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HAYFIELD v. HOME DEPOT U.S.A.
October 1, 2001
JOAN HAYFIELD, PLAINTIFF
HOME DEPOT U.S.A., INC. AND ARTISTIC CHECKS COMPANY, DEFENDANTS.
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.
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
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 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;
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
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
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.").
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.
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.
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
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 ...