Joseph Harmon and Marilyn Harmon v. Oki Systems and Crown Equipment Corporation

Citations: 115 F.3d 477; 1997 U.S. App. LEXIS 12675; 1997 WL 289098Docket: 96-3287

Court: Court of Appeals for the Seventh Circuit; June 2, 1997; Federal Appellate Court

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The case involves Joseph and Marilyn Harmon suing OKI Systems and Crown Equipment Corporation for products liability following an incident where Joe Harmon was injured by a forklift. The injury occurred on July 29, 1991, when Harmon, an experienced forklift operator, had his foot pinned between the forklift and a wall. The Harmons filed their lawsuit in Indiana state court in July 1993, alleging negligence in the design of the forklift by Crown and negligent maintenance by OKI Systems. They sought punitive damages and Mrs. Harmon included a loss of consortium claim.

Crown removed the case to the United States District Court for the Southern District of Indiana, claiming diversity jurisdiction under 28 U.S.C. § 1332, but the removal notice was incomplete, lacking details about the defendants' principal places of business, the Harmons' full citizenship, and the amount in controversy. The Harmons did not contest the removal immediately, engaging in nearly two years of discovery. However, as the court moved towards summary judgment, the Harmons sought to remand the case back to state court, citing the deficiencies in the removal notice. The district court denied the motion to remand and granted summary judgment for the defendants, leading to the current appeal.

Judge Hamilton denied the Harmons' request to remand the case and permitted Crown to amend its removal papers under 28 U.S.C. § 1653, noting that the Harmons did not dispute the existence of diversity or the amount in controversy exceeding $50,000. Instead, they claimed Crown failed to demonstrate these facts with reasonable probability. Judge Hamilton categorized the identified omissions as 'procedural defects' and referenced 28 U.S.C. § 1447(c), which mandates that motions to remand based on such defects must be filed within 30 days of removal. He concluded that federal jurisdiction was established at the time of removal, supported by the Harmons' interrogatory responses showing over $55,000 in medical expenses and $80,000 in lost wages incurred up to that point.

On the same date, Judge Hamilton addressed various evidentiary matters and granted summary judgment in favor of Crown, concluding that the Harmons did not prove that Crown's conduct was the proximate cause of the accident. Approximately 10 months later, he granted summary judgment for OKI, reasoning similarly regarding the lack of proximate cause. The Harmons contested Judge Hamilton's decision to deny remand and allow Crown's amendment, arguing that the procedural defects were not subject to the 30-day limit and that post-removal evidence should not have been considered to assess jurisdiction at the time of removal. They highlighted Crown's admission that it was unaware of the specific amount in controversy due to Indiana rules prohibiting plaintiffs from specifying damages in complaints.

The legal determination centers on whether Crown's errors constituted procedural defects under § 1447(c) or revealed a lack of subject matter jurisdiction. The precedent from the Fifth Circuit suggests that issues like failure to allege citizenship instead of residency are procedural defects, as they do not dispute the possibility of bringing the case in federal court. Thus, Crown's omissions did not undermine jurisdiction, unlike a scenario where the Harmons could have been Ohio citizens living in Indiana.

The district court's authority to determine jurisdiction at the time of removal is under scrutiny, with the Harmons arguing that the court should rely solely on the record at the time of removal. They reference the case In re Shell Oil Co. and their interpretation of Chase v. Shop 'N Save Warehouse Foods, Inc., which suggest that post-removal affidavits cannot establish or alter jurisdictional amounts. The plaintiffs also cite Laughlin v. Kmart Corp., where the Tenth Circuit raised jurisdictional issues despite the defendant's assertion that the amount in controversy exceeded the threshold. 

However, the text argues against strictly limiting the district court’s review to the evidence available at the time of removal. It notes that neither Shell nor Chase involved attempts to amend jurisdictional allegations under 28 U.S.C. § 1653, but rather attempts to manipulate the factual basis for jurisdiction. It posits that barring the court from considering reliable evidence obtained during discovery is imprudent, as such evidence can illuminate the circumstances at the time of removal.

The Harmons also allege that the district court improperly weighed evidence regarding whether the Rider was moving when Harmon dismounted and that proximate cause was misclassified as a jury question. Nevertheless, the court concluded that any dispute about the Rider's movement is irrelevant; the Harmons must provide evidence that either a defect caused the Rider to move spontaneously or that a warning could have prevented the injury to overcome summary judgment. The court found that the brakes were functioning properly before and after the incident, and Harmon had disengaged them to move away from the wall.

If the forklift was still moving, no warning could have prevented the accident. The Harmons claimed Crown should have warned them that a moving Rider can travel up to 8 feet after brakes are engaged; however, Harmon acknowledged he was aware not to jump off a moving forklift, having operated them for 19 years. Winsor's affidavit, which stated that inadequate warnings were a proximate cause of Mr. Harmon's injury, lacked supporting evidence and was insufficient to advance the Harmons' claims against Crown to a jury. The court referenced Buckner v. Sam's Club, Inc., highlighting that undisputed facts did not allow for reasonable jury inference of proximate cause.

The Harmons also asserted that OKI negligently maintained the Rider, noting that while OKI serviced the forklift monthly from November 1988 to December 1990, no service occurred in the six months preceding the accident. They argued that summary judgment against OKI was inappropriate due to the absence of a required statement of undisputed facts and the improper striking of Winsor's statement regarding the Rider's service history. However, OKI provided admissible evidence from a post-accident inspection showing the brakes were functioning properly, undermining the Harmons' negligent maintenance claim. The judge did not abuse discretion in excluding the hearsay statement about the service history, as there was no proof linking the lack of maintenance to any brake defects.

Judge Hamilton also dismissed the Harmons' challenge regarding local rule 56.1, affirming that OKI's brief could remain despite not fully complying with the rule. The court determined that the brief's length and the clarity of the factual assertions meant the Harmons were not prejudiced by this procedural oversight. Consequently, the court affirmed the summary judgment in favor of Crown and OKI.