Infinity Fulfillment Group, LLC et al. v. Cenveo Corporation, et al.
MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that movants' motion to remand (ECF #19) is DENIED. Signed by District Judge Stephen N. Limbaugh, Jr on 8/19/2014. (JMC)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
INFINITY FULFILLMENT GROUP, LLC,
GFA DECORATIVE TRADE SERVICES, INC.,
and STEPHEN C. HANNIGAN,
CENVEO CORPORATION and
MICHAEL R. DENNY,
) Case No. 4:14CV966 SNLJ
MEMORANDUM AND ORDER
This matter is before the Court on movants’ motion to remand. The motion has
been fully briefed and this matter is ripe for disposition. For the following reasons, the
Court concludes that federal diversity jurisdiction does exist, and movants’ motion to
remand will be denied.
The parties participated in arbitration that was initiated on August 31, 2012
regarding a contract dispute. On January 6, 2014, the arbitrators issued their Award of
Arbitrators. On April 7, 2014, movants filed their Motion to Modify or, in the
Alternative, Vacate the Arbitration Award pursuant to section 435.425 RSMo. in the
Circuit Court of St. Louis County. Following service of the motion, respondents timely
filed their Notice of Removal in this Court on May 23, 2014, based on diversity
jurisdiction. Movants filed a motion to remand requesting that this Court remand this
matter to the Circuit Court of St. Louis County pursuant to 28 U.S.C. § 1447(c) alleging a
lack of diversity jurisdiction.
Movants are Missouri citizens. Infinity Fulfillment Group, LLC is a limited
liability company whose sole member is GFA Decorative Trade Services, Inc., a
Missouri corporation with its principal place of business in Missouri. Stephen Hannigan
is domiciled in Missouri. Respondent Cenveo Corporation is a Delaware corporation
with its principal place of business in Connecticut. Respondent Michael Denny was
domiciled in Missouri during the arbitration proceedings but at the time this action was
filed he was domiciled in Florida. Denny retired and moved to Florida in January 2014.
Legal Standard – Jurisdiction, Removal, and Remand
The Eighth Circuit has admonished district courts to “be attentive to a satisfaction
of jurisdictional requirements in all cases.” Sanders v. Clemco Industries, 823 F.2d 214,
216 (8th Cir. 1987). “Only state court actions that originally could have been filed in
federal court may be removed to federal court by the defendant.” Caterpillar Inc. v.
Williams, 482 U.S. 386, 392 (1987). 28 U.S.C. § 1332(a)(1) provides that “district courts
shall have original jurisdiction of all civil actions where the matter in controversy . . . is
between citizens of different states.” “In the case of a removed action, diversity [of
citizenship] must exist both when the state petition is filed and when the petition for
removal is filed.” Knudson v. Systems Painters, Inc., 634 F.3d 968, 975 (8th Cir. 2011).
“[T]he rationale for this time-of-filing rule is to prevent defendants from manipulating
jurisdiction by changing their citizenship after the plaintiff has filed its suit in state
court.” Id. “[I]n a case where there are plural plaintiffs and plural defendants a federal
court does not have diversity jurisdiction unless there is diversity between all plaintiffs
and all defendants.” Iowa Public Service Co. v. Medicine Bow Coal Co., 556 F.2d 400,
403-04 (8th Cir. 1977).
28 U.S.C. § 1441 and § 1446 govern removal of a state court action to federal
court. Pursuant to § 1446(b), “[t]he notice of removal of a civil action or proceeding
shall be filed within 30 days after the receipt by the defendant, through service or
otherwise, of a copy of the initial pleading setting forth the claim for relief upon which
such action or proceeding is based . . . .” “A motion to remand the case on the basis of
any defect other than lack of subject matter jurisdiction must be made within 30 days
after the filing of the notice of removal under section 1446(a).” 28 U.S.C. § 1447(c).
The party invoking federal jurisdiction bears the burden of showing that all prerequisites
to jurisdiction are satisfied. Hatridge v. Aetna Cas. & Sur. Co., 415 F.2d 809, 814 (8th
Cir. 1969). “[A]ll doubts about federal jurisdiction [are resolved] in favor of remand.”
Transit Cas. Co. v. Certain Underwriters at Lloyd's of London, 119 F.3d 619, 625 (8th
The disputed issues in this case include the proper time to determine whether
diversity jurisdiction exists, and the citizenship of Denny at that time. Movants argue
that Denny’s citizenship should be examined as of the filing of the arbitration action and
therefore, there cannot be diversity jurisdiction because he was a Missouri citizen at that
time. Movants characterize the arbitration proceeding and the motion to modify or vacate
as continuing litigation and refer to the motion as an appeal from arbitration. Movants
complain that respondents cannot create diversity jurisdiction “mid-litigation” by a
change in Denny’s domicile after the arbitration proceeding commenced but before the
filing of the motion to modify or vacate.
Respondents contend that Denny’s citizenship should be examined at the time of
filing the motion to modify or vacate in state court and the time of filing the notice of
removal, at which times Denny was a Florida citizen. Respondents argue that arbitration
is not a civil action and the motion to modify or vacate is not an appeal from the
arbitration. Instead, they maintain that the motion to modify or vacate is the civil action,
there was complete diversity among the parties at the time of the filing of the civil action
in state court and the removal in this Court and, therefore, jurisdiction is proper in this
Because this is a removed action based on diversity jurisdiction, diversity of
citizenship is required at two points – when the state court action is filed and when the
notice of removal is filed in this Court. Knudson, 634 F.3d at 975. Here, the first filing
in a court of law was the filing of the motion to modify or vacate pursuant to section
435.425 RSMo. in state court. The filing of the motion is the commencement of this civil
action. Federal Rule of Civil Procedure 3 provides “[a] civil action is commenced by
filing a complaint with the court.” The determination as to whether there is diversity of
citizenship is the commencement of the civil action – first in state court at the time of
filing this action and second in this Court at the time of filing the notice of removal – not
the initiation of the arbitration proceeding. See Rowland v. Patterson, 882 F.2d 97 (4th
Cir. 1989) (en banc) (holding that diversity was determined by parties’ citizenship at time
federal diversity action was commenced rather than time arbitration claim was filed).
Movants have not submitted, and this Court has not found, any case law or other
authority supporting their position that the citizenship of the parties in a civil action
should be determined at the time a private arbitration proceeding is initiated as opposed
to when a civil action related to the arbitration proceeding is filed in a court of law. For
purposes of a civil action, this Court finds that the legal and logical commencement of the
civil action is the filing of a pleading in a court of law – not the time of filing of a prelitigation claim whether it be an arbitration proceeding, an insurance claim, or a
Further, movants argue that this action should be remanded because the evidence
fails to establish that Denny was a citizen of Florida at the time of the filing in state court
and in this Court. “Citizenship is determined by a person’s physical presence in a state
along with his intent to remain there indefinitely.” Altimore v. Mount Mercy College,
420 F.3d 763, 768 (8th Cir. 2005). In support of removal, respondents filed Denny’s
affidavit declaring that he retired from Cenveo in December 2013; relocated to Florida in
January 2014 to a home he had previously purchased; sold his home in Missouri; notified
his creditors, service providers, friends, and family of his change of residence to his
Florida home; obtained a Florida driver’s license and surrendered his Missouri driver’s
license; purchased automobile insurance consistent with Florida’s requirements;
registered to vote in Florida; has bank accounts in Florida; joined a local golf club in
Florida; and since moving to Florida has maintained an intent to be and remain a Florida
citizen. The information in Denny’s affidavit is more than sufficient to establish his
Florida citizenship at the relevant times for purposes of diversity jurisdiction.
Movants offer evidence that they suggest is contrary to Denny’s affidavit and
creates doubt as to his citizenship. First, they offer an undated page from a deposition in
which Denny answered “no” when asked if he was retiring at the end of the year. In
response, respondents offer another page from Denny’s deposition in which he testified
that he had purchased a home in Florida and would like to retire to that home soon if he
could. Second, movants offer affidavit testimony that the affiant was told by a Cenveo
employee that in February 2014 Denny was presented with a cake by Cenveo employees
and was still on Cenveo’s payroll. Movants also offer an e-mail exchange between
counsel for the parties on this issue. In the e-mail exchange, movants’ counsel contends
that Denny’s attendance at a going away party at Cenveo in February 2014 and the fact
that he was still on Cenveo payroll at that time indicates he “was not absent from the state
without an intent to return and/or remains a Missouri citizen.” Respondents’ counsel
replied that Denny has completely retired from Cenveo, sold his Missouri home, and
physically moved to Florida where he intends to remain, which all occurred in stages
before movants filed the motion to modify or vacate. Respondents’ counsel also states
that Denny is no longer a Missouri resident and his presence at the Eureka, Missouri
facility in February and severance arrangements are irrelevant.
Respondents argue that movants’ affidavit is inadmissible hearsay and should not
be considered. Movants contend that the statements made to the affiant by a Cenveo
employee fall under the hearsay exception for admissions against interest. It is not
necessary, however, to make a determination as to the hearsay issue. Even considering
the affidavit testimony that Denny was at Cenveo in Missouri in February 2014 receiving
a cake and was still on the Cenveo payroll, movants’ evidence does not create a doubt
with regard to Denny’s Florida citizenship at the time the state court action was filed in
April 2014 or when the notice of removal was filed in this Court in May 2014. Finally,
movants suggestion that Denny’s retirement and relocation is part of a conspiracy by
Cenveo and Denny to create diversity jurisdiction is without merit. Movants only weakly
raise the issue and do not offer any factual support for their theory.
Based on the foregoing, this Court finds that at the time of the filing of the motion
to modify or vacate in state court, and at the time of the filing of the notice of removal in
this Court, Denny was a Florida citizen. Therefore, there was complete diversity among
the parties at the time of the filing of the civil action in state court and the removal in this
Court and jurisdiction is proper in this Court.
IT IS HEREBY ORDERED that movants’ motion to remand (ECF #19) is
Dated 19th this day of August, 2014.
STEPHEN N. LIMBAUGH, JR.
UNITED STATES DISTRICT JUDGE
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