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Universal Truck & Equipment Co. Inc. v. Southworth-Milton, Inc.

United States Court of Appeals, First Circuit

September 2, 2014

UNIVERSAL TRUCK & EQUIPMENT COMPANY, INC.; NEW LONDON MINING MANUFACTURING & PROCESSING, LLC; NICHOLAS E. CAMBIO, individually and as Trustee of the Nicholas E. Cambio, Roney A. Malafronte and Vincent A. Cambio Trust; VINCENT A. CAMBIO, Plaintiffs-Appellants,
v.
SOUTHWORTH-MILTON, INC., Defendant-Appellee, CATERPILLAR, INC.; CATERPILLAR FINANCIAL SERVICE CORPORATION; W. FRANK BLOUNI; JOHN R. BRAZIL; DANIEL M. DICKINSON; JOHN T. DILLON; EUGENE V. FIFE; GAIL D. FOSLER; JUAN GALLARDO; DAVID R. GOODE; PETER A. MAGOWAN; WILLIAM A. OSBORN; JAMES W.L. OWENS; CHARLES D. POWELL; EDWARD B. BUST, JR.; SUSAN C. SCHWAB; JOSHUA I. SMITH; KENT ADAMS; JIM DUENSING; PETER DAGASTINO, Defendants

Page 104

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND. Hon. William E. Smith, U.S. District Judge.

Richard G. Riendeau, for appellant.

J. Richard Ratcliffe, with whom Jeffrey Biolchini and Ratcliffe Harten Burke & Galamaga, LLP were on the brief, for appellee.

Before Torruella, Dyk[*] and Kayatta, Circuit Judges.

OPINION

Page 105

DYK, Circuit Judge.

The plaintiffs here filed a breach of contract complaint in state court. After the only non-diverse defendant was dismissed from the case by the state court, the remaining defendants removed the lawsuit to federal court, invoking diversity jurisdiction. At the time of removal, the dismissal of the non-diverse defendant was not final. The district court denied the plaintiffs' motion to remand and later granted summary judgment in favor of defendant Southworth-Milton, Inc. (" Southworth" ) and awarded attorneys' fees. In addition to challenging the summary judgment decision and award of attorneys' fees in favor of Southworth, the plaintiffs argue that the case should be remanded to state court.

We hold that, despite the defendants' failure to comply with the statutory removal requirements, a remand to state court is not required because complete diversity existed at the time of judgment, and plaintiffs failed to object to the statutory procedural defect in a timely manner. We also affirm the district court's grant of summary judgment and award of attorneys' fees in favor of defendant Southworth.

I.

The plaintiffs in this action are Universal Truck & Equipment Co., Inc. (" Universal" ); New London Mining Manufacturing & Processing, LLC (" NLM" ); Nicholas E. Cambio, individually and as Trustee of the Nicholas E. Cambio, Roney A. Malafronte and Vincent A. Cambio Trust; and Vincent A. Cambio (collectively, the " appellants" or " plaintiffs" ). They are citizens of Rhode Island. They brought state law contract claims against the following defendants: Southworth, Caterpillar, Inc. (" Caterpillar" ), Caterpillar Financial Services Corp. (" CAT Financial" ), and several other entities and individuals (collectively, the " appellees" or " defendants" ). Southworth is a New Hampshire corporation and authorized Caterpillar equipment dealer with its principal place of business in Milford, Massachusetts. Caterpillar and CAT Financial are distinct Delaware corporations with principal places of business in Illinois and Tennessee, respectively. All but one of the other defendants were not Rhode Island citizens. But Peter D'Agostino, a salesman at Southworth, was also named as an original defendant in state court, and he was a citizen of Rhode Island. If D'Agostino were a proper party to the action, his Rhode Island residency would have prevented diversity jurisdiction.

So far as pertinent for the present purposes, the state court action arose from an alleged oral agreement between defendants Caterpillar, CAT Financial, and Southworth, on the one hand, and plaintiff NLM, on the other. Around March 17, 2008, NLM purchased or refinanced construction equipment from Caterpillar's Southworth dealership for approximately

Page 106

$3.4 million. The purchase was financed by CAT Financial, and NLM provided a security agreement and promissory note to CAT Financial.

After the 2008 national recession, NLM experienced a severe downturn in its business, and by mid-2009, NLM was unable to make its monthly payments to CAT Financial. As a result, CAT Financial and NLM began to explore refinancing options.

Around July 29, 2009, NLM and CAT Financial agreed that NLM would sell four of the purchased construction vehicles in order to reduce NLM's debt to CAT Financial. Southworth agreed to store the four vehicles on its lot for a seventy-five day period while NLM attempted to sell them. The vehicles were transferred to Southworth's custody, if not immediately to its lot, around August 9, 2009.

While the four vehicles were awaiting sale, a conversation occurred, which forms the basis for the claimed oral contract. Original defendant Peter D'Agostino, a salesman at Southworth, visited NLM and spoke to an NLM officer, Vincent Cambio, regarding the status of the refinancing negotiations. When D'Agostino asked Cambio about the progress of the sales, Cambio responded " I got to tell you, you know how they're going; you know better than me." Transcript of Summary Judgment Hearing at 5:10-11, Universal Truck & Equipment Co., Inc. v. Caterpillar, Inc., et al., No. 1:10-cv-00466 (D.R.I., Dec. 5, 2012), ECF No. 103. D'Agostino then asked, " So you're going to get rid of some equipment?" Id. at 5:12-13, to which Cambio answered, " Yeah there's no use for them. Are you going to try to sell some of them for us like outright sales?" Id. at 5:13-15. D'Agostino then replied, " I'll do what I can do," or " we'll do what ...


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