Mandley Excavating LLC v. Lund et al
MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 5/29/13. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
MANDLEY EXCAVATING, LLC,
Civil Action No. DKC 13-0840
ARTHUR H. LUND, JR., et al.
Presently pending and ready for review in this mechanic’s
lien case are the motions to remand (ECF No. 17) and for an
emergency hearing and order prohibiting the transfer of real
property (ECF No. 22) filed by Plaintiff Mandley Excavating,
The issues have been fully briefed, and the court now
rules, no hearing being deemed necessary.
Local Rule 105.6.
For the following reasons, the motion to remand will be granted,
but the fee request will be denied.
Defendants Arthur Lund, James Pailthorp, and the estate of
residents, own real property at 7035 Indian Head Highway in
property is composed of two parcels, totaling 20.34 acres.
September 23, 2010, Defendant Maryland CVS Pharmacy, LLC (“CVS”)1
signed a lease for a 1.84 acre portion of the property.
The lease between the in-state Defendants and CVS
provided for the construction of a 13,225 square foot retail
pharmacy, roads, sewers, and infrastructure improvements, both
inside and outside of the bounds of the portion of real property
specifications for this construction, reserved a non-exclusive
right for the in-state Defendants to use these infrastructure
improvements, and specified that the in-state Defendants will
retain ownership of the new construction and improvements.
Builders, S&D, Inc., which, in turn, contracted with Plaintiff
Mandley Excavating for a portion of this project.
(ECF No. 2-
Plaintiff provided labor and materials for the construction
of the pharmacy and the paving of streets and access roads on
and around the portion of the parcel leased by CVS.
CVS avers that it is a single-member Maryland LLC, wholly
owned by CVS Pharmacy, Inc., which is incorporated in Rhode
Island and has its principal place of business in Rhode Island.
(ECF No. 1, at 4).
Therefore, it argues, for diversity
purposes, it is a citizen of that state.
waterlines, sewers, storm drains, and utilities on and around
September 8, 2011 and October 26, 2011.
Plaintiff avers that it
was not paid the $276,926.45 that it was due for that work.
declaration of easements with the clerk of Charles County to
establish easement rights for themselves across portions of the
real property, including land covered by the lease with CVS.
easements over Plaintiff’s road work for the benefit of the instate Defendants.
(ECF No. 2-10).
On February 26, 2013, Plaintiff filed a petition against
Defendants in the Circuit Court for Charles County, requesting a
mechanic’s lien against the real property and CVS’s leasehold
enrichment and quantum meruit.
(ECF No. 2).
the case to this court on March 19, asserting that the in-state
basis of diversity jurisdiction.
(ECF No. 1).
On April 18,
Plaintiff moved to remand the case to state court.
Defendants opposed this motion (ECF No. 23), and Plaintiff
replied (ECF No. 27).
Plaintiff has also filed a number of
papers requesting an emergency hearing, because it believes that
the in-state Defendants are going to sell the property to the
State Highway Administration.
motion has been denied.3
(ECF Nos. 18 & 22).
(ECF No. 20).
Defendants have filed a
motion to strike the remaining emergency motion.
(ECF No. 25).
Standard of Review
This case was removed from Maryland state court on the
basis of diversity jurisdiction, pursuant to 28 U.S.C. § 1332,
but, as will be seen, the parties are not completely diverse.
The doctrine of fraudulent joinder is an exception to the
complete diversity rule that is normally required for a federal
court to exercise diversity jurisdiction.
See Bendy v. C.B.
Fleet Co., No. CCB-10-3385, 2011 WL 1161733, *3 (D.Md. Mar. 28,
This doctrine allows a federal court to “disregard, for
Defendants have also moved to consolidate this case with a
related case, Kane Builders S&D, Inc. v. MD CVS Pharmacy, LLC,
12-3775. (ECF No. 11). Because this case will be remanded to
state court, that motion will be denied as moot.
Because this court lacks jurisdiction over this dispute,
Plaintiff’s remaining motions will not be addressed. (ECF Nos.
12, 13, 22 & 25).
jurisdictional purposes, the citizenship of certain [in-state]
Rapoport, 198 F.3d 457, 464 (4th Cir. 1999).
When removal is based on a theory of fraudulent joinder,
the defendant opposing remand carries a very heavy burden.
defendant must show either that:
(1) there has been outright
possibility that the plaintiff would be able to establish a
cause of action against the in-state defendant in state court.”
Id. (quoting Marshall v. Manville Sales Corp., 6 F.3d 229, 232
(4th Cir. 1993)).
Judges in this court and others around the country have
Barlow v. John Crane Houdaille, Inc., WMN-12-
1780, 2012 WL 5388883, at *2 n. 1 (D.Md. Nov. 1, 2012) (citing
Hartley v. CSX Transp., Inc., 187 F.3d 422, 426 (4th Cir. 1999)
(noting that a plaintiff is only required to show “a slight
possibility of a right to relief” or that he has a “glimmer of
hope” of success); Green v. Amerada Hess Corp., 707 F.2d 201,
205 (5th Cir. 1983) (“The removing party must prove that there is
absolutely no possibility that the plaintiff will be able to
establish a cause of action against the in-state defendant in
In deciding whether a party has been fraudulently joined, a
court may consider not only the allegations contained in the
complaint, but the entire record.
AIDS Counseling & Testing
Ctrs. v. Group W Television, Inc., 903 F.2d 1000, 1004 (4th Cir.
The court must “resolve all doubts about the propriety
(also noting that the standard is more favorable than the Rule
In their notice of removal, Defendants argue that Plaintiff
(1) the in-state Defendants’ interest in
the land is not lienable; (2) an easement is not lienable; (3)
Plaintiff’s petition for a mechanic’s lien is untimely because
the petition misstates the last day that Plaintiff performed
work; and (4) Plaintiff cannot recover on theories of unjust
enrichment and quantum meruit.
believes that its claims against the in-state Defendants will
survive, and the case should be remanded to state court:
the Circuit Court has already found reasonable grounds for the
lien to attach against the in-state Defendants;4 (2) because the
allegations of the petition, they are deemed to have admitted
those facts pursuant to Md. Code Ann. Real Prop. § 9-106; (3)
Maryland lien law permits a mechanic’s lien to attach to the
property; (4) the in-state Defendants are not insulated from a
downstream construction contract; (5) a mechanic’s lien should
attach because Plaintiff performed work on land owned by the instate Defendants outside of the leasehold premises; (6) CVS was
definition and construction of terms in the Notice of Mechanic’s
Lien cannot be resolved at the removal stage.
(ECF No. 17-2, at
Defendants supplement the arguments of their removal papers
and oppose Plaintiff’s motion to remand by arguing that:
This argument is unavailing.
The show cause order does
demonstrate that the state court judge found a reasonable basis
for a mechanic’s lien to attach to the property. It is silent,
however, as to whether a reasonable basis exists to find that a
mechanic’s lien should attach specifically to the in-state
Defendants and their interest in the property.
responsive pleadings (ECF No. 12 & 13); (3) CVS controlled every
aspect of the construction project; and (4) an easement is not
lienable as a matter of law.
(ECF No. 23).
All of the parties’ arguments will not be addressed here,
that it holds a “glimmer of hope” that it will prevail against
the in-state Defendants.
Therefore, this case will be remanded
to the Circuit Court for Charles County.
Potential Agency Relationship between the In-State
Defendants and CVS
With respect to the merits of the case, Plaintiff argues
that the terms of the lease contract, which compel CVS to erect
construction and make improvements on the land, establish an
agency relationship between the in-state Defendants and CVS that
could render Defendants liable under a mechanic’s lien theory.
Plaintiff points to York Roofing, Inc. v. Adcock, 333 Md. 158
(1993), in which
the Maryland Court of Appeals suggested in
dicta that a third party may be liable on a mechanic’s lien
where the party that contracted with the subcontractor for the
improvements was acting as the agent for that third party.
Plaintiff argues that there is evidence here that
Specifically, it points to the lease contract and emails that
over CVS, and the parties’ mutual consent for the same.
Ins. Co. of N. Am. v. Miller, 362 Md. 361, 373 (2001) (“Agency
is the fiduciary relation which results from the manifestation
of consent by one person (the principal) to another (the agent)
control and consent by the other so to act”) (quotations and
Defendants cite North Carolina, Oklahoma, and Virginia law
to support their position that an agency relationship cannot be
created by a lease that requires improvements to the leasehold
(ECF No. 23, at 14 n. 8).
They do not point to any
Maryland law supporting this categorical position.
Maryland, “[t]he determination of the existence of a principalagent relationship is, generally, a question of fact.”
362 Md. at 372.
Construing the contract and emails in the light
most favorable to Plaintiff, these documents could demonstrate
an agency relationship that could give rise to the in-state
Accordingly, at this stage it is inappropriate to
conclude that “there is no possibility that the plaintiff would
be able to establish a cause of action [based on an agency
Mayes, 198 F.3d at 464.
Question of whether Lien is Appropriate on Easement is
Issue for Maryland Courts
Defendants also argue that a mechanic’s lien cannot attach
to the property adjacent to the leasehold and on which the instate
language of the mechanic’s lien statute seems to preclude it.
(ECF No. 1, at 21).
Principles of comity support
It is not clear that the in-state Defendants’ interest
correct, because this would be a matter of first impression of
“unique questions of state law to which the Maryland courts have
a greater interest,” this issue will not be addressed by this
Sherman v. Sigma Alpha Mu Fraternity, 128 F.Supp.2d 842,
847 (D.Md. 2001) (remanding case where no evidence of fraudulent
joinder exists, and complaint raised novel issues of state law).
showing that there is no possibility for Plaintiff to recover
Plaintiff’s allegations, the in-state Defendants’ interest in
the land both inside and outside of the leasehold property could
Defendants was not fraudulent, and the case must be remanded to
Attorneys’ fees, costs, and expenses may be awarded when a
Whether to award attorney fees under this section is
left to the sound discretion of the court.
Capital Corp., 546 U.S. 132, 136 (2005).
Martin v. Franklin
The court’s limited
authority “to award fees as a sanction for a removal taken in
Plaintiff argues that Defendants have exhibited bad faith in
their attempt to remove the case to federal court.
demonstrate that the question of whether the in-state defendants
are proper parties is a difficult issue.
Defendants’ basis for
removal was neither unreasonable nor frivolous.
See In re Lowe,
102 F.3d 731, 733 (4th Cir. 1996) (holding that awarding attorney
fees and costs was appropriate under § 1447(c) where “‘a cursory
Because Plaintiff’s claims will be remanded to state court
for the reasons stated above, the viability of its unjust
enrichment and quantum meruit claims as against the in-state
Defendants need not be reached.
jurisdiction”) (citations omitted).
Accordingly, this portion
of Plaintiff’s motion will be denied.
For the foregoing reasons, the motion to remand filed by
Plaintiff Mandley Excavating, LLC will be granted.
Order will follow.
DEBORAH K. CHASANOW
United States District Judge
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