Royal Alice Properties, LLC et al v. Atkins et al
Filing
15
ORDER AND REASONS denying 5 Motion to Remand to State Court. Jonesfilm shall be named as a Defendant and the matter shall proceed in this Court. Signed by Judge Jane Triche Milazzo. (ecm, )
Royal Alice Properties, LLC et al v. Atkins et al
Doc. 15
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ROYAL ALICE PROPERTIES, LLC, ET AL.
Plaintiffs
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CIVIL ACTION NO. 12‐2937
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SECTION: H
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JUDGE JANE TRICHE MILAZZO
VERSUS
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MAGISTRATE: 3
DALE N. ATKINS, ET AL.
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MAG. DANIEL E. KNOWLES, III
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Defendants *
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ORDER AND REASONS
The matter before the Court is a Motion to Remand (Doc. 5) filed by Plaintiffs Royal Alice
Properties, LLC ("RAP") and Susan Hoffman ("Susan"). For the following reasons the Motion is
DENIED.
BACKGROUND
I. First Judgment
In 2002, a dispute arose out of the alleged misconduct of Defendant Peter Hoffman's
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Company, NTTS Productions, Ltd., with respect to certain Jonesfilm motion picture rights. Jonesfilm
instituted an arbitration proceeding against Defendant Peter Hoffman and his affiliate company,
NTTS Productions, Ltd., before the American Film Marketing Association (“AFMA"). On July 20,
2004, the AFMA arbitration tribunal issued a declaration of rights in favor of Jonesfilm and a
monetary award to Jonesfilm against NTTS. The order was confirmed by the Superior Court for Los
Angeles County, California in December 2004. On March 18, 2005, the Los Angeles Superior Court
amended its judgment to include Peter Hoffman as a Judgment Debtor in the action as the alter
ego of NTTS Productions, Ltd., finding him jointly and severally liable for its obligation under the
judgment. On March 14, 2006, the Civil District Court for the Parish of Orleans made the California
Judgment against Peter Hoffman in the amount of $290,911.00 plus interest executory in Louisiana.
This judgment was recorded on March 15, 2006 in the Orleans Parish mortgage records.
II. Second Judgment
In August 2005, Jonesfilm instituted an arbitration proceeding against Peter Hoffman
affiliates Cinevisions (“CV”), Seven Arts Pictures, Inc. (“SAP”), Seven Arts Filmed Entertainment
(“SAFE”), and Seven Arts Pictures, PLC (“PLC”) before the Independent Film & Television Alliance
("IFTA"). On June 22, 2006, the IFTA arbitrator issued a monetary award and other relief in favor
of Jonesfilm and against the Peter Hoffman affiliates jointly and severally. The United States
District Court for the Central District of California confirmed the arbitration award on June 19,
2007. Jonesfilm registered this Order and Judgment with the United States District Court for the
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Eastern District of Louisiana on June 2, 2010, and recorded the judgment in the Orleans Parish
mortgage records. The Second Judgment was confirmed on appeal by the United States Court of
Appeals for the Ninth Circuit on February 12, 2009.
III. Third Judgment
On February 26, 2008, the United States District Court for the Central District of California
granted Jonesfilm's Motion for Contempt against Peter Hoffman, CV, SAP, SAFE, and PLC. In
addition, the Court confirmed the imposition of a constructive trust and lien in the amount of
$41,766.00 plus interest. Jonesfilm registered the contempt judgment with the United States
District Court for the Eastern District of Louisiana and recorded this judgment in the Orleans Parish
mortgage records on June 2, 2010. The Third Judgment was confirmed on appeal by the United
States Court of Appeals for the Ninth Circuit on February 12, 2009.
IV. Post‐Judgment Actions
Jonesfilm alleges that Peter Hoffman ("Peter"), SAFE, SAP, CV, and PLC have failed to make
any payments to Jonesfilm and have further failed to satisfy any other obligations imposed by
these previous judgments. Jonesfilm conducted discovery which confirmed that Peter and other
Judgment Debtors have interests in Louisiana properties and, in light of their failure to pay
Jonesfilm on the previous judgments, began actions in this Court to collect on and enforce its
judgments.
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V. Orders of This Court
On November 15, 2011 this Court issued an Order approving and adopting an October 26,
2011 Report and Recommendations of Magistrate Judge Knowles. In that Order the Court found
that Peter disobeyed this Court's October 2010 Charging Orders and January 2011 Garnishment
Order. This Order was recorded with the Orleans Parish Mortgage Recorder. This Order was
affirmed by the United States Fifth Circuit on February 18, 2013.
On November 5, 2012 this Court again issued an Order finding Judgment Debtors in
Contempt. This Court found that Leeway and Peter had failed to immediately deliver funds in the
amount of $174,769.56 plus interest, that the judgment debtors had to deliver its financial
statements and tax returns for the years 2007 through 2011, that each garnishee had to fully
answer the Garnishment Interrogatories, and that reasonable attorneys fees were due to
Jonesfilm. This Order was recorded with the Orleans Parish Mortgage Recorder. This Order was
affirmed by the United States Fifth Circuit on August 8, 2013.
VI. The Motion to Remand
In late 2012 Susan and RAP filed a Petition for a Writ of Mandamus against the Clerk of
Orleans Parish ("Orleans COC") under Louisiana Code of Civil Procedure articles 3861–63. Susan
and RAP requested the Orleans COC to remove certain judgments filed by Jonesfilm and Too Easy
Entertainment, a Louisiana limited liability company, and certain lis pendens filed by Jonesfilm in
the property records of Orleans Parish, against immovable properties owned by Susan and RAP.
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On December 12, 2012 Jonesfilm removed the Petition for Writ of Mandamus alleging that
this Court has jurisdiction under 28 U.S.C. § 1332, 28 U.S.C. § 1355, and the Court's inherent
jurisdiction to effectuate its decrees, including its Contempt Orders. Plaintiffs filed a Motion to
Remand on December 21, 2012. (Doc. 5.) Jonesfilm opposed the Motion on January 8, 2013. (Doc.
7.) The Motion was taken under submission on January 16, 2013.
LEGAL STANDARD
Generally, a defendant may remove a civil state court action to federal court if the federal
court has original jurisdiction over the action. 28 U.S.C.A. § 1441(a); Syngenta Crop Prot., Inc. v.
Henson, 537 U.S. 28, 34 (2002). The burden is on the removing party to show “[t]hat federal
jurisdiction exists and that removal was proper.” Manguno v. Prudential Prop. & Cas. Ins. Co., 276
F.3d 720, 723 (5th Cir. 2002). When determining whether federal jurisdiction exists, courts
consider “[t]he claims in the state court petition as they existed at the time of removal.” Id. (citing
Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th Cir. 1995)). Removal statutes
should be strictly construed, and any doubt as to whether removal is appropriate should be
resolved in favor of remand. Id. (citing Acuna v. Brown & Root, Inc., 200 F.3d 335, 339 (5th Cir.
2000).
LAW AND ANALYSIS
I.
Arguments of the Parties
Plaintiffs argue that Jonesfilm is not a party to the Petition for Writ of Mandamus and
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therefore is not entitled to remove the action, that this Court does not have Federal Question
subject matter jurisdiction or "inherent jurisdiction," and that this Court does not have Diversity
subject matter jurisdiction. Jonesfilm argues that this Court has original jurisdiction because the
judicial mortgages were issued by this Court; that this Court has "inherent jurisdiction" to vindicate
its authority, and that this Court has diversity jurisdiction as Susan and RAP are residents of
Louisiana and the only real party in interest is Jonesfilm, a corporation with the domicile of
Delaware and Pennsylvania. Jonesfilm alleges that Orleans COC is a nominal defendant whose
presence is disregarded.
II.
Analysis
"A writ of mandamus may be directed to a public officer to compel the performance of a
ministerial duty required by law." Smith v. Ruson Fire and Police Civil Serv. Bd., 939 So. 2d 586, 590
(La. App. 2 Cir. 2006) (citing La. Code Civ. Proc. Ann. art. 3863). "Mandamus has been held to be
the proper remedy for compelling a recorder of mortgages to cancel or erase an illegal or
unauthorized inscription." L&A Contracting Co., Inc. v. Mabry, 637 So. 2d 1090, 1093–94 (La. App.
2 Cir. 1994) (citations omitted).
Traditionally, all that the courts have required in a mandamus proceeding is that the parties
in interest should have notice of the application, in order that their rights may be protected.
Realsco, Inc. v. Green Acres Civic Ass'n, 169 So. 2d 570, 572 (La. App. 4 Cir. 1964). "The fact that
other parties additional to the recorder are respondents in [a] suit for mandamus, or are given
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notice by service of process of the application for mandamus, is of no importance since the only
demand made is against the recorder" to perform a purely ministerial duty. Id. at 571–72.
On the other hand, the rights of a judgment creditor during a mandamus proceeding are
greater. In this respect, courts have held that there is an "[i]nherent lack of due process in a
mandamus proceeding to which a judgment debtor seeks to have cancelled a judicial mortgage
without calling into court the judgment creditor." Matherne v. Guillot, 544 So. 2d 723, 726 (La.
App. 3 Cir. 1989); see also L&A Contracting, 637 So. 2d at 1094 ("an ex parte mandamus
proceeding which effectively cancels a mortgage or lien without notice to the creditor is inherently
violative of the due process rights of the mortgagee or lien creditor as guaranteed by the
Fourteenth Amendment of the United States Constitution and Article I, § 2 of the Louisiana
Constitution.") "Although the debtor does not seek a judgment against the creditor, the debtor
must notify the creditor of the proceeding and the creditor must be recognized as a party in
interest. " Id. Accordingly, "the judgment creditor is an indispensable party to such a proceeding
and must be joined therein." Id.
As the judgment creditor, Jonesfilm is an indispensable party. Thus, the Court must
determine whether it properly possesses subject matter jurisdiction. The first issue is whether or
not the Orleans COC is a nominal party such that diversity is met. See State of La., ex. rel. Ieuoub
v. Borden, Inc., No. 94‐3640, 1995 WL 59548, at *1 (E.D. La. Feb. 10, 1995) (the citizenship of a
nominal party is disregarded in determining the existence of diversity jurisdiction as only the
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citizenship of the parties with a real interest in the case will be considered).
As noted previously, the judgment creditor is an indispensable party in interest because it
is inherently affected by any decision of the Court. On the other hand, the Court finds that, in the
instant action, the Orleans COC is merely a party to effectuate the removal of the mortgage or lien.
See Matherne, 544 So. 2d at 726 (the clerk of court has no real interest in the mandamus
proceedings because the only interest his only interest in the litigation is the lawful discharge of
the duties of his office). As such, any decision made by the Court will not affect the Orleans COC,
as they are merely in this action as a party to perform a ministerial function. Because the Orleans
COC is not considered in the diversity analysis, the Plaintiffs are citizens of Louisiana, and Jonesfilm
is a citizen of Delaware and Pennsylvania, this Court finds that the parties are completely diverse.
Next, "[w]hen a complaint does not allege a specific amount of damages, the party invoking
federal jurisdiction must prove by a preponderance of the evidence that the amount in controversy
exceeds the jurisdictional amount." St. Paul Reinsurancce Co., Ltd. v. Greenburg, 134 F.3d 1250,
1253 (5th Cir. 1998). If it is not apparent from the face of the complaint, then the court may rely
on summary judgment type evidence to ascertain the amount in controversy. Id. (quotations and
citation omitted). "Importantly, the jurisdictional facts must be judged as of the time the complaint
is filed." Id. at 1253–54. Jonesfilm presents more than sufficient evidence that the amount of the
judicial mortgages securing more than $500,000. Accordingly, the amount in controversy is met.
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In the end, the Court finds that Jonesfilm is an indispensable party to the Petition for
Mandamus, that the Orleans COC is a nominal party whose domicile is not considered in the
diversity analysis, that the Plaintiffs, Susan and RAP, are completely diverse from Jonesfilm, and
that the amount in controversy has been met. Accordingly, this Court properly exercises subject
matter jurisdiction over the instant matter and removal is proper.
CONCLUSION
For the foregoing reasons, the Motion to Remand (Doc. 5) filed by Plaintiffs Royal Alice
Properties, LLC ("RAP") and Susan Hoffman ("Susan") is DENIED. Jonesfilm shall be named as a
Defendant to the above captioned action and the matter shall proceed in this Court.
New Orleans, Louisiana on this 14th day of August, 2013.
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JANE TRICHE MILAZZO
UNITED STATES DISTRICT COURT JUDGE
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