The opinion of the court was delivered by: Samuel Der-yeghiayan, District Judge
This matter is before the court on Plaintiff AEL Financial, LLC's ("AEL") motion to remand. For the reasons stated below, we deny the motion to remand.
AEL alleges that in January 2005, it entered into an equipment lease ("Lease") with Defendant David Tessier ("Tessier") under which Tessier leased certain computer equipment for Tessier Chiropractic. The computer equipment was allegedly provided by TNG Systems. (Compl. Group Ex.A). Tessier also allegedly signed a separate guaranty agreement ("Guaranty"), individually guaranteeing all obligations under the Lease. According to AEL, under the terms of the Lease, Tessier was obligated to make monthly installments and since December 9, 2005, Tessier has been delinquent on his payments. AEL claims that under the terms of the Lease, Tessier's payment schedule has been accelerated and Tessier owes $39,005.20 in Lease payments and $14,366.20 in late charges. AEL brought the instant action in Illinois state court and included in its complaint a breach of contract claim (Count I) and a breach of guaranty claim (Count II). Tessier subsequently removed this case to federal court and AEL now seeks to have the case remanded back to Illinois state court.
Pursuant to 28 U.S.C. § 1441, a "civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). Pursuant to 28 U.S.C. § 1447, "[I]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded. . . ." 28 U.S.C. § 1447(c). The party removing the case to federal court and thus "invoking federal jurisdiction bears the burden of demonstrating its existence. . . ." Hart v. FedEx Ground Package Sys., Inc., 457 F.3d 675, 679 (7th Cir. 2006)(stating that "[f]ederal courts are courts of limited jurisdiction" and that "'[i]t is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction'")(quoting in part Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375 (1994)).
I. Diversity Subject Matter Jurisdiction
AEL first argues in its motion to remand that this court does not have diversity subject matter jurisdiction. AEL claims that "[t]o support removal to this Court, [Tessier] claims federal question and diversity of citizenship as his basis for subject matter jurisdiction." (Mot. 2). However, Tessier did not assert in his notice of removal that this court has diversity subject matter jurisdiction. (Rem. 1). There is no mention in the notice of removal regarding diversity, or of 28 U.S.C.§ 1332, the diversity statute. Rather, Tessier specifically stated in his notice of removal, and continues to argue in his answer to the motion to remand, that this court has jurisdiction over this case because it is related to a bankruptcy action. Thus, Tessier did not base the removal on diversity subject matter jurisdiction and Tessier does not contest AEL's position that this court lacks diversity subject matter jurisdiction.
II. Federal Question Subject Matter Jurisdiction
AEL argues that the court also lacks federal question subject matter jurisdiction over the instant action. Tessier asserted in his notice of removal that this court has subject matter jurisdiction over this action pursuant to 28 U.S.C.§ 157, 28 U.S.C.§ 1443, and 28 U.S.C.§ 1452. (Rem. 1). Tessier contends that AEL's claims in the instant action and Tessier's affirmative defenses are connected to In re Today's Destiny, Inc. ("Bankruptcy Proceeding"), case number "05-90080," which is a bankruptcy proceeding in the United States Bankruptcy Court for the Southern District of Texas, Houston Division ("Southern District"). Tessier also contends that the instant action is connected to case number "06-3285," which is an adversary proceeding ("Adversary Action") related to the Bankruptcy Proceeding before the bankruptcy court in the Southern District. (Ans. 2). Tessier states that since this case has been removed to federal court, he intends to move for the referral of this matter to a bankruptcy court judge in this district and then move to transfer this case to Southern District where a class of plaintiffs are pursuing a fraud action against defendants that include AEL.
A. Jurisdiction Over Bankruptcy Proceedings
In regards to the removal of cases related to bankruptcy proceedings, pursuant to 28 U.S.C. § 1452, a party can "remove any claim or cause of action in a civil action other than a proceeding before the United States Tax Court or a civil action by a governmental unit to enforce such governmental unit's police or regulatory power, to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under [28 U.S.C. § 1334]." 28 U.S.C.§ 1452(a). Pursuant to 28 U.S.C. § 1334, a federal district court generally has "original but not exclusive jurisdiction of all civil proceedings:" (1) "arising under" Title 11 of the United States Bankruptcy Code ("Title 11"), (2) "arising in . . . cases" brought under Title 11, or (3) "related to cases [brought] under [T]itle 11." 28 U.S.C. § 1334(b).
Tessier does not argue that AEL's claims in the instant action and, Tessier's affirmative defenses arise under Title 11, or arise in a case brought under Title 11. Tessier contends that AEL's claims and his affirmative defenses are related to the Bankruptcy Proceeding and Adversary Action, stating that they are "inextricably tied to the" Bankruptcy Proceeding and Adversary Action. (Ans. 1-2). A claim is deemed to be related to a bankruptcy proceeding if "the dispute 'affects the amount of property for distribution [,i.e., the debtor's estate,] or the allocation of property among creditors.'" In re Memorial Estates, Inc., 950 F.2d 1364, 1368 (7th Cir. ...