Answer:
The Home owner commenced the action in a state A court ( C )
Step-by-step explanation:
The Defendant ( the contractor) can decide to transfer the case from a state court to a federal court within the same state in which the case was filled by the The home owner if the federal court has the Jurisdiction to rule on the case
Since the contract was signed in state A under the laws of the state the case is definitely a state case and the Homeowner's move to remand the case to a state court with the argument that the Federal court lacks proper Jurisdiction is in order. The court decision on the matter will be based on the fact that the Homeowner commenced the action in a state A court where the contract was signed.