BAC Home Loans Servicing, LP et al v. McDaniel et al

Filing 39

ORDER: Granting in Part Denying in Part Plaintiffs' Motion to Remand 4 , GRANTED as to Motion to Remand, DENIED as to Plaintiffs' request for attorney fees and costs; Denying Defendants' Motion to Dismiss 9 . Requests for oral argument denied as unnecessary, and this case is REMANDED to state court. Signed on 5/15/2012 by Chief Judge Ann L. Aiken. (lg)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

BAC HOMES LOANS SERVICING,
LP; RECONTRUST COMPANY, N.A.;
and THE BANK OF NEW YORK
MELLON FKA THE BANK OF NEW
YORK, as trustee for the
certificateholders CWALT, INC.,
alternative loan trust 2006OCll, mortgage pass-through
certificates, series 2006-0Cll;
Plaintiffs,

v.
SCOTT and LEAH MCDANIEL;
CITIBANK (SOUTH DAKOTA), N.A.;
RAY KLEIN, INC.; CAPITAL ONE
BANK (USA); UNITED STATES OF
AMERICA, Department of
Treasury - Internal Revenue
Service; and PORTFOLIO RECOVERY
ASSOCIATES, LLC;
Defendants.

Page 1 - OPINION AND ORDER

Case No. 6:12-cv-00327-AA
OPINION AND ORDER

Tanya D. Urbach
Julie M. Engbloom
Lane Powell PC
601 SN Second Avenue, Suite 2100
Portland, Oregon 97204
Attorneys for plaintiffs
Leah and Scott McDaniel
25225 Cultus Lane
Bend, Oregon 97701
Pro se defendants
AIKEN, Chief Judge:
Plaintiffs BAC Home Loans Servicing, LP ("BAC"), ReconTrust
Company,

N.A.

("ReconTrust"),

and the Bank of New York Mellon

("BNYM") move to remand this case back to the Deschutes County
Circuit Court pursuant to 28 U.S.C.

§

defendants Scott and Leah McDaniel'

("the McDaniels")

request for judicial notice. 2

1447 (c).

In addition,
filed a

For the reasons set forth below, the

McDaniels' request is denied and plaintiffs' motion to remand is
granted.
BACKGROUND

On October 17,

2006,

the McDaniels took out a loan from

Decision One Mortgage Company ("Decision One"), in the amount of
$255,000, to purchase a residential property.

Pursuant to this

transaction, the McDaniels executed a promissory note (the "Note")

I All other defendants, except for the Internal Revenue
Service ("IRS"), have had default orders entered against them.
Further, the McDaniels did not obtain consent for removal from
the IRS. Accordingly, the McDaniels are the only defendants who
are a party to plaintiffs' motion for remand.

2 Leah and Scott MCDaniel each filed separate requests for
judicial notice; however, their motions are identical. As such,
this Court will address the McDaniels' requests together as a
single motion.

Page 2 - OPINION AND ORDER

in favor of Decision One.

The Note was secured by a trust deed

(the "Deed of Trust"), which lists Decision One as the lender and
MERS as the beneficiary.

BAC was the loan servicer.

Subsequently,

MERS assigned the Deed of Trust to BNYM, as trustee for certificate
holder CWALT, Inc., and appointed ReconTrust to serve as successor
trustee.

The Deed of Trust and subsequent transfers were duly

recorded in the official records of Deschutes County, Oregon.
In April 2009, the McDaniels stopped making the requisite loan
repayments,

thereby

materially

defaulting.

In

December

2009,

ReconTrust issued a Notice of Default and Election to Sell the
disputed property.
In June 2010,

A foreclosure sale has not yet occurred.
the McDaniels filed a complaint in Deschutes

County Circuit Court,
arising

out

foreclosure
McDaniels'

of

plaintiffs'

proceedings.
claims

jurisdiction.
judicial

in which they asserted seventeen claims

In

to

foreclosure.

Plaintiffs

federal

June

foreclosure,

allegedly

2011,

court

on

wrongful
thereafter
the

plaintiffs

electing

non-judicial

instead

basis

removed
of

rescinded
to

the

di versi ty
their

pursue

non-

judicial

As such, the Honorable Michael Hogan dismissed all of

the McDaniels' claims as moot.
On June 7,

2011, plaintiffs filed a complaint for judicial

foreclosure against defendants in Deschutes County Circuit Court.
On February 6, 2012, plaintiffs filed an amended complaint, which
alleged the same causes of action but changed the listed name of
BNYM from "Bank of New York Mellon Corporation" to "The Bank of New
York

Mellon

FKA

The

Bank

Page 3 - OPINION AND ORDER

of

New

York,

as

Trustee

for

the

Certificateholders CWALT, Inc., Alternative Loan Trust 20006-0Cll,
Mortgage Pass-Through Certificates, Series 200 6-0Cll." On February
23, 2012, the McDaniels filed a notice of removal (the ftNotice").
Subsequently, plaintiffs filed a motion for remand.
STANDARD OF :REVIEW

Federal courts ftstrictly construe the removal statute against
removal jurisdiction." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th
Cir. 1992) (citations omitted).

As such, cases removed to federal

court must be

a

remanded where

defect

exists

in

the

procedure or where subject-matter jurisdiction is lacking.
U.S.C.
469

§

F.3d

1447(c); see also
1236,

1240

(9th

removal
See 28

~A~g~u~o~nL-4S~h~u~1~t~e~v~.~~~u~a~m~E~1~e~c~t~~~·o~n~C~o~mm~'~n,

Cir.

2006).

Further,

the

"strong

presumption against removal jurisdiction means that the defendant
always has the burden of establishing that removal is proper."
Gaus, 980 F.2d at 566 (citations and internal quotations omitted) .
DISCUSSION

I. Motion for Judicial Notice
To support their opposition to plaintiffs' motion to remand,
the McDaniels request that this Court take judicial notice of: In
re MERSCORP, Inc., OCC No. AA-EC-11-20, Consent Order (April 13,
2011); Memorandum of Review, No. 2012-FW-1802, by the Office of
Inspector General, U.S. Department of Housing and Urban Development
(March 12, 2012); and an Oregon Department of Justice Press Release
(February 14, 2012).
Under the Federal Rules of Evidence, the "court may judicially
notice a fact that is not subject to reasonable dispute because it:
Page 4 - OPINION AND ORDER

(1)

is

generally

known

within

the

trial

court's

territorial

jurisdiction; or (2) can be accurately and readily determined from
sources whose accuracy cannot reasonably be questioned."

Fed. R.

Evid. 201 (b) .
As such,

facts

contained in public records are generally

considered appropriate subjects for judicial notice.

Santa Monica

Food Not Bombs v. City of Santa Monica, 450 F.3d 1022, 1025 n. 2
(9th Cir. 2006).

The court, however, may not take judicial notice

of documents, regardless of whether they meet the requirements of
Fed. R. Civ. P. 201(b), that are unrelated to the matter at issue.
Hart v. Parks, 450 F.3d 1059, 1063 n. 2 (9th Cir. 2006).
Here, the MCDaniels attached eighty-six pages of materials to
their request for judicial notice; however, they fail to address
how these documents relate to the present dispute.

Thus,

the

MCDaniels have not provided any basis for this Court to judicially
notice the identified documents.
Servicing, 2011 WL 3841588, *2

See McDaniels v. BAC Home Loans
(D.Or. Aug. 29,

2011); see also

Crawford v. Countrywide Home Loans, Inc., 647 F.3d 642, 650 (7th
Cir. 2011)

(court cannot "take judicial notice of a universe of

litigation actions and articles when a party offers that universe
without careful delineation of the facts to be noticed") .
The McDaniels' request fails for an additional reason.

In re

MERSCORP, Inc. and the Memorandum of Review involve investigations
into MERS' and Bank of America's administration of their services
as they relate to foreclosures.

The Oregon Department of Justice's

Press Release relates to the Attorney General's lawsuit arising out
Page 5 - OPINION AND ORDER

of BNYM's foreign currency exchange manipulation scheme.

The Court

presumes that the McDaniels requested notice of these materials in
order to demonstrate plaintiffs' allegedly predatory lending and
non-judicial foreclosure practices.
Plaintiffs'

claims,

however,

emanate

from

the MCDaniels'

failure to make the requisite loan repayments under the Note; as
such, the present action has nothing to with plaintiffs' lending or
non-judicial foreclosure methods.

Moreover, the Oregon Attorney

General's suit against BNYM is related to securities fraud and, as
such,

is

especially not

completely unrelated to

germane.

Thus,

the present

these materials

dispute.

Therefore,

are
the

McDaniels' request for judicial notice is denied.
II.

Motion to Remand
Plaintiffs assert that this case must be remanded because: 1)

this Court lacks subj ect-matter jurisdiction; and 2) "the McDaniels
failed to comply with the procedural requirements imposed by 28

u.s.c.

§

A.

1446."

PIs.' Mem. in Supp. of Mot. Remand 4, 9.

Subject-Matter Jurisdiction

The existence of subject matter-jurisdiction is a threshold
issue; thus, absent a proper basis for subject-matter jurisdiction,
a removed case must be remanded to state court.

28 u. S. C.

§

1447(c); see also Steel Co. v. Citizens for a Better Env't, 523

u.s.

83,

96-98

(1998).

"In

civil

cases,

subject-matter

jurisdiction is generally conferred upon federal district courts
either through diversity jurisdiction, 28 U.S.C.
question jurisdiction, 28 U.S.C.
Page 6 - OPINION AND ORDER

§

1331."

§

1332, or federal

Peralta v. Hispanic

Bus .. Inc., 419 F.3d 1064, 1068 (9th Cir. 2005).

The defendant

bears the burden of establishing that diversity jurisdiction is
proper pursuant to a motion for remand.

See,

e.g.,

Kanter v.

Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001).
Here, plaintiffs' amended complaint does not raise any federal
questions.

See generally Am. Compl.

Thus, the issue is whether

this Court has diversity jurisdiction, which exists where "the
matter in controversy exceeds the sum or value of $75,000 [and is
between] citizens of different States."

28 V.S.C.

§

1332(a) (1).

It is undisputed that the amount in controversy requirement is
met in this case.
$255,000");

see also

Am.

~

PIs.'

CompI.
Mem.

at pg.

in Supp.

1

("Prayer Amount:

of Mot.

Remand 10.

Rather, plaintiffs argue that the Notice "fails to establish all
the parties'

citizenships or in any manner establish diversity

jurisdiction provided the basis for the filing."

PIs.' Mem. in

Supp. of Mot. Remand 10.
Plaintiffs, however, misrepresent the content of the Notice.
While

the McDaniels

do

not

identify the

statutory basis

for

removal, the Notice contains information sufficient to determine
that jurisdiction is appropriately premised on complete diversity.
Specifically,

in the section entitled "Basis for Removal," the

MCDaniels state
[pllaintiffs are all foreign entities. [BAC] is a Texas
Limited Partnership .
[ReconTrustl has a principal
office address in Simi Valley California. [BNYMj is a
Delaware corporation with its principal executive offices
located at One Wall Street, New York. CWALT, Inc. is a
Delaware corporation.
Notice

~

4.

In addition, the McDaniels are "domiciled in Oregon

Page 7 - OPINION AND ORDER

[and the) subject property is in Oregon."

Id. at 'If 24.

Thus, the Notice reveals that plaintiffs are diverse from the
McDaniels.

Since the MCDaniels are proceeding pro se, their briefs

are held "to less stringent standards than formal pleadings drafted
by lawyers." Haines v. Kerner, 404 U.S. 519, 520 (1972).

Further,

at this stage in the proceedings, "defendants [are) merely required
to allege

(not to prove) diversity."

Kanter, 265 F.3d at 857.

Accordingly, that the Notice does not contain a formal statement of
subject-matter jurisdiction is immaterial because the McDaniels
have adequately demonstrated complete diversity between the parties
and,

additionally,

the

amount

in

controversy

requirement

is

satisfied.
Moreover, the Court notes that, with nearly identical parties
involved, plaintiffs removed the McDaniels' claims to federal court
on the basis of diversity jurisdiction less than two years ago.

As

such, plaintiffs' assertions that diversity is lacking in this case
are somewhat disingenuous.

Therefore, I find that this Court has

subject-matter jurisdiction.
B.

Compliance with 28 U.S.C.

§

1446

Plaintiffs next assert that the McDaniels neglected to follow
the procedural requirements of the removal statute.
plaintiffs

Specifically,

argue that this case must be remanded because the

McDaniels

failed to:

1)

following

receipt

the

'process'

and

of

file

their Notice wi thin thirty days

initial

'pleadings'''; and 3)

removal from all defendants.
Page 8 - OPINION AND ORDER

complaint;

2)

include

"all

seek and obtain consent to

PIs.' Mem. in Supp. of Mot. Remand 2.

The defendant must file a notice of removal "wi thin thirty
days after the receipt [of the complaint]."

28 U.S.C.

§

1446(b).

Because the removal statute must be strictly construed against
removal jurisdiction, the court must grant a motion for remand
where the defendant's petition for removal was untimely.
v.

ITEX Corp.,

568 F.3d 752,

755-56

(9th Cir. 2009)

~

Kamm

(citations

omi tted) .
Plaintiffs assert that the Notice was over two-hundred days
late.

Specifically,

plaintiffs acknowledge that the McDaniels

filed their Notice seventeen days after the amended complaint but
argue that "the [a]mended [c]omplaint did nothing to give rise to
a new 30-day removal window."
9.

Pls.' Mem. in Supp. of Mot. Remand

Conversely, the McDaniels argue that the "filing of an amended

complaint of necessity must trigger a new 30 day provision or
different time frame in part because a defendant is required to
file an answer anew as if the amended complaint were a new or
different complaint."

McDaniels' Resp. to Mot. Remand 2.

Generally, the filing of an amended complaint does not restart
the thirty day time frame in which a petition for removal must be
filed.
where

See 28 U.S.C.
the

complaint

case was
sets

jurisdiction.

§

1446(b) (3).

not

forth

An exception exists, however,

previously removable
a

basis

for

federal

and

the

amended

subj ect-matter

Id.

Here, plaintiffs' initial complaint was virtually identical to
the amended complaint; as such, this case became removable as of
August 4, 2011, the date on which the McDaniels accepted service of
Page 9 - OPINION AND ORDER

the original complaint.

Accordingly, these circumstances do not

fall within the exception.

The McDaniels, however, filed a motion

to dismiss on September 19, 2011.
While difficult to decipher,

See Englebloom Declo Ex.

11.

it appears as though the McDaniels

construed their motion to dismiss as procedurally equivalent to a
petition for removal.

See McDaniels' Resp. to Mot. Remand 2.

Regardless, the MCDaniels' actions are insufficient to satisfy
the requirements of the removal statute for two reasons.

First,

the McDaniels' motion to dismiss was filed over thirty days from
the date of service.
their motion

as

Thus,

even if the Court were to construe

commensurate

to

a

notice

of

removal,

it

was

nonetheless untimely.
Second,

because of the

strong presumption against removal

jurisdiction, the fact that the McDaniels are proceeding pro se
does

not

provide

for

any

greater

leniency

in

regard

to

the

procedures outlined in 28 U.S.C. § 1446.

While pro se litigants

are

with

held

to

a

less

stringent

standard

regard

to

their

pleadings, they still "must follow the same rules of procedure that
govern other litigants.

H

King v. Atiyeh, 814 F.2d 565, 567

(9th

Cir. 1987).
As such,
have

courts within this District and the Ninth Circuit

routinely

granted

motions

for

remand

defendant's notice of removal was untimely.
2009 WL 840191,

*3

Mortg.

Martinez,

Ass'n v.

(D.Or. March 26,

2009);

2012 WL 1552761,

where

a

pro

se

See Anderson v. Babb,
see also Fed.
*3

Nat'l

(E.D.Calo May 1,

2012); Fed. Home Loan Mortg. Corp. v. Garcia, 2011 WL 4500921, *3

Page 10 - OPINION AND ORDER

(E.D.Cal. Sept. 27), adopted by 2011 WL 2680523 (E.D.Cal. Jul. 8,
2011); Rosenb1edt v. Salgado, 2010 WL 1992542, *1-2 (N.D.Cal. May
18, 2010).

Thus, the MCDaniels' ignorance of the rules cannot

account for the fact that the Notice was filed two hundred and
three days after service of the initial complaint was effectuated.
For this reason, alone, the McDaniels improvidently removed the
case and, as a result, it must be remanded back to Deschutes County
Circuit Court.
Remand is also appropriate, however, because the IRS has not
joined in or consented to the McDaniels' Notice.
the case involves multiple defendants,

Where, as here,

the "rule of unanimity"

requires that all defendants consent to the removal petition.
Proctor v. Vishay Intertech. Inc., 584 F.3d 1208, 1225 (9th Cir.
2009)

(citing Wis. Dep't of Corrs. v. Schacht, 524 U.S. 381, 393

(1998)) .

One defendant's timely removal notice containing an

averment of the other defendants' consent is generally sufficient
to satisfy section 1446 (b) (2).

.lQ...

The Notice, however, is silent regarding whether consent from
the McDaniels' co-defendant was sought or obtained.
Notice.

Further,

this

defect

has

not

yet

See generally

been cured.

The

McDaniels assert in their response that they are attempting to
obtain the IRS' consent; yet a month has passed and there is still
no evidence that consent has been procured.

As such, it is unclear

how genuine the MCDaniels' efforts have been, especially since they
also contend in their response that "procedural mistakes regarding
the consent of the parties [is] immaterial to the questions before
Page 11 - OPINION AND ORDER

the court

on the basis of removal and

[plaintiffs'

arguments

regarding consent evidence their] apparent practice of fraud or
making false claims."
such,

See McDaniels' Resp. to Mot. Remand 2.

As

the Notice remains defective for this additional reason.

Therefore, plaintiffs' motion is granted.
III.

Attorney Fees
Finally, in their motion to remand, plaintiffs move for an

award of costs and attorney fees
improper removal.

incurred as a result of the

"An order remanding the case may require payment

of just costs and any actual expenses, including attorney fees,
incurred as a result of the removal."

28 U.S.C. l447(c).

Thus,

the determination to award costs and fees under section l447(c) is
within the discretion of the court.
~,

Lussier v. Dollar Tree Stores,

518 F.3d 1062, 1065 (9th Cir. 2008).

Generally, such payment

is appropriate "where the removing party lacked an objectively
reasonable basis for seeking removal."

Martin v. Franklin Capital

Corp., 546 U.S. 132, 141 (2005).
Plaintiffs cite to Houden v. Todd and Anderson v. Babb in
support of their contention that "defects in the removal process .
. render a removal 'objectively unreasonable.'"
Supp. of Mot. Remand 12-13. 3

PIs.' Mem. in

Houden v. Todd, 2009 WL 2956924, *1

(9th Cir. Sept. 14, 2009); Anderson v. Babb, 2009 WL 840191, *3

3 Plaintiffs cite to a number of additional cases that
awarded attorney fees and costs pursuant to section 1447(c) where
the court lacked subject-matter jurisdiction. See PIs.' Mem. in
Supp. of Mot. Remand 13-14. As discussed above, however, this
Court has subject-matter jurisdiction over this dispute and, as
such, these cases are not applicable.

Page 12 - OPINION AND ORDER

(D.Or. March 26, 2009).
Houden, however, is distinguishable, as the defendant in that
case was represented by counsel.

Houden, 2009 WL 2956924 at *1.

Further, this Court finds Anderson unpersuasive.

Despite the fact

that the defendant was proceeding pro se, the court held that "the
language of 28 U.S.C.
days,'

1446,

§

requiring removal within 'thirty

is unambiguous"; accordingly, the defendant's failure to

comply with this requirement was objectively unreasonable and fees
and costs were awarded.

Anderson, 2009 WL 840191 at *3.

This Court disagrees with Anderson and finds the language of
section 1446 equivocal.

Here,

the McDaniels clearly tried to

comply with the provisions of the removal statute.
they filed

their Notice within

seventeen days

For example,
of plaintiffs'

amended complaint based on the assumption that the new filing
triggered an additional thirty day window.

The only relevant

provision of the removal statute that addresses amended pleadings
is section 1446 (b) (3), which states "if the case stated by the
initial pleading is not removable, a notice of removal may be filed
within thirty days after receipt by the defendant [of the amended
complaint]."
unfamiliar

28
with

U.S.C.
the

§

1446(b) (3).

jurisdiction

of

As

such,

federal

if

courts,

one was
it

is

reasonable to assume that through service of an amended complaint,
the timeframe for filing a petition for removal is restarted.
Thus, the MCDaniels' mistake was not objectively unreasonable.
This is especially true considering that courts within this
Circuit

are

required

to

Page 13 - OPINION AND ORDER

accord

significant

weight

to

the

defendant's lack of representation in determining whether to award
attorney fees and costs pursuant to 28 U.S.C.

§

1447(c).

See One

West Bank, FSB v. Mohr, 2010 WL 2721437, *3 (N.D.Cal. July 7, 2010)
(declining to award fees despite untimely removal and suggestion of
bad

faith

on

basis

that

unrepresented

status

of

defendants

constituted "unusual circumstances"); Szanto v. Szanto Revocable
Trust of 1991, 2010 WL 2280356 (N.D.Cal. June 7, 2010)

(denying

motion for fees because defendant's mistake was "understandable"
for a pro se litigant); Citibank N.A. v. Ortiz, 2008 WL 4771932, *2
(S.D.Ca1. Oct. 28, 2008) (declining to award fees "in consideration
of

[d]efendant's

Peterson,

pro

se

status");

2005 WL 2334712,

*4

J.P.

Morgan

(E. D.Cal. Sept.

Chase

21,

2005)

Bank v.
(court

denied fees based on defendant's lack of representation).
Plaintiffs have not offered any evidence indicating that the
McDaniels lacked a good faith belief in their removal efforts.
While

it may have been readily apparent to an attorney that

plaintiffs' amended complaint did not create a second thirty day
period in which to file a notice of removal, the McDaniels did not
have the benefit of legal counsel.

Therefore, the Court declines

to award fees and costs in light of the McDaniels' pro se status.
CONCLUSION
The McDaniels' Requests for Judicial Notice (docs. 21, 22) are
DENIED.

Plaintiffs' Motion to Remand (doc. 4) is GRANTED; however,

plaintiffs' request for attorney fees and costs (doc. 4) is DENIED.
Further, defendants' motion to dismiss (doc. 9) is denied as moot.
Finally, the parties'

requests for oral argument are DENIED as

Page 14 - OPINION AND ORDER

unnecessary, and this case is REMANDED to state court.
IT IS SO ORDERED.
Dated this

I~~day

of May 2012.

Ann Aiken
United States District Judge

Page 15 - OPINION AND ORDER