United States District Court, C.D. California
PRESENT: THE HON. DAVID O. CARTER, JUDGE.
ORDER GRANTING MOTION TO REMAND 
DAVID O. CARTER, JUDGE.
the Court is Plaintiff Horacio Godoy’s
(“Godoy” or “Plaintiff”) Motion to
Remand (“Motion”) (Dkt. 12). The Court finds this
matter appropriate for resolution without oral argument.
Fed.R.Civ.P. 78; L.R. 7-15. After considering the Motion, the
Court determines it lacks subject matter jurisdiction over
the case. Accordingly, the case is REMANDED to Orange County
November 21, 2007, Plaintiff obtained a loan for $1, 000, 000
from Countrywide Bank, FSB (“Countrywide”). The
loan was secured by a promissory note and a Deed of Trust
with respect to the subject property at 23 Prairie, Irvine,
CA 92618. Complaint (“Compl.”) (Dkt. 1-1)
¶¶ 8-10. The Deed of Trust states Countrywide is
the lender, and ReconTrust Company, N.A. is the trustee to
the Deed of Trust. Id. ¶ 10. Plaintiff disputes
The Bank of New York Mellon fka The Bank of New York, as
Trustee for the Benefit of CWMBS, Inc. CHL Mortgage
Pass-Through Trust 2007-21 Mortgage Pass-Through
Certificates, Series 2007-21 (“BNY”), Shellpoint
Mortgage Servicing (“Shellpoint”),  and Peak
Foreclosure Services Inc. (“Peak”) (collectively,
“Defendants”) were properly substituted as the
lender, loan servicer, and trustee, respectively.
Id. ¶ 15. On February 17, 2016, Defendants
recorded a notice titled “Notice of Default and
Election to Sell Under Deed of Trust.” (“Notice
of Default”). Id. ¶ 11. The crux of
Plaintiff’s Complaint is that Defendants did not comply
with the required procedures of the California Homeowner Bill
of Rights (“HBOR”) before recording the Notice of
Default and attempting to foreclose on Plaintiff’s
property. See generally Compl.
filed suit in Orange County Superior Court on May 6, 2016,
asserting six claims: (1) violations of California Civil Code
§ 2923.55; (2) violations of California Civil Code
§ 2924.17; (3) violations of California Civil Code
§ 2923.6; (4) violations of California Civil Code §
2924(a)(6); (5) request to cancel instrument under California
Civil Code § 3412; and (6) unfair, unlawful, and
fraudulent business practices under California Business and
Professions Code § 17200. See generally Compl.
6, 2016, Defendants removed the case to federal court based
on diversity jurisdiction, pursuant to 28 U.S.C. § 1332.
See Notice of Removal (Dkt. 1). Plaintiff filed the
instant Motion on July 6, 2016. Defendants opposed on July 8,
2016. (Dkt. 14).
at any time before final judgment it appears that the
district court lacks subject matter jurisdiction, the case
shall be remanded.” 28 U.S.C. § 1447(c). Because
28 U.S.C. § 1447(c) contains the word “shall,
” not the word “may, ” the court is
powerless to hear the case when it lacks subject matter
jurisdiction, and must remand the case to the state court.
See Int’l Primate Prot. League v. Adm’rs of
Tulane Educ. Fund, 500 U.S. 72, 87 (1991) (“[A]
finding that removal was improper deprives that court of
subject matter jurisdiction and obliges a remand under the
terms of § 1447(c).”). Additionally, the court may
remand sua sponte, not just upon motion by a party.
Briano v. Conseco Life Ins. Co., 126 F.Supp.2d 1293,
1295 (C.D. Cal. 2000).
defendant may generally remove a civil action from a state
court to a federal court “embracing the place where
such action is pending” if the action could have been
brought in federal court originally. 28 U.S.C. §
1441(a). A federal court has federal question jurisdiction
over “civil actions arising under the Constitution,
laws, or treaties of the United States.” 28 U.S.C.
§ 1331; see Merrell Dow Pharm. Inc. v.
Thompson, 478 U.S. 804, 807-08 (1986). A federal court
has diversity jurisdiction if: (1) the controversy is between
“citizens of different States”; and (2) the
amount in controversy exceeds the sum or value of $75, 000.
28 U.S.C. § 1332; see Owen Equip. & Erection Co.
v. Kroger, 437 U.S. 365, 373-74 (1978). Therefore, if
the district court has a basis for subject matter
jurisdiction under either 28 U.S.C. § 1331 or 28 U.S.C.
§ 1332, the action may be removed by a defendant.
See Caterpillar Inc. v. Lewis, 519 U.S. 61, 68-69
(1996); Wis. Dept. of Corrs. v. Schacht, 524 U.S.
381, 386 (1998).
a major limitation exists regarding the defendant’s
right to removal. A defendant may not remove a civil action
to federal court in the state in which the action was brought
if the defendant is a citizen of that state. 28 U.S.C. §
1441(b)(2); see Lincoln Prop. Co. v. Roche, 546 U.S.
81, 90, n.6 (2005) (noting lower courts’
characterization of the defect as procedural, not
jurisdictional). Thus, a district court must remand a case
removed by a “local” defendant - that is, a
defendant who is a citizen of the state in which the action
was originally brought. See Spencer v. U.S. Dist. Court
for N. Dist. of Cal., 393 F.3d 867, 870 (9th Cir. 2004)
(“It is thus clear that the presence of a local
defendant at the time removal is sought bars
a California citizen, argues the Court should use the
principle place of business test and find that Defendants BNY
and Shellpoint are citizens of California, and thus,
diversity of citizenship is destroyed. Mot. at 13-15. In the
Notice of Removal, Defendants assert BNY is a Delaware
corporation with its principle place of business in New York,
and Shellpoint is a dba for New Penn Financial, LLC, a
Delaware limited liability company. Notice of Removal at 4.
the Court must determine whether Defendants have met their
burden to establish there is diversity of citizenship
supporting diversity jurisdiction. See Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)
(“Federal courts are courts of limited jurisdiction . .
. It is to be presumed that a cause lies outside this limited
jurisdiction and the burden ...