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Eric Hawkins Sr., and Lynda P. Hawkins v. First Horizon Home Loans

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA


August 2, 2011

ERIC HAWKINS SR., AND LYNDA P. HAWKINS, PLAINTIFFS,
v.
FIRST HORIZON HOME LOANS, A DIVISION OF FIRST TENNESSEE BANK N.A., SUCCESSOR IN INTEREST BY MERGER TO FIRST HORIZON HOME LOAN CORPORATION, A TENNESSEE CORPORATION; FORT KNOX LENDING, A CALIFORNIA BUSINESS ENTITY FORM UNKNOWN; CALIFORNIA HOME AND MORTGAGE, A CALIFORNIA BUSINESS ENTITY FORM UNKNOWN; JAMES JABAUT, AN INDIVIDUAL; LOANGUY.COM, A CALIFORNIA CORPORATION; SOUTH BAY REALTY, INC., A CALIFORNIA CORPORATION; AND DOES 2-10, DEFENDANTS.

The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge

ORDER GRANTING MOTION TO REMAND AND DENYING REQUEST FOR ATTORNEYS' FEES AND COSTS*fn1

Plaintiffs move for an order remanding this case to the Superior Court of California in the County of San Joaquin, which is the state court from which this case was removed, and an award of attorneys' fees and costs incurred as a result of the improper removal. (ECF No. 14.) Plaintiffs argue, inter alia, that removal was improper since the federal court lacks subject matter jurisdiction over their Complaint.

Defendant First Horizon Home Loans opposes the motion. For the reasons stated below, Plaintiffs' motion to remand will be granted and their request for attorneys' fees and costs will be denied.

Defendant First Horizon Home Loans relies solely on Plaintiffs' claim alleged under California's Unfair Competition Law ("UCL"), proscribed in California Business and Professions Code section 17200 et seq., as the basis for its contention that federal question removal jurisdiction exists under 28 U.S.C. § 1331. (Notice of Removal ¶¶ 10-13; Opp'n 7:3-8:2.) Specifically, Defendant First Horizon Home Loans argues this "state law claim[ is] predicated upon, and necessitate[s] the resolution of substantial, disputed questions involving numerous federal laws, including but not limited to TILA, RESPA, and FACTA." (Opp'n 7:3-5.)

28 U.S.C. § 1331 prescribes: "The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." "Most federal-question jurisdiction cases are those in which federal law creates a cause of action. A case may also arise under federal law where it appears that some substantial, disputed question of federal law is a necessary element of one of the well-pleaded state claims." Wander v. Kaus, 304 F.3d 856, 858 (9th Cir. 2002) (citations and internal quotation marks omitted). "The . . .'well-pleaded complaint rule' . . . provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." California v. United States, 215 F.3d 1005, 1014 (9th Cir. 2000) (quoting Audette v. Int'l Longshoremen's & Warehousemen's Union, 195 F.3d 1107, 1111 (9th Cir. 1999)). "The [well-pleaded complaint] rule makes the plaintiff the master of [his] claim[s]; he . . . may avoid federal jurisdiction by exclusive reliance on state law." Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987).

"'Arising under' federal jurisdiction only arises . . . when the federal law does more than just shape a court's interpretation of state law; the federal law must be at issue." Int'l Union of Operating Eng'rs v. County of Plumas, 559 F.3d 1041, 1045 (9th Cir. 2009). "[A] case arises under . . . [federal law when] a right . . . created by [that law is] an element, and an essential one, of the plaintiff's cause of action." Id. at 1044. However, "the mere presence of a federal issue in a state cause of action does not automatically confer federal-question jurisdiction." Lippitt v. Raymond James Fin. Servs., Inc., 340 F.3d 1033, 1040 (9th Cir. 2003). Further, "[w]hen a claim can be supported by alternative and independent theories-one of which is a state law theory and one of which is a federal theory-federal question jurisdiction does not attach[.]" Rains v. Criterion Sys., Inc., 80 F.3d 339, 346 (9th Cir. 1996).

Plaintiffs allege in their UCL claim:

Defendants have engaged in "unlawful" business practices within the meaning of Section 17200 by committing intentional common law misrepresentations, statutory fraud, breach of written contract, breach of fiduciary duty, negligent lending, unjust enrichment, tortious breach of good faith and fair dealing, predatory lending practices designed to financially abuse Plaintiffs and profiting thereby, fraudulently inducing Plaintiffs to contract, and violations of [California Civil Code] § 1916.71(c) . . . , and violations of TILA (15 USC §§ 1639, 1639(h), 1638(b), Regulations Z 226.17(b), and 226.19(a)), RESPA (12 U.S.C. § 2607), FACTA (section 212(b) of the FACT Act of 2003) as shown below. (Compl. ¶ 84.) Plaintiffs' alleged federal statutory violations in their UCL claim are not "necessary element[s] of [their] claim" since Plaintiffs also allege "alternative and independent theories-one of which is a state-law theory" alleging violations of California law as a predicate act for their UCL claim. Rains, 80 F.3d at 346. In light of the alternative ways Plaintiffs have plead their UCL claim, "[t]here is no 'basic' or 'pivotal' federal question that impinges on [their] right to relief." Lippitt, 340 F.3d at 1046. Since Plaintiffs' UCL claim does not "arise under" federal law, this Court lacks subject matter jurisdiction and therefore, Plaintiffs' remand motion is GRANTED.

Plaintiffs also argue they are entitled to attorneys' fees and costs under 28 U.S.C. § 1447(c) since removal was improper. (Mot. to Remand 6:8-10.) "[T]he standard for awarding fees should turn on the reasonableness of the removal. 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." Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005). However, since Plaintiffs have failed to "document[] the . . . hours [their attorney] expended and [their attorneys'] hourly rates[,]" Plaintiffs have not substantiated their request for attorneys' fees and costs, and their request is DENIED. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983).

For the stated reasons, this case is remanded to the Superior Court of California in the County of San Joaquin.


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