Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

Pacific Western Bank v. Penna


March 19, 2012


The opinion of the court was delivered by: The Honorable Margaret M. Morrow


Present: The Honorable MARGARET M. MORROW ANEL HUERTA N/A Deputy Clerk Court Reporter Attorneys Present for Plaintiffs: Attorneys Present for Defendants: None None Proceedings: Order Remanding Case to Riverside Superior Court

On January 9, 2012, plaintiff Pacific Western Bank ("PWB") filed this action against defendants Michelle R. Penna ("Penna") and certain fictitious defendants in Riverside Superior *fn1 On February 14, 2012, Penna removed this action to federal court, invoking the court's federal question jurisdiction.*fn2

The complaint alleges that on or about May 19, 2006, Penna opened two accounts at PWB, a business checking account and a client trust account. Penna agreed to be bound by PWB's deposit account agreement and disclosure, which stated that in the event her account was overdrawn, she would pay the amount of overdraft immediately and PWB would be allowed to offset funds in either of the accounts against any overdraft.*fn3

On December 23, 2011, Penna allegedly deposited $297,500 into the client trust account using a counterfeit check.*fn4 Following her deposit, PWB gave her credit for the amount of the check, pursuant to the terms of the deposit agreement.*fn5 On December 27, 2011, Penna instructed PWB to wire $294,960 from the client trust account to an account in Japan.*fn6 On December 28, 2011, PWB received notification that the counterfeit check had been rejected.*fn7

PWB contacted Penna to inform her of the rejection and ask how she intended to rectify the overdraft created by the wire transfer.*fn8 When she failed to remedy the overdraft, PWB rescinded the provisional credit that had been given to client trust account, resulting in an overdraft of $143,562.91.*fn9 The complaint pleads claims for (1) breach of contract, (2) breach of the warranty of good title, (3) open book account, and (4) money paid out.

Penna removed the action to federal court, contending that because PWB's complaint references Regulation CC, a regulation of the Federal Reserve Bank that implements the Expedited Funds Availability Act, the court has federal question jurisdiction.*fn10 On February 22, 2012, the court ordered defendant to show cause why the action should not be remanded for lack of subject matter jurisdiction.*fn11 The court observed that while defendant had invoked federal question jurisdiction, the complaint pled only state law claims and did not raise a federal question on its face.*fn12 The court also noted that there was no indication a federal claim was a necessary ingredient of any of the causes of action plaintiff pleaded in the complaint, and that the mere mention of federal statutes was insufficient to confer jurisdiction.*fn13

The court directed defendant to file a response to the order to show cause by March 5, 2012. Defendant failed to respond to the court's order by that date, despite the fact that her counsel earlier filed a declaration stating that he served a copy of the notice of removal on PWB.*fn14 Defendant thus has identified no basis upon which the court can properly exercise jurisdiction over this case.

For the reasons stated in the court's order to show cause, and because of her failure to respond to the order to show cause, Penna has failed to meet her burden of demonstrating that the court can exercise jurisdiction over this case. The clerk is therefore directed to remand the action to Riverside Superior Court forthwith.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.