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Bova v. U.S. Bank

August 4, 2006


The opinion of the court was delivered by: Murphy, Chief District Judge


This matter is before the Court on the motion to remand brought by Plaintiffs Sandra R. Bova and Mary J. Fields (Doc. 16). For the following reasons, the motion is GRANTED. Plaintiffs' request for an award of attorney fees pursuant to 28 U.S.C. § 1447(c) and Plaintiffs' motion for sanctions (Doc. 19) are DENIED. The hearing on the motion to dismiss Plaintiffs' complaint (Doc. 8) brought by Defendant U.S. Bank, N.A. ("U.S. Bank") scheduled to be held at 2:30 p.m. on Monday, August 7, 2006, is CANCELLED.


Plaintiffs bring this action against U.S. Bank as successor to Firstar Bank, N.A. ("Firstar") and Defendant Pierce & Associates in connection with two mortgage foreclosure proceedings that were brought against them by Firstar in the Circuit Court of the Third Judicial Circuit, Madison County, Illinois, in 2001 and 2002, respectively. Count I of Plaintiffs' complaint alleges that Firstar, both directly and through the acts of its attorneys, Pierce & Associates, violated the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 -- 505/12 ("ICFA"). Count II of Plaintiffs' complaint alleges that Pierce & Associates aided and abetted violations of the ICFA by Firstar.*fn1

Plaintiffs originally filed this case in the Circuit Court of the Twentieth Judicial Circuit, St. Clair County, Illinois. Thereafter Pierce & Associates removed the case to this Court, alleging that it has been fraudulently joined to defeat diversity jurisdiction because Plaintiffs' claims against the firm are time-barred; U.S. Bank joined in the removal. Plaintiffs have moved for remand to Illinois state court on grounds of procedural defects in removal and lack of federal subject matter jurisdiction. Additionally, Plaintiffs request an award of costs and expenses, including attorney fees, pursuant to 28 U.S.C. § 1447(c), and have requested sanctions for the allegedly frivolous removal of this action under Rule 11 of the Federal Rules of Civil Procedure.


A. Legal Standard

Removal based on diversity requires that the parties be of diverse state citizenship and that the amount in controversy exceed $75,000, exclusive of interest and costs. See 28 U.S.C. § 1332; Id. § 1441. See also Rubel v. Pfizer Inc., 361 F.3d 1016, 1017 (7th Cir. 2004); Littleton v. Shelter Ins. Co., No. 99-912-GPM, 2000 WL 356408, at *1 (S.D. Ill. Mar. 9, 2000). The party seeking removal has the burden of establishing federal jurisdiction. See Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993). "Courts should interpret the removal statute narrowly and presume that the plaintiff may choose his or her forum." Id. Put another way, there is a strong presumption in favor of remand. See Jones v. General Tire & Rubber Co., 541 F.2d 660, 664 (7th Cir. 1976). See also Littleton, 2000 WL 356408, at *1 ("The removal statute, 28 U.S.C. § 1441, is construed narrowly, and doubts concerning removal are resolved in favor of remand.").

In evaluating diversity of citizenship, a court must disregard a defendant that has been fraudulently joined. See Schwartz v. State Farm Mut. Auto. Ins. Co., 174 F.3d 875, 878 (7th Cir. 1999); Smith v. Shipping Utils., Inc., No. Civ. 05-500-GPM, 2005 WL 3133494, at *1 (S.D. Ill. Nov. 23, 2005). A defendant is fraudulently joined when "there is no possibility that a plaintiff can state a cause of action against [the] nondiverse defendant[ ] in state court, or where there has been outright fraud in plaintiff's pleading of jurisdictional facts." Gottlieb v. Westin Hotel Co., 990 F.2d 323, 327 (7th Cir. 1993). A defendant seeking removal based on alleged fraudulent joinder has the "heavy" burden of proving that, after the court resolves all issues of law and fact in the plaintiff's favor, there is no possibility the plaintiff can establish a cause of action against a diversity-defeating defendant in a state court. Poulos v. Naas Foods, Inc., 959 F.2d 69, 73 (7th Cir. 1992).

B. Plaintiffs' Motion for Remand

1. Procedural Defects in Removal

Plaintiffs' motion for remand asserts that the removal of this case is procedurally defective because it was effected by Pierce & Associates, which claims to have been fraudulently joined, rather than by U.S. Bank, the propriety of whose joinder as a Defendant in this case is not at issue, and because Pierce & Associates, as an Illinois citizen, cannot remove this action to a federal court in Illinois.*fn2 Additionally, by way of a reply brief in support of their motion for remand, Plaintiffs contend that the removal of this case is untimely because removal was effected not thirty days from the date U.S. Bank was served with Plaintiffs' complaint but thirty days from the date Pierce & Associates was served with the complaint.

In the Court's view, the fact that removal of this case was effected by Pierce & Associates rather than by U.S. Bank does not render the removal procedurally defective. Pierce & Associates is a party Defendant in this case and therefore has a right to remove based on Plaintiffs' claims against the firm. "The question of which parties may exercise the statutory right of removal has been answered by Congress. Section 1446(a) of Title 28 authorizes removal . . . by the state court defendants; the right of removal is further limited by the basic principle that defendants may remove only on the basis of claims brought against them and not on the basis of counterclaims, cross-claims, or defenses asserted by them." 14C Charles Alan Wright, Arthur R. Miller, Edward H. Cooper & Joan E. Steinman, Federal Practice & Procedure § 3731 (3d ed. 1998 & Supp. 2006) (footnote & emphases omitted) (collecting cases). See also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 104-09 (1941) (a plaintiff against whom a counterclaim had been filed could not remove a case to federal court because the removal statute granted the privilege of removal to defendants only); Thomas v. Shelton, 740 F.2d 478, 488 (7th Cir. 1984) (claims against third-party defendants are not a basis for removal jurisdiction). Plaintiffs have not cited, and the Court's research has not disclosed, any authority indicating that this case must be remanded because the removing Defendant is also a diversity-defeating party that claims to have been fraudulently joined.

The Court likewise finds to be misplaced Plaintiffs' reliance on the so-called "forum defendant" rule, that is, the principle that removal by a defendant to a federal court in a state of which that defendant is a citizen is procedurally defective. See Hurley v. Motor Coach Indus., Inc., 222 F.3d 377, 378-79 (7th Cir. 2000); LaMotte v. Roundy's, Inc., 27 F.3d 314, 315-16 (7th Cir. 1994); Holmstrom v. Harad, No. 05 C 2714, 2005 WL 1950672, at *1 (N.D. Ill. Aug. 11, 2005); Allstate Life Ins. Co. v. Hanson, 200 F. Supp. 2d 1012, 1014-15 (E.D. Wis. 2002). The forum defendant rule applies only to defendants who have been "properly joined and served" within the meaning of 28 U.S.C. ยง 1441(b). See Thornton v. Signature Flight Support Corp., No. 04 C 5795, 2004 WL 2608291, at *2 (N.D. Ill. Oct. 14, 2004); Maple Leaf Bakery v. Raychem Corp., No. 99 C 6948, 1999 WL 1101326, at *1 (N.D. Ill. Nov. 29, 1999). Correspondingly, where a resident defendant has been fraudulently joined, the forum defendant rule is irrelevant. See Merriweather v. Braun, 792 F. Supp. 659, 661 (E.D. Mo. 1992) (although an action is not removable in diversity if any properly joined defendant is a citizen of the state in which the ...

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