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DOUGLASS v. PARK CITY ASSOCS.

September 3, 1971

Lathrop DOUGLASS, Plaintiff,
v.
PARK CITY ASSOCIATES and Walter E. Heller & Co., Defendants


Vanartsdalen, District Judge.


The opinion of the court was delivered by: VANARTSDALEN

VANARTSDALEN, District Judge.

 Plaintiff filed action in Pennsylvania State Courts. One of the defendants, a non-resident of Pennsylvania, filed a petition to remove to Federal Court pursuant to 28 U.S.C.A. 1441(c) (1950). Plaintiff has moved to remand to State Court pursuant to 28 U.S.C.A. 1447(c) (1950) for lack of jurisdiction. The Motion to Remand will be granted.

 LATHROP DOUGLAS (hereinafter Douglass), a citizen of New York, filed the present action in assumpsit in the Common Pleas Court of Lancaster County against PARK CITY ASSOCIATES (hereinafter Park City), an association formed under the laws of Pennsylvania, and WALTER E. HELLER & CO. (hereinafter Heller), a Delaware Corporation with its principal place of business in Chicago. The complaint alleges, in a single count, a breach of a written contract between Douglass and Park City. The complaint also in the same single count alleges that Douglass is a third party beneficiary to a contract between Park City and Heller, whereby it is alleged that Heller became obligated to pay Douglass for service that Douglass performed for Park City.

 Douglass and Park City entered into a written contract, the terms and existence of which are admitted by all of the parties. Under the contract Douglass was to perform architectural services with respect to the planning and construction of a shopping center in Lancaster County. Douglass avers that the services have been performed and that Park City has failed to pay for the services. It appears in the complaint that advance payments in the years 1969 and 1970 were made to Douglass by check from Heller. This, Douglass claims, gives rise to the inference that Douglass is the third party beneficiary of some contract between Park City and Heller. Heller does not deny that they made payments to Douglass. However, Heller claims that there is no contract between Heller and Park City to which Douglass is a third party beneficiary.

 The merits of this controversy aside, it is admitted that Park City is a Pennsylvania citizen and that there is requisite diversity as per title 28, U.S.C.A. § 1332 (1966), between Douglass and Heller. The sole issue presented is whether the complaint states a separate and independent claim or cause of action against Heller, which would be removable if sued upon alone under title 28, U.S.C.A. 1441(c).

 Cases are legion for the proposition that title 28, U.S.C.A. 1441(c) should be given a strict construction and that doubt should be resolved in favor of non-removal. (See cases cited at Notes 2 and 5, title 28 U.S.C.A. 1441, 1971 pocket part pp. 6, 7 & 8.) Also, the cases cited by both parties indicate that the terms separate and independent should be given a broad construction in order to carry out the purpose of Congress to limit removal.

 The terms "separate" and "independent" have been defined by a number of authorities as has the meaning of the term "cause of action". Without question, the leading case on the construction and intent of Section 1441(c) is American Fire and Casualty v. Finn, 341 U.S. 6, 71 S. Ct. 534, 95 L. Ed. 702 (1951). In that case the Supreme Court noted at page 12, 71 S. Ct. at page 539: "Of course 'separate cause of action' restricts removal more than 'separable controversy'. In a suit covering multiple parties or issues based on a single claim, there may be only one cause of action and yet be separable controversies." (Footnotes omitted.)

 In discussing the meaning of "cause of action", the Court said:

 
"In a suit turning on the meaning of 'cause of action,' this Court announced an accepted description. Baltimore S.S. Co. v. Phillips, 274 U.S. 316 [47 S. Ct. 600, 71 L. Ed. 1069]. *fn10" This Court said, [274 U.S. at page] 321 [ 47 S. Ct. at page 602]:
 
'A cause of action does not consist of facts, but of the unlawful violation of a right which the facts show.'
 
"See Magnolia Petroleum Co. v. Hunt, 320 U.S. 430, 443 [64 S. Ct. 208, 215, 88 L. Ed. 149]. *fn11" Considering the previous history of 'separable controversy,' the broad meaning of 'cause of action,' and the congressional purpose in the revision resulting in 28 U.S.C. § 1441(c), [ 28 U.S.C.A. § 1441(c)] we conclude that where there is a single wrong to plaintiff, for which relief is sought, arising from an interlocked series of transactions, there is no separate and independent claim or cause of action under § 1441(c)."

 In this case, Douglass claims a single wrong, i.e., the breach of his contract with Park City. He claims a recovery for that breach. However, he prays for relief in the alternative against Park City and/or Heller. Heller contends that since Douglass claims to be a third party beneficiary to a contract between Park City and Heller, Douglass has stated a ...


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