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Bugno v. Prestige Financial Services, Inc.

United States District Court, S.D. Ohio, Eastern Division

December 16, 2019

ANGIE BUGNO, Plaintiff,
v.
PRESTIGE FINANCIAL SERVICES, INC. Defendant.[1]

          Sarah D. Morrison Judge

          REPORT AND RECOMMENDATION

          ELIZABETH A. PRESTON DEAVERS, CHIEF UNITED STATES MAGISTRATE JUDGE

         This matter is before the Court for issuance of a Report and Recommendation on the Motion to Remand (ECF No. 15) filed by Plaintiff Angie Bugno (“Ms. Bugno”), the response (ECF No. 18) filed by Prestige Financial Services, Inc. (“Prestige”), and Ms. Bugno's reply memorandum (ECF No. 19). For the reasons that follow, it is RECOMMENDED that Ms. Bugno's Motion to Remand be GRANTED and that this action be REMANDED to the Court of Common Pleas for Franklin County.

         I.

         On December 27, 2017, Prestige filed a complaint against Ms. Bugno in Franklin County Municipal Court (“Municipal Court”) captioned Prestige Financial Services, Inc., No. 2017 CVF 044552, seeking to collect on an alleged deficiency balance remaining on an installment contract for the purchase of an automobile. (ECF No. 1 at 1; ECF No. 15-1 (copy of Prestige's Complaint).) Ms. Bugno filed an answer and counterclaim (ECF No. 15-2 at PAGEID ## 255- 61), to which Prestige responded (id. at PAGEID # 239-44). The parties engaged in written discovery. (Id. at PAGEID ## 219, 245.)

         On February 28, 2019, Ms. Bugno served on Prestige a motion for leave to file an amended answer and class-action counterclaim and a motion to transfer to the Court of Common Pleas for Franklin County (“Franklin County Common Pleas Court”). (Id. at PAGEID ## 192, 209; ECF No. 1 at 1-2).

         On March 7, 2019, Prestige filed a notice of dismissal without prejudice. (ECF No. 15-2 at PAGEID ## 226-27.)

         On March 25, 2019, Ms. Bugno's motion for leave to file an amended answer and class-action counterclaim and a motion to transfer to the Franklin County Common Pleas Court was filed in the Municipal Court. (Id. at PAGEID ## 190-216.) On March 26, 2019, the Municipal Court filed two entries granting Ms. Bugno's motion to amend and to transfer and directed the Municipal Court Clerk to transfer the action to the Franklin County Common Pleas Court. (ECF No. 15-2 at PAGEID ## 183, 189.) On April 5, 2019, the Municipal Court transferred the action to the Franklin County Common Pleas Court. (Id. at PAGEID # 278.)

         On April 24, 2019, Prestige filed its notice of removal in this Court and in Municipal Court, removing the action to this Court on the basis of diversity jurisdiction pursuant to 28 U.S.C. §§ 1332, 1441. (ECF No. 1; ECF No. 15-3.)

         On April 29, 2019, the Franklin County Common Pleas Court opened a file for the case transferred from Municipal Court. (ECF No. 15-4.)

         On May 21, 2019, this Court conducted a preliminary pretrial conference pursuant to the provisions of Federal Rule of Civil Procedure 16(b) and issued a scheduling Order. (ECF No. 9.) On June 14, 2019, Prestige moved to dismiss Ms. Bugno's claims. (ECF No. 11.) Thereafter, Ms. Bugno filed a Motion to Remand. (ECF No. 15.) Upon Ms. Bugno's motion and for good cause shown and in consultation with the presiding District Judge, the Court stayed discovery and briefing on Prestige's Motion to Dismiss pending resolution of the Motion to Remand. (ECF No. 17.) Prestige has filed a response in opposition to the Motion to Remand (ECF No. 18) and Ms. Bugno has filed a reply memorandum (ECF No. 19). This matter is ripe for resolution.

         II.

         Generally, “[t]he defendant or the defendants” may remove a civil action from state court to the federal district court “for the district and division embracing the place where such action is pending” if the action could have been brought there originally. 28 U.S.C. § 1441(a); see also 28 U.S.C. § 1446(a) (explaining the general process that “[a] defendant or defendants” wishing to remove an action must follow). “The term ‘defendant' in removal statutes is narrowly construed.” In re Mortg. Elec. Registration Sys., Inc., 680 F.3d 849, 853 (6th Cir. 2012) (citations omitted); see also First Nat'l Bank of Pulaski v. Curry, 301 F.3d 456, 462-63 (6th Cir. 2002) (“[T]he phrase “the defendant or the defendants, ” as used in § 1441(a), [must] be interpreted narrowly, to refer to defendants in the traditional sense of parties against whom the plaintiff asserts claims.”) (citations omitted).

         “Considering the phrase ‘the defendant or the defendants' in light of the structure of the statute and our precedent, [the United States Supreme Court has] conclude[d] that § 1441(a) does not permit removal by any counterclaim defendant, including parties brought into the lawsuit for the first time by the counterclaim.” Home Depot U.S. A., Inc. v. Jackson, 139 S.Ct. 1743, 1748 (2019); see also In re Mortg. Elec. Registration Sys., Inc., 680 F.3d at 853 (“[A] counterclaim or third-party defendant is not a ‘defendant' who may remove the action to federal court.”) (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 104-08 (1941) (interpreting an earlier version of the removal statute); First Nat'l Bank, 301 F.3d at 461-62 (“Counterclaims, cross-claims, and third-party claims cannot be the basis for removal under § 1441(a).”) (internal quotation marks and citations omitted))); Sesi v. Perrault, No. 16-cv-12680, 2016 WL 9403992, at *1 (E.D. Mich. Aug. 10, 2016) (“[Plaintiff, Counterclaim-Defendant] Sesi seems to think that because Perrault filed a counterclaim against him, he is now a ‘defendant' for purposes of the removal statute. He is wrong.”). As the United States Supreme Court explains, “because the ...


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