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STATE FARM INDEM. v. FORNARO

August 26, 2002

STATE FARM INDEMNITY, PLAINTIFF,
V.
CARMINE FORNARO, JR., DEFENDANT. MONMOUTH OCEAN COLLECTION SERVICES, INC., ASSIGNEE OF VINCENT VICCI, JR., D.O., PLAINTIFFS, V. CARMINE FORNARO, JR. & SPOUSE, MARIA FORNARO, DEFENDANTS, THIRD PARTY PLAINTIFFS, V. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, NEW JERSEY AUTO DIVISION, D/B/A STATE FARM INDEMNITY COMPANY, AND UNITED STATES OFFICE OF PERSONNEL MANAGEMENT, (A FEDERAL GOVERNMENT AGENCY), HORIZON BLUE CROSS AND BLUE SHIELD OF NEW JERSEY, ADMINISTRATORS FOR THE FEDERAL GOVERNMENT EMPLOYEE HEALTH BENEFITS PROGRAM, THIRD PARTY DEFENDANTS.



The opinion of the court was delivered by: Hayden, District Judge.

  OPINION & ORDER

This matter comes before the Court on the objections of Carmine Fornaro, filed in response to the Report and Recommendation (R & R) of Magistrate Judge Hedges dated June 13, 2002. On April 29, 2002, Carmine Fornaro removed the lawsuit filed against him by State Farm Indemnity. et al., Civil Action No. 02-2019, from the New Jersey Superior Court Law Division to this Court. On the same date, Fornaro and Maria Fornaro also removed a suit filed against them in state court by Monmouth Ocean Collection Services, Inc., Civil Action No. 02-2020.

This Court's review of the R & R and the objections to it is governed by Local Civil Rule 72.1(a)(2) and 72.1(c)(2), which provides that the Court "shall make a de novo determination of those portions [of the R & R] to which objection is made and may accept, reject or modify, in whole or in part, the findings or recommendations made by the Magistrate Judge. The Judge, however, need not normally conduct a new hearing and may consider the record developed before the Magistrate Judge, making his or her own determination on the basis of that record." L.Civ.R. 72.1(c)(2); Zinberg v. Washington Bancorp., Inc., 138 F.R.D. 397, 401 (D.N.J. 1990) (holding that the court makes a de novo review of the parts of the report to which the parties object); see also MAGI-Corp. v. Kinetic Presentations, Inc., 718 F. Supp. 334, 335 (D.N.J. 1989).

In a well reasoned opinion, Judge Hedges determined that an examination of the two state complaints revealed no diversity jurisdiction, and that as a result, removal must be based on a federal question. (R & R at 11.) Judge Hedges then determined that there was neither a federal question presented on the face of the Complaint, nor was there Congressional preemption based on the Federal Employees Health Benefits Act of any claim raised in the Complaint. (Id. at 11-12). He also found that the presence of OPM as a third-party defendant does not establish subject matter jurisdiction and does not give rise to a removable federal question. Finally, Judge Hedges found that defendants' reliance on the entire controversy doctrine for the existence of subject matter jurisdiction is misplaced. Significantly, he characterized the thrust of the removal as follows:

(R & R at 20.)

In his objections, Fornaro cites to the United States Constitution, multiple sections of the United States Code, the Code of Federal Regulations, the Federal Rules of Civil Procedure, "Federal Contracts," and Supreme Court and state court precedents.

It is clear that Judge Hedges's "take" on the removal is accurate: defendants want this Court to undo actions of the state courts based on principles that simply do not confer requisite jurisdiction.

The Court adopts Judge Hedges's findings that this Court does not have diversity jurisdiction, federal question jurisdiction or subject matter jurisdiction over these consolidated matters, and accordingly accepts Judge Hedges's recommendation that Civil Action No. 02-2019 be remanded to the Superior Court of New Jersey, Law Division, Morris County, and Civil Action No. 02-2020 be remanded to the Superior Court of New Jersey, Law Division, Special Civil Part, Morris County. Both Civil Action Nos. 02-2019 and 02-2020 are dismissed.

SO ORDERED.

Order Amending Order of Dismissal

This Court having entered an Order dated August 16, 2002, that in part dismissed the Complaints bearing Civil Action No. 02-2019 and Civil Action No. 02-2020; said dismissal having been entered in error; and good cause appearing, it is on this 26th day of August, 2002 hereby

ORDERED that said complaints are not dismissed and are, as ordered previously, remanded to the Superior Court of New Jersey.

REPORT AND RECOMMENDATION

INTRODUCTION

These two civil actions were removed from the Superior Court of New Jersey on April 29, 2002. On May 1, 2002, I issued a Letter-Order and Order to Show Cause. I consolidated both civil actions for all purposes. I also directed the removing parties to show cause why both civil actions should not be remanded to the Superior Court of New Jersey.

I entertained oral argument on May 28, 2002. I have also considered the letter brief of defendant Carmine Fornaro, Jr. ("Fornaro"), submitted on May 7, 2002, and his "Outline for Hearing Presentation" submitted on May 28, 2002 ("Outline").*fn1

Throughout this Report and Recommendation two considerations should be borne in mind. First, federal courts have a duty to "examine their subject matter jurisdiction at all stages of the litigation sua sponte if the parties fail to raise the issue. That obligation extends to removal cases, as well as to those originally filed in the district courts." U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 383, 388-89 (3d Cir. 2002). Second, these civil actions have been consolidated. "Consolidated cases typically are heard together; however, they are not necessarily merged forever and for all purposes." Bradgate Associates, Inc. v. Fellows, Read & Associates, Inc., 999 F.2d 745, 750 (3d Cir. 1993). The consolidated civil actions sub judice should be considered separately for jurisdictional purposes. See Bradgate Associates, Inc., 999 F.2d at 750-51.

DISCUSSION

The Pleadings.

Civil Action No. 02-2019

There may be some confusion in the captions of these civil actions. My intent here is to clarify the identity of the parties.

In Civil Action No. 02-2019, a Verified Complaint was filed with the Superior Court of New Jersey, Law Division, Morris County, on October 15, 2001, by plaintiff State Farm Indemnity Company ("State Farm"). The only named defendant is Fornaro. Appendix B, Petition for Removal.

On March 11, 2002, a Final Judgment on Order to Show Cause was filed with Judge Christine L. Miniman (attached). At the time of the filing of this judgment, the only parties were State Farm and Fornaro.

On April 15, 2002, Fornaro filed a Notice of Motion with the Morris County Clerk. Exhibit B, May 7th Letter Brief. Among other things, Fornaro sought to add the United States Office of Personnel Management ("OPM") and Horizon Blue Cross and Blue Shield of New Jersey ("Horizon") as third-party defendants. The motion was never ruled on by the Superior Court.

Plaintiffs April 15th motion also bears the caption of a proceeding before the American Arbitration Association which Fornaro commenced and which was the subject of the Verified Complaint filed by State Farm. The March 11th judgment of Judge Miniman permanently enjoined Fornaro "from participating in or requesting arbitration of any PIP claims. * * *." Thus, as of the date of the removal of Civil Action No. 02-2019, the only parties were State Farm and Fornaro.

Civil Action No. 02-2020

Civil Action No. 02-2020 stands in a different procedural posture. The plaintiff, Monmouth Ocean Collection Service, Inc. ("Monmouth"), brought suit against Fornaro and his wife, Maria Fornaro, in the Superior Court of New Jersey, Law Division, Special Civil Part, Morris County. I cannot ascertain the date of filing of the Complaint from the removal papers. However, Fornaro and his wife allege that they were served with a summons and a copy of the Complaint on or about February 22, 2002. Paragraph 2, Petition for Removal.

The Complaint contains four counts and seeks collection of a sum allegedly due from Fornaro and his wife to Monmouth as the assignee of Vincent Vicci, Jr., D.O. The removal papers do not include the Answer presumably filed by Fornaro and his wife. However, the pleadings indicate that Fornaro and his wife filed a Third-Party Complaint. The third-party defendants identified in the papers are State Farm, OPM and Horizon.

Proceedings in Special Civil Part are governed by New Jersey Civil Practice Rule ("R.") 6:1-1 et seq. R. 6:3-1 makes applicable in Special Civil Part the Superior Court rules governing, among other things, pleadings. See Comment 1 to R. 6:3-1, Pressler, Current N.J. Court Rules at 2071 (2002). R. 4:8 governs third-party practice. R. 4:8-1(a) provides that,

I will assume for the purpose of this Report and Recommendation that Fornaro and his wife timely filed and served the Third-Party Complaint against State Farm, OPM and Horizon. This would be consistent with a motion made by Horizon on or about April 11, 2002, to dismiss the Third-Party Complaint as ...


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