Opinion
Case No. 5:01 CV 2755
January 18, 2002
MEMORANDUM OPINION AND ORDER
Presently before the Court is the motion to dismiss and remand filed by one "James Curtis; George, Manager" on behalf of plaintiff, Paradise Farm. (Doc. No. 7). The Court had previously held any ruling on this motion in abeyance until the Manager identified above would file an affidavit indicating his ownership status, if any, with respect to Paradise Farm. An affidavit has been filed by a different individual. In addition, the Court is now in receipt of the full record of the case from Stark County Court of Common Pleas, the court from which the case was removed. For the reasons discussed below, plaintiff's motion to dismiss and remand is stricken from the record and this case is dismissed.
I. FACTUAL AND PROCEDURAL BACKGROUND
On November 2, 2001, plaintiff Paradise Farm filed an action in the Stark County Court of Common Pleas against the Stark County Recorder ("County Recorder") and the Internal Revenue Service ("IRS"). (See State Court Records ["Records"], Doc. No. 9). The complaint alleges that Paradise Farm is "the owner of record of certain property situated in Stark County, Ohio[,]" and that, on or about July 12, 1994, February 22, 1995, and October 27, 1998, the Stark County Recorder's Office "recorded Notices of Federal Tax Liens" against Paradise Farm. The complaint alleges that, "[b]ecause the purported Notices fail to comply with the requisites of law, they are void and of no legal consequence." The complaint further alleges that the liens constitute a cloud on the title and also render the property subject to foreclosure actions. Finally, the complaint alleges that the County Recorder has been asked to remove the liens but "has failed to do so." The complaint seeks a declaratory judgment "declaring said liens to be invalidly filed/recorded and that said liens were issued without authority[;]" it further seeks an order that the County Recorder remove or release the liens.
On November 30, 2001, the defendant County Recorder (Rick Campbell) filed a Motion to Strike Plaintiff's Complaint/Petition on the ground that the complaint was "filed by a non-attorney on behalf of Plaintiff Paradise Farm, an unregistered company, constituting the unauthorized practice of law." (See Records, Doc. No. 9). Plaintiff later filed "objections" to the motion. These were, in fact, filed on December 13, 2001, after the Notice of Removal discussed below was filed in this Court.
On December 5, 2001, the other defendant, the IRS, filed a Notice of Removal in this Court. The Notice did not contain a copy of the Motion to Dismiss already filed in the state court. (See Doc. No. 1). Nor does the Notice indicate whether or not the other defendant joined in the removal. The certificate of service on the Notice indicated that it had been mailed on December 5, 2001 to both Paradise Farm and the County Recorder. It is apparent that Paradise Farm, in the person of "James Curtis; George," received the notice because, on December 14, 2001, the motion to dismiss and remand (Doc. No. 7) was filed. However, the Records sent by the state court and filed in this Court on December 28, 2001, show that the IRS' notice of removal was not received by the state court until December 24, 2001. (See Records, Doc. No. 9). The date that the state court received the Notice of Removal is critical because, prior to that date, on December 18, 2001, the state court filed its Judgment Entry granting the County Recorder's motion to dismiss the case for the following reasons:
The motion's certificate of service shows service by mail on December 11, 2001 on counsel for both defendants.
This Court previously warned James Curtis; George (sic) to refrain from filing pleadings as a representative of Paradise Farm. On October 10, 2000, the Court advised Paradise Farm that under Ohio law, a business entity cannot be represented by its officers unless such officer is a licensed attorney at law. Then, on October 27, 2000, the Court ordered that James Curtis; George (sic) does not have authority to represent Paradise Farm and the Court will no longer accept for filing any documents prepared by him. Pursuant to Civil Rule 11, Defendant is entitled to costs in this action due to Mr. Curtis' refusal to abide by this Court's order.
Further, Paradise Farm lacks the capacity to sue. Paradise Farm is not a registered company, and is statutorily barred from filing this action.
Records, Doc. No. 9. It was six (6) days after this Judgment Entry that the state court received the Notice of Removal, on December 24, 2001.
II. DISCUSSION
The question now before this Court is whether it retains jurisdiction over an action which was dismissed by the state court after the Notice of Removal was filed in this Court but before such Notice was received by the state court.
Federal law covers all removal proceedings. Grubbs v. General Elec. Credit Corp., 405 U.S. 699 (1972). Title 28 Section 1446(d) states:
Promptly after the filing of such notice of removal of a civil action the defendant or defendants shall give written notice thereof to all adverse parties and shall file a copy of the notice with the clerk of such State court, which shall effect the removal and the State court shall proceed no further unless and until the case is remanded.
Several cases discuss the relationship between the time of filing notices of removal in federal court and in state court. See, e.g., Hampton v. Union Pacific RR Co., 81 F. Supp.2d 703, 707, n. 5 (E.D. Tex. 1999) (gathering cases). Many courts conclude that under § 1446 removal is a three-step process: (1) file the notice of removal in federal court; (2) give written notice thereof to all adverse parties; and (3) file a copy of the notice of removal with the clerk of the State court. "[T]he plain meaning of the statute seems to dictate that state courts retain jurisdiction over suits [until] all three requirements have been satisfied in all but the most unusual cases." Id. (citing La Maina v. Brannon, 804 F. Supp. 607, 612-13 (D.N.J. 1992)); see also, Seaton v. Jabe, 992 F.2d 79, 81 (6th Cir. 1993) ("once the removal petition is properly filed and notice is given, the entire case is transferred to federal court, and the state court is deprived of jurisdiction unless the federal court subsequently remands it") (emphasis added).
In an unpublished decision, the United States District Court for the Western District of Michigan has stated:
. . . The language of the statute [§ 1446(d)] clearly implies that actions taken in state court until the notice is filed there (including the amendment of a complaint) are effective. This view is supported by a majority of federal courts which have addressed the question of when a notice of removal becomes effective. See Michael J. Kaplan, Annotation, Effect, on Jurisdiction of State Court, of 28 U.S.C. § 1446(e), Relating to Removal of Civil Action to Federal Court, 38 A.L.R.Fed. 824, 858 (1978). It is not surprising that many courts hold this view since it would seem unjust to disregard actions taken in state court prior to the state court's receiving notice of the removal. Medrano v. Texas, 580 F.2d 803 (5th Cir. 1978); Jones v. Cargill Nutrena Feed Division, 665 F. Supp. 907 (S.D. Ala. 1987). It is also supported by commentators, who assert that this view is sounder and most consistent with the language of the statute. 14A C.Wright, A. Miller E. Cooper, Federal Practice Procedure, § 3737 (1985). Therefore, the Court concludes that the removal was not fully effected until after the amendment of the complaint to include a non-diverse party.Coding Products, Inc. v. Homco International, Inc., No. 4:94-CV-143, 1995 WL 423853, at *2 (W.D. Mich. Dec. 2, 1994). This court remanded the case to the state court.
Under these authorities, this Court is of the view that the state court had jurisdiction to enter the order of dismissal on December 18, 2001. The question now is whether that order binds this Court since this Court also had jurisdiction pursuant to the Notice of Removal, even though that notice had not yet been delivered to the state court.
Although the Court has found no federal case law directly on point, there are cases which provide some guidance. For example, in Hampton, supra, the court concluded that the plaintiff's first amended complaint (which added a defendant that destroyed the diversity jurisdiction upon which removal was based) rendered ineffective the Notice of Removal which had been mailed to the state court clerk on the same day the amended complaint was filed. In another case, Transitional Learning Community at Galveston, Inc. v. Metropolitan Life Ins. Co., 895 F. Supp. 153 (S.D. Tex. 1995), the court refused to set aside a default judgment which had been entered in the state court on the same day that the removal notice was filed, holding that "removal is effective only when the state court receives actual or constructive knowledge of the removal and all adverse parties have been notified." Id. at 154 (emphasis in original) (citing cases and referring to Wright Miller, § 3737. In Hampton, the court granted a motion to remand. In Transitional Learning, the court dismissed the case and "instructed [the parties] to seek whatever relief they feel themselves entitled [to] in the United States Court of Appeals for the Fifth Circuit[.]" 895 F. Supp. at 154-55.
In the instant case, since removal was not effective until December 24, 2001, and since the state court case had already been dismissed on December 18, 2001, the Court holds the view that there really was no case to remove and the Notice of Removal, not received by the state court clerk until December 24, 2001, could not "revive" the action. For that reason, this case must be dismissed.
Even if the Court were not to take this position, it would still dismiss this case both in the interest of comity and because it agrees with the state court's reason for dismissal. Here, as in the state court, Paradise Farms has failed to obtain the services of an attorney, attempting instead to proceed under the "representation" of, first, "James Curtis; George," and now, one Harry James Derflinger. As pointed out in a previous order, a corporation cannot be represented by an individual who is not a licensed attorney. See Doherty v. American Motors. Co., 728 F.2d 334, 340 (6th Cir. 1984).
On December 19, 2001, this Court directed "James Curtis; George" to file an affidavit indicating his status with respect to ownership of Paradise Farm. Mr. Harry James Derflinger responded instead, asserting that he is "the present Trustee of Paradise Farm Company." (Doc. No. 10). He represented that "James Curtis George did have the power of attorney-in-fact to protect the assets of Paradise Farm Company but he has resigned as farm manager and another will replace him." Apparently, Mr. Derflinger has also missed the point: a non-lawyer cannot represent Paradise Farm, including a person who is declared an "attorney-in-fact." Only an attorney-at-law can represent Paradise Farm.
III. CONCLUSION
The motion of Paradise Farm (Doc. No. 7), not properly filed by any licensed attorney, is stricken from the record. The Court sua sponte dismisses this action for the reasons set forth above.
Since the case has already been dismissed by the state court, remand would be an exercise in futility. Further, any time spent resolving the instant federal case would have, of course, stopped the clock for purposes of determining a deadline for appealing the state court's decision.
IT IS SO ORDERED.
JUDGMENT ENTRY
For the reasons set forth in the Memorandum Opinion and Order filed contemporaneously with this Judgment Entry, IT IS HEREBY ORDERED, ADJUDGED and DECREED that the abovecaptioned case is DISMISSED, with each party to bear its own costs.