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CIT Bank, N.A. v. Estate of Marrazzo

United States District Court, D. Oregon, Portland Division

April 17, 2018

CIT BANK, N.A., Plaintiff,
v.
ESTATE OF SHARI S. MARRAZZO; THE UNKNOWN HEIRS, DEVISEES, AND ASSIGNEES OF SHARI S. MARRAZZO; ANDREA L. RYUN, Secretary of Housing and Urban Development; AND ALL OTHER PERSONS OR PARTIES UNKNOWN CLAIMING ANY RIGHT, TITLE, LIEN, OR INTEREST IN THE REAL PROPERTY COMMONLY KNOWN AS 3435 SW COLUMBIA DR, MADRAS, OR 97741, Defendants.

          FINDINGS AND RECOMMENDATIONS

          Youlee Yim You United States Magistrate Judge.

         Before the court is plaintiff CIT Bank, N.A.'s (“CIT Bank”) Motion for Remand (ECF #14), in which it also requests costs and fees associated with the removal of this case. Defendants Estate of Shari S. Marrazzo, Heirs, Devisees, Assignees of Shari S. Marrazzo, and Andrea L. Ryun join in the motion and request their own award of costs and fees. ECF #22. For the reasons set forth below, the motion should be GRANTED, but the court should decline to exercise it discretion to award costs and fees.

         BACKGROUND

         In 2009, CIT Bank delivered an adjustable rate home equity conversion line of credit (“the note”) to Shari S. Marrazzo (“Marrazzo”) secured by her residence. Notice of Removal, Ex. 1, at 5, 15, ECF #1-1. Marrazzo made timely payments on the note until her death, after which her estate defaulted leaving $231, 316.75 due as of September 19, 2016. Id. at 7-8. Pursuant to the terms of the note, CIT Bank exercised an acceleration clause and declared the whole sum of principal and interest immediately due and payable. Id. The estate did not pay. Id. CIT Bank brought suit for judicial foreclosure in Jefferson County Circuit Court on October 29, 2017, [1] and served defendants on November 11, 2017. Id. at 3. CIT Bank seeks the sale of the Marrazzo residence to satisfy its debt, with remaining proceeds to be paid to junior interests and Marrazzo's estate. Id. at 10-11.

         One such junior interest holder, defendant Edward Hernandez (“Hernandez”), filed a Notice of Removal (ECF #1) on December 6, 2017, invoking this court's subject matter jurisdiction through federal question jurisdiction. CIT Bank filed the present Motion for Remand on January 10, 2018. ECF #14. Hernandez responded on January 24, 2018, asserting new bases for removal-74 days after CIT Bank served him with the summons and complaint of the state-court action. ECF #19.

         FINDINGS

         I. The notice of removal contains no valid basis for federal court jurisdiction, and the new bases for jurisdiction that Hernandez proffers are untimely.

         A. Relevant Law

         1. Subject Matter Jurisdiction

         “Federal courts are courts of limited jurisdiction. Corral v. Select Portfolio Servicing, Inc., 878 F.3d 770, 773 (9th Cir. 2017) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). Federal courts “have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 USC § 1331 (federal question). They also “have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between citizens of different States. . . .” 28 USC § 1332 (diversity of citizenship). Additionally, they may exercise “supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” 28 USC § 1367.

         “Subject-matter jurisdiction, because it involves a court's power to hear a case, can never be forfeited or waived.” Rainero v. Archon Corp., 844 F.3d 832, 841 (9th Cir. 2016) (quoting United States v. Cotton, 535 U.S. 625, 630 (2002)).

         2. Removal and Remand

         “[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” 28 USC § 1441. However, “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded” to state court. 28 USC § 1447(c).

         “It is to be presumed that a cause lies outside [the federal court's] limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction.” Corral, 878 F.3d at 773 (quoting Kokkonen, 511 U.S. at 377). “This burden is particularly stringent for removing defendants because ‘[t]he removal statute is strictly construed, and any doubt about the right of removal requires resolution in favor of remand.'” Id. at 773-74 (quoting Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009)); id. at 774 (citing Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992), “and noting the ‘strong presumption' against removal jurisdiction”).

         A motion to remand challenging the existence of removal jurisdiction is the “functional equivalent of a defendant's motion to dismiss for lack of subject-matter jurisdiction under Rule 12(b)(1).” Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014) (citing FRCP 12(b)(1)). Pursuant to FRCP 12(b)(1), dismissal is appropriate when the court lacks subject matter jurisdiction over a claim. “The burden of establishing federal subject matter jurisdiction falls on the party invoking removal.” Marin Gen. Hosp. v. Modesto & Empire Traction Co., 581 F.3d 941, 944 (9th Cir. 2009) (citation ...


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