Forrence et al v. Koch et al

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Kenneth Forrence et al.
v. Civil No. 18-cv-134-LM
Opinion No. 2018 DNH 140
Paul Koch and Acquvest, Inc.
O R D E R
Plaintiffs Kenneth and Diana Forrence brought suit in
Hillsborough County Superior Court, Southern District against
defendants Paul Koch and Acquvest, Inc., seeking to quiet title
to a parcel of land and requesting that the court order Koch to
remove items stored on the property. On February 9, 2018, Koch
removed the case to this court. In his notice of removal, Koch
asserted both diversity jurisdiction and federal question
jurisdiction based on several federal statutes and
constitutional amendments. See doc. no. 1.
On May 10, 2018, Koch filed a “notice of bankruptcy stay in
effect.” See doc. no. 14. In that notice, Koch states that his
estranged wife has filed for bankruptcy in Connecticut, and that
he believes this matter should be stayed in light of her
bankruptcy filing. The court construed Koch’s notice as a
motion to stay the case and directed plaintiffs to respond.
In their response (doc. no. 15), plaintiffs addressed
numerous issues and made several arguments, including: 1) the
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motion to stay is without merit, 2) default was entered against
Koch in superior court prior to Koch removing the case to this
court and, most importantly, 3) the court lacks subject matter
jurisdiction and the case should be remanded back to superior
court.
In light of plaintiffs’ challenge to the court’s subject
matter jurisdiction, the court directed Koch to “file a
memorandum with any supporting materials demonstrating that the
court has subject matter jurisdiction.” Doc. no. 16 at 2. The
court also noted that if “Koch fails to file his memorandum, the
court will determine the existence of subject matter
jurisdiction based on the parties’ current filings.” Id. Koch
has since filed his memorandum. See doc. no. 17.
STANDARD OF REVIEW
A removed case must be remanded to state court if the
district court lacks subject matter jurisdiction. 28 U.S.C. §
1447(c). Federal courts have federal question jurisdiction when
an action arises “under the Constitution, laws, or treaties of
the United States.” 28 U.S.C. § 1331. Federal courts have
diversity jurisdiction under 28 U.S.C. § 1332(a) when the
parties are citizens of different states and “the matter in
controversy exceeds the sum or value of $75,000, exclusive of
interest and costs.” § 1332(a). In the context of disputes
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over removal jurisdiction, it is the removing defendant’s burden
to show that removal was proper. See Fayard v. Northeast
Vehicle Servs., LLC, 533 F.3d 42, 48 (1st Cir. 2008); see also
Acosta–Ramirez v. Banco Popular de P.R., 712 F.3d 14, 20 (1st
Cir. 2013).
DISCUSSION
In his memorandum, Koch does not attempt to establish the
existence of federal question or diversity jurisdiction. To the
contrary, he argues that his wife’s bankruptcy filing “removed
jurisdiction from this court” until that case is closed. Doc.
no. 17 at 2.
Koch is incorrect. Even if Koch’s wife’s bankruptcy filing
would give rise to an automatic stay, the “court necessarily has
the jurisdiction to determine whether it has subject matter
jurisdiction over the case or controversy before it.” In re
Hawkins, 340 B.R. 642, 646 (Bankr. D.D.C. 2006) (noting that a
federal court may make a threshold determination of its subject
matter jurisdiction even when an automatic stay is in effect);
Pennsylvania v. Tap Pharm. Prod., Inc., 415 F. Supp. 2d 516, 521
(E.D. Pa. 2005) (holding that the court’s determination that a
proceeding should be stayed “is subject to an important
limitation: the existence of subject matter jurisdiction”).
Thus, the court must determine whether it has subject matter
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jurisdiction prior to addressing the parties’ arguments
concerning whether a stay of the proceedings is warranted.
I. Federal Question Jurisdiction
Plaintiffs’ complaint does not assert claims under the
Constitution, laws, or treaties of the United States. In his
notice of removal, Koch states:
Removal is based on grounds of . . . federal question
under 28 U.S.C. § 1331, 28 U.S.C. § 1441, and including
28 U.S.C. § 1446, 28 U.S.C. § 1332, 28 U.S.C. § 1367, 18
U.S.C. § 1028, 42 U.S.C. § 1983, 12 U.S.C. §
1819(b)(2)(A), US Constitution Article II, First,
Seventh and 14th Amendments, Federal Courts Jurisdiction
and Venue Clarification Act of 2011, Tedford v. Warner-
Lambert Co., 327 F.3d 423 (5th Cir. 2003), and legal
writing at http://federalpracticemanual.org/node/14.
Doc. no. 1 at 1. In his 34-page notice of removal, Koch
includes a brief section titled: “Federal Question
Jurisdiction.” Doc. no. 1 at 29. It reads as follows:
The US Federal courts have jurisdiction over the
statutes, including the 42 U.S. Code § 1983, The
“Act”, the “Act” addressed herein, the laws and the
issues herein, the Constitution, Fifth Amendment (for
suppressing information), Seventh Amendment (for
denying the Defendant right to a jury trial by
suppressing information of extrinsic fraud barring the
commencement of an action in equity in a state court
under Keystone Driller Co, v General Excavator Co. 290
U.S. 240 (1933). Keystone Driller Co, v General
Excavator Co. Nos 34 and 35:
“...1) He who comes into equity must come with clean
hands. P 290 U.S. 244. 2) This maxim applies only when
some unconscionable act of Plaintiff has immediate and
necessary relation to the equity he seeks in the
litigation...", 14th Amendment.
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Id. at 29. The language above represents the entirety of Koch’s
discussion in his notice of removal of the existence of federal
question jurisdiction.
Although Koch’s statement in his notice of removal is
unclear, he appears to assert federal question jurisdiction on
the basis of plaintiffs moving for, and ultimately obtaining, an
entry of default against him for failure to appear in superior
court prior to his removal.1 Thus, his assertion rests on a
theory that is in the nature of a defense to the lawsuit.
Even if plaintiffs’ conduct in obtaining an entry of
default could give rise to a cause of action based on a federal
statute or the Constitution, it cannot establish federal
question jurisdiction in this case. Federal question
jurisdiction must arise from the claim to relief and cannot
originate from a defense. See Rosselló-González v. Calderón-
Serra, 398 F.3d 1, 10 (1st Cir. 2004) (“[I]n deciding (for
removal purposes) whether a case presents a federal ‘claim or
right,’ a court is to ask whether the plaintiff’s claim to
relief rests upon a federal right . . . .” (internal citation
and quotation marks omitted)); Lee Bank v. Bearbones, Inc., No.
3:17-CV-30120-KAR, 2017 WL 4540957, at *1 (D. Mass. Oct. 11,
1 The majority of Koch’s notice of removal pertains to
plaintiffs’ allegedly fraudulent behavior in obtaining the
default against him in superior court.
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2017) (“[R]emoval jurisdiction based on a federal question stems
only on the basis of federal claims in the original complaint
and not on defenses or counterclaims.”). Therefore, the court
does not have subject matter jurisdiction based on a federal
question.
II. Diversity Jurisdiction
“If removal of a civil action is sought on the basis of the
jurisdiction conferred by section 1332(a), the sum demanded in
good faith in the initial pleading shall be deemed to be the
amount in controversy.” 28 U.S.C. § 1446(c)(2). When, as in
this case, the complaint does not claim a specific amount of
damages, “the notice of removal may assert the amount in
controversy.”2 Id. at § 1446(c)(2)(A). Removal of an action
based on an amount asserted in the notice of removal is proper
“if the district court finds, by the preponderance of the
evidence, that the amount in controversy exceeds the amount in
section 1332(a).” Id. at § 1446(c)(2)(B).
In his notice of removal, Koch includes a section titled
“Diversity of Citizenship Jurisdiction.” Doc. no. 1 at 28.
With regard to the amount in controversy, Koch provides:
2 Consistent with New Hampshire practice, no specific amount
of damages is claimed in the complaint. See RSA 508:4–c; Evans
v. Yum Brands, Inc., 326 F. Supp. 2d 214, 218 n.3 (D.N.H. 2004).
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“The amount in controversy exceeds the sum of $75,000 exclusive
of costs and interest. The original contract price on the land,
in addition to the consideration of the purchase contract to the
Defendant caveat, was $90,000.00 alone.” Id.
As discussed above, Koch did not address the existence of
the court’s subject matter jurisdiction in his memorandum or
submit any evidence relating to the amount in controversy.
Thus, the only support for the existence of diversity
jurisdiction is the unsworn statement contained in the notice of
removal that plaintiffs purchased the property at issue for
$90,000. That statement is insufficient to establish that the
amount in controversy requirement is met in this case. See Dart
Cherokee Basin Operating Co., LLC v. Owens, 135 S. Ct. 547, 554
(2014) (noting that “[e]vidence establishing the amount is
required by § 1446(c)(2)(B) . . . when the plaintiff contests,
or the court questions, the defendant’s allegation” in its
notice of removal); Sanders v. Luminescent Sys., Inc., No. 14-
cv-188-PB, 2014 WL 2815810, at *1 (D.N.H. June 23, 2014) (“When
the amount in controversy is disputed, courts require more than
a bare allegation such as that included in defendants’ notice of
removal.”); Robson v. Capitol Pizza Huts, Inc., No. 1:12-CV-100-
GZS, 2012 WL 2861017, at *3 (D. Me. July 11, 2012) (defendant
could not establish subject matter jurisdiction on basis of
statement in notice of removal because “there is nothing in the
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record that would permit the Court to find by a preponderance of
the evidence that the amount in controversy exceeds $75,000,
exclusive of interests and costs”).
For these reasons, Koch has failed to carry his burden to
show that this court has subject matter jurisdiction over the
case. Therefore, the case must be remanded to state court.
CONCLUSION
For the foregoing reasons, this case is remanded to the
Hillsborough County Superior Court.
SO ORDERED.
__________________________
Landya McCafferty
United States District Judge
July 9, 2018
cc: Counsel and Pro Se Parties of Record
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