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HOME S & L ASS'N v. SAMUEL T. ISAAC & ASSOC.

September 8, 1980

HOME SAVINGS AND LOAN ASSOCIATION OF JOLIET, A STATE SAVINGS AND LOAN ASSOCIATION, FIRST NATIONAL BANK OF JOLIET, A NATIONAL BANKING ASSOCIATION, FIRST SAVINGS AND LOAN ASSOCIATION OF WILL COUNTY, A STATE SAVINGS AND LOAN ASSOCIATION, UNION NATIONAL BANK AND TRUST COMPANY, A NATIONAL BANKING ASSOCIATION, PLAINFIELD SAVINGS AND LOAN ASSOCIATION, A STATE SAVINGS AND LOAN ASSOCIATION, PLAINFIELD NATIONAL BANK, A NATIONAL BANKING ASSOCIATION, PLAINTIFFS,
v.
SAMUEL T. ISAAC & ASSOCIATES, INC., A CORPORATION; SAMUEL T. ISAAC, INDIVIDUALLY; SECRETARY OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; SALEM VILLAGE III, INC., A CORPORATION; AND LUTHERAN SOCIAL SERVICES OF ILLINOIS, A CORPORATION; AND UNKNOWN OWNERS, DEFENDANTS.



The opinion of the court was delivered by: Bua, District Judge.

ORDER

The present action is one for equitable relief, the plaintiffs claiming essentially that they are entitled to reformation of certain Participation Agreements currently in effect between them and defendant Samuel T. Isaac & Associates, Inc. [Associates]. Said action was filed initially in the Circuit Court of Will County, Illinois, and was timely removed to this court, pursuant to 28 U.S.C. § 1442(a)(1), by the defendant Secretary of Housing and Urban Development [HUD or the Department].

The Participation Agreements under discussion, drawn in connection with the Salem Village III loan, reflect the extent and particulars regarding each of the plaintiffs' involvement in that transaction. Also included in each Agreement are the provisions: (a) that defendant Samuel T. Isaac & Associates, Inc. was to be named as mortgagee in the Salem Village III mortgage and note; and (b) that said mortgage and note, along with all other documents evidencing and securing the same, were to remain in the sole possession of Associates. It is these provisions the plaintiffs seek to have reformed.

Currently pending before the court are the following motions of the parties:

    Defendant HUD's motion to dismiss or in the
  alternative for summary judgment. Rules 12(b)(6) and
  56(b), Fed.R.Civ.P.
    The plaintiffs' motion for a preliminary injunction
  and appointment of a Receiver. Rule 65(a),
  Fed.R.Civ.P.

The court, however, because it believes that removal of this cause was improvidently granted, and because subject matter jurisdiction to hear the matter otherwise is lacking, will not rule upon these motions. Rather, for the reasons stated below, the present action is ordered remanded to the Circuit Court of Will County, Illinois.

Removal of the Cause was Improvidently Granted

As was noted above, the case at bar was filed initially in the Circuit Court of Will County, Illinois, and was timely removed to this court by the defendant Secretary of Housing and Urban Development. Said removal was founded solely upon the provisions of 28 U.S.C. § 1442(a)(1), with no other basis for federal jurisdiction being shown.

28 U.S.C. § 1442(a)(1) provides in relevant part:

  (a) A civil action or criminal prosecution commenced
  in a State court against any of the following persons
  may be removed by them to the district court of the
  United States for the district and division embracing
  the place wherein it is pending:
    (1) Any officer of the United States or any agency
    thereof, or person acting under him, for any act
    under color of such office . . .

Actions of this type encompassed by § 1442(a)(1) can be removed to a federal forum even if it is shown that federal jurisdiction otherwise is lacking. Lindy v. Lynn, 395 F. Supp. 769, 771 (E.D. Pa. 1974), aff'd, 515 F.2d 507 (3d Cir. 1975). If the state suit is one not properly removable under § 1442(a)(1), however, a federal defendant's presence in the matter is essentially immaterial. In situations of this nature, before the case can be heard in federal court, the general requirements for removal set forth in 28 U.S.C. § ...


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