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Edward Hansen Inc. v. Kearny Post Office Associates

Decided: February 2, 1979.

EDWARD HANSEN, INC., A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF,
v.
KEARNY POST OFFICE ASSOCIATES, A LIMITED PARTNERSHIP OF THE STATE OF NEW JERSEY, AND THE TRAVELERS INDEMNITY COMPANY, A CORPORATION AUTHORIZED, LICENSED, OR ADMITTED TO DO AND DOING BUSINESS IN THE STATE OF NEW JERSEY, DEFENDANTS



Kentz, J.s.c.

Kentz

After an absence of more than six years this matter returns to the court on defendants' motion for an order adopting the pleadings filed by the various parties while this case was in the United States District Court for the District of New Jersey (District Court) or in the alternative for an order granting leave to file an answer out of time.

This litigation was commenced in the Chancery Division of the Superior Court in September 1971 when Edward Hansen, Inc. (Hansen) filed a complaint seeking injunctive and declaratory relief. Hansen alleged that it had been wrongfully removed by defendant Kearny Post Office Associates (KPOA) from the construction site of the North Jersey Mail Handling and Vehicle Maintenance Facility in Kearny, New Jersey, and that the removal constituted a breach of Hansen's contract with KPOA.

Prior to answering, KPOA petitioned for removal of the case to the District Court pursuant to 28 U.S.C.A. § 1446. Immediately following removal Hansen filed a motion for remand but withdrew the motion before it was decided.*fn1 KPOA subsequently answered the complaint and filed a counterclaim seeking relief against Hansen as well as its surety, Aetna Casualty and Surety Co. (Aetna) and three of the principals of Hansen. Hansen later amended its complaint by abandoning the request for injunctive relief (which had become moot with the completion of the project) and by making a claim for damages.

In October 1977 the District Court remanded the case to this court, holding that diversity of citizenship did not exist because of the then recent decision in Carlsberg Resources Corp. v. Cameria S. & L. Ass'n , 554 F.2d 1254 (3 Cir. 1977), and concluding that there was consequently no federal jurisdiction.*fn2 In remanding the case Judge Meanor refused Aetna's request to dismiss the counterclaim against it since he apparently believed that the entire case, including all the parties, should return to the state court.

When the case returned to this court KPOA moved for an order transferring the matter to the Law Division since the only remaining relief sought was damages. Before a hearing on this motion was concluded Hansen raised the issue of whether a default should be entered against KPOA because it had never filed a responsive pleading in this court. Thereupon, KPOA filed the present motion.*fn3

The precise issue raised by this motion has apparently not been decided by the courts of this State and has seldom been addressed in other jurisdictions. Nor does the federal removal statute deal with the problem presented here. While 28 U.S.C.A. § 1447(b) provides that the District Court may require the party petitioning for removal to file copies of the state court record with the clerk of the federal court, it makes no provision for a similar procedure after remand. Instead, 28 U.S.C.A. § 1447(c) merely provides that

If at any time before final judgment it appears that the case was removed improvidently and without jurisdiction, the district court shall remand the case, and may order the payment of just costs. A certified copy of the order of remand shall be mailed by its clerk to the clerk of the State court. The State court may thereupon proceed with such case.

Following a remand the effect to be given to pleadings filed in the federal court is a matter of state policy and is not subject to federal determination. In Ayres v. Wiswall , 112 U.S. 187, 5 S. Ct. 90, 28 L. Ed. 693 (1884), the Supreme Court affirmed a remand ordered by the Circuit Court and stated that "[i]t will be for the State court, when the case gets back there, to determine what shall be done with the pleadings filed and testimony taken during the pendency of the suit in the other [ i.e. , federal] jurisdiction." Id. at 190-191, 5 S. Ct. at 92, 28 L. Ed. at 695.

More recent federal cases have not altered the rule announced in Ayres but have exhibited an expectation that the state court would on remand consider the entire case, including the federal pleadings. In Hirsch v. Bruchhausen , 284 F.2d 783 (2 Cir. 1960), for example, the court refused to disturb the District Court's pre-remand order substituting Hirsch and his business partners for the original corporate defendant. The court there said (at 786-787) that "[a]ll defenses on the merits now properly go before the state court for definitive adjudication; our function has been merely to pass on the procedural aspects of the proceedings as brought before us." Finding no irregularity in the District Court's order substituting defendants without requiring service of the amended pleadings on the new defendants, ...


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