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PNC Bank, N.A. v. Ahluwalia

United States District Court, N.D. California, San Francisco Division

May 28, 2015

PNC BANK, N.A., Plaintiff,
v.
NAVJOT AHLUWALIA, Defendant.

ORDER REASSIGNING CASE TO DISTRICT JUDGE; REPORT AND RECOMMENDATION

LAUREL BEELER, Magistrate Judge.

INTRODUCTION

The plaintiff PNC Bank filed a complaint for unlawful detainer against Navjot Ahluwalia in Contra Costa County Superior Court. For the fifth time, Mr. Ahluwalia removed the case to federal district court. ( See Notice of Removal, ECF No. 1.[1]) Based on its review of the complaint and notice of removal, the undersigned finds that it lacks subject-matter jurisdiction over this action because (1) the face of the unlawful-detainer complaint does not present a federal question, (2) the amount in controversy is less than $75, 000, and (3) Mr. Ahluwalia is a California resident and may not remove this action to federal court based on diversity jurisdiction. Because Mr. Ahluwalia declined the undersigned's jurisdiction, the court ORDERS the Clerk of the Court to reassign this action to a district judge and RECOMMENDS that the district judge remand the action to Contra Costa County Superior Court.

Moreover, PNC also moved for sanctions and an order declaring Mr. Ahluwalia a vexatious litigant. (Motion, ECF No. 7.) Given that this court previously advised Mr. Ahluwalia on four occasions that his removals were improper, and given the court's prior warning to him of the possibility of sanctions or being declared a vexatious litigant, the undersigned also recommends a narrow prefiling order tailored only to subsequent removals of the same unlawful-detainer case and a sanction in the form of a partial award of attorney's fees, which can be imposed under 28 U.S.C. § 1447(c).

STATEMENT

On April 11, 2014, PNC Bank filed an unlawful detainer action against Mr. Ahluwalia in Contra Costa County Superior Court. (ECF No. 1 at 8.) PNC Bank bought the property at issue - 131 Reagan Way, Brentwood, CA 94513 - at a trustee's sale and alleges that Mr. Ahluwalia continues to occupy the property despite being served with a three-day notice to quit dated March 25, 2014. ( Id. at 8-9, ¶¶ 2-8.) PNC Bank demands damages of $50 per day from the date of the notice to quit through entry of judgement. So far, that is roughly $21, 000 based on the approximately 14 months that have elapsed. On March 18, 2015, Mr. Ahluwalia removed the case this court, specifying diversity jurisdiction as the basis for removal. ( Id. at 1.)

Before the removal here, Mr. Ahluwalia removed the case four times, and each time, the district court remanded the case for lack of subject-matter jurisdiction. ( See 7/31/14 Order, No. 3:14-cv-03086-MMC, ECF No. 6 (adopting report and recommendation at ECF No. 3); 12/1/14 Order, No. 3:14-cv-04693-JST, ECF No. 9 (adopting report and recommendation at ECF No. 5); 1/2/8/15 Order, No. 3:14-cv-05672-WHA, ECF No. 6 (adopting report and recommendation at ECF No. 4); 3/12/15 Order, 4:15-cv-00755-YGR, ECF No. 6 (adopting report and recommendation at ECF No. 3).)[2]

In the most recent remand, the magistrate judge observed in her report and recommendation that this was the fourth improper removal and warned Mr. Ahluwalia that "any further attempts to improperly remove this complaint without a proper basis in law may result in sanctions against him, including but not limited to being deemed a vexatious litigant." (2/20/15 Report and Recommendation, 4:15-cv-00755-YGR, ECF No. 3.) In a different remand, the magistrate judge first issued an order to show cause why the case should not be remanded for lack of federal jurisdiction. (Order to Show Cause, No. 3:14-cv-04693-JST, ECF No. 4.) After Mr. Ahluwalia did not respond, the judge recommended - and the district judge ordered - remand. (11/12/14 Report and Recommendation, No. 3:14-cv-04693-JST, ECF No. 5; 12/1/14 Order, No. 3:14-cv-04693-JST, ECF No. 9.)

In this case, PNC Bank submitted a letter asking for a hearing instead of the court's customary remand because it wanted to file a motion to declare Ahluwalia a vexatious litigant. (Letter, ECF No. 4.) The court's practice is a sua sponte review for jurisdiction, which - in the context of a removal of an unlawful detainer case - can result in a remand before any motion for remand is filed. As PNC pointed out, that result denies it the opportunity to file its vexatious-litigant motion. ( Id. ). Given PNC's letter, the court deferred its customary remand to allow PNC to file its motion. (4/17/15 Order, ECF No. 5.) The court's order set forth the legal standards for declaring a litigant a vexatious litigant and also pointed out that serial removals in unlawful-detainer cases do not impede the state's exercise of jurisdiction over an unlawful-detainer trial if the subsequent removals - such as the ones here - do not raise new grounds for removal. ( Id. )[3]

PNC then filed its motion for (1) remand, (2) for a declaration of Mr. Ahluwalia as a vexatious litigant, and (3) sanctions of $1, 720, which are the legal fees it incurred to file its motion. (Motion, ECF No. 7; Asatorian Decl., ECF No. 7-1, ¶ 8 (8 hours on motion at $215 per hour equals $1, 750).) It served Mr. Ahluwalia. (Proof of Service, ECF No. 7-3.) PNC noticed the motion for June 11, 2015. The court advanced the motion to May 28, 2015, reminded Mr. Ahluwalia that his opposition was due on May 15, 2015, and sent a copy to him by mail. (5/11/15 Order, ECF No. 10.) Mr. Ahluwalia's opposition was due May 15, 2015. He did not file one. He did decline the undersigned's jurisdiction, which demonstrates his receipts of the court's orders. (ECF No. 8.) The court held a hearing on May 28, 2015. (5/28/15 Minute Order, ECF No. 11.) Mr. Ahluwalia did not appear at the hearing.

ANALYSIS

This is the fifth remand for lack of federal jurisdiction. The undersigned summarizes why (as did the earlier reports and recommendations).

I. THE COURT LACKS DIVERSITY JURISDICTION

Federal courts have original jurisdiction where the opposing parties are citizens of different states and the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332(a). Additionally, in removal cases where the purported basis of jurisdiction is diversity jurisdiction, removal is not permitted where a defendant in the case is a citizen of the state in which the plaintiff originally brought the action (even if the opposing parties are citizens of different states). See 28 U.S.C. § 1441(b).

First, the amount in controversy does not exceed $75, 000. In unlawful detainer actions, the right to possession of the property is contested, not title to the property, and plaintiffs may collect only damages that are incident to that unlawful possession. See Litton Loan Servicing, L.P. v. Villegas, No. 4:10-cv-05478-PJH, 2011 WL 204322, at *2 (N.D. Cal. Jan. 21, 2011) (quoting Evans v. Superior Ct., 67 Cal.App.3d 162, 170 (1977)). Plaintiff demands damages of $50 per day, beginning on March 25, 2015, which is about $21, 000 through the end of May. The damages do not reach the threshold amount.

Second, even assuming the threshold amount were satisfied, removal was not proper because the plaintiff filed suit in California, and the defendant, who is living on the plaintiff's property in Brentwood, is a citizen of California. 28 U.S.C. § 1441(b) prohibits removal where a defendant in the case ...


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