Chesshir et al v. Double Jay Supply Company et al
ORDER denying 15 Motion to Remand. Signed by Honorable Susan O. Hickey on April 6, 2015. (mll)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
MICHAEL CHESSHIR; and
Case No. 4:14-cv-04162
DOUBLE JAY SUPPLY COMPANY;
BRADLEY TAYLOR d/b/a TAYLOR &
TAYLOR DEVELOPMENT, LLC;
MOLLY TAYLOR d/b/a TAYLOR &
TAYLOR DEVELOPMENT, LLC;
JANELLE WHITE d/b/a TAYLOR &
TAYLOR DEVELOPMENT, LLC;
TAYLOR & TAYLOR DEVELOPMENT,
LLC; BRADLEY TAYLOR; MOLLY
TAYLOR; and JANELLE WHITE
Before the Court is the Plaintiffs’ Motion to Remand. (ECF No. 15). The Defendants have
responded. (ECF No. 22). The Court finds this matter ripe for its consideration. For the reasons
stated herein, the Court finds that Plaintiffs’ Motion to Remand should be DENIED.
On or about December 11, 2012, Taylor & Taylor and the Chesshirs entered into a
construction contract regarding property owned by the Chesshirs at 3711 Jack Cullen Drive in
Texarkana, Arkansas. The instant Complaint is based on a contractual relationship between the
Chesshirs and Double Jay.
On October 31, 2014, Plaintiffs filed this Complaint in Miller County, Arkansas Circuit
Court. In the Complaint, the Chesshirs made the following claims against Defendants: (1) Failure
to Comply to Form of Lien; (2) Failure to Comply with Applicable Requirements of Lien; (3) Slander
of Title; (4) Failure to Defend Owner from Lien Claimants; and (5) Slander of Title. Defendants
removed the case to this Court on December 10, 2014. Plaintiffs filed the instant Motion to Remand
on December 22, 2014.
Plaintiffs assert that this case should be remanded because the Notice of Removal was
untimely filed, the Court lacks personal jurisdiction over Plaintiffs, and the Court lacks subject
matter jurisdiction over the action.
A. Timeliness of Responsive Pleading
The Chesshirs argue that Ark. Code Ann. § 18-44-118(f)(3)(B) and the Arkansas Supreme
Court’s holding in Allstate Ins. Co. v. Bourland, 758 S.W.2d 700 (Ark. 1988) instruct that the causes
of action should be remanded since Defendants did not remove their action within five (5) days of
the filing of the Notice to Discharge the Lien. Defendants respond that the lien was discharged
before the Chesshirs filed their lawsuit, and thus the filing of the Notice to Discharge was moot as
the Chesshirs had not suffered an injury which could be redressed by the state court. Further, even
if the filing was not moot, the Arkansas statute does not alter Defendants’ time to remove the case
to federal court to respond to the remaining allegations in the Complaint.
Defendants’ Notice of Removal was timely. Congress, in 28 U.S.C. § 1146(b), affords
defendants 30 days to file their notice of removal after receipt of a copy of the initial pleading. The
Bourland decision from the Arkansas Supreme Court is inapposite. In that case, the Court held that
the filing of an answer in federal court when removal was not effected properly in state court did not
protect the defendant from a default judgment in state court. Those are not the issues before this
court. Instead, here, Defendants appropriately and timely filed their removal documents in state
court. They did not respond within five days to the Notice to Discharge the Lien. However, that
does not effect the timing for proper removal in this court.
B. Personal Jurisdiction
Plaintiffs argue the Court lacks both general and specific personal jurisdiction over the
parties. Initially, the Court notes that Plaintiffs have raised personal jurisdiction arguments as a basis
for remand. Because state and federal courts have concurrent jurisdiction over certain persons, the
arguments are usually made in terms of a motion to dismiss.
A state may exercise general jurisdiction if a defendant has carried on in the forum state a
continuous and systematic, even if limited, part of its general business; in such circumstances the
alleged injury need not have any connection with the forum state. Keeton v. Hustler Magazine, Inc.,
465 U.S. 770, 779 (1984). Specific jurisdiction on the other hand is appropriate only if the injury
giving rise to the lawsuit occurred within or had some connection to the forum state, meaning that
the defendant purposely directed its activities at the forum state and the claim arose out of or relates
to those activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985).
The Court finds that it has general personal jurisdiction over the parties. The Court has
general personal jurisdiction over Plaintiffs because they are residents of the state of Arkansas. See
Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co., KG, 646 F.3d 589, 592-593 (8th Cir.
2011). The Court has general personal jurisdiction over Defendants because of their minimum
contacts with the state and because Defendants have consented to personal jurisdiction. Sondergard
v. Miles, Inc., 985 F.2d 1389, 1394-95 (8th Cir. 1993); Knowlton v. Allied Van Lines, 900 F.2d.
1196, 1199 (8th Cir. 1990).
Plaintiffs next argue that the case should be remanded to Arkansas state court because this
Court lacks specific personal jurisdiction over the Plaintiffs. Particularly, the Plaintiffs argue that
the factors from Land-O-Nod v. Bassett Furniture Industries, Inc., 708 F.2d 1338 (8th Cir. 1983)
favor state court jurisdiction.
The Land-O-Nod factors are misplaced in Plaintiffs’ analysis. In Land-O-Nod, the Minnesota
District Court denied a Motion to Dismiss, finding that the Court had personal jurisdiction over the
defendant. The Eighth Circuit reversed, finding that the requisite relationship among the defendants,
the forum state, and the litigation was lacking. Therefore, the Land-O-Nod factors aid a court in
determining whether defendants have certain minimum contacts with the forum state such that
maintenance of the suit in that state does not offend “traditional notions of fair play and substantial
justice.” International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Plaintiffs are arguing that
Defendants have minimum contacts with the state of Arkansas. Because the Court agrees, and
Defendants are not contesting that assertion, it is fair for Defendants to be hailed into court in
Arkansas, whether that be in a federal or state forum.1
C. Diversity of Citizenship
Finally, the Chesshirs argue that the Court lacks subject matter jurisdiction over the parties.
First, they assert the parties are not completely diverse because Janelle White and Taylor & Taylor
are citizens of Arkansas. Second, they argue the amount in controversy does not satisfy the
jurisdictional minimum. Lastly, they argue that the Court’s exercise of jurisdiction over this lawsuit
would result in bifurcation of the case.2
i. Taylor & Taylor citizenship
It is undisputed that Plaintiffs are citizens of Arkansas. It is undisputed that Bradley Taylor
and Molly Taylor are citizens of Texas. The Plaintiffs cite no law, and the Court can find none, to
In fact, a defendant’s minimum contacts with Arkansas is necessary for this Court to find that it has jurisdiction. If this
Court lacked jurisdiction over a party every time the party had minimum contacts with the state of Arkansas, this Court’s
diversity jurisdiction would be rendered meaningless.
Plaintiffs also allege that this Court lacks subject matter jurisdiction over the action because the causes of action are
based on Arkansas law. Because it is well settled that federal courts have subject matter jurisdiction over cases grounded
in state law when there is diversity of citizenship and the minimum amount in controversy, this argument has no merit.
support their argument that Taylor & Taylor’s registration with the Arkansas Secretary of State
and/or licensure with the Arkansas Contractor’s License Board deem it to be a citizen of Arkansas.
Instead, the Court finds support for the well-settled rule that the citizenship of a limited liability
company is the citizenship of its members. OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 346
(8th Cir. 2007). Because Bradley Taylor and Molly Taylor are the only members of Taylor & Taylor,
and they are citizens of Texas, the Court finds that Taylor & Taylor, LLC is a citizen of Texas.
ii. Janelle White citizenship
Therefore, the question before the Court regarding diversity of citizenship is limited to the
alleged fraudulent joinder of defendant Janelle White. It is undisputed that Janelle White is a citizen
of Arkansas and therefore her presence in the lawsuit would destroy complete diversity should she
remain. Defendants assert that Janelle White was fraudulently joined and the Court should disregard
her citizenship for purposes of determining whether complete diversity exists. Plaintiffs assert that
she is the “registered agent (officer)” of Taylor & Taylor.
A defendant is fraudulently joined when there is no reasonable basis to support a claim
against the nondiverse defendant. In re Prempro Prods. Liab. Litig., 591 F.3d 613, 620 (8th Cir.
2010). Defendant argues that White was improperly joined because (1) she was not a party to the
contract between the Chesshirs and Taylor & Taylor; (2) her actions were under the authority of
Taylor & Taylor and on behalf of a disclosed principle; and (3) all of the Plaintiffs’ allegations
against White are based on her actions within the course of her employment so they are not entitled
to relief against her individually.
In their Complaint, the Chesshirs allege (1) Failure to Comply to Form of Lien; (2) Failure
to Comply with Applicable Requirements of Lien; (3) Slander of Title; (4) Failure to Defend Owner
from Lien Claimants; and (5) Slander of Title against all of the named Defendants. All actions that
White took were under the authority of Taylor & Taylor, a disclosed principle. Those actions cannot
make her individually liable as a named Defendant in this action. See Tallent, et al. v. Dwight
Harshaw, et al., 592 F. Supp 66 (E.D. Ark. 1984). Even if all allegations in Plaintiffs’ Complaint
are proved to be true, they are not entitled to relief against White.
Therefore, she is a fraudulently joined defendant and her citizenship will not be considered
when determining whether complete diversity of citizenship exists. Without White as a defendant,
there is complete diversity such that jurisdiction is proper in federal court.
iii. Amount in Controversy
For purposes of diversity of citizenship jurisdiction, 28 U.S.C. § 1332 gives federal district
courts original jurisdiction of all civil actions between citizens of different States where the amount
in controversy exceeds $75,000. The proponent of diversity jurisdiction has the burden of proving
that the amount in controversy exceeds the jurisdictional minimum by a preponderance of the
evidence. Advance Am. Servicing of Ark., Inc. v. McGinnis, 526 F.3d 1170, 1173 (8th Cir. 2008);
see also James Neff Kramper Family Farm P’ship v. IBP, Inc., 393 F.3d 828, 831 (8th Cir. 2005).
This standard applies regardless of whether “the complaint alleges no specific amount of damages
or an amount under the jurisdictional minimum.” In re Minn. Mut. Life Ins. Co. Sales Practices
Litig., 346 F.3d 830, 834 (8th Cir. 2003). This can be a complex task where, as here, the plaintiff
prefers to litigate in state court. See Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 449 (7th
Cir. 2005) (“The complication is that a removing defendant can’t make the plaintiff's claim for him
. . . .”). Once the removing party has established by a preponderance of the evidence that the
jurisdictional minimum is satisfied, remand is only appropriate if the plaintiff can establish to a legal
certainty that the claim is for less than the requisite amount. Meridian Sec. Ins. Co. v. Sadowski, 441
F.3d 536, 543 (7th Cir. 2006).
Plaintiffs seek damages against Defendants jointly and severally but are unclear about the
amount of money damages they seek. On the face of their Complaint, the Chesshirs allege that they
have paid to the Taylor Defendants and others an overpayment of $111,481.42. They also assert that
they should be reimbursed a sum of $71,405.13, and that their estimated cost to correct or complete
the work is $130,787.92. The Chesshirs seek judgment for (1) “treble costs” including the cost of
litigation incurred to defend against Double Jay’s allegedly fraudulent lien; (2) the amount of the lien
itself ($13,443.16); (3) the damage allegedly caused by slander of title; (4) statutory treble damages;
and (5) punitive damages. They allege that their damages are caused by Defendants. Therefore, the
Court finds that, from the face of the Complaint, Plaintiffs are seeking an amount of damages in
excess of the jurisdictional minimum. They have failed to show that the sum they are seeking is less
than this. Therefore, the Court finds that it has subject matter jurisdiction over the action.
Plaintiffs also argue that “[n]ot all of the claims addressed in Plaintiffs’ initial Complaint filed
within Miller County, Arkansas were properly removed to this Court,” so in the interest of judicial
economy, the case should be remanded to avoid bifurcation. In the Defendants’ Notice of Removal,
the entire case was removed from Miller County. (ECF No. 1). The Court fails to understand the
argument that there would be a bifurcuated case.
Accordingly, Plaintiffs’ Motion to Remand (ECF No. 15) is DENIED.
IT IS SO ORDERED, this 6th day of April, 2015.
/s/ Susan O. Hickey
Susan O. Hickey
United States District Judge
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?