Countryside Bank v. Sheikh

• Decision Date: 05 February 2020
• Docket Number: CAUSE NO.: 2:18-CV-347-TLS-JEM
• Parties: COUNTRYSIDE BANK, Plaintiff, v. SEAN Z. SHEIKH, JR., BUSHRA NASEER, CENTRAL MARKET OF INDIANA, INC., 3232 CENTRAL AVENUE LLC, NASER MUSLEH, HASAN MUSLEH, M.R. ALLAH, LLC, ZAFAR SHEIKH, BASHIR CHAUDRY, ASSOCIATED WHOLESALE GROCERS, INC., WHILSHIRE BANK, UNKNOWN OWNERS, and NON-RECORD CLAIMANTS, Defendants.
• Court: U.S. District Court — Northern District of Indiana

COUNTRYSIDE BANK, Plaintiff, v. SEAN Z. SHEIKH, JR., BUSHRA NASEER,CENTRAL MARKET OF INDIANA, INC.,3232 CENTRAL AVENUE LLC, NASER MUSLEH, HASAN MUSLEH,M.R. ALLAH, LLC, ZAFAR SHEIKH, BASHIR CHAUDRY,ASSOCIATED WHOLESALE GROCERS, INC., WHILSHIRE BANK,UNKNOWN OWNERS, and NON-RECORD CLAIMANTS, Defendants.

CAUSE NO.: 2:18-CV-347-TLS-JEM

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF INDIANA HAMMOND DIVISION

February 5, 2020

OPINION AND ORDER

On February 5, 2019, the Court issued an Opinion and Order [ECF No. 23] denying Plaintiff Countryside Bank's Motion to Remand. This matter is now before the Court on Plaintiff's Motion to Reconsider [ECF No. 24] that ruling. Because Defendant Sean Z. Sheikh, Jr. has not met his burden of demonstrating complete diversity between the parties at the time of removal, the Court grants the Motion to Reconsider and remands this case to state court.

PROCEDURAL BACKGROUND

Plaintiff Countryside Bank filed its Complaint to Foreclose Commercial Mortgage and for Other Relief [ECF No. 1] in the Lake County, Indiana, Superior Court on December 27, 2017, against Defendants Sean Z. Sheikh, Jr. ("Sean Sheikh"), Bushra Naseer, Central Market of Indiana, Inc., 3232 Central Avenue LLC, Naser Musleh, Hasan Musleh, M.R. Allah, LLC, Zafar Sheikh, Bashir Chaudry, Associated Wholesale Grocers Inc., Wilshire Bank, and unknown owners and non-record claimants. The Complaint alleges that Plaintiff "is a bank chartered under the laws of the State of Illinois." Compl. ¶ 1, ECF No. 1. The Complaint further alleges that Defendants Bushra Naseer, Zafar Sheikh, and Bashir Chaudry are each "an individual resident and citizen of the State of Illinois." Id. ¶¶ 2, 8, 9. Defendant Sean Sheikh is alleged to be a citizen of the State of New York, id. ¶ 3, and Defendant Naser Musleh is alleged to be a citizen of the State of Indiana, id. ¶ 6. The citizenship of Hasan Musleh is not alleged. See Compl.¹ As for the two limited liability companies, the Complaint alleges that Defendant 3232 Central Avenue LLC is "an Indiana limited liability company with its principal place of business in Indiana," id. ¶ 5, and that Defendant "M.R. Allah, LLC is believed to be an Indiana limited liability company," id. ¶ 7. As for the corporate defendants, the Complaint alleges: Defendant Central Market of Indiana, Inc. is an Indiana corporation with its principal place of business in Indiana, id. ¶ 4; Defendant Associated Wholesale Grocers, Inc. is a corporation organized under the laws of the State of Kansas with its principal place of business in Kansas, id. ¶ 10; and Defendant Wilshire Bank is a bank organized under the laws of the State of California with its principal place of business in California, id. ¶ 11.

The Complaint alleges the following claims:

Count I "Liability of Borrowers on Promissory Notes," seeking judgment against Central Market of Indiana, Inc. and 3232 Central Avenue LLC in the amount of $1,831,380.28, with interest. Compl. ¶¶ 13, 30-32.

Count II "Foreclosure of Mortgage," seeking entry of judgment determining that Plaintiff's mortgage is a valid, first, and subsisting lien on the Mortgaged Property; entry of a judgment in favor of Plaintiff and against Central Market of Indiana, Inc. and 3232 Central Avenue LLC in the sum of $1,831,380.28 plus interest, costs, and attorney fees; entry of an order foreclosing the Mortgage; and entry of an order directing the sale of the Mortgaged Property. Id. ¶¶ 33-35.

Count III "Liability of Guarantors on Unconditional Guarantees," seeking judgment against Bushra Naseer and Sean Sheikh in the amount of $1,831,380.28, plus interest. Id. p. 1, ¶¶ 36-39.

Count IV "Breach of Subordination Agreement," seeking judgment against Central Market of Indiana, Inc., 3232 Central Avenue LLC, Bushra Naseer, Sean Sheikh, and Naser Musleh in the amount of at least $300,000. Id. ¶¶ 40-44.

Count V "Foreclosure of Commercial Security Agreement and Request for Accounting," seeking a judgment against Central Market of Indiana, Inc. and 3232 Central Avenue LLC that Plaintiff's interest in the Collateral be foreclosed against all defendants, a judgment foreclosing the right of redemption of all parties other than Plaintiff, a judgment directing the sale of the Collateral, a judgment directing all parties to surrender possession of the Collateral, and an accounting by Associated Wholesale Grocers, Inc., Wilshire Bank, Naser Musleh, and M.R. Allah LLC. Id. ¶¶ 45-52.

Count VI "Enforcement of Assignment of Rents and Request for Accounting," against Central Market of Indiana, Inc. and 3232 Central Avenue LLC. Id. ¶¶ 53-58.

Count VII "Fraud by Bushra Naseer, Sean Sheikh, and Naser Musleh." Id. ¶¶ 59-62.

Count VIII "Fraud by Zafar Sheikh, Bashir Chaudry, and Hasan Musleh." Id. ¶¶ 63-67.

Count IX "Appointment of Receiver." Id. ¶¶ 68-72.

On September 17, 2018, Defendant Sean Sheikh filed a Notice of Removal [ECF No. 2], removing the case to this court based on diversity jurisdiction.² As for the citizenship of the parties, the Notice of Removal alleges that Plaintiff Countryside Bank is "chartered and registered to do business in the State of Illinois" and that Defendant Sean Sheikh is a citizen of the State of Texas. See Notice of Removal ¶ 1, ECF No. 2. The Notice of Removal then asserts that all other defendants have been "dismissed or defaulted." Id. ¶ 2. More specifically, three defendants are listed as "dismissed": Zafar Sheikh ("Resident of Illinois"); Naser Musleh ("Resident of Indiana"); Hasan Musleh ("Resident of Indiana"). Two defendants are listed as"Dismissed or defaulted": Bushra Naseer ("Resides overseas since 2012") and Bashir Chaudry ("Resident of Illinois"). Id.³ Two defendants are listed as "Defaulted": Central Market Inc. ("Indiana Corporation") and 3232 Central Market LLC ("Indiana LLC"). And, three defendants are listed as "Dismissed/defaulted": M.R. Allah Inc. ("Indiana Corporation"),⁴ "Associate Grocers" ("Kansas Corporation"), and Wilshire Bank ("California Corporation"). The Notice of Removal does not allege the principal place of business for the corporations (including Plaintiff) or the citizenship of members for the limited liability companies.

Pursuant to the Court's Order, Plaintiff filed a Status Report [ECF No. 13] on October 31, 2018, reporting the status of the parties in the state court proceedings prior to removal. The exhibits submitted in support of the Status Report provide the following procedural background:

1. On March 16, 2018, the state court entered a "Foreclosure Judgment on Note and Mortgage (Counts I & II)" against Central Market of Indiana, Inc. and 3232 Central Avenue LLC. See Status Report, Ex. A (Foreclosure Judgment), ECF No. 13-1. In the Foreclosure Judgment, the state court indicated that the following defendants had been served and were in default: Bushra Naseer, Sean Sheikh, Central Market of Indiana, Inc., 3232 Central Avenue LLC, Hasan Musleh, M.R. Allah, LLC, Bashir Chaudry, Associated Wholesale Grocers, Inc., and Wilshire Bank. Id. at pp. 1-2. Naser Musleh had filed an Answer by counsel, and Zafar Sheikh had not been served. Id. at pp. 1-2.

2. Also on March 16, 2018, the state court entered a "Summary Judgment on Counts III Through VI of the Complaint," incorporating the findings in the Foreclosure Judgment and finding:

(1) Bushra Naseer and Sean Sheikh liable to Plaintiff on the Unconditional Guarantee (Count III);

(2) Central Market of Indiana, Inc., 3232 Central Avenue LLC, Bushra Naseer, Sean Sheikh, and Naser Musleh liable to Plaintiff for breach of theagreements under the Musleh Note and the Subordination Agreement (Count IV);

(3) Plaintiff entitled to foreclosure on its interest in the identified collateral against Central Market of Indiana, Inc. and 3232 Central Avenue LLC, ordering Associated Wholesale Grocers to deliver to Plaintiff identified property and ordering Associated Wholesale Grocers, Wilshire Bank, Naser Musleh, and M.R. Allah LLC to file an accounting of any property that they are holding that may qualify as "Collateral" under the terms of the Commercial Security Agreement (Count V); and

(4) Plaintiff entitled to judgment against Zafar Sheikh and Bashir Chaudry in the amount of $20,000, ordering Zafar Sheikh and Bashir Chaudry to provide any accounting within 30 days (Count VI).

See id., Ex. B (Summ. Judgment Order), ECF No. 13-2. Pursuant to Indiana Trial Rule 54(b), the state court found that there was no just reason for delay and directed the entry of final judgment on the claims addressed in the ruling. Id.

3. On May 1, 2018, the state court signed a "Stipulated Motion to Dismiss Count IV Only," signed by counsel for Plaintiff and counsel for Naser Musleh, dismissing Count IV as to Naser Musleh. See id., Ex. C (Stip. Mot.), ECF No. 13-3.

4. On July 12, 2018, the state court issued an Order on "Plaintiff's Motion to Dismiss Voluntarily Counts VI, VII and VIII," vacating the summary judgment on Count VI and dismissing without prejudice Counts VI, VII, and VIII. See id., Ex. D (Order), ECF No. 13-4.

Plaintiff's Status Report and the supporting documents provide the status of each party:

1. Central Market of Indiana, Inc.: the March 16, 2018 final judgments on Counts I, II, IV, and V remain in place;⁵

2. 3232 Central Avenue LLC: the March 16, 2018 final judgments on Counts I, II, IV, and V remain in place;⁶3. Bushra Naseer: the March 16, 2018 final judgment on Counts III and IV⁷ remains in place, noting that "Bushra Naseer is believed to be an Illinois resident whose presence in the case destroys diversity jurisdiction," see Status Report ¶ 3, ECF No. 13;

4. Sean Sheikh: Count III and IV remain pending because the March 16, 2018 summary judgment ruling against him was set aside on July 26, 2018, and the state court granted him until September 17, 2018, to respond to the Complaint;

5. Associated Wholesale Grocers, Inc.: the March 16, 2018 final judgment on Count V remains in place;

6. Wilshire Bank: the March 16, 2018 final judgment on Count V

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