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Bruce V. Zahn, An Individual v. T. B. Penick & Sons

October 27, 2011

BRUCE V. ZAHN, AN INDIVIDUAL
PLAINTIFF,
v.
T. B. PENICK & SONS, INC., A
CORPORATION,
DEFENDANT.



The opinion of the court was delivered by: Hon. Anthony J. Battaglia U.S. District Judge

ORDER GRANTING MOTION TO REMAND AND SETTING HEARING FOR DETERMINATION CALIFORNIA OF FEE AWARD [Doc. No. 6]

The Defendant removed this case from the Superior Court of California, County of San Diego to this Court on June 15, 2011. On July 15, 2011, Plaintiff filed a motion to remand to state court, [Doc. No. 6], on the grounds that the Defendant failed to file the Notice of Removal within 30 days from receipt of complaint as required by 28 U .S.C. § 1446. The Defendant filed an opposition to the motion, [Doc. No. 7], and Plaintiff filed a reply, [Doc. No. 8]. The hearing set for October 28, 2011, at 1:30pm is hereby vacated as this motion is appropriate for submission on the papers, without oral argument pursuant to Civil Local Rule 7.1.d.1. Based upon the moving papers and for the reasons set forth below, the Plaintiff's motion to remand is hereby GRANTED.

I. Background

The Plaintiff filed a complaint in San Diego Superior Court against Defendant on May 5, 2011, alleging six causes of action: 1) Failure to Pay Overtime Wages (Cal. Labor Code § 510, § 1194, § 1198 et seq.); 2) Unjust Enrichment; 3) Conversion; 4) Breach of Contract and the Covenant of Good Faith and Fair Dealing; 5) Fraudulent Misrepresentation; and 6) Unfair Competition (Business and Professional Code § 17200).

The Plaintiff used an attorney service, Quick Legal Service, and its Registered Process Server, Michael Smith (hereinafter "Smith"), to file and serve the summons and complaint upon Defendant Penick. Pursuant to the information provided on the Secretary of State's website, the designated agent for service of process for Penick was John T. Boyd,. Smith attempted to serve Boyd on May 5, 2011, at Penick's Offices located at 15435 Innovation Drive, San Diego, California 92128, but Boyd was not in the office. Smith states that he informed Boyd's secretary that he was there to serve a summons and complaint. The parties disagree on what happened next. Smith claims that Shadow Souther, the Human Resources and Recruiting Manager for Defendant, assured him that he was authorized to accept process in Boyd's absence. Souther claims that he was not told that he was being served and believed he was merely accepting an opaque package from a courier. Souther's declaration states that he is authorized to accept delivery of packages and mail items, but has never been authorized to accept service of process.

The Defendant does not dispute that they made no objection to the manner in which they were served until the filing of their notice of removal on June 15, 2011. Defendant's communications and actions confirm that the Defendant believed they were served on May 5, 2011 and their answer was due thirty days later on June 5, 2011. On May 31, 2011, Grace Horoupian, Defendant's attorney, contacted Plaintiff's counsel Brahmbhatt and asked for an extension until June 15, 2011 to answer the complaint. Brambhatt agreed, and was then contacted on June 10, 2011 by Joel Glaser, who identified himself as Defendant's new attorney. The parties discussed the prospect of settling the matter between June 10 and 14, 2011, but were unsuccessful and agreed that Defendant's answer would be filed by June 17, 2011. On June 16, 2011 Glaser's assistant contacted Brahmbhatt to request another extension until July 6, 2011. Brahmbhatt consented to the extension, but requested the extension be documented in writing. Brahmbhatt states that he was unaware Defendant was attempting to remove the case until June 20, 2011, when Defendant sent an email confirming the extension and attached a written stipulation to consent to federal jurisdiction. Brahmbhatt received the Notice of Removal on June 21, 2011 and promptly informed Defendant that he would not consent to federal jurisdiction.

Plaintiff filed the motion to remand to state court on July 15, 2011, arguing that Defendant's Notice of Removal was untimely per 28 U.S.C. § 1446(b). Defendants responded on August 10,2011, arguing that the notice was timely, because the complaint was improperly served on May 5, 2011, so the thirty day period set forth in section 1446(b) had yet to begin. The Plaintiff filed a reply on August 19, 2011, arguing that regardless of whether service was initially proper, Defendant's behavior between May 6, 2011 and June 21, 2011, created ostensible authority in Mr. Souther to act as its agent.

II. Legal Standard

28 U.S.C. § 1446 allows a defendant to remove any civil action by filing a notice of removal "within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading . . ., or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever is shorter." 28 U.S.C. § 1446(b). The 30 day period is triggered by either the simultaneous service of the summons and complaint or the receipt of the complaint at some point after service of the summons, but not by the "mere receipt of the complaint unattended by any formal service." Murphy Bros, Inc. v. Michetti Pipe Stinging, Inc., 526 U.S. 344, 347 (1999).*fn1 Thus, it is not enough for Plaintiff to show that Defendant actually received a copy of the complaint by a particular date. Plaintiff must demonstrate compliance with the requirements of service. Service can be made pursuant to the law of the state in which the district court is located, the law of the state in which service is effected, or under federal law. Fed.R.Civ.P. 4(h)(1). Finally, although the plaintiff has the burden of establishing the facts requisite to effective service,*fn2 the federal removal statutes are strictly construed against removal jurisdiction. See Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir.1996); Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992). Any doubt should be resolved in favor of remanding a case to state court. See McNally Enterprises, Inc. v. McNally, 107 F.Supp.2d 1223, 1226 (C.D. Cal. 2000).

III. Discussion

Plaintiff argues that this case should be remanded to state court because Defendant Penick's Notice of Removal was untimely. 28 U.S.C. § 1446 allows a defendant to remove any civil action by filing a notice of removal within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever is shorter. 28 U.S.C. § 1446(b).

Pursuant to California Code of Civil Procedure § 446.10, a summons may be served on a corporation by delivering a copy of the summons and the complaint by any of the following methods:

(a) To the person designated as agent for service of process as provided by any provision in Section 202, 1502, 2105, or 2107 of the Corporations Code (or Sections 3301 to 3303, inclusive, or Sections 6500 to 6504, inclusive, of the Corporations Code, as in effect on December 31, 1976, with respect to corporations to which they remain applicable).

(b) To the president, chief executive officer, or other head of the corporation, a vice president, a secretary or assistant secretary, a treasurer or assistant treasurer, a controller or chief financial officer, a general manager, or a ...


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