STURZENACKER v. CMC RESTORATION, INC. et al

Filing 18

OPINION. SIGNED BY HONORABLE JOSEPH F. LEESON, JR ON 7/27/17. 8/1/17 ENTERED AND COPIES MAILED TO UNREP, E-MAILED.(mas, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF PENNSYLVANIA
__________________________________________
GLORIA STURZENACKER ,
Plaintiff,

:
:
:
v.
:
:
CMC RESTORATION, INC.;
:
CHRISTOPHER & BRUMMETT, INC; and
:
DAVID KELLEY,
:
Defendants.
:
__________________________________________

No. 5:17-CV-00113-JFL

OPINION
Joseph F. Leeson, Jr.
United States District Judge
I.

July 27, 2017

Background
This case involves a dispute between a home-owner and a contractor. In June 2015, Plaintiff

Gloria Sturzenacker’s home was damaged by a storm. Compl. ¶¶ 10, 17, ECF No. 1. Shortly
thereafter, Sturzenacker entered into a contract with Defendant CMC Restoration (“CMC”) to repair
the damage. Compl. ¶¶ 19-20. Sturzenacker alleges that after work had begun, CMC “failed to
perform proper repairs” and that in response she refused to pay CMC. Compl. ¶¶ 21, 25. Following
her refusal to pay, CMC’s president filed a mechanics lien on Sturzenacker’s home and the
company hired Defendant Christopher & Brummett, Inc. (“C&B”), a collection agency, to collect
on the debt. Compl. ¶¶ 27-28. Sturzenacker alleges that C&B engaged in numerous harassing
behaviors in violation of multiple state and federal statutes.
Plaintiff’s complaint originally brought the following claims: violation of the federal Fair
Debt Collection Practices Act (“FDCPA”) against Defendant C&B; violation of Pennsylvania’s Fair
Credit Extension Uniformity Act (“FCEUA”) against Defendant CMC, C&B, and Kelley; violation
of Pennsylvania’s Home Improvement Consumer Protection Act (“HICPA”) against CMC;
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violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”)
against CMC and C&B; fraud against CMC and C&B; and breach of contract against CMC. On
April 12, 2017, Defendant C&B defaulted for failure to appear. Then, on June 28, 2017, this Court
entered an Order and an Opinion dismissing, without prejudice, the FCEUA claims against CMC
and Kelley. See ECF Nos. 13-14.
Additionally, this Court noted that the claims appeared to be part of the “same case or
controversy” and therefore this Court could exercise supplemental jurisdiction. Id. The Order
granted Sturzenacker leave to file an amended complaint but stayed the time to file said amended
complaint pending a decision regarding supplemental jurisdiction. The June 28 Order directed the
parties to submit briefs discussing whether this Court should exercise supplemental jurisdiction.
The parties were specifically instructed to discuss 28 U.S.C. § 1367(c)(2) and whether the state
claims in this case “substantially predominate over” the federal claim. 1
II.

Analysis
“Federal courts are courts of limited jurisdiction. They possess only that power authorized

by Constitution and statute, which is not to be expanded by judicial decree. It is to be presumed that
a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon
the party asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377
(1994) (internal citations omitted). Furthermore, the power to exercise supplemental jurisdiction
“need not be exercised in every case in which it is found to exist.” United Mine Workers v. Gibbs,
383 U.S. 715, 726 (1966). The Supreme Court has cautioned that “[n]eedless decisions of state law
should be avoided both as a matter of comity and to promote justice between the parties.” United
Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966).

1

The only federal claim, which was the sole basis for federal jurisdiction, was the FDCPA
claim against Defendant C&B, which has now been defaulted.
2

Where, as here, a party seeks supplemental jurisdiction of state-law claims, the court must
evaluate jurisdiction under the statutory principles of 28 U.S.C. § 1367. DeAsencio v. Tyson Foods,
Inc., 342 F.3d 301, 310 (3d Cir. 2003). The statute provides:
The district courts may decline to exercise supplemental jurisdiction over a claim
under subsection (a) if-(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over which the
district court has original jurisdiction,
(3) the district court has dismissed all claims over which it has original jurisdiction,
or
(4) in exceptional circumstances, there are other compelling reasons for declining
jurisdiction.
28 U.S.C. § 1367(c). Pursuant to subparagraph 2, “if it appears that the state issues substantially
predominate, whether in terms of proof, of the scope of the issues raised, or of the
comprehensiveness of the remedy sought, the state claims may be dismissed without prejudice and
left for resolution to state tribunals.” United Mine Workers v. Gibbs, 383 U.S. 715, 726-27 (1966).
Not all three factors must be present for the court to decline to exercise supplemental jurisdiction.
See De Asencio v. Tyson Foods, Inc., 342 F.3d 301, 309-312 (3d Cir. 2003) (holding that when the
state claims predominate over the federal claims in terms of proof and scope of the issues presented,
the court may decline to exercise supplemental jurisdiction). The Third Circuit Court of Appeals
has stated that § 1367(c)(2) may be invoked when “permitting litigation of all claims in the district
court can accurately be described as allowing a federal tail to wag what is in substance a state dog.”
Borough of W. Mifflin v. Lancaster, 45 F.3d 780, 789 (3d Cir. 1995).
The proof needed to litigate the state claims 2 is distinct from the proof needed for the
defaulted federal claim. Sturzenacker’s brief correctly points out that the defaulted federal claim is
not yet fully resolved. Pls.’ Br. Support Supp. Jur. at 7, ECF No. 17. However, Plaintiff is
incorrect in stating that this fact alone mandates the exercise of supplemental jurisdiction. The only
2

For the purposes of this Order, this Court assumes that the state-law claims dismissed
without prejudice may be sufficiently pled in an amended complaint.
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evidence that will be required to fully litigate the sole federal claim is evidence regarding the
amount of damages to be imposed on C&B. See Fed. R. Civ. P. 55(b)(2)(B); see also Comdyne I,
Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990) (“A consequence of the entry of a default
judgment is that ‘the factual allegations of the complaint, except those relating to the amount of
damages, will be taken as true’”). This amount of evidence would be vastly less than the “proof”
required to fully litigate the five state-law claims. Thus, “in terms of proof” the state claims
“substantially predominate” over the lone defaulted federal claim.
As it pertains to the “comprehensiveness of remedies sought,” this factor also weighs against
exercising supplemental jurisdiction. In the federal claim, Sturzenacker seeks an award of actual
and statutory damages, as well as attorney’s fees and costs. This relief is also requested in some of
the state law claims. However, this Court may be able to assess damages for the defaulted claim
upon briefing by the parties, while the state claims likely would see the question of damages posed
to a jury. Furthermore, the state claims include requests for treble damages, punitive damages, and
the removal of the mechanics lien from the subject property. Compl. ¶ 47. These remedies are
distinct from and broader than those sought in the federal claim.
Finally, “in terms of the scope of issues raised” it appears that the five state claims
“substantially predominate over” the federal claim. Again, the only issue remaining in the defaulted
federal claim is the amount of damages to be awarded. Conversely, the state claims raise issues of
liability, the possibility of affirmative defenses, and damages. Additionally, the only law applicable
to these issues is state law. Thus, it is clear that “in terms of the scope of the issues presented” the
state law claims “substantially predominate over” the federal claim.
Consequently, this Court declines to exercise supplemental jurisdiction pursuant to 28
U.S.C. § 1367(c)(2). See Ruiz v. Apco Constr., No. 2:10-cv-1312, 2014 U.S. Dist. LEXIS 82270, at
*16 (D. Nev. June 17, 2014) (finding that the state law claims against APCO “substantially
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predominate[d]” over the stayed federal claims against a co-defendant and the federal claims against
another co-defendant against whom default had been entered); Boyd v. Herron, 39 F. Supp. 2d
1129, 1131 (N.D. Ind. Mar. 15, 1999) (declining to exercise supplemental jurisdiction after the
entry of default against the co-defendants because the only substantive issues remaining were those
related to the state law claim). Moreover, the justification for supplemental jurisdiction “lies in
considerations of judicial economy, convenience and fairness to litigants” and “if these are not
present a federal court should hesitate to exercise jurisdiction over state claims.” Gibbs, 383 U.S. at
726. Looking to concerns of judicial economy and convenience to the parties, this Court finds that
because this case is in the early stages of litigation, the risk of conflicting court decisions and
duplicative discovery is minimal.
III.

Conclusion
Because federal courts are courts of limited subject matter jurisdiction and the state law

claims remaining in this case “substantially predominate over” the lone defaulted federal law claim,
this Court declines to exercise of supplemental jurisdiction.
A separate Order follows.

BY THE COURT:

/s/ Joseph F. Leeson, Jr.________
JOSEPH F. LEESON, JR.
United States District Judge

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