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Palmeira v. CIT Bank, N.A.

United States District Court, D. Hawaii

October 24, 2017

AURALEE J. PALMEIRA and ADELE PALMEIRA-SHINN, Plaintiffs,
v.
CIT BANK, N.A., formerly known as ONEWEST BANK, FSB; FEDERAL HOME LOAN MORTGAGE CORPORATION; KALEI B. COLRIDGE; and DOE DEFENDANTS 1-50, Defendants.

          ORDER ADOPTING AS MODIFIED THE FINDINGS AND RECOMMENDATION TO GRANT PLAINTIFFS' MOTION FOR AN ORDER OF REMAND

          Alan C. Kay Sr. United States District Judge

         For the reasons set forth below, the Court adopts as modified the Findings and Recommendation to Grant Plaintiffs' Motion for an Order of Remand, ECF No. 26, issued by Magistrate Richard L. Puglisi on August 10, 2017.

         BACKGROUND

         On June 30, 2016, Plaintiffs Auralee J. Palmeira and Adele Palmeira-Shinn (“Plaintiffs”) filed this action in the Circuit Court of the Fifth Circuit, State of Hawaii (“State Court Action.”) See Notice of Removal ¶ 1, ECF No. 1. On September 27, 2016, Plaintiffs filed a First Amended Complaint in the State Court Action. Id. ¶ 2. CIT Bank, f/k/a OneWest Bank, N.A. f/k/a OneWest Bank, FSB, as well as Federal Home Loan Mortgage Corp., (collectively, the “Mortgagee Defendants”) filed their answer to the First Amended Complaint on October 27, 2016. Id. ¶ 3. Defendant Kalei B. Colridge was served, through her attorney, on May 23, 2017. Id. ¶ 15.

         Defendant Colridge filed her Notice of Removal based on diversity jurisdiction on June 9, 2017, 17 days after being served. See id. ¶¶ 13, 15. In the Notice, Defendant Colridge alleges that the Mortgagee Defendants answered the First Amended Complaint in 2016. Id. ¶ 3. However, the Notice of Removal does not indicate that the Mortgagee Defendants consented to or joined in the removal. See generally id. On June 26, 2017, the Mortgagee Defendants filed a notice consenting to and joining in the Notice of Removal. ECF No. 7 (“Consent and Joinder”). In the Consent and Joinder, the Mortgagee Defendants state that Defendant Colridge's attorney telephonically obtained their consent to remove the case on June 7, 2017, and that prior to that conversation the Mortgagee Defendants were not aware that complete diversity existed. Id. at 3; Declaration of Judy A. Tanaka ¶¶ 4-5, ECF No. 7-1 (“Tanaka Decl.”). On June 27, 2017, Defendant Colridge filed a “supplement” to her notice of removal regarding these same facts and arguing that the Mortgagee Defendants timely requested removal through their Consent and Joinder. ECF No. 11 ¶¶ 4-6.

         Plaintiffs filed their motion to remand to state court on July 7, 2017. ECF No. 21. Defendant Colridge filed her opposition on July 21, 2017, to which the Mortgagee Defendants filed a substantive joinder. ECF Nos. 23-24. Plaintiffs filed their reply on August 4, 2017. ECF No. 25. On August 10, 2017, Judge Puglisi issued Findings and Recommendation to Grant Plaintiffs' Motion for an Order of Remand. ECF No. 26 (“F&R”).

         In the F&R, Judge Puglisi found that the Notice of Removal was procedurally defective because it was silent as to the Mortgagee Defendants' consent, even though consent had apparently been previously obtained. F&R at 5-7. While recognizing conflicting authority, Judge Puglisi also found that any defects in the Notice had to be cured within the 30-day removal period, but that the Consent and Joinder and the supplement had been filed outside of that window. Id. at 8-10. Finally, Judge Puglisi also rejected the argument that removal was timely because Defendant Colridge's Notice of Removal was the first paper from which the Mortgagee Defendants could ascertain the case was removable since the Mortgagee Defendants did not thereafter file a notice of removal. Id. at 10-11.

         On August 24, 2017, Defendant Colridge filed objections to Judge Puglisi's F&R (“Obj.”), to which the Mortgagee Defendants filed a substantive joinder. ECF Nos. 27-28. Plaintiffs did not file a response to the objections.

         STANDARD

         “This Court treats a motion to remand as a dispositive motion, requiring the issuance of a findings and recommendation by the magistrate judge.” PSC Indus. Outsourcing, LP v. Burlington Ins. Co., Civ. No. 10-00751, ACK-BMK, 2011 WL 1793333, at *3 (D. Haw. May 10, 2011) (citing Keown v. Tudor Ins. Co., 621 F.Supp.2d 1025, 1029 (D. Haw. 2008)).

         When a party objects to a magistrate judge's findings or recommendation, the district court must review de novo those portions to which the objections are made and “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1)(C); see also United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc) (“[T]he district court must review the magistrate judge's findings and recommendations de novo if objection is made, but not otherwise.” (emphasis in original)).

         Under a de novo standard, a district court reviews “the matter anew, the same as if it had not been heard before, and as if no decision previously had been rendered.” Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006). The district court need not hold a de novo hearing; however, it is the court's obligation to arrive at its own independent conclusion about those portions of the magistrate judge's findings or recommendation to which a party objects. United States v. Remsing, 874 F.2d 614, 618 (9th Cir. 1989).

         It is within the district court's discretion to “receive further evidence, recall witnesses, or recommit the matter to the magistrate judge with instructions.” Local Rule 74.2. Pursuant to Local Rule 74.2, this Court “may consider the record developed before the magistrate judge, ...


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