Trustee Gen Assembly v. Patterson

Opinions of the United
2008 Decisions States Court of Appeals
for the Third Circuit
11-28-2008
Trustee Gen Assembly v. Patterson
Precedential or Non-Precedential: Non-Precedential
Docket No. 07-2109
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"Trustee Gen Assembly v. Patterson" (2008). 2008 Decisions. Paper 188.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 07-2109
_____________
THE TRUSTEES OF THE GENERAL ASSEMBLY
OF THE CHURCH OF THE LORD JESUS
CHRIST OF THE APOSTOLIC FAITH, INC.,
Appellant,
v.
ANTHONEE PATTERSON; KENNETH SHELTON
Consolidated Appeal from the United States
District Court for the Eastern District of Pennsylvania
(Civ. No. 07-0024)
District Court Judge: Honorable Anita B. Brody
_____________
Nos. 07-2270, 07-2378, 07-2392, 07-2419 & 07-2778
_____________
ANTHONEE PATTERSON, as General Overseer of the
Minority Faction of TRUSTEES OF THE GENERAL
ASSEMBLY OF THE CHURCH OF THE LORD JESUS
CHRIST OF THE APOSTOLIC FAITH, INC.,
v.
KENNETH SHELTON, individually and as the
General Overseer of the TRUSTEES OF THE
GENERAL ASSEMBLY OF THE CHURCH OF THE
LORD JESUS CHRIST OF THE APOSTOLIC FAITH, INC.
TRUSTEES OF THE GENERAL ASSEMBLY OF THE CHURCH
OF THE LORD JESUS CHRIST AND THE APOSTOLIC
FAITH, INC.; INDIVIDUAL TRUSTEES OF THE
TRUSTEES GENERAL ASSEMBLY OF THE CHURCH OF
THE LORD JESUS CHRIST OF THE APOSTOLIC FAITH, INC.,
JOHN C. S. THOMAS, J. LEON BLIGEN, ERIK SHELTON,
A. WOODARD REAGAN, JOHN R. BROWN, JAMES H. BROWN, I,
AND ANTHONY E. LAMB; THE GENERAL ASSEMBLY OF THE
CHURCH OF THE LORD JESUS CHRIST OF THE
APOSTOLIC FAITH,
Intervenors in District Court
ANTHONEE PATTERSON, as General Overseer of the
Minority Faction of TRUSTEES OF THE GENERAL
ASSEMBLY OF THE CHURCH OF THE LORD JESUS
CHRIST OF THE APOSTOLIC FAITH, INC.,
Appellant in No. 07-2270
TRUSTEES OF THE GENERAL ASSEMBLY OF THE CHURCH
OF THE LORD JESUS CHRIST OF THE APOSTOLIC FAITH, INC.,
Appellants in No. 07-2378
KENNETH SHELTON,
Appellant in No. 07-2392
GENERAL ASSEMBLY OF THE CHURCH OF THE LORD
JESUS CHRIST OF THE APOSTOLIC FAITH BY CHURCH
MEMBERS CARLTON MORRISON, DIANE TAYLOR,
ANDREW SCOTT, AND C. KATHERLINE WILLIAMS,
TRUSTEES AD LITEM, AND CARLTON MORRISON,
DIANE TAYLOR, ANDREW SCOTT, AND C. KATHERLINE WILLIAMS
(COLLECTIVELY THE ‘GENERAL ASSEMBLY’ OR ‘INTERVENORS’),
Appellants in No. 07-2419
INDIVIDUAL TRUSTEES OF THE TRUSTEES OF THE
GENERAL ASSEMBLY OF THE CHURCH OF THE LORD
JESUS CHRIST OF THE APOSTOLIC FAITH, INC.;
SPECIFICALLY, JOHN C. S. THOMAS, J. LEON BLIGEN,
ERIK SHELTON, A. WOODARD REAGAN,
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JOHN R. BROWN, JAMES H. BROWN, I, AND
ANTHONY E. LAMB,
Appellants in No. 07-2778
Consolidated Appeal from the United States
District Court for the Eastern District of Pennsylvania
(Civ. No. 06-5060)
District Court Judge: Honorable Anita B. Brody
___________
Submitted Under Third Circuit L.A.R. 34.1(a)
November 21, 2008
___________
Before: FUENTES, HARDIMAN and GARTH, Circuit Judges
(Opinion Filed: November 28, 2008)
___________
OPINION
___________
GARTH, Circuit Judge:
Anthonee Patterson (“Patterson”) was a member of the Church of the Lord Jesus
Christ of the Apostolic Faith (“the Church”). In 1995, Patterson sued fellow congregant
and then-head of the Church Kenneth Shelton (“Shelton”)1 and his brother Erik for an
accounting of funds, and for appointment of a receiver, alleging misappropriation.
1
Also involved in this case are the Intervenors on appeal: The General Assembly
of the Church, the Individual Trustees of the General Assembly of the Church, and the
Trustees of the General Assembly of the Church (the Church Corporation), who adopt
the arguments set forth in Shelton’s brief.
-3-
Shelton filed a counterclaim for fraud. The parties agreed in 2006 to arbitrate the claims
before retired Magistrate Judge Edwin Naythons.
Judge Naythons found in favor of Patterson in a series of awards on April 26,
2006, May 8, 2006, May 16, 2006, and October 3, 2006. The April 26, 2006 award was
the principal judgment finding Shelton and his affiliates liable for various acts. Patterson
petitioned to confirm that award in the Philadelphia Court of Common Pleas. That Court
confirmed the award on July 10, 2006.2 Shelton appealed.
Patterson also sought to confirm the October 3, 2006 award, which awarded
damages. Shelton opposed the confirmation of the October 3, 2006 award.3 On January
31, 2008, the Commonwealth Court of Pennsylvania, in ruling on Shelton’s appeal of July
10, 2006, reversed the Court of Common Pleas’ confirmation of the April 26, 2006
award, and instructed the Court of Common Pleas to vacate all of Judge Naythons’s
awards on the grounds that Judge Naythons had exceeded the scope of his authority. It
thereupon remanded the case to the Court of Common Pleas “to conduct the proper
proceedings consistent with the foregoing opinion to determine whether Anthonee J.
Patterson is entitled to relief pursuant to the Pennsylvania Nonprofit Corporation Law.”
Supp. Appx. 232.
2
The record indicates that the May 8, 2006 award was also confirmed. Appx. 51.
It is questionable, however, if the May 16, 2006 award was confirmed. Appx. 51, 58.
3
This appeal from the confirmation of the October 3, 2006 award remained
pending at the time Patterson filed his action in the United States District Court for the
Eastern District of Pennsylvania, on November 15, 2006.
-4-
Patterson filed a Petition for Allowance of Appeal in the Supreme Court of
Pennsylvania. On November 15, 2006, Patterson filed a Petition/Motion to confirm the
awards in the United States District Court for the Eastern District of Pennsylvania
pursuant to the Federal Arbitration Act (“FAA”).4 Shelton and several intervening
Church entities moved to dismiss and/or vacate the petition for lack of subject matter
jurisdiction or, alternatively, for Judge Naythons’s failure to set forth a proper award, for
partiality and misconduct, for exceeding the scope of his powers, and for manifestly
disregarding the law. Supp. Appx. 128.
On April 6, 2007, the District Court held a telephone conference to discuss
jurisdiction. The parties argued that jurisdiction was based upon diversity since Patterson
was from Florida and Shelton was from Pennsylvania. However, when pressed further,
counsel for Patterson indicated that “the minority trustees” were also plaintiffs – although
not named in the caption – and that counsel, himself, was one of the trustees, and he
resided in Pennsylvania. Appx. 122. The District Court dismissed the case sua sponte for
lack of diversity jurisdiction.
On April 25, 2007, Patterson filed a timely notice of appeal of the District Court’s
dismissal.5 This Court has jurisdiction pursuant to 28 U.S.C. § 1291. The District
4
9 U.S.C. § 1 et seq.
5
While Patterson’s federal appeal of the District Court’s order of dismissal was
pending before us, we were notified that the Pennsylvania Supreme Court denied
Patterson’s Petition for Allowance of Appeal, thus leaving undisturbed the
Commonwealth Court’s order vacating the arbitration awards and remanding for further
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Court’s jurisdiction under 28 U.S.C. § 1332 is in question.
“We review de novo the District Court’s dismissal for lack of [diversity]
jurisdiction.” Metro. Life Ins. Co. v. Price, 501 F.3d 271, 275 (3d Cir. 2007). The FAA
does not create independent federal question jurisdiction. The Supreme Court has held
that an independent basis for jurisdiction must exist, such as diversity. Moses H. Cone
Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 26 n.32 (1983). We agree with
Shelton that there is insufficient evidence of the residence of the parties to satisfy our
diversity jurisdiction requirements. The petition need not affirmatively allege diversity
jurisdiction if the parties otherwise plead the elements. See Smith Barney, Inc. v. Sarver,
108 F.3d 92, 95 (6th Cir. 1997); Averbach v. Rival Mfg. Co., 809 F.2d 1016, 1019 (3d
Cir. 1987). However, Patterson has not satisfied this standard. We will affirm the
District Court’s holding that the lack of diversity jurisdiction mandated a dismissal of the
action.6
The motion to expand the record is accordingly denied.
proceedings.
6
Shelton had raised the issues of res judicata and collateral estoppel in his brief on
appeal to us. In light of our affirmance of the District Court’s dismissal based on lack of
diversity jurisdiction, we do not address Shelton’s issues.
-6-