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U.S. Bank National Association, As Trustee For the Lxs 2006-16n Trust Fund v. Marlene Gonzales; and Does 1-10

March 22, 2011

U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE LXS 2006-16N TRUST FUND, PLAINTIFF,
v.
MARLENE GONZALES; AND DOES 1-10, INCLUSIVE DEFENDANTS.



The opinion of the court was delivered by: Kendall J. Newman United States Magistrate Judge

FINDINGS AND RECOMMENDATIONS

Presently before the court is plaintiff's motion to dismiss for lack of an existing state court action, and plaintiff's motion for an order remanding this unlawful detainer action to the Superior Court of the State of California, County of Sacramento ("Superior Court"). (Dkt. Nos. 4, 13.)*fn1 For the reasons that follow, the undersigned recommends that: (1) plaintiff's motion to dismiss be denied; (2) plaintiff's motion to remand be granted; and (3) that this entire case be remanded to the Superior Court for further proceedings.

I. BACKGROUND

Plaintiff is alleged to be the purchaser of real property at a trustee's sale effectuated under California state law.*fn2 (Compl. for Unlawful Detainer ("Complaint") ¶ 1, Dkt. No. 4.) Defendant is an individual who is alleged to be a holdover occupant and previous owner of the subject property. (Id. ¶ 2.) Defendant is a resident of the State of California. (Notice of Removal ¶ 16, Dkt. No. 1.)

Plaintiff alleges that on March 17, 2010, following the trustee's sale and perfection of plaintiff's title to the subject property, it served defendant with a "Three Day Notice for Possession," which required defendant to quit and deliver up possession of the premises to plaintiff. (Compl. ¶ 5.) Plaintiff alleges that defendant remains in possession of the property. (Id. ¶ 6.)

On April 7, 2010, plaintiff filed its verified Complaint in the Superior Court, seeking: (1) restitution and possession of the real property in question; (2) damages at a rate of $50.00 per day from March 21, 2010, until the date of entry of judgment for plaintiff; and (3) costs and further relief as is proper. (Id. at 3.) The caption of the Complaint states the following: "DEMAND UNDER $10,000." (Id. at 1.) On May 18, 2010, the Superior Court entered judgment in favor of plaintiff. (See Writ of Execution of Possession of Real Property ("Writ of Execution"), Dkt. No. 1 at 19-20.) Subsequently, a Writ of Possession was issued on May 28, 2010, followed by a Notice to Vacate. (Dkt. No. 1 at 21). Defendant implies that an order was issued by the Sacramento Superior Court which addressed a "Motion to Stay and Recall Writ." (Notice of Removal ¶ 19.) However, defendant did not file this document with the court as required by 28 U.S.C. §1446(a).*fn3

On October 8, 2010, defendant removed this unlawful detainer action to this court on the grounds that: (1) this court has original jurisdiction because defendant's "principle claim for relief concerns [U.S. Bank's] wrongful foreclosure practices which action arises under 28 U.S.C. § 1331"; and (2) this court has original jurisdiction over this action under 28 U.S.C. § 1332 because plaintiff's state of incorporation is not California and defendant is a resident of California. (Notice of Removal ¶¶ 14-16.)

Plaintiff filed a motion to remand on January 11, 2011. (Dkt. No. 4.) Plaintiff's motion seeks remand on the ground that this court lacks subject matter jurisdiction. Defendant did not file an opposition. The court heard this matter on its law and motion calendar on February 17, 2011. Attorney Deepika S. Saluja appeared on behalf of plaintiff. Defendant did not appear.

Before proceeding to discuss the motion to remand, the undersigned addresses a preliminary matter-the recently filed motion to dismiss. At the February 17, 2011 hearing on the motion to remand, the undersigned expressed concern regarding the status of the state court action. The undersigned informed plaintiff's counsel that in their respective filings, the parties had each represented that a final judgment had been entered, but that the court's records did not contain any support for these assertions.*fn4 Further, the undersigned informed counsel that if there was no existing action to remove, logically, there was no action to remand. See U.S.C. § 1446; see also Ristuccia v. Adams, 406 F.2d 1257, 1258 (9th Cir. 1969) (per curiam) ("We hold that, as a matter of logic, if appellants had no existing cause of action to remove, the fact that the district court has determined that appellants lacked a removable cause of action creates no cause of action that can be remanded.")

To determine whether there was any action to remand to state court, the undersigned inquired of plaintiff's counsel: (1) whether the state court action had reached a final judgment; (2) whether defendant's representation that she had filed a Motion to Stay and Recall the Writ of Possession was accurate; and (3) why plaintiff sought to remand, rather than dismiss this action, if in fact the state court action had proceeded to a final judgment.

Plaintiff's counsel again represented that a final judgment had been entered. The court then ordered counsel to file, within one week, evidence of the final state court judgment. (Minute Order, Dkt. No. 12.) Further, the court informed counsel that if there had been a ruling on the Motion to Stay and Recall, this document should also be filed with this court. Finally, the undersigned advised plaintiff's counsel that if the state court documents established that there was no action to remove at the time the Notice of Removal was filed with this court, then a motion to dismiss would be the procedural device for disposing of the federal court action. Counsel was instructed that if a motion to dismiss was required, plaintiff would need to notice such a motion and brief the grounds on which dismissal would be proper.

On February 24, 2011, plaintiff filed a motion to dismiss. (Dkt. No. 13.) Despite this court's guidance at the February 17, 2011 hearing, the arguments supporting this motion miss the point. Rather than addressing the status of the state court action, the motion to dismiss makes the same arguments found in the motion to remand, i.e., lack of subject matter jurisdiction. Further, although counsel attached evidence of the final judgment, no documents or representations were made regarding the Motion to Stay and Recall the Writ of Possession. Absent documents or declarations demonstrating that the Motion to Stay and Recall the Writ of Possession is not currently pending in state court, plaintiff has failed to establish that there was no pending action to remove to federal court. Accordingly, the undersigned recommends that plaintiff's motion to dismiss be denied. The undersigned next addresses plaintiff's motion to remand.

II. LEGAL STANDARDS

The federal courts are courts of limited jurisdiction, and only cases which could have originally been brought in federal court may be ...


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