Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_06-cv-01136/USCOURTS-caed-1_06-cv-01136-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-(Citizenship)

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

BRIGHTON/SHAW, INC.,et.al., )

)

)

)

Plaintiffs, )

)

v. )

)

ROBERT CARSON,et al., )

)

)

)

Defendants. )

 )

1:06cv1136 AWI DLB

ORDER GRANTING 

MOTION TO REMAND

(Document 10) 

Defendants Craig Davis and Cindy Davis (“Davis Defendants”) filed the instant motion

to remand on September 19, 2006. The matter was heard on December 15, 2006, before the

Honorable Dennis L. Beck, United States Magistrate Judge. James Betts appeared on behalf of

the Davis Defendants; David Holzworth appeared on behalf of defendants Michiko Morinaga

and Kimiko Miyoshi Price (“Removing Defendants”); and Christopher Seymore appeared on

behalf of plaintiffs Brighton/Shaw, Inc., Brighton Hill, Ltd and Shaw Academy Associates

(collectively “Brighton Plaintiffs”). 

BACKGROUND

This action for declaratory and injunctive relief was filed in the Fresno County Superior

Court on July 13, 2006 by the Brighton Plaintiffs as well as twenty limited partners. The suit was

filed against a number of defendants and seeks to resolve claims relating to the limited

Case 1:06-cv-01136-AWI -DLB Document 26 Filed 02/07/07 Page 1 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

partnership interests of two of the Brighton Plaintiff’s limited partners: Craig Davis and Robert

Carson. Named as defendants are:

1. Craig Davis (California);

2. Carol Davis (California);

3. Robert Carson (California);

4. James Quiring (California); and

5. IQ Properties-BHLC, a California limited partnership (not yet

served).

The complaint also names several individuals and/or business entities which are

domiciled in Japan: 

1. Humitoshi/Fumitoshi Ito/Itoh (deceased);

2. Junko Oyama;

3. Michiko Morinaga;

4. Kimiko Miyoshi Price;

5. Shizuo Miyoshi (deceased);

6. Hiromichi Oyama; and 

7. Japan Investment Management Agency (JIMA)

On August 25, 2006, the Removing Defendants (the only Japanese defendants that have

been served) filed a Notice of Removal. Morinaga is a citizen of Japan and Price is a Japanese

national residing in Hawaii. Removing Defendants argue that Hiromichi Oyama and Junko

Oyama have been improperly named in this suit as they are not heirs or successors of Fumitoshi

Ito. Naoko Ito, Toshie Ito and Takafumi Ito (not named in this suit), citizens of Japan, are the

heirs and successors of Fumitoshi Ito and are plaintiffs in a related action pending in this court,

06 CV 1135 AWI DLB. 

This case and the related case arise from a dispute over the rightful owners of 12 limited

partnership units in a real estate development partnership that was first purchased by Fumitoshi

Ito and Shizuo Miyoshi, now deceased. 

Case 1:06-cv-01136-AWI -DLB Document 26 Filed 02/07/07 Page 2 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 The Notice of Removal inadvertently omitted John Quiring as a named defendant. Removing defendants 1

have lodged an errata. 

3

The Removing Defendants contend that complete diversity exists between themselves on

the one hand, and the Brighton Plaintiffs and adverse defendants Robert Carson, Craig Davis,

Cindy Davis and John Quiring on the other, once the parties are properly aligned. Removing 1

Defendants argue that while plaintiffs filed this case styled as a declaratory judgment action, they

averred that they had no interest as to the rightful owners of the 12 disputed units, but sought

only to establish the identity of the rightful owners. Removing Defendants therefore argue the

complaint has the characteristics of an interpleader action (except that funds were not deposited). 

Removing Defendants argue the Brighton Plaintiffs are either unaligned or, to the extent the

partnership has not recognized the entitlement of the Removing Defendants, have interests

adverse to the Removing Defendants. Removing Defendants argue the outcome of this case

hinges on a single legal determination: Whether an assignment by Quiring to Carson of the 12

limited partnership units held by IQ Properties for the benefit of its two limited partners,

Fumitoshi Ito and Shizuo Miyoshi, was valid and enforceable. Removing Defendants argue that

if the assignment was valid, Carson and the Davis Defendants are the owners. If the assignment

was not legally valid, the Ito Miyoshi Heirs are the owners. Removing Defendants argue the

interests of the CDQ Defendants (Carson, Davis and Quiring) are completely adverse to the

Removing Defendants in that each claim ownership of the units and they disagree as to the

validity of the assignment of the units. Removing Defendants argue the Brighton Plaintiffs and

CDQ Defendants should be realigned as plaintiffs based on their common interest in a

determination that the units were properly assigned to Carson and Davis. Removing Defendants

contend that Brighton Plaintiffs and CDQ Defendants adverse interests on ancillary issues should

not be permitted to destroy complete diversity.

The Davis Defendants seek to remand this action, arguing that complete diversity does

not exist between plaintiffs and defendants and therefore the action should be remanded to state

court. The Davis Defendants argue that Removing Defendants have mis-characterized this

lawsuit. They represent that this is not the first lawsuit between Davis and the Brighton

Case 1:06-cv-01136-AWI -DLB Document 26 Filed 02/07/07 Page 3 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

Plaintiffs. Davis Defendants argue that in claiming the local defendants are not properly aligned

as parties, Removing Defendants ignore the profound disputes that exist between the Brighton

Plaintiffs on the one hand and Carson, Davis, Quiring and IQ Properties on the other. Davis

Defendants argue that Brighton Plaintiffs are not “neutral” on the issue of ownership. 

Removing Defendants filed their opposition on October 31, 2006 and Davis Defendants

filed their reply on November 6, 2006. 

DISCUSSION

28 U.S.C. Section 1332(a) provides for federal jurisdiction based on diversity of

citizenship: 

(a) The district courts shall have original jurisdiction of all civil

actions where the matter in controversy exceeds the sum or value

of $75,000, exclusive of interest and costs, and is between--

 (1) citizens of different States;

 (2) citizens of a State and citizens or subjects of a foreign state;

 (3) citizens of different States and in which citizens or subjects

of a foreign state are additional parties; and

 (4) a foreign state, defined in section 1603(a) of this title, as

plaintiff and citizens of a State or of different States.

For the purposes of this section, section 1335, and section 1441, an

alien admitted to the United States for permanent residence shall

be deemed a citizen of the State in which such alien is domiciled.

A civil action originally filed in a State court which could have been commenced in

federal court based on diversity jurisdiction may be removed from state court to U.S. District

Court on this ground. 28 U.S.C. § 1441(b). 

After removal, the plaintiff may challenge the allegations of the removal notice. The

burden is on defendant to prove the existence of jurisdictional facts (complete diversity, etc.)

Gaus v. Miles , 980 F.2d 564, 566 (9 Cir. 1992). As with original diversity jurisdiction, in th

determining whether diversity exists in cases removed from state court, the federal court has the

power to align the parties according to their real interests. Smith v. Salish Kootenai College, 434

F.3d 1127, 1133 (9 Cir. 2006). The alignment in the complaint is not controlling. The issue of th

alignment for purposes of diversity jurisdiction requires a court to “look beyond the pleadings” to

the actual interests of the parties respecting the subject matter of the lawsuit. City if Indianapolis

v. Chase Nat’l Bank, 314 U.S. 63, 69 (1941). 

Case 1:06-cv-01136-AWI -DLB Document 26 Filed 02/07/07 Page 4 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

Realignment of the parties as urged by the Removing Defendants is not warranted in this

case. It is clear from the complaint that the Brighton Plaintiffs are not taking a neutral position in

this lawsuit. While the validity of the assignment from IQ Properties is certainly a significant

issue, resolution of this question does not resolve the multiple disputes between the parties. The

allegations in the complaint are not neutral and it is clear to the Court that the Brighton Plaintiffs

are adverse to the named defendants. Indeed, plaintiffs allege:

Plaintiffs are informed and believe and thereon allege that the

attempted purchase of the twelve BRIGHTON HILLS’ partnership

units held and owned by IQ PROPERTIES by CARSON and the

subsequent attempt to transfer from CARSON to DAVIS of seven

of those twelve units under the terms set forth in the declaration

was void as will be discussed herein. 

The Brighton Plaintiffs’ complaint lists twenty-two (22) separate paragraphs which detail

the broad range of declaratory relief requested and the prayer includes a claim for indemnity and

seeks an injunction against Carson and Davis. Additionally, Mr. Davis asserts that the general

partner (Brighton/Shaw) has breached its fiduciary duties by instigating this controversy in the

first place and by suing its own limited partners in an effort to force concessions relating to

Carson and Davis’ ownership interests. 

This case is unlike Eikle v. States Marine Lines, Inc., 473 F.2d 959, cited by Removing

Defendants, where the court determined that the appropriate way to characterize the lawsuit for

purposes of diversity jurisdiction was as a suit by a law firm against a client for attorneys’ fees. 

When Goller (the attorney) was injected into the lawsuit, his status could only be as a plaintiff as

his interests were aligned with his partner and adverse to the client defendant. Here, plaintiffs’

interests are very much adverse to the Davis Defendants and while each seeks resolution of the

title to partnership interests, their interests are not aligned. 

The Removing Defendants sought removal of this case exclusively upon the diversity of

the parties. Complete diversity does not exist between the Brighton Plaintiffs and the Davis

Defendants. While Removing Defendants seek to avoid this lack of diversity by claiming that

these defendants are not properly aligned, the Court disagrees. Based on the allegations in the

Case 1:06-cv-01136-AWI -DLB Document 26 Filed 02/07/07 Page 5 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

complaint and the matters in actual controversy, the parties are properly aligned and complete

diversity does not exist. 

Based on the foregoing, Defendant’s motion to remand is HEREBY GRANTED and the

court HEREBY ORDERS this case REMANDED to the Fresno County Superior Court. 

IT IS SO ORDERED. 

IT IS SO ORDERED. 

Dated: February 6, 2007 /s/ Dennis L. Beck 

3b142a UNITED STATES MAGISTRATE JUDGE

Case 1:06-cv-01136-AWI -DLB Document 26 Filed 02/07/07 Page 6 of 6