Maseda v. Honda Motor Co., Ltd., Nos. 87-5866

CourtUnited States Courts of Appeals. United States Court of Appeals (11th Circuit)
Writing for the CourtBefore HILL and FAY; FAY
Citation861 F.2d 1248
PartiesDon D. MASEDA and Maria Maseda, his wife, individually and as Guardian of Don D. Maseda, Plaintiffs, v. HONDA MOTOR COMPANY, LTD., a foreign corporation and American Honda Company, Inc., a foreign corporation, Defendants-Appellees, The Packer Corporation d/b/a Packer Pontiac of Miami, Defendant-Appellant.
Decision Date19 December 1988
Docket Number88-5015,Nos. 87-5866

Page 1248

861 F.2d 1248
Don D. MASEDA and Maria Maseda, his wife, individually and
as Guardian of Don D. Maseda, Plaintiffs,
v.
HONDA MOTOR COMPANY, LTD., a foreign corporation and
American Honda Company, Inc., a foreign
corporation, Defendants-Appellees,
The Packer Corporation d/b/a Packer Pontiac of Miami,
Defendant-Appellant.
Nos. 87-5866, 88-5015.
United States Court of Appeals,
Eleventh Circuit.
Dec. 19, 1988.

Page 1250

Betsy E. Gallagher, Robert B. Brown, III, Kubicki, Bradley, Draper, Gallagher & McGrane, P.A., Miami, Fla., for defendant-appellant.

Sharon Lee Stedman, Rumberger, Kirk, Caldwell, Cabaniss & Burke, Orlando, Fla., for Honda Motor Co., Ltd.

Appeal from the United States District Court for the Southern District of Florida.

Before HILL and FAY, Circuit Judges, and DUBINA *, District Judge.

FAY, Circuit Judge:

This appeal concerns the harmonious function of our parallel system of justice. The plaintiffs initially filed this product liability suit in state court against several defendants. One defendant cross-claimed against another defendant for indemnity. Thereafter, the plaintiffs voluntarily dismissed their claims against the cross-claimant which permitted the remaining defendants to remove the case to federal district court. The dispositive question presented by this appeal is whether the federal district court had subject matter jurisdiction after removal to rule on the cross-claim and therefore properly enjoined the state court from enforcing its subsequent ruling on the cross-claim. Because we find that the cross-claim was within the federal district court's ancillary jurisdiction and the entire case including the cross-claim was removed to the federal court, the filing of the removal petition stayed the state court proceedings and the state court was without jurisdiction to rule on the cross-claim. Further, the anti-injunction statute, 28 U.S.C. Sec. 2283, permits a federal court to enjoin a state court from proceeding in a removed case. Hence, the federal court properly enjoined the state court. In ruling on the cross-claim, however, the district court denied attorney's fees to the cross-claimant. Under Florida law, neither a settlement between the indemnitor and the plaintiff nor an indemnitee's exoneration negate the right to indemnification. Thus, the district court erred when it denied attorney fees. Therefore, we affirm in part, reverse in part and remand to the district court to assess the fees and costs due the cross-claimant/appellant.

I. Background

Plaintiffs Don and Maria Maseda of Florida filed a product liability suit in Florida

Page 1251

state court against The Packer Corporation d/b/a Packer Pontiac of Miami (Packer), a Florida corporate citizen, Honda Motor Co., Ltd. (Honda), a Japanese corporate citizen, and several other nonresident defendants. 1 Packer asserted a cross-claim against Honda for indemnity claiming that its liability would be of a vicarious nature based on its relationship with Honda as a retailer of cars manufactured by Honda. The state trial judge granted summary judgment in favor of Packer on its indemnity cross-claim and retained jurisdiction to assess attorney's fees and costs.

Eventually, the plaintiffs voluntarily dismissed their claims against Packer which enabled Honda and the remaining defendants to remove the case to federal district court on the basis of diversity jurisdiction on September 9, 1985. The parties settled just prior to trial and the plaintiffs claims were dismissed with prejudice. On July 24, 1987, Packer filed a motion in federal district court to assess attorney's fees. On August 14, 1987, Packer filed the same motion in state court. On September, 2, 1987, the district court denied Packer's motion for attorney's fees reasoning that assessing attorney's fees required a final judgment of liability against Honda. On October 27, 1987, the state trial judge held a hearing on Packer's motion. Despite Honda's argument that the prior federal court ruling on the motion constituted res judicata, the state court judge granted $72,000 in attorney's fees to Packer. In concluding the cross-claim was not subject to removal and thus had remained within its jurisdiction, the state court reasoned that Packer had been dismissed from the case by the plaintiff before removal and that Packer as a Florida corporate citizen would have destroyed the federal court's diversity jurisdiction. Further, the state court reasoned it had "reserved" jurisdiction when it issued summary judgment on the cross-claim. Two weeks later, on November 10, 1987, the federal district court heard Honda's emergency motion to enjoin the state court from enforcing its judgment for attorney's fees. The district court granted the injunction. On this appeal, Packer challenges the federal district court's: 1) jurisdiction to rule on the cross-claim; 2) injunction preventing the state court from enforcing its award of attorney's fees; 2 and 3) ruling denying attorney's fees.

II. Jurisdiction Upon Removal

When a removal petition is filed and proper notice is given, the entire case is transferred to the federal district court. IMFC Professional, Etc. v. Latin Am. Home Health, 676 F.2d 152, 158 (5th Cir.1982); 3 Argano v. Guzman Travel Advisors Corp., 621 F.2d 1371, 1375 (5th Cir.1980); Allman v. Hanley, 302 F.2d 559, 562 (5th Cir.1962); 4 Further, the remand statute, 28 U.S.C. Sec. 1447(c), provides that remand is appropriate only where the federal court lacks jurisdiction over the case. Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 96 S.Ct. 584, 46 L.Ed.2d 542 (1976). Hence, in determining the district court's authority to rule on Packer's cross-claim, we first address whether the cross-claim remained part of the case after the plaintiffs voluntarily dismissed Packer and was within the federal court's jurisdiction so that it was transferred to the federal

Page 1252

court upon removal. 5

Packer contends the cross-claim was not subject to removal since the summary judgment on indemnity and the voluntary dismissal of the plaintiffs' claims against Packer terminated its involvement in the case. In essence, Packer argues that the order granting summary judgment in which the state court reserved jurisdiction precluded the federal court from ruling on the claim. Packer misinterprets the significance of the summary judgment and voluntary dismissal. First, a federal district court may dissolve or modify injunctions, orders, and all other proceedings which have taken place in state court prior to removal. Granny Goose Foods, Inc. v. Teamsters, 415 U.S. 423, 437, 94 S.Ct. 1113, 1123, 39 L.Ed.2d 435 (1974); Ex parte Fisk, 113 U.S. 713, 5 S.Ct. 724, 28 L.Ed. 1117 (1885); 28 U.S.C. Sec. 1450. Additionally, a state court judgment in a case removed to federal court does not foreclose subsequent proceedings in the case in federal court. E.D. Sys. Corp. v. Southwestern Bell Tel. Co., 674 F.2d 453 (5th Cir.1982). 6 In this case, the state court's summary judgment on Packer's indemnity cross-claim did not foreclose a modification of that judgment by the federal court. In fact, all aspects of the claim were not conclusively decided. The state court indicated that further judicial proceedings were needed to assess the amount of attorney's fees due. Furthermore, while the state court "retained" jurisdiction over the cross-claim, this did not defeat the claim's removal since removal is within the exclusive power of the defendant. 28 U.S.C. Sec. 1441. Consequently, the district court had the authority to rule on the indemnity claim despite the state court's summary judgment.

Second, the plaintiffs' dismissal of their claims against Packer did not remove the cross-claim from the case. While it is true that a nondiverse defendant must be formally dismissed from the case to permit a subsequent removal, this in effect requires only that the plaintiff dismiss all his claims asserted against the nondiverse defendant and does not prevent the federal court from exercising ancillary jurisdiction over a third-party claim against a defendant or a cross-claim between defendants. See Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978); 7 C. Wright & A. Miller, Federal Practice and Procedure Sec. 1433

Page 1253

(1971). 8 Therefore, while the plaintiffs voluntarily dismissed their claims against Packer, Packer did not dismiss its claim against Honda and the indemnity claim remained part of the case subject to removal.

Packer also argues that if the federal district court exercises jurisdiction over its claim, the court's diversity jurisdiction will be destroyed. We disagree. Once a court has jurisdiction over a main claim, it also has jurisdiction over any claim ancillary to the main claim, regardless of the amount in controversy, citizenship of the parties or existence of a federal question in the ancillary claim. Eikel v. States Marine Lines, Inc., 473 F.2d 959, 965 (5th Cir.1973) (citing 1 Moore's Federal Practice Sec. 0.90; Scott v. Fancher, 369 F.2d 842 (5th Cir.1966); 6 C. Wright & A. Miller, Federal Practice and Procedure Sec. 1433 (1971). A cross-claim for indemnity is typically considered within the federal court's ancillary jurisdiction since it arises from the same operative facts as the main claim. Stamford Board of Education v. Stamford Education Assoc., 697 F.2d 70, 72 (2nd Cir.1982); Scott, supra, 369 F.2d at 844; see also Owen Equipment & Erection Co. v. Kroger, supra, 437 U.S. at 375, 98 S.Ct. at 2403. (jurisdiction over nonfederal claims is often upheld in situations of impleader, cross-claims or counterclaims). 9

In this case, the removal of and jurisdiction over the plaintiffs' product liability claim is not contested. With the removal of the main claim, the indemnity claim fell within the federal court's ancillary jurisdiction. Not only did the main action and cross-claim arise from the same operative facts, but they also were...

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  • In re Plowman, Bankruptcy No. 91-72472-TBB-13
    • United States
    • U.S. Bankruptcy Court — Northern District of Alabama
    • March 10, 1998
    ...the clerk of the court from which the matter was removed. 28 U.S.C. § 1446(d); Fed. R.Bankr.P. 9027(c); Maseda v. Honda Motor Co., Ltd., 861 F.2d 1248, 1251 (11th Cir.1988) (The entire case is transferred to the District Court once the removal petition is filed and appropriate notice is giv......
  • IN RE EASTERN AND SOUTHERN DISTRICTS ASBESTOS LIT., No. NYAL 4000
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • August 30, 1991
    ...evidence of state law. See, e.g., Puckett v. Tennessee Eastman Co., 889 F.2d 1481, 1485 (6th Cir.1989); Maseda v. Honda Motor Co., 861 F.2d 1248, 1256 n. 14 (11th Cir.1988); Weiss v. United States, 787 F.2d 518, 525 (10th Cir.1986) (federal courts must follow state intermediate court decisi......
  • Holmes v. Ac & S, Inc., No. CIV.A. 2:04CV7633.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)
    • December 29, 2004
    ...an ending of the case in the state court results in there being nothing to remove to federal court. See Maseda v. Honda Motor Co., Ltd., 861 F.2d 1248, 1252 n. 6 (11th Cir.1988). This general proposition, however, is subject to certain exceptions based on the nature of the proceedings in th......
  • Fed. Nat'l Mortg. Ass'n v. Milasinovich, No. CIV 15–0627 JB/WPL
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • March 30, 2016
    ...federal court necessarily divests state and local courts of their jurisdiction over a particular dispute.”); Maseda v. Honda Motor Co., 861 F.2d 1248, 1254 (11th Cir.1988) (“[A]fter removal, the jurisdiction of the state court absolutely ceases and the state court has a duty not to proceed ......
  • Request a trial to view additional results
107 cases
  • In re Plowman, Bankruptcy No. 91-72472-TBB-13
    • United States
    • U.S. Bankruptcy Court — Northern District of Alabama
    • March 10, 1998
    ...the clerk of the court from which the matter was removed. 28 U.S.C. § 1446(d); Fed. R.Bankr.P. 9027(c); Maseda v. Honda Motor Co., Ltd., 861 F.2d 1248, 1251 (11th Cir.1988) (The entire case is transferred to the District Court once the removal petition is filed and appropriate notice is giv......
  • IN RE EASTERN AND SOUTHERN DISTRICTS ASBESTOS LIT., No. NYAL 4000
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • August 30, 1991
    ...evidence of state law. See, e.g., Puckett v. Tennessee Eastman Co., 889 F.2d 1481, 1485 (6th Cir.1989); Maseda v. Honda Motor Co., 861 F.2d 1248, 1256 n. 14 (11th Cir.1988); Weiss v. United States, 787 F.2d 518, 525 (10th Cir.1986) (federal courts must follow state intermediate court decisi......
  • Holmes v. Ac & S, Inc., No. CIV.A. 2:04CV7633.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)
    • December 29, 2004
    ...an ending of the case in the state court results in there being nothing to remove to federal court. See Maseda v. Honda Motor Co., Ltd., 861 F.2d 1248, 1252 n. 6 (11th Cir.1988). This general proposition, however, is subject to certain exceptions based on the nature of the proceedings in th......
  • Fed. Nat'l Mortg. Ass'n v. Milasinovich, No. CIV 15–0627 JB/WPL
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • March 30, 2016
    ...federal court necessarily divests state and local courts of their jurisdiction over a particular dispute.”); Maseda v. Honda Motor Co., 861 F.2d 1248, 1254 (11th Cir.1988) (“[A]fter removal, the jurisdiction of the state court absolutely ceases and the state court has a duty not to proceed ......
  • Request a trial to view additional results

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