Huelsman v. Grosz

Filing 10

REPORT AND RECOMMENDATIONS; ORDER DENYING JOINDER OF THE AMERICAN ARBITRATION ASSOCIATION - Because Plaintiff has not demonstrated that this Court has subject matter jurisdiction of this case, it should be dismissed without prejudice for lack of sub ject matter jurisdiction. That dismissal will render moot the Fed. R. Civ. P. 12(b)(6) branch of Defendant's Motion. Plaintiff's Motion for Joinder by Court Order (Doc. No. 8) is DENIED. Objections to R&R due by 2/24/2014. Signed by Magistrate Judge Michael R Merz on 2/5/2014. (kpf1)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT DAYTON
CARL E. HUELSMAN,
Plaintiff,

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vs

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Case No. 3:13-cv-413
District Judge Walter Herbert Rice
Magistrate Judge Michael R. Merz

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WILLIAM R. GROSZ,

Defendant.

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REPORT AND RECOMMENDATIONS; ORDER DENYING
JOINDER OF THE AMERICAN ARBITRATION ASSOCIATION

This case is before the Court on Motion to Dismiss of Defendant William R. Grosz
(Doc.No. 4). Because Plaintiff is proceeding pro se, the Court advised him in writing of his
obligation to file a memorandum in opposition not later than January 27, 2014 (Doc. No. 6,
PageID 142). No such memorandum has been filed. Instead, Plaintiff filed a Motion for Joinder
by Court Order (Doc. No. 8)
The first branch of Defendant’s Motion seeks dismissal under Fed. R. Civ. P. 12(b)(1) for
lack of subject matter jurisdiction. The Complaint lists Plaintiff’s address as 4340 Iddings Road
in West Milton, Ohio, and Defendant’s address as 3900 State Route 571, Troy, Ohio.
Manifestly, there is not diversity of citizenship between the parties and thus no subject matter
jurisdiction under 28 U.S.C. § 1332.

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In the caption, Plaintiff says the action is brought pursuant to 26 U.S.C. § 7434. That
section creates a cause of action by one person against another person who has filed a fraudulent
information return with the Internal Revenue Service with respect to payments purportedly made
to the first person. In other words, if person A filed a false W-2 form claiming to have paid
wages to person B, person B could bring suit against person A for damages. Such a claim would
arise under federal law and could be brought in federal court. However, despite the caption, no
claims is made in the Complaint about any false IRS information return. Instead, the Complaint
seeks to have this Court appoint an arbitrator between the parties. Thus there is no subject matter
jurisdiction under the general federal question statute, 28 U.S.C. § 1331.
Federal courts are courts of limited jurisdiction; they are empowered to hear only those
cases which are within the judicial power of the United States as defined in the United States
Constitution and as further granted to them by Act of Congress. Finley v. United States, 490
U.S. 545, 550 (1989); Aldinger v. Howard, 427 U.S. 1, 15 (1976). Therefore there is a
presumption that a federal court lacks jurisdiction until it has been demonstrated. Turner v.
President, Directors and Co. of the Bank of North America, 4 U.S. 8 (1799). Facts supporting
subject matter jurisdiction must be affirmatively pleaded by the person seeking to show it.
Bingham v. Cabot, 3 U.S. 382 (1798). The burden of proof is on the party asserting jurisdiction
if it is challenged. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 182-83 (1935).
A federal court is further obliged to note lack of subject matter jurisdiction sua sponte. Answers
in Genesis of Ky., Inc. v. Creation Ministries Int’l, Ltd., 556 F.3d 459, 465 (6th Cir. 2009).
Plaintiff may believe that by language in the corporate documents of Creative
Construction Services LLC and Creative Construction Investments LLC the members of those
corporations consented to federal court jurisdiction. However, subject matter jurisdiction cannot

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be conferred on a federal court by consent. Bender v. Williamsport Area Sch. Dist., 475 U.S.
534, 541(1986), quoting Mitchell v. Maurer, 293 U.S. 237, 244 (1934).
Because Plaintiff has not demonstrated that this Court has subject matter jurisdiction of
this case, it should be dismissed without1 prejudice for lack of subject matter jurisdiction. That
dismissal will render moot the Fed. R. Civ. P. 12(b)(6) branch of Defendant’s Motion.
In the Motion for Joinder, Plaintiff seeks a court order joining the American Arbitration
Association as a party pursuant to Fed. R. Civ. P. 19. Plaintiff apparently believes this Court can
obtain jurisdiction by adding the AAA as a party (See Doc. No. 8, PageID 148).
The American Arbitration Association is not a party to the dispute between the persons already
parties to this action; the fact that those parties named the AAA as a source of arbitrators in their
corporate documents does not make the AAA a necessary party to this case. Instead, if this
Court or any court were to compel arbitration of the dispute between the parties by the AAA, it
would still be for those parties to submit the matter to the AAA pursuant to its rules. The Motion
for Joinder is DENIED.
Because the law cited above is dispositive of this matter, the Magistrate Judge forebears
consideration of Defendant’s res judicata argument based on the final unappealed judgment in
Creative Construction Service, LLC v. Grosz, Case No. 3:13-cv-397.

February 5, 2014.
s/ Michael R. Merz
United States Magistrate Judge

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Defendant seeks dismissal with prejudice (Doc. No. 4, PageID 137). The Court cannot enter a dismissal with
prejudice – i.e. on the merits – in a case in which it lacks subject matter jirisdction.

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NOTICE REGARDING OBJECTIONS
Pursuant to Fed. R. Civ. P. 72(b), any party may serve and file specific, written objections to the
proposed findings and recommendations within fourteen days after being served with this Report
and Recommendations. Pursuant to Fed. R. Civ. P. 6(d), this period is extended to seventeen
days because this Report is being served by one of the methods of service listed in Fed. R. Civ.
P. 5(b)(2)(C), (D), (E), or (F). Such objections shall specify the portions of the Report objected
to and shall be accompanied by a memorandum of law in support of the objections. If the Report
and Recommendations are based in whole or in part upon matters occurring of record at an oral
hearing, the objecting party shall promptly arrange for the transcription of the record, or such
portions of it as all parties may agree upon or the Magistrate Judge deems sufficient, unless the
assigned District Judge otherwise directs. A party may respond to another party=s objections
within fourteen days after being served with a copy thereof. Failure to make objections in
accordance with this procedure may forfeit rights on appeal. See United States v. Walters, 638
F.2d 947, 949-50 (6th Cir. 1981); Thomas v. Arn, 474 U.S. 140, 153-55 (1985).

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