United States District Court, D. Arizona
Gainey Ranch Community Association, an Arizona-nonprofit corporation; and The Pavilions Council of Co-owners, an Arizona non-profit organization, Plaintiff,
Rune Kraft, an individual; Trancycle; Inland Concrete Enterprises, Inc. Employee Stock Ownership Plan; Oldcastle Precast, Inc.; John Does and Jane Does I through X; Black Corporations I through X; and White Partnerships I through X, Defendants.
MICHELLE H. BURNS UNITED STATES MAGISTRATE JUDGE
before the Court is Plaintiffs' Motion to Dismiss for
lack of subject matter jurisdiction (Doc. 7). Plaintiffs
contend that “the Superior Court is the proper venue in
which to litigate this matter.” The Court construes
Plaintiff's Motion to Dismiss for lack of subject matter
jurisdiction as a “motion to remand” to state
court. After considering the arguments raised by the parties
in their briefings, this Court finds that it lacks subject
matter jurisdiction over the matter, and, as such, this
matter should be remanded to state court.
September 1, 2015, Plaintiff Gainey Ranch Community
Association (“Gainey Ranch”) filed their original
Complaint in the McDowell Mountain Justice Court. Plaintiffs
alleged that Rune Kraft and Trancycle breached contractual
obligations to pay past due assessments and late fees
relating to the property located at 7272 E. Gainey Ranch Rd.,
Unit Number 100, Scottsdale, Arizona 85250 (“Unit
100"), as well as pay attorneys' fees and costs. At
the time that the Complaint was filed, the total amount owed
to Gainey Ranch was $4, 306.62 (the “loss
amount”), and therefore fell under the Justice
Court's jurisdiction, pursuant to A.R.S. §
case remained in the Justice Court until Plaintiff realized
that its loss amount then exceeded the Justice Court's
jurisdictional limit of $10, 000, pursuant to A.R.S. §
22-201(C). On December 7, 2016, Plaintiff filed a motion to
transfer the case to state court. The Justice Court granted
Plaintiff's Motion, and the case was transferred to the
Maricopa County Superior Court on December 28, 2016.
thereafter discovered that Unit 100 was eligible for
foreclosure, and as such ordered a “litigation
Guarantee” which revealed Defendants Kraft and
Trancycle as record owners. As such, Plaintiff amended its
complaint to add a foreclosure claim, and to add co-plaintiff
Pavilions Council of Co-Owners, and defendants Inland
Concrete Enterprises, Inc. Employee Stock Ownership Plan
(“Inland Concrete”) and OldCastle Precast, Inc.
(“OldCastle”). In their Amended Complaint, dated
March 30, 2017, Plaintiffs assert a loss amount of $43,
30, 2017 Defendant Kraft filed a Petition for Removal to the
United States District Court for the District of Arizona. In
his petition, Defendant Kraft alleges there exists diversity
between the parties, and the amount in controversy exceeds
the statutory jurisdictional amount. On July 14, 2017,
Plaintiffs filed their motion to remand, disputing the
existence of subject matter jurisdiction. Plaintiffs assert
that the parties in this case are not completely diverse -
that they are all citizens of Arizona. Plaintiffs also assert
that the amount in controversy is below the statutory
threshold. There is no dispute that on the date Defendant
Kraft removed this matter, Plaintiffs claimed that the total
loss amount was $62, 824.64.
response, Defendant Kraft responds and alleges that diversity
of citizenship exists as he and co-Defendants Island Concrete
and OldCastle are not Arizona citizens. Further, he alleges
that the amount in controversy will soon exceed the statutory
courts are courts of limited jurisdiction; the Constitution
and Congress authorize which matters federal courts may
preside over. U.S. Const. art. III, § 2, cl. 1;
e.g., Kokkonen v. Guardian Life Ins., 511
U.S. 375, 377 (1994). “In general, removal statutes are
strictly construed against removal.” Luther v.
Countywide Home Loans Serv., L.P., 533 F.3d 1031, 1034
(9th Cir. 2008). Federal courts are "presumed to lack
jurisdiction in a particular case unless the contrary
affirmatively appears." Stock West, Inc. v.
Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir.
1989). Accordingly, any doubt as to the right of removal
should be resolved in favor of remand to state court.
Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.
1992) (per curiam).
a case filed in state court may be removed to federal court
by the defendant if the federal court otherwise would have
had original jurisdiction. 28 U.S.C. 1441(a). There is a
presumption that “a cause lies outside this limited
jurisdiction, ” and the “burden of establishing
the contrary rests upon the party asserting
jurisdiction.” Kokkonen, 511 U.S. at 377
Amended Complaint asserts a cause of action based on the
breach of private contractual obligations, which is not an
independent basis for federal jurisdiction. See 28
U.S.C. § 1331. Therefore, in order for the Court to have
jurisdiction over Plaintiffs' claims, jurisdiction must
be predicated on another independent source. To establish
subject matter jurisdiction otherwise, the party asserting
jurisdiction must show (1) an amount in controversy exceeding
$75, 000, and (2) complete diversity among opposing parties.
28 U.S.C. § 1332(a). Defendant contends that this action
meets both requirements, and therefore removal is
AMOUNT IN CONTROVERSY
should discourage premature removal. Abrego Abrego v. Dow
Chem. Co., 443 F.3d 676, 691 (9th Cir. 2006). The
conditions necessary must exist at the time of the removal.
Id.; see also Budget Rent-A-Car, Inc. v.
Higashiguchi, 109 F.3d 1471, 1473 (9th Cir. 1997).
“[T]he court may demand that the party alleging
jurisdiction justify his allegations by a preponderance of
the evidence.” See Gaus, 980 F.2d at 567
(citing McNutt v. General MotorsAcceptance
Corp., 298 U.S. 178, 189 (1936)). When a the party
asserting jurisdiction fails to present to the court any
concrete factual evidence that establishes jurisdiction, it
is “well within the court's discretion to remand to