Van Beek v. Ninkov
| Decision Date | 02 June 2003 |
| Docket Number | No. C 03-014-MWB.,No. C 03-4017-MWB.,C 03-014-MWB.,C 03-4017-MWB. |
| Citation | 265 F.Supp.2d 1037 |
| Parties | Ronald VAN BEEK and Janet Van Beek, Plaintiffs, v. Dusan NINKOV and Zora Ninkov, Defendants. Van Beek Global/Ninkov, L.L.C., and R & J Van Beek, L.L.C., Plaintiffs, v. Dusan Ninkov, Defendant. |
| Court | U.S. District Court — Northern District of Iowa |
MEMORANDUM OPINION AND ORDER REGARDING PLAINTIFF'S MOTION TO REMAND AND DEFENDANT'S MOTION TO DISMISS STAY OR TRANSFER
I. INTRODUCTION AND BACKGROUND 1039
II. LEGAL ANALYSIS 1040
A. The Iowa Case 1040
1. Standards And Procedures Of Removal Jurisdiction 1040
2. Complete Diversity 1041
B. The Federal Case 1043
1. The Local Action Rule 1043
2. Determination If Claims Here Are Local Or Transitory 1045
III. CONCLUSION 1046
On February 13, 2003, plaintiffs Ronald Van Beek and Janet Van Beek filed a complaint in this court (Case No. C03-4014-MWB) against Dusan Ninkov and Zora Ninkov ("the Federal Case"). In the Federal Case, the Van Beeks assert state common law claims against the Ninkovs for breach of contract, fraudulent misrepresentation, and failure of consideration. The Van Beeks' claims all pertain to promises and contracts made by Dusan Ninkov that he would transfer certain interests in patents in exchange for the Van Beeks transferring title in a house in San Diego, California that they owned. The Van Beeks assert that while they deeded the California property to the Ninkovs, Dusan Ninkov failed to transfer the patent rights. The Van Beeks seek a declaratory judgment that the transfer of the California property was null and void and request injunctive relief requiring the Ninkovs to transfer title to the California property back to the Van Beeks.
On February 13, 2003, plaintiffs Van Beek Global/Ninkov L.L.C. ("VBGN") and R & J Van Beek, L.L.C. filed a petition in Iowa District Court for Sioux County against defendant Dusan Ninkov ("the Iowa Case"). On March 14, 2003, defendant Ninkov removed the Iowa Case to this court (Case No. C03-4017-MWB), pursuant to 28 U.S.C. § 1441, alleging jurisdiction based on complete diversity of citizenship between the parties pursuant to 28 U.S.C. § 1332(a). Plaintiff VBGN is a limited liability company having its principal place of business in Orange City, Iowa, and has two members: Dusan Ninkov and R & J Van Beek, L.L.C. R & J Van Beek, L.L.C. is a limited liability company with two members: Ronald Van Beek and Janet Van Beek. In the Iowa Case, plaintiffs assert state common law claims against defendant Ninkov for breach of contract, fraudulent misrepresentation, negligent misrepresentation and breach of fiduciary duty. Plaintiffs allege that Ninkov breached obligations under the VBGN L.L.C. agreement by failing to make certain required capital contributions to VBGN, by overstating the value of assets he contributed to VBGN, by maintaining an interest in a competitor of VBGN, and by failing to maintain the confidentiality of VBGN information. Plaintiffs further contend that Ninkov breached an employment agreement by maintaining an interest in a competitor of VBGN, and by failing to maintain the confidentiality of VBGN information. Plaintiffs also allege that Ninkov breached an agreement to transfer his interest in VBGN to the Van Beeks. Plaintiffs also contend that Ninkov fraudulently and negligently misrepresented the availability and value of assets he contributed or was required to contribute to VBGN, the existence of patentable inventions, and his severance from his former company in the Netherlands. Finally, plaintiffs contend that Ninkov breached certain fiduciary duties he owed to VBGN and it members.
On January 16, 2003, before either the Iowa Case or the Federal Case was filed, Dusan Ninkov filed a complaint in California Superior Court for San Diego County against defendants VBGN, R & J Van Beek, L.L.C, Ronald Van Beek, and 50 John Doe defendants ("the California Case"). In the California Case, Ninkov alleges claims for breach of contract related to his employment agreement and VBGN's Limited Liability Corporation Agreement, breach of fiduciary duties by Ronald Van Beek, VBGN, and R & J Van Beek, L.L.C. concerning VBGN's Limited Liability Corporation Agreement, and breach of the California unfair business practices statute. Dusan Ninkov also seeks declaratory relief that he and his wife hold title to their house in San Diego free and clear of an interest by the defendants.
On April 4, 2003, defendants in both the Iowa Case and the Federal Case filed a Pre-Answer Motion To Dismiss, Stay Or Transfer. In the Federal Case, the Ninkovs contend that the Local Action Rule compels dismissal. The Ninkovs alternatively assert that because the California Case was filed before the Federal Case, the Federal Case should be dismissed, stayed or transferred pursuant to the First Filed Rule. The Ninkovs additionally contend that this court should stay the case under the Colorado River abstention doctrine. See Colorado River Water Conserv. Dist. v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). The Ninkovs further contend that plaintiffs have failed to plead with the particularity required by Federal Rule of Civil Procedure 9(b). Finally, defendant Zora Ninkov moves to dismiss the complaint for lack of personal jurisdiction. Plaintiffs have filed a timely response to the Ninkovs' Pre-Answer Motion To Dismiss, Stay Or Transfer.
In the Iowa Case, defendant Diisan Ninkov contends that because the California Case was filed before the Iowa Case, the Iowa Case should be dismissed, stayed or transferred pursuant to the First Filed Rule. Ninkov additionally contends that this court should stay the case under the Colorado River abstention doctrine. See Colorado River Water Conserv. Dist, 424 U.S. at 817, 96 S.Ct. 1236. Finally, defendant Ninkov contends that plaintiffs have failed to plead with the particularity required by Federal Rule of Civil Procedure 9(b). Plaintiffs have filed a timely response to defendant Ninkov's Pre-Answer Motion To Dismiss, Stay Or Transfer.
On April 14, 2003, plaintiffs in the Iowa Case filed a Motion To Remand, asserting that there is not complete diversity of citizenship between plaintiffs and defendant Dusan Ninkov, and therefore this court does not have jurisdiction pursuant to 28 U.S.C. § 1332(a). Defendant Ninkov has filed a timely response to plaintiffs' Motion To Remand.
On April 21, 2003, plaintiffs in the Federal Case filed a First Amended Complaint. As in the original complaint, the Van Beeks assert state common law claims against the Ninkovs for breach of contract, fraudulent misrepresentation, and failure of consideration. On May 5, 2003, the Ninkovs filed a Motion To Dismiss The First Amended Complaint. In their motion to dismiss, the Ninkovs reassert each of the grounds raised in their Pre-Answer Motion To Dismiss, Stay Or Transfer. Plaintiffs have filed a timely response to the Ninkovs' Motion To Dismiss The First Amended Complaint.
The court held telephonic oral arguments on the parties' pending motions on May 23, 2003. At the oral arguments, plaintiffs Ronald Van Beek, Janet Van Beek, Van Beek Global/Ninkov, L.L.C., and R & J Van Beek, L.L.C. were represented by Dennis W. Johnson and Michael C. Gilchrist of Dorsey & Whitey L.L.P., Des Moines, Iowa. Defendants Dusan Ninkov and Zora Ninkov were represented by Allen E. Fredrigill and Jeff W. Wright of Heidman, Redman, Fredregill, Patterson, Plaza, Dykstra & Prahl, L.L.P., Sioux City, Iowa. The parties have filed comprehensive briefs in support of their respective positions.
In Foslip Pharmaceuticals, Inc. v. Metabolife Int'l, Inc., 92 F.Supp.2d 891 (N.D.Iowa 2000), this court summarized the principles of subject matter jurisdiction implicated by removal and remand of cases originally filed in state court, observing that:
[S]uffice it to say that 28 U.S.C. § 1332 establishes original federal jurisdiction over actions involving "diversity of citizenship"; 28 U.S.C. § 1441(a) provides for removal to federal court of civil actions "of which the district courts of the United States have original jurisdiction"; § 1441(b) provides that actions not founded on a federal question "shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought"; § 1446 establishes the procedure for removal; and § 1447 establishes the procedures after removal and the procedures for challenging removal for lack of subject matter jurisdiction or other defect. Farmers Co-op. Elevator, Woden, Iowa v. Doden, 946 F.Supp. 718, 726 (N.D.Iowa 1996). "[W]here the district court does not have original jurisdiction for want of subject matter jurisdiction, removal is improper and the case must be remanded under the terms of § 1447(c)." Id. Furthermore, Id. (citations omitted).
Foslip Pharmaceuticals, Inc., 92 F.Supp.2d at 900-01.
Prior to Foslip, in McCorkindale v. American Home Assur. Co./A.I.C, 909 F.Supp. 646 (N.D.Iowa 1995), this court summarized the principles applicable to a motion to remand as follows: (1) the party seeking removal and opposing remand bears the burden of establishing federal subject matter jurisdiction; ...
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