Tropical Winds Joint Venture v. Coker Builders, Inc., 88-1341
| Citation | 884 F.2d 1390 |
| Decision Date | 30 August 1989 |
| Docket Number | No. 88-1341,88-1341 |
| Parties | Unpublished Disposition NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit. TROPICAL WINDS JOINT VENTURE, Bruce H. Robinson, Jr., Plaintiffs-Appellees, v. COKER BUILDERS, INC., H.C.C. Development, Inc., Defendants-Appellants. |
| Court | United States Courts of Appeals. United States Court of Appeals (4th Circuit) |
Everett J. Bowman (John B. Orgain, IV, Robinson, Bradshaw & Hinson, P.A. on brief) for appellants.
Bruce Hamilton Robinson, Jr. for appellee.
Before SPROUSE, Circuit Judge, JOHN A. MACKENZIE, Senior Judge, United States District Court, Eastern District of Virginia, sitting by designation, and FRANKLIN T. DUPREE, Jr., Senior Judge, United States District Court, Eastern District of North Carolina, sitting by designation.
In a North Carolina state court action, Tropical Winds Joint Venture and Bruce H. Robinson, Jr., sued Coker Builders, Inc., for breach of a construction contract and H.C.C. Development, Inc., for breach of a joint venture agreement. After Coker Builders and H.C.C. removed the case to federal district court, Robinson received a jury award of $325,000 against Coker Builders and $200,000 against H.C.C. The district court subsequently denied the motion of Coker Builders and H.C.C. for a judgment notwithstanding the verdict and for a new trial, and they appeal. We reverse because the parties lacked the complete diversity of citizenship necessary to establish subject matter jurisdiction.
Robinson, an attorney residing in North Carolina, had an option to purchase real estate on Carolina Beach, North Carolina. He entered into a joint venture agreement in January 1984 with H.C.C., a South Carolina corporation, to form Tropical Winds for the purpose of developing and selling condominiums on Carolina Beach. Under the agreement, H.C.C. agreed to advance funds amounting to $108,000 in order to exercise Robinson's option to purchase the land and to be the managing partner in charge of overall development activities. Robinson made a $2,000 capital contribution and agreed to provide administrative and legal services. Under the agreement, Robinson had a 65% share in profits and losses and H.C.C. had a 35% share.
In February 1984, Tropical Winds contracted with Coker Builders, a South Carolina corporation owned by the same principals as H.C.C., to build twenty-one condominium units to be substantially completed no later than June 30, 1984, for a lump sum of $720,500. Coker Builders succeeded in substantially completing the project by that date, but, because three units had to be reconstructed so that they faced the ocean rather than the street, actual completion was delayed until October 1, 1984. Although the evidence is not entirely clear, the three units requiring reconstruction apparently had been built according to the plans and specifications furnished by Tropical Winds.
Tropical Winds financed the construction with the proceeds of a one million dollar loan secured by Tropical Winds' promissory note that was endorsed by H.C.C., Robinson, and the primary stockholders of Coker Builders and H.C.C. The proceeds of the loan were used to pay Coker Builders $630,500 of the $720,500 contract price and to pay various expenses of the joint venture. After August 1985, when the loan proceeds had been exhausted, H.C.C. expended approximately $311,180 of its own funds for interest, maintenance, and sales expenses, but Robinson, who allegedly had received a $30,000 advance on profits, contributed nothing. Robinson, as well as H.C.C., however, remained liable on the construction loan's outstanding balance, which was $787,182.44 as of April 1988.
During construction, real estate agents obtained presale contracts for all but one of the condominium units and obtained small "reservation deposits" from each prospective buyer. Unfortunately, the condominium market became glutted at about the time the condominiums were under construction, and the individuals who had signed presale contracts asked to be released from them. On Robinson's recommendation, these buyers were released and their deposits were refunded. Subsequent efforts to sell most of the condominiums were unsuccessful.
We agree with the contention advanced by Coker Builders and H.C.C. on appeal that the district court lacked subject matter jurisdiction because one of the plaintiffs, Tropical Winds, and both of the defendants, H.C.C. and Coker Builders, are South Carolina citizens. Complete diversity between plaintiffs and defendants must exist, of course, in order to ground diversity jurisdiction. Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806); see 28 U.S.C. Sec. 1332; see also Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 373 (1978). Jurisdiction may be contested at any time, even by the parties who successfully procured removal to a federal court. Chicago, Burlington, & Quincy Ry. v. Willard, 220 U.S. 413, 420 (1911); see also In re Carter, 618 F.2d 1093, 1100 (5th Cir.1980), cert. denied, 450 U.S. 949 (1981).
Robinson contends, however, that, for purposes of a diversity analysis, we should realign the parties according to their real interest. He argues that, because he is the real party-in-interest, we should dismiss Tropical Winds as a plaintiff. 1 According to Robinson, with that alternative scenario, we should treat the appeal as one involving him as a North Carolina plaintiff against Coker Builders and H.C.C. as South Carolina defendants.
A dispensable party may be dismissed in some instances even at the appellate stage in order to preserve diversity jurisdiction. Newman-Green, Inc. v. Alfonzo-Larrain, ...
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Gibbs v. Bank of Am., N.A., Case No.: GJH-16-2855
...jurisdiction to hear a case may be made "at any time," and cannot be waived by the parties. Tropical Winds Joint Venture v. Coker Builders, Inc., 884 F.2d 1390 (4th Cir. 1989). Pursuant to 28 U.S.C. § 1447(c), "[i]f at any time before final judgment it appears that the district court lacks ......