Mendoza v. Yu

Background

Mae-Lin Mendoza sued Gregory J. Yu in San Mateo County Superior Court. The complaint alleged that Mendoza and her mother, Grace Yu, had signed a Living Support Plan for Mason Yu, Jr. Under the plan, $350,000 was placed in a Morgan Stanley account for Mason’s benefit. Grace, Mendoza, and Gregory Yu were listed as joint tenants on the account.

After Grace died, Morgan Stanley required Mendoza and Gregory Yu to open a new account without Grace on the title. The complaint alleged that Yu refused to complete the required paperwork, leaving the account frozen and preventing Mendoza from making distributions to Mason. Mendoza asked the state court to confirm that the Living Support Plan was a valid trust under California law, direct Yu to convey the account to her as trustee, impose damages under California Probate Code section 859, and award attorney’s fees and costs.

Yu removed the case to federal court based on diversity jurisdiction, stating that Mendoza was a citizen of Texas and he was a citizen of California. Mendoza moved to remand the case to state court. She argued that removal violated the forum defendant rule and that the case also fell within the probate exception to federal jurisdiction.

Forum Defendant Rule

The forum defendant rule, 28 U.S.C. § 1441(b)(2), generally prevents a defendant from removing a case based only on diversity jurisdiction when a properly joined and served defendant is a citizen of the state where the state case was filed. The court noted that Yu stated he was a California citizen and that the record showed he had been served before removal.

Yu did not dispute that the rule applied. Instead, he argued that the rule was a procedural, waivable limitation. The court agreed that the rule is procedural rather than jurisdictional, but held that Mendoza timely objected because she filed her motion within 30 days after removal. The court therefore held that removal was improper under the forum defendant rule.

Because that issue resolved the motion, the opinion did not decide Mendoza’s separate argument based on the probate exception.

Attorney’s Fees and Costs

Mendoza requested $3,428.26 for expenses incurred in opposing removal. Under 28 U.S.C. § 1447(c), a remand order may require payment of costs and actual expenses, including attorney’s fees, caused by the removal. The court found that Yu lacked an objectively reasonable basis for removal because the forum defendant rule clearly barred it, and because Mendoza’s attorney had warned Yu about the rule before filing the remand motion.

The court approved attorney John Doyle’s request for $2,992.50, representing 7.6 hours at $393.75 per hour. It declined to award $33.75 for a legal assistant’s generalized billing entry and declined to award an anticipated $402 filing cost because no supporting record was provided.

Disposition

The court granted Mendoza’s motion to remand and granted her request for attorney’s fees in the amount of $2,992.50. The Clerk of Court was ordered to remand the case to the Superior Court of San Mateo County, California. Judge Thomas S. Hixson signed the order.