ONE SYLVAN ROAD NORTH ASSOC. v. Lark Intern., Ltd., 3:95cv400(DJS).

• Decision Date: 22 June 1995
• Docket Number: No. 3:95cv400(DJS).,3:95cv400(DJS).
• Citation: 889 F. Supp. 60
• Parties: ONE SYLVAN ROAD NORTH ASSOCIATES, Plaintiff, v. LARK INTERNATIONAL, LTD., Defendant.
• Court: U.S. District Court — District of Connecticut

889 F. Supp. 60

ONE SYLVAN ROAD NORTH ASSOCIATES, Plaintiff, v. LARK INTERNATIONAL, LTD., Defendant.

No. 3:95cv400(DJS).

United States District Court, D. Connecticut.

June 22, 1995.

Janine M. Becker, Willinger, Shepro, Tower & Bucci, Bridgeport, CT, for plaintiff One Sylvan Road North Associates, a Conn. Gen. Partnership.

James R. Hawkins, II, Patrick J. McHugh, Finn, Dixon & Herling, Stamford, CT, for defendant Lark Intern. Ltd.

MEMORANDUM OPINION AND ORDER

SQUATRITO, District Judge.

I. INTRODUCTION

This cause is now before the court on the motion to remand filed by Plaintiff, One Sylvan Road North Associates ("Sylvan"), on March 24, 1995. 28 U.S.C. § 1441(a). Document # 5.

Sylvan originally filed this action against Defendant, Lark International Limited ("Lark"), in the Connecticut Superior Court for the Judicial District of Stamford/Norwalk at Norwalk (Housing Session) on April 6, 1994. It alleges breach of a lease agreement and seeks possession of the premises in question. Lark removed the case to this court for a second time on March 7, 1995. It maintains that the court has diversity jurisdiction. 28 U.S.C. § 1332.

For the reasons stated below, the motion to remand is granted.

II. BACKGROUND

Sylvan is a Connecticut general partnership with its principal place of business in Connecticut. Notice of Removal ¶ 10. Lark is a corporation organized under the laws of the British Crown Colony of Hong Kong with its principal place of business in Hong Kong. Id.

On or about August 1, 1986, Sylvan entered into a written lease agreement with Lindblad Travel ("Lindblad") for the use and occupancy of the premises located at One Sylvan Road North or 232 Post Road West, Westport, Connecticut.¹ Lark's Memorandum at 2. On that same date, Sylvan and Lark entered into a written guarantee. Compl. (First Count) ¶ 2. Under the terms of the agreement, Lark guaranteed Lindblad's payment of rents and additional rents as required under the lease. Id. ¶ 3. Lindblad then allegedly defaulted under the terms of the lease. Id. ¶ 4.

On or about October 4, 1993, Sylvan and Lark entered into a written modification agreement. Id. ¶ 5. On or about November 29, 1993, Sylvan and Lark entered into a second modification agreement. Id. ¶ 6. Under the terms of the lease and subsequent agreements Lark obtained an option to purchase the premises in question, which are valued at in excess of $2,000,00.00. Lark's Memorandum at 4.

On February 16, 1994, Sylvan provided Lark with a written notice of default, claiming that Lark had failed to pay the February 1994 rent. Id. ¶¶ 9-10. On March 9, 1994, Sylvan served on Lark a Notice to Quit requiring that the premises be vacated. Id. ¶ 11. Nevertheless, Lark continued to claim a right to possession and a right to exercise the option. Id. ¶ 12.

On April 6, 1994, Sylvan commenced a summary process action in state court. Lark removed the case to federal district court on April 21, 1994. In a Ruling filed on August 17, 1994, United States District Judge Alfred V. Covello ("Judge Covello") granted Sylvan's first motion to remand based on a finding that the court did not have subject matter jurisdiction. In sum, he concluded that only possession of the premises was at issue and that, therefore, the amount in controversy did not exceed $50,000.00. One Sylvan Rd. Assocs. v. Lark Int'l Ltd., Civil No. 3:94-CV-655(AVC), slip op. at 4-5 (D.Conn. Aug. 17, 1994).

Subsequently, the case proceeded to trial in state court. Prior the completion of the trial, however, Lark removed the action to this court for a second time. This motion followed.

III. STANDARD OF REVIEW

On a motion to remand, the court construes all factual allegations in favor of the party seeking the remand. Metropolitan Property & Cas. Ins. Co. v. J.C. Penney Cas. Ins. Co., 780 F.Supp. 885, 887 (D.Conn.1991) (citations omitted). See R.G. Barry Corp. v. Mushroom Makers, Inc., 612 F.2d 651, 655 (2d Cir.1979). Moreover, it is well settled that defendants, as the parties removing the action to federal court, have the burden of establishing federal jurisdiction. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 37, 66 L.Ed. 144 (1921); Sullivan v. First Affiliated Secur., Inc., 813 F.2d 1368, 1371 (9th Cir.), cert. denied, 484 U.S. 850, 108 S.Ct. 150, 98 L.Ed.2d 106 (1987); Metropolitan, 780 F.Supp. at 889 (citations omitted).

IV. DISCUSSION

Lark argues remand is inappropriate because (1) a subsequent ruling by a state court judge concluded, unlike Judge Covello's ruling, that the option would be affected by the outcome of this case and therefore, the amount in controversy is in excess of $50,000.00 and (2) testimony and evidence in the subsequent state court proceedings reveal that Sylvan is in fact seeking damages in excess of $50,000.00. The court does not agree.

A. Re-Removal

The court's analysis begins by recognizing that a decision to remand for lack of subject matter jurisdiction may not be appealed. 28 U.S.C. § 1447(d); Hamilton v. Aetna Life & Cas. Co., 5 F.3d 642, 644 (2d Cir.1993) (per curiam), cert. denied, ___ U.S. ___, 114 S.Ct. 1100, 127 L.Ed.2d 413 (1994). It is axiomatic that remanding a case to state court terminates the jurisdiction of a federal district court over that case. Courts have construed 28 U.S.C. § 1447(d) as prohibiting appeals of remand orders as well as reconsiderations by district courts of their own remands based on the same grounds as the initial removal. In re La Providencia Dev. Corp., 406 F.2d 251, 253 (1st Cir.1969) ("The district court has one shot, right or wrong."). Therefore, the court cannot engage in a review of Judge Covello's prior ruling.

Nevertheless, the fact that a case was initially removed and remanded does not in of itself preclude removal a second time around. A defendant who fails in an attempt to remove on the initial pleadings can file a second removal petition when subsequent pleadings or events reveal a new and different ground for removal. Fritzlen v. Boatmen's Bank, 212 U.S. 364, 372-73, 29 S.Ct. 366, 369-70, 53 L.Ed. 551 (1909); Powers v. Chesapeake & Ohio Ry. Co., 169 U.S. 92, 102, 18 S.Ct. 264, 267-68, 42 L.Ed. 673 (1898); FDIC v. Santiago Plaza, 598 F.2d 634, 636 (1st Cir.1979); Employers Ins. of Wausau v. Certain Underwriters at Lloyds, 787 F.Supp. 165, 169 (W.D.Wis.1992).

The second paragraph of 28 U.S.C. § 1446(b) is designed to allow a defendant to remove a state action when it was not originally removable as stated by plaintiff's initial complaint, but has become removable due to the filing in state court of "an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable."² By adding the second paragraph of § 1446(b), Congress "`intended that a party be permitted successive removals.'" Feller v. National Enquirer, 555 F.Supp. 1114, 1116-17 (N.D.Ohio 1982) (citation omitted).

B. Lark's Arguments

In its first argument, Lark maintains that "subsequent actions of the state court alone may justify the denial of a motion to remand the re-removal." Lark's Memorandum at 10. Specifically, it contends that a state judge's conclusion that the instant lawsuit will affect Lark's ability to exercise its option establishes that the amount in controversy is in excess of $50,000.00.³ In support of its argument, Lark cites Central of Ga. Ry. Co. v. Riegel Textile Corp., 426 F.2d 935 (5th Cir. 1970) and Doe v. American Red Cross, 14 F.3d 196 (3rd Cir.1993).

In Central, an employee filed a Federal Employers' Liability Act ("FELA") claim against his employer, Central of Georgia Railway Co. ("Central"), in Alabama state court. Central filed a third-party complaint against Riegal Textile Corporation ("Riegal"), claiming indemnity under the terms of a track agreement. Riegal removed the case to the federal district court for the Northern District of Alabama, alleging diversity jurisdiction between it and the employer. The district court granted motions to remand by the employee and Central.

Back in state court the employee moved to strike the third party complaint on grounds that it unduly prejudiced his claim. The state court severed the third party complaint for trial purposes and set the original action for trial. Once again Riegel removed the case to federal court under 28 U.S.C. § 1441(c).⁴ The district court granted the employee's motion to remand the FELA case, but denied Central's motion and retained jurisdiction over the indemnity claim. It then certified the case for interlocutory appeal.

The Fifth Circuit affirmed the district court's conclusion that removal was appropriate under § 1441(c). The court, per Judge Godbold, concluded that "where removal would not have the effect of defeating plaintiff's choice of forum, federal courts should recognize that a party in Riegel's position is as much a `defendant' as if an original action had been brought against him." Central, 426 F.2d at 938.

In Doe, the American Red Cross ("Red Cross") and its affiliates were sued in Pennsylvania state court by plaintiffs claiming that they had contracted Acquired Immune Deficiency Syndrome ("AIDS") through contaminated blood transfusions and that their injuries were caused by negligence on the part of the Red Cross. The Red Cross removed the cases to the federal district court in the Eastern District of Pennsylvania. The cases were remanded to state court without prejudice to defendants' right to petition for re-removal should the case law of the jurisdiction change during the life span of the case, stating that removal would be proper.

Subsequently, in American National Red Cross v. S.G., 505 U.S. 247, 112 S.Ct. 2465, 120 L.Ed.2d 201 (1992), the Supreme Court held that 36 U.S.C. § 2, the "sue and be sued" provision in the Red Cross' congressional charter, conferred original jurisdiction on federal courts. Id. 257, 112 S.Ct. at 2472. In an interlocutory appeal, the Third Circuit addressed the...