MB Financial Bank, NA v. David A. Novoselsky
Filing
Filed opinion of the court by Chief Judge Easterbrook. AFFIRMED. Appellees are entitled to legal fees for the cost of work reasonably performed in defense of the district court's decision. They have 14 days to submit a statement of these fees. Novoselsky will have 14 days to respond. Frank H. Easterbrook, Chief Judge; Daniel A. Manion, Circuit Judge and Diane S. Sykes, Circuit Judge. [6392087-3] [6392087] [11-2603]
Case: 11-2603
Document: 53
Filed: 04/24/2012
Pages: 7
In the
United States Court of Appeals
For the Seventh Circuit
No. 11-2603
MB F INANCIAL, N.A., as Guardian of the Estate of
Cristina Zvunca, a minor,
Plaintiff,
v.
JEANINE L. S TEVENS, et al.,
Defendants-Appellees.
A PPEAL OF:
D AVID A. N OVOSELSKY
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 11 C 798—Harry D. Leinenweber, Judge.
A RGUED A PRIL 12, 2012—D ECIDED A PRIL 24, 2012
Before E ASTERBROOK , Chief Judge, and M ANION and
S YKES, Circuit Judges.
E ASTERBROOK, Chief Judge. Attorney David Novoselsky,
purporting to represent MB Financial as guardian of
Cristina Zvunca’s financial interests, filed suit in a state
court against six defendants. This suit alleged, among
Case: 11-2603
2
Document: 53
Filed: 04/24/2012
Pages: 7
No. 11-2603
other things, that several of the defendants had abused
Zvunca. It had multiple problems, including the fact
that Tiberiu Klein, Zvunca’s general guardian (she is a
minor), had discharged Novoselsky as Zvunca’s lawyer.
When defendants pointed out the suit’s shortcomings,
Novoselsky dismissed the complaint—but the defendants,
who had been defamed and put to the expense of procuring dismissal, sought an award of sanctions against
Novoselsky under Illinois Supreme Court Rule 137.
Before the state court ruled on this motion, Klein filed
a motion to intervene for the purpose of requesting sanctions on Zvunca’s behalf. And before the state court
could rule on Klein’s motion, Novoselsky filed a notice
of removal to federal court under 28 U.S.C. §1441. (Our
references throughout this opinion are to the laws in
force in spring 2011, when the suit was removed. The
Federal Courts Jurisdiction and Venue Clarification Act
of 2011, Pub. L. 112–63, 125 Stat. 758 (2011), amended
28 U.S.C. §§ 1332, 1441, 1446, and several other statutes.
The President signed the 2011 Act on December 7,
2011. It went into force on January 6, 2012, and the jurisdictional changes apply only to suits begun on or
after that date. See §105 of the 2011 Act, 28 U.S.C. §1332
note.)
Within a month, and notwithstanding what the
district judge called a “deluge of motions” from
Novoselsky, the federal court remanded the proceeding
to state court. The put-upon litigants asked for an award
of attorneys’ fees for wrongful removal. See 28 U.S.C.
§1447(c). The district judge concluded that such an
award is appropriate and that Novoselsky also had vexa-
Case: 11-2603
Document: 53
Filed: 04/24/2012
No. 11-2603
Pages: 7
3
tiously multiplied the proceedings, allowing an award
under 28 U.S.C. §1927. See 2011 U.S. Dist. L EXIS 71803
(N.D. Ill. July 5, 2011). The court ordered Novoselsky
to pay $10,155 to one of the defendants and $2,432 to
another. Novoselsky has appealed. The order must be
affirmed if either §1447(c) or §1927 supports it; we
discuss only §1447(c).
Section 1447(c) authorizes an award of attorneys’ fees
when the removal was unreasonable. Martin v. Franklin
Capital Corp., 546 U.S. 132 (2005). Novoselsky’s removal
was worse than unreasonable; it was preposterous. Here
is a partial list of the problems:
•
Only a party can remove a suit to federal
court. 28 U.S.C. §1441(a), (b). A request for
sanctions does not convert a lawyer into a
party. (Nor, as a matter of Illinois law, does a
motion under Rule 137 create a new suit with
the lawyer as defendant. See Cook County v.
Triangle Sign Co., 40 Ill. App. 2d 202, 216
(1963). That’s why Novoselsky removed MB
Financial v. Stevens, the suit he originally filed,
rather than attempting to remove “Klein v.
Novoselsky” as a separate juridical unit.)
•
Among parties, only a defendant can remove
the suit. 28 U.S.C. §1441(a), (b). Novoselsky is
not a defendant; he was counsel on the plaintiff’s side. Like Klein, Novoselsky might have
moved to intervene, but he didn’t.
•
Removal requires the consent of all defendants.
See Chicago, Rock Island & Pacific Ry. v. Martin,
Case: 11-2603
4
Document: 53
Filed: 04/24/2012
Pages: 7
No. 11-2603
178 U.S. 245 (1900). (This requirement has
been codified by §103(b) of the 2011 Act,
amending 28 U.S.C. §1446(a)(2)(B).) The state
suit has six defendants, none of whom consented to removal. So even if Novoselsky
were treated as a seventh defendant, removal would be impossible.
•
When federal jurisdiction depends on diversity of citizenship, the suit “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.” 28 U.S.C. §1441(b). Section 103(a)
of the 2011 Act makes this language even
stronger. All six defendants in the state suit
are citizens of Illinois, the state in which
the action was brought—so again treating
Novoselsky as a party would not have
allowed removal, even had all of the original six defendants consented (which they
didn’t).
•
A notice of removal must be filed within
30 days of a suit’s commencement. 28 U.S.C.
§1446(b). Novoselsky’s notice was filed long
after that.
Novoselsky has slighted all of these problems except
the last—the 30-day rule. He invokes the proviso in
§1446(b) that a new 30-day window opens, “[i]f the case
stated by the initial pleading is not removable”, on
“receipt by the defendant, through service or otherwise,
Case: 11-2603
No. 11-2603
Document: 53
Filed: 04/24/2012
Pages: 7
5
of a copy of an amended pleading, motion, order or
other paper from which it may first be ascertained that
the case is one which is or has become removable”. According to Novoselsky, Klein’s motion for leave to intervene brought the suit within the diversity jurisdiction because Zvunca is a citizen of Romania, while
Novoselsky is a citizen of Wisconsin. There are multiple
problems with this theme.
First, a motion to intervene does not create diversity
of citizenship. Perhaps a grant of that motion could have
done so, had it produced a Romanian plaintiff and
a Wisconsin defendant. But a motion proposing to
become a party did not make Klein a party. Novoselsky
needed to wait for the state court’s decision on Klein’s
motion. That decision would have been an “order”
starting the 30-day period (had the other conditions of
removal been met).
Second, and apart from the fact that Novoselsky
would not have been a party even if Klein had become
one, is the statutory rule that a new 30-day period for
removal begins only “[i]f the case stated by the
initial pleading is not removable”. The case stated by
Novoselsky’s initial pleading may have been removable
(if, like Novoselsky, we were to disregard the rule that
the suits with forum-state defendants cannot be removed). It had a Romanian citizen as the plaintiff and
six Illinois citizens as defendants. Novoselsky apparently believes that MB Financial should be treated
as a citizen of Illinois (the bank’s citizenship) rather
than of Romania (the ward’s citizenship). But §1332(c)(2)
Case: 11-2603
6
Document: 53
Filed: 04/24/2012
Pages: 7
No. 11-2603
provides that “the legal representative of an infant or
incompetent shall be deemed to be a citizen only of the
same State as the infant or incompetent.” So if Zvunca is
a citizen of Romania—and only Romania—then the suit
was removable on the day it was filed and did not
first become removable when Klein sought to intervene.
But there could be a wrinkle. “For the purposes of this
section, section 1335, and section 1441, an alien admitted
to the United States for permanent residence shall
be deemed a citizen of the State in which such alien is
domiciled.” Section 1332(a) hanging paragraph. (This
language, too, was amended by the 2011 Act to make
doubly clear that an alien domiciled in the United States
is treated as a citizen of the state of domicile.) If
Zvunca has permanent-residence status, then citizens
of Illinois are on both sides of the case, whether Zvunca
is represented by MB Financial or by Klein. And, if
that’s right, then Novoselsky could not remove even
if he were treated as a party. Complete diversity is essential. See Strawbridge v. Curtiss, 3 Cranch (7 U.S.) 267 (1806).
A suit with citizens of Illinois on both sides cannot
be removed under the diversity jurisdiction.
Novoselsky has not grappled with the problems in
his new-30-day-window theory—not in this court, not
in the district court. He simply takes it as a given that
the suit was not removable until Klein filed the motion
for leave to intervene and became removable the
instant that motion was filed. Ignoring the fundamental problems we have identified was irresponsible.
The sanctions meted out by the district court were
richly deserved.
Case: 11-2603
Document: 53
No. 11-2603
Filed: 04/24/2012
Pages: 7
7
Appellees request an award of fees in this court. We
held in Garbie v. DaimlerChrysler Corp., 211 F.3d 407 (7th
Cir. 2000), that litigants who receive an award of fees
in the district court under §1447(c) automatically receive
reimbursement for the expense of defending that award
on appeal. See also CIR v. Jean, 496 U.S. 154 (1990).
Nothing in Martin disturbs that aspect of Garbie.
Appellees are entitled to legal fees for the cost of work
reasonably performed in defense of the district court’s
decision. They have 14 days to submit a statement of
these fees. Novoselsky will have 14 days to respond.
On the merits, the district court’s decision is
AFFIRMED .
4-24-12
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?