West Coast Group Enterprises, LLC v. Darst as Trustee of G.A. Darst Equity Trust
| Decision Date | 22 September 2021 |
| Docket Number | Case No. 8:21-cv-0832-KKM-JSS |
| Citation | 561 F.Supp.3d 1180 |
| Parties | WEST COAST GROUP ENTERPRISES, LLC, Plaintiff, v. Gregory A. DARST, AS TRUSTEE OF the G.A. DARST EQUITY TRUST, Defendant, Gregory A. Darst, as Trustee of the G.A. Darst Equity Trust, Crossclaimant, v. United States of America, Crossclaim Defendant. |
| Court | U.S. District Court — Middle District of Florida |
I. Richard Terry Avis, Richard T. Avis Attorney LLC, St. Petersburg, FL, for Plaintiff.
Jeremy Allen Rill, U.S. Department of Justice, Tax Division, Washington, DC, for Crossclaim Defendant.
Gregory A. Darst, Spencerville, OH, Pro Se.
The United States, as a Crossclaim Defendant, removed this state law quiet title action between Plaintiff West Coast Group Enterprises, LLC, and Defendant Gregory A. Darst, acting as trustee of the G.A. Darst Equity Trust, to federal court on April 7, 2021. (Doc. 1.) The United States quickly moved to dismiss Darst's crossclaim for tortious inference. (Doc. 5.) Darst then moved to remand to state court on May 5, 2021. (Doc. 10.) Darst alleges that this Court lacks subject matter jurisdiction over this suit. (Id. ) The United States disagrees. (Doc. 11.) Because this Court has no jurisdiction over the crossclaim and the United States has established no other viable jurisdictional hook, this Court lacks subject matter jurisdiction and remands this action back to the Sixth Judicial Circuit, in and for Pinellas County, Florida.
Darst created the G.A. Darst Equity Trust and acquired the real property that is the subject of this quiet title action through the Darst Trust. (Doc. 1 at ¶ 5–7.) The Darst Trust sold the property to West Coast on July 14, 2009, (Doc. 1-1 at ¶ 7), apparently after the United States’ tax liens attached to the property but before the United States filed the notice of the tax liens under I.R.C. § 6323(f). (Doc. 16 at 7.)1 The sale terms required West Coast to make regular mortgage payments to the Darst Trust. (Doc. 1-1 at ¶ 10.) After the sale, "the Internal Revenue Service issued a Notice of Levy to West Coast, which required that all mortgage payments due to the Darst Trust be made to the IRS instead." (Doc. 16 at 2–3.) Importantly, West Coast failed to make the final balloon payment of the mortgage on August 1, 2014. (Doc. 1-1 at ¶¶ 12–14.)
On February 7, 2020, West Coast filed suit in the Sixth Judicial Circuit of Florida, seeking to quiet title the property. (Id. at ¶ 1.) Though West Coast knew the United States had a lien on the property, it did not name the United States as a party. (Doc. 16 at 3.) Darst filed a crossclaim against the United States but did not serve the United States. (Doc. 17 at 5 n.10.) As soon as it learned of the action, on April 7, 2021, the United States removed the action to this Court. (Doc. 16 at 3.) The United States then promptly filed motions to dismiss Darst's crossclaim, (Doc. 5), and to intervene. (Doc. 6). On May 5, 2021, Darst filed a motion to remand to state court. (Doc. 10.) On May 10, 2021, the United States filed its response in opposition. (Doc. 11.) West Coast does not oppose remand. (Doc. 15.)
Under 28 U.S.C. § 1441(a), a defendant may remove "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." Federal courts are courts of limited jurisdiction, and the removal statute must be construed narrowly, resolving any doubts against removability. When, as here, a defendant asserts jurisdiction in a notice of removal, the defendant has the burden of establishing that removal is proper. "Absent diversity of citizenship, federal-question jurisdiction is required." Caterpillar Inc. v. Williams , 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). Under 28 U.S.C. § 1331, a defendant may assert federal question jurisdiction where a civil action arises under the Constitution, laws, or treaties of the United States.
"The presence or absence of federal-question jurisdiction is governed by the ‘well-pleaded complaint rule,’ which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar Inc. , 482 U.S. at 392, 107 S.Ct. 2425 ; Merrell Dow Pharms. Inc. v. Thompson , 478 U.S. 804, 808, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986) (). The well-pleaded complaint rule means that a federal question is "presented" when the complaint—on its face—invokes federal law as the basis for relief. "Th[is] rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law." Caterpillar Inc. , 482 U.S. at 392, 107 S.Ct. 2425. The Supreme Court long ago declared that, "[b]y unimpeachable authority," a lawsuit "brought upon a state statute does not arise under an act of Congress or the Constitution of the United States." Gully v. First Nat. Bank in Meridian , 299 U.S. 109, 116, 57 S.Ct. 96, 81 L.Ed. 70 (1936).
So too, "[a] defense that raises a federal question is inadequate to confer federal jurisdiction." Merrell Dow Pharms. Inc. , 478 U.S. at 808, 106 S.Ct. 3229. Indeed, "it is now settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of pre-emption, even if the defense is anticipated in the plaintiff's complaint, and even if both parties concede that the federal defense is the only question truly at issue."
Caterpillar Inc. , 482 U.S. at 393, 107 S.Ct. 2425. This type of defensive preemption, sometimes called "ordinary preemption," is subject to the well-pleaded complaint rule. See Geddes v. Am. Airlines, Inc. , 321 F.3d 1349, 1352–53 (11th Cir. 2003). Ordinary preemption provides an affirmative defense to state-law claims but will not provide a basis for removal to federal court. See Conn. State Dental Ass'n v. Anthem Health Plans, Inc. , 591 F.3d 1337, 1343–44 (11th Cir. 2009).
Because West Coast and Darst are not of diverse citizenship, the Court can only exercise jurisdiction if federal question jurisdiction exists. If it does not, the Court must grant Darst's motion to remand to state court. See 28 U.S.C. § 1447(c). West Coast's complaint neither asserts a federal claim nor references any federal statutes on its face, including under 28 U.S.C. § 2409a. And the United States does not dispute that West Coast's complaint fails to raise an issue of federal question under the well-pleaded complaint rule.
That said, the United States asserts two grounds for subject matter jurisdiction over this action to resist Darst's motion to remand:2 (1) based on Darst's crossclaim against the United States; and (2) based on the federal government's interest in the property at issue in the state law quiet title action. Neither argument is persuasive.
In responding to West Coast's complaint, Darst brought a crossclaim against the Internal Revenue Service for tortious interference with his right of contract. (Doc. 1-2 at 8.) The United States removed, relying on 28 U.S.C. § 1442(a)(1). After removal, the United States promptly moved to dismiss Darst's crossclaim, alleging that the state court lacked subject matter jurisdiction under Rule 12(b)(1) because sovereign immunity bars Darst's tort claim.3 (Doc. 5 at 2–4.) Neither Darst nor West Coast responded to that motion; accordingly, this Court treats it as unopposed. See Local Rule 3.01(c) ().
Section 1442(a)(1) allows federal officers and agencies sued in state court to remove the action to federal court to enforce a federal defense. See Mesa v. California , 489 U.S. 121, 136, 109 S.Ct. 959, 103 L.Ed.2d 99 (1989) (). However, upon removal, the federal district court acquires only the jurisdiction that was originally vested in the state court. In other words, "if the state court lacks jurisdiction over the subject matter or the parties, the federal court acquires none upon removal, even though the federal court would have had jurisdiction if the suit had originated there." Arizona v. Manypenny , 451 U.S. 232, 242 n.17, 101 S.Ct. 1657, 68 L.Ed.2d 58 (1981) ; Lambert Run Coal Co. v. Baltimore & O.R. Co. , 258 U.S. 377, 382, 42 S.Ct. 349, 66 L.Ed. 671 (1922) (). Accordingly, if the United States is correct that the state court lacked jurisdiction over Darst's tort claim against the United States, this Court also lacks jurisdiction.
Darst's crossclaim alleges that the Internal Revenue Service tortiously interfered with his right of contract. (Doc. 1-2 at 8.) After pointing out that the state court had jurisdiction over the quiet title action because it is in rem, the crossclaim makes no effort to establish that the state court had jurisdiction over the tort claim. (Id. at 2.) Instead, Darst merely suggests that "[t]he Court can assist [him] to secure service of process on the IRS." (Id. ) This feeble attempt fails to satisfy Darst's burden of establishing subject matter jurisdiction.
Because Darst is suing the United States, he also "bears the burden of establishing that the government has waived sovereign immunity with respect to his claims." Reeves v. Belton , No. 14-60608-CIV, 2014 WL 4388145, at *2 (S.D. Fla. Sept. 5, 2014). Absent an applicable waiver, courts lack jurisdiction to adjudicate claims against the United States. See FDIC v....
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