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January 2, 1990

ROBERT PHILPOTT and DREAMA PHILPOTT, his wife, Plaintiffs,
RESOLUTION TRUST CORPORATION, solely as successor to the Federal Savings and Loan Insurance Corporation as conservator of Skokie Federal Savings and Loan Association, F.A., conservatorship, Defendant

The opinion of the court was delivered by: HART



 On June 2, 1989, plaintiffs Robert and Dreama Philpott brought suit against Sko-Fed Credit a/k/a Skokie Federal Savings. The suit was filed in the Circuit Court of the Nineteenth Judicial District, Lake County, Illinois. Plaintiffs alleged that the interest charged on their mortgage violated Ill. Rev. Stat. ch. 17, para. 6410, and that the prepayment penalty provisions of their mortgage violated para. 6404. On March 15, 1989, Skokie Federal had been placed into conservatorship with the FSLIC as conservator. On July 19, 1989, the FSLIC was also appointed as receiver and transferred Skokie Federal's assets into a newly formed successor institution with the same name. On August 9, 1989, Congress enacted the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("Act"), Pub. Law 101-73, 103 Stat. 183, which created the Resolution Trust Corporation. Resolution Trust automatically succeeded the FSLIC as conservator and receiver. Act § 501(b)(6), 12 U.S.C. § 1441a(b)(6). See also Act § 401(f)(2).

 Before passage of the Act, Skokie Federal moved to dismiss and stay the action against it. The four-paragraph motion to dismiss simply stated that dismissal was sought pursuant to para. 2-615 of the Illinois Code of Civil Procedure for failure to allege facts supporting the claimed violation of para. 6410 and pursuant to para. 2-619 because Skokie Federal was insolvent. The motion to stay was based on a pending petition for leave to appeal in a case concerning para. 6404. The motion was initially heard on July 11, 1989 and continued to August 29, 1989. On August 29, the state court entered the following order: "It is hereby ordered that the Motion to Dismiss of Defendant Sko-Fed Credit, pursuant to Section 2-615 of the Illinois Code of Civil Procedure, is granted." Before this court, defendant has represented that this order dismissed the case. The order itself does not expressly state the case is dismissed and no record of docket entries was provided to show this was treated as a closing order. See Illinois Supreme Court Rule 272. Also, no record of the August 29 hearing is provided, but the written motion only requested that the para. 6410 claim be dismissed pursuant to Rule 2-615, not the para. 6404 claim as well. Plaintiffs subsequently moved to vacate the August 29 order. The motion was noticed to be heard on October 10, but the record filed with this court does not indicate when the motion was filed. It was apparently filed prior to October 6, which was the date defendant filed its removal petition. In its entirety, the motion reads as follows:


Now come the Plaintiffs, ROBERT PHILPOTT and DREAMA K. PHILPOTT, his wife, by and through their attorneys, GANTOR, DeMARTINI & WALDECK, LTD., and moves to vacate the Order of August 29, 1989, or in the alternative, allow Plaintiffs to replead their Complaint, and in support thereof, states as follows:


1. That the Defendant filed a Notice to Dismiss in the above captioned matter based on a 2-615 Motion, the Complaint did not state a cause of action.


2. The Court granted said Motion and entered an Order of August 29, 1989, not allowing Plaintiffs time to replead.


3. That Defendant moved under Section 2-619 to dismiss on the fact that Skokie was an insolvent institution.


4. That Plaintiffs state that the Order entered on August 29, 1989 fails to state whether the Motion to Dismiss was granted based on Section 2-619 Motion and Plaintiffs request that a rehearing be held on the merits of that Motion.


WHEREFORE, Plaintiffs pray that this Court vacate the Order entered on August 29, 1989, or in the alternative, allow Plaintiffs time to replead their Complaint; and Grant Plaintiffs a rehearing on the merits on the Section 2-619 Motion.

 If the August 29 order was a final judgment and plaintiffs' motion was filed subsequent to September 28, 1989, then the motion to vacate was one pursuant to Rule 2-1401. Otherwise, it was pursuant to Rule 2-1301(e). See Lurie Co. v. Teichner, 63 Ill. App. 3d 950, 380 N.E.2d 959, 960, 20 Ill. Dec. 750 (1978); International Industrial Leasing, Ltd. v. H.J. Coleman & Co., 66 Ill. App. 3d 884, 384 N.E.2d 1, 5, 23 Ill. Dec. 365 (1977).

 On October 6, 1989, defendant filed its notice of removal, purportedly pursuant to § 501(l) of the Act, 12 U.S.C. § 1441a(l). A status hearing was held on December 7 at which defendant represented that the case had been closed in state court, but that defendant removed the case because of possible reconsideration. The court questioned whether a closed case could be removed, but set a date for defendant's answer to the motion to vacate and a date for plaintiffs' reply. Defendant was also to address the question of removal of a closed case. Defendant did not address that question and its brief also gives no explanation of the state court's ground for granting the Rule 2-615 motion. Plaintiffs did not file a reply.

 Before turning to the merits of the motion to vacate, it must be determined whether this court has jurisdiction over this case. Section 501(l) of the Act provides as follows:




(1) IN GENERAL. -- Notwithstanding any other provision of law, any civil action, suit, or proceeding to which the Corporation is a party shall be deemed to arise under the laws of the United States, and the United States district courts shall have original jurisdiction over such action, suit, or proceeding.


(2) CORPORATION AS PARTY. -- The Corporation shall be substituted as a party in any civil action, suit, or proceeding to which its predecessor in interest was a party with respect to institutions which are subject to the management agreement dated February 7, 1989, among the Federal Savings and Loan Insurance Corporation, the Federal Home Loan Bank Board and the Federal Deposit Insurance Corporation.


(3) REMOVAL AND REMAND. -- The Corporation may, without bond or security, remove any such action, suit, or proceeding from a State court to the United States District Court for the District of Columbia, or if the action, suit, or proceeding arises out of the actions of the Corporation with respect to an institution for which a conservator or a receiver has been appointed, the United States district court for the district where the institution's principal business is located. The removal of any action, suit, or proceeding shall be instituted --


(A) not later than 90 days after the date the Corporation is substituted as a party, or


(B) not later than 30 days after the date suit is filed against the Corporation, if such suit is filed after the date of enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.


The Corporation may appeal any order of remand entered by a United States district court.

 12 U.S.C § 1441a(l). Defendant contends its removal was timely pursuant to § 501(l)(3)(A) because its notice of removal was filed within 90 days of its substitution into the case.

 Ambiguities in § 501(l)(3) make it unclear as to whether it applies to the present situation. But even if it doesn't, § 501(l)(1) makes this a case that could have been brought in federal court and therefore removal could have been done pursuant to 28 U.S.C. § 1441 et seq. That removal would have been untimely under 28 U.S.C. § 1446(b) would not matter since plaintiffs raised no untimeliness objection within 30 days of removal. See 28 U.S.C. § 1447(c). Still, if removal was pursuant to § 501(l)(3), it may be that removal to the District Court of the District of Columbia would have been the proper venue, not this district. See FSLIC v. Westgate Partners, Ltd., 726 F. Supp. 807 (D. Colo. Dec. 12, 1989). Since it is otherwise found that this court lacks jurisdiction for removal, it is unnecessary to resolve if removal was to the wrong district.

 In a recent case, the Seventh Circuit considered whether a defendant can waive the right to remove a case by action taken in the state court. See Rothner v. City of Chicago, 879 F.2d 1402 (7th Cir. 1989). In that case, the Seventh Circuit quoted Moore's, which states the right to remove "is not lost by action in the state court short of proceeding to an adjudication on the merits." Rothner, 879 F.2d at 1415 (quoting 1A Moore's Federal Practice para. 0.157[9] at 153 (2d ed. 1987)). In dictum, the Seventh Circuit added, "That is not to say, however, that district courts are without power to remand in extreme situations. One can imagine a case in which the suit is fully tried before the statutory period has elapsed and the defendant then files a petition for removal."

 There is no jurisdiction to remove a case if no case or controversy exists. Maine Association of Interdependent Neighborhoods, Inc. v. Petit, 700 F. Supp. 75, 77 (D. Me. 1986). A number of cases hold that removal is not possible where the case has reached final judgment in the state court. See Four Keys Leasing & Maintenance Corp. v. Simithis, 849 F.2d 770, 774 (2d Cir. 1988); Ristuccia v. Adams, 406 F.2d 1257, 1258 (9th Cir.) (per curiam), cert. denied, 396 U.S. 1, 90 S. Ct. 24, 24 L. Ed. 2d 3 (1969); MHM Sponsors Co. v. Permanent Mission of Pakistan, 672 F. Supp. 752, 753 (S.D.N.Y. 1987); FSLIC v. Templeton, 700 F. Supp. 456, 457-58 (S.D. Ind. 1988). Simithis and Ristuccia, however, were cases in which the highest courts of the state had already denied review. In MHM, the state court had dismissed the case, denied reconsideration, and removed the case from its calendar. A motion to restore the case to the calendar was pending at the time of removal. In Templeton, the FSLIC became a party after oral arguments in the state appellate court and the federal district court held a case on appeal from a final judgment could not be removed. In FDIC v. Klayer, 519 F. Supp. 889, 890-91 (E.D. Ky. 1981), removal of a counterclaim-crossclaim was denied for lack of a pending case because the state court had not yet permitted filing of the proposed counterclaim-crossclaim. Other courts have denied removal where motions for reconsideration were pending on the ground that removal should not be used as a means to appeal a state court decision to federal court. See Handlon v. Allis-Chalmers Coal Gas Corp., 666 F. Supp. 153, 154 (S.D. Ill. 1987); Kiddie Rides USA, Inc. v. Elektro-Mobiltechnik GmbH, 579 F. Supp. 1476, 1479-80 (C.D. Ill. 1984); Bolivar Sand Co. v. Allied Equipment, Inc., 631 F. Supp. 171, 172-73 (W.D. Tenn. 1986); In re 73rd Precinct Station House, 329 F. Supp. 1175, 1178 (E.D.N.Y. 1971). However, since those cases rely on the right to remove being waived, their vitality in the Seventh Circuit is doubtful in light of Rothner's rejection of waiver.

 A number of cases have held that cases can be removed after the entry of a default judgment and that the federal court can then consider whether to vacate the default. See Butner v. Neustadter, 324 F.2d 783, 785 (9th Cir. 1963); Munsey v. Testworth Laboratories, 227 F.2d 902 (6th Cir. 1955) (per curiam); Robert E. Diehl, Inc. v. Morrison, 590 F. Supp. 1190, 1192 (M.D. Pa. 1984); Kizer v. Sherwood, 311 F. Supp. 809, 811 (M.D. Pa. 1970). See also Murray v. Ford Motor Co., 770 F.2d 461, 463 (5th Cir. 1985). Only one case has been found that permitted removal after final judgment where the judgment was not one by default. In In re Savers Federal Savings & Loan Association, 872 F.2d 963 (11th Cir. 1989), the FSLIC was appointed conservator of a bank after the entry of judgment in a state court suit. The FSLIC timely removed the case within thirty days and before the time for filing a state court appeal had expired. The FSLIC then filed a notice of appeal to the Eleventh Circuit. The Eleventh Circuit held that it had jurisdiction over the appeal. Id. at 965-66.

 In light of the dictum in Rothner and the Seventh Circuit's generally narrow interpretation of federal jurisdiction, it is believed the Seventh Circuit would follow those courts that hold there is generally no jurisdiction to remove closed cases. Such a position is consistent with both the requirement of a case or controversy and principles of comity. See Templeton, 700 F. Supp. at 458. The present case appears to be most like MHM, supra. The motion to vacate filed in state court appears to have been filed more than 30 days after the entry of judgment. Therefore, the time for filing a Rule 2-1301(e) motion (the equivalent of Fed. R. Civ. P. 59(e)) had expired as has the time for appeal. The motion to vacate could still be brought under Rule 2-1401 (the equivalent of Fed. R. Civ. P. 60(b)), but that is a motion brought in a closed case. Unless the state court grants that motion, there is no pending case in state court. Therefore, there was no case or controversy to remove and this court lacks subject matter jurisdiction over the case.

 The above discussion assumes that the order entered on August 29 was a final judgment. As previously mentioned, that is not clear from the record before the court. It is, however, what defendant has represented to this court to be true. The burden is on the parties to show this court has jurisdiction. It is assumed that the August 29 order was final and that this court lacks jurisdiction over the case. If it was not an order dismissing the entire case, then defendant can timely move for reconsideration of today's order remanding the case. Any motion for reconsideration would also have to address the question of whether removal was to the proper district.

 IT IS THEREFORE ORDERED that this action is remanded to the Circuit Court of the Nineteenth Judicial Circuit, Lake County, Illinois. Two weeks after the entry of this order, the Clerk of the Court shall take the necessary steps to accomplish such transfer. Each party shall bear its own costs of removal.

 Dated: JANUARY 2, 1990


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