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Nix v. Walker Morgan LLC

United States District Court, D. South Carolina, Columbia Division

February 17, 2017

Richard Nix, as Personal Representative of the Estate of Dale Gutierrez, Plaintiff/Counterclaim Defendant,
v.
Walker Morgan, LLC; William P. Walker, Jr.; and S. Kirkpatrick Morgan, Jr., Defendants/Counterclaim Plaintiffs,
v.
Kevin Johnston, Counterclaim Defendant.

          ORDER AND OPINION

          Margaret B. Seymour Senior United States District Judge

         On July 1, 2016, Plaintiff/Counterclaim Defendant Richard Nix, as Personal Representative of the Estate of Dale Gutierrez (“Plaintiff”), filed the within action in the Court of Common Pleas for Lexington County, South Carolina. Plaintiff alleges causes of action for professional negligence, breach of fiduciary duty, and violation of the South Carolina Unfair Trade Practices Act, SC Code Ann. § 39-5-10 et seq. On August 2, 2016, Defendants/Counterclaim Plaintiffs (“Defendants”) Walker Morgan, LLC; William Walker, Jr.; and S. Kirkpatrick Morgan, Jr. filed an answer and counterclaims for civil conspiracy, negligence per se, and common law barratry. On or about August 12, 2016, Plaintiff filed a reply to Defendants' counterclaims, and asserted two counter-counterclaims against Defendants: a cause of action for abuse of process and a cause of action asserting a violation of 28 U.S.C. § 1927 (providing for the recovery of fees, costs, and expenses incurred as a result of defending vexatious litigation).

         Defendants removed the action to this court on September 9, 2016. Defendants assert that a federal question is presented based upon Plaintiff's counter-counterclaim purporting to allege a cause of action under § 1927. Defendants filed a reply to Plaintiff's counter-counterclaim also on September 9, 2016.

         This matter now is before the court on motion to remand filed by Plaintiff on October 7, 2016. Defendants filed a response in opposition to Plaintiff's motion to remand on October 24, 2016, to which Plaintiff filed a reply on October 31, 2016.

         DISCUSSION

         The presence or absence of federal-question jurisdiction is governed by the “well-pleaded complaint rule, ” which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987) (citing Gully v. First Nat'l Bank, 299 U.S. 109, 112-13 (1936)). The rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law. Id.

         Defendants contend that Plaintiff's counter-counterclaim asserting a violation of § 1927 has the legal effect of an amendment to the complaint asserting a federal cause of action. Thus, according to Defendants, Plaintiff's § 1927 cause of action is presented on the face of Plaintiff's complaint and constitutes a proper ground for removal.

         The Federal Rules of Civil Procedure do not recognize counterclaims to counterclaims. Under Fed.R.Civ.P. 7(a),

(a) Pleadings. Only these pleadings are allowed:
(1) a complaint;
(2) an answer to a complaint;
(3) an answer to a counterclaim designated as a counterclaim;
(4) an answer to a ...

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