Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Michael Seneca v. First Franklin Financial Corp.

April 5, 2011

MICHAEL SENECA,
PLAINTIFF,
v.
FIRST FRANKLIN FINANCIAL CORP., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hon. Dana M. Sabraw United States District Judge

ORDER DENYING MOTION TO REMAND TO STATE COURT AND GRANTING MOTION TO DISMISS

Pending before the Court are a motion to dismiss by Defendants Home Loan Services, Inc. ("HLS"), First Franklin Financial Corporation ("FFFC"), U.S. Bank, N.A. ("U.S. Bank"), and Bank of America, N.A. ("Bank of America", together with HLS, FFFC, and U.S. Bank, collectively, "Defendants"), and Plaintiff's motion to remand the action to state court. For the following reasons, Plaintiff's motion to remand is denied and Defendants' motion to dismiss is granted.

I. BACKGROUND

In September, 2005, Plaintiff obtained a loan for $225,000.00 for the purchase of the subject property from his mother. (Complaint at 6.) On June 22, 2006, Plaintiff sought to obtain an equity loan on the property, but was instead convinced by his broker to refinance the loan in the amount of $300,000.00. (Id.) In February 2007, Plaintiff contacted the same broker whom he had worked with on the original loan and the refinancing, Defendant Mark Moore, to see about the possibility of a short-term loan. (Id. at 6-7.) Defendant Moore responded to Plaintiff by suggesting that he could arrange for a new loan with a lower interest rate and a lower monthly payment. (Id. at 7.) Defendant Moore subsequently personally made a loan to Plaintiff so that he could make two missed payments on his existing loan. (Id. at 8-9.) On February 23, 2007, Plaintiff signed documents to obtain a new loan in the amount of $374,000.00, which was secured by a Note on the subject property. (Id. at 9, 15.) Plaintiff assumed the terms of the loan would include a lower interest rate and a lower monthly payment. (Id. at 9.) However, the new loan resulted in higher monthly payments. (Id. at 10.)

On October 12, 2010, Plaintiff filed a Complaint in San Diego Superior Court. On November 10, 2010, Defendants removed the action to this Court. (Doc. 1.) The Complaint sets forth ten claims for relief: (1) fraud, (2) professional malpractice, (3) negligence, (4) violation of the Unfair Competition Law ("UCL"), (5) violation of the Real Estate Settlement Procedures Act ("RESPA"),

(6) rescission under the Truth in Lending Act ("TILA"), (7) contractual rescission, (8) reformation, (9) to quiet title, and (10) injunctive relief. On November 18, 2010, Defendants filed a motion to dismiss the Complaint. (Doc. 3.) On December 7, 2010, Plaintiff filed a motion to remand the action. (Doc. 5.) Objections and replies were filed by the parties to both of the motions. (Docs. 9-12.)

II. DISCUSSION

A. Motion to Remand

28 U.S.C. § 1446(b) states "[t]he notice of removal of a civil action or proceeding shall be filed within thirty 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." It is undisputed that none of Defendants have been formally served with Plaintiff's state court Complaint. Nonetheless, Defendants, who apparently received a courtesy copy of the Complaint, removed the action to this Court on the basis of federal question jurisdiction. In his motion to remand, Plaintiff argues removal was improper because this Court lacks personal jurisdiction over Defendants who have not yet been served and because Defendants did not obtain the consent of all other Defendants named in the Complaint, who have also not yet been served, prior to removal.

Notably, neither party cites to, and the Court has been unable to find, any case law addressing the propriety of removal to Federal Court prior to service of the Complaint. However, as Defendants note, a party that voluntarily appears before a Court may waive lack of personal jurisdiction due to defect in service by appearing generally without challenging the defect in a preliminary motion or in a responsive pleading. Jackson v. Hayakawa, 682 F.2d 1344, 1347 (9th Cir. 1982)("Jurisdiction attaches if a defendant makes a voluntary general appearance."). By their removal of this action, Defendants have generally appeared before this Court and the removal was proper and timely.

Plaintiff also argues removal was improper because Defendants did not obtain the consent of all other defendants named in the Complaint. However, unserved defendants are not required to join in a notice of removal. Salveson v. Western States Bankcard Ass'n, 731 F.2d 1423, 1429-30 (9th Cir. 1984), superceded by statute on other grounds. Here, it is undisputed that the remaining defendants named in the Complaint have not yet been served. Accordingly, they were not required to join in the notice of removal.

Removal jurisdiction may be based on diversity of citizenship or on the existence of a federal question. 28 U.S.C. § 1441. Here, from the face of the Complaint, it is apparent that Plaintiff asserts claims arising under the federal Real Estate Settlement Procedures Act and under the federal Truth in Lending Act. Therefore, removal was proper on the basis of federal question jurisdiction. Furthermore, the Court may exercise supplemental jurisdiction over Plaintiff's state law claims forming part of the same case or controversy pursuant to 28 U.S.C. § 1367(a).

B. Motion to Dismiss

A party may move to dismiss a claim under Rule 12(b)(6) if the claimant fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). The Federal Rules require a pleading to include a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The Supreme Court, however, recently established a more stringent standard of review for pleadings in the context of 12(b)(6) motions to dismiss. See Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). To survive a motion to dismiss under this new standard, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 129 S. Ct. at 1949 (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.