Universal Truck & Equipment Co, et al v. Southworth-Milton, Inc., et al

Filing

OPINION issued by Juan R. Torruella, Appellate Judge; Kermit V. Lipez, Appellate Judge and Rogeriee Thompson, Appellate Judge. Unpublished. [15-1609]

Case: 15-1609

Document: 00117020980

Page: 1

Date Filed: 06/27/2016

Entry ID: 6012429

Not for Publication in West's Federal Reporter

United States Court of Appeals
For the First Circuit

No. 15-1609
UNIVERSAL TRUCK & EQUIPMENT COMPANY, INC.; NEW LONDON MINING
MANUFACTURING & PROCESSING, LLC; NICHOLAS E. CAMBIO,
individually and as Trustee of the Nicholas E. Cambio, Roney A.
Malafronte and Vincent A. Cambio Trust; VINCENT A. CAMBIO,
Plaintiffs, Appellants,
v.
CATERPILLAR, INC.; CATERPILLAR FINANCIAL SERVICE CORPORATION,
Defendants, Appellees,
W. FRANK BLOUNI; JOHN R. BRAZIL; DANIEL M. DICKINSON; JOHN T.
DILLON; EUGENE V. FIFE; GAIL D. FOSLER; JUAN GALLARDO; DAVID R.
GOODE; PETER A. MAGOWAN; WILLIAM A. OSBORN; JAMES W.L. OWENS;
CHARLES D. POWELL; EDWARD B. BUST, JR.; SUSAN C. SCHWAB; JOSHUA
I. SMITH; KENT ADAMS; JIM DUENSING; PETER D'AGOSTINO;
SOUTHWORTH-MILTON, INC.,
Defendants.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. William E. Smith, U.S. District Judge]

Before
Torruella, Lipez, and Thompson,
Circuit Judges.

Case: 15-1609

Document: 00117020980

Page: 2

Date Filed: 06/27/2016

Entry ID: 6012429

Richard G. Riendeau, for appellants.
A. Neil Hartzell, with whom LeClairRyan, PC was on brief, for
appellees.

June 27, 2016

Case: 15-1609

Document: 00117020980

Page: 3

Date Filed: 06/27/2016

Entry ID: 6012429

THOMPSON, Circuit Judge.
Stage Setting
Today's case involves a routine commercial-collection
matter gone awry.
recounted

The parties know the facts — some of which are

elsewhere,

see

Universal

Truck

&

Equip.

Co.

v.

Southworth–Milton, Inc., 765 F.3d 103, 105-07 (1st Cir. 2014)
("Universal I," from now on) — so a simple summary suffices.
Plaintiff

New

London

entered

into

an

installment

contract with Defendant Caterpillar Financial to buy 22 pieces of
heavy equipment for about $3.4 million.

The remaining Plaintiffs

listed in our caption signed personal guarantees of New London's
obligations.
Caterpillar

New London later defaulted on its payments.
Financial

agreed

to

renegotiate

the

But

terms.

Unfortunately, New London defaulted on those terms too.
Things

eventually

turned

litigious,

unsurprisingly.

Sprinting to Rhode Island state court, Plaintiffs sued Caterpillar
Financial, Caterpillar, Inc., Southworth (a Caterpillar-equipment
dealer),

individual

members

of

Caterpillar,

Inc.'s

board

of

directors, as well as an individual employee — Peter D'Agostino —
of Southworth.

Plaintiffs' complaint alleged claims for breach of

contract and related wrongs.
citizens.

All Plaintiffs are Rhode Island

And all Defendants are citizens of other states — all,

- 3 -

Case: 15-1609

Document: 00117020980

Page: 4

Date Filed: 06/27/2016

Entry ID: 6012429

that is, except Defendant D'Agostino, who is a Rhode Island
citizen.
Defendants Caterpillar Financial and Southworth later
counterclaimed for (among other things) breach of contract.

The

individual Defendants — including Defendant D'Agostino — moved to
dismiss the claims against them.

And the state court granted the

motion.
Before a partial final judgment could enter, see R.I.
Super. Ct. R. Civ. P. 54(b), Defendants Caterpillar Financial,
Caterpillar, Inc., and Southworth removed the case to federal court
on diversity grounds.

These corporate Defendants argued that

diversity

the

arose

after

D'Agostino from the case.

state

court

dismissed

Defendant

They also argued that they had timely

removed the case because they had filed the removal notice within
30 days of the state court's dismissal order.
Unpersuaded, Plaintiffs filed a remand motion, arguing
that removal was improper because Defendant D'Agostino's dismissal
had not "occurred as a result of" Plaintiffs' "voluntary action"
and the dismissal order "had not become final" at the time of
removal.

Defendants countered that Plaintiffs' claims against

Defendant D'Agostino had no reasonable chance of success under
state law — Plaintiffs had "fraudulently joined" him to defeat
removal (the argument continued) and so the judge should disregard
- 4 -

Case: 15-1609

Document: 00117020980

Page: 5

Date Filed: 06/27/2016

him for purposes of determining diversity.
the

fraudulent-joinder

charge,

Entry ID: 6012429

Plaintiffs disputed

insisting

that

Defendant

D'Agostino's joinder "had nothing to do with his citizenship or
any intent" on Plaintiffs' part "to thwart removal."

Agreeing

with Defendants' fraudulent-joinder thesis, the district judge
denied Plaintiffs' remand motion, see Universal I, 765 F.3d at 107
—

"there

is

not

and

was

not

a

colorable

claim

against

the

Defendant, D'Agostino," the judge stressed in his oral ruling,
"and therefore there was diversity and removal to this [c]ourt was
appropriate."
After

discovery,

all

judgment on Plaintiffs' claims.
and

Southworth

counterclaims.

also

moved

Defendants

moved

for

summary

Defendants Caterpillar Financial
for

summary

judgment

on

their

In a detailed and thoughtful order, the judge

granted Defendants' motion.

Deeming Plaintiffs' claims against

Southworth frivolous, the judge awarded Southworth its attorney
fees.

The judge later entered a partial final judgment "for

Defendant Southworth and against all Plaintiffs."

See Fed. R.

Civ. P. 54(b). Issues concerning damages for Caterpillar Financial
and attorney fees for Caterpillar Financial and Caterpillar, Inc.
remained unresolved at that time.
Plaintiffs

appealed

against

Defendant

Southworth,

challenging the judge's remand denial, grant of summary judgment,
- 5 -

Case: 15-1609

Document: 00117020980

and attorney-fees award.

Page: 6

Date Filed: 06/27/2016

Entry ID: 6012429

After oral argument here but before our

decision, Plaintiffs asked the district judge to reconsider his
remand ruling, arguing for the first time — some three years after
the judge's original ruling — that Defendants' failure to raise
their

fraudulent-joinder

theory

within

30

days

of

receiving

service of the state-court complaint (as opposed to 30 days after
Defendant D'Agostino's dismissal) made their removal improper.
Opposing

Plaintiffs'

Caterpillar

Financial

reconsideration
and

effort,

Caterpillar,

Inc.

Defendants
argued

that

Plaintiffs' appeal divested the district court of jurisdiction to
act on the motion.

They also argued that their "position is and

continues to be" that Plaintiffs' fraudulent joinder of Defendant
D'Agostino barred remand to state court.
The

district

judge

did

not

take

on

Plaintiffs'

reconsideration motion until after our Universal I decision came
down — a decision that affirmed the judge's original order denying
remand, as well as his summary-judgment and attorney-fees rulings
for Defendant Southworth.

See 765 F.3d at 105.

more to say about Universal I in just a bit.

We will have

Anyway, the judge

ended up denying Plaintiffs' reconsideration motion, noting that
he had orally denied their original remand motion after "adopting
Defendants' fraudulent joinder theory" and that Universal I's
affirmance of his earlier remand ruling required him to deny the
- 6 -

Case: 15-1609

Document: 00117020980

reconsideration request.

Page: 7

Date Filed: 06/27/2016

Entry ID: 6012429

And after concluding that "Plaintiffs'

claims presented no justiciable issues of law or fact and exhibited
bad faith," the judge entered a judgment against Plaintiffs and in
favor

of

Defendants

—

awarding

Defendant

Caterpillar,

Inc.

$68,181.89 in attorney fees and costs (relying "on either [the
court's]

inherent

power

or

Rhode

Island

law")

and

Defendant

Caterpillar Financial $2,553,203.50 in damages plus $235,192.97 in
attorney fees and costs (finding an entitlement to fees and costs
under the agreement).

The judge held Plaintiffs "jointly and

severally liable" for the judgments.
Which takes us to the present, with Plaintiffs arguing
that the judge triply erred:

Giving us a sense of déjà vu, they

contend — as they did in Universal I — that the judge stumbled by
not remanding the case to state court.1

Next they argue that the

judge blundered by granting Caterpillar Financial and Caterpillar,
Inc. summary judgment on all claims.
the

judge

slipped

by

awarding

1

And finally they argue that
Caterpillar

Financial

and

We read Plaintiffs' brief as contesting the judge's original
remand denial, not his denial of the reconsideration motion. But
even if we are wrong about that, Plaintiffs would gain nothing.
And that is because, as Defendants note, Plaintiffs based their
reconsideration argument on a new theory — that Defendants botched
matters by not raising the fraudulent-joinder theory within 30
days of service — and "a party may not, on a motion for
reconsideration, advance a new argument that could (and should)
have been presented prior to the district court's original ruling."
Cochran v. Quest Software, Inc., 328 F.3d 1, 11 (1st Cir. 2003).
- 7 -

Case: 15-1609

Document: 00117020980

Page: 8

Caterpillar, Inc. attorney fees.

Date Filed: 06/27/2016

Entry ID: 6012429

For our part, however, we see no

reason to undo what the judge did.
Remand Ruling
A defendant may remove a civil case from state to federal
court only if the federal court has "original jurisdiction" over
the action, see Universal I, 765 F.3d at 108-09 — for example, if
the parties are of diverse citizenship and the stakes exceed
$75,000, see McKenna v. Wells Fargo Bank, N.A., 693 F.3d 207, 21112 (1st Cir. 2012).

A defendant looking to remove a case must

file a notice of removal within 30 days of receiving a copy of the
initial pleading.

See Universal I, 765 F.3d at 108.

But if the

case is not removable from the get-go (because of, say, a lack of
complete diversity among the parties), the defendant must file the
removal

notice

within

30

days

of

when

the

case

"become[s]

removable" — provided the case is less than one year old.
(quoting 28 U.S.C. § 1446(b)(3)).

See id.

A case may "become removable"

in the diversity context if "through service or otherwise . . . of
a copy of an amended pleading, motion, order or other paper . . .
it may first be ascertained that" the parties' citizenship is
diverse.

2

28 U.S.C. § 1446(b)(3).2

As we said in Universal I, "[t]he parties now apparently agree
that the original asserted grounds for removal — the dismissal of
D'Agostino — was not proper because the state court decision was
not final in the sense that it was not voluntary, and still subject
to review on appeal." 764 F.3d at 108. So we did not then and do
- 8 -

Case: 15-1609

Document: 00117020980

Page: 9

Date Filed: 06/27/2016

Entry ID: 6012429

Trying yet again to get us to kibosh the judge's remand
ruling, Plaintiffs offer a kitchen-sink's worth of arguments,
though their contentions basically turn on a common theme — namely,
that Defendants waited too long to remove this action, so the judge
should have remanded the case back to state court.

But Universal

I knocks the legs out from under their theory.
There,

we

held

that

these

same

Plaintiffs

had

no

"reasonable possibility" of succeeding against the non-diverse
defendant, Defendant D'Agostino — they had thrown him in, we said,
only to defeat diversity jurisdiction.

Id.

And this "fraudulent

joinder" — a theory Defendants argued below, which the judge
"agree[d]" with — was obvious on the face of Plaintiffs' statecourt complaint.

Id. at 107, 108.

So, we added, Defendants knew

(or should have known) from the case's beginning that they could
remove the suit to federal court under diversity jurisdiction.
See id. at 108.

And that means they had to remove the case within

30 days of service. See id. They did not. See id. But Plaintiffs
had "raised no objection" below about "the timeliness of a removal
based on fraudulent joinder."

Id. at 107.

In other words, while

"[D]efendants failed to remove this lawsuit due to fraudulent

not now address whether the 30-day clock begins running on a state
court's yet-to-be-appealed or unappealed dismissal of a diversitydestroying party.
- 9 -

Case: 15-1609

Document: 00117020980

Page: 10

Date Filed: 06/27/2016

Entry ID: 6012429

joinder in a timely manner, . . . [P]laintiffs never argued" to
the district judge that Defendants' "fraudulent joinder theory was
untimely."

Id. at 109-10.

Noting that the 30-day-time limit "is

not jurisdictional" and thus can be "waive[d]" if not seasonably
raised, we found that Plaintiffs' silence below on this fraudulentjoinder issue constitutes a waiver.

Id. at 110, 111.

And with

that, we affirmed the judge's decision not to remand the removed
case to state court.
At

oral

Id. at 111, 112.

argument

in

the

present

appeal,

Plaintiffs

candidly conceded that Universal I specifically rejected the very
claims they make here about the removal's (supposed) untimeliness.
They just think that Universal I does not bind us — it is not "law
of the case" — basically because (as they see it) the panel there
got two things wrong:

first, they say the panel wrongly concluded

that they had "never argued that fraudulent joinder was untimely";
and second, they claim the panel wrongly thought that the district
judge denied the remand motion based on a finding of fraudulent
joinder.
The

law-of-the-case

doctrine

"binds

a

successor

appellate panel in a second appeal in the same case to honor fully
the original decision."

United States v. Matthews, 643 F.3d 9, 13

(1st Cir. 2011) (internal quotation marks omitted).

Of course,

like most judicial doctrines, this one has its exceptions — though
- 10 -

Case: 15-1609

Document: 00117020980

Page: 11

Date Filed: 06/27/2016

Entry ID: 6012429

the list is "short" and "narrowly cabined," see United States v.
Rivera-Martinez, 931 F.2d 148, 151 (1st Cir. 1991), only covering
situations

involving

"exceptional

circumstances,"

Almeda v. Santiago, 579 F.3d 45, 51 (1st Cir. 2009).

see

Negrón-

An important

exception (the one Plaintiffs try to invoke) provides that a
litigant can avoid the doctrine's "application . . . by showing
that

the

earlier

decision

is

blatantly

erroneous

and,

if

uncorrected, will work a miscarriage of justice," see Matthews,
643 F.3d at 14 — a hard-to-satisfy standard that requires us to
have

"a definite and firm conviction that a prior ruling on a

material matter is unreasonable or obviously wrong, and resulted
in prejudice," see United States v. Moran, 393 F.3d 1, 8 (1st Cir.
2004) (internal quotation marks omitted).
Moving from the general to the specific, we find that
this exception offers Plaintiffs no refuge. Take their first claim
of blatant error — that we wrongly concluded in Universal I that
they had "never argued that the fraudulent joinder theory was
untimely":

Hoping to give their claim an aura of plausibility,

Plaintiffs point out that they had said in their memo supporting
their remand bid that "Defendants failed to" remove the case
"within 30 days of" the case's "initiation . . . in state court."
True.

But a review of Plaintiffs' remand papers shows they did

not argue there (as they do here) that Defendants failed to timely
- 11 -

Case: 15-1609

Document: 00117020980

Page: 12

Date Filed: 06/27/2016

assert their fraudulent-joinder theory.
at 110.

Entry ID: 6012429

See Universal I, 765 F.3d

So their opening blatant-error claim misfires.
The same is true of their second blatant-error claim —

that we wrongly concluded in Universal I that the judge had
rebuffed their remand bid on fraudulent-joinder grounds:

Recall

that in opposing the remand motion, Defendants raised a fraudulentjoinder theory premised on Plaintiffs' offering no state-law basis
for recovery against Defendant D'Agostino.

Well, in words that

echoed Defendants' argument, the judge — in delivering an oral
decision denying Plaintiffs' remand motion — held that Plaintiffs
had no "colorable claim" against Defendant D'Agostino.

On top of

that, in rejecting Plaintiffs' reconsideration motion, the judge
made it crystal clear that he had indeed "adopt[ed] Defendants'
fraudulent joinder theory" in spurning Plaintiffs' remand motion.
And given this record, we cannot say that Universal I blatantly
erred in describing fraudulent joinder as the basis for the judge's
remand denial.
Because Plaintiffs have not satisfied the blatant-error
step, we need not consider whether they can satisfy the prejudice
step.3

3

What this means is that the law-of-the-case doctrine

Plaintiffs also vaguely accuse the Universal I panel of
"condon[ing]" what it calls Defendants' "'fraudulent joinder by
hindsight' tactic." But Plaintiffs say this only in the "summary
of the argument" section to their reply brief — the body of that
brief's argument section does not discuss how the panel's supposed
- 12 -

Case: 15-1609

Document: 00117020980

Page: 13

Date Filed: 06/27/2016

Entry ID: 6012429

applies here, not the narrow exception that Plaintiffs seek to
exploit.

So Plaintiffs' assault on the judge's remand ruling goes

nowhere.
Summary-Judgment and Attorney-Fee Rulings
Less need be said about Plaintiffs' challenges to the
judge's

summary-judgment

and

attorney-fee

rulings.

When

a

district judge pens a cogent, well-reasoned decision, we appellate
judges should resist the urge to put matters into our own words.
See, e.g., Moses v. Mele, 711 F.3d 213, 215-16 (1st Cir. 2013)
(noting

that

because

"starting

from

scratch

and

building

a

rationale from the ground up is sometimes an extravagant waste of
judicial resources," we have long held that when a lower-court
judge

"accurately

takes

the

measure

of

a

case,

persuasively

explains its reasoning, and reaches a correct result, it serves no
useful purpose for a reviewing court to write at length in placing
its seal of approval on the decision below"); deBenedictis v.
Brady-Zell (In re Brady-Zell), 756 F.3d 69, 71 (1st Cir. 2014)
(similar). Because this is such an instance, we affirm the judge's

"condon[ing]" brings them within the longed-for exception to the
law of the case.
Consequently we need say no more about that
subject. See, e.g., United States v. Trinidad-Acosta, 773 F.3d
298, 310 n.5 (1st Cir. 2014) (deeming waived arguments alluded to
in the brief's summary-of-the-argument section but not developed
elsewhere).
- 13 -

Case: 15-1609

Document: 00117020980

Page: 14

Date Filed: 06/27/2016

Entry ID: 6012429

summary-judgment and attorney-fee rulings for substantially the
reasons outlined in his persuasive decisions.

And that is that.

Final Words
Having

fully

considered

Plaintiffs'

many

arguments

(including some not mentioned above, because they deserve no
discussion), we let the judge's decisions stand.
Affirmed.

- 14 -