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Hamilton San Diego Apartments, LP v. RBC Capital Markets, LLC

United States District Court, S.D. California

December 11, 2014

HAMILTON SAN DIEGO APARTMENTS, LP, a California Limited Partnership, Plaintiff,
v.
RBC CAPITAL MARKETS, LLC, an Illinois limited liability company; RBC CAPITAL MARKETS CORPORATION, an Illinois corporation; and DOES 1 through 50, inclusive, Defendants.

ORDER

WILLIAM Q. HAYES, District Judge.

The matter before the Court is Plaintiff's Motion to Remand. (ECF No. 9).

I. Background

On July 30, 2012, Plaintiff filed a complaint against RBC Capital Markets Corporation, an Illinois Corporation and RBC Dain Rauscher, Inc., an Illinois Corporation, in the San Diego Superior Court, Case No. 37-2012-00101475-CU-BC-CTL. The initial action alleged: (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, (3) intentional interference with contractual advantage, and (4) intentional interference with economic advantage. (ECF No. 1 at ¶4-5). On September 17, 2012, the Defendants removed the initial action to the Southern District Court of California claiming original jurisdiction under 28 U.S.C. §1332(a)(1) because the amount in controversy exceeded $75, 000 and involved citizens of different states. Id. at ¶6. On March 27, 2013, Plaintiff dismissed the initial action. Id. at ¶9.

On April 10, 2013, Plaintiff filed this action against RBC Capital Markets Corporation, an Illinois Corporation and RBC Dain Rauscher, Inc., an Illinois Corporation (collectively "RBC") and WNC & Associates, Inc., WNC Holding, LLC, and WNC Housing, L.P. (collectively "WNC") in the San Diego Superior Court, Case No. 37-2013-00043450-CU-BC-CTL. (ECF No. 1, Ex. 1). Plaintiff alleged the following causes of action against both RBC and WNC: (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, (3) intentional interference with contractual advantage, (4) intentional interference with economic advantage, and (5) fraud in the inducement. Id.

On June 18, 2014, Plaintiff filed a Request for Dismissal with Prejudice as to the WNC Defendants and WNC was dismissed from the action. (ECF No. 1 ¶ 20).

On August 6, 2014, Defendant removed this action to this Court, asserting diversity of citizenship between the parties and that the amount in controversy exceeded $75, 000. Id. at ¶ 25-35; see 28 U.S.C. § 1332.

On September 5, 2014, Plaintiff filed the Motion to Remand on the grounds that (1) Defendant's removal notice was untimely, (2) inclusion of WNC and subsequent dismissal of WNC from the case is not evidence of bad faith, and (3) Defendant independently waived any right to remove the case.[1] (ECF No. 9). On September 29, 2014, Defendant filed an opposition to the Motion to Remand asserting that removal was timely because Plaintiff joined WNC in bad faith to prevent removal. (ECF No. 13).

II. Analysis

Title 28 U.S.C. § 1446(b) provides that "a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." 28 U.S.C. § 1446(b)(3) (emphasis added). However, "[a] case may not be removed under subsection (b)(3) on the basis of jurisdiction conferred by section 1332 more than 1 year after commencement of the action, unless the district court finds that the plaintiff has acted in bad faith in order to prevent a defendant from removing the action." 28 U.S.C. § 1446(c)(1).

A defendant bears the burden of establishing federal jurisdiction. Abrego Abrego v. The Dow Chemical Co., 443 F.3d. 676, 682 (9th Cir. 2006). "Removal statutes are strictly construed against removal." Luther v. Countrywide Home Loan Servicing LP, 533 F.3d 1031, 1034 (9th Cir. 2008). "Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

A. Contentions of Parties

Defendant contends that, "Notice of Removal is timely pursuant to 28 U.S.C. § 1446(c)(1) because Hamilton acted in bad faith to prevent RBC from removing the action." (ECF No. 1). Defendant contends that WNC, a non-diverse defendant, was named in the complaint "solely to prevent RBC from exercising its right to remove this action to federal court." (ECF No. 13 at 6). Defendant contends that a finding of bad faith is supported by the following facts:

a. In its 2012 Complaint, Hamilton alleged the same claims against RBC based on the same theory it asserts in the 2013 Complaint, yet in the 2012 Complaint Hamilton sued ...

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