Compassionate Pain Mgmt., LLC v. Frontier Payments, LLC
| Decision Date | 04 October 2017 |
| Docket Number | No. 17 C 5568,17 C 5568 |
| Parties | COMPASSIONATE PAIN MANAGEMENT, LLC, Plaintiff, v. FRONTIER PAYMENTS, LLC et al., Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION AND ORDER
Compassionate Pain Management, LLC ("Plaintiff") originally filed this action in the Circuit Court of Cook County, Illinois, bringing state-law claims against Frontier Payments, LLC ("Frontier"), Vouchera, LLC ("Vouchera"), Potential, LLC ("Potential"), and THC Merchant Services, LLC ("TMS") (collectively, "Defendants") related to Defendants' alleged failure to remit $134,333.99 owed to Plaintiff. (R. 1-1, State Compl.) Potential removed the action to this Court on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)(1). (R. 1, Notice of Removal.) Plaintiff moves to remand to state court, and Potential moves for leave to amend its notice of removal. (R. 13, Mot. to Remand; R. 16, Mot. to Amend.) For the reasons stated below, Plaintiff's motion to remand is granted, and Potential's motion to amend is denied. Plaintiff's request for attorney's fees and costs is denied.
Plaintiff is a Colorado limited liability company ("LLC") that operates a licensed cannabis dispensary in Louisville, Colorado. Plaintiff engaged TMS in September 2015 to find a company that could process credit and debit card sales for Plaintiff's cannabis dispensary. (Id. ¶¶ 11-12.) TMS introduced Plaintiff to Potential and Vouchera as companies that could provide such a solution, and on October 7, 2015, Plaintiff entered into a contract with Potential. (Id. ¶¶ 13-15.) The contract allegedly requires Potential to provide Plaintiff with payment processing hardware, software, and services through Vouchera and other third parties, including Frontier. (Id. ¶¶ 15-16, 19.) The contract also provides that once Vouchera processes and approves credit and debit card sales from Plaintiff's customers, Vouchera must pay Plaintiff the proceeds of those sales. (See id. ¶ 17.)
Plaintiff claims that Potential performed under the contract until approximately October 2016, when Potential, acting on Vouchera's and Frontier's behalf, allegedly refunded $14,528.25 to Plaintiff's customers in response to disputed transactions without Plaintiff's authorization or an opportunity to review the disputed transactions. (Id. ¶¶ 21-22.) Additionally, Frontier and Vouchera, acting on Potential's behalf, allegedly failed to remit $134,333.99 in credit card payments they processed for Plaintiff. (Id. ¶¶ 24-27.)
On June 29, 2017, Plaintiff filed a complaint in the Circuit Court of Cook County, Illinois, claiming conversion against all Defendants, and breach of contract and fraud against Potential, Vouchera, and TMS. (Id. ¶¶ 29-61.) Plaintiff served Potential with the complaint and summons on July 14, 2017.
On July 31, 2017, Potential filed a notice of removal. (R. 1, Notice of Removal.) Potential alleges that the parties are citizens of different states, and the amount in controversy exceeds $75,000, exclusive of interest and costs. (Id.) The notice of removal asserts, based on Potential's "information and belief," that Plaintiff is a Colorado LLC with one member who is a natural person domiciled in Colorado, and that Frontier is a Delaware LLC whose members are three natural persons domiciled in New York and Idaho. (Id. at 1-2.) Potential then claims that itis a Wyoming LLC whose sole member is a natural person domiciled in Arizona, and that Vouchera is an Illinois LLC with two members—an irrevocable trust whose trustee is domiciled in Arizona and an LLC whose sole member is a natural person domiciled in Arizona. (Id. at 1-2.) Finally, the notice of removal alleges that TMS is a Nevada LLC with two members who are natural persons domiciled in Texas and Nevada. (Id. at 2.)
Plaintiff served Frontier with the complaint and summons on July 11, 2017, three days before Plaintiff served Potential. (See R. 13, Mot. to Remand at 5; R. 18, Opp'n. to Mot. to Amend at 3; R. 23, Reply at 5; R. 24, Opp'n to Mot. to Remand at 3-4.) Potential, however, did not join Frontier in the notice of removal or procure Frontier's written consent to removal at the time Potential filed its notice of removal. (See R. 1, Notice of Removal at 1-3.)
On August 2, 2017, the Court dismissed the present action without prejudice to Plaintiff's filing of a motion to remand or an amended federal complaint. (R. 6, Min. Entry.) On August 30, 2017, Plaintiff filed its present motion to remand. (R. 13, Mot. to Remand.) In its motion, Plaintiff argues first that the notice of removal is defective because Potential alleges jurisdiction on "information and belief." (Id. at 3-4.) Plaintiff also argues that the remaining Defendants failed to timely consent to the removal in writing, as required under 28 U.S.C. § 1446(b)(2)(A). (Id. at 4-5.) Finally, Plaintiff submits that removal is improper because Vouchera is a citizen of Illinois, and 28 U.S.C. § 1441(b)(2) precludes removal if any Defendant is a citizen of the state where the state court action was brought. (Id. at 5-6.) Plaintiff claims Potential had no legitimate basis to seek removal, and therefore the Court should award Plaintiff attorney's fees and costs arising from Potential's removal. (Id. at 6-7.)
In response, Potential argues that jurisdictional allegations made on "information and belief are a curable defect. (R. 24, Opp'n to Mot. to Remand at 1-2.) Potential also contends thatTMS and Vouchera timely consented to removal, and that the Court should excuse Frontier's failure to timely consent to removal. (Id. at 2-5.) Finally, Potential maintains that Vouchera is not a citizen of Illinois such that 28 U.S.C. § 1441(b)(2) would bar removal. (Id. at 5.)
On September 6, 2017, Potential filed its present motion for leave to amend its notice of removal and attached a proposed amended notice of removal to the motion. (R. 16, Mot. to Amend; R. 16-1, Ex. 1.) In the motion, Potential concedes that its notice of removal improperly alleges jurisdictional facts based on "information and belief." (R. 16, Mot. to Amend 5.) Potential argues, however, that the proposed amended notice of removal cures ail defects in the original notice since it clarifies the citizenship of the parties and includes Frontier's consent to removal. (See id. ¶ 12.) Potential alternatively argues that the Court should allow Frontier to consent to removal, even if Frontier's consent is untimely, because the Court's dismissal of the complaint on August 2, 2017, should toll the time in which Potential can freely amend its notice of removal to include Frontier's written consent. (See id. ¶¶ 17-22.)
Potential's amended notice of removal eliminates the jurisdictional allegations made on "information and belief," and revises the allegations concerning Frontier's and TMS' citizenship. (See R. 16-1, Ex. 1.) Frontier is now alleged to be a Delaware LLC with thirteen members, twelve of which are natural persons domiciled in New York, California, Massachusetts, and Idaho, and one of which is a British private charitable company with a principal place of business in England. (Id. ¶ 11.) Potential now alleges that TMS is a Nevada LLC with only one member who is a natural person domiciled in Texas. (Id.) The amended notice of removal states that Frontier "joins in and consents to the removal of this action, as denoted by [Frontier's] signature on the last page of this Amended Notice of Removal." (Id. ¶ 10.) The last page, however, lacks any signature on Frontier's behalf. (Id. at 3.) There is a signature line on the lastPage that is intended for Frontier's Chief Executive Officer ("CEO") to sign, but he has not done so. (Id.) Instead, the only signature that appears on the amended notice is that of Potential's counsel of record. (Id.)
In response to Potential's motion to amend, Plaintiff argues that Potential's notice of removal must be signed by all of the other Defendants in this case. (R. 18, Opp'n. to Mot. to Amend at 2.) Because all of the other Defendants have still not signed or joined Potential's notice of removal, Plaintiff claims the notice is deficient. (See id. at 2-3.) Plaintiff maintains that this defect is substantive, not technical, and therefore fatal to Potential's attempt to remove this case to federal court. (Id.) Plaintiff also disputes that the Court's dismissal on August 2, 2017, tolls the remaining Defendants' obligation to consent to removal. (Id.)
In reply, Potential concedes that all previously-served Defendants must consent to removal within the thirty days following Potential's service of the summons and complaint. (See R. 23, Reply at 1-3, 5.) Potential contends that the Court should excuse Potential's failure to join Frontier in the notice of removal because Potential exercised reasonable diligence in attempting to comply with the removal statute. (Id. at 4-5.) Once Potential reviewed the process server affidavits attached to Plaintiff's motion to remand, Potential argues that it then diligently procured the other Defendants' written consent to removal. (Id. at 2-3, 5.) Potential also attached to its reply another version of its proposed amended notice of removal, this time with Frontier's CEO's signature. (R. 23-5, Ex. 5.)
"In considering a motion for remand, the court must examine the [plaintiff's] complaint at the time of the defendant's removal and assume the truth of all factual allegations contained within the original complaint." Elftmann v. Vill. of Tinley Park, 191 F. Supp. 3d 874, 878 (N.D.Ill. 2016) (citation omitted). "The removing defendant has the burden of proving the jurisdictional predicates for removal." Walker v. Trailer Transit, Inc., 727 F.3d 819, 824-25 (7th Cir. 2013). "[F]ederal courts should interpret the removal statute narrowly, resolving any doubt in favor...
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