Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-01355/USCOURTS-caed-2_05-cv-01355-2/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1446 Petition for Removal

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1 Note that the party identities in this order differ from

the court docket. In filing his notice of removal, Peterson

incorrectly identified himself as the plaintiff, resulting in an

error in how this case was captioned. (See Def.’s Notice of

Removal).

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

J.P. MORGAN CHASE BANK,

NO. CIV. S-05-01355 WBS GGH

Plaintiff,

v. MEMORANDUM AND ORDER RE:

MOTION TO REMAND

CEDRIC V. PETERSON,

Defendant.

----oo0oo----

Plaintiff J.P. Morgan Chase Bank (“the Bank”) filed

this lawsuit in the Superior Court of California in and for the

County of Sacramento to enforce its ownership interest in the

residence of defendant Cedric V. Peterson (“Peterson”), which was

obtained through a non-judicial foreclosure.1 Peterson removed

the case to this court and the Bank now seeks remand, arguing

that removal was procedurally defective and furthermore improper

Case 2:05-cv-01355-WBS-GGH Document 16 Filed 09/23/05 Page 1 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

because the matter could not have originally been filed in

federal court. 

I. Factual and Procedural Background

The tortured history of this case concerns the

ownership and retention of a single family residence located at

8675 Elm Avenue, Orangevale, CA 95662 (“the property”). After

Peterson failed to meet his payment obligations, the Bank, as the

beneficiary under a Deed of Trust, executed a non-judicial

foreclosure sale on April 10, 2003 through which the property was

sold. (Pl.’s P. & A. in Supp. of Mot. to Remand at 2). Peterson

responded by filing a pro se suit in state court, asking the

court to (1) set aside the sale, (2) cancel the trustee’s deed,

and (3) quiet title. (Id.). Peterson also alleged fraud and

requested an accounting of any amount still owed to the Bank

under the loan as well as injunctive relief. (Pl.’s Req. For

Judicial Notice in Supp. of Mot. to Remand Ex. A, Compl. ¶¶

13-36, 37-40, 63-65, J.P. Morgan Chase Bank v. Peterson, No.

04-civ-02492 (E.D. Cal. Mar. 10, 2005) (defendant’s state court

complaint)). The state court awarded summary judgment on all

counts to the Bank.

When Peterson failed to vacate the property following

the state court’s ruling, the Bank brought suit, again in state

court, alleging unlawful detainer following the foreclosure sale

and praying for (1) restitution of the property, (2) $30 per day

for each day beyond April 10, 2003 that Peterson retained

possession of the property, and (3) attorney’s fees. Peterson

removed the unlawful detainer case to federal court based on

arguments for diversity jurisdiction, (Def.’s Notice of Removal,

Case 2:05-cv-01355-WBS-GGH Document 16 Filed 09/23/05 Page 2 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

J.P. Morgan Chase Bank v. Peterson, No. 04-civ-02492 (E.D. Cal.

Jan. 27, 2005)), and then submitted an unopposed motion to

dismiss pursuant to Rule 41 of the Federal Rules of Civil

Procedure. (Def.’s Mot. to Dismiss Pursuant to Rule 41). Judge

England granted the Rule 41 motion without prejudice. J.P.

Morgan Chase Bank v. Peterson, No. 04-civ-2492, slip op. at 2

(E.D. Cal. Jan. 26, 2005). 

After obtaining counsel, Peterson next filed his own

federal suit against the Bank, alleging (1) breach of contract,

(2) wrongful foreclosure, (3) violation of the federal Truth in

Lending Act, 15 U.S.C. §§ 1601-1667f (TILA), (4) violation of the

Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601-2617

(RESPA), (5) violation of the Fair Debt Collection Practices Act,

15 U.S.C. § 1692d (FDCPA), and other state law violations.

(Compl. ¶¶ 13-30, Peterson v. J.P. Morgan Chase Bank, No.

05-civ-0423 (E.D. Cal. Mar. 2, 2005)). That case, Peterson v.

J.P. Morgan Chase Bank, No. 05-civ-0423, is currently before

Judge Damrell. 

Meanwhile, Judge England granted the Bank’s motion to

remand the dismissed wrongful detainer suit, finding that removal

based on diversity jurisdiction was procedurally defective

because Peterson was a citizen of the state where suit was filed. 

J.P. Morgan Chase Bank, No. 04-civ-2492, slip op. at 4, 6 (E.D.

Cal. Apr. 27, 2005). Additionally, the amount in controversy in

a California wrongful detainer case, the rental value of the

property wrongfully detained, did not meet the statutory minimum,

$75,000, required for diversity jurisdiction. Id. at 4. Because

Peterson had proceeded pro se, however, Judge England rejected

Case 2:05-cv-01355-WBS-GGH Document 16 Filed 09/23/05 Page 3 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

the Bank’s request for attorney’s fees under 28 U.S.C. § 1447(c)

(2000) and awarded only the Bank’s costs in filing the motion to

remand. Id. at 5.

After the BAnk renewed its pursuit of the wrongful

detainer claim in state court, Peterson again removed the case to

this court. (Def.’s Notice of Removal). Pursuant to Local Rule

83-123, Peterson was required to file a Notice of Related Cases. 

Judge England declined this request to relate or reassign the

cases, finding such a course of action “inappropriate.” J.P.

Morgan Chase Bank, No. 04-civ-2492, slip op. at 1 (E.D. Cal. Aug.

3, 2005). Consequently, in that case Judge Damrell will

determine the outcome of Peterson’s state and federal claims

generally alleging defective process in the establishment of the

loan for the property and wrongful disclosure. The sole claim

before the court in this case is therefore the Bank’s claim

against Peterson for wrongful detainer.

II. Discussion

In opposition to the Bank’s motion to remand, Peterson

urges the court to postpone its decision until Judge Damrell

rules on the Bank’s motion for summary judgment in case No.

05-civ-0423. However, although Judge Damrell’s decision may

alter the rights of the parties with respect to the property,

Judge England has already ruled that determinations of the issues

before this court and Judge Damrell need not be concurrent. Id.

The cases have not been related. 

Moreover, the law instructs this court to consider the

Bank’s motion to remand before entertaining Peterson’s arguments

to await Judge Damrell’s decision. Jurisdiction is a preliminary

Case 2:05-cv-01355-WBS-GGH Document 16 Filed 09/23/05 Page 4 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

matter that should be resolved before decisions regarding the

pace of the case. Smith v. Mail Boxes, Etc., 191 F. Supp. 2d

1155, 1157 (E.D. Cal. 2002) (“[J]urisdictional issues should be

resolved before the court determines if a stay is appropriate.”);

see also Villarreal v. Chrysler Corp., No. C-95-4414, 1996 WL

116832, at *1 (N.D. Cal. Mar. 12, 1996) (“Judicial economy will

best be served by addressing the remand issue [before a party’s

motion to stay] because a determination on this issue will

facilitate litigation in the appropriate forum.”). Finally, the

outcome of the Bank’s summary judgment motion before Judge

Damrell has no bearing on whether the court’s exercise of

jurisdiction over the wrongful detainer claim in this case was

proper. Peterson’s federal claims against the Bank in another

matter, decidedly separate and apart from the one before this

court, have no influence on a determination of jurisdiction. 

Therefore, the court will address the merits of the Bank’s motion

to remand.

A. Standard for Remand

A party can remand a case to state court after removal

to federal court when the case lacks grounds for federal

jurisdiction or removal was procedurally improper. 28 U.S.C. §

1447(c). Any questions regarding the propriety of removal are

resolved in favor of the party moving for remand. Matheson v.

Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir.

2003) (“Where doubt regarding the right to removal exists, a case

should be remanded to state court.”). The Bank alleges that

removal was both procedurally and substantively defective in this

case. 

Case 2:05-cv-01355-WBS-GGH Document 16 Filed 09/23/05 Page 5 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

A defendant may remove from state to federal court any case

that “aris[es] under the Constitution, treaties or laws of the

United States . . . .” 28 U.S.C. § 1441(a)-(b). The claim

arising under federal law on which jurisdiction is based must,

however, come from the plaintiff’s complaint. Louiseville &

Nashville R.R. v. Mottley, 211 U.S. 149 (1908). Defendant’s

defenses and counterclaims, even compulsory counterclaims, cannot

provide the basis for “arising under” jurisdiction. Holmes

Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826,

830-32 (2002). In other words, defendant’s answer has no bearing

on whether federal jurisdiction is proper. Id. at 831.

The rule for removal of diversity cases is more

restrictive. Diversity jurisdiction exists when a dispute arises

between “citizens of different states” over an amount greater

than $75,000. 28 U.S.C. § 1332(a). In the Ninth Circuit, the

amount in controversy in suits other than class actions can be

calculated from the defendant’s viewpoint (the amount defendant

stands to lose) or the plaintiff’s viewpoint (the amount the

plaintiff stands to gain). Ridder Bros., Inc. v. Blethen, 142

F.2d 395, 399 (9th Cir. 1944) (“The value of the ‘thing sought to

be accomplished by the action’ may relate to either or any party

to the action.” (citation omitted)); see also Kanter v.

Warner-Lambert Co., 265 F.3d 853, 858 (9th Cir. 2001)

(noting that Ridder Bros. remains good law only in non-class

action cases). But such cases can be removed “only if [no

defendant] is a citizen of the State in which the action is

brought” when notice of removal is filed. 28 U.S.C. § 1441(b)

(emphasis added); Spencer v. U.S. Dist. Court for N. Dist. of

Case 2:05-cv-01355-WBS-GGH Document 16 Filed 09/23/05 Page 6 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7

Cal., 393 F.3d 867, 871 (9th Cir. 2004) (holding that the “forum

defendant rule” of § 1441(b) “applies at the time the notice of

removal is filed”).

B. Analysis of Defendant’s Notice of Removal

Whether based on federal question or diversity

jurisdiction, Peterson’s removal of the Bank’s wrongful detainer

action was improper. In his notice of removal, Peterson cited

several federal statutes, including TILA, RESPA, and FDCPA, as

grounds for federal question jurisdiction in this case. (Def.’s

Notice of Removal at 3). Those statutes are all, however, the

basis of Peterson’s claims against the Bank and consequently they

cannot justify removal of the Bank’s unlawful detainer action

because “arising under” jurisdiction only considers the claims

made in the complaint. Holmes Group, 535 U.S. at 831.

Likewise, removal cannot be predicated upon diversity

jurisdiction for procedural reasons. The plain language of the

second sentence of 28 U.S.C. § 1441(b), sometimes called the

“forum defendant rule” in the Ninth Circuit, prohibits removal of

cases that might have been brought in federal court on diversity

grounds when the case is before a court in defendant’s home

state. See Spencer, 393 F.3d at 871. As noted in Judge

England’s remand order, “at the time of removal Defendant was a

citizen of the state in which the action was brought.” J.P.

Morgan Chase Bank, No. 04-civ-2492, slip op. at 4 (E.D. Cal. Apr.

27, 2005); (see also Def.’s Opp’n to Pl.’s Mot. to Remand and for

the Imposition of Sanctions at 3-4). Petersont has never

disavowed his California citizenship in these proceedings. 

Therefore, regardless of whether the Bank could have filed this

Case 2:05-cv-01355-WBS-GGH Document 16 Filed 09/23/05 Page 7 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

8

wrongful detainer action in federal court on diversity grounds,

Peterson cannot remove it.

C. Attorneys’ Fees

Plaintiff has asked the court to “sanction” Peterson by

awarding the costs incurred by the BAnk in response to Peterson’s

removal notices. Under 28 U.S.C. § 1447(c), “[a]n order

remanding the case may require payment of just costs and any

actual expenses, including attorney fees, incurred as a result of

the removal.” While the court will entertain the BAnk’s request,

it first notes that “the court's award of fees . . . is not a

punitive award against defendants; it is simply reimbursement to

plaintiffs of wholly unnecessary litigation costs the defendant

inflicted.” Moore v. Permanente Med. Group, Inc., 981 F.2d 443,

447 (9th Cir. 1992). Sanctions, as discussed below, are a

separate matter.

In his order for remand, Judge England declined to

award attorney fees because of Peterson’s pro se status. J.P.

Morgan Chase Bank, No. 04-civ-2492, slip op. at 5 (E.D. Cal. Apr.

27, 2005). But he also noted that removal was clearly improper. 

Id. For the case now before this court, Peterson obtained

representation and then filed a nearly identical notice of

removal, again in response to the Bank’s wrongful detainer

action. The court is baffled as to why Peterson’s attorneys

would file a removal notice in light of Judge England’s prior

determination that removal of the Bank’s wrongful detainer action

was improper. While a pro se litigant “may not be verse in

federal civil procedure,” (id.), defendant’s attorneys are not

judged by the same lenient standard. 

Case 2:05-cv-01355-WBS-GGH Document 16 Filed 09/23/05 Page 8 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2 Because Peterson did not object to the Bank’s

calculation of the attorneys fees incurred in defense of

defendant’s second notice removal, the court assumes the amount

proposed by the Bank is reasonable.

9

The Bank has requested reimbursement of $5,860.00,

which represents the fees incurred in pursuit of its action for

wrongful detainer. Included in this amount are $780 in attorney

fees “for briefing the state court” and “$3,510.00 for

researching and preparing the instant Motion to Remand.” These

same items and amounts were included in the Bank’s previous

motion to remand before Judge England. The court declines the

Bank’s request to award costs already denied by Judge England. 

However, because Peterson’s second notice of removal, for what

was essentially the same matter as that presented to Judge

England, was, if possible, even more clearly improper, the court

awards the Bank its reasonable attorney’s fees for preparing a

second motion to remand in the stated amount of $1,720.00.2

Although the Bank mentions Federal Rule of Civil

Procedure Rule 11 sanctions as well, this request is procedurally

deficient and will not be considered. Rule 11 plainly requires

that “motions for sanctions . . . be made separately from other

motions.” Fed. R. Civ. P. 11. In simply mentioning “sanctions

under Federal Rule of Civil Procedure § [sic] 11" in its motion

for remand, the Bank failed to meet the precise requirements for

a Rule 11 motion for sanctions. See Arellano v. Home Depot

U.S.A., Inc., 245 F. Supp. 2d 1102, 1109 (S.D. Cal. 2003)

(declaring Home Depot’s request for sanctions “procedurally

defective” because it “was contained in its opposition to

plaintiff's motion to remand”).

Case 2:05-cv-01355-WBS-GGH Document 16 Filed 09/23/05 Page 9 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10

IT IS THEREFORE ORDERED that plaintiff’s motion to

remand be, and the same hereby is, GRANTED, and this matter is

hereby REMANDED to Superior Court of the State of California in

and for the County of Sacramento. 

IT IS FURTHER ORDERED that plaintiff recover its

reasonably incurred attorney fees in the amount of $1,720.00.

DATED: September 21, 2005

Case 2:05-cv-01355-WBS-GGH Document 16 Filed 09/23/05 Page 10 of 10