Leo Stoller v. CMH Manufacturing, Inc.
20-1227
| 7th Cir. | Oct 26, 2021Background
- Christopher Stoller bought a model home from CMH Manufacturing and refused to pay, alleging the home was defective; he and his nephew Michael sued for breach of contract and conspiracy in state court.
- Defendants removed the case to federal court on diversity jurisdiction; Christopher is subject to a preexisting filing bar and did not pursue an appeal.
- The district court permitted Leo Stoller to participate only as Michael’s court‑appointed guardian through counsel, but Leo was not made a party in his own right.
- The district court dismissed Michael’s contract-based claims because he was not a contracting party or an intended beneficiary, denied Christopher’s request to transfer the breach claim to Leo under Rule 25(c), and granted summary judgment to CMH on the breach claim.
- On appeal, Michael sought review (with Leo purporting to join); the Seventh Circuit affirmed, holding Leo lacks standing to appeal and Michael’s appellate arguments frivolous, and it issued show‑cause orders on sanctions and invited a bill of costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to appeal by Leo | Leo claims he may appeal (having participated as Michael’s guardian). | Leo was never made a party in his individual capacity. | Leo lacks standing; may not appeal because he is not a party. |
| Amount‑in‑controversy for removal | Stipulation said they do not “seek” more than $74,000, so diversity amount not met. | The stipulation did not bind them to refuse >$75,000; injunction sought could exceed $75,000. | Diversity amount satisfied; stipulation insufficient to prevent removal. |
| Michael’s entitlement as intended beneficiary | Michael asserts he is an intended beneficiary of Christopher’s contract and has equitable interest. | Contract does not mention Michael; Illinois presumes contracts bind only contracting parties. | Michael is not an intended beneficiary; his contract claims fail. |
| Transfer of Christopher’s claim to Leo (Rule 25(c)) | Christopher sought to transfer his breach claim to Leo so litigation could continue despite Christopher’s filing bar. | District court argued Leo hadn’t obtained leave to litigate and denied transfer. | Denial affirmed; transfer not permitted and Leo lacked requisite leave. |
Key Cases Cited
- Marino v. Ortiz, 484 U.S. 301 (standing principle that only parties or proper parties may appeal)
- Support Sys. Int’l, Inc. v. Mack, 45 F.3d 185 (7th Cir. 1995) (procedural posture on appeal by non‑parties)
- Johnson v. Pushpin Holdings, LLC, 748 F.3d 769 (7th Cir. 2014) (stipulation limits and removal amount analysis)
- Oshana v. Coca‑Cola Co., 472 F.3d 506 (7th Cir. 2006) (injunctive relief counted toward amount in controversy)
- Bank of America Nat’l Ass’n v. Bassman FBT, LLC, 981 N.E.2d 1 (Ill. App. Ct. 2012) (Illinois presumption that contracts bind only contracting parties)
- Carr v. Tillery, 591 F.3d 909 (7th Cir. 2010) (court’s authority to sanction attorney misconduct)