United States District Court, N.D. Illinois, Eastern Division
September 15, 2005.
CHRISTOPHER BATTLE and KETINA BATTLE, Plaintiffs,
COUNTRYWIDE HOME LOANS, INC. FREMONT INVESTMENT & LOAN COMPANY, and WM SPECIALTY MORTGAGE, LLC., Defendants.
The opinion of the court was delivered by: SAMUEL DER-YEGHIAYAN, District Judge
This matter is before the court on Plaintiffs' motion to
remand. For the reasons stated below, we deny the motion to
remand without prejudice.
Plaintiffs allege that on August 23, 2002 they executed a Note
and Mortgage in the amount of $100,000 secured by a first lien on
their personal residence in connection with a refinance loan on
the subject property ("Property") in favor of Defendant Fremont
Investment and Loan Company ("Fremont"). Plaintiffs allege that they also executed a similar note on August 23, 2002, in the
amount of $25,000 to be secured by a second lien position on
their personal residence in connection with a refinance loan on
Property in favor of Fremont. Plaintiffs allege that in January
2003, they received notice that the servicing of the first
mortgage was being transferred or assigned to Defendant
Countrywide Home Loan Company ("Countrywide"). Plaintiffs claim
that without their permission Countrywide created an escrow
account to pay Plaintiffs' real estate taxes. According to
Plaintiffs, they became delinquent in their mortgage payments
because Countrywide was requesting "unlawful and exorbitant"
escrow payments. Defendant WM Specialty Mortgage LLC ("WM") filed
suit against Plaintiffs on December 9, 2004 seeking to foreclose
their interest in the Property. Plaintiffs brought the instant
action in the Illinois Circuit Court of Cook County, Illinois.
The complaint includes a claim alleging an Illinois Interest Act
claim (Count I), an Illinois Consumer Fraud and Deceptive
Business Act claim (Count II), and a negligence claim (Count
III). This action was subsequently removed to federal court.
Plaintiffs now seek to have the action remanded back to state
Removal is proper if it is based on statutorily permissible
grounds, 28 U.S.C. § 1441, and if it is timely. 28 U.S.C. § 1446.
Boyd v. Phoenix Funding Corp., 366 F.3d 524, 529-32 (7th
Cir. 2004). The party seeking to remove an action and invoking federal jurisdiction "bears the burden of demonstrating
that removal is proper." Id. A motion to remand a case to state
court that is based "on any defect other than lack of subject
matter jurisdiction must be made within 30 days after the filing
of the notice of removal under section 1446(a)."
28 U.S.C. § 1447(c). The Seventh Circuit has cautioned that "Courts should
interpret the removal statute narrowly and presume that the
plaintiff may choose his or her forum" and that "[a]ny doubt
regarding jurisdiction should be resolved in favor of the
states." Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th
Plaintiffs argue that the instant action should be remanded
because Defendants failed to file their notice of removal in a
timely fashion. Pursuant to 28 U.S.C. § 1446, "[t]he notice of
removal of a civil action or proceeding shall be filed within
thirty days after the receipt by the defendant, through service
or otherwise, of a copy of the initial pleading setting forth
the claim for relief upon which such action or proceeding is
based, or within thirty days after the service of summons upon
the defendant if such initial pleading has then been filed in
court and is not required to be served on the defendant,
whichever period is shorter." 28 U.S.C. § 1446 (emphasis added).
Plaintiffs claim that on April 12, 2005 they served WM with a
copy of a summons and complaint via U.S. first class certified
mail with receipt requested to Kerry K. Killinger ("Killinger"),
CEO of WM, which was received on April 18, 2005. Plaintiffs argue that although there was not
formal service on WM, the mailing of materials falls within the
phrase "through service or otherwise" in 28 U.S.C. § 1446.
Plaintiffs contend that the 30 day deadline for the filing of a
notice of removal ran from April 18, 2005, and that Defendants
did not file their notice of removal until May 20, 2005, which
was beyond the 30 day limit.
Defendants first argue that Plaintiffs did not serve WM or
properly notify WM for purposes of 28 U.S.C. § 1446. Defendants
argue that Plaintiffs sent the complaint and summons to
Washington Mutual, Inc., a non-party to this action and that
Killinger is the CEO of Washington Mutual, Inc. and not the CEO
of WM. Defendants state that WM is merely a far removed
subsidiary of Washington Mutual, Inc. In support of Defendants'
contentions that Washington Mutual, Inc. is not closely connected
to WM Defendants have provided a declaration of William Lynch
which contains various conclusory statements and legal
conclusions regarding WM's relationship to Washington Mutual,
Inc. Plaintiffs argue that they believe that WM and Washington
Mutual, Inc. share the same principal place of business and that
there are ties between WM and Washington Mutual, Inc. Plaintiffs
question the conclusory statements provided by Lynch, but contend
that in order to rebut the statements in the declaration they
need limited discovery to acquire the necessary information. We
agree that Defendants should not be allowed to side-step the key
issue at hand by providing a bare-boned declaration with
unverified information. Therefore, we deny Plaintiffs' motion to
remand without prejudice and grant the parties leave to conduct
limited discovery regarding WM's relationship to other corporate entities and to Killinger. The discovery must be
completed by September 29, 2005. Plaintiff is given leave to file
a new motion to remand by October 6, 2005. Defendants' answer
brief is due October 13, 2005, and the reply is due on October
20, 2005. The court will rule by mail on the motion to remand if
one is filed by Plaintiffs. We note that Defendants currently
have a motion to stay the instant proceedings and compel
arbitration pending in this court. However, as previously stated
in open court, we must first resolve any motion to remand and
determine if the instant action was properly removed from state
court and is properly before this court before we proceed onward
as to other issues.
Based on the foregoing analysis, we deny Plaintiffs' motion to
remand without prejudice. The parties are given leave to conduct
limited discovery regarding WM's relationship to other corporate
entities and to Killinger. Discovery must be completed by
September 29, 2005. Plaintiff is given leave to file a new motion
to remand by October 6, 2005. Defendants' answer brief is due
October 13, 2005, and the reply is due on October 20, 2005.
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