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KAYE ASSOCS. v. BOARD OF CHOSEN FREEHOLDERS

March 1, 1991

KAYE ASSOCIATES, PLAINTIFF,
v.
BOARD OF CHOSEN FREEHOLDERS-COUNTY OF GLOUCESTER, DEFENDANT, THIRD-PARTY PLAINTIFF, V. HONEYWELL INC., THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Gerry, Chief Judge:

OPINION

BACKGROUND

On February 23, 1990, plaintiff, Kaye Associates ("Kaye"), filed a Complaint against defendant, Board of Chosen Free-holders-Gloucester County ("Gloucester County"), in the Superior Court of Camden County, New Jersey. The Complaint alleged that Gloucester County breached a contract to pay Kaye for consulting services in connection with the installation of a telecommunications system.

Thereafter, having obtained leave of court, Gloucester County filed a two count third-party complaint against Honeywell Inc. ("Honeywell"). The first count alleges that Gloucester County is entitled to recover contribution from Honeywell for any damages owed to Kaye which are attributable to Honeywell's failure to timely complete work under a separate contract with Gloucester County regarding the same telecommunications system. The second count seeks to recover damages from Honeywell on the basis of a liquidated damages clause in the contract between Gloucester County and Honeywell.

Pursuant to 28 U.S.C. § 1441(a) and (c), Honeywell filed a Notice of Removal with this court. In that pleading, Honeywell asserted that this court has original jurisdiction over the third-party claim because there is diversity of citizenship between Gloucester County and Honeywell and because the amount in controversy exceeds $50,000. See 28 U.S.C. § 1332. The parties are presently before the court upon plaintiff's motion to remand its claim to the Superior Court of New Jersey.

DISCUSSION

Honeywell removed the case pursuant to 28 U.S.C. § 1441(a) and (c). Those sections provide that:

  (a) . . . any civil action brought in a State
  court of which the district courts of the United
  States have original jurisdiction, may be removed
  by the defendant or the defendants, to the
  district court of the United States for the
  district and division embracing the place where
  such action is pending.
  (c) Whenever a separate and independent claim or
  cause of action, which would be removable if sued
  upon alone, is joined with one or more otherwise
  non-removable claims or causes of action, the
  entire case may be removed and the district court
  may determine all issues therein, or, in its
  discretion, may remand all matters not otherwise
  within its original jurisdiction.*fn1

There is a widespread difference of opinion among courts as to whether or not third-party defendants are entitled under these provisions to remove cases to federal courts.

Numerous courts have held that third-party defendants can remove actions under § 1441(c), so long as the third-party complaint is a "separate and independent claim or cause of action, which would be removable if sued upon alone." See, e.g., Carl Heck Engineers, Inc. v. Lafourche Parish Police Jury, 622 F.2d 133 (5th Cir. 1980); Columbia Casualty Co., Inc. v. Statewide Hi-Way Safety, Inc., 94 F.R.D. 182 (D.N.J. 1982); Marsh Investment Corp. v. Langford, 494 F. Supp. 344 (E.D.La. 1980); Bond v. Doig, 433 F. Supp. 243 (D.N.J. 1977); Ted Lokey Real Estate Co. v. Gentry, 336 F. Supp. 741 (N.D.Tex. 1972).

However, several commentators and numerous other courts have rejected that view. Those authorities have argued that third-party defendants are not proper parties for removal because they are not "defendants" under § 1441(a) and/or because § 1441(c) only applies to claims joined by plaintiffs. See, e.g., 1A Moore's Federal Practice ¶ 0.167[10] (2nd Ed. 1990); Luebbe v. Presbyterian Hospital, 526 F. Supp. 1162 (S.D.N.Y. 1981); Chase v. North American Systems, Inc., 523 F. Supp. 378 (W.D.Pa. 1981); Hopkins Erecting Co. v. Briarwood Apartments of Lexington, 517 F. Supp. 243 (E.D.Ky. 1981); White v. Baltic Conveyor Co., 209 F. Supp. 716 (D.N.J. 1962).*fn2

As the cited cases illustrate, not only are the courts across the country extremely divided, but our own district is also divided. Compare Columbia Casualty, supra, and Bond, supra, with White, supra. Unfortunately, neither the Supreme Court nor the Third Circuit has provided guidance with regard to this issue. See Bond, 433 F. Supp., at 249 (the district court certified the issue to the Third Circuit but no subsequent opinion is reported). Having considered the arguments on both sides of the issue, ...


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