Brief Fact Summary.
Appellee sued Appellant and Defendant for nonpayment of work. Defendant filed a motion to dismiss and Appellant filed a cross-claim and a counterclaim.
Synopsis of Rule of Law.
Once a cross-claim has been permitted under Rule 13(g), it cannot be dismissed for lack of diversity jurisdiction after the plaintiff’s claim is dismissed on the merits.
We can affirm a district court's disposition on grounds other than those on which the district court relied.View Full Point of Law
Fairview Park Excavation (Appellee), an Ohio corporation and a subcontractor for Al Monzo Construction (Appellant), sued Appellant, Maryland Casualty, and Robinson Township (Defendant), a citizen of Pennsylvania, when Appellee was not paid for its work. Appellee brought the suit under diversity jurisdiction in Pennsylvania federal court. Defendant filed a motion to dismiss against Appellee. Appellant and Maryland Casualty filed a counterclaim against Appellee and a cross-claim against Defendant.
Was the dismissal of Appellant’s cross-claim, for lack of diversity jurisdiction, erroneous?
Yes, dismissal of the cross-claim was erroneous.
The Court noted that if a plaintiff’s claim is dismissed for lack of subject matter jurisdiction then any cross-claims would rightfully also be dismissed. But when the plaintiff’s claim is dismissed on the merits, the Court determined it would be improper to dismiss related cross-claims. Ruling otherwise would make it nearly impossible to bring a cross-claim otherwise protected by ancillary jurisdiction.