Glovis Alabama, LLC v. Richway Transportation Services, Inc.

          ORDER

          KRISTI K. DUBOSE, CHIEF UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Plaintiff's amended complaint (Doc. 58), Defendant Richway Transportation Services, Inc.'s motion to strike and motion to stay, or in the alternative to extend the time within which to respond to Plaintiff's amended complaint (Doc. 62), Plaintiff's response (Doc. 65), and Defendant Richway's reply (Doc. 66).

         I. Background

         On November 12, 2018, Plaintiff Glovis Alabama, LLC (Glovis) initiated this action against Richway Transportation Services, Inc. (Richway) in the Circuit Court of Mobile County, Alabama (Glovis Alabama, LLC v. Richway Transp. Servs., Inc., 02-CV-2018-902866). (Doc. 1-1). Based on Richway's alleged indebtedness related to a contract regarding certain leased equipment, Glovis alleges breach of lease, replevin and unjust enrichment, and seeks an order for the release of property and for monetary damages ($370, 506), pre and post judgment interest, attorney's fees, and costs.

         On December 14, 2018, Richway removed this case to this Court on the basis of federal diversity subject matter jurisdiction. (Doc. 1). On December 21, 2018, Richway answered and counterclaimed against Glovis for "suit on sworn account pursuant to Ala. Code § 12-21-111," breach of contract, promissory estoppel, and fraud. (Doc. 2). Richway seeks $474, 524.65 in actual and liquidated damages, pre/post judgment interest, attorney's fees, and costs. (Id.) Richway denies that it is in default and/or that it owes any payments to Glovis, "because such amounts were deducted" from Glovis' "outstanding payables owed to Richway." Also on this date, Richway filed its disclosure statement asserting that it is Texas corporation with its principal place of business in Houston, Texas. (Doc. 3 at 1; Doc. 37 at 2 at ¶2).

         On December 27, 2018, the Court ordered Richway to supplement its removal with citizenship information for Glovis, due to a deficiency in the allegations for a limited liability company (LLC), i.e., an LLC's citizenship is determined by the LLC members' citizenship not where the LLC was formed or the LLC's principal place of business. (Doc. 6). On January 2, 2019, Glovis filed its disclosure statement asserting that it is an Alabama LLC with its principal place of business in Montgomery, Alabama, listing its parent company as the only reportable entity -- Glovis America, Inc., a California corporation. (Doc. 7). On January 3, 2019, Richway supplemented its removal, specifying that the LLC's only member, Glovis America, Inc., is a California corporation with its principal place of business is Irvine, California. (Doc. 10 at 2 at ¶4).

         On April 12, 2019, Glovis moved for a Rule 65 preliminary injunction and Rule 64 writ of seizure against Richway, which was set for an April 18, 2019 hearing. (Doc. 28; Doc. 29). At the parties' request, the hearing and relevant deadlines were re-set to June 2019. (Doc. 30; Doc. 32).

         On April 30, 2019, Richway moved to amend its answer/counterclaim as it discovered that the equipment at issue is not owned by Glovis: "[r]eview of State of Alabama Certificates of Title confirm the majority -- and likely all -- of the Equipment is owned by Richardson Alabama Equipment Leasing, Inc….which is not a party to the Lease Agreement…Alabama Department of Revenue license and registration receipts similarly identify RAEL as the owner…." (Doc. 33 at 3). Richway also added a counterclaim for quantum meruit. While given the opportunity to respond to Richway's motion (Doc. 34), Glovis did not do so. On May 24, 2019, Richway's motion was granted, and on May 28, 2019, Richway filed its amended answer/counterclaims. (Doc. 37).

         On May 24, 2019, Richardson Alabama Equipment Leasing, Inc. (RAEL) filed a Rule 24(a)(2) motion to intervene.^[1] (Doc. 35). RAEL asserted that it, not Glovis, is the true owner of the equipment, and sought intervention to protect its rights. Specifically, per RAEL:

….Plaintiff…neither owns nor maintains any possessory interest in the Equipment…. The Equipment was acquired by Intervenor directly from Transcraft Corporation in June and July of 2016, and thereafter registered and titled in Intervenor's name. [ ] The Equipment has remained under Intervenor's ownership and control since it was acquired. [ ]

…Plaintiff does not maintain any legal ownership, possessory, or security interest in any of the Equipment at issue. Intervenor has not transferred, granted, or otherwise conferred any ownership, possessory, or security interest in the Equipment to Plaintiff. [ ] Intervenor and Plaintiff have not entered into any agreements with respect to the Equipment. [ ] Plaintiff….has never even been in possession of the Equipment…

…Plaintiff contends that is it has contractual and legal rights to immediate possession of the Equipment…despite a complete and utter absence of same. Plaintiff contends it may repossess, sell, or release the Equipment, despite not having any legal ownership or possessory interest in any of the Equipment in issue….Plaintiff may not “repossess” property that it never possessed to begin with, and cannot “sell” what it does not own.

….Intervenor…maintains the only legal ownership and possessory interest in the Equipment…not Plaintiff. Intervenor claims that right pursuant to State of Alabama Certificates of Title and Alabama Department of Revenue license and registration receipts…..

(Doc. 35 at 3-4 (footnotes omitted, emphasis in original)).

         On May 31, 2019, Glovis opposed, contending that Richway is acting "surreptitious[ly]" and in bad faith with RAEL, to take Glovis' equipment without payment, when RAEL is not a necessary party. (Doc. 40). Glovis argues that the motion is untimely, RAEL is not necessary as it is not a party to the Glovis-Richway equipment lease agreement, "it could not logically be the owner" of the equipment per Richway's ...