S.J. Amoroso Construction Inc v. Boneso Brothers Construction Inc

Background

Amoroso originally filed the case in state court on April 30, 2020. The dispute arose from the Research and Veterinary Medical Unit project. Amoroso was the direct contractor with the United States Department of Veterans Affairs and entered into a subcontract with Boneso. Amoroso’s state-court complaint asserted claims for breach of written contract and an action on a written performance bond against Boneso and The Guarantee Company of North America USA.

Boneso later filed a cross-complaint asserting breach of contract, open book account, quantum meruit, prompt-payment penalties, negligent misrepresentation, and intentional misrepresentation. On April 12, 2022, Boneso filed a separate federal lawsuit against Amoroso, Liberty Mutual Insurance Company, and Federal Insurance Company to enforce a Miller Act payment bond for the project. On April 28, 2022, Boneso, with Guarantee’s consent, removed the state-court action to federal court. Boneso argued that the state-law claims were connected to, and supplemental to, its separate Miller Act case.

Jurisdiction and Remand

The court explained that removal is proper only if the federal court would have had original subject-matter jurisdiction over the complaint. Because Boneso did not argue that diversity jurisdiction existed, the court considered federal-question jurisdiction.

The court applied the well-pleaded complaint rule, under which federal-question jurisdiction ordinarily must appear on the face of the plaintiff’s complaint. Amoroso’s complaint asserted only state-law claims. The court held that the separate Miller Act action did not provide a basis for removing this case. A federal defense or counterclaim also could not create removal jurisdiction.

The court considered narrow exceptions to the well-pleaded complaint rule, including complete federal preemption, claims that are necessarily federal in character, and claims requiring resolution of a substantial and disputed federal question. The court found that Boneso had not shown that any exception applied. It also rejected Boneso’s argument that supplemental jurisdiction could support removal, explaining that supplemental jurisdiction applies only when a federal court already has original jurisdiction over the civil action and cannot create removal jurisdiction based on claims related to a separate lawsuit.

The court did not reach the parties’ dispute about whether the Colorado River doctrine required staying the separate Miller Act action. It concluded that the issue concerned that separate case rather than the motion to remand in this case.

Attorney’s Fees and Disposition

Under 28 U.S.C. § 1447(c), a court may award costs and attorney’s fees resulting from removal when the removing party lacked an objectively reasonable basis for removal. Judge Susan Van Keulen found that Boneso lacked such a basis. The court also noted the timing of removal after more than two years of state-court litigation, approaching discovery events and trial, and Boneso’s effort to consolidate the cases. The court stated that these circumstances appeared to support the conclusion that removal was intended to delay litigation or impose costs on Amoroso.

The court granted Amoroso’s motion to remand, granted its request for attorney’s fees in the amount of $8,585, and remanded the case to San Mateo County Superior Court.