UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA
March 15, 2012
WELLS FARGO BANK, ET AL.
DONNIE MAYES, ET AL.
The opinion of the court was delivered by: Honorable Margaret M. Morrow Anel Huerta N/a
CIVIL MINUTES - GENERAL
Present: The Honorable MARGARET M. MORROW ANEL HUERTA N/A
Deputy Clerk Court Reporter
Attorneys Present for Plaintiffs: Attorneys Present for Defendants:
Proceedings: Order Remanding Action to Los Angeles Superior Court for Lack of Subject Matter Jurisdiction; Declining to Evaluate Defendants' Ex Parte Application
I. FACTUAL BACKGROUND
Plaintiff Wells Fargo Bank, NA, successor by merger to Wells Fargo Bank Southwest, NA formerly known as Wachovia Mortgage, FSB, formerly known as World Savings Bank, FSB ("Wells Fargo") filed this unlawful detainer action in Los Angeles Superior Court against defendants Donnie
R. Mayes, Donnie R. Mayes as trustee of the Donnie R. Mayes Living
Trust (collectively, "Mayes"), and certain fictitious defendants on
October 18, 2011.*fn1 Mayes is allegedly the former
owner of real property located at 19355 Pacific Oaks Place, Rowland
Heights, Los Angeles County, California 91748 ("the
property").*fn2 On December 23, 2005, Mayes, as
trustee, executed a deed of trust on the
property as security for a promissory note.*fn3 Mayes
allegedly defaulted on the note, and the trustee under the deed of
trust filed a notice of default and election to sell the
property.*fn4 In October, 2011, the property was
allegedly sold to Wells Fargo at a foreclosure sale.*fn5
A trustee's deed reflecting the sale to Wells Fargo was
recorded in Los Angeles County on October 6, 2011.*fn6
On October 6, 2011, Wells Fargo allegedly served a notice to quit on
Mayes, which required him to vacate the property within three
days.*fn7 Its complaint alleges that, although more
than three days had elapsed, Mayes continues in possession of the
property without Wells Fargo's permission or consent.*fn8
Wells Fargo seeks possession of the property as well as
damages in the amount of $100 per day (the allegedly reasonable daily
rental value) for each day from October 10, 2011 until Mayes
relinquishes the property. It also seeks costs of suit.*fn9
Mayes filed a notice of removal on February 17, 2012, invoking the
court's federal question and diversity jurisdiction.*fn10
On March 12, 2012, he filed a motion captioned "Emergency Ec
Parte Application to Turnover Property (I) to Enforce the Federal
Removal; (II) for an Order to Show Cause."*fn11 In the
motion, Mayes states that on March 7, 2012, he was locked out of his
house. He appears to argue that his eviction was improper because he
had removed the unlawful detainer action to federal court.*fn12
"A district court has an independent obligation to examine whether removal jurisdiction exists before deciding any issue on the merits." Thiara v. Kiernan, No. C06-03503 MJJ, 2006 WL 3065568, *2 (N.D. Cal. Oct. 25, 2006); see also United Investors Life Ins. Co. v. Waddell & Reed, , 360 F.3d 960, 966 (9th Cir. 2004) ("[A] district court's duty to establish subject matter jurisdiction is not contingent upon the parties' arguments," citing Mitchell v. Maurer, 293 U.S. 237, 244 (1934)); see also Attorneys Trust v. Videotape Computer Products, Inc., 93 F.3d 593, 594-95 (9th Cir. 1996) (lack of subject matter jurisdiction may be raised at any time by either party or by the court sua sponte).
When a case has been removed, the court may remand for lack of subject matter jurisdiction at any time before final judgment. 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 may -- indeed 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," Sparta Surgical Corp. v. Nat'l Ass'n Sec. Dealers, Inc., 159 F.3d 1209, 1211 (9th Cir. 1998)). For the reasons discussed below, the court lacks subject matter jurisdiction and the action must be remanded to Los Angeles Superior Court.
A. Whether the Court Has Diversity Jurisdiction to Hear the Action
"The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs. . . ." 28 U.S.C. § 1332(a); see also Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) ("[J]urisdiction founded on [diversity] requires that the parties be in complete diversity and the amount in controversy exceed $75,000").
In any case where subject matter jurisdiction is premised on diversity, there must be complete diversity, i.e, all plaintiffs must have citizenship different than all defendants. See Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 & n. 3 (1996). Neither Mayes nor Wells Fargo alleges the citizenship of the parties. Consequently, the court cannot determine whether this prerequisite to diversity jurisdiction is satisfied.*fn13
Even if there were complete diversity of citizenship, moreover, Mayes has not met his burden of demonstrating that the amount in controversy exceeds $75,000. "[W]hen a state-court complaint affirmatively alleges that the amount in controversy is less than the jurisdictional threshold, the 'party seeking removal must prove with legal certainty that [the] jurisdictional amount is met.'" Guglielmino
v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007) (quoting Lowdermilk v. U.S. Bank National Association, 479 F.3d 994, 1000 (9th Cir. 2007)). It is clear from information in the record that the amount in controversy does not meet the jurisdictional threshold. Wells Fargo seeks damages of $100 per day from October 10, 2011 to the date it regains possession of the property.*fn14 Wells Fargo alleges that its damages do not exceed $10,000, and it filed the action as a limited civil case.*fn15
AL. CODE CIV. PROC. § 86 (classifying cases where the prayer is less than $25,000 as limited civil cases). Given its allegations that the amount in controversy does not exceed $75,000, Mayes must establish to a legal certainty that the amount in controversy exceeds that amount to demonstrate that the court has diversity jurisdiction to hear the action.
Mayes contends that the amount in controversy should be determined by looking to the value of the property, which he asserts is "probably closer to $600,000."*fn16 In an unlawful detainer action, however, the appropriate measure of damages is the amount sought in the complaint, not the value of the property. Federal Nat. Mortg. Ass'n v. Lemon, No. CV 11--03948 DDP (FFMx), 2011 WL 3204344, *2 (C.D. Cal. July 26, 2011) ("[T]he appropriate damages in unlawful detainer action remains the amount sought in the complaint, not the value of the property itself"); see also U.S. Bank Nat. Ass'n v. Marshall-Edward: Mikels, No. C 11--4687 PJH, 2011 WL 5362082, *2 (N.D. Cal. Nov. 7, 2011) ("The complaint seeks restitution of the premises, damages in the amount of $50.00 per day from August 6, 2010, through the date that defendant remains in possession of the property, plus costs of suit. The amount in controversy is not the assessed value or the sales value of the property, but rather the $50.00 per day that HSBC is seeking in damages. Thus, if HSBC prevails against defendant in the unlawful detainer action, liability will not exceed $75,000.00"); Skyline Vista Equities, LLC v. Henderson, No. ED CV 11--1665 PA (AGRx), 2011 WL 5122616, *2 (C.D. Cal. Oct. 25, 2011) ("[T]he amount in controversy is determined by the amount of damages sought in the Complaint, rather than the value of the subject real property"). Consequently, Mayes has not met his burden of proving to a legal certainty that the amount in controversy requirement is satisfied. See Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 376 (9th Cir. 1997) ("[W]here the plaintiff does not claim damages in excess of [the jurisdictional amount] and the defendant offers 'no facts whatsoever' to show that the amount in controversy exceeds [the jurisdictional amount], then the defendant has not borne the burden on removal of proving that the amount in controversy requirement is satisfied," citing Gaus, 980 F.2d at 566--67).
Accordingly, there is no basis for exercising diversity jurisdiction over this action.
B. Whether the Court Has Federal Question Jurisdiction to Hear the Action Under 28 U.S.C. § 1331, district courts "have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." Federal question jurisdiction is presumed absent unless defendant, as the party seeking to invoke the court's jurisdiction, shows that plaintiff has either alleged a federal cause of action, American Well Works Co. v. Layne & Bowler , 241 U.S. 257, 260 (1916) ("a suit arises under the law that creates the action"), a state cause of action that turns on a substantial dispositive issue of federal law, Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 9 (1983); Smith v. Kansas City Title & Trust Co., 255 U.S. 180, 199 (1921), or a state cause of action that Congress has transformed into an inherently federal cause of action by completely preempting the field of its subject matter, Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557, 560 (1968); Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987).
Whether a claim "arises under" federal law must be determined by reference to the "well-pleaded complaint." Franchise Tax Bd., 463 U.S. at 9-10. Since a defendant may remove a case under 28 U.S.C. § 1441(b) only if the claim could have been brought in federal court, the existence of removal jurisdiction must also be determined by reference to the "well-pleaded complaint." Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 808 (1986). The well-pleaded complaint rule makes plaintiff the "master of the claim" for purposes of removal jurisdiction. Caterpillar, Inc., 482 U.S. at 392. Where a plaintiff could maintain claims under both federal and state law, therefore, plaintiff can prevent removal by ignoring the federal claim and alleging only state law claims. Rains v. Criterion Systems, Inc., 80 F.3d 339, 344 (9th Cir.1996).
For federal question jurisdiction to attach,"a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action." Gully v. First Nat'l Bank in Meridian, 299 U.S. 109, 112 (1936). Only where the "right to relief under state law requires resolution of a substantial question of federal law in dispute between the parties" does a state law cause of action "arise under" the laws of the United States. Franchise Tax 463 U.S. at 13 (1983). A claim does not present a "substantial question" of federal law merely because a federal question is an "ingredient" of the cause of action. Indeed, "the mere presence of a federal issue in a state cause of action does not automatically confer federal question jurisdiction." Merrell Dow Pharmaceuticals, 478 U.S. at 813.
Likewise, it is not enough for removal purposes that a federal question may arise during the litigation in connection with a defense or counterclaim. "[F]ederal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar, , 482 U.S. at 392. See also Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 152 (1908). "A defense is not part of a plaintiff's properly pleaded statement of his or her claim." Rivet v. Regions Bank of La., 522 U.S. 470, 475 (1998). See also Taylor, 481 U.S. at 63; Gully, 299 U.S. at 112 ("To bring a case within the [federal-question removal] statute, a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action"). Thus, "a case may not be removed to federal court on the basis of a federal defense, . . . even if the defense is anticipated in the plaintiff's complaint, and even if both parties admit that the defense is the only question truly at issue in the case." Franchise Tax Bd., 463 U.S. at 14.
There is no federal question apparent on the face of Wells Fargo's complaint, which alleges only an unlawful detainer cause of action. See Wells Fargo Bank v. Lapeen, No. C 11--01932 LB, 2011 WL 2194117, *3 (N.D. Cal. June 6, 2011) ("an unlawful detainer action, on its face, does not arise under federal law but is purely a creature of California law," citing Wescom Credit Union v. , No. CV 10-8203 GAF (Ssx), 2010 WL 4916578, *2 (C.D. Cal. Nov. 22, 2010)); Galileo Financial v. Miin Sun Park, No. EDCV 09-1660 PSG, 2009 WL 3157411, *1 (C.D. Cal. Sept. 24, 2009) ("Here, the complaint only asserts a claim for unlawful detainer, a cause of action that is purely a matter of state law. Thus, from the face of the complaint, it is clear that no basis for federal question jurisdiction exists").
Mayes alleges in his notice of removal that Wells Fargo's complaint violates various federal statutes, including the Securities Exchange Act of 1934,*fn17 various amendments to the United States Constitution,*fn18 and the equal protection clause.*fn19 These are federal defenses and, as noted, "a case may not be removed to federal court on the basis of a federal defense, . . . even if the defense is anticipated in the plaintiff's complaint. . . ." Franchise Tax Bd., 463 U.S. at 14. Because Wells Fargo's complaint does not present a federal question, the court does not have jurisdiction under 28 U.S.C. § 1331.
"The 'strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Gaus, 980 F.2d at 566. Mayes has failed to carry that burden here. His notice of removal fails allege an amount in controversy exceeding $75,000, fails to allege the citizenship of the parties, and fails to identify a federal question raised by the complaint. For the reasons stated, the clerk is directed to remand this case to Los Angeles Superior Court forthwith. Because the court lacks jurisdiction to hear the action, it lacks power to consider the merits of Mayes' ex parte application.