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Mb Financial Bank, N.A v. 56 Walker

December 19, 2011

MB FINANCIAL BANK, N.A., PLAINTIFF, -
v.
56 WALKER, LLC, ET AL.,
DEFENDANTS.



The opinion of the court was delivered by: John G. Koeltl, District Judge:

OPINION AND ORDER

The plaintiff, MB Financial Bank, N.A. ("the plaintiff"), brings this motion for attorney's fees after defendants 56 Walker, LLC ("56 Walker"), Guy Morris ("Morris"), and INN World Report, Inc. ("INN") (collectively "the removing defendants") removed the above-captioned case to this Court and subsequently consented to remand after a motion for remand was fully briefed. The plaintiff seeks fees only against Morris and INN, because 56 Walker is currently in bankruptcy.

I.

The plaintiff's predecessor in interest, Broadway Bank, initially brought this action in the New York State Supreme Court, New York County, seeking foreclosure upon a commercial mortgage lien on a building in Manhattan due to an alleged failure to repay an $8 million mortgage loan. The foreclosure is the only cause of action asserted in the plaintiff's amended complaint.

On July 21, 2011, the New York State Supreme Court, New York County issued an order directing defendants 56 Walker and Morris to show cause by August 10, 2011 why a receiver should not be appointed. On August 10, 2011, the same date their opposition to the order to show cause was due, these defendants, as well as defendant INN, filed a notice of removal to this Court. Notice of Removal, MB Financial Bank, N.A. v. 56 Walker, LLC, et al., No. 11 Civ. 5538 (S.D.N.Y. Aug. 10, 2011). The removing defendants asserted that the action arose under federal law and that jurisdiction was therefore proper under 28 U.S.C. § 1331. Id. Only three of the fifteen defendants named in the complaint joined in the removal. Id.

On August 12, 2011, the plaintiff moved this Court, by order to show cause, for the case to be remanded to the New York State Supreme Court, New York County. On September 7, 2011, this Court held oral argument on the motion to remand. The Court noted its concern that the removing defendants appeared unable to articulate a jurisdictional basis for removal but gave the parties an opportunity to submit further briefing, which they subsequently did. (Sept. 7, 2011 Hr'g Tr. at 10, 14.)

On September 13, 2011, the removing defendants notified the Court that they consented to the remand of this action. At a hearing held that same day, the Court indicated that it would issue an order remanding the case and instructed the plaintiff to submit any application for attorney's fees and costs by October 28, 2011. (Sept. 13, 2011 Hr'g Tr. at 11, 13.) The Court also indicated that sanctions under Federal Rule of Civil Procedure 11 were not available. (Sept. 13 Hr'g Tr. at 13-14.) The Court subsequently issued an order remanding this case to the New York State Supreme Court, New York County. Order, MB Financial Bank, N.A. v. 56 Walker, LLC, et al., No. 11 Civ. 5538 (S.D.N.Y. Sept. 13, 2011).

On October 28, 2011, the plaintiff filed this application seeking an award of $30,615 in attorney's fees based on the fees it asserts it incurred in connection with the remand motion.

II.

A.

28 U.S.C. § 1447(c) provides that "[a]n order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal."

28 U.S.C. § 1447(c). The Supreme Court has held that, "[a]bsent unusual circumstances, courts may award attorney's fees under § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal. Conversely, when an objectively reasonable basis exists, fees should be denied."

Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005); see Calabro v. Aniqa Halal Live Poultry Corp., 650 F.3d 163, 166 (2d Cir. 2011) (attorney's fees and costs proper under § 1447(c) where the purported basis for removal was objectively unreasonable).

A case need not be removed improvidently or in bad faith for costs to be appropriate. See Morgan Guaranty Trust Co. of N.Y. v. Republic of Palau, 971 F.2d 917, 923-24 (2d Cir. 1992). Instead, it is appropriate for a court to consider the "overall fairness given the nature of the case, the circumstances of the remand, and the effect on the parties." Id. at 924 (internal quotation marks omitted). Costs and expenses are available to "deter[] improper removal" because "the simplicity of [the removal] procedure . . . exposes a [non-removing party] to the possibility of abuse, unnecessary ...


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