Curry v. U.S. Bulk Transport, Inc.

Decision Date05 September 2006
Docket NumberNo. 05-4218.,05-4218.
Citation462 F.3d 536
PartiesFloyd CURRY, Plaintiff-Appellant, v. U.S. BULK TRANSPORT, INC. et al., Defendants-Appellees.
CourtU.S. Court of Appeals — Sixth Circuit

L. Christopher Coleman, Steuer, Escovar, Berk & Brown, Cleveland, Ohio, for Appellant. John B. Stalzer, Reminger & Reminger, Cleveland, Ohio, for Appellees.

ON BRIEF:

L. Christopher Coleman, Steuer, Escovar, Berk & Brown, Cleveland, Ohio, for Appellant. John B. Stalzer, Brian D. Sullivan, Frank Leonetti III, Reminger & Reminger, Cleveland, Ohio, for Appellees.

Before: MOORE and GIBBONS, Circuit Judges; ACKERMAN, District Judge.*

OPINION

KAREN NELSON MOORE, Circuit Judge.

Plaintiff-Appellant Floyd Curry brought this suit to recover damages resulting from injuries he sustained in an accident when a truck carrying potassium sulfate overturned in the warehouse in which Curry worked. Curry alleges that Defendants-Appellees U.S. Bulk Transport, Inc., David Priddy, and Eric Susman negligently operated and covered the truck, thereby causing his injuries. The district court granted summary judgment to defendants, finding that Curry had not provided any evidence that defendants were negligent. Curry appeals, arguing that genuine issues of material fact preclude summary judgment. During review of our jurisdiction to hear this appeal, it became apparent that complete diversity was destroyed when Priddy and Susman were identified and substituted as nondiverse defendants, with the result that the district court lacked subject-matter jurisdiction over this suit. We therefore REMAND Curry's lawsuit to the district court with instructions to remand to the state court from which removal was granted.

I. BACKGROUND

The following facts are undisputed. On April 3, 2002, Plaintiff-Appellant Curry was on the job as a warehouse manager at American Metal Chemical Corporation in Medina, Ohio. Joint Appendix ("J.A.") at 36 (Fourth Amd. Compl. at 2); J.A. at 96 (Curry Dep. at 17). Curry was in charge of inventory at the warehouse, and it was his job to direct incoming trucks making deliveries and to show the drivers where in the warehouse incoming truck loads should be dumped. On that morning, Defendant-Appellee Priddy arrived at the warehouse driving a Freightliner truck loaded with potassium sulfate. Defendant-Appellee Susman owned the truck that Priddy was driving, and Defendant-Appellee U.S. Bulk Transport was the lessee of the truck.

When Priddy pulled the truck into the warehouse that day, Curry directed Priddy to dump the potassium sulfate in the area of the warehouse designated for raw materials. While Priddy was in the truck's driver's seat, Curry stood behind the truck and directed Priddy to raise the truck bed and dump the material. Curry observed that after Priddy raised the truck bed, a significant quantity of the potassium sulfate in the truck adhered to the truck's bed instead of falling out of the truck. When gravity failed to dislodge the adhering material, Curry moved to the side of the truck so that he could approach Priddy to tell him that the material was stuck to the truck. Curry incorrectly believed that the truck was equipped with a vibrator that could be used to shake a load loose, and so Curry intended to tell Priddy to vibrate the truck bed so the material would fall out. While Curry was beside the truck, he "heard metal under stress," and looked up to see that the truck bed was falling over towards him. J.A. at 97 (Curry Dep. at 18). Curry scrambled to get out of the way of the falling bed, and ran towards the back of the truck. Curry escaped from the path of the falling truck bed, but stumbled over some chunks of potassium sulfate that had fallen from the load and fell on his knee and elbows, sustaining injuries that required surgery.

Curry filed suit in the Court of Common Pleas for Cuyahoga County, Ohio, in April 2004, naming U.S. Bulk Transport1 as well as four John Doe defendants (the truck driver, the truck driving company, the truck owner, and the loading company, all of whose names were then unknown to Curry) and alleging three counts of negligence. J.A. at 10-15 (Amd.Compl.). U.S. Bulk Transport filed a notice of removal in the United States District Court for the Northern District of Ohio on July 20, 2004, invoking diversity jurisdiction. Diversity exists between Curry and U.S. Bulk Transport, because Curry is a citizen of Ohio, and U.S. Bulk Transport is a Pennsylvania corporation with its principal place of business in Pennsylvania. J.A. at 7 (Notice of Removal). In January 2005, the district court granted Curry's motion to file a third amended complaint, which identified and added Priddy and Susman, both citizens of Ohio, as defendants in place of two previous John Doe defendants. J.A. at 27-28 (Third Amd. Compl. at 2-3). Neither party filed a motion to remand to state court for lack of complete diversity or took any other steps to notify the district court of the potential problem of subject-matter jurisdiction.

Defendants moved for summary judgment on May 20, 2005, but the following month the parties filed a joint motion for an extension of the deadline for filing Curry's brief in opposition to summary judgment so that the parties could proceed with discovery. Curry filed his opposition to defendants' summary-judgment motion on August 1, 2005. Defendants filed a reply to Curry's opposition motion on August 5, 2005. On August 18, 2005, Curry filed a motion for leave to file a fourth amended complaint, which the court granted on August 23, 2005. Dist. Ct. Docket at R.29. Curry's fourth amended complaint removed the remaining John Doe defendants and also eliminated the third count of his complaint, leaving only Count 1 (negligent operation of the truck during dumping) and Count 2 (negligent loading and tarping of the load). J.A. at 35 (Fourth Amd. Compl.). On August 26, 2005, the district court granted summary judgment to the three defendants on both counts, concluding that there was "absolutely no evidence whatsoever that any [of] the Defendants were negligent in operating or maintaining the vehicle," and that Curry had not produced any evidence that Priddy's use of a tarp to cover the potassium sulfate was negligent. J.A. at 47-48 (Dist. Ct. Mem. Op. at 9-10). Curry filed a timely notice of appeal.

II. ANALYSIS

After U.S. Bulk Transport filed a notice of removal, the district court assumed diversity jurisdiction over this case under 28 U.S.C. § 1332. At that time, the only defendant identified by name in Curry's first amended complaint was U.S. Bulk Transport. The remaining defendants were merely identified as John Does, and their citizenship was unknown. Curry is a citizen of Ohio, and U.S. Bulk Transport is a citizen of Pennsylvania, as it is a Pennsylvania corporation with its principal place of business in Pennsylvania. J.A. at 7 (Notice of Removal). There is no question, therefore, that at the moment of removal, complete diversity existed between the identified parties, and the district court properly exercised diversity jurisdiction. See Jerome-Duncan, Inc. v. Auto-By-Tel, L.L.C., 176 F.3d 904, 907 (6th Cir.1999) ("In order for a defendant to remove a case to federal court based upon diversity jurisdiction, there must be complete diversity of citizenship both at the time that the case is commenced and at the time that the notice of removal is filed.").

In January 2005, however, the district court granted Curry's motion to file a third amended complaint. This amended complaint added Priddy and Susman as nondiverse defendants, as both men, like Curry, are citizens of Ohio. J.A. at 27-29 (Third Amd. Compl. at 1-3). Curry explained at oral argument that he did not learn the identities of Priddy and Susman until discovery, and defendants agreed and conceded that there was no improper motive on Curry's behalf regarding this delay in identifying the parties. Yet upon the substitution of Priddy and Susman for two John Doe defendants in the complaint and the realization that there were then Ohio citizens on both sides of the lawsuit, neither party raised before the district court the issue of whether the district court's diversity jurisdiction remained valid, and the court failed to reconsider its subject-matter jurisdiction sua sponte.2 See Owens v. Brock, 860 F.2d 1363, 1367 (6th Cir.1988) ("[D]efects in subject matter jurisdiction cannot be waived by the parties and may be addressed by a court on its own motion at any stage of the proceedings."). Upon review, we conclude that the district court should have dismissed the case for lack of subject-matter jurisdiction upon granting Curry's motion to amend the complaint to include Priddy and Susman.

"Diversity of citizenship, the basis for jurisdiction in the present case, exists only when no plaintiff and no defendant are citizens of the same state." Jerome-Duncan, Inc., 176 F.3d at 907. The general rule is that diversity is determined at the time of the filing of a lawsuit. See Smith v. Sperling, 354 U.S. 91, 93 & n. 1, 77 S.Ct. 1112, 1 L.Ed.2d 1205 (1957). Notwithstanding this general rule, persuasive authority counsels that in a situation such as this where an amended complaint is filed to include the identity of a previous unidentified defendant, diversity must be determined at the time of the filing of the amended complaint. As the leading civil procedure treatise explains:

Although jurisdiction will not be ousted by a subsequent change in parties who are ancillary to the suit and whose presence . . . is not essential to an adjudication on the merits, a change in parties that goes to the very essence of the district court's ability to adjudicate the merits of the dispute effectively — most notably the addition of indispensable parties — may destroy it. The cases indicate that the court will take account of whether the plaintiff has been dilatory or is trying to destroy diversity, whether the...

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