Arena v. Graybar Elec. Co.

• Decision Date: 25 January 2012
• Docket Number: No. 10–31096.,10–31096.
• Citation: 669 F.3d 214
• Parties: Richard A. ARENA, Jr., d/b/a Water–Tite Roofing, Plaintiff–Appellee, v. GRAYBAR ELECTRIC COMPANY, INC.; Stevens Land & Construction, L.L.C., Defendants–Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

669 F.3d 214

Richard A. ARENA, Jr., d/b/a Water–Tite Roofing, Plaintiff–Appellee,

v.GRAYBAR ELECTRIC COMPANY, INC.; Stevens Land & Construction, L.L.C., Defendants–Appellants.

No. 10–31096.

United States Court of Appeals, Fifth Circuit.

Jan. 25, 2012.

Michael Scott Harper (argued), Law Offices of Thomas R. Hightower, Jr., Lafayette, LA, for Plaintiff–Appellee.

James B. Doyle, Sr. (argued), Heath Joseph Dorsey, Law Offices of James B. Doyle, A.P.L.C., Lake Charles, LA, Judith R. Blakeway, Strasburger, Prince, Oppenheimer, Blend, L.L.P., San Antonio, TX, Peter Michael Jung, Strasburger & Price, L.L.P., Dallas, TX, James Richard Mitchell, Mitchell Eaves & Klann, Leesville, LA, H. David Vaughan, II, Plauche, Smith & Nieset, L.L.C., Lake Charles, LA, for Defendants–Appellants.

Appeals from the United States District Court for the Western District of Louisiana.

Before REAVLEY, ELROD and GRAVES, Circuit Judges.

GRAVES, Circuit Judge:

This appeal arises from the district court's denial of the defendants' post-trial motions. In a bench trial, the district court dismissed the plaintiff's Miller Act claim, the basis of his federal jurisdiction, for failure to secure a bond as required by the statute. The court proceeded on plaintiff's remaining state-law contractual claims by asserting pendent jurisdiction. It found in favor of the plaintiff. After the trial concluded, the court allowed plaintiff to amend his complaint by claiming that diversity allegedly existed at the beginning of the lawsuit. The defendants urged that the court lacked subject-matter jurisdiction and could not allow plaintiff to amend his complaint. The defendants submitted new evidence challenging diversity jurisdiction. The court ruled that it properly asserted supplemental jurisdiction despite the dismissal of the Miller Act claim and dismissed the defendants' jurisdictional challenge as irrelevant. For the reasons discussed below, we VACATE and REMAND to the district court.

I. FACTS AND PROCEDURAL HISTORY

The defendant Graybar Electric Company, Inc. (Graybar)¹ contracted with Stevens Land & Construction, L.L.C. (Stevens)² to do re-roofing work for on-post military personnel housing located at the U.S. Army base at Fort Polk, Louisiana. Graybar was the principal contractor and Stevens was the sub-contractor; Stevens subsequently retained the plaintiff, Richard A. Arena d/b/a Water–Tite Roofing (Arena)³ to perform the re-roofing project. Stevens lacked experience in roofing and hired Arena to be the primary roofer. Arena did not have a written contract with either Graybar or Stevens but there was a clear understanding that Arena would perform roofing services for the project. Arena completed satisfactory work at the instruction of Graybar and Stevens. In fact, the work performed by Arena exceeded their expectations of him. Arena was not paid in full and subsequently brought this action.

Arena originally brought suit under the Miller Act, 40 U.S.C. § 3133 et seq., which provides federal question jurisdiction to the district court pursuant to 28 U.S.C. § 1331. In Arena's original complaint, he asserted proper jurisdiction based on federal question and supplemental jurisdiction. Arena conceded at the beginning of the bench trial that the defendants failed to secure a bond as required under the Miller Act. The failure to secure a bond resulted in the district court's dismissal of Arena's Miller Act claim. Therefore, Arena proceeded to trial under applicable Louisiana state-law. In March 2010, the district court entered judgment in favor of Arena on his state-law breach of contract claims, holding Graybar and Stevens liable for unpaid compensation for the work Arena provided. After the trial, the court allowed Arena to amend his complaint “to allege diversity that existed at the time of the original complaint.”

After judgment was entered, Graybar and Stevens filed a motion for a new trial pursuant to Fed.R.Civ.P. 59 and a motion to dismiss under Fed.R.Civ.P. 12(b)(1) for lack of subject-matter jurisdiction. The defendants argued that there was no jurisdiction at the time the court allowed Arena to amend his complaint to assert diversity of citizenship. Although 28 U.S.C. § 1653 and Fed.R.Civ.P. 15(a) allow amendments to cure defective jurisdictional allegations, these rules do not permit the creation of jurisdiction when none existed at the time the original complaint was filed. According to the defendants, Arena was a Louisiana citizen at the time he filed suit, not a Texas citizen. The defendants submitted a voter registration document which purports to show Arena's status as a Louisiana-registered voter or citizen until the registration was cancelled in September 2005. The original complaint was filed on May 25, 2005. The district court acknowledged the defendants' argument and newly submitted exhibit but found that defendants did not give reasons why the new evidence was not submitted before entry of judgment. Accordingly, the defendant's challenge to diversity jurisdiction was deemed irrelevant. The court asserted pendent jurisdiction over Arena's state-law claims. The court declined to consider the defendants' newly submitted evidence and ruled against their jurisdictional challenge. That ruling is now before us on appeal.

II. STANDARD OF REVIEW

The court reviews a district court's assumption of subject-matter jurisdiction de novo. PCI Transp., Inc. v. Fort Worth & W. R.R. Co., 418 F.3d 535, 540 (5th Cir.2005); see also Williams v. Wynne, 533 F.3d 360, 364 (5th Cir.2008) (holding that the court reviews dismissals for lack of subject matter jurisdiction de novo ). And, “jurisdictional findings of fact [are reviewed] for clear error.” Krim v. pcOrder.com, Inc., 402 F.3d 489, 494 (5th Cir.2005). “The burden of establishing federal jurisdiction rests on the party seeking the federal forum.” Howery v. Allstate Ins. Co., 243 F.3d 912, 919 (5th Cir.2001).

III. DISCUSSION

Before reaching the jurisdictional issues that are at the heart of this appeal, we first address defendant Graybar's untimely filing of its notice of appeal. Burnley v. City of San Antonio, 470 F.3d 189, 192 (5th Cir.2006) (holding that, “taking of an appeal within the prescribed time is mandatory and jurisdictional”) (citing Budinich v. Becton Dickinson & Co., 486 U.S. 196, 203, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988)). “A timely filed notice of appeal is an absolute prerequisite to this court's jurisdiction.” Moody Nat. Bank of Galveston v. GE Life and Annuity Assur. Co., 383 F.3d 249, 250 (5th Cir.2004) (citation omitted). Graybar was required to file its notice of appeal with the district clerk within thirty-days after the judgment on the defendants' motion for a new trial in accordance with Fed. R.App. P. 4(a)(1)(A). The court entered judgment on October 5, 2010 denying the defendants' Fed.R.Civ.P. 59 and 12(b)(1) requests for post-judgment relief. Graybar and Stevens were required to file their notices of appeal by November 4, 2010.

Defendant Stevens timely filed its notice of appeal on November 4, 2010. Graybar failed to file by this date. The Federal Rules of Appellate Procedure, however, permitted a later filing. Pursuant to Fed. R.App. P. 4(a)(3), Graybar was permitted to file its notice of appeal by November 18, 2010.⁴ The record does not show that Graybar properly filed a notice of appeal by the November 18, 2010 date. Accordingly, we dismiss Graybar from this appeal.⁵

Proper Federal Jurisdiction

Arena's original lawsuit alleged a Miller Act claim and Louisiana state-law claims. The Miller Act claim failed, however, and was dismissed by the district court at the beginning of trial. Defendants argue that the Miller Act claim's dismissal eliminated subject-matter jurisdiction over Arena's lawsuit and the court's assertion of supplemental jurisdiction over Arena's remaining state-law claims was in error.

1. The Miller Act and Federal Question Jurisdiction

Arena asserted a claim under the Miller Act as a basis for his federal question subject-matter jurisdiction. “Federal question jurisdiction arises when a plaintiff[ ] set[s] forth allegations ‘founded on a claim or right arising under the Constitution, treaties or laws of the United States.’ ” Hart v. Bayer Corp., 199 F.3d 239, 243 (5th Cir.2000) (citations omitted). “The purpose of the Miller Act is ‘to protect persons supplying labor and material for the construction of federal public buildings in lieu of the protection they might receive under state statutes with respect to the construction of nonfederal buildings.’ ” U.S. for Use and Benefit of Water Works Supply Corp., v. George Hyman Constr. Co., 131 F.3d 28, 31 (1st Cir.1997) (citing U.S. ex rel. Sherman v. Carter, 353 U.S. 210, 216, 77 S.Ct. 793, 1 L.Ed.2d 776 (1957)). The Act gives suppliers and subcontractors the right to sue a prime contractor in U.S. district court for the amount owed to them. See 40 U.S.C. § 3133(b)(1). The Act creates a right to sue when the plaintiff has “furnished labor or material in carrying out work provided in a contract for which a payment bond is furnished under § 3131 of this title ...” Id. This statutory scheme was created to protect parties such as subcontractors or suppliers who work on federal projects as state-law liens cannot be applied against federally-owned property and traditional state-law remedies are unavailable. See U.S. for Use of Gen. Elec. Supply Co. v. U.S. Fid. & Guar. Co., 11 F.3d 577, 580 (6th Cir.1993).

The Miller Act itself does not explicitly mention that a bond is necessary to maintain jurisdiction under the statute. Federal case law, however, has established that a claim under the Miller Act cannot be maintained without it. “Absent the existence of a bond, there can be no claim under the [Miller] statute.” Faerber Elec. Co., Inc. v. Atlanta Tri–Com, Inc., 795 F.Supp. 240, 244 (N.D.Ill.1992) (citing Arvanis v. Noslo Eng'g Consultants, Inc., 739 F.2d 1287, 1290 (7th Cir.1984), cert. denied, 469...