., 200 F.3d 335, 339 (5th Cir.
2000).

Id. In addition to the above, federal courts may raise the issue
of subject matter jurisdiction even if the parties have not raised
the issue themselves.

Gaar v. Quirk, 86 F.3d 451, 453 (5th Cir.

1996).

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Defendant Charles III cites 28 U.S.C. §§ 1334, 1452 as grounds
for removal. Section 1334 provides that:
(b) . . . the district courts shall have original but
not exclusive jurisdiction of all civil proceedings
arising under title 11, or arising in or related to cases
under title 11.
28 U.S.C. § 1334 (2005). Section 1452 provides that:
(a) [a] party may remove any claim or cause of action in
a civil action . . . to the district court for the
district where such civil action is pending, if such
district court has jurisdiction of such claim or cause
of action under section 1334 of this title.
28 U.S.C. § 1452 (1990). However, contrary to Defendant Charles
III’s contentions, neither of these statutes support removal of
the Hu Plaintiffs’ eviction action to federal court.
Defendant Charles III filed a voluntary petition for Chapter
11 Bankruptcy on October 26, 2016. See United States Trustee v.
Charles

Lincoln

III,

No.

16-12650

(Bankr.

E.D.La.

2016)(hereinafter referred to as, “Bankr. No. 16-12650”). However,
on December 22, 2016—almost a year before Charles III’s removal of
the instant eviction proceedings—his cited bankruptcy action was
converted sua sponte to a Chapter 7 Bankruptcy. Bankr. No. 1612650, Rec. Doc. 46. Also relevant here is the fact that Charles
III signed the lease in controversy in April of 2017—almost six
months after he filed for bankruptcy. Further, the Hu Plaintiffs
are not listed as creditors in the Bankruptcy action. As a result,
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Charles III’s beliefs that this Court has jurisdiction because the
lease was part of some grand bankruptcy rehabilitation plan are
entirely misled and inaccurate.
The Fifth Circuit has already spoken to what constitutes
“related to” or “arising under” a bankruptcy proceeding. Arising
under refers to proceedings “that are not based on any right
expressly created by title 11, but nevertheless, would have no
existence outside of the bankruptcy.” In Matter of Galaz, 665 F.
App'x 372, 375 (5th Cir. 2016). A matter is related to a bankruptcy
proceeding where “the outcome of that proceeding could conceivably
have any effect on the estate being administered in bankruptcy.”
Matter of Wood, 825 F.2d 90, 93 (5th Cir. 1987).
As a result, this action is neither related to nor does it
arise under Charles III’s bankruptcy proceedings. Furthermore, his
bankruptcy petition was converted to a Chapter 7, where there is
no plan of reorganization. It follows that no federal court, i.e.,
district

court

jurisdiction

or

over

the
the

Bankruptcy
state

court

Plaintiffs.

5

Court,

has

eviction

subject

filed

by

matter
the

Hu

Notwithstanding the above findings of a lack of subject matter
jurisdiction,

the

interests

of

justice

require

this

eviction

action be timely adjudicated in State court.
New Orleans, Louisiana, this 29th day of May, 2018.

___________________________________
SENIOR UNITED STATES DISTRICT JUDGE

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