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Gilmore v. Bank of New York

July 9, 2009

KAREN GILMORE; LARRY GILMORE, PLAINTIFFS,
v.
BANK OF NEW YORK; COUNTRYWIDE HOME LOANS; AMERICA'S WHOLESALE LENDER; BANK OF AMERICA; AMERICAN MORTGAGE PROFESSIONAL, INC.; AND DOES 1-10, DEFENDANTS.



The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court

ORDER: (1) GRANTING PLAINTIFFS' MOTION TO REMAND CASE TO STATE COURT [Doc. No. 19]; and (2) DENYING AS MOOT DEFENDANTS' MOTION TO DISMISS COMPLAINT [Doc. No. 18.]

Plaintiffs Karen and Larry Gilmore ("Plaintiffs") have filed a motion to remand this case to state court. (Doc. No. 19.) Defendants Bank of New York ("BNY"), Countrywide Home Loans ("Countrywide"), America's Wholesale Lender ("AWL"), and Bank of America ("BOA") (collectively, "Defendants") have filed a motion to dismiss Plaintiffs' first amended complaint under Fed. R. Civ. P. 12(b)(6). (Doc. No. 18.) For the reasons stated herein, the Court grants Plaintiffs' motion to remand and denies Defendants' motion to dismiss as moot.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs Karen and Larry Gilmore's claim arises from a loan Ms. Gilmore received to purchase a home. The following facts are drawn from Plaintiffs' first amended complaint. On March 9, 2006 Karen Gilmore purchased an Oceanside, California home ("the property") for $780,000.

Using the services of a mortgage broker, Defendant American Mortgage Professional, Inc. ("AMP"), she obtained a loan from AWL for 80% ($624,000) of the purchase price. Ms. Gilmore agreed to make monthly payments on the loan in an amount of $4,591.74 at an interest rate of 7% for a period of 10 years.*fn1 Ms. Gilmore financed the remaining 20% ($156,000) of the purchase price though a home equity line of credit ("HELOC"), allegedly funded by BOA. She agreed to monthly payments in an amount of $1,586.71 at an interest rate of 12.375%. The combined monthly payment on Plaintiffs' two loans equaled $6,178.45, at a time when Plaintiffs earned a combined monthly income of $7,500. At an undisclosed point in time, AWL allegedly transferred the servicing of the two loans to its parent company, Countrywide. Plaintiffs defaulted on their loans, resulting in a trustee's sale of the property on September 29, 2008 to BNY, as agent for Countrywide.

Plaintiffs brought the instant action in the Superior Court of California for the County of San Diego on January 12, 2009. Defendants removed the case to this Court on February 5, 2009. (Doc. No. 1.) The complaint alleged: "wrongful foreclosure;" "action to set aside trustee sale;" violation of California Civil Code §§ 1573 (constructive fraud) and 2923.5; violation of California Financial Code §§ 4973(f) and (n); violation of 12 U.S.C. §§ 2607(a) and (b) (the Real Estate Settlement Procedures Act, hereinafter "RESPA"); and "breach of fiduciary duties." Plaintiffs filed a first amended complaint on April 10, 2009 (Doc. No. 17,) alleging the following claims: "set aside of trustee sale;" conspiracy to defraud; violation of Cal. Civ. Code §§ 1573, 1667, 1708, 1770 and 2923.5; violation of Cal. Fin. Code § 4973; "breach of fiduciary duties;" and "contractual rescission."

On April 27, 2009, Defendants filed a motion to dismiss the first amended complaint. (Doc. No. 18.) On May 13, 2009 Plaintiffs filed a motion to remand the case to state court. (Doc. No. 19.) The parties have filed oppositions to each respective motion. Defendants have filed a reply brief in support of their motion to dismiss, but Plaintiffs have not filed a reply in support of their motion to remand. The Court finds the motions appropriate for disposition without oral argument pursuant to Local Civil Rule 7.1(d)(1).

DISCUSSION

I. Plaintiffs' Motion to Remand

A. Legal Standard

"Any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a) (2009). Removal jurisdiction may be based on diversity of citizenship or on the existence of a federal question. 28 U.S.C. § 1441(b); id. at § 1331. The removal statute also provides that "[w]henever a separate and independent claim or cause of action within the jurisdiction conferred by [28 U.S.C. § 1331] is joined with one or more otherwise nonremovable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters in which State law predominates." 28 U.S.C. § 1441(c) (2009).

The Ninth Circuit "strictly construe[s] the removal statute against removal jurisdiction." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citations omitted). Accordingly, "[t]he 'strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Id. Whether removal jurisdiction exists must be determined by reference to the well-pleaded complaint. Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 808 (1986).

B. Analysis

Defendants originally premised their removal of this case upon Plaintiffs' allegations that Defendants violated RESPA, a federal statute. (Notice of Removal at 3.) Defendants further argued the Court had supplemental jurisdiction over Plaintiffs' state law claims pursuant to 28 U.S.C. § 1367(a)*fn2 because ...


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