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Dennis Schendel, An Individual, and v. Ace Mortgage Funding

February 13, 2012

DENNIS SCHENDEL, AN INDIVIDUAL, AND CATHERINE SCHENDEL, AN INDIVIDUAL; PLAINTIFFS,
v.
ACE MORTGAGE FUNDING, LLC., ET AL.; DEFENDANTS.



ORDER DENYING PLAINTIFFS‟ MOTION TO REMAND TO STATE COURT PURSUANT TO 28 U.S.C. §§ 1441 and 1446

This matter is before the Court on Plaintiffs Dennis Schendel and Catherine Schendel‟s ("Plaintiffs") Motion to Remand to State Court pursuant to 28 U.S.C. §§ 1441 and 1446 (Doc. #9).*fn1

Defendants Aurora Loan Services, LLC and Mortgage Electronic Registration Systems, Inc. ("Defendants") oppose the motion (Doc. #25).

I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

This action arises out of a dispute concerning the real property located at 8720 Pathfinder Court, Orangevale, California 2 (the "Property"). In short, Plaintiffs obtained a mortgage on the 3 Property and later defaulted. Defendants, claiming an interest in 4 the mortgage, instituted a non-judicial foreclosure on the Property 5 on September 23, 2010. The Property was subsequently sold at a 6 Trustee‟s Sale on March 25, 2011. The parties indicate that 7 Plaintiffs continue to occupy the Property, and an eviction action 8 is proceeding before the Superior Court of California, Sacramento 9 County.

The procedural background of this action involves three different lawsuits. The first action concerning the Property was filed before this Court by Plaintiffs on May 25, 2011. That complaint alleged several federal causes of action, which gave this Court jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1367. The unlawful detainer action was then filed against Plaintiffs in state court. On October 5, 2011, Plaintiffs filed a second action in state court, which was largely duplicative of their first federal complaint except that it did not explicitly include any federal causes of action.

On October 6, 2011, Plaintiffs moved to consolidate the unlawful detainer action with their new state court lawsuit. Before the motion to consolidate was decided, Defendants removed Plaintiff‟s second action on the basis of federal question jurisdiction to the Eastern District of California and it was assigned to District Judge Mueller. Subsequently, the Superior Court denied the motion to consolidate because Plaintiffs‟ second action had been removed to federal court. On November 15, 2011, Plaintiffs voluntarily dismissed their first action. The next day, Plaintiffs filed the present motion to remand the second action to 2 state court. Their second action was then deemed related to the 3 first and reassigned to this Court on December 23, 2011. Thus, 4 Plaintiffs‟ first action filed in federal court is dismissed, 5 Plaintiffs‟ second action that was filed in state court is 6 presently before the Court after its removal, and the unlawful 7 detainer action filed against Plaintiffs is still before the state 8 court. 9

As stated above, Defendants claim that this Court has jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1367.

II. OPINION

A. Legal Standard

As this is a motion to remand pursuant to 28 U.S.C. § 1447(c),*fn2 the issue to be decided is the Court‟s subject matter jurisdiction or lack thereof. See 28 U.S.C. § 1447(c) ("If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded."). The court must remand an action sua sponte if it determines that it lacks subject matter jurisdiction. See Kelton Arms Condominium Owners Ass'n v. Homestead Ins. Co., 346 F.3d 1190, 1192 (9th Cir.2003) ("[W]e have held that the district court must remand if it lacks jurisdiction," citing Sparta Surgical Corp. v. Nat'l Ass'n Sec. Dealers, Inc., 159 F.3d 1209, 1211 (9th Cir.1998)). The /// removal statute explains when removal is proper: 2

Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of 3 which the district courts of the United States have original jurisdiction, may be removed by the defendant 4 or the defendants, to the district court of the United States for the district and division embracing the 5 place where such action is pending. 6

28 U.S.C. § 1441(a). 7

The Ninth Circuit "strictly construe[s] the removal statute 8 against removal jurisdiction." Gaus v. Miles, Inc., 980 F.2d 564, 9 566 (9th Cir.1992) (citing Boggs v. Lewis, 863 F.2d 662, 663 (9th Cir.1988), and Takeda v. Northwestern National Life Insurance Co., 765 F.2d 815, 818 (9th Cir.1985)). Thus, "[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Id. (citing Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir.1979)). "The "strong presumption‟ against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." ...


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