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South Shore Ranches, LLC v. Lakelands Company

May 13, 2009

SOUTH SHORE RANCHES, LLC, AND JMZ DEVELOPMENT COMPANY, LLC, PLAINTIFFS,
v.
LAKELANDS COMPANY, LLC, AND DOES 1 THROUGH 25, INCLUSIVE DEFENDANTS.



The opinion of the court was delivered by: Anthony W. Ishii Chief United States District Judge

ORDER ON DEFENDANT'S MOTION TO REMAND AND MOTION TO DISMISS AND ORDER STRIKING DOCUMENT NO. 31

This case stems from a land transaction in Tuolumne County, California, that went awry. Plaintiffs South Shore Ranches, L.L.C. ("SSR") and JMZ Development Company, L.L.C. ("JMZ") (or collectively "Plaintiffs") have brought this suit to confirm an arbitration award. Defendant Lakelands Company, L.L.C. ("Lakelands") has filed an amended motion to remand that includes a motion to dismiss. The Court has instructed Lakelands to file an amended motion and informed the parties that it had concern regarding its subject matter jurisdiction. After considering Lakelands's motions, the Court will deny the motion to remand but grant the Rule 12(b)(1) motion and dismiss this case.*fn1

BACKGROUND

From the submissions of the parties, SSR is a Michigan business entity with its principal place of business in Michigan. See Anderson Declaration at ¶¶ 4-7; Doc. No. 16 Exhibit 4. JMZ is registered as a California business entity. See Doc. No. 16 Exhibit 5. It appears that Lakelands is also a registered California business entity. See Doc. No. 13 at p.1; Doc. No. 22 at p.10.

On December 12, 2005, Plaintiffs as seller and Lakelands as buyer entered into a contract ("the Contract") for the sale of 1,947 acres of real property located in Tuolumne County, California. See Doc. No. 13 at Exhibit 1. The Contract contains an arbitration clause, which reads in part:

Except for any rights or claims arising out of or provided for in the Note and/or First Deed of Trust, any controversy or claim arising out of or relating to this Agreement, the breach hereof or the transactions contemplated hereby, upon the request of either party, shall be settled by arbitration. Either party may demand that a dispute be determined by arbitration by sending written notice to the other party. . . .

The judgment upon the award rendered by the arbitrations may be entered in any court having jurisdiction. The parties agree to submit to discovery in connection with the arbitration. Such discovery shall be conducted in accordance with all rules of California law relating to discovery.

Doc. No. 13 at Exhibit 1 at ¶ 10. The Contract also contained a "governing law; venue" clause which reads:

This Agreement shall be construed and interpreted in accordance with the laws of the State of California. Venue for any action brought to interpret or enforce this Agreement shall be the Superior Court for the County of Tuolumne.

Id. at ¶ 14.5.

At some point in the transaction process, the sale broke down. In October 2007, Plaintiffs inquired if retired Judge Broadman was available to arbitrate. See id. Doc. No. 13 Exhibit 2. On December 10, 2007, Plaintiffs confirmed arbitration with Judge Broadman for May 2008, with a "cc" to Lakelands's counsel. See id. at Exhibit 3. Apparently at the request of Lakelands, the arbitration did not occur in May 2008. See Anderson Declaration at ¶ 12. At some point, arbitration was re-scheduled for August 2008. See id. at ¶ 10.

In order to further process the parcel map and to extend valuable benefits within Tuolumne County, JMZ deeded all of the real estate it owned relative to the Contract to SSR. See Anderson Declaration at ¶ 8. JMZ did this in late July 2008, at the request of Tuolumne County. See id. The grant deed was recorded on August 13, 2008, in Tuolumne County by the Yosemite Title Company. See Anderson Declaration Exhibits.

On August 28, 2008, arbitration went forward before Judge Broadman, but Lakelands did not appear. See Anderson Declaration at ¶ 11. After hearing evidence, Judge Broadman issued his decision. See Doc. No. 13 Exhibit 4.

On September 22, 2008, Plaintiffs filed a petition to confirm the arbitration award in the Tuolumne County Superior Court.*fn2 See Doc. No. 16 Exhibit 1. On October 23, 2008, the Tuolumne County Superior Court confirmed Judge Broadman's order. See id. at Exhibit 2.

On January 14, 2009, Plaintiffs filed this lawsuit seeking an order from this Court to confirm Judge Broadman's arbitration award. See Doc. No. 2. The confirmation order that Plaintiffs wish this Court to sign is identical to that which the Tuolumne County Superior Court signed. Cf. Doc. No. 16 Exhibit 2 with Doc. No. 13-1.

Lakelands responded by filing a motion to dismiss on February 13, 2009. See Doc. No. 9. Plaintiffs filed a motion to confirm arbitration award on February 13, 2009. See Doc. No. 12. On February 19, 2009, Lakelands filed in the Tuolumne County Superior Court a motion to set aside the arbitration confirmation.*fn3 See Doc. No. 16 Exhibit 3. Hearing on the motion to set aside was to occur on March 19, 2009. See id.

Plaintiffs then filed an amended petition on March 16, 2009, in which they made allegations about the citizenship of SSR and Lakelands, and alleged that this Court had jurisdiction pursuant to 28 U.S.C. § 1332 (diversity), 9 U.S.C. § 9, and paragraph 10 of the Contract. See Doc. No. 13 at ¶ 2. On March 16, 2009, Lakelands filed a motion to remand which asserted in part that Plaintiffs had filed a notice of removal in the Tuolumne County Superior Court. See Doc. No. 14. In connection with the pending motions, the parties have submitted a notice of removal that is captioned for this Court and is signed by Plaintiffs' counsel as March 5, 2009.*fn4 See Doc. No. 23 Exhibit 1; Doc. No. 26 Exhibit 4. Plaintiffs ...


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