Sara Rhodes v. Ryan Barnett

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
JUN 26 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
SARA RHODES, an individual, No. 15-35340
Plaintiff-Appellee, D.C. No. 2:14-cv-00400-SAB
v.
MEMORANDUM*
RYAN BARNETT, AKA Ryan
Moosbrugger, as an individual and a
marital community and SHARON S.
BARNETT, AKA Sharon S. Kim, as an
individual and a marital community,
Defendants-Appellants,
and
STADTMUELLER & ASSOCIATES PS,
DBA Barnett, Stadtmueller & Associates
PS, a Washington professional services
corporation,
Defendant.
Appeal from the United States District Court
for the Eastern District of Washington
Stanley Allen Bastian, District Judge, Presiding
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Submitted June 8, 2017**
Seattle, Washington
Before: McKEOWN, CALLAHAN, and IKUTA, Circuit Judges.
Sara Rhodes filed a complaint in Washington state court naming Ryan
Barnett, Sharon Kim, and “Stadtmueller & Associates, P.S., d/b/a Barnett,
Stadtmueller & Associates, P.S.” as defendants. Barnett and Kim (“Defendants”)
removed the case to federal court on the basis of diversity jurisdiction. Rhodes
moved to remand, and sought an award of the attorneys’ fees and costs she
incurred as the result of Defendants’ improper removal. The district court
determined that it lacked subject matter jurisdiction and remanded to state court.
The court further found that Defendants lacked an objectively reasonable basis for
removal, and awarded Rhodes attorneys’ fees. Defendants appealed the award of
attorneys’ fees. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.
1. Under 28 U.S.C. § 1447(c), “[a]n order remanding the case may
require payment of just costs and any actual expenses, including attorney fees,
incurred as a result of the removal.” We have held that “[a]bsent unusual
circumstances, attorney’s fees should not be awarded when the removing party has
an objectively reasonable basis for removal.” Patel v. Del Taco, Inc., 446 F.3d
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
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996, 999 (9th Cir. 2006) (quoting Martin v. Franklin Capital Corp., 546 U.S. 132,
136 (2005)). “We review an award of attorneys’ fees for an abuse of discretion
and will overturn the district court’s decision only if it is based on clearly
erroneous findings of fact or erroneous determinations of law.” Id. (quoting Dahl
v. Rosenfeld, 316 F.3d 1074, 1077 (9th Cir. 2003)).
2. Defendants’ challenge to the fees award rests on their contention that
the district court erred in determining that it lacked diversity jurisdiction. Thus, to
determine whether the district court erred, we must assess whether Defendants’
arguments in support of diversity jurisdiction were clearly foreclosed. Lussier v.
Dollar Tree Stores, Inc., 518 F.3d 1062, 1065–66 (9th Cir. 2008).
3. The district court did not err. “Stadtmueller & Associates” was not
sued under a “fictitious name” within the meaning of 28 U.S.C. § 1441(b)(1). That
statute refers to Doe defendants, e.g., Newcombe v. Adolf Coors Co., 157 F.3d 686,
690 (9th Cir. 1998), not misnamed corporate entities. Although Rhodes’s
complaint incorrectly identifies her employer as “Stadtmueller & Associates”
rather than “Barnett & Associates,” all parties understood that Rhodes intended to
name the company owned by Barnett which employed Rhodes. This misnomer
does not change the fact that Barnett & Associates is a real party in interest to the
case, and the entity that she named as a defendant is not a “nominal” party. See
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Prudential Real Estate Affiliates, Inc. v. PPR Realty, Inc., 204 F.3d 867, 873 (9th
Cir. 2000) (defining “nominal” parties that may be disregarded for purposes of
determining the existence of diversity jurisdiction); see also 6A Charles Alan
Wright, et al., Federal Practice & Procedure § 1498.2 (3d ed. 2017) (discussing
misnomer). Furthermore, Barnett & Associates is a citizen of the same state as
Rhodes, and unserved parties must be considered in determining whether there is
complete diversity. Clarence E. Morris, Inc. v. Vitek, 412 F.2d 1174, 1176 (9th
Cir. 1969). Thus, whether this entity was served does not impact the jurisdictional
analysis.
Nor did Rhodes admit diversity jurisdiction. There is no basis for
Defendants’ assertions that serving a party in a particular state establishes that the
party is a citizen of that state, or that filing a jury demand may serve as an
admission establishing jurisdiction. Cf. Kuntz v. Lamar Corp., 385 F.3d 1177,
1181 (9th Cir. 2004) (considering a challenge to diversity jurisdiction raised for the
first time following a jury trial). Moreover, as Rhodes’s Rule 15 motion to amend
the pleadings was denied, it could not provide a basis for a determination that the
parties were not diverse.
4. Finally, at the time of removal, Defendants were aware that the
corporate defendant was misnamed and that, had the company’s correct name been
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used, they would have no basis for asserting diversity jurisdiction. Instead of
correcting Rhodes’s mistake, Defendants sought to use it to establish diversity
jurisdiction where none existed. The district court therefore reasonably determined
that Defendants lacked an objectively reasonable basis for seeking removal, and it
was well within its discretion in granting Rhodes’s request for attorneys’ fees.
AFFIRMED.
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