Flahaut et al v. Johnson et al
Filing
54
MEMORANDUM DECISION and ORDER denying 29 Motion for Recusal; granting 3 Motion to Remand. Magistrate Judge Paul M. Warner no longer assigned to case. Case closed. Signed by Judge Ted Stewart on 3/12/2015. (blh) Modified by adding closing text on 3/12/2015 (blh).
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION
RODNEY FLAHAUT, et al.,
MEMORANDUM DECISION AND
ORDER DENYING DEFENDANT’S
EX PARTE MOTION AND
GRANTING PLAINTIFFS’
MOTION TO REMAND
Plaintiffs,
v.
JAMIS JOHNSON, et al.,
Defendants.
Case No. 2:14-CV-726 TS
District Judge Ted Stewart
This matter is before the Court on Defendant Jamis Johnson’s Ex Parte Motion and
Plaintiffs’ Motion to Remand. For the reasons discussed below, the Court will deny Defendant’s
Motion and grant Plaintiff’s Motion.
I. BACKGROUND
Rodney Flahaut and Marianne Flahaut (“Plaintiffs”), residents of Utah, initially filed this
action in the Third Judicial Court in and for Salt Lake County, State of Utah, on July 8, 2013. In
their Amended Complaint, Plaintiffs asserted claims for reformation, breach of warranty deed
covenants, and quiet title. Plaintiffs claim that the deeds in the chain of title should be reformed
to reflect the intent of the parties, i.e., that Plaintiffs received legal title to the residential home
located at 1408 Military Way, Salt Lake City, Utah 84103 (“Property”), that the Plaintiffs are the
current legal title holders, and that the Bank of America deeds of trust were valid liens against
1
the Property. Plaintiffs further claim that Reliable Solutions, LLC (“Reliable”) did not hold nor
convey title to Plaintiffs. Therefore, Reliable’s warranties, as set forth in the warranty deed,
have been breached. Finally, Plaintiffs claim that they are entitled to an order quieting title to the
Property in them, subject only to the trust deeds to Countrywide Bank, N.A., held by Bank of
America.
On October 3, 2014, Jamis Johnson (“Defendant”) filed a Notice of Removal, removing
this matter to federal court on the basis of diversity jurisdiction. Defendant later filed an
Amended Notice of Removal asserting diversity jurisdiction and federal question jurisdiction.
Plaintiffs timely sought remand.
II. DISCUSSION
As a preliminary matter, Defendant moves the Court to recuse itself from this matter.
Having considered Defendant’s argument, the Court will deny Defendant’s Motion.
Federal courts are courts of limited jurisdiction and must have a statutory basis for their
jurisdiction. 1 “Removal statutes are to be strictly construed and all doubts are to be resolved
against removal.” 2 The party seeking removal must overcome this presumption against removal
jurisdiction. 3 The removing party bears the burden of establishing the requirements for federal
jurisdiction. 4
1
Castaneda v. I.N.S., 23 F.3d 1576, 1580 (10th Cir. 1994).
2
Fajen v. Found. Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir. 1982) (citation omitted).
3
See Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir. 1995).
4
Martin v. Franklin Capital Corp., 251 F.3d 1284, 1290 (10th Cir. 2001).
2
In this action, the Court finds that Defendant fails to satisfy the requirements necessary to
remove his case for the following reasons: there is no diversity between the parties, the removal
was untimely, and all defendants did not unanimously agree to the removal.
A.
DIVERSITY JURISDICTION
Defendant based his initial Notice of Removal on diversity jurisdiction. A civil action
cannot “be removed if any of the parties in interest properly joined and served as defendants is a
citizen of the State in which such action is brought.” 5 The United States Supreme Court has
stated that “[d]efendants may remove an action on the basis of diversity of citizenship [only] if
there is complete diversity between all named plaintiffs and all named defendants, and no
defendant is a citizen of the forum state.” 6 In addition, the matter in controversy must exceed
“the sum or value of $75,000, exclusive of interests and costs, and is between citizens of
different states.” 7
Although this matter exceeds $75,000, Defendant only fulfills part of the requirement for
removal on the basis of diversity. Complete diversity does not exist in this matter, as Plaintiffs
and most of the Defendants are citizens of the forum state of Utah. Because the sole basis of
Defendant’s initial Notice of Removal was diversity, this Court must remand this matter. 8
5
28 U.S.C. § 1441(b)(2).
6
Lincoln Prop. Co. v. Roche, 546 U.S. 81, 84 (2005).
7
28 U.S.C. § 1332(a).
8
Fed. Nat’l Mortgage Ass’n v. Rojas, 2:13-CV-86, 2013 WL 2099753 (D. Utah May 14, 2013).
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B.
TIMELINESS
Even if there were diversity between the Plaintiffs and Defendant, a defendant must
comply with 28 U.S.C. § 1446(b) if they wish to remove a civil action. 28 U.S.C. § 1446(b)
provides:
The notice of removal of a civil action or proceeding shall be filed within 30 days
after the receipt by the defendant, through service or otherwise, of a copy of the
initial pleading setting forth the claim for relief upon which such action or
proceeding is based, or within 30 days after the service of summons upon the
defendant if such initial pleading has then been filed in court and is not required
to be served on the defendant, whichever period is shorter. 9
However,
[I]f the case stated by the initial pleading is not removable, a notice of removal
may be filed within 30 days after receipt by the defendant, through service or
otherwise, of a copy of an amended pleading, motion, order or other paper from
which it may first be ascertained that the case is one which is or has become
removable. 10
Further, “[a] case may not be removed under subsection (b)(3) on the basis of jurisdiction
conferred by section 1332 more than 1 year after commencement of the action, unless the district
court finds that the plaintiff has acted in bad faith in order to prevent a defendant from removing
the action.” 11 “The failure to comply with these express statutory requirements for removal can
fairly be said to render the removal ‘defective’ and justify a remand.” 12
Defendant filed his Notice of Removal 449 days after he filed his Answer to his original
Complaint and he filed his Answer to the Amended Complaint 163 days after the Amended
9
28 U.S.C. § 1446(b)(1).
10
28 U.S.C. § 1446(b)(3).
11
28 U.S.C. § 1446(c)(1).
12
Huffman v. Saul Holdings Ltd. P’ship, 194 F.3d 1077 (10th Cir. 1999) (citation and internal
quotation marks omitted).
4
Complaint was filed. Based upon the above, Defendant failed to remove this matter within the
time allotted by the statute. Therefore, removal was improper.
Defendant’s attempt to amend his Notice of Removal to assert a new basis for jurisdiction
after the time to file a notice of removal had expired does not alter this conclusion. The Tenth
Circuit Court of Appeals allows a defendant to amend their notice of removal, even when the
thirty-day removal window has expired, in order to correct simple errors in its jurisdictional
allegations. 13 Examples of simple errors include failing to identify a corporation’s principal
place of business or referring to an individual’s state of residence rather than citizenship. 14
“However, defendants may not add completely new grounds for removal or furnish missing
allegations, even if the court rejects the first-proffered basis of removal, and the court will not,
on its own motion, retain jurisdiction on the basis of a ground that is present but that defendants
have not relied upon.” 15 Moreover, “[a] defendant may not normally cure a defective notice of
removal by asserting a new basis of jurisdiction not contained in the original notice of
removal” 16 Thus, the Court will not consider the Amended Notice of Removal to the extent that
it seeks to add a new jurisdictional basis. 17
13
Hendrix v. New Amsterdam Cas. Co., 390 F.2d 299, 301 (10th Cir. 1968).
14
Id.
15
14C Wright & Miller, Federal Practice and Procedure § 3733, at 651–59 (4th ed. 2009).
16
Zamora v. Wells Fargo Home Mortg., 831 F. Supp. 2d 1284, 1293 (D.N.M. 2011).
17
Even considering the Amended Notice of Removal, the Court finds that it fails to adequately
assert federal question jurisdiction.
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C.
UNANIMOUS CONSENT
In addition to the requirements set forth above, all defendants must unanimously agree to
remove. 18 “Remand is required if all of the defendants fail to consent to the petition for removal
within the thirty-day period.” 19 Here, there is no evidence that all Defendants “consent[ed] to
the removal of the action.” 20 While certain Defendants have filed consents to removal, not all
Defendants have done so. Therefore, the Court must remand this action.
III. ATTORNEY’S FEES AND COSTS
In the event this matter is remanded, Plaintiffs request their attorney fees and costs.
“[A]n order remanding the case may require payment of just costs and actual expenses, including
attorney fees, incurred as a result of the removal.” 21 “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. Conversely, when an objectively reasonable basis exists,
fees should be denied.” 22
The Court finds that under the circumstances presented here, Defendant’s removal lacked
an objectively reasonable basis for the reasons set forth above. Therefore, the Court will grant
Plaintiff’s request for attorney fees and costs.
IV. CONCLUSION
It is therefore
18
See 28 U.S.C. § 1446(b)(2)(A).
19
Williams v. Bd. of Regents of Univ. of New Mexico, 990 F. Supp. 2d 1121, 1138 (D. N.M.
2014).
20
28 U.S.C. § 1446(b)(2)(A).
21
28 U.S.C. § 1447(c).
22
Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005).
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ORDERED that Defendant’s Motion (Docket No. 29) is DENIED. It is further
ORDERED that Plaintiffs’ Motion to Remand (Docket No. 3) is GRANTED.
The Clerk of the Court is directed to transmit this matter to the Third Judicial District
Court in and for Salt Lake County, State of Utah and close this case forthwith.
Plaintiffs are directed to submit an affidavit detailing their costs and actual expenses,
including attorney fees, incurred as a result of the removal within fourteen (14) days of this
Order.
DATED March 12, 2015.
BY THE COURT:
________________________________________
TED STEWART
United States District Judge
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