Whitson v. Hallpier Corporation - Camel Motors
This text of Whitson v. Hallpier Corporation - Camel Motors (Whitson v. Hallpier Corporation - Camel Motors) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Thomas J. Whitson, an unmarried man, No. CV-23-00223-TUC-JGZ
10 Plaintiff, ORDER
11 v.
12 Hallpier Corporation-Camel Motors, an Arizona corporation; et al. 13 Defendant. 14 15 On January 10, 2022, Plaintiff Thomas J. Whitson filed a complaint in state court 16 against multiple Defendants, including Hallpier Corporation-Camel Motors (Camel 17 Motors) and Karim Hallal. (Doc. 1-1 at 1.) Whitson alleged four claims relating to a vehicle 18 sale: breach of contract, consumer fraud, negligent misrepresentation, and unjust 19 enrichment. (Id. at 1–5.) On January 18, 2023, the state court dismissed Whitson’s claims 20 against Hallal. (Doc. 8-1 at 6.) On February 14, 2023, the state court entered a judgment 21 against Camel Motors. (Id. at 2–3.) 22 On March 21, 2023, the state court issued a writ of garnishment and summons to 23 Wells Fargo for collection of the judgment. (Id. at 9–12.) The writ of garnishment states it 24 “applies to all safe deposit boxes owned by any of the defendants.” (Id. at 9.) Although 25 Karim Hallal is named as defendant in the case caption on the first page of the writ, the 26 writ identifies only Camel Motors as a judgment debtor and directs Wells Fargo to report 27 whether it is in possession of any monies or properties of the judgment debtor. (Id. at 9– 28 11.) 1 Based on Whitson’s filing of the writ of garnishment, Hallal filed, on May 12, 2023, 2 a Notice of Removal under 28 U.S.C. §§ 1331, 1446(b)(3). (Doc. 1 at 1.) In his Notice of 3 Removal, Hallal alleges a counterclaim under the Fair Debt Collection Practices Act 4 (FDCPA) against Whitson and asserts the Court has subject matter jurisdiction pursuant to 5 15 U.S.C. § 1692(d)–(f) because “the matter [has] now [with the filing of the writ] become 6 a federal question.” (Doc. 1 at 1, 3–4.) Hallal alleges the writ of garnishment resulted in 7 false publishing on credit reports and his wrongful termination of employment. (Id. at 2– 8 3.) 9 Whitson subsequently filed a Motion to Remand to State Court. (Doc. 8.) The 10 parties have also filed numerous additional motions, including: (1) Hallal’s Application for 11 Leave to Proceed in Forma Pauperis (Doc. 2); (2) Hallal’s Emergency Motion to Vacate 12 State Court Issued Writ of Garnishment (Doc. 3); (3) Hallal’s Motion to Allow Electronic 13 Filing by a Party Appearing Without an Attorney (Doc. 4); (4) Hallal’s Motion to Join 14 Necessary Party (Doc. 9); (5) Hallal’s Motion to Strike (Doc. 12); (6) Hallal’s Motion for 15 Entry of Default Final Judgment (Doc. 13); (7) Whitson’s Amended Supplemental Motion 16 to Supplement Request for Oral Argument on Motion to Remand (Doc. 17); and (8) 17 Hallal’s Motion For/To Sanction Counselor Robert Wolkin (Doc. 19). 18 DISCUSSION 19 The Court will remand this case to state court because the Court lacks subject matter 20 jurisdiction: Hallal is not a defendant in the matter, and he does not allege a FDCPA claim; 21 he asserts a counterclaim. A state court defendant may remove to federal court any civil 22 action brought in the state court over which the federal district courts would have original 23 jurisdiction. 28 U.S.C. § 1441(a). “[T]he defendant always has the burden of establishing 24 that removal is proper.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). “If at any 25 time before final judgment it appears that the district court lacks subject matter jurisdiction, 26 the case shall be remanded.” 28 U.S.C. § 1447(c). 27 Here, Hallal is not a defendant in this action. The state court dismissed him by court 28 order. (Doc. 8-1 at 6.) Further, even if Hallal was a defendant, a federal question 1 counterclaim cannot support removal under the well-pleaded complaint rule. The well- 2 pleaded complaint rule states that federal question jurisdiction applies only if a federal 3 question is presented on the plaintiff’s properly pleaded complaint. Caterpillar, Inc. v. 4 Williams, 482 U.S. 386, 399 (1987). A defendant cannot inject a federal question into “an 5 action that asserts what is plainly a state-law claim.” Id. The Ninth Circuit has reiterated 6 that removability cannot be created by a defendant pleading a counterclaim that presents a 7 federal question. See Takeda v. Northwestern Nat’l Life Ins. Co., 765 F.2d 815, 822 (9th 8 Cir. 1985); see also Fannie Mae v. Ortega, No. CV 12-7223 UA (DUTYx), 2012 U.S. Dist. 9 LEXIS 127024, at *2 (C.D. Cal. Aug. 30, 2012) (FDCPA counterclaims cannot be the basis 10 for federal question jurisdiction). 11 Hallal argues this matter has been “rife with abuse and violations of the FDCPA,” 12 the Arizona Supreme Court allows parties to assert wrongful garnishment as a 13 counterclaim, he was never served properly, and Whitson “obtained a default judgment 14 under false representations to the state judiciary.” (Docs. 10-1 at 1–2; 12 at 1–2.) Even if 15 true, Whitson’s state action involved breach-of-contract, consumer-fraud, negligent- 16 misrepresentation, and unjust-enrichment claims. (Doc. 1 at 1.) These are all plainly state- 17 law claims. All of Hallal’s arguments relate to the state court proceedings and do not 18 present a federal question that establishes subject matter jurisdiction. See Caterpillar, Inc., 19 482 U.S. at 399. Moreover, Hallal was no longer a party to the action. 20 The Court will grant Whitson’s request for attorney’s fees because Hallal lacked an 21 objectively reasonable basis for removal. “An order remanding the case may require 22 payment of just costs and any actual expenses, including attorney fees, incurred as a result 23 of the removal.” 28 U.S.C. § 1447(c). The Ninth Circuit has held “[a]bsent unusual 24 circumstances, courts may award attorney’s fees under 28 U.S.C. § 1447(c) only where the 25 removing party lacked an objectively reasonable basis for seeking removal.” Jordan v. 26 Nationstar Mortg. LLC, 781 F.3d 1178, 1184 (9th Cir. 2015). 27 Here, Hallal lacks an objectively reasonable basis for removal. He is not a defendant 28 in the matter and a federal counterclaim cannot be the basis for removal. Hallal should have known he had no basis for removal. He should have investigated whether there was an 2|| objectively reasonable basis for removal, if not initially, at least after Whitson raised the || challenge in his motion to dismiss. Hallal did not and he persisted in seeking removal. Whitson is entitled to an award of attorneys’ fees and costs incurred as a result. 5 For the foregoing reasons, IT IS ORDERED: 6 1. Plaintiff's Motion to Remand to State Court (Doc. 8) is granted. The Clerk || of the Court is directed to remand this action to Pima County Superior Court and close its 8 || file in this action. 9 2. Plaintiff's request for Attorneys’ Fees and Costs is granted. (Doc. 8.) 10 || Defendant shall pay Plaintiff’s reasonable attorneys’ fees and costs. Plaintiff shall submit 11 || a fee request with appropriate documentation within 14 days of the date of this Order. 12 3.
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