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Freeney v. Clear Recon Corp

United States District Court, D. Nevada

April 22, 2014

CURTIS FREENEY, Plaintiff,
v.
CLEAR RECON CORP, ONEWEST BANK FSB, and FINANCIAL FREEDOM, a division of ONEWEST BANK, Defendants.

ORDER

MIRANDA M. DU, District Judge.

I. SUMMARY

Before the Court is Plaintiff Curtis Freeney's Motion to Remand (dkt. no. 6). The Court has also considered Defendant Clear Recon Corp. ("CRC") and OneWest Bank, FSB's ("OneWest")[1] Opposition (dkt. no. 12) and Plaintiff's Reply (dkt. no. 15). For the reasons stated below, the Motion is denied.

II. BACKGROUND

The following facts are alleged by Plaintiff in his Amended Complaint. (Dkt. no. 4.) Plaintiff's parents, Attea Freeney and Rubina Freeney ("the Freeneys"), owned the real property located at 2730 Parsons Run Court ("the Property") in Clark County, Nevada. In 1999, the Freeneys recorded a deed of trust in Clark County transferring the Property to the Rubina A. Freeney and Attea C. Freeney Family Trust ("the Trust"). Plaintiff is serving as Trustee of the Trust.

Mrs. Freeney's medical records from 2007 and 2008 indicate that she was suffering from dementia. In April or May 2008, when Mrs. Freeney was suffering from dementia and the Freeneys were both eighty-one years of age, the Freeneys entered into a reverse mortgage with OneWest. Later that year, a doctor determined that Mr. Freeney was also suffering from a number of debilitative diseases and Plaintiff became the guardian to both Mrs. and Mr. Freeney. Mrs. Freeney died in 2010 and Mr. Freeney died in 2012.

On August 2, 2013, Defendants recorded a Notice of Default and Election to Sell Under Home Equity Conversion Deed of Trust or Reverse Mortgage ("Notice of Default"). The Notice of Default listed CRC as trustee and OneWest as note holder and beneficiary.

On October 2, 2013, Plaintiff sued Defendants in the Eighth Judicial District Court of the State Of Nevada ("State Court") alleging five causes of action: (1) rescission; (2) injunctive relief; (3) declaratory relief; (4) deceptive trade practices; and (5) punitive damages. Defendant OneWest removed the case on November 6, 2013, based on diversity jurisdiction. (Dkt. no. 1.) Plaintiff filed a Petition for Remand on November 26, 2013. (Dkt. no. 6.)

Prior to removal, Plaintiff also moved for a preliminary injunction to enjoin Defendants from foreclosing on the Property. (Dkt. no. 1-3.) The parties have subsequently stipulated to, and the Court has ordered, that the Motion for Preliminary Injunction be denied without prejudice as Defendants have not currently noticed a sale of the Property, but that Plaintiff may re-notice the Motion for Preliminary Injunction should Defendants re-notice the sale. (Dkt. no. 14.)

III. DISCUSSION

A. Legal Standard

Federal courts are courts of limited jurisdiction, having subject-matter jurisdiction only over matters authorized by the Constitution and Congress. U.S. Const. art. III, § 2, cl. 1; e.g., Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A suit filed in state court may be removed to federal court if the federal court would have had original jurisdiction over the suit. 28 U.S.C. § 1441(a). However, courts strictly construe the removal statute against removal jurisdiction, and "[f]ederal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (emphasis added). The party seeking removal bears the burden of establishing federal jurisdiction. Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1252 (9th Cir. 2006).

To establish subject matter jurisdiction pursuant to diversity of citizenship, the party asserting jurisdiction must show: (1) complete diversity of citizenship among opposing parties and (2) an amount in controversy exceeding $75, 000. 28 U.S.C. § 1332(a). Where a defendant removes a plaintiff's state action on the basis of diversity jurisdiction, the defendant must either: (1) demonstrate that it is facially evident from the plaintiff's complaint that the plaintiff seeks in excess of $75, 000, or (2) prove, by a preponderance of the evidence, that the amount in controversy meets the jurisdictional limit. Valdez v. Allstate Ins. Co., 372 F.3d 1115 (9th Cir. 2004). In considering what evidence may be considered under (2) above, the Ninth Circuit has adopted the "practice of considering facts presented in the removal petition as well as any summary-judgment[sic]-type evidence relevant to the amount in controversy at the time of removal.'" Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th Cir. 2003) ( quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)).

Although an action may be removed to federal court only where there is complete diversity of citizenship, "one exception to the requirement for complete diversity is where a non-diverse defendant has been fraudulently joined.'" Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir.2001). Joinder is fraudulent "[i]f the plaintiff fails to state a cause of action against a resident defendant, and the failure is obvious according to the settled rules of the state.'" Hamilton Materials, Inc. v. Dow Chemical Corp., 494 F.3d 1203, 1206 (9th Cir. 2007) ( quoting McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th ...


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