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Mandley Excavating, LLC v. Lund

United States District Court, Fourth Circuit

May 29, 2013

MANDLEY EXCAVATING, LLC,
v.
ARTHUR H. LUND, JR., et al.

MEMORANDUM OPINION

DEBORAH K. CHASANOW, District Judge.

Presently pending and ready for review in this mechanic's lien case are the motions to remand (ECF No. 17) and for an emergency hearing and order prohibiting the transfer of real property (ECF No. 22) filed by Plaintiff Mandley Excavating, LLC. The issues have been fully briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, the motion to remand will be granted, but the fee request will be denied.

I. Background

A. Factual Background

Defendants Arthur Lund, James Pailthorp, and the estate of Sharon Pailthorp ("in-state Defendants"), all Maryland residents, own real property at 7035 Indian Head Highway in Charles County, Maryland. (ECF No. 2, at 2-3). The real property is composed of two parcels, totaling 20.34 acres. On September 23, 2010, Defendant Maryland CVS Pharmacy, LLC ("CVS")[1] signed a lease for a 1.84 acre portion of the property. (ECF No. 2-2). The lease between the in-state Defendants and CVS provided for the construction of a 13, 225 square foot retail pharmacy, roads, sewers, and infrastructure improvements, both inside and outside of the bounds of the portion of real property described in the lease. The lease contract included specifications for this construction, reserved a non-exclusive right for the in-state Defendants to use these infrastructure improvements, and specified that the in-state Defendants will retain ownership of the new construction and improvements. (ECF No. 17-1).

After signing the lease, CVS contracted with TVC Construction Services for the road construction and infrastructure improvements. TVC then contracted with Kane Builders, S&D, Inc., which, in turn, contracted with Plaintiff Mandley Excavating for a portion of this project. (ECF No. 2-8). Plaintiff provided labor and materials for the construction of the pharmacy and the paving of streets and access roads on and around the portion of the parcel leased by CVS. Plaintiff also provided labor and materials for the construction of waterlines, sewers, storm drains, and utilities on and around the land leased by CVS. Plaintiff's work occurred between September 8, 2011 and October 26, 2011. Plaintiff avers that it was not paid the $276, 926.45 that it was due for that work.

On October 12, 2011, the in-state Defendants filed a declaration of easements with the clerk of Charles County to establish easement rights for themselves across portions of the real property, including land covered by the lease with CVS. This declaration granted access, parking, utility, and sign easements over Plaintiff's road work for the benefit of the instate Defendants. (ECF No. 2-10).

B. Procedural Background

On February 26, 2013, Plaintiff filed a petition against Defendants in the Circuit Court for Charles County, requesting a mechanic's lien against the real property and CVS's leasehold interest in the property, and asserting claims of unjust enrichment and quantum meruit. (ECF No. 2). Defendants removed the case to this court on March 19, asserting that the in-state Defendants were fraudulently joined to avoid removal on the basis of diversity jurisdiction. (ECF No. 1). On April 18, Plaintiff moved to remand the case to state court. (ECF No. 17).[2] Defendants opposed this motion (ECF No. 23), and Plaintiff replied (ECF No. 27). Plaintiff has also filed a number of papers requesting an emergency hearing, because it believes that the in-state Defendants are going to sell the property to the State Highway Administration. (ECF Nos. 18 & 22). One such motion has been denied.[3] (ECF No. 20). Defendants have filed a motion to strike the remaining emergency motion. (ECF No. 25).

II. Standard of Review

This case was removed from Maryland state court on the basis of diversity jurisdiction, pursuant to 28 U.S.C. ยง 1332, but, as will be seen, the parties are not completely diverse. Defendants contend that the in-state defendants were "fraudulently joined" and need not be considered for jurisdiction purposes.

The doctrine of fraudulent joinder is an exception to the complete diversity rule that is normally required for a federal court to exercise diversity jurisdiction. See Bendy v. C.B. Fleet Co., No. CCB-10-3385, 2011 WL 1161733, *3 (D.Md. Mar. 28, 2011). This doctrine allows a federal court to "disregard, for jurisdictional purposes, the citizenship of certain [in-state] defendants, assume jurisdiction over a case, dismiss th[ose] defendants, and thereby retain jurisdiction." Mayes v. Rapoport, 198 F.3d 457, 464 (4th Cir. 1999).

When removal is based on a theory of fraudulent joinder, the defendant opposing remand carries a very heavy burden. The defendant must show either that: (1) there has been outright fraud in the plaintiff's pleading, or (2) "there is no possibility that the plaintiff would be able to establish a cause of action against the in-state defendant in state court." Id. (quoting Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993)).

Judges in this court and others around the country have affirmed that "no possibility' does actually mean no possibility." Barlow v. John Crane Houdaille, Inc., WMN-12-1780, 2012 WL 5388883, at *2 n. 1 (D.Md. Nov. 1, 2012) (citing Hartley v. CSX Transp., Inc., 187 F.3d 422, 426 (4th Cir. 1999) (noting that a plaintiff is only required to show "a slight possibility of a right to relief" or that he has a "glimmer of hope" of success); Green v. Amerada Hess Corp., 707 F.2d 201, 205 (5th Cir. 1983) ("The removing party must prove that there is ...


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