Marlin Business Bank v. Halland Companies, LLC

18 F. Supp. 3d 239, 2014 WL 1814379, 2014 U.S. Dist. LEXIS 63220
CourtDistrict Court, E.D. New York
DecidedMay 7, 2014
DocketNo. 14-cv-2382 (ADS)(GRB)
StatusPublished
Cited by3 cases

This text of 18 F. Supp. 3d 239 (Marlin Business Bank v. Halland Companies, LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Marlin Business Bank v. Halland Companies, LLC, 18 F. Supp. 3d 239, 2014 WL 1814379, 2014 U.S. Dist. LEXIS 63220 (E.D.N.Y. 2014).

Opinion

DECISION AND ORDER

SPATT, District Judge.

On March 21, 2014, the Plaintiff Marlin Business Bank (the “Plaintiff’) commenced this action against the Defendant the Hal-land Companies, LLC (the “Defendant”) in the Philadelphia County Court of Common Pleas, alleging a breach of an equipment lease agreement.

The following facts are drawn from the complaint. According to the complaint, the Plaintiff is a commercial bank charted by the State of Utah and a member of the Federal Reserve System, with an office in Philadelphia County. Among other things, the Plaintiff is a direct lender providing financing to businesses so that they can acquire new equipment and technology.

Upon the Plaintiffs information and belief, the Defendant is a New York limited liability company.

On September 12, 2012, the Defendant executed and delivered an Equipment Lease Contract (the “Lease”), which provided for the lease and hire of certain items of equipment and provided for payments to be made by the Defendant. The Lease contained a forum selection clause under paragraph 18 which reads as follows:

You hereby acknowledge that this Agreement was accepted by us in Pennsylvania, where we maintain an office, and it did not take effect until we received the executed legal documents in our Pennsylvania office. Accordingly, you agree that this agreement shall be governed by the laws of the Commonwealth of Pennsylvania. You agree that any suit relating to this Agreement shall be brought only in a state or federal court in Pennsylvania, and you irrevocably consent and submit to the jurisdiction of such courts. Each party waives any right to a jury trial.

(Compl., at ¶ 9.)

On April 14, 2014, the Defendant removed this case pursuant to 28 U.S.C. § 1441(b) to this Court on the basis of diversity jurisdiction under 28 U.S.C. § 1332.

On April 23, 2014, the Plaintiff moved for an order pursuant to 28 U.S.C. § 1447(c) remanding this case to the Philadelphia County Court of Common Pleas and awarding the Plaintiff costs and attorneys’ fees incurred by the Plaintiff in association with this motion.

Also, on April 23, 2014, the Defendant filed a counterclaim against the Plaintiff and a third-party complaint against Andrew Fenton, Newport Business Solutions, Inc., and Long Island Business Solutions, Inc.

On April 28, 2014, the Defendant filed an amended counterclaim.

Also, on April 28, 2014, this case was referred for arbitration.

The motion to remand is fully briefed.

Any civil action brought in state court may be removed to the federal district court that embraces the state court only if the federal courts have original jurisdiction over the matter. See 28 U.S.C. § 1441(a).

When challenged, the party seeking removal bears the burden of establishing federal jurisdiction. See In re Refco. Inc. Sec. Litig., 628 F.Supp.2d 432, 437 (S.D.N.Y.2008) (citing In re WorldCom, Inc. Sec. Litig., 293 B.R. 308, 316 (S.D.N.Y.2003)). On a motion for remand, the Court “must construe all disputed questions of fact and controlling substantive law in favor of the plaintiff,” In re [241]*241NASDAQ Mkt. Makers Antitrust Litig., 929 F.Supp. 174, 178 (S.D.N.Y.1996), and, “out of respect for the limited jurisdiction of the federal courts and the rights of states, [the Court] must resolve any doubts against removability.” California v. Atl. Richfield Co. (In re Methyl Tertiary Butyl Ether (“MTBE”) Prods. Liab. Litig.), 488 F.3d 112, 124 (2d Cir.2007) (internal quotation marks and alterations omitted).

Of relevance here, the United States District Court for the Eastern District of New York is not a district court which embraces the court in Philadelphia County, as required by 28 U.S.C. § 1441(a). In other words, the Pennsylvania state-court action cannot be removed to this Court. Accordingly, the Court grants that portion of the Plaintiffs motion remanding this case to the Philadelphia County Court of Common Pleas. Having concluded that this case was not properly removed, the Court declines to entertain the Defendant’s alternative request to transfer this case to the Eastern District of Pennsylvania under the provision of 28 U.S.C. § 1404.

With respect to the Plaintiffs request for attorneys’ fees and costs incurred in connection with this motion, 28 U.S.C. § 1447(c) instructs that “[a]n order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal.” The Second Circuit has historically granted discretion to the district court in determining whether an award of attorney’s fees' is appropriate, requiring consideration of “overall fairness given the nature of the case, the circumstances of remand, and the effect on the parties.” Morgan Guar. Trust Co. of New York v. Republic of Palau, 971 F.2d 917, 924 (2d Cir.1992) (internal citations and quotations omitted). However, the Supreme Court of the United States has since instructed that “[a]bsent unusual circumstances, courts may award attorney’s fees under § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal. Conversely, when an objectively reasonable basis exists, fees should be denied.” Martin v. Franklin Capital Corp., 546 U.S. 132, 141, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005).

Given the plain language of 28 U.S.C. § 1441(a), the Court concludes that there was no objectively reasonable basis supporting the Defendant’s removal of this action to this Court.

The Court notes that, contrary to the contention of the Defendant, “[a] case need not be removed improvidently or in bad faith for costs to be appropriate.” Little Rest Twelve, Inc. v. Visan, 458 B.R. 44, 61 (S.D.N.Y.2011), citing Morgan Guar. Trust Co. of N.Y., 971 F.2d at 923.

The Defendant relies on Doukas v. Ballard, 825 F.Supp.2d 377 (E.D.N.Y.2011) for the proposition that a finding of bad faith on the part of the removing party is a prerequisite to an award of costs and attorneys’ fees under 28 U.S.C. § 1447(c). In that case, the court, in denying the plaintiffs’ request for costs and expenses, reasoned that although “removal was improper, the removing defendants had an objectively reasonable basis to at least seek removal given the patent subject matter of the alleged contract and several references in plaintiffs’ complaint to the patent application.

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Bluebook (online)
18 F. Supp. 3d 239, 2014 WL 1814379, 2014 U.S. Dist. LEXIS 63220, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marlin-business-bank-v-halland-companies-llc-nyed-2014.