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Jay Garnett, Et. Al. v. Aurora Loan Services

April 25, 2012

JAY GARNETT, ET. AL.
v.
AURORA LOAN SERVICES, LLC, ET. AL.



The opinion of the court was delivered by: Honorable Stephen V. Wilson, U.S. District Judge

CIVIL MINUTES - GENERAL

Present: The Honorable STEPHEN V. WILSON, U.S. DISTRICT JUDGE

Paul M. Cruz N/A Deputy Clerk Court Reporter / Recorder Tape No. Attorneys Present for Plaintiffs: Attorneys Present for Defendants:

N/A N/A

Proceedings: IN CHAMBERS ORDER Re Plaintiffs' Motion to Remand and Defendants' Motion to Dismiss [18] [5]

INTRODUCTION

On January 11, 2012, Plaintiffs Jay and Doris Garnett filed the instant action in Riverside County Superior Court in connection with efforts to modify their home loan. Plaintiffs' Complaint names Aurora Loan Services, LLC ("Aurora"), US Bank, N.A. ("US Bank") and Cal-Western Reconveyance Corporation ("Cal-Western") as Defendants and lists the following seven causes of action: (1) Intentional Misrepresentation; (2) Negligent Misrepresentation; (3) Negligence; (4) Breach of Fiduciary Duty; (5) Breach of Implied Covenant of Good Faith and Fair Dealing; (6) Unfair Business Practices - False Advertising pursuant to Cal. Bus. and Prof. Code § 17200; and (7) False Advertising pursuant to Cal. Bus. & Prof. Code § 17500. (Complaint, ¶¶ 81 - 146).

On February 21, 2012, Defendants US Bank and Aurora removed the case to this Court pursuant to Federal Question Jurisdiction and Diversity Jurisdiction. 28 U.S.C. §§ 1441 and 1446. (Dkt. No. 1). Defendants claim that federal question jurisdiction exists because "Plaintiffs' entire complaint is premised on Defendants' alleged violations under HAMP," the Home Affordable Modification Program created by the Making Homes Affordable Act. (Dkt. No. 1) (emphasis in original). Defendants claim that diversity jurisdiction exists because two of the three Defendants are diverse from Plaintiffs and the amount in controversy exceeds $75,000. (Dkt. 1 ¶ 7). Defendants also claim that the non-diverse Defendant is a "nominal party" that does not destroy diversity. (Id.).

On March 22, 2012, Plaintiffs filed the instant Motion to Remand in which they argue that Defendants fail to show that Plaintiffs' Complaint (1) establishes federal question jurisdiction; and (2) establishes complete diversity of the parties as required for diversity jurisdiction. (Motion to Remand, Dkt. No. 18).

Plaintiffs' Motion to Remand is GRANTED for the reasons set forth in this Order.*fn1 The hearing scheduled for Monday April 30, 2012 at 1:30 p.m. is hereby VACATED.

DISCUSSION

Federal courts are of limited jurisdiction, having subject matter jurisdiction only over matters authorized by the Constitution and Congress. See, e.g., Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994). A "strong presumption" against removal jurisdiction exists. Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th Cir. 1992). In seeking removal, the defendant bears the burden of proving that jurisdiction exists. Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986).

A. Federal Question Jurisdiction

Under 28 U.S.C. § 1331, this Court has original jurisdiction over civil actions "arising under" federal law. Removal based on § 1331 is governed by the "well-pleaded complaint" rule. Caterpillar, v. Williams, 482 U.S. 386, 392 (1987). Under the rule, "federal jurisdiction exists only when a federal question is presented on the face of plaintiff's properly pleaded complaint." Id. at 392. If the complaint does not specify whether a claim is based on federal or state law, it is a claim "arising ...


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