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PNC Bank v. Rencher / American Manor

September 23, 2010

PNC BANK, NATIONAL ASSOCIATION, PLAINTIFF,
v.
RENCHER / AMERICAN MANOR, LLC, AN IDAHO LIMITED LIABILITY COMPANY; 151 FAMILY TRUST; PACIFIC COAST INVESTMENT COMPANY; INTERNAL REVENUE SERVICE; CITY OF REXBURG; AND MADISON COUNTY TREASURER, DEFENDANTS.



The opinion of the court was delivered by: Honorable B. Lynn Winmill Chief U. S. District Judge

MEMORANDUM DECISION AND ORDER

Before the Court is Plaintiff PNC Bank's Motion to Remand (Docket No. 3), and Defendant Rencher / American Manor's Motion for Temporary Restraining Order (Docket No. 9). The Court has determined that oral argument would not significantly assist the decisional process. Therefore, the Court will address the motion without a hearing.

BACKGROUND

Defendant Rencher / American Manor entered into a loan agreement and borrowed money from Plaintiff PNC Bank. The loan agreement encumbers real property in Rexburg, Madison County, Idaho. On or around March 5, 2010, PNC sent a letter to Rencher declaring Rencher in default under the loan agreement. PNC also initiated a non-judicial foreclosure action against Rencher, with a trustee sale scheduled for October 5, 2010. On July 27, 2010, PNC filed a petition for appointment of a receiver in Madison County district court, in an effort to collect on amounts owed by Rencher. In that petition, PNC named Defendants Rencher / American Manor, 151 Family Trust, Pacific Coast Investment Company, the Internal Revenue Service, the City of Rexburg, and the Madison County Treasurer. On August 20, 2010, Defendant Rencher removed the matter to this Court, citing federal question jurisdiction.

On August 26, 2010, PNC filed a Motion to Remand or for Appointment of Receiver and Motion for Expedited Consideration. (Docket No. 3). Although Tamla Rencher has indicated she was unaware that the Motion to Remand (Docket No. 3) was filed in this matter, the docket reflects that PNC did properly file and serve the Motion on all parties. (Docket No. 3-1 at 11.) Defendant Rencher's response to PNC's motion to remand was due September 20, 2010. No such response has been filed.

ANALYSIS

1. Rencher / American Manor Is Not Properly Represented

As an initial matter, the Court notes that Defendant Rencher is not properly represented in this matter. Pursuant to Local Rule 83.4, "[w]henever an entity other than an individual desires or is required to make an appearance in this Court, the appearance shall be made only by an attorney of the bar of this Court or an attorney permitted to practice under these rules." Rencher, the sole defendant named in the removal to this Court, is a limited liability company. Tamla Rencher participated in a telephone conference with the Court's staff, on behalf of Defendant; PNC was represented by counsel. At the conference, conducted September 21, 2010, Ms. Rencher indicated that she was unaware of the requirement that an entity be represented by counsel, but that she had spoken with an attorney who would file a notice of appearance shortly. Ms. Rencher also indicated she had not received PNC's motion to remand the matter. Counsel for PNC indicated that a copy had been sent to Rencher, but another courtesy copy would be provided.

2. The Action Was Improperly Removed Because No Federal Question is Presented

"Removal jurisdiction is statutory and strictly construed." Gould v. Mutual Life Ins. Co. Of New York, 790 F.2d 769, 773 (9th Cir. 1986). An action filed in state court may be removed where the district court could have exercised jurisdiction over the action if originally filed there. Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996); 28 U.S.C. § 1441. Federal district courts have original jurisdiction in cases "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. In completing the cover sheet for its Notice of Removal, Rencher indicated that the basis for jurisdiction is federal question, and cited 12 U.S.C. § 2605(e) and (f).

The federal statute cited by Rencher in support of removal addresses the servicing of federally related mortgage loans. See 12 U.S.C. § 2605. A "federally related mortgage loan" is defined by the statute as a loan secured by a lien on residential real property designed for the occupancy of one to four families, made by a lender whose deposits or accounts are insured by, or who is regulated by, any agency of the Federal Government. 12 U.S.C. § 2602(1). The underlying petition in this matter is a request for appointment of a receivership to facilitate management of the property encumbered by the loan to which PNC and Rencher are parties. The records before this Court demonstrate that the statute cited by Rencher is not at issue here*fn1 ; rather, the applicable statutes are state laws over which this court lacks federal question jurisdiction. The Court thus finds that removal was improper.

3. The Action Was Improperly Removed Because less than All Defendants Joined in the Notice of Removal

A "rule of unanimity" is imposed in cases removed to federal court such that all named and served defendants must join in the notice of removal unless such defendants are nominal, unknown, or fraudulently joined. See Mitchell v. Paws Up Ranch, LLC, 597 F.Supp.2d 1132, 1135 (D. Mont. 2009), citing Hewitt v. City of Stanton, 798 F.2d 1230, 1233 (9th Cir. 1986); Salveson v. Western States Bankcard Ass'n, 731 F.2d 1423, 1429 (9th Cir. 1984). It does not appear, from Rencher's notice ...


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