United States District Court, E.D. California
RODRICK J. SILAS, Plaintiff,
ARGENT MORTGAGE COMPANY, LLC ITS SUCCESSORS AND/OR ASSIGNS; and DOES 1-25, Inclusive, Defendants.
MEMORANDUM DECISION AND ORDER DENYING PLAINTIFF'S
MOTION TO REMAND AND GRANTING INTERVENOR DEEFENDANT'S
MOTION TO DISMISS AND MOTION TO EXPUNGE LIS PENDENS (ECF Nos.
4, 5, 6, 13)
LAWRENCE J. O'NEILL UNITED STATES CHIEF DISTRICT JUDGE
se Plaintiff Rodrick Silas (“Plaintiff” or
“Silas”) brings this action against Defendant
Argent Mortgage Company, LLC, Its Successors And/Or Assigns
(“Argent”) and Does 1 through 50, and intervenor
Defendant U.S. Bank (“US Bank” or
“Intervenor Defendant”). Plaintiff alleges
violations of the Federal Truth in Lending Act
(“TILA”), and brings causes of action for quiet
title, cancellation of instrument, and declaratory relief
related to real property at 5914 Summer Country Drive,
Bakersfield, CA 93313 (“Subject Property”).
action stems from Plaintiff's unsuccessful attempts to
halt foreclosure on the Subject Property. Now before the
Court is Intervenor Defendant's motion to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(1) &
(6) (ECF No. 4), Intervenor Defendant's Motion to Expunge
Lis Pendens (ECF No. 5), and Plaintiff's motion for
remand (ECF No. 13). Venue is proper in this Court and this
matter is suitable for disposition without oral argument.
See Local Rule 230(g).
August 8, 2006, Plaintiff executed a promissory note, in
favor of Argent Mortgage, secured by the Subject Property
through a Deed of Trust recorded on August 16, 2006. (FAC Ex.
A.) On August 14, 2012, an Assignment of Deed of Trust was
recorded indicating that Argent assigned all beneficial
interest under the Deed of Trust to U.S. Bank. (FAC Ex. B.) A
Notice of Default and Election to Sell Under Deed of Trust
was recorded the same day, as Plaintiff was $55, 987.58 in
arrears at the time. (Request for Judicial Notice
(“RJN”) Ex. 1.) On December 7, 2012, National
Default Servicing Corporation was substituted in as Trustee.
(RJN Ex. 2.) On December 21, 2012, a Notice of Trustee's
Sale was recorded. (RJN Ex. 3.)
Initial State Court Action and Rescission
April 1, 2014, Plaintiff filed a complaint for quiet title
and wrongful foreclosure against U.S. Bank in Kern County
Superior Court (“Initial State Court Action”).
(RJN Ex. 4.) In an amended complaint in the same action,
Plaintiff alleged that U.S. Bank had no ownership interest in
Plaintiff's loan, that the Note and Deed of Trust had
been separated, that the security instrument was not assigned
to the Trust or pool prior to its closing date, and that the
substitution of trustee was invalid under Civil Code §
2934(a)(1)(A). (RJN Ex. 5.) Plaintiff requested quiet title,
cancellation of the recorded Assignment of Deed of Trust, and
a judicial declaration that title was vested in Plaintiff.
February 25, 2015, U.S. Bank filed a demurrer on the grounds
that the amended complaint failed to state a claim for
relief, arguing that the assignment was valid under state law
and that the loan had been properly transferred to U.S. Bank.
(RJN Ex. 6.) The state court sustained U.S. Bank's
demurrer without leave to amend and entered judgment of
dismissal with prejudice in favor of U.S. Bank in April of
2015. (RJN Exs. 7-9.)
6, 2015, Plaintiff allegedly mailed a Notice of Rescission to
the loan servicer, Select Portfolio Servicing, Inc.
(“SPS”). (ECF No. 1 at 21.)
Initiation of the Instant Action
filed a complaint in the instant action on October 9, 2015,
in the Kern County Superior Court against Argent, the
original lender, regarding the subject property
(“Instant Action”). (ECF No. 1 at 5 (Docket).)
Plaintiff's January 7, 2016 amended complaint alleged
violations of TILA, and requested quiet title, cancellation
of instruments, and declaratory relief. (First Amended
Complaint (“FAC”).) Plaintiff recorded a Notice
of Pendency of Action related to the Instant Action on March
18, 2016. (RJN Ex. 10.)
Federal Court Action and Foreclosure Sale
Notice of Trustee's Sale was recorded on December 16,
2016, setting a sale date of January 11, 2017. (RJN Ex. 11.)
On January 4, 2017, Plaintiff filed a complaint in this
district against SPS and U.S. Bank (“Federal Court
Action”). The case was assigned to Judge Drodz, who
denied Plaintiff's motion for a temporary restraining
order halting the foreclosure sale. (RJN Ex. 13.) A
foreclosure sale occurred on January 11, 2017, and the
subject property reverted to the U.S. Bank as evidenced by a
recorded Trustee's Deed Upon Sale. (RJN Ex. 14.)
amended complaint in the Federal Court Action, Plaintiff
alleged violations of TILA, rescission of mortgage under
TILA, declaratory relief, quiet title, and cancellation of
instruments. (RJN Ex. 15.) On March 17, 2017, SPS and U.S.
Bank filed a motion to dismiss the Federal Court Action (RJN
Ex. 16.) On May 19, 2017, the court filed an order granting
the motion to dismiss, concluding that the majority of
Plaintiff's claims were barred by res judicata
and that Plaintiff's TILA claims were time-barred. (RJN
Ex. 17.) Silas v. Select Portfolio Servicing, Inc.,
No. 1:17-CV-00012-DAD-JLT, 2017 WL 2214937, at *4 (E.D. Cal.
May 19, 2017) (“Silas I”). In its
decision, the Court held that Plaintiff's non-TILA claims
were barred by claim preclusion because the claims related to
the same primary right previously litigated to final judgment
in the Initial State Court Action. Id. at *4-5. With
respect to Plaintiff's TILA claims, the Court held that
they were time-barred since rescission was only available for
three years after consummation of the loan agreement and the
time limit was not subject to equitable tolling. Id.
at 5-6. A judgment of dismissal was entered the same day.
(RJN Ex. 18.)
US Bank's Intervention in and Removal of the Instant
the motion to dismiss the Federal Court Action was pending,
U.S. Bank moved to intervene in the Instant Action on March
29, 2016. (ECF No. 1 at 178.) The motion to intervene was
granted by the state court on May 12, 2017. (ECF No. 1 at 2.)
On May 18, 2017, one day after the district court dismissed
the Federal Court Action, Defendant filed a Notice of Removal
pursuant to 28 U.S.C. § 1441 and the case was removed to
this Court. (ECF No. 1.)
25, 2017, Intervenor Defendant filed a motion to dismiss the
Instant Action for lack of jurisdiction and a motion to
expunge lis pendens. (ECF Nos. 4, 5.) Intervenor Defendant
also filed a simultaneous request for judicial notice. (ECF.
No. 6.) On June 9, 2017, Plaintiff filed an opposition to
Defendant's motion to dismiss (ECF No. 8), motion to
expunge lis pendens (ECF No. 7) and request for judicial
notice (ECF No. 9). Intervenor Defendant filed replies to all
three motions on June 15, 2017. (ECF Nos. 10, 11, 12.)
15, 2017, Plaintiff filed a motion for remand. (ECF No. 13).
Intervenor Defendant opposed the motion. (ECF No. 16.) To
date, Plaintiff has not submitted a reply. All pending
motions are ripe for review.
MOTION FOR REMAND
“determination of the remand issue will facilitate
litigation in the appropriate forum, ” and because
“judicial economy will be best served by addressing the
remand issue, ” the Court first considers the motion
for remand. Smith v. Mail Boxes, Etc., 191 F.Supp.2d
1155, 1157 (E.D. Cal. 2002) (internal quotation marks and
citations omitted). A state-court defendant may remove a case
from state to federal court if the federal courts would have
original jurisdiction over the case. 28 U.S.C. §
1441(a). To accomplish this task, the removing defendant
files a notice of removal in the federal district court in
the district and division within which the state court action
was pending. 28 U.S.C. § 1446(a). The notice must
contain “a short and plain statement of the grounds for
removal”-in this case relying on this Court's
federal question jurisdiction over Plaintiff's TILA
claims, see 28 U.S.C. § 1331, together with a
copy of “all process, pleadings, and orders”
served previously on the removing defendant. 28 U.S.C. §
1446(a). The plaintiff may then challenge the removal on the
basis that the requirements for subject-matter jurisdiction
have not been met.
courts have “original jurisdiction of all civil actions
arising under the Constitution, laws, or treaties of the
United States.” 28 U.S.C. § 1331. Determination of
federal question jurisdiction “is governed by the
‘well-pleaded complaint rule, ' which provides that
federal jurisdiction exists only when a federal question is
presented on the face of plaintiff's properly pleaded
complaint.” Caterpillar, 482 U.S. at 392. To
invoke federal question jurisdiction, a complaint must
establish “either that (1) federal law creates the
cause of action or that (2) plaintiff's right to relief
necessarily depends on resolution of a substantial question
of federal law.” Williston Basin Interstate
Pipeline Co. v. An Exclusive Gas Storage & Easement,
524 F.3d 1090, 1100 (9th Cir. 2008).
does not contest that this Court has subject matter
jurisdiction over his TILA claims. Rather, Plaintiff contends
that remand is proper because (1) Intervenor Defendant's
removal was not timely, and (2) Intervenor Defendant does not
have standing to remove the case. Plaintiff's argument is
flawed on both counts. (ECF No. 13.)
Plaintiff argues that the thirty-day window for Intervenor
Defendant to remove the case did not run from the order
granting intervention, but rather from the time when
defendant was served with the summons and complaint.
Plaintiff notes that Intervenor Defendant was not ever served
with the summons and complaint. (ECF No. 13 at 6.)
1446(b)(1) provides: “The notice of removal of a civil
action or proceeding shall be filed within 30 days after the
receipt by the defendant, through service or otherwise, of a
copy of the initial pleading setting forth the claim for
relief upon which such action or proceeding is based . . .
.” Where multiple defendants are served with the
complaint at different times, the Ninth Circuit has held that
“each defendant is entitled to thirty days to exercise
his removal rights after being served.” Destfino v.
Reiswig, 630 F.3d 952, 956 (9th Cir. 2011) (“There
is no reason to lock an earlier-served defendant out of the
federal forum, if he later chooses to consent.”). In
other words, a later-served defendant may, with consent of an
earlier served defendant, remove a case to federal court even
if the earlier served defendant has missed the thirty-day
window to do so. Id. (concluding that the
later-served rule prevents “binding later-served
defendants to decisions made before they were joined”).
may file notices of removal if they are properly aligned as
defendants . . . .” 14C Charles A. Wright & Arthur
R. Miller, Federal Practice and Procedure §
3730 (4th online ed. 2014). Intervenor Defendant became
“properly aligned” as a defendant when the Kern
County Superior Court granted their motion to intervene on
May 12, 2017. See Kirkbride v. Cont'l Cas. Co.,
933 F.2d 729, 733 (9th Cir. 1991) (30-day period began to run
when intervenor was made a party to the case); Tucker v.
Equifirst Corp., 57 F.Supp.3d 1347, 1349 (S.D. Ala.
2014) (“Once its motion to intervene was granted, U.S.
Bank was properly aligned as a defendant to the original
complaint. . . . Thus, if the case was then removable, the
30-day period began to run when the motion to intervene was
granted.”). Intervenor Defendant's thirty-day
window to remove began to run when the state court granted
its motion to intervene on May 12, 2017. Intervenor Defendant
removed this case within thirty days of becoming a defendant
in the case, on May 25, 2017. Defendant Argent, the only
other named defendant in the action, consented to the filing
of the notice of removal. (ECF No. 1 at 2.) Therefore,
removal of this case to federal court was timely.
Plaintiff contends that Intervenor Defendant lacks standing
to remove the case because U.S. Bank is a “debt
collector” within the meaning of the Fair Debt
Collections Practices Act (“FDCPA”) and therefore
has no pecuniary or equitable interest in the alleged debt
obligation on Plaintiff's property. (ECF No. 13 at 7-8.)
Plaintiff also appears to question the state court's
decision to allow U.S. Bank to intervene, arguing that they
have no “direct or immediate interest in the
action.” (ECF No. 13 at 9.) As Intervenor Defendant
points out in its opposition, U.S. Bank is not a debt
collector within the meaning of the FDCPA. ECF No. 16 at 2.
As the Supreme Court recently concluded in a case concerning
an entity that purchased loans in default for its own
account, “[i]ndividuals and entities who regularly
purchase debts originated by someone else and then seek to
collect those debts for their own account are not ‘debt
collectors' subject to the FDCPA.” Henson v.
Santander Consumer USA Inc., 137 S.Ct. 1718 (2017). U.S.
Bank was likewise assigned all beneficial interest in the
subject property under the Deed of Trust on August 14, 2012.
U.S. Bank owned the loan which was secured by the property,
and it now owns the property after the non-judicial
foreclosure sale. U.S. Bank is not a debt collector within
the meaning of the FDCPA.
as the purchaser of Plaintiff's mortgage debt, which is
the subject of Plaintiff's Complaint, Intervenor
Defendant is a real party in interest with standing to remove
this case. The state court properly granted U.S. Bank's
motion to intervene because U.S. Bank clearly has an
“interest relating to the property or ...