National Insp. & Repairs v. George S. May Intern.

• Decision Date: 02 May 2002
• Docket Number: No. 01-2489-JAR.,01-2489-JAR.
• Citation: 202 F.Supp.2d 1238
• Parties: NATIONAL INSPECTION & REPAIRS, INC., Plaintiff, v. GEORGE S. MAY INTERNATIONAL COMPANY, and William Doane, Defendants.
• Court: U.S. District Court — District of Kansas

202 F.Supp.2d 1238

NATIONAL INSPECTION & REPAIRS, INC., Plaintiff, v. GEORGE S. MAY INTERNATIONAL COMPANY, and William Doane, Defendants.

No. 01-2489-JAR.

United States District Court, D. Kansas.

May 2, 2002.

Dan E. Turner, Turner & Turner Law Firm, Topeka, KS, for Plaintiff.

Michael J. Abrams, Blaine C. Kimrey, Lathrop & Gage L.C., Kansas City, MO, for Defendants.

MEMORANDUM AND ORDER DENYING PLAINTIFF'S MOTION TO REMAND AND GRANTING DEFENDANT'S MOTION TO TRANSFER

ROBINSON, District Judge.

Plaintiff National Inspection & Repairs, Inc. filed an action on August 27, 2001, in the District Court of Wyandotte County, Kansas against defendants George S. May International Company (GSM) and William Doane, for negligence in connection with a contract between plaintiff and GSM for management consultation services. Defendant GSM removed the action to this court on October 4, 2001. This matter comes before the Court on Plaintiff's Motion to Remand (Doc. 5) and defendant GSM's Motion to Dismiss or Transfer this case (Doc. 2).¹

Motion to Remand

A civil action is removable only if plaintiff could have originally brought the action in federal court.² The court is required to remand "if at any time before final judgment it appears that the district court lacks subject matter jurisdiction."³ Because federal courts are courts of limited jurisdiction, the law imposes a presumption against federal jurisdiction,⁴ and requires a court to deny its jurisdiction in all cases where such jurisdiction does not affirmatively appear in the record.⁵ The burden is on the party requesting removal to demonstrate that the court has jurisdiction.⁶ The court must resolve any doubts concerning removability in favor of remand.⁷

Plaintiff contends that this case should be remanded to state court because there is no diversity of citizenship supporting diversity jurisdiction in federal court. It is undisputed that plaintiff prayed for damages of $75,000 in its petition. It is also undisputed that plaintiff is a citizen of Kansas and that defendant GSM is a citizen of Delaware with its principal place of business in Illinois. The issue is the citizenship of defendant William Doane.

In its petition filed in state court, plaintiff alleged that Doane was a "resident" of Kansas and could be served at his place of employment, Rylie Equipment in Kansas City, Kansas. In fact, on August 30, 2001, Doane was personally served with the petition and summons at Rylie Equipment in Kansas. Doane had not filed an answer to plaintiff's petition and was in default status when GSM filed its Notice of Removal on October 4, 2001. In its Notice of Removal, GSM alleged that based on a discussion with Doane's employer, GSM believes that Doane is a citizen of Missouri.

In response to plaintiff's motion to remand, GSM attached two affidavits and a certified driver's license record of William Doane. One affiant, Michael J. Abrams, stated that on October 2 and October 12, 2001, he spoke with the office manager of Rylie Equipment, Doane's current employer. He was advised that Doane represented to Rylie Equipment that Doane's residential address was 312 N.E. Cedar Court in Blue Springs, Missouri. The Missouri Department of Revenue issued a certified copy of Doane's driver's license record, which showed that as of October 11, 2001, Doane's residential address was the same address on Cedar Court in Blue Springs, Missouri. Further, the Missouri Department of Revenue records reveal that this was Doane's address in March of 2001 when he applied for a commercial driver's license. Abrams affidavit further states that his review of GSM's personnel files revealed that at the time Doane terminated employment at GSM, he was residing at another address in Blue Springs, Missouri. Finally, Abrams, as well as the second affiant, Blaine C. Kimrey, stated that their respective efforts to contact Doane at the Cedar Court address by letter and in person were not successful. The letter Abrams sent got no response from Doane; when Kimrey visited the Cedar Court address, no one was home.

In seeking removal from state court to federal court, GSM has the burden of proving by a preponderance of evidence that the requirements for diversity jurisdiction are present.⁸ The defendant or defendants may remove a state court action to federal court, based on diversity of citizenship, if no defendant "is a citizen of the State in which such action is brought."⁹ In other words, removal requires complete diversity between plaintiff and the defendants.¹⁰ A person is a citizen of the state in which the person is domiciled. Domicile has two elements: the place the person resides coupled with a present intent to remain there.¹¹ In determining diversity jurisdiction, domicile is determined as of the date the complaint is filed.¹²

Plaintiff alleged in its petition in state court that defendant Doane was a resident of Kansas. Having challenged this assertion, GSM must prove that Doane is not a citizen of Kansas, thus establishing complete diversity of defendants and plaintiff. The Court finds that GSM has met that burden of proof. GSM asserted in its Notice of Removal that based on its discussions with Doane's current employer, Doane resides in Missouri. GSM further showed, in affidavits and a certified copy of Doane's driver's license record, that Doane resided in Missouri at the time he terminated his employment with GSM, that Doane represented to his current employer that he resides in Missouri, and that, as of March, 2001 and continuing through at least October, 2001, Doane had a Missouri driver's license which identified his residential address in Missouri. All of this establishes that Doane resided in Missouri on or about the time plaintiff filed its petition in state court in August 2001, and continued to reside in Missouri on or about the time GSM filed its Notice of Removal on October 4, 2001.¹³

While residency alone does not establish domicile, it does create a presumption of domicile for diversity purposes.¹⁴ The place where a person lives is assumed to be his domicile unless the evidence establishes the contrary.¹⁵ Plaintiff has done nothing to rebut this presumption or defendant's showing of domicile by affidavits and driver's license records. In State Farm Mutual Automobile Insurance Company v. Dyer,¹⁶ the Tenth Circuit considered evidence such as driver's license records as relevant to the question of domicile for diversity purposes.

Furthermore, the fact that Doane has not responded to a letter mailed to his address on Cedar Court in Blue Springs, and that no one was home when someone attempted to contact Doane there, does not rebut the presumption of domicile at his last known residential address. As the Tenth Circuit noted in State Farm, absent evidence that the defendant has taken up residence elsewhere, it is appropriate to conclude that the domicile has not changed.¹⁷

Finally, plaintiff argues that because Doane had not filed an Answer to its petition, and was in fact out of time to file an answer by the time GSM removed the action, Doane is deemed to have admitted the averment in the Petition that Doane is a resident of Kansas. In State Farm, a defendant affirmatively admitted an element of diversity, but the court rejected plaintiff's argument that such an admission served to establish diversity with respect to the other defendants, stating

We have also noted that in an answer filed through counsel for Dyer in the federal declaratory action, there was a statement that "Defendant admits for purposes of this action that he is a resident of the State of Oregon," while the remaining allegations of paragraph 2 of the complaint were denied for lack of sufficient knowledge to form a belief as to their truthfulness. While this admission may be considered against Dyer on the diversity of citizenship question, it is not admissible against Colley and the other codefendants who are challenging diversity jurisdiction in the instant case.¹⁸

Doane's failure to timely answer plaintiff's petition may serve as an admission by him to the averment that he is a citizen of Kansas, but cannot serve as an admission against the interests of GSM, who has made a showing of complete diversity of citizenship. Plaintiff's motion to remand is denied.¹⁹

Motion to Dismiss or Transfer

GSM moves for dismissal or transfer of this case to the United States District Court for the Northern District of Illinois, pursuant to a "forum selection clause" in GSM's contract with plaintiff. Forum selection clauses are "prima facie valid and should be enforced unless enforcement is shown by the resisting party to be unreasonable under the circumstances."²⁰ When construing language that limits the filing of actions, the parties' stated intent should be given effect.²¹

The clause at issue here, found in the parties' Authorization for Management Service and Method of Payment, states:

12) It is expressly agreed that this printed document embodies the entire agreement of the parties in relation to the subject matter of the Management Service to be rendered by the Company, and that no understandings or agreement, verbal or otherwise, in relation thereto, exist between the parties except as herein expressly set forth. It is agreed by and between the parties that jurisdiction shall vest in the State of Illinois.

As the Tenth Circuit noted in Excell, Inc. v. Sterling Boiler & Mechanical, Inc.²², some forum selection clauses are mandatory, others permissive. Mandatory forum selection clauses have language that clearly expresses that jurisdiction is appropriate only in the designated forum²³, while permissive forum selection clauses authorize jurisdiction in a particular forum, but not to the exclusion of other forums.²⁴ By way of example, the Tenth Circuit noted that a clause stating "venue for any dispute arising under or in relation to this contract shall lie only in the Seller's state and county," has been deemed mandatory;²...