Futurama Import Corp. v. Kaysons Internat'l of Miami, Inc.

• Decision Date: 23 October 1969
• Docket Number: Civ. No. 556-68.
• Parties: FUTURAMA IMPORT CORPORATION, Plaintiff, v. KAYSONS INTERNATIONAL OF MIAMI, INC.; Kaysons International Ltd.; United Factors, Division of United Merchants and Manufacturers, Inc., Defendants.
• Court: U.S. District Court — District of Puerto Rico

304 F. Supp. 999

FUTURAMA IMPORT CORPORATION, Plaintiff, v. KAYSONS INTERNATIONAL OF MIAMI, INC.; Kaysons International Ltd.; United Factors, Division of United Merchants and Manufacturers, Inc., Defendants.

Civ. No. 556-68.

United States District Court D. Puerto Rico.

October 23, 1969.

Federico A. Cordero, Condominio San Martin, Santurce, P. R., for plaintiff.

Antonio M. Bird, San Juan, P. R., for defendant, Kaysons International, Ltd.

Nachman, Feldstein, Laffitte & Smith, San Juan, P. R., for defendants.

ORDER AND MEMORANDUM OPINION

FERNANDEZ-BADILLO, District Judge.

This declaratory judgment proceeding was commenced in the Superior Court of Puerto Rico, San Juan Part, and removed to this Court on August 29, 1968 by co-defendant United Merchants and Manufacturers, Inc. (hereinafter referred to as United Merchants) on the ground that federal jurisdiction existed by reason of complete diversity of citizenship between the parties. The verified petition for removal was brought solely on behalf of United Merchants while the other two co-defendants, Kaysons International of Miami, Inc. and Kaysons International, Ltd., were not joined in said petition nor was any reason given for the failure to do so. On September 3rd, 1968 plaintiff moved to remand claiming that the controversy presented did not exceed the requisite jurisdictional amount of $10,000.00. Briefs were filed by plaintiff and by the removing party and on November 14, 1968 this Court entered an Order stating that "the sole question to be determined is whether the amount involved is sufficient to clothe this Court with jurisdiction". Satisfied that the requisite jurisdictional value was present the Motion to Remand was denied. Shortly thereafter, plaintiff moved the Court to reconsider its previous order alleging that remand was warranted for the following reasons:

(1) The jurisdictional standards had not been satisfied;

(2) 28 U.S.C. Sec. 1332, as amended, is unconstitutional; and

(3) 48 U.S.C. Sec. 863 is not applicable to the present case.

The Motion for Reconsideration came on for hearing on November 29, 1968 and argument of counsel was heard. The Court allowed time within which to file memoranda and instructed the parties to discuss in their briefs the controversy as to the applicability of 48 U.S.C. Sec. 863 and the issue of joinder of all party defendants in the petition for removal. The parties have complied with this directive and the Court, duly advised in the premises, proceeds to discuss the issue of joinder of multiple defendants in the removal petition.

It is the generally established rule that all defendants named in the complaint and which have been served must join in the petition for removal. Nowell v. Nowell, 272 F.Supp. 298 (D. C.Conn., 1967) 1 A Moore's Federal Practice, § 0.157(7) p. 266 (2nd Ed. 1965); Morales Serrano v. Playa Associates, Inc., 390 F.2d 593 (1st Cir., 1968). An exception to the general rule is the situation given when the non-joined is a non-resident defendant who has not been served in time to join in the removal petition. Norwich Realty Corp. v. United States Fire Insurance Co., 218 F.Supp. 484, 486 (D.C.Conn., 1963). Petitioner cites in its brief the case of Pullman Co. v. Jenkins, 305 U.S. 534, 59 S.Ct. 347, 83 L.Ed. 334 (1939), in support of the fact that there are exceptions to the general rule of joinder. This is certainly so. However, the Pullman case is clearly distinguishable from the case at bar and this is obvious from the very words of the Supreme Court opinion, where it is said:

"At the time of the petition for removal the Pullman porter had not yet been served with process. Where there is a non-separable controversy with respect to several non-resident defendants, one of them may remove the cause, although the other defendants have not been served with process and have not appeared. * * * In such a case there is diversity of citizenship, and the reason for the rule is stated to be that the defendant not served may never be served, or may be served after the time has expired for the defendant who has been served to apply for a removal, and unless the latter can make an effective application alone, his right to removal may be lost. * * * But the rule is otherwise where a nonseparable controversy involves a resident defendant. In that case the fact that the resident defendant has not been served with process does not justify removal by the non-resident defendant." (Emphasis supplied.)

In the instant case all three defendants are non-residents and the two non-joining defendants were served with process on the same date that the removing defendant was served.¹ Therefore, the present suit does not fall within the exception which is permissible when the non-joined defendant is a non-resident who has not been served in time to join in the petition for removal. Service of process was made on all three non-resident defendants pursuant to Rule 4.7 of the Rules of Civil Procedure for the General Court of Justice of the Commonwealth of Puerto Rico, 32 LPRA, App. II, R-4.7. The receipts for certified mail which have been annexed to plaintiff's memorandum indicate that actual notice of the complaint and summons was had by all defendants on August 16, 1968. Pursuant to said rule copies of the summons and of the initial pleading were also served upon an Assistant Secretary of State on August 20, 1968 as statutory agent of each of the three defendants. It is clear that when the petition for removal was filed on August 29, 1968 there was proof on the record that all three defendants had been served with process by way of the method of substitute service. Notwithstanding this fact there is no allegation or reason given in the removal petition which would explain why the other two defendants were not included therein. In discussing the contents of a petition for removal as required by 28 U.S.C. § 1446. Moore comments:

"It is not enough that a valid basis for removal exists. The ground(s) must be set out in the removal petition; and the petition should not leave any issue, as to the prima facie right to remove, at large. Thus where the suit involved multiple defendants and one or more of the defendants does not join in the petition, better practice dictates that the petition expressly indicate why, e. g., that he is a nominal party or was not served at the time of filing the petition." 1 A Moore's Federal Practice Sec. 0.168(3-4) pp. 1201, 1202, Second Edition.

There are situations where the removal petition has been found to be fatally defective where one or more of the defendants have been disregarded and no explanation was given for the non-joinder. Heckleman v. Yellow Cab Transit Co., 45 F.Supp. 984, 985 (E.D.Ill.1942) cited in McMahan v. Fontenot, 212 F.Supp. 812, 813, 814-815 (W.D.Ark.1963); Gratz v. Murchison, 130 F.Supp. 709, 713 (D.Del. 1955).

In its efforts to avoid remand, petitioner United Merchants contends for the first time in its memorandum that even if joinder of the other defendants were required generally in the circumstances of this case there are other reasons why remand would not be proper. Setting aside for the moment the obligation of petitioner to make proper allegations of fact in the petition for removal which would justify invoking federal jurisdiction without joining the other co-defendants, the Court deems it proper to discuss these contentions of the removing defendant.

Defendant United Merchants has claimed that "there was absolutely no way in which it could determine whether the other defendants were required to appear within the time fixed for removal since plaintiff did not comply with Rule 10.1 of the Rules of Civil Procedure for the General Court of Justice of the Commonwealth of Puerto Rico, 32 LPRA, App. II, R. 10.1". This rule, in its pertinent part, provides:

"* * * if service of process is made pursuant to Rule 4.7, the defendant shall serve an answer within a reasonable time fixed by the court, which shall not be less than 30 days after the mailing, by registered mail, of a copy of the summons and of the complaint."

No such order was obtained by plaintiff. It should be borne in mind, however, that this rule contemplates the period within which a defendant shall serve an answer in an action, that is, it deals with the appearance of a defendant after process has been made. The removal statute,² unequivocally provides that the thirty day period within which to file the petition for removal is to run from the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which the action or...