Toumajian v. Frailey

Plaintiff Michael Toumajian filed a Complaint in California state court in which he asserted that the defendants, Richard Frailey and Frailey & Associates, Inc. (collectively "Frailey"), were negligent in advising him in setting up and administer- ing a pension plan. The defendants had the matter removed to the district court. On motion of the defendants, the district court dismissed the Complaint. Following payment of sanc- tions to the defendant, plaintiff was permitted to file an amended complaint. Plaintiff also filed a Motion to Remand. The district court dismissed the Amended Complaint without leave to amend and denied the Motion to Remand as moot. On appeal, the plaintiff challenges both the first and second dismissals as well as the award of sanctions. Because we con- clude the action was improvidently removed in the first instance, all orders subsequently entered by the district court dismissing the Complaint and the Amended Complaint are reversed. Although our Conclusion that the district court lacked subject matter jurisdiction does not necessarily invali- date the district courts award of sanctions, we also reverse that award. Accordingly, the action is remanded to the district court with directions to remand the action to the state court.