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Jose R. Herrera and Marie L. Herrera v. Union Fidelity Mortgage

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


August 31, 2011

JOSE R. HERRERA AND MARIE L. HERRERA, PLAINTIFFS,
v.
UNION FIDELITY MORTGAGE, INC.; CAL
WIDE MORTGAGE; CAL WESTERN RECONVEYANCE CORPORATION;
CITIBANK, N.A.; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; AND EMC MORTGAGE CORPORATION; DEFENDANTS.

United States District Court For the Northern District of California

ORDER GRANTING PLAINTIFFS' MOTION TO REMAND

I. INTRODUCTION

Before the Court is a motion to remand this action to state 20 court filed by Plaintiffs Jose R. Herrera and Marie L. Herrera 21 ("Plaintiffs"). ECF No. 10 ("Mot."). Former Defendant Aurora Loan 22 Services, LLC ("Aurora") filed an Opposition, which no other 23 Defendants joined. ECF No. 13 ("Opp'n"). For the following 24 reasons, the Court GRANTS Plaintiffs' Motion. 25 26

II. BACKGROUND

On February 17, 2011, Plaintiffs commenced this action in the Superior Court of California for the County of Alameda, bringing nineteen state law claims relating to the origination and servicing 2 of a mortgage on their Hayward, California home and the subsequent 3 attempts to foreclose upon this home. ECF No. 1 ("Notice of Removal") Ex. A ("Compl."). Named in the Complaint as one of eight 5 defendants was Aurora, although the body of Plaintiffs' Complaint 6 included no specific references to Aurora. Id. 7

8 citing 28 U.S.C. § 1331 as the basis for removal. See Notice of 9

On March 28, 2011, Aurora removed the action to federal court,

Removal. Specifically, Aurora alleged that Plaintiffs' claims of 10 negligence and violation of section 17200 of California's Business and Professions Code ("section 17200 claim") are partially premised 12 on violations of federal law. Id. In Plaintiffs' pleading of 13 their negligence claim, they allege violation of the Truth-in-14

Plaintiffs' pleading of their section 17200 claim, they allege 16 violations of TILA, the Real Estate Settlement Procedures Act Code. Compl. ¶¶ 164, 167. 19

20 that Aurora did not service Plaintiffs' loan and noting that 21

Plaintiffs failed to make any specific allegations against Aurora, 22 let alone mention the name "Aurora," in the body of their Complaint. ECF No. 4. On May 3, 2011, Plaintiffs filed the 24 instant Motion to remand this action to state court; in it, 25

U.S.C. § 1447(c). See Mot. On May 13, 2011, Aurora filed its 27

26, 2011, Plaintiffs voluntarily dismissed Aurora from this action;

United States District Court For the Northern District of California

Lending Act ("TILA") and 12 C.F.R. § 226.34 ("Regulation Z"); in 15 ("RESPA"), and sections 1916.7 and 1921 of the California Civil 18

On April 4, 2011, Aurora moved to dismiss the action, alleging Plaintiffs seek an award of attorneys' fees and costs under 28 26 Opposition, which no other Defendant joined. See Opp'n. On May

the Clerk of the Court subsequently terminated Aurora as a party.

ECF No. 14. On June 9, 2011, Defendants Citibank, N.A., et al. 3 filed a motion to dismiss Plaintiffs' action, which is now fully 4 briefed. ECF Nos. 19, 23, 24. 5

6 because the Court lacks subject matter jurisdiction over this 7 action. Mot at 1. They contend that neither their negligence nor 8 their section 17200 claim is an artfully pleaded federal claim and 9 that neither claim necessarily requires a determination of a 10 federal question. Id.

14 district courts of the United States have original jurisdiction, 15 may be removed by the defendant or the defendants, to the district 16 court of the United States for the district and division embracing 17 the place where such action is pending." 28 U.S.C. § 1441(a). 18

District courts have original jurisdiction over "federal question" 19 cases -- those cases "arising under the Constitution, laws, or 20 treaties of the United States." 28 U.S.C. § 1331. District courts 21 must remand actions where subject matter jurisdiction is lacking. 22

28 U.S.C. § 1447(c). As a general rule, the court must strictly 23 construe the removal statute, "and any doubt about the right of 24 removal requires resolution in favor of remand." Moore--Thomas v. 25

(citation omitted). "The presumption against removal means that 27 the defendant always has the burden of establishing that removal is 28 proper." Id. (internal quotations omitted).

In their Motion, Plaintiffs argue that remand is proper

United States District Court For the Northern District of California

III. LEGAL STANDARD

"[A]ny civil action brought in a State court of which the

Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009)

3 longer a party to this action and no other Defendants filed an 4 opposition or joined in Aurora's Motion, Plaintiffs' Motion is 5 effectively unopposed. However, even if another Defendant had 6 joined in Aurora's Opposition, the Court would rule in Plaintiffs' 7 favor. 8

9 argued in its Opposition that Plaintiffs' section 17200 claim is 10

(YSP) Plaintiffs paid on their loan violated the reasonableness of 12 fees standard under RESPA." Id. at 3. Similarly, Aurora argued 13 that Plaintiffs' negligence claim is premised partially on 14

Federal courts have subject matter jurisdiction over a state

16 law claim under 28 U.S.C. § 1331 if it "necessarily raise[s] a 17 stated federal issue, actually disputed and substantial, which a 18 federal forum may entertain without disturbing any congressionally-19 approved balance of federal and state judicial responsibilities." 20

308, 314 (2005). Plaintiffs correctly note that while their 22 section 17200 and negligence claims are partially premised on 23 violations of federal law, the Complaint pleads "alternative and 24 independent theories" supporting them. Mot. at 9. Put simply, 25

Plaintiffs could prevail on both claims without addressing a 26 question of federal law. As such, Defendants have failed to 27 establish that any federal question imbedded in Plaintiffs' claims 28 is both necessary and substantial under Grable.

IV. DISCUSSION

The Court GRANTS Plaintiffs' Motion. Because Aurora is no

Plaintiffs bring no federal claims in their Complaint. Aurora "primarily based on the allegation that the Yield Spread Premium

Defendants' violation of TILA and Regulation Z. Id. at 4. 15

Grable & Sons Metal Prod., Inc. v. Darue Eng'g & Mfg., 545 U.S. 21

Plaintiffs seek attorneys' fees under 28 U.S.C. § 1447(c), 2 which provides: "An order remanding the case may require payment of 3 just costs and any actual expenses, including attorney fees, 4 incurred as a result of the removal." The Supreme Court has held 5 that "[a]bsent unusual circumstances, courts may award attorney's 6 fees under § 1447(c) only where the removing party lacked an 7 objectively reasonable basis for seeking removal." Martin v. 8

Franklin Capital Corp., 546 U.S. 132, 141 (2005) (citations 9 omitted). "Conversely, when an objectively reasonable basis 10 exists, fees should be denied." Id. The Court finds that Aurora's stated basis for removal was not objectively unreasonable; 12 accordingly, it DENIES Plaintiffs' request for attorneys' fees.

Because the Court lacks subject matter jurisdiction over this 14 action, it does not rule on the motion to dismiss filed by 15 Defendants Citibank N.A., et al. 16 17

V. CONCLUSION

For the foregoing reasons, the Court GRANTS the Motion to 19 remand this action filed by Plaintiffs Jose R. Herrera and Marie L. Herrera, and REMANDS this action to Superior Court of California 21 for the County of Alameda. Plaintiffs' request for attorneys' fees 22 is DENIED. 23 24

IT IS SO ORDERED.

UNITED STATES DISTRICT JUDGE

20110831

© 1992-2011 VersusLaw Inc.



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