Siebert v. Norwest Bank Minnesota , 166 F. App'x 603 ( 2006 )


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  •                                                                                                                            Opinions of the United
    2006 Decisions                                                                                                             States Court of Appeals
    for the Third Circuit
    2-7-2006
    Siebert v. Norwest Bank MN
    Precedential or Non-Precedential: Non-Precedential
    Docket No. 04-4422
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    Recommended Citation
    "Siebert v. Norwest Bank MN" (2006). 2006 Decisions. Paper 1631.
    http://digitalcommons.law.villanova.edu/thirdcircuit_2006/1631
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    NOT PRECEDENTIAL
    UNITED STATES COURT OF APPEALS
    FOR THE THIRD CIRCUIT
    No. 04-4422
    ERIC J. SIEBERT; RUTH A. SIEBERT,
    Appellants
    v.
    NORWEST BANK MINNESOTA, AS TRUSTEE FOR THE AMRESCO
    RESIDENTIAL SECURITIES MORTGAGE LOAN TRUST 1998-2;
    FIDELITY NATIONAL FORCLOSURE SOLUTIONS; WENDOVER
    FINANCIAL SERVICES; RALPH CASALE;
    CASALE & PELLEGRINO, L.L.C.
    On Appeal from the United States District Court for the District of New Jersey
    (D.C. Civil No. 02-cv-4356)
    District Court Judge: Honorable Jose L. Linares
    Submitted pursuant to Third Circuit L.A.R. 34.1(a)
    January 30, 2006
    Before: McKEE, VAN ANTWERPEN, and SILER,* Circuit Judges.
    (Filed: February 7, 2006)
    OPINION OF THE COURT
    VAN ANTWERPEN, Circuit Judge.
    *
    The Honorable Eugene E. Siler, Jr., Senior United States Circuit Judge, United States
    Court of Appeals for the Sixth Circuit, sitting by designation.
    Appellants Eric and Ruth Siebert, plaintiffs below, challenge the Order of the District
    Court denying their request for attorney fees and costs under 
    28 U.S.C. § 1447
    (c) following
    remand of their case to state court. The Sieberts successfully challenged on procedural
    grounds the defendants’ petition to remove the case to federal court. Following remand, they
    sought fees and costs. The District Court referred the matter to a Magistrate Judge, who
    denied the request; on appeal, the District Court affirmed. Because the District Court was
    within its discretion to deny the fee request, we will affirm.
    I
    On July 29, 2002, the Sieberts filed a Complaint in the Superior Court of New Jersey,
    Bergen County, naming as defendants Norwest Bank Minnesota as Trustee of a Mortgage
    Trust, Fidelity National Foreclosure Solutions, Wendover Financial Services, Ralph Casale,
    Esq., Casale & Pellegrino, LLC, and a John Doe. The lawsuit involved alleged misconduct
    by the defendants in foreclosure proceedings against the Sieberts. In the Complaint, the
    Sieberts included two New Jersey statutory consumer protection claims, and a federal claim
    under the Fair Debt Collection Practices Act, 
    15 U.S.C. § 1692
    . On September 6, 2002,
    Wendover Financial Services filed a notice of removal indicating (1) that the District Court
    had federal question jurisdiction under 
    28 U.S.C. § 1331
    , and removal was available under
    
    28 U.S.C. § 1441
    ; (2) that only Ralph Casale and Casale & Pellegrino had been served; and
    (3) that they had “both indicated their consent to this removal.” Wendover alleged oral
    consent only. After the time for filing for removal had passed, the defendants filed untimely
    written consents to removal.
    The Sieberts moved for remand on November 20, 2002. A Magistrate Judge issued
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    a report on July 16, 2003 recommending remand based on the failure to obtain written
    consent to removal from Casale individually and the firm of Casale & Pellegrino. The
    Sieberts had included a request for fees and costs in their motion, but the report and
    recommendation was silent on it; accordingly, they filed a limited objection renewing their
    request for expenses. On October 6, 2003, the District Court, Judge Jose L. Linares,
    reviewed the report and recommendation de novo, adopted it, and ordered remand. However,
    he referred the Sieberts’ request for fees and costs to the Magistrate Judge.
    The Sieberts argued below that they were entitled to attorney fees and costs under 
    28 U.S.C. § 1447
    (c), which provides that the court “may” order “payment of just costs and any
    actual expenses, including attorney fees, incurred as a result of the removal.” They claimed
    that because Wendover’s removal was procedurally improper, the Court should exercise its
    discretion to award fees and costs for obtaining a remand to the Sieberts. In an August 12,
    2004 Order, the Magistrate Judge denied the request, noting (1) that there was a sound legal
    basis for removal – namely, federal question jurisdiction; and (2) that the law in the District
    of New Jersey, the Third Circuit, and elsewhere was unsettled as to whether defendants could
    orally consent to removal. The Sieberts appealed to the District Court. Reasoning that the
    fee award determination was non-dispositive, it reviewed the Magistrate Judge’s Order
    under the “clearly erroneous or contrary to law” standard set forth in the Magistrate Act, 
    28 U.S.C. § 636
    (b)(1)(A). Because § 1447(c) leaves the award of costs and fees in the
    discretion of the court, the District Court also noted that it would only reverse for abuse of
    discretion. The Sieberts argued that because the District Court had initially treated their
    motion to remand as dispositive, and because that motion had included a fee request, the
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    District Court should review the fee issue de novo. The District Court properly observed,
    however, that the dispositive aspect of the case was the remand motion itself; not the fee
    request. It went on to agree with the Magistrate Judge, and affirmed the denial of fees and
    costs. It also noted that it would have affirmed even if review were de novo. The Sieberts
    timely appealed.
    II
    Our jurisdiction lies pursuant to 
    28 U.S.C. § 1291
    . The substance of a remand to state
    court under 
    28 U.S.C. § 1447
    (c) following a removal attempt is unreviewable. 
    28 U.S.C. § 1447
    (d); Mints v. Educ. Testing Serv., 
    99 F.3d 1253
    , 1258 (3d Cir. 1996). In contrast, fee
    awards under that section are collateral issues over which federal courts retain jurisdiction
    after remand. 
    Id.
     The Sieberts incorrectly contend that our standard of review over the
    award determination is de novo. Their argument is addressed infra, section III; for present
    purposes, it suffices to note that the proper standard is abuse of discretion. 
    Id. at 1260
    . “A
    district court abuses its discretion by basing its decision on a clearly erroneous finding of
    fact, an erroneous legal conclusion, or an improper application of law to fact.” Roxbury
    Condominium Ass’n, Inc. v. Anthony S. Cupo Agency, 
    316 F.3d 224
    , 226 (3d Cir. 2003)
    (citations and quotations omitted).
    III
    The Sieberts argue that this Court should review the District Court’s decision
    affirming the denial of fees and costs by the Magistrate de novo. We disagree. There is no
    authority for this Court to review decisions on the award of fees under § 1447(c) for anything
    other than abuse of discretion. This is so because award of fees under § 1447(c) is
    -4-
    discretionary: the statutory language, which states that remand orders “may require” payment
    of fees is plain in this respect. 
    28 U.S.C. § 1447
    (c). This Court has held as much. Mints,
    
    99 F.3d at 1260
     (holding that court of appeals reviews counsel fees following remand for
    abuse of discretion); see Anjelino v. New York Times Co., 
    200 F.3d 73
    , 88 (3d Cir. 1999)
    (reviewing district court’s affirmance of magistrate’s ruling on non-dispositive discovery
    motions for abuse of discretion).
    The Sieberts also argue that de novo review is called for because the Magistrate Judge
    and the District Court adjudicated the fee issue on the basis of a strictly legal question –
    namely, whether or not it is settled law that defendants must consent to removal in writing.
    This confuses entitlement to fees under § 1447(c) in the first instance with the subsequent
    – and discretionary – decision whether to award them. As discussed below, the clarity of
    procedural law governing removal is a factor a court may consider when determining
    whether to grant fees upon remand; not a question of law regarding entitlement to fees in the
    first instance. See Mints, 
    99 F.3d at 1260
     (district courts have broad discretion in fee awards
    under § 1447(c)).
    IV
    Predicated on their belief that our review is de novo, the Sieberts argue that the
    District Court erred in denying their request for fees. As discussed, our review is for abuse
    of discretion, and the record reveals no such abuse. As we have noted, § 1447(c) grants
    district courts broad discretion in determining whether to award fees following a remand.
    Mints, 
    99 F.3d 1260
    . Bad faith on the part of the removing party is not a prerequisite to an
    award of attorneys fees, but it is a consideration. 
    Id.
     Similarly, where the substantive basis
    -5-
    for the removal petition was “frivolous” or “insubstantial,” a district court may exercise its
    discretion to award fees. See 
    id. at 1261
     (where basis for removal “was, if not frivolous, at
    best insubstantial,” district court did not abuse its discretion by awarding fees). We have not
    had occasion to examine in a precedential opinion the significance of fatal procedural flaws
    like those here when determining post-remand fee awards,1 but the answer is nonetheless
    plain.
    The Sieberts argue that it was an abuse of discretion to deny their fee request in light
    of defendants’ collective failure to provide timely written consents that gave rise to the
    remand. To the contrary, however, it is not necessarily an abuse of discretion to deny a fee
    request where a removal attempt failed for procedural reasons; rather the issue is within the
    discretion of the district court, which must weigh the circumstances of the case before it.
    Mints, 
    99 F.3d 1260
    . The Sieberts also argue that the law is settled in the District of New
    Jersey that removal petitions on behalf of multiple defendants must include timely written
    consent by all,2 and that defendants’ failure to comply necessitates an award of fees. Again,
    that plaintiffs may be able to obtain fees and costs because defendants have procedurally
    bungled removal does not mean that such fee awards are automatic. Rather, district courts
    must exercise their discretion in view of the circumstances of the case. We find no reason
    1
    We did, however, hold in a recent unpublished opinion with similar facts that a
    district court was within its discretion to deny fees where several defendants failed to
    provide written consent to removal, even though the substantive basis for removal was
    sound. Hammer v. Scott, 
    137 Fed. Appx. 472
    , 475 (3d Cir. 2005).
    2
    At least two District of New Jersey cases do hold that timely written consents are
    required. E.g., Michaels v. New Jersey, 
    955 F. Supp. 315
     (D.N.J. 1996). However, the
    Third Circuit has not visited the issue, and it is the subject of some disagreement among
    federal courts nationwide.
    -6-
    to disturb the judgment of the District Court, where it determined that even if Wendover
    should have obtained written consents to removal, the law on that procedural issue was
    debatable.
    Furthermore, because the Sieberts included a federal claim in their Complaint, the
    removal petition was substantively sound, and neither frivolous nor insubstantial. They
    allege neither clearly erroneous fact finding, nor misapplication of law to fact. Nor do they
    assert an actual legal error. They do claim that the District Court erred in determining the
    legal standard for awarding fees, but the argument is specious. The District Court’s
    enunciation of the standard accords with the Third Circuit’s precedent in Mints, set forth
    above. Accordingly, the District Court was within its discretion to deny the fee request.
    V
    The Sieberts also argue that the District Court should have reviewed the Magistrate
    Judge’s denial of their fee request de novo, rather than determining whether it was “clearly
    erroneous or contrary to law” and applying abuse of discretion review. This claim is
    unavailing. Any error would be harmless because the District Court’s decision would have
    been the same under either standard of review. In reviewing the denial for abuse of
    discretion, the District Court stated that it “would not reach a different outcome were it to
    treat this matter as dispositive under [the Magistrate Act], allowing de novo review of a
    magistrate’s proposed findings and recommendations.” It went on to make a full review of
    the issue, and affirmed. We therefore need not, and do not, reach the issue of the correct
    standard of review: doing so would not change the result. See Forrest v. Beloit Corp., 
    424 F.3d 344
    , 349 (3d Cir. 2005) (error harmless where highly probable that it did not affect
    -7-
    outcome of the case).
    VI
    For the foregoing reasons, we will affirm the Order of the District Court. We have
    considered all other arguments advanced by the parties, and conclude that further discussion
    is not warranted.
    -8-
    

Document Info

Docket Number: 04-4422

Citation Numbers: 166 F. App'x 603

Judges: Van Antwerpen, McKee, Van Antwerpen Siler

Filed Date: 2/7/2006

Precedential Status: Non-Precedential

Modified Date: 10/19/2024