Prolite Bldg. Supply, LLC v. MW Mfrs., Inc.
Prolite Bldg. Supply, LLC v. MW Mfrs., Inc.
Opinion of the Court
Prolite Building Supply bought Ply Gem windows from MW Manufacturers. (The *257parties use "Ply Gem" for both the product and its maker; we do the same.) Prolite resold the windows to residential builders in Wisconsin. Some of the homeowners were not satisfied with the windows, which admitted air even when closed. They complained to the builders, which complained to Prolite, which complained to Ply Gem. Working together under a contract that made Prolite the windows' principal servicer, Prolite and Ply Gem solved some but far from all of the problems. Contractors stopped buying from Prolite, which stopped paying Ply Gem for earlier deliveries.
Prolite and 12 homeowners filed suit in state court. Prolite contended that Ply Gem broke a promise to make the builders and ultimate customers happy. The homeowners made claims under the warranties that accompanied the windows. Ply Gem removed the action to federal court and counterclaimed against Prolite for unpaid bills. It added Andrew Johnson and Michael Newman, Prolite's only two members, as additional parties. (Johnson and Newman had guaranteed payment of Ply Gem's invoices.) Great Lakes Window, a company affiliated with Ply Gem, filed its own federal suit against Prolite, Johnson, and Newman, seeking to collect other invoices. Additional homeowners intervened in the removed suit. The district court consolidated these actions, and the caption that begins this opinion names the main contestants without going into excessive detail.
The district court granted summary judgment to Ply Gem and Great Lakes.
Ply Gem and Prolite had three contracts: a sales agreement, a credit agreement, and a service agreement (the "Service Rebate Obligation"). Prolite concedes that it does not have any defense to the claims for payment by Ply Gem and Great Lakes, which rest on the credit agreement, unless it can show that Ply Gem broke its promises under the service agreement. The service agreement requires Prolite to repair the Ply Gem windows that the contractors installed. In exchange, Ply Gem gave Prolite a 3% discount on the windows' price and promised to furnish needed parts at no cost. Prolite says that it spent about $290,000 trying to fix the troublesome windows but concedes that it received the 3% discount and all the parts it requested. Another portion of the service agreement provides that in the event of "excessive" problems (an undefined term) Ply Gem would furnish additional aid, including complete window reinstallation, for a price to be negotiated. Prolite never asked Ply Gem to replace windows under this clause.
Prolite contends that what Ply Gem should have done was either reinstall all of *258the windows, without specific requests, or design a new line of windows with better attributes and replace the old windows with the new ones, again without requests. Only those two steps could have kept the customers happy, Prolite insists. The problem, as the district judge observed, is that the service agreement does not require Ply Gem to keep the customers happy. (That's the function of the warranties.) Instead the service agreement requires Prolite to keep the customers happy by performing repairs in exchange for a discount. The district court's opinion meticulously discusses the contractual language. It is not necessary to repeat that analysis in the Federal Reporter. Nor need we repeat the district court's convincing resolution of the dispute about expert evidence that Prolite proffered.
The homeowners' claims, by contrast, pose a knotty problem. They can be resolved under the supplemental jurisdiction only if they "are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution."
CNH Industrial America LLC v. Jones Lang LaSalle Americas, Inc. ,
Prolite might have been able to make the imbroglio a single case or controversy by framing a contract theory that turned on the merits of the homeowners' warranty claims. If Prolite had alleged, for example, that Ply Gem refused to acknowledge that the homeowners had warranty claims, preventing Prolite from complying with its obligations under the service agreement, then the warranty claims would have been integral to the whole dispute. But Prolite didn't make any such allegations. The homeowners' claims therefore cannot proceed under the supplemental jurisdiction.
What happens now? Ply Gem asks us to affirm the judgment on Prolite's claims (and the counterclaims) and send the homeowners' claims back to state court. Prolite and the homeowners, however, want us to vacate the whole judgment and remand the whole case.
If the dispute between Prolite and Ply Gem were one under federal law, then
The way § 1441(c) treats the combination of removable and non-removable claims implies that there is no jurisdictional obstacle to removing the whole suit and sending the surplus claims back to state court. Section 1447(c) tells us that a motion to remand on the basis of any ground other than the absence of subject-matter jurisdiction is forfeited if not made within 30 days after the filing of the notice of removal. Prolite and the homeowners did not argue in the district court, during those 30 days, that the homeowners' claims are outside the supplemental jurisdiction and that the whole suit was therefore not properly removed. In this court Prolite and the homeowners initially represented that the entire case comes within federal jurisdiction, only to change their minds after the supplemental-jurisdiction issue was raised at oral argument. Grubbs v. General Electric Credit Corp .,
Imagine what would have happened if the original suit had begun in federal court. The diversity jurisdiction of
What's more, we cannot forget that we have two suits, the second one (by Great Lakes) filed initially in federal court with both complete diversity and stakes exceeding $75,000 for every litigant. Each of these consolidated suits must be considered *260independently. Hall v. Hall , --- U.S. ----,
The judgment of the district court is affirmed, except with respect to the homeowners' claims. The judgment dealing with those claims is vacated, and the case is remanded to the district court with instructions to remand them to state court.
Reference
- Full Case Name
- PROLITE BUILDING SUPPLY, LLC v. MW MANUFACTURERS, INC., doing business as Ply Gem Windows, and Great Lakes Window, Incorporated, Third-Party
- Cited By
- 32 cases
- Status
- Published