Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-00018/USCOURTS-azd-2_08-cv-00018-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1331 Fed. Question

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

James A. Monroe and Kimberly )

M. Pirtle, )

)

Plaintiffs ) No. CIV 2:08-CV-0018-PHX-RCB

)

vs. ) O R D E R

)

James L. Gagan, Jane Doe )

Gagan, Ross Miljenovich, )

John Does I through X, and )

Jane Does I through X, )

 )

 Defendants )

 )

)

Ross Miljenovich, )

)

Defendant-Cross- )

Claimant )

 )

 )

vs. )

)

James L. Gagan and Jane Doe )

Gagan, John and Jane Does I )

through 10 and 11 through 20, )

XYZ Corporations 1 through 10,)

ABC Partnerships 1 through 10,)

and Black and White )

Unincorporated Associations 1 )

through 10, )

)

Cross-Defendants )

Case 2:08-cv-00018-RCB Document 27 Filed 09/29/08 Page 1 of 26
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Since the commencement of this action, Ms. Monroe Clark’s marital 1

status has changed so she no longer goes by Kimberly M. Pirtle, as the caption

indicates.

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Currently pending before the court are motions to remand

pursuant to 28 U.S.C. § 1447(c) by plaintiffs James A. Monroe and

Kimberley Monroe Clark (doc. 7), and by defendant/cross-claimant 1

Ross Miljenovich (doc. 10). The moving parties posit that this

action must be remanded to Arizona Superior Court, Maricopa County

because this court lacks subject matter jurisdiction. 

Background

This is the latest round in a dispute between Messrs. Monroe

and Gagan, originating in a business venture which began more than

a quarter of a century ago, in 1982. Eventually, Mr. Gagan

obtained a judgment in Indiana of roughly $1.7 million dollars

against Mr. Monroe, among others. Thereafter, for more than a

decade this court presided over the related action of Gagan v.

Sharar, 2:99-cv-1427-RCB (“Gagan”), wherein Mr. Gagan was seeking

to enforce that Indiana judgment. The court assumes familiarity

with all prior related proceedings. An abbreviated version of this

protracted dispute is set forth below as necessary to frame the

issues which these remand motions raise. 

As part of the enforcement efforts in Gagan, eventually the

United States Marshal conducted a sale of Mr. Monroe’s real

property located at 9795 East Caron Street, Scottsdale, Arizona

85258. Gagan, (doc. 347). At the time of that sale Mr. Monroe’s

daughter, Kimberly Monroe Clark, was residing there, but Mr. Monroe

was not. See Amended Co. (doc. 5) at 3, ¶ 4. The proceeds of that

sale were to be applied toward the satisfaction of the Indiana

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judgment. Gagan, (doc. 341) at 1. Defendant James Gagan was the

highest bidder at that sale, bidding $560,000.00. Id. (doc. 341)

at 2. On May 15, 2007, a “United States Marshal’s Deed” was issued

to Mr. Gagan. Id. (doc. 347). Thereafter, “[i]n June, 2007, [Mr.]

Gagan entered into a contract with . . . [Mr.] Miljenovich to sell

to him for $750,000 whatever right, title and interest the United

States Marshal's Deed had vested in Gagan.” Not. of Removal (doc.

1) at 3, ¶ 4.

Unwilling to concede defeat, on August 31, 2007, Mr. Monroe

and his daughter, Kimberley Monroe Clark, filed the present action

against Messrs. Gagan and Miljenovich and numerous fictitious

individuals. Mr. Monroe now alleges that despite the Marshal's

sale, he “is the lawful owner of a fee simple estate” in the

subject property. Not. of Rem. (doc. 1), exh. A thereto (doc. 1-4)

at 2, ¶ 2. Mr. Monroe further alleges that the United States

Marshal, “act[ing] upon the advice and instructions of Defendants

Gagan[,]” refused to pay Mr. Monroe the $150,000.00 statutory

homestead exemption. Id. at 5, ¶ 17. The failure to pay that

exemption, Mr. Monroe alleges, renders “invalid[ ]” Mr. Gagan's May

15, 2007 Marshal's deed. Id. at 5, ¶ 19. 

Mr. Monroe is seeking two forms of declaratory judgment. 

First, he is seeking a declaration that the “Indiana Judgment

against [him], domesticated in Arizona . . . , was not renewed and

expired and was, therefore, of no further force or effect and that

it was, and is, invalid in the State of Arizona [.]” Id. at 6, ¶

A(1). Second, he is seeking a declaration that the May 15, 2007,

Marshal's Deed “is void and invalid.” Id. at 6, ¶ A(2). Citing to

Arizona statutes governing actions to quiet title, Mr. Monroe also

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seeks a declaration “establishing [his] estate” in the subject

property, and “barr[ing] and forever estopp[ing]” defendants from

claiming any right or title to that property. Id. at 6, ¶ B. 

Similarly, he seeking a judgment “barring and forever estopping”

defendants from asserting an interest or lien upon the property

which is adverse to his. Id. at 6, ¶ C. Plaintiff Monroe Clark

seeks unspecified monetary damages based upon alleged “intentional

wrongful eviction.” Id. at 6, ¶¶ 20 and D. 

Roughly a week after the Monroes filed their state court

action, Mr. Miljenovich filed a separate state court action against

“James L. Gagan and Jane Doe Gagan[.]”. Doc. 26-2. Mr.

Miljenovich alleges that he and the Gagans are residents of

Maricopa County, Arizona. Id. at 1-2, ¶¶ 1-2. He further alleges

that he entered into a contract with the Gagans to purchase the

subject property for $750,000.00. As that contract required, Mr.

Miljenovich deposited $25,000.00 as earnest money. In the event

Mr. Miljenovich did not perform under the contract, that $25,000.00

was non-refundable. 

 In addition, Mr. Miljenovich alleges that while contracting

with Mr. Gagan to purchase the subject property, Mr. Gagan

“represented to [him] that the Property was free and clear of all

encumbrances except for those listed in the Purchase Contract.” 

Id. at 3, ¶ 13. Mr. Miljenovich subsequently learned, however,

that Mr. Monroe has a $150,000.00 homestead exception recorded on

the subject property. Id. at 3, ¶¶ 14-16. Because allegedly the

Gagans have refused to pay that exemption, Mr. Miljenovich claims

that he “is unable to complete the purchase of the Property and

obtain title to the Property free and clear of all encumbrances[.]”

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Id. at 4, ¶ 19. Given that his “inability to close on the property

is a result of the Gagans[’] own actions[,]” Mr. Miljenovich claims

an “entitle[ment] to the return of his [$25,000.00] earnest money.” 

Id. Mr. Miljenovich sets forth state law claims for breach of

contract; fraud; intentional/negligent misrepresentation; and

consumer fraud under ARS § 44-1521 et seq. 

 The state court consolidated the Monroe and Miljenovich actions

on October 26, 2007. Thereafter, Mr. Miljenovich filed a crossclaim against the Gagans on December 6, 2007. Doc. 11, exh. B

thereto (doc. 1-4). That cross-claim mirrors his complaint in

Miljenovich v. Gagan. Mr. Gagan then removed the matter to this

court on January 4, 2008, where it was randomly assigned to the

Honorable Earl. H. Carroll. Primarily for reasons of judicial

economy, this court granted Mr. Gagan’s motion to transfer that

action to the undersigned. Gagan v. Estate of Sharar, 2008 WL

2810978 (D.Ariz. July 18, 2008). Prior to that transfer,

plaintiffs filed this motion to remand (doc. 7), to which Mr.

Miljenovich filed a “joinder” (doc. 10), arguing that this court

lacks subject matter jurisdiction. Given that transfer, these

remand motions are properly before this court. 

Discussion

I. Governing Legal Standards

“A defendant may remove an action originally filed in state

court only if the case originally could have been filed in federal

court.” In re NOS Communications, MDL No. 1357, 495 F.3d 1052,

1057 (9 Cir. 2007) (citing 28 U.S.C. § 1441(a), (b)). Consistent th

with the foregoing and because “federal courts are court of limited

jurisdiction[,]” Vacek v. U.S. Postal Service, 447 F.3d 1248, 1250

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(9 Cir. 2006) (internal quotation marks and citation omitted), th

cert. denied, 127 S.Ct. 2122 (2007), “[i]f 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). 

It is beyond peradventure that “[i]n general, removal statutes

are strictly construed against removal.” Luther v. Countrywide

Home Loans Servicing LP, 533 F.3d 1031, 1034 (9 Cir. 2008) th

(citing, inter alia, Shamrock Oil & Gas Corp. v. Sheets, 313 U.S.

100, 108-09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941)). Accordingly,

“[i]t is to be presumed that a cause lies outside [the] limited

jurisdiction [of the federal courts] and the burden of establishing

the contrary rests upon the party asserting jurisdiction.” Abrego

Abrego v. The Dow Chemical Co., 443 F.3d 676, 685 (9 Cir. 2006) th

(internal quotation marks and citation omitted). Therefore, “[a]

defendant seeking removal has the burden to establish that removal

is proper and any doubt is resolved against removability[,]” and,

by extension, in favor of remand. Luther, 533 F.3d at 1034

(citation omitted).

II. Impact of Consolidation

At the outset it is necessary to address the impact of

consolidation on the court’s jurisdictional analysis. Despite

consolidation, the Monroe action and the Miljenovich action retain

their separate identities. See Continental Airlines v. Goodyear

Tire & Rubber Co., 819 F.2d 1519, 1523 n. 1 (9 Cir. 1987) (quoting th

Johnson v. Manhattan Ry., 289 U.S. 479, 497, 53 S.Ct. 721, 728, 77

L.Ed. 1331 (1933)) (“[T]he consolidation of the cases below did not

‘make those who are parties in one suit parties in another.’”) As

one court has so picturesquely put it, “[c]onsolidation is not like

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The fact that these two actions were consolidated in state court, prior 2

to removal, does not change the result. Presumably those actions were consolidated

pursuant to ARCP 42(a) which is virtually identical to Fed. R. Civ. P. 42(a).

“‘[B]ecause Arizona has substantially adopted the Federal Rules of Civil Procedure,

[Arizona courts ] give great weight to the federal interpretation of the rules.’”

Cachet Residential Builders, Inc. v. Gemini Ins. Co., 547 F.Supp.2d 1028, 1030

(D.Ariz. 2007) (quoting Anserv Ins. Servs., Inc. v. Albrecht, 192 Ariz. 48, 960

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a marriage, producing one indissoluble union from two distinct

cases.” Chaara v. Intel Corp., 410 F.Supp.2d 1080, 1094 (D.N.M.

2005), aff’d without pub’d opinion, 245 Fed.Appx. 784 (10 Cir. th

2007). “Instead, consolidation is an artificial link formed by a

court for the administrative convenience of the parties; it fails

to erase the fact that, underneath consolidation’s facade, lie two

individual cases.” Id. (citations omitted). Given the fundamental

nature of consolidation, courts have uniformly held that “[t]here

must be separate jurisdictional bases for each action prior to any

consolidation, and any case lacking a separate jurisdictional basis

must be remanded.” James v. CSX Transportation, Inc., 2007 WL

1100503, at *3 (S.D.Ga. April 9, 2007) (citing Johnson, 289 U.S. at

496-97, 53 S.Ct. 721); see also Chaara, 410 F.Supp.2d at 1095

(treating consolidated actions “[a]s separate actions,” so that

“each case must satisfy jurisdiction on its own[]”) (emphasis

added). This is equally true for cases where diversity is the

jurisdictional basis. In re Ibasis, Inc. Deriv. Litig., 551

F.Supp.2d 122, 125 (D.Mass. 2008) (citing, inter alia, Cella v.

Togum Constructeru Ensemleier en Industrie Alimentaire, 173 F.3d

909, 913 (3 Cir. 1999)) (“Courts have recognized that analysis of rd

diversity jurisdiction remains separate for cases even after they

have been consolidated.”) Thus, in the present case, the court

must “analyze[] the jurisdictional basis of [the Monroe action and

the Miljenovich action] independently.” See Cella, 173 F.3d at 2

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P.2d 1159, 1160 (1998)). The foregoing “strengthen[s] the Court’s conclusion that

[Arizona] courts would not reach a different conclusion under the [Arizona] Rules.”

See Chaara, 410 F.Supp.2d at 1095 (citations omitted). 

The court is compelled to comment upon two defects in defendant Gagan’s 3

removal. First, it violates the rule of unanimity which basically requires that

all served defendants join in a notice of removal. Vasquez v. North County Transit

Dist., 292 F.3d 1049, 1060 n.5 (9 Cir. 2002) (citation omitted). Obviously, th

defendant Gagan did not join defendant Miljenovich in his Notice of Removal. This

is a procedural defect, however, which is waived where no timely objection is made.

Id. (citation omitted). By filing their motion to remand within 30 days of the

Notice of Removal, plaintiffs would have been entitled to raise this procedural

defect, but they did not. Hence it is waived. Defendant Miljenovich likewise

waived his right to waive this procedural defect because he did not file his motion

to remand until February 12, 2008, more than 30 days after the filing of Gagan’s

Notice of Removal. 

Removal, to the extent it is based upon diversity of citizenship, also is

defective here because it violates the forum defendant rule. That rule “confines

removal on the basis of diversity jurisdiction to instances where no defendant is

a citizen of the forum state.” Lively v. Wild Oats Markets, Inc., 456 F.3d 933,

939 (9 Cir. 2006). Here, according to the Notice of Removal, defendant th

Miljenovich is a citizen of Arizona, the forum state. Not. of Rem. (doc. 1) at 4,

¶ 9. Like the unanimity rule, however, the forum defendant rule is procedural.

Lively, 456 F.3d at 942. Thus, a violation of that rule “constitutes a waivable

non-jurisdictional defect subject to the 30-day time limit imposed by § 1447(c).”

Id. 

As with the unanimity rule, plaintiffs’ timely remand motion is silent as to

the forum defendant rule. Accordingly, they waived the right to object to removal

on that basis. And once again, defendant Miljenovich waived his right to raise

this procedural defect because he did not file his remand motion within 30 days

after the filing of the Notice of Removal. 

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913 (citing Cole v. Schenley Industries, Inc., 563 F.2d 35, 38 (2d

Cir. 1977)). 

III. Subject Matter Jurisdiction3

A. Monroe v. Gagan

Defendant Gagan’s Notice of Removal identifies what he views

as several “uncontested grounds for removal” which alone or

together “defeat” remand. Resp. (doc. 15) at 6. Defendant argues

that there are four possible jurisdictional bases for the Monroe v.

Gagan action: (1) diversity of citizenship pursuant to 28 U.S.C. §

1332; (2) federal question jurisdiction under 28 U.S.C. § 1331; (3)

supplemental jurisdiction under 28 U.S.C. § 1367; and (4) pursuant

to 28 U.S.C. § 1442(a)(2), the federal title dispute statute. The

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court will address in reverse order whether any of these statutes

provide a basis for subject matter jurisdiction in Monroe. 

1. Federal Title Dispute

 The “rarely invoked” federal title dispute statute, Vanouwerker

v. Owens-Corning Fiberglass Corp., 1999 WL 335960, at *13 (E.D.Tex.

May 26, 1999), reads in relevant part as follows:

A civil action . . . commenced in a State court 

against any of the following may be removed by 

them to the district court of the United States 

for the district . . . embracing the place wherein 

it is pending:

. . . .

A property holder whose tile is derived from 

any such officer, where such action or prosecution 

affects the validity of any law of the United States.

28 U.S.C. § 1442(a)(2) (West 2006). Reliance upon this statute

“requires compliance with two prongs[.]” Benitez-Bithorn v.

Rossello-Gonzalez, 200 F.Supp.2d 26, 31 (D.P.R. 2002). First, “the

property in controversy must derive from an officer of the United

States[.]” Id. Second, “the controversy regarding the property

must affect the validity of any law of the United States.” Id. 

 Mr. Gagan contends that Monroe’s claims against him satisfy

both prongs; hence, this court has subject matter jurisdiction

under section 1442(a)(2). As to the first prong, Gagan asserts

that because he obtained the subject property through a sale by the

United States Marshal, he is a “property holder whose title derives

from an officer of the United States[]” within the meaning of

section 1442(a)(2). The court agrees. Indeed, in their complaint,

the Monroes explicitly allege that the Gagans “claim an interest in

and title to the Property[] . . . through . . . a [United States]

Marshal’s Deed, dated May 15, 2007[.]” Not. of Rem. (doc. 1), exh.

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B thereto (doc. 1-4) at 4, ¶ 13. 

 Nonetheless, Mr. Gagan cannot satisfy the second prong of

section 1442(a)(2). Gagan baldly contends that the Monroes’

allegations “affect the validity of a law of the United States”

because they are “attack[ing] . . . the Marshal’s fulfillment of

[his] express statutory duties” under 28 U.S.C. § 566. Not. of

Rem. (doc. 1) at 6, ¶ 12.; see also Resp. (doc. 15) at 5-6 (same). 

That statute delineates the “powers and duties” of the United

States Marshal. 28 U.S.C. § 566 (West 2006 & West Supp. 2008). 

Additionally, Gagan argues that this matter affects the validity of

a law of the United States because it “draw[s] into issue the

validity of Gagan’s federal RICO Judgment as well as the validity

of various Orders” by this court in Gagan. Id. at 6, ¶ 12. 

Mr. Gagan too broadly construes the second prong of section

1442(a)(2). The Marshal’s supposed failure to comply with his

duties under federal law does not transform this action into one

affecting the validity of a law of the United States. This is not

a situation, for example, where the Monroes are arguing that

section 566 is constitutionally infirm. Likewise, questioning the

validity of a judgment and federal court orders does not transform

this into a controversy affecting the validity of any law of the

United States. See Town of Stratford v. City of Bridgeport, 434

F.Supp. 712, 715 (D.Conn. 1977) (citation omitted) (“None of the

provisions of federal law cited in support of [defendant’s] removal

petition meets the § 1442 standard, since [plaintiff’s] suit does

not attack the validity of any of them.”) In short, reciting that

a controversy affects the validity of a law of the United States

does not make is so. Because Monroe’s claims do not affect the

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validity of any federal law, Gagan improperly relied upon the

federal title dispute statue as a basis for removal here. 

2. Supplemental Jurisdiction

Defendant Gagan relies upon 28 U.S.C. § 1367(a) as another

possible jurisdictional basis. That statute states in pertinent

part as follows:

[I]n any civil action of which the district courts 

have original jurisdiction, the district courts shall 

have 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 U.S.C. § 1367(a) (West 2006) (emphasis added). Gagan argues

that pursuant to that statute this case is within the court’s

supplemental jurisdiction in Gagan. Gagan misconceives the scope

of section 1367(a).

“Supplemental jurisdiction must be exercised in the same

action that furnishes the basis for exercise of supplemental

jurisdiction.” Ortolf v. Silver Bar Mines, 111 F.3d 85, 86 (9th

Cir. 1991) (emphasis added). As the Ninth Circuit explained in

Ortolf, “[t]he phrases ‘in any civil action’ and ‘in the

action[,]’” as employed in section 1367(a), “require that

supplemental jurisdiction be exercised in the same case, not a

separate or subsequent case.” Id. (emphasis added). Thus, Gagan

cannot form the basis for the exercise of this court’s supplemental

jurisdiction in this separate, subsequent action. See Brummer v.

Iasis Healthcare of Arizona, Inc., 2007 WL 2462174, at *1 (D.Ariz.

Aug. 24, 2007)(and cases cited therein) (rejecting argument that

removal was proper based upon supplemental jurisdiction because the

state claims were related to federal claims pending in another

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district court); see also In re Enron Corp. Sec., 2002 WL 32107216,

at *2 (S.D.Tex. Aug. 12, 2002) (citations omitted) (There can be no

supplemental jurisdiction without the existence initially of

original subject matter jurisdiction over at least some of the

claim in the same suit, at the point it is either filed in or

removed to federal court.”) Accordingly, Gagan is improperly

relying upon section 1367(a) as a basis for removal.

3. Federal Question Jurisdiction

The court will next examine whether Monroe v. Gagan raises a

federal question so as to confer jurisdiction upon this court

pursuant to 28 U.S.C. § 1331.

a. Well-Pleaded Complaint Rule

“‘The presence or absence 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 the plaintiff’s properly pleaded

complaint.’” NOS Communications, 495 F.3d at 1047 (emphasis added)

(quoting Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct.

2425, 96 L.Ed.2d 318 (1987)). “The well-pleaded complaint rule is

a ‘powerful doctrine [that] severely limits the number of cases in

which state law ‘creates the cause of action’ that may be initiated

in or removed to federal district court[.]’” Lippitt v. Raymond

James Financial Services, Inc., 340 F.3d 1033, 1039-40 (9 Cir. th

2003) (quoting Franchise Tax Bd. of California v. Construction

Laborers Vacation Trust, 463 U.S. 1, 9-10, 103 S.Ct. 2841, 77

L.Ed.2d 420 (1983)). As the Supreme Court long ago explained:

whether a case is one arising under the Constitution 

or a law or treaty of the United States . . . must 

be determined from what necessarily appears in the

plaintiff’s statement of his own claim . . . , 

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unaided by anything alleged in anticipation of 

avoidance of defenses which it is thought the 

defendant might interpose.

Taylor v. Anderson, 234 U.S. 74, 75-76, 34 S.Ct. 724, 58 L.Ed. 1218

(1914). As the foregoing makes clear, the court’s first task is

to determine whether on its face the Monroe complaint “contains

any allegations that would render [their] cause of action one that

‘arises’ under federal law.” See Lippitt, 340 F.3d at 1040

(citation omitted).

 Here, the parties disagree as to which complaint the court

should look - the original consolidated state court complaint, or

the amended complaint which was filed and served post-removal. In

terms of alleged federal question jurisdiction, the complaints are

identical. Thus, at this juncture, it matters not whether the

court focuses on the original Monroe v. Gagan complaint or on the

amended complaint. 

The court hastens to add, however, that in ascertaining

federal question jurisdiction, it will not consider defendant

Miljenovich’s cross-claim. That pleading does not come into play

here because “[r]emoval, . . ., cannot be based on a counter-claim

or cross-claim raising a federal question.” Redevelopment Agency

of the City of San Bernardino v. Alvarez, 288 F.Supp.2d 1112, 1114

(C.D.Cal. 2003) (citation omitted). Therefore, the court will

limit its federal question inquiry to the Monroe plaintiffs’

complaint. 

When it does that, the court easily concludes that on its face

the Monroe complaint does not arise under federal law. Rather,

plaintiffs have cast their claims strictly in terms of Arizona

state law. For example, plaintiffs argue, as they have repeatedly

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in related actions, that the Indiana judgment expired under Arizona

law. Then, even assuming the validity of that judgment, plaintiffs

accurately state that the issue of the validity of Gagan’s sale of

the subject property without paying the Arizona homestead exemption

is solely a matter of state law. Finally, they point out that

plaintiff Kimberley Monroe Clark’s wrongful eviction claim also is

strictly a creature of state law.

b. Artful Pleading Doctrine

Defendant Gagan does not dispute any of the foregoing. 

Instead, relying exclusively upon Sparta Surgical v. Nat. Ass’n of

Sec. Dealers, 159 F.3d 1209 (9 Cir. 1998), he rejoins that th

plaintiffs are impermissibly omitting the “essentially federal

underpinnings of their claims.” Mot. (doc. 15) at 8. Those

essential underpinnings, from defendant Gagan’s standpoint, are

plaintiffs’ “attack[s] . . . [on a] federal Court Judgment[,] . . .

numerous federal Court Orders, and the conduct of the United States

Marshal[.]” Id. at 7. Had plaintiffs included the foregoing in

their complaint, then federal question jurisdiction is

“inevitable[,]” Gagan asserts. Id. at 8. 

 Plaintiffs counter that their claims do not “arise under”

federal law because there are no applicable federal laws at issue,

much less “complete preemption” of such laws. See Reply (doc. 16)

at 4-5. Plaintiffs reiterate that there is no federal question

jurisdiction because their right to relief under Arizona State law

does not “necessarily depend[] on resolution of a substantial

question of federal law.” Id. at 4 (internal quotation marks and

citations omitted). 

Although not explicitly, defendant Gagan is invoking the

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artful pleading doctrine. Under that doctrine, a plaintiff “may

not avoid federal jurisdiction by omitting from the complaint

allegations of federal law that are essential to the establishment

of his claim.” Lippitt, 340 F.3d at 1041 (internal quotation marks

and citations omitted). “The artful pleading doctrine allows

courts to delve beyond the face fo the state court complaint and

find federal question jurisdiction by recharacteriz[ing] a

plaintiff’s state-law claim as a federal claim.” Id. (internal

quotation marks and citations omitted). The Ninth Circuit has

cautioned, however, that “[c]ourts should invoke the doctrine only

in limited circumstances as it raises difficult issues of state and

federal relationships and often yields unsatisfactory results.” 

Id. (internal quotation marks and citations omitted). 

Courts employ the artful pleading doctrine in two situations:

(1) complete preemption cases; and (2) substantial federal question

cases. Id. (citations omitted). Only the latter s a possibility

here because this is not a case of complete preemption where a

federal statute “provides the exclusive cause of action for the

claim asserted and also set[s] forth procedures and remedies

governing that cause of action[.]” See id. at 1042 (internal

quotation marks and citations omitted) (emphasis omitted). And,

indeed, Gagan is not making this argument. 

Mindful, as the Lippitt Court put it, that the court is

“treading in a doctrinal minefield,” it must next determine whether

plaintiffs’ complaint raises a substantial federal question. See

id. at 1041. If plaintiffs’ state law claims “implicate a

substantial federal question[,]” then this federal court may retain

jurisdiction over such claims. See id. at 1042. A substantial

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federal question exists where “a substantial, disputed question of

federal law is a necessary element of . . . the well-pleaded state

claim[.]” Id. (internal quotation marks and citation omitted)

(emphasis in original). Or, a substantial federal question can 

exist where “the right to relief depends on the resolution of a

substantial, disputed federal question[.]” Id. (internal quotation

marks and citation omitted). Neither exists here; and, tellingly,

defendant Gagan did not address either of these possibilities in

his motion. 

Federal law is not intrinsic to any of plaintiffs’ claims. 

Clearly federal law is not a necessary “element” of plaintiffs’

claim that the Indiana judgment expired under Arizona state law. 

While defendant Gagan may intend to rely upon the preclusive effect

of this court’s judgment in Gagan or orders issued in connection

therewith, or both, such reliance does not transform this otherwise

state law claim into one arising under federal law. See Lighting

Science Group Corp. v. Koninklijke Philips Electronics N.V., 2008

WL 2917602, at *5 n.1 (E.D.Cal. June 3, 2008) (citing Metcalf v.

City of Watertown, 128 U.S. 586, 9 S.Ct. 173, 32 L.Ed. 543 (1888))

(“That a defense may implicate federal law does not suffice to

confer jurisdiction to the court.”) Nor is federal law a “necessary

element” of plaintiffs’ claim that Gagan purportedly failed to

comply with Arizona’s statutory homestead exemption. Likewise,

plainly, federal law is not an element of plaintiff Kimberley

Monroe Clark’s Arizona state law claim for wrongful eviction. 

Sparta, the sole basis for Gagan’s argument that this court

has federal question jurisdiction is readily distinguishable, and

hence does not compel a different result here. In Sparta, although

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That statute provides in relevant part: 4

 Whenever a separate and independent claim or cause 

of action within the jurisdiction conferred by section 

1331 of this title is joined with one or more other non-removable

claims or causes of action, the entire case may be removed 

and the district court may determine all issues therein[.]

28 U.S.C. § 1441(c) (West 2006). 

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plaintiffs’ claims were “carefully articulated in terms of state

law,” the Ninth Circuit held that the district court had subject

matter jurisdiction because those claims were predicated upon a

violation of federal securities law. Sparta, 159 F.3d at 1212

(internal quotation marks and citation omitted). A similar federal

law predicate is conspicuously absent from plaintiffs’ claims. 

Thus, notwithstanding defendant Gagan’s depiction of plaintiffs’

claims, those claims are not federal claims disguised as state law

causes of action. Consequently, Gagan cannot rely upon section

1331 - the federal question statute - as a jurisdictional basis for

removal. Having found that there is no federal question

jurisdiction as to Mr. Monroe’s claims, Gagan’s assertion that 28

U.S.C. § 1441(c) provides a jurisdictional basis for the claims of 4

Ms. Monroe Clark is unavailing. 

4. Diversity Jurisdiction

The only remaining possible basis for jurisdiction here is

28 U.S.C. § 1332. That statute provides in relevant part that

district courts “shall 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 U.S.C. 1332(a)(1) (West 2006)

(emphasis added). To establish federal jurisdiction under that

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statute, two requirements must be met. First, “each defendant

[must be] a citizen of a different state from each plaintiff.” 

Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373, 98 S.Ct.

2396, 57 L.Ed.2d 274 (1978) (emphasis in original). Second, the

complaint must include allegations that the amount in controversy

“exceeds” $75,000.00. 28 U.S.C. § 1332(a). 

For removal purposes, diversity “is determined (and must

exist) as of the time the complaint is filed and removal is

effected.” Stroter Corp. v. Air Transport Ass’n. of America, 300

F.3d 1129, 1131 (9 Cir. 2002) (citations omitted). “A party th

invoking diversity jurisdiction must allege the actual citizenship

of the relevant parties and the existence of complete diversity

must be confirmable.” Kanaan v. Freescale Semiconductor, Inc.,

2007 WL 420241, at *2 (N.D.Cal. Feb. 5, 2007) (citing Kanter v.

Warner-Lambert Co., 265 F.3d 853, 857 (9 Cir. 2001)). Defendant th

Gagan’s Notice of Removal is facially deficient because, as

explained below, he does not “show . . . affirmatively and

distinctly, the existence of what is essential to federal

[diversity] jurisdiction” – complete diversity of citizenship. See

Smith v. McCullough, 270 U.S. 456, 459, 46 S.Ct. 338, 339 (1926). 

 In his Notice of Removal, Gagan indicates that when this

action was originally filed in state court, plaintiff James A.

Monroe “was a citizen of the State of Texas.” Not. of Rem. (doc.

1) at 7, ¶ 13 (citation omitted). To support this statement, Gagan

cites to a “Notice of Change of Address” which Mr. Monroe filed in

Gagan (doc. 346), on April 10, 2007, roughly four months prior to

the commencement of his state court action. In that Notice, Mr.

Monroe lists his “new mailing address” as follows:

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It is impossible to ascertain whether or not there is complete 5

diversity of citizenship from either the original Monroe v. Gagan complaint or from

the amended complaint in this removed action. As to the former, there are

allegations as to the parties’ residences, but not as to their citizenship

(although it is alleged that Mr. Monroe is domiciled in Texas). Allegations of

residency are do not suffice to show diversity jurisdiction though because section

1332 “speaks of citizenship, not of residency[.]” See Kanter v. Warner-Lambert Co.,

265 F.3d 853, 857-58 (9 Cir. 2001). Similarly, while the amended complaint th

alleges that both of the Monroe plaintiffs are Arizona citizens, it does not allege

the citizenship of Messrs. Gagan and Miljenovich. It only alleges their place of

residence. Thus, there is no way of knowing from the face of that complaint

whether there is complete diversity of citizenship. 

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Salt River Cablevision

San Carlos Cablevision

James A. Monroe, 

P.O. Box 461264

Garland, TX 75046-1264

Gagan (doc. 346) at 1. 

Gagan’s Notice of Removal further states that he is a citizen

of Indiana, whereas Mr. Miljenovich is a citizen of Arizona. Not.

of Rem. (doc. 1) at 7, ¶ 13. Then, although there is no mention of

Ms. Monroe Clark’s citizenship in his Notice of Removal, Gagan

urges the court to “disregard” her citizenship. Id. Gagan reasons

that the court should disregard her citizenship because supposedly

she was “fraudulently joined as a plaintiff[]” in that her wrongful

eviction claim is barred by res judicata or waiver. Id. 

There is no need to determine whether or not Ms. Clark was

fraudulently joined at this point. Likewise, there is no need to

become mired down in whether, as Gagan also contends, Mr. Monroe

has made a “transparent attempt to defeat diversity by changing his

citizenship” from Texas to Arizona in his amended complaint, which 5

was filed after removal. See Resp. (doc. 15) at 10. Delving into

those issues now is not necessary because Gagan’s Notice of Removal

is deficient in that the existence of complete diversity is not

confirmable given the lack of any affirmative statement as to the

citizenship of Ms. Monroe Clark. See Kanter, 265 F.3d at 857-58

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(citation omitted) (because “neither Plaintiffs’ complaint nor

[defendant’s] notice of removal made any allegation regarding

Plaintiffs’ state citizenship[,]” and “[s]ince the party asserting

diversity bears the burden of proof, . . , [defendant’s] failure 

to specify Plaintiff’ state citizenship was fatal to [the]

assertion of diversity jurisdiction[]”). 

Further frustrating the diversity inquiry is the fact that

Gagan’s claim that Mr. Monroe is a Texas citizen is based upon a

change of address form which on its face lists what appear to be

the name of two businesses, as well as a post office box in Texas. 

However, “[c]hanging the location of one’s residence or work does

not necessarily result in a change of domicile.” Franco v. Empire

Southwest Holdings, Inc., 2007 WL 951841, at *3 (S.D.Cal. March 12,

2007). Therefore, Mr. Monroe’s citizenship likewise is not

“affirmatively and distinctly” shown on the face of Gagan’s Notice

of Removal. See McCullough, 270 U.S. at 459, 46 S.Ct. 338. In

short, on the record as presently constituted, defendant Gagan has

not overcome the “strong presumption” against removability. See

Gaus v. Miles, Inc., 980 F.2d 564, 566 (9 Cir. 1992). th

At the same time, however, because these citizenship

allegations could potentially be cured, in accordance with 28

U.S.C. § 1653, the court will allow defendant Gagan fifteen (15)

days from the date hereof in which to cure these pleading

deficiencies. The court will proceed in that way because “[a]n

inadequate pleading does not in itself constitute an actual defect

of federal jurisdiction.” Kanter, 265 F.3d at 858 (internal

quotation marks and citation omitted). Failure to timely comply

with this order shall result in remand of this action for lack of

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subject matter jurisdiction without further notice. 

B. Miljenovich v. Gagan

The court is now free to turn to the issue of whether, as Mr.

Miljenovich argues, it must remand his action because there is

neither diversity jurisdiction under § 1332, nor federal question

jurisdiction under § 1331. Gagan responds that “Miljenovich’s case

is properly removed . . . on diversity grounds alone.” Resp. (doc.

15) at 4 (emphasis added). Because that is the only jurisdictional

basis which Gagan, the removing party, is asserting, the court will

limit its analysis accordingly. 

1. Diversity Jurisdiction

As just discussed, to establish federal jurisdiction under

section 1322(a)(1), two requirements must be met. First, “each

defendant [must be] a citizen of a different state from each

plaintiff.” Owen Equip., 437 U.S. at 373, 98 S.Ct. 2396 (emphasis

in original). Second, the complaint must include allegations that

the amount in controversy “exceeds” $75,000.00. 28 U.S.C. §

1332(a)(1). 

a. Citizenship

Mr. Miljenovich contends that due to the “alignment of the

parties[,]” diversity jurisdiction is not extant. Mot. (doc. 10)

at 3:3. In making this argument, Mr. Miljenovich improperly takes 

into account the citizenship of Mr. Monroe. In particular, Mr.

Miljenovich believes that like himself Mr. Monroe is an Arizona

citizen, thus destroying diversity. As previously explained

though, irrespective of consolidation, the Miljenovich action is

separate and distinct from the Monroe action. Hence, as Mr. Monroe

is not a party in the Miljenovich action, his citizenship has no

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That section provides in relevant part that “[f]or purposes of removal 6

. . . , the citizenship of defendants sued under fictitious names shall be

disregarded.” 28 U.S.C. § 1441(a) (emphasis added) (West 2006).

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bearing on the issue of existence of diversity jurisdiction in that

action. 

Gagan responds that he is an Indiana citizen and Miljenovich

is an Arizona citizen. Gagan accurately states that in accordance

with section 1441(a), the court must disregard the citizenship of

defendants sued under fictitious names. When that is done, Gagan 6

validly asserts that, as the notice of removal shows, there is

complete diversity between plaintiff Miljenovich and defendant

Gagan. 

b. Amount in Controversy

Evidently confident that he would prevail on his lack of

diversity of citizenship argument, Miljenovich did not address the

second element of section 1332 jurisdiction - the amount in

controversy. Because there cannot be diversity under that statute

without satisfying the amount in controversy set forth therein, the

court must next address that element.

As defendant Gagan interprets Mr. Miljenovich’s action, he is

refusing to perform the contract, which he had with Mr. Gagan, to

purchase the subject property for $750,000.00 “until a $150,000

homestead claim by Monroe has been resolved.” Resp. (doc. 15) at 4

(citation omitted); see also Not. of Removal (doc. 1) at 5, ¶ 9. 

Relying solely upon those allegations, in his Notice of Removal and

in his response to these remand motions, Gagan contends that the

amount in controversy exceeds the $75,000.00 statutory minimum,

thereby conferring original jurisdiction on this court pursuant to

section 1332(a). 

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Carefully parsing the Miljenovich complaint reveals that in

his prayers for relief, despite Gagan’s contrary suggestion, there

are no specific allegations of an amount in controversy. At one

point, Mr. Miljenovich alleges that he is “entitled to the return

of his earnest money” from Mr. Gagan. Not. of Removal (doc. 1),

exh. B thereto (doc. 1-4) at 21, ¶ 20. Earlier he alleges that in

accordance with the terms of the purchase contract, he deposited

$25,000.00 in earnest money, which is non-refundable in the event

he breaches that contract. Id. at 19-20, ¶¶ 10 and 11. Throughout

the remainder of his complaint, Mr. Miljenovich seeks unspecified

damages in varying forms, i.e. “compensatory[,]” “actual[,]”

“consequential[,]” and “punitive[.]” See, e.g., Not. of Removal

(doc. 1), exh. B thereto (doc. 1-4) at 21; and at 23, ¶¶ (B)-(C). 

He also is seeking statutory attorneys’ fees in an unspecified

amount, as well as pre-judgment and post-judgment interest “at the

maximum legal rate[.]” Id. at 22, ¶ (C). 

Mr. Miljenovich’s complaint can easily be read to support a

finding that he is seeking at least $25,000.00 in damages – the

amount of the purportedly non-refundable earnest money deposit. 

Obviously, that $25,000.00 falls far short of the $75,000.00

statutory minimum. As a general proposition, “[t]he amount-incontroversy requirement may be satisfied by claims of general and

specific damages, punitive damages, and attorney’s fees (if

authorized by statute or contract.” Colvin, 2007 WL 3306746 at *2

(citing, inter alia, Kroske v. U.S. Bank Corp., 432 F.3d 976, 980

(9 Cir. 2005)). Given the lack of specificity in the Miljenovich th

complaint, however, defendant Gagan cannot avail himself of such

damage claims to meet the statutory threshold of $75,000.00. 

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First, because section 1332(a) specifically excludes interest

from the amount in controversy, the court declines to consider any

possible interest award in deciding whether the amount in

controversy is met here. See Home Buyers Warranty Corp. v.

Leighty, 2007 WL 4616687, at *7 (D.Ariz. Dec. 28, 2007) (declining

to take into account claimed statutory interest due to § 1332(a)’s

exclusion of interest from the amount in controversy calculation). 

Second, as this court thoroughly explained in Leighty, “the mere

possibility of a punitive damage award is insufficient to prove

that the amount in controversy requirement has been met[.]” Id. at

*8 (internal quotation marks and citation omitted). Third, as in

Leighty, the court will not include attorneys’ fees in determining

the amount in controversy here because it would be speculative

given the complaint’s silence as to the amount of any such award. 

See id. (citing cases). 

As the foregoing shows, because the Miljenovich complaint is

“unclear or fails to specify a total amount in controversy[,]” it

is not apparent on the face of that complaint that the amount in

controversy is above $75,000.00. See Colvin v. Conagra Foods,

Inc., 2007 WL 3306746, at *2 (W.D.Wash. Nov. 5, 2007) (citing 

Guglielmino v. McKee Foods Corp., 506 F.3d 696(9 Cir. 2007)). th

Therefore, as the removing defendant, Mr. Gagan has the burden of

“establishing, by a preponderance of the evidence, that the amount

in controversy requirement has been met.” Id. Gagan has not met

that burden, however. At most his Notice of Removal contains

“conclusory allegations” as to the amount in controversy. See

Albano v. Shea Homes Ltd. Partnership, 2008 WL 2941279, at *3

(D.Ariz. July 25, 2008) (citing Singer v. State Farm Mut. Auto.

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Ins. Co., 116 F.3d 373, 376 (9 Cir. 1997)). Mr. Gagan has not, as th

he “must[,] provide[d] some facts to support [hi]s claim that the

amount in controversy requirement is satisfied.” See id. Stated

somewhat differently, Gagan has not met his burden of establishing

by a preponderance of the evidence “that it is more likely than not

that the amount in controversy exceeds that [$75,00.00] amount.” 

Guglielmino, 506 F.3d at 699 (internal quotation marks and citation

omitted). Thus, because defendant Gagan has not met his burden of

proof in terms of satisfying the amount in controversy requirement

in the Miljenovich action, jurisdiction over this action is not, as

Gagan believes “obvious[.]” Mot. (Doc. 15) at 4. 

2. Supplemental Jurisdiction

Even though the diversity statute cannot provide a basis for

jurisdiction over the Miljenovich action, that does not necessarily

mean that jurisdiction is lacking. If ultimately the court finds

that it has jurisdiction over the Monroe action, then it will

exercise supplemental jurisdiction over the Miljenovich action in

accordance with 28 U.S.C. § 1367. The exercise of such

jurisdiction would be proper if the court has jurisdiction over the

Monroe action because Miljenovich is part of “the same case or

controversy” as the Monroe action. By the same token, though, if

the court eventually determines that it lacks subject matter

jurisdiction over Monroe, clearly the exercise of supplemental

jurisdiction over Miljenovich would be improper. Accordingly, the

court conditionally denies defendant Miljenovich’s motion to

remand. However, if defendant Gagan fails to file an amended

Notice of Removal within fifteen (15) days from the date of entry

of this order, then the court will remand the Miljenovich action to

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Arizona Superior Court, Maricopa County without further notice. 

For all of these reasons, the court hereby ORDERS that:

(1) plaintiffs’ motion to remand (doc. 7) is DENIED

without prejudice; 

(2) defendant Ross Miljenovich’s motion to remand (doc.

10) is DENIED on the condition that defendant James L.

Gagan files an amended Notice of Removal within fifteen

(15) days of the date hereof; if defendant Gagan does not

timely file such notice, the court will GRANT defendant

Ross Miljenovich’s motion to remand for lack of subject

matter jurisdiction; and

(3) defendant James L. Gagan has fifteen (15) days from

the date of entry of this order in which to file an

amended Notice of Removal. Failure to comply with this

order shall result in the remand of Monroe v. Gagan

without further notice for lack of subject matter

jurisdiction.

DATED this 29th day of September, 2008.

Copies to counsel of record

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