United States District Court, D. Hawaii
ORDER MODIFYING FINDINGS AND RECOMMENDATION TO DENY
PLAINTIFFS' MOTION FOR ORDER OF REMAND
A. Otake Judge, Judge
the Court is Plaintiffs Douglas Newton Copeland, Cerilene
Tacderan Copeland, and Kaleimaeole Nola Lindsey
Latronic's (collectively “Plaintiffs”)
Objections to Magistrate-Judge's April 29, 2019 Findings
and Recommendation to Deny Plaintiffs' Motion for Order
of Remand [ECF 21]. ECF No. 23. After careful consideration
of the Magistrate Judge's Findings and Recommendation to
Deny Plaintiffs' Motion for Order of Remand
(“F&R”), ECF No. 21, the parties'
submissions, and the applicable law, the Court MODIFIES the
F&R for the reasons set forth below.
instant action arises out of the allegedly wrongful
foreclosures of Plaintiffs' properties. Plaintiffs
commenced this action on December 11, 2018 in the Circuit
Court of the Third Circuit, State of Hawai‘i. The
Complaint asserts the following causes of action: (1)
wrongful deprivation of real property (Count I); (2) unfair
and deceptive trade practices and unfair methods of
competition under H.R.S. Chapter 480 (Count II); and (3)
quiet title and ejectment against Defendants David Shishikin
(“David”); Anna V. Shishikin
(“Anna”); Vyacheslav Tkach
(“Vyacheslav”); Alla Tkach (“Alla”);
Mortgage Electronic Registration Systems
(“MERS”), Inc.; Caliber Home Loans, Inc.
(“CHL”); May Lee (“Lee”),
individually and as Trustee of the May Ming-Wah Lee Revocable
Living Trust Dated May 2, 2002 (“the Trust”); and
DHI Mortgage Company, Ltd. (“DHI”) (Count
January 18, 2019, Defendant PNC Bank N.A. (“PNC”)
removed this action on the basis of diversity jurisdiction.
Notice of Removal (“Notice”), ECF No. 1 at ¶
12. PNC argues that the citizenships of the Shishikins; the
Tkachs; Lee, individually and as Trustee of the Trust; MERS;
and CHL may be disregarded because they were
fraudulently joined. Id. at ¶¶ 14-15.
Following removal, Plaintiffs filed a Motion for Order of
Remand (“Remand Motion”). ECF No. 7.
F&R, the Magistrate Judge recommended that
Plaintiffs' Remand Motion be denied. F&R, ECF No. 21
at 15. The F&R contained the following findings:
(1) [I]t is obvious from the face of the  Complaint that
Plaintiffs fail to state a claim against the Individual
Defendants under settled Hawaii law. Contrary to
Plaintiffs' assertions, the court is not required to
conduct a searching inquiry into the merits of
Plaintiffs' claims. Id. at 8.
(2) Viewing Plaintiffs' allegations in light of the
applicable authority, the Court finds that Plaintiffs'
claims against the Individual Defendants obviously fail under
settled Hawaii law. See McCabe, 811 F.2d at 1339.
Plaintiffs do not allege that that the Individual Defendants
colluded with Defendant PNC, were involved in a scheme to
wrongfully obtain title from Plaintiffs, or had actual
knowledge of Defendant PNC's alleged misconduct.
Id. at 13-14.
(3) After considering the parties' arguments and
Plaintiffs' allegations in the Complaint, the Court finds
that Defendant PNC has met its burden to show that
Plaintiffs' claims for quiet title and ejectment
obviously fail under settled Hawaii law. Id. at
Magistrate Judge ultimately concluded that “PNC has
shown that there is no possibility that Plaintiffs can state
a cause of action against the Individual Defendants.”
Id. at 15.
13, 2019, Plaintiffs filed Objections to the F&R. ECF No.
23. PNC filed a Response on May 28, 2019. ECF No. 25.
Court treats a motion to remand as a dispositive motion.
Keown v. Tudor Ins. Co., 621 F.Supp.2d 1025, 1029
(D. Haw. 2008); Bralich v. Sullivan, No. CV 17-00203
ACK-RLP, 2017 WL 4883221, at *4 (D. Haw. Oct. 30, 2017).
Magistrate judges may be assigned to prepare findings and
recommendations of pretrial matters dispositive of a claim or
defense. Fed.R.Civ.P. 72(b)(1). Parties may object to a
magistrate judge's findings and recommendation.
Id.; Local Rule 74.2. “The district judge must
determine de novo any part of the magistrate judge's
disposition that has been properly objected to. The district
judge may accept, reject, or modify the recommended
disposition; receive further evidence; or return the matter
to the magistrate judge with instructions.”
Fed.R.Civ.P. 72(b)(3); Local Rule 74.2; 28 U.S.C. §
636(b)(1). Under a de novo standard, there is no deference to
the lower court's ruling; rather, the Court “freely
consider[s] the matter anew, as if no decision had been
rendered below.” Dawson v. Marshall, 561 F.3d
930, 933 (9th Cir. 2009) (alteration in original);
Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th
object to the F&R on the following grounds: (1) the
Magistrate Judge did not mention the common defense rule set
forth in Hunter v. Philip Morris USA, 582 F.3d 1039
(9th Cir. 2009); (2) the Magistrate Judge did not mention
Jebo v. Aurora Loan Services LLC or In re
Ho, which together show that the question of whether the
deeds are “void and not merely voidable” is
unsettled; and (3) the Magistrate Judge erroneously rejected
Plaintiffs' argument that the Court cannot decide whether
the individual Defendants are bona fide purchasers at this
stage in the litigation because that requires an inquiry into
the merits of the case. Objections, ECF No. 23 at 12-35.
counters that: (1) the Magistrate Judge correctly declined to
apply the common defense exception to fraudulent joinder; (2)
Silva v. Lopez, 5 Haw. 262 (Haw. Kingdom 1884), does
not mandate that defective nonjudicial foreclosures are
considered void even as against innocent purchasers; (3) the
Magistrate Judge correctly concluded that Plaintiffs failed
to offer any imaginable basis for challenging the innocence
of the subsequent purchasers of the subject properties; and
(4) Plaintiffs' arguments founded upon Nevada and
Mississippi law are inapplicable, distinguishable, and
ultimately irrelevant. Response at 1-2.
Court finds it unnecessary to evaluate many of the arguments
raised in the Objections and Response because they are
irrelevant to the fraudulent joinder determination.
28 U.S.C. § 1441, a defendant may remove a civil action
brought in a state court to federal district court if the
district court has original jurisdiction. Abrego Abrego
v. The Dow Chemical Co., 443 F.3d 676, 679-80 (9th Cir.
2006). “Removal . . . statutes are ‘strictly
construed,' and a ‘defendant seeking removal has
the burden to establish that removal is proper and any doubt
is resolved against removability.'” Hawaii ex
rel. Louie v. HSBC Bank Nevada, N.A., 761 F.3d 1027,
1034 (9th Cir. 2014) (quoting Luther v. Countrywide Home
Loans Serv. LP, 533 F.3d 1031, 1034 (9th Cir. 2008));
Hunter, 582 F.3d at 1042 (quoting Gaus v.
Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (per
curiam)) (“The ‘strong presumption against
removal jurisdiction means that the defendant always has the
burden of establishing that removal is proper,' and that
the court resolves all ambiguity in favor of remand to state
court.”); Durham v. Lockheed Martin Corp., 445
F.3d 1247, 1252 (9th Cir. 2006). Courts should presume that a
case lies outside the limited jurisdiction of the federal
courts. Hunter, 582 F.3d at 1042.