Lee Bank v Bearbones, Inc. et al

Filing 12

Magistrate Judge Katherine A. Robertson: ORDER entered. MEMORANDUM AND ORDER entered. For the reasons stated herein, this matter is REMANDED to the Berkshire County Superior Court. The Clerks Office is directed to return the file to the Clerk of the Berkshire County Superior Court. (Finn, Mary)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
LEE BANK,
Plaintiff,

)
)
)
v.
)
)
BEARBONES, INC., AMARAL
)
ENTERPRISES, LLC, BRIAN AMARAL, )
AND ANTHONY AMARAL ,
)
Defendants.
)

Civil Action No. 3:17-cv-30120-KAR

MEMORANDUM AND ORDER
ROBERTSON, U.S.M.J.
On September 11, 2017, defendant Brian A. Amaral (“Amaral”) filed a Notice of
Removal of the instant action from the Berkshire County Superior Court (Dkt. No. 1). The
parties have consented to this court’s jurisdiction (Dkt. No. 9). See 28 U.S.C. § 636(c); Fed. R.
Civ. P. 73. While plaintiff Lee Bank (“Lee Bank” or “the Bank”) has not filed a motion for
remand, the court sua sponte issues this memorandum and order remanding the case back to the
Berkshire County Superior Court for lack of subject matter jurisdiction.
I.

Background

Lee Bank initiated this action in Berkshire County Superior Court on or about July 31,
2017. According to its verified complaint, Lee Bank is a Massachusetts FDIC regulated savings
bank with a place of business located at 75 Park Street, Lee, Massachusetts. The Bank named
the following individuals and entities as defendants: Bearbones, Inc. d/b/a Morningside Bakery
(“Bearbones”), a corporation organized under the laws of the Commonwealth of Massachusetts;
Amaral Enterprises, LLC (“Amaral Enterprises”), a Massachusetts limited liability company;
Amaral, an individual who resides in Waterford, New York; and Anthony Amaral, an individual
who resides in Pittsfield, Massachusetts.

In its verified complaint, Lee Bank alleges that Bearbones and Amaral Enterprises each
entered into Notes with Lee Bank in the principal amounts of $70,000.00 and $115,000.00,
respectively. The notes were secured by a first and second mortgage given by Amaral
Enterprises on a commercial condominium unit located at 283 Tyler Street, Pittsfield, MA, a
property Amaral Enterprises owns and in which Bearbones formerly did business. In addition,
Bearbones executed a Loan and Security Agreement with the Bank granting the Bank a first
security position in all of its business assets, and each of the defendants executed an Unlimited
Guaranty, guarantying repayment of the debts of Amaral Enterprises and Bearbones to Lee
Bank.
Lee Bank alleges that the defendants are now in continuing default under the provisions
of the Notes, Guarantees, and other loan documents. As a result of the default under the Notes,
all obligations due thereunder have been accelerated, and the Bank alleges that it is entitled to
payment of the outstanding balance on each of the Notes, in the amounts of $65,414.64 and
$123,185.65, plus continuing interest, costs of collection, and attorney’s fees as set forth in each
Note.
Lee Bank asserts a total of seven counts in its complaint. Six of the counts sound in
breach of contract, whether of the Notes or of the Guarantees. The remaining count is for
injunctive relief preventing the defendants from interfering with the Bank’s right to take
possession of the collateral.
II.

Discussion

A state court action may only be removed to federal court if it could have originally been
filed there. See 28 U.S.C. § 1441(a) (“Except as otherwise expressly provided by act of
Congress, any civil action brought in a State court of which the district courts of the United

2

States have original jurisdiction, may be removed by the defendant or defendants, to the district
court of the United States for the district and division embracing the place where such action is
pending.”). Brian Amaral filed his Notice of Removal of the present action on the basis of his
having asserted a counterclaim under the federal Fair Credit Reporting Act (“FCRA”),
presumably attempting to invoke federal-question jurisdiction. Federal-question jurisdiction
applies where an action “aris[es] under the Constitution, laws, or treaties of the United States.”
28 U.S.C. § 1331. The difficulty for Amaral is that “[t]he presence or absence of federalquestion 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.” Caterpillar Inc., v. Williams, 482 U.S. 386, 392 (1987) (citing
Gully v. First Nat’l Bank, 299 U.S. 109, 112-13 (1936)). It cannot be based on a federal defense
or counterclaim, as Amaral attempts to do here. Id. See also Rosselló-González v. CalderónSerra, 398 F.3d 1, 10 (1st Cir. 2004) (“‘[I]n deciding (for removal purposes) whether a case
presents a federal ‘claim or right,’ a court is to ask whether the plaintiff’s claim to relief rests
upon a federal right, and the court is to look only to the plaintiff’s complaint to find the answer.’”
(quoting Hernández-Agosto v. Romero-Barceló, 748 F.2d 1, 2 (1st Cir. 1984); Duquette v. Stern,
No. 11-30005-MAP, 2011 WL 468783, at *1 (Feb. 3, 2011) (noting that “removal jurisdiction
based on a federal question stems only on the basis of federal claims in the original complaint
and not on defenses or counterclaims”). Here, Lee Bank has not pleaded a federal cause of
action in its complaint, and, therefore, it is not removable on the basis of a federal question.
Nor would the complaint be removable on the basis of diversity of citizenship, 28 U.S.C.
§ 1332, as there is not complete diversity between the plaintiff and defendants. Halleran v.

3

Hoffman, 966 F.2d 45, 47 (1st Cir. 1992) (“Diversity jurisdiction requires complete diversity
between all the plaintiffs and all the defendants.”).
“Regardless of whether the issue is raised by the parties, a district court is required to
inquire into and determine whether federal subject matter jurisdiction in a removed action
exists.” Stewart v. Atwood, 834 F. Supp. 2d 171, 177 (W.D.N.Y. 2012) (citing Mehlenbacher v.
Akzo Nobel Salt, Inc., 216 F.3d 291, 295-96 (2d Cir. 2000)). The court here concludes that it
does not.
III.

Conclusion

For the reasons stated herein, this matter is remanded to the Berkshire County Superior
Court. The Clerk’s Office is directed to return the filed to the Clerk of the Berkshire County
Superior Court.
It is so ordered.
October 11, 2017

/s/ Katherine A. Robertson____
KATHERINE A. ROBERTSON
United States Magistrate Judge

4