1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 OSCAR CUEVAS, Case No.: 3:25-cv-02153-JES-BJW
12 Plaintiff, ORDER: 13 v. (1) GRANTING MOTION TO 14 PRESTIGE DEFAULT SERVICES, LLC; REMAND; and SHELLPOINT MORTGAGE 15 SERVICING; NEWREZ LLC d/b/a (2) DENYING MOTION TO DISMISS 16 SHELLPOINT MORTGAGE AS MOOT SERVICING; and UMB BANK, N.A., AS 17 OWNER TRUSTEE FOR VMCAP 18 TRUST U-OR1, [ECF Nos. 3, 5] 19 Defendants. 20
21 Before the Court is a motion to dismiss filed by Defendants Newrez LLC d/b/a 22 Shellpoint Mortgage Servicing (“Newrez”), and UMB Bank, N.A. (collectively, 23 “Defendants”) and a motion to remand filed by Plaintiff Oscar Cuevas (“Plaintiff”). ECF 24 Nos. 3, 5. Both motions are fully briefed. ECF Nos. 4, 9, 10. Since Plaintiff challenges the 25 Court’s jurisdiction to hear this matter, the Court must first address the motion to remand 26 prior to addressing the motion to dismiss. The motion to remand requires the Court to 27 decide whether the removal statute, which requires removal 30 days after service, permits 28 1 removal months after a defendant’s substantive litigation in state court if plaintiff never 2 properly effectuated service. Defendants argue that their removal almost five months after 3 the state court claim was filed is timely, because they were never properly served and thus 4 the removal timeline never started. ECF No. 10 (“Opp’n.”). The Court disagrees with 5 Defendants’ position on the removal statute, and finds that the 30-day removal timeline 6 began when Defendants’ general appearance in state court operated as a summons and 7 cured defects in Plaintiff’s service under state law. For the reasons discussed below, the 8 Court finds that removal was untimely, and GRANTS Plaintiff’s motion to remand. The 9 Court DENIES AS MOOT Defendants’ motion to dismiss. 10 I. BACKGROUND 11 Plaintiff lives at a property, 28114 Queensbridge Road, Valley Center, California 12 92082 (“the Property”), upon which Defendants seek to foreclose. ECF No. 1-2 (“Compl.”) 13 ¶¶ 1, 4. The Property is owned by Evelyn M. Morgan (“Morgan”), who is not a party to 14 this action. ECF No. 1 ¶ 2. Plaintiff alleges that he entered into an unrecorded lease-to- 15 own agreement with Morgan on October 1, 2019, which he argues gives him equitable 16 interest in the property. Compl. ¶ 2. 17 On March 28, 2025, Plaintiff filed the present action in San Diego Superior Court, 18 where the case proceeded for nearly five months. ECF No. 1-5 (“State Dkt.”). On April 2, 19 2025, Plaintiff filed a motion for a temporary restraining order and Newrez filed an 20 opposition to Plaintiff’s TRO application. Id. at 4. On April 16, 2025, Newrez filed an 21 opposition to Plaintiff’s application for a preliminary injunction, and a proof of service, 22 declaration/pleading, and request for judicial notice regarding the same. Id. On April 18, 23 2025, Newrez filed a peremptory challenge. Id. at 3. On May 9, 2025, all four Defendants 24 named in this action filed an ex parte application and supporting documents, a proposed 25 order, and proof of service. Id. The state court held a motion hearing on June 27, 2025. Id. 26 at 2. On July 16, 2025, Prestige Default Services, LLC (“Prestige”) filed its declaration of 27 Non-Monetary Status in state court. Id. 28 1 On August 20, 2025, Defendants removed the case to this Court. ECF No. 1. In the 2 notice of removal, Defendants allege there is federal subject matter jurisdiction through 3 diversity jurisdiction. Id. ¶¶ 6-11. On September 19, 2025, Plaintiff filed the current motion 4 for remand. ECF No. 5. 5 II. LEGAL STANDARDS 6 Federal courts are courts of limited jurisdiction. Gunn v. Minton, 568 U.S. 251, 256 7 (2013). In a case originally brought in state court, a defendant may remove the action to 8 federal court if there is federal subject matter jurisdiction. 28 U.S.C. § 1441(a) (“Except as 9 otherwise expressly provided by Act of Congress, any civil action brought in a State court 10 of which the district courts of the United States have original jurisdiction, may be removed 11 by the defendant or the defendants, to the district court of the United States for the district 12 and division embracing the place where such action is pending.”). 13 “Consistent with the limited jurisdiction of federal courts, the removal statute is 14 strictly construed against removal jurisdiction.” Audo v. Ford Motor Co., No. 3:18-cv- 15 00320-L-KSC, 2018 WL 3323244, at *1 (S.D. Cal. July 6, 2018) (citing Gaus v. Miles, 16 Inc., 980 F.2d 564, 566 (9th Cir. 1992)). Therefore, the “burden of establishing that 17 removal is proper” always lies with the defendant. Gaus, 980 F.2d at 566. If there is any 18 doubt as to the propriety of removal, the court shall reject federal subject matter 19 jurisdiction. Id.; see also Hansen v. Grp. Health Coop., 902 F.3d 1051, 1057 (9th Cir. 2018) 20 (“If a district court determines at any time that less than a preponderance of the evidence 21 supports the right of removal, it must remand the action to the state court.”). 22 Federal subject matter jurisdiction may arise based on federal question or diversity 23 jurisdiction. 28 U.S.C. § 1331, 1332(a). The statute governing diversity jurisdiction 24 requires complete diversity between plaintiffs and defendants. Hunter v. Philip Morris 25 USA, 582 F.3d 1039, 1043 (9th Cir. 2009). Further, to satisfy section 1332, the matter in 26 controversy must exceed the sum or value of $75,000, exclusive of interests and costs. 28 27 U.S.C. § 1332(a). 28 // 1 III. DISCUSSION 2 Plaintiff raises three bases for remand; (1) the presence of a non-diverse defendant, 3 Prestige, who is a California citizen; (2) the removal was untimely under 28 U.S.C. § 4 1446(b); and (3) the removal lacked the unanimous consent of all properly served 5 defendants. Mot. at 8-9. The Court will address Plaintiff’s argument regarding untimely 6 removal. Plaintiff argues removal was untimely under 28 U.S.C. § 1446(b) because 7 Defendants removed the case almost five months after the initial action was filed in state 8 court. Id. Defendants disagree, arguing that the 30-day period to remove never began 9 because Plaintiff never properly effectuated service. Opp’n. at 5. The Court agrees with 10 Plaintiff that remand is proper because removal was untimely. 11 Plaintiff argues that removal was untimely because it was outside the statutory 30- 12 day limit to remove cases from state to federal court. Mot. at 8. The statute governing 13 removal of state court actions requires as follows: 14 The notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy 15 of the initial pleading setting forth the claim for relief upon which such action 16 or proceeding is based, or within 30 days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not 17 required to be served on the defendant, whichever period is shorter. 18 28 U.S.C. § 1446(b)(1).
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 OSCAR CUEVAS, Case No.: 3:25-cv-02153-JES-BJW
12 Plaintiff, ORDER: 13 v. (1) GRANTING MOTION TO 14 PRESTIGE DEFAULT SERVICES, LLC; REMAND; and SHELLPOINT MORTGAGE 15 SERVICING; NEWREZ LLC d/b/a (2) DENYING MOTION TO DISMISS 16 SHELLPOINT MORTGAGE AS MOOT SERVICING; and UMB BANK, N.A., AS 17 OWNER TRUSTEE FOR VMCAP 18 TRUST U-OR1, [ECF Nos. 3, 5] 19 Defendants. 20
21 Before the Court is a motion to dismiss filed by Defendants Newrez LLC d/b/a 22 Shellpoint Mortgage Servicing (“Newrez”), and UMB Bank, N.A. (collectively, 23 “Defendants”) and a motion to remand filed by Plaintiff Oscar Cuevas (“Plaintiff”). ECF 24 Nos. 3, 5. Both motions are fully briefed. ECF Nos. 4, 9, 10. Since Plaintiff challenges the 25 Court’s jurisdiction to hear this matter, the Court must first address the motion to remand 26 prior to addressing the motion to dismiss. The motion to remand requires the Court to 27 decide whether the removal statute, which requires removal 30 days after service, permits 28 1 removal months after a defendant’s substantive litigation in state court if plaintiff never 2 properly effectuated service. Defendants argue that their removal almost five months after 3 the state court claim was filed is timely, because they were never properly served and thus 4 the removal timeline never started. ECF No. 10 (“Opp’n.”). The Court disagrees with 5 Defendants’ position on the removal statute, and finds that the 30-day removal timeline 6 began when Defendants’ general appearance in state court operated as a summons and 7 cured defects in Plaintiff’s service under state law. For the reasons discussed below, the 8 Court finds that removal was untimely, and GRANTS Plaintiff’s motion to remand. The 9 Court DENIES AS MOOT Defendants’ motion to dismiss. 10 I. BACKGROUND 11 Plaintiff lives at a property, 28114 Queensbridge Road, Valley Center, California 12 92082 (“the Property”), upon which Defendants seek to foreclose. ECF No. 1-2 (“Compl.”) 13 ¶¶ 1, 4. The Property is owned by Evelyn M. Morgan (“Morgan”), who is not a party to 14 this action. ECF No. 1 ¶ 2. Plaintiff alleges that he entered into an unrecorded lease-to- 15 own agreement with Morgan on October 1, 2019, which he argues gives him equitable 16 interest in the property. Compl. ¶ 2. 17 On March 28, 2025, Plaintiff filed the present action in San Diego Superior Court, 18 where the case proceeded for nearly five months. ECF No. 1-5 (“State Dkt.”). On April 2, 19 2025, Plaintiff filed a motion for a temporary restraining order and Newrez filed an 20 opposition to Plaintiff’s TRO application. Id. at 4. On April 16, 2025, Newrez filed an 21 opposition to Plaintiff’s application for a preliminary injunction, and a proof of service, 22 declaration/pleading, and request for judicial notice regarding the same. Id. On April 18, 23 2025, Newrez filed a peremptory challenge. Id. at 3. On May 9, 2025, all four Defendants 24 named in this action filed an ex parte application and supporting documents, a proposed 25 order, and proof of service. Id. The state court held a motion hearing on June 27, 2025. Id. 26 at 2. On July 16, 2025, Prestige Default Services, LLC (“Prestige”) filed its declaration of 27 Non-Monetary Status in state court. Id. 28 1 On August 20, 2025, Defendants removed the case to this Court. ECF No. 1. In the 2 notice of removal, Defendants allege there is federal subject matter jurisdiction through 3 diversity jurisdiction. Id. ¶¶ 6-11. On September 19, 2025, Plaintiff filed the current motion 4 for remand. ECF No. 5. 5 II. LEGAL STANDARDS 6 Federal courts are courts of limited jurisdiction. Gunn v. Minton, 568 U.S. 251, 256 7 (2013). In a case originally brought in state court, a defendant may remove the action to 8 federal court if there is federal subject matter jurisdiction. 28 U.S.C. § 1441(a) (“Except as 9 otherwise expressly provided by Act of Congress, any civil action brought in a State court 10 of which the district courts of the United States have original jurisdiction, may be removed 11 by the defendant or the defendants, to the district court of the United States for the district 12 and division embracing the place where such action is pending.”). 13 “Consistent with the limited jurisdiction of federal courts, the removal statute is 14 strictly construed against removal jurisdiction.” Audo v. Ford Motor Co., No. 3:18-cv- 15 00320-L-KSC, 2018 WL 3323244, at *1 (S.D. Cal. July 6, 2018) (citing Gaus v. Miles, 16 Inc., 980 F.2d 564, 566 (9th Cir. 1992)). Therefore, the “burden of establishing that 17 removal is proper” always lies with the defendant. Gaus, 980 F.2d at 566. If there is any 18 doubt as to the propriety of removal, the court shall reject federal subject matter 19 jurisdiction. Id.; see also Hansen v. Grp. Health Coop., 902 F.3d 1051, 1057 (9th Cir. 2018) 20 (“If a district court determines at any time that less than a preponderance of the evidence 21 supports the right of removal, it must remand the action to the state court.”). 22 Federal subject matter jurisdiction may arise based on federal question or diversity 23 jurisdiction. 28 U.S.C. § 1331, 1332(a). The statute governing diversity jurisdiction 24 requires complete diversity between plaintiffs and defendants. Hunter v. Philip Morris 25 USA, 582 F.3d 1039, 1043 (9th Cir. 2009). Further, to satisfy section 1332, the matter in 26 controversy must exceed the sum or value of $75,000, exclusive of interests and costs. 28 27 U.S.C. § 1332(a). 28 // 1 III. DISCUSSION 2 Plaintiff raises three bases for remand; (1) the presence of a non-diverse defendant, 3 Prestige, who is a California citizen; (2) the removal was untimely under 28 U.S.C. § 4 1446(b); and (3) the removal lacked the unanimous consent of all properly served 5 defendants. Mot. at 8-9. The Court will address Plaintiff’s argument regarding untimely 6 removal. Plaintiff argues removal was untimely under 28 U.S.C. § 1446(b) because 7 Defendants removed the case almost five months after the initial action was filed in state 8 court. Id. Defendants disagree, arguing that the 30-day period to remove never began 9 because Plaintiff never properly effectuated service. Opp’n. at 5. The Court agrees with 10 Plaintiff that remand is proper because removal was untimely. 11 Plaintiff argues that removal was untimely because it was outside the statutory 30- 12 day limit to remove cases from state to federal court. Mot. at 8. The statute governing 13 removal of state court actions requires as follows: 14 The notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy 15 of the initial pleading setting forth the claim for relief upon which such action 16 or proceeding is based, or within 30 days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not 17 required to be served on the defendant, whichever period is shorter. 18 28 U.S.C. § 1446(b)(1). Interpreting this statute, the Supreme Court has held that “a named 19 defendant's time to remove is triggered by simultaneous service of the summons and 20 complaint, or receipt of the complaint, ‘through service or otherwise,’ after and apart from 21 service of the summons, but not by mere receipt of the complaint unattended by any formal 22 service.” Murphy Bros. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347–48 (1999). 23 “When a case is removed from state court to federal court, the question whether service of 24 process was sufficient prior to removal is governed by state law.” Whidbee v. Pierce Cnty., 25 857 F.3d 1019, 1023 (9th Cir. 2017). 26 In California, “[a] general appearance by a party is equivalent to personal service of 27 summons on such party.” Cal. Civ. Proc. Code § 410.50. “‘A general appearance operates 28 1 as a consent to jurisdiction of the person, dispensing with the requirement of service of 2 process, and curing defects in service.’” Fireman's Fund Ins. Co. v. Sparks Constr., Inc., 3 114 Cal. App. 4th 1135, 1145 (2004) (quoting 2 Witkin, Cal. Procedure (4th ed. 1996) 4 Jurisdiction, § 190, p. 756)). 1 “A general appearance occurs when a party [] participates in 5 an action in some manner which recognizes the authority of the court to proceed” including 6 “rais[ing] any question or ask[ing] for any relief which can only be granted upon the 7 hypothesis that the court has jurisdiction of his person.” Dial 800 v. Fesbinder, 118 Cal. 8 App. 4th 32, 52-53 (2004) (internal quotations and citations omitted). “Thus, if a defendant 9 seeks any affirmative relief on the merits, the application may be deemed a general 10 appearance.” Id. at 53. Parties may preserve service objections under California law by 11 filing motions to quash service before or concurrently with general appearances. See 12 ViaView, Inc. v. Retzlaff, 1 Cal. App. 5th 198, 213-14 (2016) (citing Cal. Civ. Proc. Code 13 § 418.10(e) for the proposition that “‘no act by a party who makes a [motion to quash], 14 including filing an answer, demurrer, or motion to strike,’ before or concurrently with 15 taking that action will be deemed a general appearance until litigation of the motion to 16 quash is finally resolved adversely to the defendant.”). 17 Here, Defendants argue that removal was timely because they were never properly 18 served, foreclosing the application of § 1446(b)’s timeliness requirement. Opp’n at 5. 19 Defendants point out that Plaintiff attempted electronic service without their consent, 20 which is impermissible under California law. See id.; Cal. Civ. Proc. Code 21 § 1010.6(a)(2)(A)(ii); Cal. R. Ct. 2.251(b)(1). Thus, Defendants are correct that Plaintiff 22 did not properly serve them with process under California law when he attempted 23 electronic service. See id.; Mot. at 8. 24 25 1 The same is true under federal law. See Benny v. Pipes, 799 F.2d 489, 492 (9th Cir. 1986) (“A general appearance or responsive pleading by a defendant that fails to dispute personal jurisdiction will waive any 26 defect in service or personal jurisdiction.”). The Ninth Circuit has noted that the waiver rule avoids “sandbagging” by defendants, who could otherwise begin to litigate the merits of an issue, and then 27 exercise their jurisdictional options only if they think they will lose. See Peterson v. Highland Music, Inc., 140 F.3d 1313, 1318 (9th Cir. 1998). 28 1 However, it does not follow that, as Defendants argue, “the 30-day removal period 2 under 28 U.S.C. § 1446(b) never began,” when Defendants did not remove until nearly five 3 months after the initial pleading, and filed responsive filings in state court. See State Dkt. 4 Newrez made its first appearance in state court on April 2, 2025, when they filed an 5 opposition to a request for a temporary restraining order. Id. at 4. On May 9, 2025, all four 6 named Defendants filed an ex parte application and supporting documents, a proposed 7 order, and proof of service. Id. at 3. By making substantive filings requesting relief which 8 could only be granted if the state court had jurisdiction, such as an ex parte application and 9 a proposed order, Defendants recognized the state court’s authority over the proceeding. 10 See Dial 800, 118 Cal. App. 4th at 52-53. The April 2, 2025, filing constituted a general 11 appearance on the part of Newrez. See id. The May 9, 2025, filings thus constituted a 12 general appearance on the part of all Defendants. See id. Defendants, who bear the burden 13 of showing removal was proper, do not state that they raised jurisdictional or service of 14 process issues in those filings. See Gaus, 980 F.2d at 566. Defendants also do not state that 15 they filed a motion to quash service concurrently with their general appearance to preserve 16 the objection. See id.; ViaView, 1 Cal. App. 5th at 213-14. Therefore, the May 9, 2025, 17 filing was a general appearance which operated as equivalent to personal service of a 18 summons on Defendants under California law, curing Plaintiff’s defective service. See 19 Fireman's Fund Ins. Co., 114 Cal. App. 4th at 1145. 20 Under the removal statute as interpreted by the Supreme Court, the period to remove 21 this case began when the complaint had been filed and service of summons was proper. 22 See Murphy Bros., 526 U.S. at 354 (“[I]f the complaint is filed in court prior to any service, 23 the removal period runs from the time of service of the summons.”). Because the state law 24 equivalent of a proper summons existed against all Defendants under California law on 25 May 9, 2025, the removal period ran for 30 days after that date, or until June 8, 2025. See 26 id.; Whidbee., 857 F.3d at 1023 (holding that state law governs sufficiency of process for 27 removal purposes). Plaintiff is therefore correct that Defendant’s removal on August 20, 28 2025, was untimely. See id.; Mot. at 8. The Court GRANTS Plaintiff’s motion for remand 1 || on the basis that removal was untimely. The Court declines to address Plaintiff's remaining 2 || arguments for removal. 3 IV. CONCLUSION 4 After due consideration and for the reasons discussed above, the Court GRANTS 5 || Plaintiff's Motion to Remand. The case is REMANDED back to the San Diego Superior 6 || Court. The Court DENIES AS MOOT Defendant’s pending motion to dismiss. The Clerk 7 Court is directed to close the case. 8 IT IS SO ORDERED. 9 19 || Dated: March 25, 2026 faite Siemens 4. 11 Honorable James E. Sunmons Jr. 12 United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28