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October 1, 2001


The opinion of the court was delivered by: Franklin S. Van Antwerpen, U.S.D.J.


Plaintiff Joan Hayfield ("Plaintiff") brings this case against Home Depot U.S.A., Inc. and Artistic Checks Company ("Defendants"). Plaintiff alleges malicious prosecution against Home Depot and breach of contract and negligence against Artistic. Currently we consider summary judgment motions filed by Defendants, and deny both motions, for the reasons set forth hereinafter. The case will be immediately scheduled for trial.


We have before us Defendant Home Depot's Notice of Removal, filed on September 20, 2000 ("Removal"), Answer to Complaint with Affirmative Defenses by Defendant Artistic Checks Company, filed on December 13, 2000, Answer and Separate Affirmative Defenses to Complaint by Defendant Home Depot, Inc., filed on December 15, 2000, Reply by Defendant Home Depot, Inc. to Defendant Artistic Checks Company, Inc. Crossclaim, filed on January 5, 2001, Self-Executing Disclosure by Defendant Artistic Checks Comp., filed on February 14, 2001, Motion by Defendant Home Depot, Inc. for Summary Judgment, Memorandum, ("Home Depot SJ Mot.," "Home Depot SJ Brief"), filed on July 5, 2001, Answer by Plaintiff Joan Hayfield to Motion for Summary Judgment filed by Home Depot, filed on August 9, 2001, Brief by Plaintiff Joan Hayfield in Support of Response to Motion for Summary Judgment pursuant to FRCP 56(b) ("Plaintiff's Response to Home Depot"), filed on August 9, 2001, Notice of Motion and Motion by Defendant Artistic Checks Comp. for Summary Judgment, filed on August 16, 2001, Brief by Defendant Artistic Checks Comp. in Support of Summary Judgment ("Artistic SJ Brief"), filed on August 16, 2001, Response by Defendant Home Depot, Inc. to Defendant Artistic Check's Motion for Summary Judgment, Memorandum, filed on August 27, 2001, and Plaintiff's Answer to Motion for Summary Judgment Filed by Defendant Artistic Checks Company and Memorandum ("Plaintiff's Response to Artistic"), filed on September 14, 2001.


The most essential facts are undisputed. On July 13, 1999, Plaintiff made a $35.28 purchase at Home Depot, using a check which had been erroneously printed with an incorrect account number by Artistic. Artistic SJ Brief at 2-3. Plaintiff was unaware of Artistic's error at the time she executed the check. Id. at 6. Plaintiff sent a substitute check to Home Depot for the amount of the original check plus a returned check fee on August 22, 1999. Home Depot SJ Brief at 2,6. Home Depot, after depositing Plaintiff's substitute check on September 14, 1999, initiated criminal prosecution of Plaintiff on October 7, 1999 under a state law designed to combat bad check writing. Id. Plaintiff was acquitted at a January 21, 2000 hearing. Id. at 2.

The following are the details related by Plaintiff in her deposition. "Deposition of Joan Hayfield," May 3, 2001, provided as Exhibit to Artistic SJ Mot. ("Plaintiff's Depo."). Plaintiff is an unsophisticated sales representative who rearranges products on grocery shelves. Plaintiff's Depo. at 6:23-7:18. She never graduated from high school and earns just over $10 an hour. Id. at 7:24-8:2. She purchased checks from Defendant Artistic because she learned these checks were less expensive than her bank's checks. Id. at 10:12-14. Plaintiff was trying to save costs wherever possible because she had recently purchased a new house. Id.

When Plaintiff received her new checks in the mail on July 13, 1999, she inspected her name and address but did not notice the account number printed on the checks. Id. at 14:8-15:6. Plaintiff has had a 14-year relationship with her bank, the Stroehmann Credit Union, and has never felt it necessary to inspect the numbers on her checks. Id. at 33:5-9. During her 14 years as a Stroehmann customer, Plaintiff has never bounced a check. Id. at18:22-19:1.

Plaintiff states that she "was so psyched [excited] when I got those checks, because they were my new checks in my new house, I was going to go to Home Depot and buy everything." Id. at 33:20-22. Plaintiff, who was a regular customer at that Home Depot store in Bethlehem, went directly to this store on July 13 and used the first of her new checks from Artistic to make $35.28 in purchases. Id. at 34:7-11, 37:1-9. At the time, Plaintiff had approximately $2,000 in her bank account. Id. at 50:3-13; 191:20-192:3.

Only later did Plaintiff discover that her checks were erroneously numbered. Id. at 20:7-19. She called the credit union the day after she learned one of her checks had bounced, and realized Artistic's printing error in discussion with bank personnel. Id. at 21:4-13, 22:2-10, 24:9-25. Plaintiff "didn't wait" to contact Artistic. Id. at 25:4-19. Artistic apologized, said it would reimburse Plaintiff and volunteered to send a letter explaining its error, which Plaintiff, in turn, could provide to creditors. Id. at 25:22-27:4. Artistic fulfilled these promises. Id. Plaintiff contacted all of the creditors, including Home Depot, to whom she had written checks, explaining the situation and offering to make an effective payment. Id. at 45:20-46:5. The Home Depot representative on the phone indicated that it would be acceptable for Plaintiff to return to the store to clear her debt. Id. at 47:18-48:12

On or about August 22, 1999, before Home Depot began its prosecution, Plaintiff drove one hour to the store where she had made her purchases, intending to make a substitute payment using an old, valid check issued by her credit union before she received Artistic's checks. Id. at 45:13-16; 185:16-185:25. Plaintiff states that she planned to show Home Depot officials her good checks and those issued by Artistic, adding, "I had my license with me, my registration with me, my company car information with me, everything, to show these people that I was not trying to rip them off." Id. at 48:7-12.

Plaintiff was told that Home Depot would not accept another check. Id. at 48:15-49:19. She had not brought enough cash to make a payment. Id. at 57:1-16. Because Plaintiff's first check was considered a bounced check, Plaintiff understood that she would be required to pay an additional $20. Id. at 50:12-13. According to Plaintiff, she was predisposed to paying the $20 to end the situation, saying, "I didn't argue the $20. I had said, you know what, you can have it." Id.

Plaintiff showed or read Artistic's letter of explanation to approximately a dozen creditors and all but Home Depot accepted it without any problem. Id. at 16:12; 53:10-23. Although Plaintiff brought the Artistic letter to Home Depot to clear her name, no one would listen to her. Id. at 54:3-18. She explains, "Nobody would come down and talk to me. I mean, I had my license, all that stuff, to show that I'm, I was not a bad person. . . . I wanted to clear me." [sic] Id. at 54:3-18.

On at least one occasion, Plaintiff spoke with Home Depot's Manager, "Tina," Christina Cunha, who later filed the criminal complaint. Id. at 63:11-67:19; 102:19-23. Plaintiff engaged in a conference call and "about a dozen" other discussions with an executive in Home Depot's Georgia headquarters, Mickey Davis, explaining her entire situation, beginning with Artistic's printing error. Id. at 66:20-67:9; 197:1-25. In total, she spent approximately $20 on phone calls to Georgia. Id. at 112:10-19. Home Depot acknowledges that Plaintiff made calls to its office in Georgia before she received a criminal summons. Id. at 68:6-14.

Immediately after Plaintiff's visit to Home Depot on or about August 22, finding no resolution, Plaintiff took matters into her own hands and wrote Home Depot a letter of explanation with a replacement check for the $35.20 original charge plus the $20 penalty the company demanded. Id. at 69:22-71:2, 87:11-90:25. The replacement check was cashed by Home Depot and cleared on September 14, 1999. Id. at 76:14-77:10.

In October 1999, Plaintiff received from Home Depot her criminal summons, an "arresting type of paper," accusing her of paying bad checks. Id. at 77:17-78:14. Plaintiff states, "I took it as being, you know, like, I'm going to get arrested and go to jail. I've never gotten papers like that before in my life." Id. at 78:6-8. Plaintiff paid over $183 bond to avoid incarceration. Id. at 79:15-16, 19-20.

Traumatized, Plaintiff began calling friends to calm her down. Id. at 82:2. Then she again called Mickey Davis, the Home Depot executive in Georgia, and weeping, she pleaded with him to stop the prosecution. Id. at 87:11-90:25, 197:1-25. She communicated to him her frustrations: "Did somebody cash my check and pocket the money? [W]here is the deposit slip? That's what I kept asking Mickey Davis. Ask them for the deposit slip. Well, we can't find it. That's not my fault. That's not my problem. You know, do better record keeping."Id. at 131:5-24. She also cried on the phone with the District Justice's office, which told Plaintiff that its hands were tied. Id. at 95:18.

Between her October receipt of the summons and her January criminal hearing, Plaintiff was "upset constantly." Id. at 103:14-104:3. As she explains, "You think about it constantly, constantly what's going to happen. I never encountered something like this before. . . . I mean, I was, I'm still, I still am extremely upset over this. But this should not have been happening. . . . It's, it's in the back of my mind, it was in the back of my mind, what's going to happen, who's going to be there. You know, if you never had anything like this before, it kind of drives you a little crazy." Id. Plaintiff spent $758.48 to hire an attorney (id. at 113:8-15) and missed work on several occasions, though she lost no pay as a result of the case. Id. at 116:19-22; 117:14-118:5; 123:10-123:16; 148:4-8.

Plaintiff is a very private person. Id. at 133:14-134:12. However, since Plaintiff filed this suit on August 31, 2000, she has received unwanted media attention, including several articles in local newspapers, reprinted on the Internet, and radio stories, which have caused her a great deal of humiliation and embarrassment. Id. at 137:24-138:8; 141:23-143:8; 146:21-147:2; 162:1-25; 164:13-18; 165:21-166:9; 168:2-8. Plaintiff still cries on the phone to her best friends because of the stress of this case. Id. at 151:17-152:3.

On September 20, 2000, Home Depot removed this case to Federal Court based on diversity jurisdiction.


A. Statement of Jurisdiction

1. The Erie Doctrine

When federal jurisdiction is based on diversity of citizenship under 28 U.S.C. § 1332, federal courts must, "[e]xcept in matters governed by the Federal Constitution or by Acts of Congress, . . . [apply] the law of the State." Erie Railroad v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Under the Erie Doctrine, federal diversity cases are governed by federal procedural laws, such as the Federal Rules of Civil Procedure. See Hanna v. Plumer, 380 U.S. 460, 473-74, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965) ("To hold that a Federal Rule of Civil Procedure must cease to function whenever it alters the mode of enforcing state-created rights would be to disembowel either the Constitution's grant of power over federal procedure or Congress' attempt to exercise that power in the Enabling Act."). See also Henderson v. United States, 517 U.S. 654, 668, 116 S.Ct. 1638, 134 L.Ed.2d 880 (1996) ("[A] Rule made by Congress supercedes conflicting laws no less than a Rule this Court prescribes."); Budinich v. Becton Dickinson & Co., 486 U.S. 196, 199, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988); Wayman v. Southard, 23 U.S. (10 Wheat.) 1, 6 L.Ed. 253 (1825). Substantively, the forum state's laws govern — in this case Pennsylvania's, as established by the Pennsylvania Supreme Court. See Commissioner of Internal Revenue v. Bosch's, 387 U.S. 456, 465, 87 S.Ct. 1776, 18 L.Ed.2d 886 (1967). As the Third Circuit explained, applying Erie, "While the Federal Courts should properly employ its [sic] own rules of procedure to secure the just, efficient and prompt determination of all claims inherent in any litigation before it, nevertheless the ultimate results reached must be such as accord with the substantive jurisprudence of the State of the forum."(Citations omitted.) Smith v. Whitmore, 270 F.2d 741, 745 (3rd Cir. 1959).

Lower state court decisions are persuasive, but not binding, on the federal court's authority; if the State's highest court has not spoken on a particular issue, the "federal authorities must apply what they find to be the state law after giving `proper regard' to relevant rulings of other courts of the State." Id.; see also Polselli v. Nationwide Mut. Fire Ins., 126 F.3d 524, 528 (3d. Cir. 1997); Scranton Dunlop, Inc. v. St. Paul Fire & Marine Ins. Co., 2000 WL 1100779, at *1 (E.D.Pa. Aug.4, 2000) ("Since this is a matter of state law that has not been decided by the Pennsylvania Supreme Court, a prediction must be made as to how that court would rule if confronted with the same facts.").

2. Complete Diversity

Federal diversity jurisdiction exists where the parties have complete diversity and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332. Plaintiff is a Pennsylvania citizen, while Home Depot is a Delaware Corporation with its principle place of business in Georgia and Artistic is organized and has its principle place of business in Arkansas. Complete diversity is therefore established.

3. Amount in Controversy

The amount in controversy is not so readily determinable. Plaintiff's Complaint*fn1 demands judgment against Home Depot "in excess of $50,000.00, plus punitive damages, costs, interest and said other relief as the court may deem proper," and demands judgment against Artistic "in excess of $50,000.00 and such other relief as the court may deem proper under the circumstances." Complaint at 9, 11. Defendant Home Depot's Removal merely states without explanation that "the amount in controversy in this action is in excess of the amount of $75,0000.00 [sic], exclusive of interest and costs." Removal at Line 7. Plaintiff did not respond to Home Depot's Removal and has not raised subject matter jurisdiction in its responses to summary judgment.

In light of Plaintiff's complaints against two unrelated defendants for an unspecific amount over $50,000 — and the fact that Plaintiff's pecuniary losses seem to be less than a thousand dollars — it is not obvious to us that Plaintiff's suit concerns a jurisdictionally-sound value over $75,000. It is obvious, however, that neither party gave the issue the consideration it requires. Nonetheless, federal procedural guidelines dictate that we may consider jurisdiction on our own at any time.*fn2 In Re: Orthopedic "Bone Screw" Products Liability Litigation 132 F.3d 152, 155 (3rd Cir. 1997) ("Bone Screw") citing Underwood v. Maloney, 256 F.2d 334 (3d Cir.), cert. denied, 358 U.S. 864, 3 L.Ed.2d 97, 79 S.Ct. 93 (1958). The parties may not confer jurisdiction by consent, i.e. by agreeing to remain before our Court despite jurisdictional deficiency. Meritcare, 166 F.3d at 217. The law is straightforward in this respect: if we determine that a case before us lacks subject matter jurisdiction, we have no authority under the Constitution to decide a case on the merits. Bone Screw, 132 F.3d at 155. Where a case has been removed from state court, like this case, it must be remanded without prejudice if jurisdiction is lacking. See Bradgate Associates v. Fellows, Read & Associates, 999 F.2d 745, 750-51 (3d Cir. 1993) (finding that, where the district court lacks subject matter jurisdiction, it must remand a removed state court case).

The sum Plaintiff claims controls the determination of the amount in controversy if her claim was made in good faith — the latter is not at issue here. St. Paul Mercury Indem. Co., 303 U.S. at 288; Dardovitch v. Haltzman, 190 F.3d 125, 135 (3rd Cir. 1999). See also Angus v. Shiley, Inc., 989 F.2d 142, 145 (3d Cir. 1993) ("The general federal rule is to decide the amount in controversy from the complaint itself."). However, Plaintiff Hayfield does not specifically demand over $75,000 of either Defendant. Thus, to enable jurisdiction, we would be required to find that the claims against Defendants, which specifically demand more than $50,000 each, actually demand over $75,000 each.*fn3 Otherwise, we must aggregate her claims in order to reach the jurisdictional minimum.

4. Aggregation

Another court in our District recently confronted a similar situation. See C.D. Peacock, Inc. v. Neiman Marcus Group, Inc., 1998 WL 111738 (E.D.Pa., 1998). In Peacock, the plaintiff jewelry vendor alleged that he did not receive his merchandise from a supplier, Yurman, in breach of their contract, because the Neiman Marcus department store interfered with the contract and business relations between the two, monopolizing the supplier's attention. Peacock, 1998 WL 111738 at *1. The supplier could be liable only for the value of the undelivered merchandise, well under the jurisdictional minimum, but the interfering department store was potentially liable for two counts sounding in tort, which when combined were worth over $100,000. Id. The court explained in a footnote,

A single plaintiff's claims against more than one defendant are aggregated to determine the jurisdictional amount in controversy only if the claims are so "integrated" and "tied together by combination or conspiracy, as to make the relief single;" otherwise, "where a plaintiff alleges independent, several liability against more than one defendant, plaintiff's claims against each defendant must individually satisfy the amount in controversy requirement."

Peacock, 1998 WL 111738 at *2 FN2, citing Cottman Transmission v. Metro Distrib., 796 F. Supp. 838, 841 (E.D.Pa. 1992) (internal quotations omitted), vacated on other grounds, 36 F.3d 291 (3d Cir. 1994). However, after reiterating the Cottman rule, the Peacock court opted not to decide the issue of whether the action against the supplier was properly before the court, as follows:

Peacock's breach of contract claim against Yurman [the supplier] for $11,000.00 obviously does not, alone, satisfy the jurisdictional amount. Even assuming Peacock's claim against Yurman is so "integrated" with Peacock's claims against Neiman Marcus, it is still necessary that the two tort claims against Neiman Marcus be aggregated to attain the jurisdictional amount. Therefore, the primary issue to be resolved in my analysis is whether the two tort claims in Counts II and III can be properly aggregated. Id.

After holding that the claims against Neiman Marcus could be aggregated, the court stated in a footnote without further explanation, "The Court exercises its supplemental jurisdiction over the breach of contract claim against Yurman for $11,000 in Count I." Id. at *5 FN5. We are not content to assert such jurisdiction without analysis, like the court in the 1998 Peacock case, given the Third Circuit's 1999 admonishment to strictly construe the removal statute in light of "the congressional intent to restrict federal diversity litigation." Meritcare, 166 F.3d at 217.*fn4

We find no Third Circuit rule respecting the aggregation of claims against multiple defendants to attain the amount in controversy requirement. We believe, however, that if multiple defendants jointly harm a common plaintiff, then the claims against these defendants are integrated and may be aggregated for the purpose of calculating the amount in controversy required for federal jurisdiction. For similar approaches, see Jewell v. Grain Dealters Mut. Ins. Co., 290 F.2d 11, 13 (5th Cir. 1961) ("Claims against two or more defendants can be aggregated for the purpose of attaining the jurisdictional amount . . . [only] if [the defendants] are jointly liable to the plaintiff.") citing Walter v. Northeastern R. Co., 147 U.S. 370, 373 13 S.Ct. 348, 37 L.Ed. 206 (1893); Trustees of Boston University v. ASM Communications, Inc., 33 F. Supp.2d 66, 76 (D.Mass. 1998) (citing Jewell); Libby v. City Nat'l Bank, 592 F.2d 504, 510 (9th Cir. 1978) (The "tests for aggregating claims of one plaintiff against multiple defendants and multiple plaintiffs against one defendant are essentially the same . . .: the plaintiff's claims against the defendants must be common and undivided so that the defendant's liability is joint and not several."); 14B C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3704, pp. 145-156 (3d ed. 1998 & 2001 Pocket Part) ("It is only when two or more plaintiffs have a common, undivided interest in the subject matter of the litigation and a single title or right is involved in the litigation that the claims of the coparties have been added together in determining whether the statutory amount in controversy requirement has been satisfied. The same exception to the basic rule against aggregation applies when the suit is against multiple defendants.").

Though the Third Circuit has not ruled on aggregation of multiple defendants, the Court's position is clear regarding aggregation of multiple plaintiffs' separate and distinct claims: the Third Circuit opposes such aggregation, even of claims arising out of the same factual circumstances, unless each plaintiff individually reaches the $75,000 minimum. Meritcare, 166 F.3d at 218. In the 1999 Meritcare decision, the Third Circuit ruled on an apparent conflict being considered by many circuit courts — namely, how to reconcile 28 U.S.C. § 1367, enacted in 1990, creating supplemental jurisdiction,*fn5 with the U.S. Supreme Court's decision in Zahn v. International Paper Co., 414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973). Relying on the legislative ...

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