Zolfaghari v. Wall&Associates, Inc.

CourtDistrict Court, N.D. California
DecidedFebruary 13, 2020
Docket5:19-cv-08101
StatusUnknown

This text of Zolfaghari v. Wall&Associates, Inc. (Zolfaghari v. Wall&Associates, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zolfaghari v. Wall&Associates, Inc., (N.D. Cal. 2020).

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 JAVAD ZOLFAGHARI, Case No. 19-cv-08101-SVK

8 Plaintiff, ORDER GRANTING MOTION TO 9 v. REMAND

10 WALL&ASSOCIATES, INC., et al., Re: Dkt. No. 10 11 Defendants.

12 Before the Court are Plaintiff Javad Zolfaghari’s motion to remand (Dkt. 10) and 13 Defendants Greg Thorson, P. Mark Yates, Wall & Associates, Inc., and Jennifer L. Cable’s 14 (collectively, “Defendants”) motion to dismiss (Dkt. 8). All parties have consented to the 15 jurisdiction of the undersigned magistrate judge. See Dkts. 7, 13. The Court finds this matter 16 suitable for decision without oral argument pursuant to Civ. L.R. 7-1(b). 17 The initial and fundamental issue in this case is whether the jurisdiction of this Court 18 attached to Plaintiff’s state court complaint as drafted. This Court concludes that it did not. 19 Accordingly, the Court GRANTS Plaintiff’s motion to remand and DENIES AS MOOT 20 Defendants’ motion to dismiss for the reasons discussed below. 21 I. BACKGROUND 22 A. The Complaint 23 On November 13, 2019, Plaintiff filed his complaint, utilizing standard Judicial Council 24 forms, alleging state-law claims of fraud and intentional tort against Defendants in the Superior 25 Court of California for the County of Santa Clara. Dkt. 1-1 at 2. Plaintiff’s allegations arise out 26 of alleged representations by Defendants that, in return for payment, they would represent Plaintiff 27 before the California Employment Development Bureau (“EDD”) regarding a tax lien. See 1 More specifically, Plaintiff alleges that he paid Defendants $63,500.00 for their services in 2 helping Plaintiff remedy a $21,000,000.00 tax lien that was placed on his corporation. Dkt. 1-1 at 3 6. Plaintiff further alleges that despite his payments, Defendants did not take any action to remedy 4 the tax lien. Id. Plaintiff mentions the $63,500.00 payment and the $21,000,000.00 tax lien in 5 various places of the complaint. See id. at 6-8. Plaintiff further alleges: “Defendant would 6 arrange for a hearing before the California Employment Development (EDD) bureau at which 7 Plaintiff would have an opportunity to explain and set aside the tax liabilities which were 8 improperly charged to Plaintiff by way of a tax lien placed on corporation in which he is an officer 9 and shareholder.” Id. at 6. Plaintiff also alleges “Defendant failed to take effective action to 10 resolve the tax obligations disclosed to them” and “Defendant did not arrange for a hearing before 11 EDD and made no effort to set aside tax lien.” Id. In the complaint and under the pre-printed text 12 “[b]ecause of plaintiff’s reliance upon defendant’s conduct, plaintiff has been damaged,” Plaintiff 13 states: 14 Plaintiff expended $60000 plus $3500 to obtain competent, effective and timely representation. Plaintiff did not retain competent representation to proceed against 15 the EDD lien of approximately $21,000,000. Plaintiff’s business interests in Zolman Construction and Development, Inc. was severely jeopardized as a result of 16 Defendant's lack of representation and incorrect tax advice. 17 Id. at 7. Plaintiff indicated that he intended to seek compensatory damages and punitive damages 18 but did not specify an amount. Id. at 5. The civil case cover sheet filed along with Plaintiff’s 19 complaint indicated that Plaintiff sought monetary, nonmonetary (declaratory or injunctive relief), 20 and punitive remedies. Id. at 11. 21 B. Notice of Removal 22 Defendants removed Plaintiff’s action to this Court on December 11, 2019 (Dkt. 1) and 23 filed their motion to dismiss on December 18, 2019 (Dkt. 8). In their notice of removal, 24 Defendants contend that this Court has diversity jurisdiction over the instant action because (1) the 25 amount in controversy exceeds $21,000,000.00; and (2) Plaintiff is a citizen of California and no 26 Defendants are citizens of California. Dkt. 1 at 4-6. 27 //// 1 C. Motion to Remand 2 Plaintiff filed the instant motion to remand on December 20, 2019, arguing that in the 3 complaint he claims only $63,500.00 in damages. Dkt. 10; Dkt. 11 at 8. Plaintiff also avers by 4 counsel that “he is willing to stipulate that he will not claim any more than $10,000 in punitive 5 damages, and shall not exceed $74,900.00.” Dkt. 10-1 ¶ 6. 6 In opposition, Defendants clarify that Plaintiff seeks: (1) $60,000.00 for an initial payment; 7 (2) $3,500.00 for a subsequent payment; and (3) $21,000,000.00 for the tax lien Defendants were 8 hired to challenge. Dkt. 15 at 6. Defendants contend that Plaintiff’s argument that his complaint 9 does not seek compensatory damages of over $21,000,000.00 is “absurd” and that “‘it is facially 10 apparent from the allegations in the complaint that plaintiff’s claims’ include a claim for 11 $21,000,000.” Id. at 8. 12 In addition, Defendants argue that they were “eligible to assert the amount in controversy 13 under 28 U.S.C § 1446(c)(2)(A)(ii) because California law ‘does not permit demand for a specific 14 sum’ of exemplary damages and thus ‘does not permit’ Plaintiff to state the total ‘specific sum’ of 15 damages that he is seeking” and “Defendants exercised this right by stating, in their Notice of 16 Removal, that the amount in controversy exceeds $75,000.” Dkt. 15 at 10. Defendants also argue 17 that “Plaintiff’s civil cover sheet, which is part of his Complaint, seeks ‘nonmonetary; declaratory 18 or injunctive relief’” and “Defendants were thus eligible to assert the amount in controversy under 19 28 U.S.C § 1446(c)(2)(A)(i)” and subsequently exercised that right. Id. 20 Finally, Defendants take issue with Plaintiff’s post-removal statement that he will not seek 21 more than $74,900.00 in damages. Dkt. 15 at 10-13. Defendants argue that Plaintiff’s statement 22 that he “shall not exceed $74,900” is “unclear” and “problematic.” Id. at 11. Defendants also 23 contend that the Supreme Court barred post-removal stipulations in St. Paul Mercury Indemnity 24 Co. v. Red Cab Co., 303 U.S. 283 (1938). Id. In particular, Defendants argue that “the initial 25 complaint determines original jurisdiction and hence the propriety of remand, and nothing that the 26 plaintiff says after filing the complaint can divest a court of jurisdiction that was conferred by the 27 complaint.” Id. Defendants also argue that this Court has “applied this rule to block plaintiffs 1 (citing Bay Area Surgical Mgmt., LLC v. Principal Life Ins. Co., No. 12-cv-1140 EJD, 2012 WL 2 3656451, at *2 (N.D. Cal. Aug. 24, 2012)). 3 II. LEGAL STANDARDS 4 A. Removal 5 The federal removal statute permits the removal of an action which could have been 6 brought originally in federal court. See 28 U.S.C. § 1441(a). Removal jurisdiction is determined 7 from the four corners of the complaint as it existed at the time of removal. Franchise Tax Bd. of 8 the State of Cal. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 10 (1983). Removal 9 statutes are strictly construed against removal and place the burden on the party seeking removal 10 to show removal is proper. Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 11 2009) (citing Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)).

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Zolfaghari v. Wall&Associates, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/zolfaghari-v-wallassociates-inc-cand-2020.