Abm Janitorial Services v. Pami Ryan Town Centre
| Decision Date | 22 October 2008 |
| Docket Number | No. 08-CV-100-LRR.,No. 08-CV-123-LRR.,08-CV-100-LRR.,08-CV-123-LRR. |
| Citation | 601 F.Supp.2d 1111 |
| Parties | ABM JANITORIAL SERVICES-NORTH CENTRAL, INC., Plaintiff, v. PAMI RYAN TOWN CENTRE LLC, Defendant. J.E.M.M. of Pinellas, Inc., Plaintiff, v. Pami Ryan Town Centre LLC, Defendant. |
| Court | U.S. District Court — Northern District of Iowa |
Jeffrey Alan Stone, Roger W. Stone, Simmons, Perrine, Albright & Ellwood, PLC, Cedar Rapids, IA, for ABM Janitorial Services-North Central, Inc. Stephen D. Marso, Whitfield & Eddy, PLC, West Des Moines, IA, for Pami Ryan Town Centre LLC.
Debra Rectenbaugh Pettit, Davis Brown Koehn Shors & Roberts, P.C., Des Moines, IA, for J.E.M.M. of Pinellas, Inc.
The matter before the court is Defendant PAMI Ryan Town Centre LLC's ("PAMI Ryan") "Motion to Dismiss Application for Appointment of Receiver" ("Motion") (docket no. 11 in case no. 08-CV123-LRR).1
Viewed in the light most favorable to Plaintiffs ABM Janitorial Services-North Central, Inc. d/b/a ABM Janitorial Services ("ABM") and J.E.M.M. of Pinellas, Inc. d/b/a Bay Area Disaster Kleenup ("BADK"), see Farm Credit Servs. v. Am. State Bank, 339 F.3d 764, 767 (8th Cir. 2003) (), the facts are these:
PAMI Ryan owns and leases certain real estate ("Real Estate") in downtown Cedar Rapids, Iowa. The Real Estate is commonly known as the "Town Centre" and consists of two five-story commercial buildings and a five-story parking ramp.2 PAMI Ryan owns the vast majority of the Real Estate and leases the remainder from the City of Cedar Rapids ("City").3
The Great Flood of 2008 severely damaged the buildings and the parking ramp. PAMI Ryan contacted ABM to obtain services for the cleanup, restoration and security of the Real Estate. On June 13, 2008, ABM and PAMI Ryan executed a written contract entitled "Restoration Services and Authorization Agreement" ("Agreement"). PAMI Ryan promised to make all payments directly to ABM, including any payments due to subcontractors.
To PAMI Ryan's benefit, ABM mobilized immediately; worked diligently to complete the clean-up, restoration and security services necessary for the project; performed its obligations completely and to the satisfaction of ABM; and achieved the project's goals. ABM and its subcontractors substantially performed all of ABM's obligations under the Agreement.
On July 9, 2008, ABM billed PAMI Ryan approximately $4.3 million for services rendered pursuant to the Agreement. PAMI Ryan refused to pay the entire bill. PAMI Ryan presently owes ABM approximately $3.9 million plus costs, interest and attorneys' fees.
BADK is one of ABM's subcontractors. Pursuant to a written contract, BADK agreed to furnish labor and materials at the Real Estate. From June 17, 2008 through July 4, 2008, BADK provided such labor and materials.
The total cost of BADK's labor and materials was approximately $1.5 million. Because PAMI Ryan failed to pay ABM in full, ABM failed to pay BADK in full. ABM owes BADK approximately $1.3 million. BADK demanded payment from PAMI Ryan, but PAMI Ryan refused.
On August 8, 2008, ABM filed an Amended Mechanic's Lien (docket no. 2-3) in the Iowa District Court in and for Linn County ("the Iowa District Court"). See ABM v. PAMI Ryan et al., No. LNLN021181 (filed Aug. 1, 2008). Pursuant to Iowa Code § 572.8 (2007), ABM asserted a mechanic's lien in the approximate amount of $3.9 million plus interest, costs and attorneys' fees against ABM's fee and leasehold interests in the Real Estate.4
On September 19, 2008, BADK filed an Amended Mechanic's Lien (docket no. 2-7 in case no. 08-CV-123-LRR) in the Iowa District Court. See BADK v. PAMI Ryan, No. LNLN021194 (filed Aug. 11, 2008). BADK asserted a mechanic's lien in the approximate amount of $1.3 million plus interest, costs and attorneys' fees against ABM's fee and leasehold interests in the Real Estate.
On September 19, 2008, ABM filed a two-count Amended Complaint (docket no. 7) in this court against PAMI Ryan. In Count I, ABM seeks foreclosure of ABM's fee and leasehold interests in the Real Estate, pursuant to Iowa Code chapter 572. In Count II, ABM seeks pre-judgment attachment by garnishment of all rent payments due to PAMI Ryan, pursuant to Iowa Code chapter 639. ABM invoked this court's diversity jurisdiction, 28 U.S.C. § 1332(a)(1).
On October 10, 2008, PAMI Ryan filed an Answer (docket no. 9) to the Amended Complaint, in which it denied the substance of ABM's allegations. PAMI Ryan also asserted four affirmative defenses, including that "[t]he Amended Complaint violates Iowa Code [c]hapter 572's prohibition on joining other causes of action with a mechanic's lien foreclosure cause of action." Answer (docket no. 9), at 6.
On September 10, 2008, BADK filed a "Petition to Foreclose Mechanic's Lien" ("Petition") (docket no. 2-4 in case no. 08-CV-123-LRR) in the Iowa District Court. Although the Petition did not contain any formal counts and did not cite any statutory authority, BADK sought (1) foreclosure of its mechanic's lien upon PAMI Ryan's fee interests in the Real Estate and (2) "appointment of a Receiver to take charge of the Real Estate during the period of foreclosure for the purpose of investigating the status of the Real Estate for the benefit of all concerned." Petition at 4.
On the same date, BADK filed an "Application for Appointment of Receiver and Request for Immediate Hearing" ("Application") (docket no. 2-5 in case no. 08-CV-123-LRR). Invoking Iowa Code § 680.1, BADK requested that the court appoint "Heritage Associates Corporation, a local commercial and investment real estate company with previous receivership experience, to serve as receiver in this matter." Application at 3. BADK represented to the court that failure to appoint a receiver would cause BADK irreparable harm, because "[t]he Real Estate, and any rents and profits and insurance and government benefits therefrom, are in danger of being lost, severely injured or impaired through the actions and inactions of [PAMI Ryan] in restoring the [Real Estate] and in failing to make payments when due." Id. at 2. The Iowa District Court immediately granted the Application in part and set a hearing on the merits of the Application for October 16, 2008.
On September 29, 2008, BADK filed an Amended Petition (docket no. 2-7 in case no. 08-CV-123-LRR). The Amended Petition is in all relevant respects identical to the Petition, except that in the Amended Petition BADK also sought foreclosure of PAMI Ryan's leasehold interests in the Real Estate.
On October 7, 2008, PAMI Ryan removed the Amended Petition to this court, pursuant to 28 U.S.C. § 1441(a). PAMI Ryan invoked this court's diversity jurisdiction, 28 U.S.C. § 1332(a)(1). The court granted the Application in part and set a hearing on the merits of the Application for October 16, 2008. On October 15, 2008, PAMI Ryan filed an "Answer and Resistance to Application for Appointment of Receiver" (docket no. 18).5
On October 20, 2008, PAMI Ryan filed an Answer (docket no. 30) to the Amended Petition, in which it denied the substance of BADK's allegations. PAMI Ryan also asserted three affirmative defenses, including that the Amended Petition and the Application "violate Iowa Code [c]hapter 572's prohibition on joining other causes of action with a mechanic's lien foreclosure cause of action." Answer (docket no. 30), at 2.
On October 10, 2008, PAMI Ryan filed a motion to consolidate the two foreclosure cases before the court. PAMI Ryan averred that the two cases involved common questions of law and fact and concluded that the court should consolidate them, pursuant to Federal Rule of Civil Procedure 42(a). Because BADK was one of ABM's subcontractors, PAMI Ryan concluded that "the work and amounts at issue in [BADK]'s case are entirely subsumed in ABM's case and are being claimed by ABM in its case." Motion to Consolidate (docket no. 10), at 2. On October 14, 2008, the court consolidated the two foreclosure actions for the sake of judicial efficiency. Fed.R.Civ.P. 42(a).
On October 10, 2008, PAMI Ryan filed the Motion. On October 15, 2008, BADK filed a Resistance (docket nos. 20 & 21) to the Motion. On October 16, 2008, ABM filed a Resistance (docket no. 24) to the Motion.6
On October 16, 2008, the court held a Hearing on the Motion. Attorneys Jeffrey A. Stone and Roger W. Stone represented ABM. Attorney Debra Rectenbaugh Pettit represented BADK. Attorneys Stephen D. Marso, Gary F. Eisenberg and Laura S. Halbreich represented PAMI Ryan.
At the Hearing, the court denied the Motion. The court indicated, however, that it would file the instant Order to explain more fully the reasons for its decision.
The court holds that it has diversity subject-matter jurisdiction over the instant consolidated cases. 28 U.S.C. § 1332(a)(1). ABM is a California corporation with its principal place of business in Texas. BADK is a Florida corporation with its principal place of business in Florida. PAMI Ryan is a Delaware corporation with its principal place of business in New York. The amount in controversy exceeds $75,000.
In the Motion, PAMI Ryan asks the court to strike the Application. PAMI Ryan argues that the Application violates Iowa Code § 572.26, which provides that "[a]n action to enforce a mechanic's lien shall be by equitable proceedings, and no other cause of action shall be joined therewith." Iowa Code § 572.26. PAMI Ryan contends that the Application is a "cause of action," and thus concludes that BADK is impermissibly attempting to join another cause of action to its action to enforce its mechanic's lien.
ABM and BADK both resist the Motion, but they do...
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First Bank Business Capital v. Agriprocessors, Inc.
...action."); ABM Janitorial Servs.-N. Central, Inc. v. PAMI Ryan Town Centre LLC, Nos. 08-CV-100-LRR & 08-CV-123-LRR, 601 F.Supp.2d 1111, 1116-17, 2008 WL 4690597, *5 (N.D.Iowa Oct. 22, 2008) (holding application for receiver in a complaint is not a "cause of 2. Other attachments not previous......