Fairview Park Excavating Co. v. Al Monzo Construction Co.

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.

Facts.

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.

Issue.

Was the dismissal of Appellant’s cross-claim, for lack of diversity jurisdiction, erroneous?

Held.

Yes, dismissal of the cross-claim was erroneous.

Discussion.

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.