Polanco v. 21 Arden Realty Corp.
| Decision Date | 01 November 1990 |
| Docket Number | No. 90 Civ. 4630 (KTD).,90 Civ. 4630 (KTD). |
| Parties | Felipa POLANCO, Petitioner, v. 21 ARDEN REALTY CORP., Harry Greenbaum, and Department of Housing Preservation and Development of the City of New York, Respondents. |
| Court | U.S. District Court — Southern District of New York |
Adele Bartlett, of counsel to Francis J. Clark, Director, Harlem Legal Services, Inc., New York City, for petitioner.
Ronald D. Hariri & Associates, New York City, for respondents.
Plaintiff Felipa Polanco, a seventy-four year old widow, originally commenced this action against defendants 21 Arden Realty Corporation ("21 Arden Realty"), Harry Greenbaum, and the New York City Department of Housing Preservation and Development ("DHPD"), seeking to compel repairs of certain conditions existing in Polanco's apartment as a result of fire, rendering the apartment uninhabitable. The Civil Court entered an order on January 23, 1990, enforcing a stipulated promise by Greenbaum, as 21 Arden Realty's agent, to repair the premises. Subsequently, the order was ignored and, by Order to Show Cause, Polanco brought on a motion for contempt of court on June 11, 1990. The hearing was adjourned until July 13, 1990. Greenbaum was thereafter declared in default for failure to answer or respond to the contempt proceeding. Greenbaum had 21 Arden Realty commence proceedings in the Bankruptcy Court, claiming that the requisite repairs were done and that the repairs had drastically affected 21 Arden Realty's finances. Greenbaum has removed the state proceedings to this court, claiming federal jurisdiction, by virtue of the bankruptcy petition and diversity of citizenship. Polanco now moves to remand the case back to the state court.
Greenbaum, the registered managing agent, and apparently the beneficial owner, of the apartment house involved here, claims diversity of citizenship in seeking removal of the state proceeding. In addition, having filed a petition in the Bankruptcy Court, Greenbaum seeks a stay of the contempt proceedings or, in the alternative, requests that I entertain the state issues in the interim. Meanwhile, Polanco, a seventy-four year old indigent widow, has continuously sought to obtain repairs in her fire-damaged uninhabitable apartment for nearly two years.
At the same time as Greenbaum and 21 Arden Realty were asserting in the state courts an absolute refusal to make the requisite repairs to Polanco's dwelling unit, statements were filed in the Bankruptcy Court, alleging substantial expense was incurred in making the very same repairs. The Bankruptcy petition was dismissed on August 13, 1990. Therefore, the sole application presently pending before this court is whether the action for contempt of the orders of the New York City Civil Court should be remanded.
In order to find jurisdiction in this court over a case started in state court, there must be a proper removal of the action and a federal question, or complete diversity and an amount in controversy in excess of $50,000. The action must be removed within a short period of time. Specifically, 28 U.S.C. § 1446(b) requires that a petition for removal be made within thirty days of service of the initial pleadings. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941). In complete disregard to the mandates of the rule, the removal was not filed until July 12, 1990, seven months after proceedings were commenced.
Additionally, it is axiomatic that all defendants in a diversity action must agree on removal and, upon obtaining consent, all must be named in the case's caption, regardless that a defendant is nominal. See R.I.P.R. Co. v. Martin, 178 U.S. 245, 20 S.Ct. 854, 44 L.Ed. 1055 (1900). Greenbaum omitted the DHPD as a defendant and no explanation was offered for that omission. Just because Greenbaum suggests now that the DHPD is merely a nominal party is of no moment. The facts belie that assertion because the DHPD appeared in the action and engaged in motion practice before the Civil Court. Yet, Greenbaum and his counsel knew that if the DHPD were included in the caption, lack of diversity of citizenship would be apparent. To delete the DHPD as a party to this action, as Greenbaum does here in order to claim diversity, constitutes a gross misrepresentation of the truth for which sanctions are warranted.1
Greenbaum avers that the bankruptcy petition, filed on July 1, 1990, stayed the state proceeding, including any motions arising therefrom for contempt. I disagree. In order to find jurisdiction based on 28 U.S.C. § 1334, I must find that the proceeding is related to the bankruptcy proceeding. To be found a related proceeding, the outcome of the proceeding sought to be removed must have an effect on the estate which is the subject of the bankruptcy petition. 28 U.S.C. § 1334 (1988); In re Consulting Actuarial Partners, Ltd. Ptn., 72 B.R. 821 (Bkrtcy.S.D.N.Y.1987). Here, Polanco withdrew her contempt proceedings against 21 Arden Realty in response to the bankruptcy stay because she did not want her action stayed.
The action sought to be removed is a contempt proceeding against Greenbaum individually; he is a non-debtor and co-respondent. The outcome of this could have no effect whatsoever on the (now dismissed) bankruptcy proceeding of the corporate respondent, 21 Arden Realty. As such, I fail to see how the bankruptcy of the corporate defendant can have any impact, staying the instant action.2 In any event the bankruptcy petition has been dismissed. Here, there is no diversity jurisdiction and no federal question jurisdiction.
Removal statutes are to be strictly construed against removal and in favor of remand. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941). Failure to comply with the time limitations for removal consistent with 28 U.S.C. § 1446 constitutes improper removal, requiring remand. Universal Motors Group of Cos. v. Wilkerson, 674 F.Supp. 1108 (S.D.N.Y.1987). The filing of notice of removal was totally without basis in fact or in law and, in addition to warranting remand, constitutes sanctionable conduct under Fed.R.Civ.P. 11 ("Rule 11"). Both Greenbaum and his then attorney, Michael Kane Esq., signed that document and are subject to the mandates of Rule 11.
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