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First National Bank of LA Grange, Illinois v. Sherwin-Williams Co.

December 21, 2009

FIRST NATIONAL BANK OF LA GRANGE, ILLINOIS, AS SPECIAL ADMINISTRATOR OF THE ESTATE OF FRANCISCO ZUNIGA, DECEASED; AND AS SPECIAL ADMINISTRATOR OF THE ESTATE OF CARLOS MIRANDA, DECEASED; AND MIGUEL OSORIO, INDIVIDUALLY, PLAINTIFFS,
v.
THE SHERWIN-WILLIAMS COMPANY AND BRADFORD WHITE CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: David H. Coar United States District Judge

HONORABLE DAVID H. COAR

MEMORANDUM OPINION AND ORDER

Plaintiffs initially filed this state-law tort action in the Circuit Court of Cook County. In due course, they agreed to settle their claims against all defendants except Sherwin-Williams and Bradford White. When the other defendants, who were nondiverse, were dismissed pursuant to the settlement agreement, Sherwin-Williams and Bradford White removed the case to this court on the basis of diversity jurisdiction. Plaintiffs now move to remand the case to state court or, in the alternative, to stay any federal litigation pending their receipt of funds from the state-court settlement agreement. For the following reasons, Plaintiffs' motion is DENIED.

BACKGROUND

Plaintiffs filed this state-law tort action in the Circuit Court of Cook County against KBC Developer and Contactor, Ltd., Southpaw Construction Company, Christopher and Kevin Dermody, and Robert Tiberi (collectively, "the settling defendants"). The parties agree that the settling defendants were nondiverse. Present in the case at that time, too, were Allstate Insurance Company and Cincinnati Insurance Company, also nondiverse parties. In their second amended complaint, Plaintiffs named Bradford White and Sherwin-Williams as defendants. There is no dispute that Bradford White and Sherwin-Williams are diverse parties.

On September 14, 2009, pursuant to a request from Plaintiffs and the settling defendants, the state court entered a good-faith finding of the proposed settlement. (R.19, Ex. B.) In the same order, the state court also dismissed Sherwin-Williams's crossclaims against the settling defendants, accidentally referring to them as counterclaims: "At oral argument it was learned that Sherwin had filed a counterclaim for contribution against the settling defendants. This counterclaim is hereby dismissed as against the settling defendants." (Id. at 2.) The order contained no language purporting to dismiss the settling defendants from Plaintiffs' action.

On September 17, 2009, Plaintiffs requested that the state court dismiss all of the non-diverse parties pursuant to their Petition for Partial Disbursement. (R.19, Ex. C.) Accordingly, the state court dismissed them in an order dated September 29, 2009, stating, "the following parties are dismissed with prejudice now and forever in any capacity in this action: KBC DEVELOPER AND CONTRACTOR, LTD.; SOUTHPAW CONSTRUCTION COMPANY; CHRISTOPHER DERMODY; KEVIN DERMODY; ROBERT TIBERI; ALLSTATE INSURANCE COMPANY; and CINCINNATI INSURANCE COMPANY." (R.19, Ex. A ¶9.)

On October 29, 2009, the remaining named defendants-Bradford White and Sherwin-Williams-filed a petition for removal in this court based on diversity jurisdiction. (R.1.) The parties do not dispute that the amount-in-controversy requirement is satisfied.

ANALYSIS

In the first instance, Plaintiffs ask this court to remand the case to the Circuit Court of Cook County. The court finds that there is no basis for a remand.

Plaintiffs argue that this court lacks subject-matter jurisdiction because removal was untimely. This conclusion is unfounded. The removal statute provides, in relevant part:

If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable . . . .

28 U.S.C. § 1446(b). The state court dismissed the nondiverse parties in an order dated September 29, 2009. At that point, the case first became removable. Bradford White and Sherwin-Williams therefore had until October 29, 2009 to remove the case to federal court, which they did. Removal was therefore timely.

Plaintiffs, however, mount two arguments in defense of their position that the thirty-day removal period began to run upon entry of the state court's September 14 order. First, Plaintiffs contend that the language in the September 29 order that purports to dismiss all of the nondiverse parties was only meant to clear up the confusion created by the September 14 order's accidental use of 'counterclaim' in place of 'cross-claim;' the September 14 order, properly understood, dismissed all nondiverse parties. This argument is frivolous. Even if the September 14 order had referred to Sherwin-Williams's crossclaims against the settling defendants with the word 'crossclaims' rather than the word 'counterclaims,' the state court's dismissal of those claims would not have worked a dismissal of Plaintiffs' claims against the settling defendants, who would still have remained parties to the action, and who would still need to be dismissed upon entry of the settlement. That was precisely the purpose-and the plain language-of the September 29 order.*fn1 Moreover, during the September 29 hearing, Judge Quinn, who ...


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