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Sterling Bank v. Caesarea-Millbrook, LLC

United States District Court, M.D. Alabama, Northern Division

April 23, 2015

STERLING BANK, Interpleader,
v.
CAESAREA-MILLBROOK, LLC; an Alabama limited liability company; CAESAREA-CHANTILLY, LLC, an Alabama limited liability company; CAESESERA DEVELOPMENT, LLP, a Delaware limited partnership; JACKSON HEALTH, INC., an Alabama corporation; JOSEPH L. HERROD, an individual; DONALD P. BROBST, an individual; C. DENNIS WOOLDRIDGE, an individual; A.CHANDLER MULLER, an individual; etc., Claimants.

MEMORANDUM OPINION AND ORDER

W. HAROLD ALBRITTON, Senior District Judge.

This cause is before the court on a Motion to Realign and Add Additional Parties filed by Caesarea Development, LLP and Joseph L. Herrod (Doc. #3).

I. FACTS AND PROCEDURAL HISTORY

This case was originally filed as an interpleader action in state court by Sterling Bank. Sterling Bank alleged that it had been made aware of a dispute among the claimants relating to control over the bank accounts of Caesarea Millbrook, LLC and Caesarea-Chantilly, LLC. Sterling Bank deposited into court the funds from the accounts, asked the state court to require the claimants to assert their claims and to determine their rights to the money in those accounts, asked to be discharged from all liability in the premises, and asked for reimbursement of attorneys' fees and costs of suit. Sterling Bank named the following as Defendants: Caesarea-Millbrook, LLC; Caesarea-Chantilly, LLC; Caesesera Development, LLP; Jackson Health, Inc.; Joseph L. Herrod; Donald P. Brobst; C. Dennis Wooldridge; A. Chandler Muller; and fictitious Defendants.

The case was removed to this court on the basis of diversity jurisdiction by Defendants Joseph L. Herrod ("Herrod") and Ceasarea Development, LLP ("CD") on March 6, 2015. The Notice of Removal recites that Sterling Bank is a national banking association with its primary place of business in Columbus, Georgia. The Notice of Removal also states that CD is a Delaware limited liability partnership whose partners are "residents" of Florida and Tennessee and that Herrod is a "resident" of Florida. Defendants Donald Brobst ("Brobst"), A. Chandler Muller ("Muller"), and Dennis Wooldridge ("Wooldridge") are identified as "residents" of Alabama, and Jackson Health, Inc. as an Alabama corporation. (Doc. #1). In the Notice of Removal, Herrod and CD ask the court to realign the parties for removal purposes.

After removal, CD and Herrod filed an Answer which included claims designated as "Cross-Claims/Third-Party Claims" against originally-named Defendants Brobst, Jackson Health, Muller, and Wooldridge, and claims designated as "Cross-Claims/Third-Party claims" against new parties Jackson Hospital & Clinic, Inc. and Primary Physicians, Inc. f/k/a PriMed Physicians, Inc. (Doc. #2). CD and Herrod seek compensatory and punitive damages arising from alleged breaches of contract and torts arising from a business relationship.

CD and Herrod filed the instant Motion to Realign and Add Additional Parties on March 25, 2105. In the Motion, CD and Herrod ask the court to realign the parties upon the release of interpleader Sterling Bank; specifically, to realign CD and Herrod as Defendants, and to realign all other parties as Plaintiffs. CD and Herrod also ask the court to change the claims brought against Jackson Hospital and Primary Physicians, Inc. to counterclaims.

On March 30, 2015, within thirty days of removal, Caesarea-Millbrook, LLC; Caesarea-Chantilly, LLC; Jackson Health, Inc.; Brobst, Wooldridge, and Muller filed a Response to the Notice of Removal in which they stated that they did not object to removal if the Notice of Removal is amended to demonstrate complete diversity of citizenship of the parties, rather than identifying the residency of the parties. They did not dispute that complete diversity of citizenship exists.

On April 6, 2015, the court issued an Order for the parties to show cause why Sterling Bank ought not be allowed to file a claim for attorney's fees and expenses out of the interpleaded fund and be discharged from all liability, and why the Motion to Realign and Add Additional Parties ought not be granted.

Service of the Summons and Third-Party Complaint was made on Jackson Hospital & Clinic, Inc. and Primary Physicians, Inc. f/k/a PriMed Physicians, Inc. on April 14, 2015. (Doc. #15).

In the response to this court's Order to show cause, Caesarea-Chantilly, LLC; Caesarea-Millbrook, LLC; Jackson Health, Inc.; Brobst; Muller; and Wooldridge stated that they do not object to the request by Sterling Bank that it be allowed reasonable attorney's fees and expenses from the interpleaded funds and thereafter be discharged from liability in this case; and agree that the parties are due to be realigned, but request that they be realigned as Defendants, not Plaintiffs. They contend that the Motion to Add Parties is due to be denied.

On April 21, 2015, Sterling Bank filed a Notice in this court that it had requested that the funds deposited in state court be released to the Clerk of this court. (Doc. #20).

II. DISCUSSION

As noted above, this case was removed to federal district court on the basis of diversity jurisdiction. The non-removing Defendants filed a Response to Removal, which the court construes as a consent to removal, in which they stated that they do not object to removal, but pointed out that "residence" rather than "citizenship" had been stated in the Notice of Removal, stating that this procedural defect is one which should be ...


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