Universal Truck & Equipment Co. v. Southworth-Milton, Inc.
765 F.3d 103
1st Cir.2014Background
- Plaintiffs (Rhode Island citizens) sued Caterpillar, CAT Financial, Southworth (MA/NH), and others in Rhode Island state court for breach of an alleged oral agreement concerning sale/marketing of repossessed construction equipment.
- Peter D’Agostino, a Rhode Island resident and Southworth salesman, was an original defendant; his presence would have destroyed diversity.
- Rhode Island state court granted D’Agostino’s motion to dismiss on October 25, 2010, but that dismissal was not yet final when defendants removed the case to federal court on November 16, 2010.
- Plaintiffs moved to remand, arguing removal was improper because the dismissal was not final; defendants argued D’Agostino was fraudulently joined. The district court accepted fraudulent joinder and denied remand.
- District court later granted summary judgment for defendants (finding no oral contract) and awarded attorneys’ fees to Southworth as frivolous; plaintiffs appealed as to remand, summary judgment, and fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was removal defective/timely under §1446 given D’Agostino’s non-final dismissal? | Removal improper because state-court dismissal was not final; removal untimely. | Removal proper because D’Agostino was fraudulently joined (his citizenship can be disregarded). | Removal was procedurally defective but not jurisdictionally fatal; no remand required because complete diversity existed at judgment and plaintiffs waived the timely‑removal objection. |
| Does Caterpillar v. Lewis permit upholding federal judgment despite antecedent statutory removal defects? | Plaintiffs urged remand despite procedural defect. | Defendants relied on Caterpillar to argue statutory (not jurisdictional) defect doesn’t require vacatur/remand when diversity exists at judgment. | Caterpillar applies: procedural defect does not require vacatur/remand when complete diversity exists at time of judgment. |
| Was summary judgment for Southworth on the oral-contract claim erroneous? | Plaintiffs contend disputed fact issues existed supporting an oral contract. | Southworth: no evidence supports oral agreement; plaintiff’s own witness disclaimed such an agreement. | Affirmed: plaintiffs’ appellate briefing was perfunctory and cited no record evidence; summary judgment proper. |
| Was award of attorneys’ fees to Southworth an abuse of discretion? | Plaintiffs argued award improper. | Southworth: claims were frivolous; fees warranted under inherent power and R.I. statute. | Affirmed: district court did not abuse discretion in finding claims frivolous and awarding fees. |
Key Cases Cited
- Caterpillar, Inc. v. Lewis, 519 U.S. 61 (procedural removal defect does not require vacatur/remand when diversity exists by judgment)
- Grupo Dataflux v. Atlas Global Group, L.P., 541 U.S. 567 (distinguishes jurisdictional defects from procedural cures; parties cannot manufacture diversity)
- Esposito v. Home Depot U.S.A., Inc., 590 F.3d 72 (1st Cir. 2009) (statutory removal time-limit is procedural, not jurisdictional)
- Whitney Bros. Co. v. Sprafkin, 60 F.3d 8 (1st Cir. 1995) (standards for finding bad faith and awarding attorneys’ fees under inherent power)
- Grubbs v. Gen. Elec. Credit Corp., 405 U.S. 699 (statutory removal defects do not always mandate remand)