Strojnik v. Ensemble Hotel Partners, LLC

Background

Peter Strojnik filed a disability-rights lawsuit concerning access to the facilities and services at a hotel in Santa Cruz, California. He alleged that booking websites inadequately described accessibility features and rooms, did not allow reservations to be made in the same manner as reservations for people who did not require accessible rooms, and that the hotel had barriers involving the pool, bar, and guest-room accommodations. He asserted claims under the Americans with Disabilities Act, the California Unruh Civil Rights Act, the California Disabled Persons Act, and negligence based on allegations that the hotel lost his car keys.

Ensemble Hotel Partners, LLC, doing business as Dream Inn Santa Cruz, answered and asserted a counterclaim for breach of contract. It alleged that Strojnik breached a March 19, 2019 settlement agreement resolving an earlier disability-access lawsuit by filing the present action. The counterclaim stated that the agreement released “Ensemble Investments, LLC” and certain related entities and persons from specified liabilities and claims. Hotel Partners alleged that Strojnik refused to dismiss this action after being told it was covered by the settlement.

Motion and jurisdiction analysis

Strojnik moved to dismiss the counterclaim for lack of subject-matter jurisdiction and failure to state a claim. He argued that the counterclaim had no relationship to his claims for purposes of supplemental jurisdiction and that Hotel Partners lacked standing because it was not a party to, or third-party beneficiary of, the settlement agreement.

The court treated the motion as arising under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), which address subject-matter jurisdiction and failure to state a legally sufficient claim. It first considered the jurisdictional issue. The court had original federal-question jurisdiction over Strojnik’s ADA claim, but it found no original jurisdiction over Hotel Partners’s counterclaim. The opinion also states that diversity jurisdiction was not apparent from the record and had not been invoked by either side.

The court explained that supplemental jurisdiction may extend to other claims forming part of the same constitutional case or controversy. A compulsory counterclaim—one arising from the same transaction or occurrence as the opposing party’s claim—would ordinarily fall within supplemental jurisdiction. The court found that Hotel Partners had not adequately argued that its counterclaim was compulsory. Although the company described the earlier lawsuit as practically identical and claimed in its opposition brief that it was owned by Ensemble Investments LLC, the counterclaim did not sufficiently allege that the settlement released Hotel Partners or establish how Hotel Partners and this action fell within the settlement’s released parties and matters. The opinion also noted that Strojnik’s allegations appeared to concern a different hotel from the hotel involved in the earlier lawsuit.

Disposition

The court found no basis to conclude that Hotel Partners’s counterclaim was sufficiently related to Strojnik’s claims to form part of the same case or controversy. It therefore granted Strojnik’s motion to dismiss Hotel Partners’s counterclaim for lack of subject-matter jurisdiction, with leave to amend. The court stated that Hotel Partners could amend if it could remedy the identified defects consistently with its obligations under Rule 11. The amended counterclaim was due November 13, 2019, and Strojnik’s response was due November 27, 2019.

Judge Virginia K. Demarchi signed the order as a United States Magistrate Judge.