Williams v. Beyer, Civ. A. No. 78-145.

• Decision Date: 22 August 1978
• Docket Number: Civ. A. No. 78-145.
• Citation: 455 F. Supp. 482
• Parties: Jack E. WILLIAMS, d/b/a Jack E. Williams Associates v. Alexander W. BEYER.
• Court: U.S. District Court — District of New Hampshire

455 F. Supp. 482

Jack E. WILLIAMS, d/b/a Jack E. Williams Associates v. Alexander W. BEYER.

Civ. A. No. 78-145.

United States District Court, D. New Hampshire.

August 22, 1978.

David H. Bradley, Hanover, N. H., for plaintiff.

Joseph F. Daschbach, Lebanon, N. H., for defendant.

ORDER AND OPINION

DEVINE, District Judge.

On or about April 1, 1976, plaintiff Williams, a resident of Vermont, entered into a contract with defendant Beyer, a resident of New Hampshire, whereby plaintiff agreed to construct a house for defendant in Etna Village, Grafton County, New Hampshire. The contract was drafted by an attorney retained by the defendant, and contained an agreement to arbitrate as follows:

8. DISPUTE: Any dispute arising out of this Contract or the application of any provisions thereof shall be submitted to an arbitrator or arbitrators not interested in the financial aspects of this Contract. The parties may agree on one arbitrator, or may select one each and these two shall select a third. It is mutually agreed that any such arbitration award shall be binding and at the same weight as a legal adjudication of any differences between the parties.

A dispute subsequently arose between the parties, and on March 7, 1977, the plaintiff filed in the Superior Court of Grafton County a Petition For Appointment Of Arbitrator, pursuant to RSA 542:4. This petition set forth the diverse residency of the parties and indicated that the amount in controversy was $15,000. The petition was duly served upon the defendant, who filed an Answer And Cross-Petition on April 14, 1977. On June 9, 1977, the defendant filed a Petition to Attach, alleging that his counterclaim was in the amount of $30,000, and that because of the non-residence of the plaintiff, attachment of such assets as were located in New Hampshire was necessary.

RSA 542:4 provides in pertinent part:

If no method of naming arbitrators be provided, or if for any other reason there shall be a lapse in the naming of arbitrators, then upon the application of either party to the controversy the court aforesaid or the court in and for the county in which the arbitration is to be held shall designate and appoint an arbitrator or arbitrators as the case may require, who shall act under the said agreement with the same force and effect as if he or they had been specifically named therein; and, unless otherwise provided in the agreement, the arbitration shall be by a single arbitrator.

On August 19, 1977, the Superior Court of Grafton County denied the defendant's petition to attach and ordered the parties to proceed to arbitration. It was originally contemplated that arbitration would proceed before three arbitrators but, due to the illness of one arbitrator chosen, the parties agreed to proceed before a single arbitrator who held hearings and took evidence between March 15 and 17, 1978. On March 29, 1978, the arbitrator entered an award which directed that the defendant pay to the plaintiff the sum of nine thousand and twelve dollars ($9,012).

The defendant having failed to pay the arbitrator's award, the plaintiff on May 1, 1978, filed an Application For Confirmation Of Award in the Grafton County Superior Court. On May 8, 1978, defendant filed his petition and bond for removal in this court pursuant to 28 U.S.C. § 1446. On the same date defendant also filed in this court his Motion To Vacate Arbitration Award, contending that jurisdiction existed pursuant to the United States Arbitration Act (9 U.S.C. §§ 1, et seq.), and diversity of citizenship (28 U.S.C. § 1332). The basis of this motion was that the arbitrator was not impartial in that he had previous business and social relationships with the plaintiff and with the plaintiff's principal witness, had previous adverse business relationships with defendant's principal witness, had imposed an unreasonable time limit for the presentation of the defendant's case, and had imposed upon the defendant an improper burden of proof.

Plaintiff filed his motion to remand on May 12, 1978, and the matter came on for hearing before this Court on August 17, 1978.

The removal statute (28 U.S.C. § 1441) contains no express requirement as to the amount that must be in controversy before a case may be removed, but since it authorizes removal only of cases that originally might have been brought in a federal court, it follows that the jurisdictional amount requirement of $10,000 exclusive of interest and costs (28 U.S.C. § 1332) applies to removed actions to the same extent as to original actions. 14 Wright, Miller & Cooper, Federal Practice and Procedure, § 3725, p. 660. No part of the required jurisdictional amount can be met by considering a defendant's counterclaim. Id., p. 670. Inasmuch as the award here is less than the jurisdictional amount, the defendant must assert some other basis for removal.

The removal statute further provides (28 U.S.C. § 1441b) that unless the original jurisdiction of the district court is founded on a claim or right arising under the Constitution, treaties, or laws of the United States, it cannot be removed if, as here, the defendant is a citizen of the state in which the action is brought.

For a suit to be one that arises under the laws of the United States, so as to confer original or removal jurisdiction on the federal courts, it must appear on the face of the complaint that resolution of the case depends upon a federal question. . . . The fact that a defense to the action may raise a federal question, . . is immaterial. . . . It is also irrelevant that plaintiff may, in fact, have no valid state cause of action, but at best only a federal one; he is free to select the suit he will bring. . . . Brough v. United Steelworkers of America, AFL CIO, 437 F.2d 748, 749 (1st Cir. 1971) (citations omitted).

And the United States Arbitration Act (9 U.S.C. §§ 1, et seq.) does not of...