Hashem v. Stephen

Filing 192

Judge Indira Talwani: ORDER entered. MEMORANDUM AND ORDER ALLOWING Defendants D'Angelo and D'Angelo Law Group's 188 Renewed Motion to Remand. (DaSilva, Carolina)

Case 1:16-cv-12383-IT Document 192 Filed 01/24/19 Page 1 of 6

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
SABA HASHEM, individually and as a
member of, and derivatively on behalf of,
D’Angelo and Hashem, LLC,

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Plaintiff / Defendant-in-Counterclaim,
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v.
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STEPHEN D’ANGELO, individually and as
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a member of D’Angelo & Hashem, LLC,
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and D’Angelo Law Group; D’ANGELO
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LAW GROUP, LLC, and D’ANGELO
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AND HASHEM, LLC,
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Defendants / Plaintiffs-in-Counterclaim
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__________________________________________*
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JENNIFER M. CARRION,
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Intervention-Plaintiff,
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v.
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SABA HASHEM, STEPHEN D’ANGELO,
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D’ANGELO & HASHEM, LLC, D’ANGELO
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LAW GROUP, LLC,
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Intervention-Defendants.
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Civ. Action No. 16-cv-12383-IT

MEMORANDUM AND ORDER
January 24, 2019
TALWANI, D.J.
I.

Introduction
Plaintiff Saba Hashem (“Hashem”) filed this action in the Superior Court of Essex

County, Massachusetts,1 individually, and “as a [m]ember of, and derivatively on behalf of,
Although the header of Hashem’s Verified Complaint states “Suffolk, SS,” the filing stamp on
the first page shows it was in fact filed in Essex Superior Court. Verified Compl. [#1-2].
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D’Angelo and Hashem, LLC [(“D&H”)],” against Defendants Stephen D’Angelo (“D’Angelo”)
and D’Angelo Law Group, LLC (“D’Angelo Law”), and “nominally” against D&H. Verified
Compl. 1 [#1-2]. D’Angelo and D’Angelo Law promptly removed the case to this court pursuant
to 28 U.S.C. § 1332(a)(1). Not. of Removal [#1].
The Notice of Removal asserted for purposes of diversity jurisdiction that Plaintiff
Hashem is a citizen of Massachusetts, and Defendants D’Angelo and D’Angelo Law are citizens
of New Hampshire. Id. ¶¶ 8–11. The Notice of Removal acknowledged that D&H’s “initial
members”—D’Angelo and Hashem—were a citizen of Massachusetts and a citizen of New
Hampshire, but asserted that “D&H [was] named only ‘derivatively’ and ‘nominally,’ and thus
should not be considered a substantial party to the controversy for purposes of diversity.” Id.
¶¶ 12, 14.2 Consistent with this position, Defendants subsequently asserted that D&H “was not a
legal entity,” “exists in name only,” and “could not be a moving party” as to their motion to
dismiss. Mot. for Leave to Respond to Order ¶¶ 4-5 [#21].
After the court allowed Jennifer Carrion’s Motion to Intervene [#26] as a judgment
creditor of Hashem and D&H, see Mem. & Order [## 38, 39], Defendants changed their position.
D&H joined D’Angelo and D’Angelo Law in filing an Answer [#59] to Carrion’s CrossComplaint [#48] and Answer and Counterclaim [#58] to Plaintiff’s Amended Complaint [#46].
In these pleadings, Defendants admitted that D&H was formed as a limited liability company
and that both Hashem and D’Angelo are members of D&H. See, e.g., Answer and Countercl.
¶¶ 6-7 [#58]. In Counterclaim, they sought damages for, inter alia, an alleged breach of a
fiduciary duty owed to D&H, damages caused to D&H’s reputation, the loss of D&H’s clients,
and an accounting of work performed by Hashem for D&H. Id. at Countercl. ¶¶ 29, 31.
The state court record reflects that D&H was served on November 2, 2016. See State Court
Rec. 23 at Docket No. 6 [#10].
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On November 16, 2018, on Carrion’s Emergency Motion for Preliminary Injunction
against D’Angelo and D’Angelo Law Group [#155], the court entered a Temporary Restraining
Order [#165] as agreed to by the parties and set a motion hearing on the preliminary injunction
for December 6, 2018.
On November 20 and December 4, 2018, new counsel filed notices of appearance for
D’Angelo and D’Angelo Law Group. On December 4, 2018, these two Defendants filed a
Motion to Remand [#169], which this court denied without prejudice for failing to comply with
Local Rule 7.1. Elec. Order [#180].
On December 6, 2018, the court entered a preliminary injunction, which remains in place
“pending further order of this court, or if the matter is remanded, of the Superior Court for the
Commonwealth of Massachusetts.” Mem. & Order 10 [#183].
II.

Renewed Motion to Remand
On December 17, 2018, approximately two years after removing the case, D’Angelo and

D’Angelo Law filed their Renewed Motion to Remand the Case to Essex Superior Court for
Lack of Subject Matter Jurisdiction (“Mot. to Remand”) [#188]. Defendants D’Angelo and
D’Angelo Law now assert that because “[D&H] had not been dissolved, was still legally in
existence, and was fully capably and duly authorized to enter into contracts and to conduct
business operations[,]” D&H was a real and substantial party and no diversity existed at the time
that this lawsuit commenced. Defs.’ Mem. 2 [#189].3
“The district courts shall have original jurisdiction of all civil actions where the matter in
controversy exceeds the sum or value of $75,000 . . . and is between [] citizens of different

Defendants argue in the alternative that diversity was destroyed when Intervenor Plaintiff was
permitted to intervene. Defs.’ Mem. 2 [#189]. Because the court finds that no diversity existed at
the commencement of the action, the court does not reach this argument.
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States.” 28 U.S.C. § 1332(a)(1). “[T]he citizenship of an unincorporated entity, such as a
partnership, is determined by the citizens of all of its members.” Pramco, LLC v. San Juan Bay
Marina, Inc., 435 F.3d 51, 54 (1st Cir. 2005) (citing Carden v. Arkoma Assoc., 494 U.S. 185,
195-96 (1990)). “[A] federal court must disregard nominal or formal parties and rest jurisdiction
only upon the citizenship of real parties to the controversy.” Navarro Savings Assoc. v. Lee, 446
U.S. 458, 461 (1980).
Despite the assertions in the Notice of Removal [#1] filed by D’Angelo and D’Angelo
Law Group, D&H was not simply a “derivative” or “nominal” party at the time the action
commenced. Plaintiff’s original Verified Complaint sought relief from D&H, including an
accounting of D&H’s clients and assets and an injunction ordering distributions by D&H to its
members. Verified Compl. 7-8 [#1-2]. D&H’s subsequent Answers [##58, 59] admit to D&H’s
legal existence at all relevant times. Accordingly, because D&H was a real and substantial party
to this action from the outset, and is a citizen of both Massachusetts and New Hampshire, and
because Hashem is a citizen of Massachusetts, complete diversity never existed and the court
lacks subject matter jurisdiction. The removal by D’Angelo and D’Angelo Law was improper.
In opposition to remand, Carrion argues that her intervention in this case did not destroy
diversity, that she had a right to intervene under federal law, that her confidential settlement
agreement with Hashem would restore complete diversity, and that the doctrine of laches prevent
D’Angelo and D’Angelo Law from now moving to remand. Intervenor Pl.’s Opp’n [#173];
Intervenor Pl.’s Second Opp’n [#176]. However, the court is not remanding based on Carrion’s
intervention, but because complete diversity did not exist amongst the parties at the time that this
lawsuit commenced. See Valentin v. Hosp. Bella Vista, 254 F.3d 358, 361 (1st Cir. 2001) (“For
federal jurisdictional purposes, diversity of citizenship must be determined at the time of suit.”

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(citing Bank One v. Montle, 964 F.2d 48, 49 (1st Cir. 1992)). Moreover, where the court lacks
subject matter jurisdiction, remand is mandatory, and the doctrine of laches does not apply. See
28 U.S.C. § 1447(c).
III.

Fees and Costs
28 U.S.C. § 1447(c) contemplates the imposition of “just costs and any actual expenses,

including attorney fees, incurred as a result of the removal.” In analyzing when imposing such
fees is appropriate, the Supreme Court recognized that when removal is inappropriately used as a
litigation strategy, “[t]he process of removing a case to federal court and then having it remanded
back to state court delays resolution of the case, imposes additional costs on both parties, and
wastes judicial resources.” Martin v. Franklin Capital Corp., 546 U.S. 132, 140 (2005). The high
court advised the district courts to “recognize the desire to deter removals sought for the purpose
of prolonging litigation and imposing costs on the opposing party” when awarding fees under
section 1447(c), id., but cautioned that absent unusual circumstances, expenses should be
awarded “only where the removing party lacked an objectively reasonable basis for seeking
removal.” Id. The district courts “retain discretion to consider whether unusual circumstances
warrant a departure from the rule in a given case.” Id. As an example of such an unusual
circumstance, the Supreme Court noted “a plaintiff’s delay in seeking remand or failure to
disclose facts necessary to determine jurisdiction.” Id. at 141.
Here, no party contends that the removing parties sought to prolong litigation or impose
costs on the opposing party by removing the action. Moreover, Hashem never sought remand. To
the contrary, it is the removing parties who are now seeking remand. Given that subject matter
jurisdiction is not waivable and that any final judgment that this court ordered without subject

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matter jurisdiction would be vacated on appeal, the court cannot find that the motion to remand
was an “inappropriate” litigation strategy.
In considering “just costs and actual expenses” the court notes further that the costs of
litigating here would just as well have been incurred if the matter had not been removed, and that
the case is being remanded with fact discovery completed (other than as to those documents
identified at the September 5, 2018, status conference) and a preliminary injunction in place.
Accordingly, the court does not require the payment of any costs or expenses incurred as a result
of the improper removal.
IV.

Conclusion
For the foregoing reasons, the court ALLOWS Defendants D’Angelo and D’Angelo Law

Group’s Renewed Motion to Remand [#188]. The case is REMANDED to the Essex Superior
Court. The clerk shall mail a certified copy of this order to the clerk of the Superior Court of
Essex County so that that court may proceed with the case.
IT IS SO ORDERED.

Dated: January 24, 2019

/s/ Indira Talwani
United States District Judge

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