Heniford v. American Motors Sales Corp., Civ. A. No. 79-220.

CourtUnited States District Courts. 4th Circuit. United States District Court of South Carolina
Writing for the CourtAllen L. Ray, Conway, S. C., for AMSC
Citation471 F. Supp. 328
PartiesDavis O. HENIFORD, Jr., Charles E. Hodges, and W. C. Bell, individually and as stockholders of Bell Pontiac-GMC, Inc., and Bell Pontiac-GMC, Inc., a corporation, Plaintiffs, v. AMERICAN MOTORS SALES CORPORATION, and Ralph C. Cooke, Defendants.
Docket NumberCiv. A. No. 79-220.
Decision Date25 May 1979

471 F. Supp. 328

Davis O. HENIFORD, Jr., Charles E. Hodges, and W. C. Bell, individually and as stockholders of Bell Pontiac-GMC, Inc., and Bell Pontiac-GMC, Inc., a corporation, Plaintiffs,
v.
AMERICAN MOTORS SALES CORPORATION, and Ralph C. Cooke, Defendants.

Civ. A. No. 79-220.

United States District Court, D. South Carolina, Florence Division.

May 25, 1979.


471 F. Supp. 329
COPYRIGHT MATERIAL OMITTED
471 F. Supp. 330
James P. Stevens, Sr., James P. Stevens, Jr., J. Jackson Thomas, Stevens, Stevens & Thomas, Loris, S. C., Ronald L. Motley, Blatt & Fales, Barnwell, S. C., for plaintiffs

Allen L. Ray, Conway, S. C., for AMSC.

John C. Thompson, Conway, S. C., for Cooke.

471 F. Supp. 331

ORDER

CHAPMAN, District Judge.

Originally instituted in the Court of Common Pleas for the County of Horry, South Carolina, this action was removed by defendant American Motors Sales Corporation AMSC to this Court on February 2, 1979. The circumstances surrounding the removal are far from typical and present what the Court ascertains as a novel question, requiring almost a complete circumspection of the removal provisions for its resolution. The case is presently before the Court on defendant AMSC's motion for an Order asserting the jurisdiction of this Court and enjoining any further proceedings in state court, and on plaintiffs' motion to dismiss the removal petition or, in the alternative, to remand the matter.

Defendant AMSC did not perfect removal of this cause until after the jury had retired to determine a verdict in the trial of the case in state court. In an attempt to preserve the substantial verdict returned by the jury in their favor, plaintiffs have broadsided defendant's removal, challenging its sufficiency in almost every respect.

Plaintiffs brought this action against AMSC, a Delaware corporation with its principal place of business in Detroit, Michigan, and Ralph Cooke, a resident of South Carolina, alleging violations of South Carolina's statute regulating manufacturers, distributors, and dealers of motor vehicles, § 56-15-10 et seq. S.C.Code (1976). The individual plaintiffs are citizens and residents of South Carolina which is also the principal place of business and state of incorporation of the corporate plaintiff. The amended complaint alleges wrongful termination of a franchise agreement to sell AMSC's products and asserts, among other things, that AMSC worked in concert with Ralph Cooke in illegally breaching said franchise agreement. Plaintiffs allege that Ralph Cooke, a former franchisee of AMSC, performed certain acts and made certain misrepresentations to plaintiffs, the apparent and allegedly contracted successors to the dealership in dispute, causing a wrongful termination of the franchise.

At the close of the testimony in the trial of the case on Thursday, February 1, 1979, both defendants made motions for a directed verdict, which motions were denied by the court. Some discussion then transpired between the trial judge and counsel concerning the pleadings and damages, followed by the return of the jury and closing arguments. It is upon the closing argument of plaintiffs' counsel that AMSC premises its right to remove. Defendant AMSC contends that the case became one between parties of diverse citizenship when remarks by an attorney for the plaintiffs, in his closing statement, dismissed plaintiffs' claim against the sole resident defendant. The closing arguments of all three attorneys for the plaintiffs have been transcribed and supplied the Court.

All three of plaintiffs' counsel made closing statements to the jury. The first two arguments of plaintiffs' attorneys zeroed in on AMSC, completely sidestepping defendant Ralph Cooke. In arguing that the party guilty of wrongdoing was the corporate defendant, AMSC, plaintiffs' counsel, Mr. Jackson Thomas, focused the jury's attention on this same defendant with the following:

The issue is not what Mr. Heniford and what Mr. Hodges and Mr. Cooke did back in '73 or '74 when they — the issue is when Mr. W. C. Bell bought in in the early part of 1976. Did American Motors wrongfully and unlawfully, under the statute that you'll hear tomorrow, terminate, and refuse to transfer this franchise. That's the only real question before you other than damages.

Plaintiffs' counsel finally and completely isolated its true prey in the last closing statement, that of Mr. James P. Stevens, Sr.1 It is upon his statement that defendant AMSC contends plaintiffs discontinued their action against Ralph Cooke. Along with endorsing the credibility and integrity

471 F. Supp. 332
of Ralph Cooke, Mr. Stevens, Sr., in various parts of his closing argument, directed the jury as follows
Ralph Cooke is a good friend of mine. He lives in my town, but let's just see. I'm not so much worried about Ralph Cooke.
* * * * * *
Well, let's look a little bit further at Ralph. You know — and look here, don't give a verdict against Ralph. We're not actually suing Ralph because we've found out now — found out when this case come up, that Ralph was telling the truth by the records in this particular case.
* * * * * *
I don't want you to give a verdict against Ralph Cooke. No we don't want a verdict against that because we have now determined that this man is telling the truth and he has all along, . . .

The argument of Mr. Stevens, Sr., concluded Thursday's proceedings, and the trial did not commence again until 2:00 p. m. the following day, Friday, February 2, 1979. Upon the convening of the trial, Mr. Cooke's attorney, Mr. John C. Thompson, moved for a directed verdict on the ground that no verdict was asked against his client. The trial judge denied the motion. Counsel for AMSC, Mr. Allen Ray, then notified the Court that AMSC was removing the case to federal court because the statements of Mr. Stevens, Sr., in his closing argument, were tantamount to consenting to dismissal of the action against Ralph Cooke and, at that point or when the trial court denied Ralph Cooke's motion for a directed verdict, the case became removable. Mr. Ray also stated that it was AMSC's position that the state court lacked jurisdiction to proceed further unless and until the case was later remanded. AMSC's attorney handed plaintiffs' counsel a copy of the Notice of Removal and announced that an attorney in Columbia, South Carolina, was standing by to file AMSC's removal papers. A copy of these removal papers was then given the clerk in the state court.

Despite permitting Mr. Ray to make a short recitation of legal authority into the record, the state court denied his motion to abstain from further proceeding and continued with the case. The trial court charged the jury which retired for its deliberations at 3:12 p. m. AMSC's removal papers were filed in Columbia at approximately 4:25 p. m. The affidavit of Ms. Sandy Roberson, deputy clerk for the district court, shows the removal papers originally were designated "Columbia Division" but staff clerks altered them to show "Florence Division", the proper division for a case removed from Horry County. At approximately 5:00 p. m. the clerk of court in the state court filed copies of these removal papers and published notice thereof in court. After this announcement by the clerk that she had filed these papers, Mr. Ray made a statement into the record that he had handed a copy of the removal papers to counsel for the plaintiffs. The affidavits of all three of plaintiffs' counsel deny receiving anything more than a copy of the Notice of Removal. At 6:10 p. m. the jury returned a verdict in favor of the plaintiffs in the amount of $300,000 actual damages, to be doubled under § 56-15-110(1) S.C.Code (1976), and $100,000 punitive damages. The trial court later assessed $50,000 attorney fees against AMSC for a total of $750,000.

The basis for defendant AMSC's removal of the case is specified in its Petition for Removal as the following:

3. That upon completion of the trial of the case on February 1, 1979, the Plaintiff's attorney in his oral argument asked the jury not to find a verdict against the Defendant, Ralph Cooke and the Petitioner is informed and believes that there now exists complete diversity of citizenship.

Plaintiffs' counsel in their various affidavits assert that they had no authority to dismiss Ralph Cooke and opposed his motion for a directed verdict. They further aver that, in their view, the defendants had defended by pointing the finger at each other but that, immediately prior to trial when certain documents were revealed for the first time to them, it became clear AMSC was the culpable party.

471 F. Supp. 333

The instant case does not present a question of fraudulent joinder or sham defendant in the technical sense. In such cases, the issue is whether the allegations of the complaint constitute a valid claim for relief against the party allegedly fraudulently joined. Jacks v. Torrington Co., 256 F.Supp. 282, 286-287 (D.S.C.1966); Parks v. New York Times Co., 308 F.2d 474, 478 (5th Cir. 1962). Since § 56-15-40(1) creates liability for any motor vehicle dealer who engages in any action which is in bad faith and causes damage to any of the parties, plaintiffs' amended complaint alleged at least a minimal claim against the resident defendant Ralph Cooke. Thus, disregarding the problem of the sufficiency of the Petition for Removal to allege fraudulent joinder, the Court finds the present case may not be characterized as one of fraudulent joinder in the technical sense.

Rather, the provision determining the issue of whether this case was properly removable is 28 U.S.C. § 1446(b), which reads as follows:

(b) The petition for removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon
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69 practice notes
  • Entrekin v. Fisher Scientific Inc., Civil Action No. 00-4363 (MLC) (D. N.J. 6/11/2001), Civil Action No. 00-4363 (MLC)
    • United States
    • U.S. District Court — District of New Jersey
    • June 11, 2001
    ...230 (N.D. W. Va. 1988); Mike Silverman & Assocs. v. Drai, 659 F. Supp. 741, 745-47 (C.D. Cal. 1987); Heniford v. Am. Motors Sales Corp., 471 F. Supp. 328, 332-37 (D.S.C. 1979), dismissed, 622 F.2d 584 (4th Cir. 1980) (unpublished table decision); First Nat'l Bank in Little Rock v. Johnson &......
  • State Farm Fire & Cas. Co. v. Valspar Corp., No. CIV. 09–5056–JLV.
    • United States
    • U.S. District Court — District of South Dakota
    • September 24, 2010
    ...the state court, that plaintiff previously dismissed the remaining non-diverse defendant); Heniford v. American Motors Sales Corp., 471 F.Supp. 328, 334–35 (D.S.C.1979) (case became removable when plaintiff's counsel, in closing argument, admonished the jury not to enter a verdict against t......
  • Arango v. Guzman Travel Advisors Corp., No. 79-1280
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • July 25, 1980
    ...§ 1446(e); 1A MOORE'S FEDERAL PRACTICE P 0.168(.3-8), at 515-16 (2d ed. 1979). See, e. g., Heniford v. American Motors Sales Corp., 471 F.Supp. 328, 338 5 The remainder of 28 U.S.C. § 1441, the general removal statute, provides: (a) Except as otherwise expressly provided by Act of Congress,......
  • Entrekin v. Fisher Scientific Inc., No. CIV. A. 00-4363MLC.
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • June 11, 2001
    ...227, 230 (N.D.W.Va.1988); Mike Silverman & Assocs. v. Drai, 659 F.Supp. 741, 745-47 (C.D.Cal.1987); Heniford v. Am. Motors Sales Corp., 471 F.Supp. 328, 332-37 (D.S.C.1979), dismissed, 622 F.2d 584 (4th Cir.1980) (unpublished table decision); First Nat'l Bank in Little Rock v. Johnson & Joh......
  • Request a trial to view additional results
69 cases
  • Entrekin v. Fisher Scientific Inc., Civil Action No. 00-4363 (MLC) (D. N.J. 6/11/2001), Civil Action No. 00-4363 (MLC)
    • United States
    • U.S. District Court — District of New Jersey
    • June 11, 2001
    ...230 (N.D. W. Va. 1988); Mike Silverman & Assocs. v. Drai, 659 F. Supp. 741, 745-47 (C.D. Cal. 1987); Heniford v. Am. Motors Sales Corp., 471 F. Supp. 328, 332-37 (D.S.C. 1979), dismissed, 622 F.2d 584 (4th Cir. 1980) (unpublished table decision); First Nat'l Bank in Little Rock v. Johnson &......
  • State Farm Fire & Cas. Co. v. Valspar Corp., No. CIV. 09–5056–JLV.
    • United States
    • U.S. District Court — District of South Dakota
    • September 24, 2010
    ...the state court, that plaintiff previously dismissed the remaining non-diverse defendant); Heniford v. American Motors Sales Corp., 471 F.Supp. 328, 334–35 (D.S.C.1979) (case became removable when plaintiff's counsel, in closing argument, admonished the jury not to enter a verdict against t......
  • Arango v. Guzman Travel Advisors Corp., No. 79-1280
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • July 25, 1980
    ...§ 1446(e); 1A MOORE'S FEDERAL PRACTICE P 0.168(.3-8), at 515-16 (2d ed. 1979). See, e. g., Heniford v. American Motors Sales Corp., 471 F.Supp. 328, 338 5 The remainder of 28 U.S.C. § 1441, the general removal statute, provides: (a) Except as otherwise expressly provided by Act of Congress,......
  • Entrekin v. Fisher Scientific Inc., No. CIV. A. 00-4363MLC.
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • June 11, 2001
    ...227, 230 (N.D.W.Va.1988); Mike Silverman & Assocs. v. Drai, 659 F.Supp. 741, 745-47 (C.D.Cal.1987); Heniford v. Am. Motors Sales Corp., 471 F.Supp. 328, 332-37 (D.S.C.1979), dismissed, 622 F.2d 584 (4th Cir.1980) (unpublished table decision); First Nat'l Bank in Little Rock v. Johnson & Joh......
  • Request a trial to view additional results

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