United States District Court, D. Montana, Billings Division
SAGE FINANCIAL PROPERTIES, LLC, HORIZON PROPERTIES, INC., Plaintiffs,
FIREMAN'S FUND INSURANCE COMPANY, Defendant.
ORDER AND FINDINGS AND RECOMMENDATION OF U.S.
TIMOTHY J. CAVAN UNITED STATES MAGISTRATE JUDGE.
action was originally brought in the Seventh Judicial
District Court, Richland County, in the State of Montana. On
April 4, 2019, Defendant Fireman's Fund Insurance
Company, timely removed, invoking the Court's diversity
jurisdiction under 28 U.S.C. § 1332(a) and 1441. (Doc.
before the Court are Plaintiffs' Motion to Remand (Doc.
11) and Defendant's Unopposed Motion for Leave to File
Sur-Reply Brief (Doc. 17), which have been referred to the
undersigned under 28 U.S.C. § 636(b)(1)(B). These
motions are fully briefed and ripe for the Court's
review. (Docs. 12, 15, 16, 18.)
considered the parties' submissions, the Court finds
diversity jurisdiction is lacking, and therefore, RECOMMENDS
Plaintiffs' motion to remand be GRANTED.
courts are courts of limited jurisdiction, ” and
“possess only that power authorized by Constitution and
statute.” Kokkonen v. Guardian Life Ins. Co. of Am.,
511 U.S. 375, 377 (1994). Federal district courts have
original jurisdiction over actions “arising under the
Constitution, laws, or treaties of the United States, ”
28 U.S.C. § 1331, and in actions where there is complete
diversity of citizenship between the parties and the amount
in controversy exceeds $75, 000.00. 28 U.S.C. § 1332.
Complete diversity of citizenship requires each of the
plaintiffs to be a citizen of a different state than each of
the defendants. Morris v. Princess Cruises, Inc., 236 F.3d
1061, 1067 (9th Cir. 2001). For purposes of diversity
jurisdiction, the citizenship of a limited liability company
is determined by the citizenship of its members. Johnson v.
Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th
Defendant removed this matter from state court, Defendant
alleged that it is a California corporation with its
principle place of business in Illinois. Defendant further
alleged Plaintiff Horizon Properties, Inc. is a Montana
corporation with its principle place of business in Montana,
and Plaintiff Sage Financial Properties, LLC is a Montana
limited liability company with its principle place of
business in Montana. Defendant, however, failed to allege any
facts regarding the citizenship of the members of Sage
moved to remand on grounds that complete diversity does not
exist because one of Sage Financial's members, Mark
Brodka, is a citizen of California. In response, Defendant
agrees that complete diversity does not exist, and that
remand is appropriate. Accordingly, in light of the
parties' agreement that diversity jurisdiction is
lacking, the Court recommends that this action be remanded to
state court. Plaintiffs have also requested attorney's
fees pursuant to 28 U.S.C. § 1447(c). The award of
attorney's fees on remand is discretionary. Section
1447(c) provides in relevant part: “An order remanding
the case may require payment of just costs and any actual
expenses, including attorney fees, incurred as a result of
the removal.” 28 U.S.C. § 1447(c). “Absent
unusual circumstances, a court may award costs and
attorney's fees under § 1447(c) only where the
removing party lacked an objectively reasonable basis for
seeking removal.” Grancare, LLC v. Thrower by &
through Mills, 889 F.3d 543, 552 (9th Cir. 2018).
Defendant incorrectly treated Sage Financial as a
corporation, and arguably should have been more diligent in
inquiring into the citizenship of Sage Financial's
members before removing this action. Despite Defendant's
mistake, however, the Court cannot conclude Defendant's
conduct was objectively unreasonable on this record.
Plaintiffs' Complaint did not include information
regarding the members and citizenship of Sage Financial.
Further, once Defendant was provided with the affidavit of
Mark Brodka, Defendant conceded the basis for removal was
lacking, and did not oppose remand. “[R]emoval is not
objectively unreasonable solely because the removing
party's arguments lack merit, or else attorney's fees
would always be awarded whenever remand is granted.”
Lussier v. Dollar Tree Stores, Inc., 518 F.3d 1062, 1065 (9th
Cir. 2008). See also Berkeley Research Grp., LLC v. United
Potato Growers of Am., Inc., 2017 WL 1650582, *4 (N.D. Cal.
May 2, 2017) (finding it was not objectively unreasonable for
defendants to remove based on the information in the
complaint given the 30-day time limit for removal).
Accordingly, the Court recommends that Plaintiffs'
request for attorney's fees be denied.
on the foregoing, IT IS HEREBY ORDERED that:
Defendant's Unopposed Motion for Leave to File Sur-Reply
(Doc. 17) is DENIED.
Preliminary Pretrial Conference presently scheduled for May
30, 2019 at 11:00 a.m. is VACATED.
IS RECOMMENDED that Plaintiffs' Motion for
Remand (Doc. 11) be GRANTED, and that