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2008 Decisions Opinions of the United States Court of Appeals for the Third Circuit 11-28-2008 Trustee Gen Assembly v. Patterson Precedential or Non-Precedential: Non-Precedential Docket No. 07-2109 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2008 This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova University School of Law Digital Repository. It has been accepted for inclusion in 2008 Decisions by an authorized administrator of Villanova University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu. Recommended Citation "Trustee Gen Assembly v. Patterson" (2008). 2008 Decisions. Paper 188. http://digitalcommons.law.villanova.edu/thirdcircuit_2008/188 NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _____________ No. 07-2109 _____________ THE TRUSTEES OF THE GENERAL ASSEMBLY OF THE CHURCH OF THE LORD JESUS CHRIST OF THE APOSTOLIC FAITH, INC., Appellant, v. ANTHONEE PATTERSON; KENNETH SHELTON Consolidated Appeal from the United States District Court for the Eastern District of Pennsylvania (Civ. No. 07-0024) District Court Judge: Honorable Anita B. Brody _____________ Nos. 07-2270, 07-2378, 07-2392, 07-2419 & 07-2778 _____________ ANTHONEE PATTERSON, as General Overseer of the Minority Faction of TRUSTEES OF THE GENERAL ASSEMBLY OF THE CHURCH OF THE LORD JESUS CHRIST OF THE APOSTOLIC FAITH, INC., v. KENNETH SHELTON, individually and as the General Overseer of the TRUSTEES OF THE GENERAL ASSEMBLY OF THE CHURCH OF THE LORD JESUS CHRIST OF THE APOSTOLIC FAITH, INC. TRUSTEES OF THE GENERAL ASSEMBLY OF THE CHURCH OF THE LORD JESUS CHRIST AND THE APOSTOLIC -2- FAITH, INC.; INDIVIDUAL TRUSTEES OF THE TRUSTEES GENERAL ASSEMBLY OF THE CHURCH OF THE LORD JESUS CHRIST OF THE APOSTOLIC FAITH, INC., JOHN C. S. THOMAS, J. LEON BLIGEN, ERIK SHELTON, A. WOODARD REAGAN, JOHN R. BROWN, JAMES H. BROWN, I, AND ANTHONY E. LAMB; THE GENERAL ASSEMBLY OF THE CHURCH OF THE LORD JESUS CHRIST OF THE APOSTOLIC FAITH, Intervenors in District Court ANTHONEE PATTERSON, as General Overseer of the Minority Faction of TRUSTEES OF THE GENERAL ASSEMBLY OF THE CHURCH OF THE LORD JESUS CHRIST OF THE APOSTOLIC FAITH, INC., Appellant in No. 07-2270 TRUSTEES OF THE GENERAL ASSEMBLY OF THE CHURCH OF THE LORD JESUS CHRIST OF THE APOSTOLIC FAITH, INC., Appellants in No. 07-2378 KENNETH SHELTON, Appellant in No. 07-2392 GENERAL ASSEMBLY OF THE CHURCH OF THE LORD JESUS CHRIST OF THE APOSTOLIC FAITH BY CHURCH MEMBERS CARLTON MORRISON, DIANE TAYLOR, ANDREW SCOTT, AND C. KATHERLINE WILLIAMS, TRUSTEES AD LITEM, AND CARLTON MORRISON, DIANE TAYLOR, ANDREW SCOTT, AND C. KATHERLINE WILLIAMS (COLLECTIVELY THE ‘GENERAL ASSEMBLY’ OR ‘INTERVENORS’), Appellants in No. 07-2419 INDIVIDUAL TRUSTEES OF THE TRUSTEES OF THE GENERAL ASSEMBLY OF THE CHURCH OF THE LORD JESUS CHRIST OF THE APOSTOLIC FAITH, INC.; SPECIFICALLY, JOHN C. S. THOMAS, J. LEON BLIGEN, ERIK SHELTON, A. WOODARD REAGAN, Also involved in this case are the Intervenors on appeal: The General Assembly 1 of the Church, the Individual Trustees of the General Assembly of the Church, and the Trustees of the General Assembly of the Church (the Church Corporation), who adopt the arguments set forth in Shelton’s brief. -3- JOHN R. BROWN, JAMES H. BROWN, I, AND ANTHONY E. LAMB, Appellants in No. 07-2778 Consolidated Appeal from the United States District Court for the Eastern District of Pennsylvania (Civ. No. 06-5060) District Court Judge: Honorable Anita B. Brody ___________ Submitted Under Third Circuit L.A.R. 34.1(a) November 21, 2008 ___________ Before: FUENTES, HARDIMAN and GARTH, Circuit Judges (Opinion Filed: November 28, 2008) ___________ OPINION ___________ GARTH, Circuit Judge: Anthonee Patterson (“Patterson”) was a member of the Church of the Lord Jesus Christ of the Apostolic Faith (“the Church”). In 1995, Patterson sued fellow congregant and then-head of the Church Kenneth Shelton (“Shelton”) and his brother Erik for an 1 accounting of funds, and for appointment of a receiver, alleging misappropriation. The record indicates that the May 8, 2006 award was also confirmed. Appx. 51. 2 It is questionable, however, if the May 16, 2006 award was confirmed. Appx. 51, 58. This appeal from the confirmation of the October 3, 2006 award remained 3 pending at the time Patterson filed his action in the United States District Court for the Eastern District of Pennsylvania, on November 15, 2006. -4- Shelton filed a counterclaim for fraud. The parties agreed in 2006 to arbitrate the claims before retired Magistrate Judge Edwin Naythons. Judge Naythons found in favor of Patterson in a series of awards on April 26, 2006, May 8, 2006, May 16, 2006, and October 3, 2006. The April 26, 2006 award was the principal judgment finding Shelton and his affiliates liable for various acts. Patterson petitioned to confirm that award in the Philadelphia Court of Common Pleas. That Court confirmed the award on July 10, 2006. Shelton appealed. 2 Patterson also sought to confirm the October 3, 2006 award, which awarded damages. Shelton opposed the confirmation of the October 3, 2006 award. On January 3 31, 2008, the Commonwealth Court of Pennsylvania, in ruling on Shelton’s appeal of July 10, 2006, reversed the Court of Common Pleas’ confirmation of the April 26, 2006 award, and instructed the Court of Common Pleas to vacate all of Judge Naythons’s awards on the grounds that Judge Naythons had exceeded the scope of his authority. It thereupon remanded the case to the Court of Common Pleas “to conduct the proper proceedings consistent with the foregoing opinion to determine whether Anthonee J. Patterson is entitled to relief pursuant to the Pennsylvania Nonprofit Corporation Law.” Supp. Appx. 232. 9 U.S.C. § 1 et seq. 4 While Patterson’s federal appeal of the District Court’s order of dismissal was 5 pending before us, we were notified that the Pennsylvania Supreme Court denied Patterson’s Petition for Allowance of Appeal, thus leaving undisturbed the Commonwealth Court’s order vacating the arbitration awards and remanding for further -5- Patterson filed a Petition for Allowance of Appeal in the Supreme Court of Pennsylvania. On November 15, 2006, Patterson filed a Petition/Motion to confirm the awards in the United States District Court for the Eastern District of Pennsylvania pursuant to the Federal Arbitration Act (“FAA”). Shelton and several intervening 4 Church entities moved to dismiss and/or vacate the petition for lack of subject matter jurisdiction or, alternatively, for Judge Naythons’s failure to set forth a proper award, for partiality and misconduct, for exceeding the scope of his powers, and for manifestly disregarding the law. Supp. Appx. 128. On April 6, 2007, the District Court held a telephone conference to discuss jurisdiction. The parties argued that jurisdiction was based upon diversity since Patterson was from Florida and Shelton was from Pennsylvania. However, when pressed further, counsel for Patterson indicated that “the minority trustees” were also plaintiffs – although not named in the caption – and that counsel, himself, was one of the trustees, and he resided in Pennsylvania. Appx. 122. The District Court dismissed the case sua sponte for lack of diversity jurisdiction. On April 25, 2007, Patterson filed a timely notice of appeal of the District Court’s dismissal. This Court has jurisdiction pursuant to 28 U.S.C. § 1291. The District 5 proceedings. Shelton had raised the issues of res judicata and collateral estoppel in his brief on 6 appeal to us. In light of our affirmance of the District Court’s dismissal based on lack of diversity jurisdiction, we do not address Shelton’s issues. -6- Court’s jurisdiction under 28 U.S.C. § 1332 is in question. “We review de novo the District Court’s dismissal for lack of [diversity] jurisdiction.” Metro. Life Ins. Co. v. Price, 501 F.3d 271, 275 (3d Cir. 2007). The FAA does not create independent federal question jurisdiction. The Supreme Court has held that an independent basis for jurisdiction must exist, such as diversity. Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 26 n.32 (1983). We agree with Shelton that there is insufficient evidence of the residence of the parties to satisfy our diversity jurisdiction requirements. The petition need not affirmatively allege diversity jurisdiction if the parties otherwise plead the elements. See Smith Barney, Inc. v. Sarver, 108 F.3d 92, 95 (6th Cir. 1997); Averbach v. Rival Mfg. Co., 809 F.2d 1016, 1019 (3d Cir. 1987). However, Patterson has not satisfied this standard. We will affirm the District Court’s holding that the lack of diversity jurisdiction mandated a dismissal of the action.6 The motion to expand the record is accordingly denied.
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2008 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 11-28-2008 # T r u s t ee Ge n As se mbl y v . P att e rson P r e c e de n t i al or N on-P r e c e de n t i al : N on-P r e c e de n t i al D ocke t N o . 07-2109 F o l low thi s a nd a dd it ion al work s at : http://d i git alc ommon s .l a w . vi l l a no va . e du/thir dc ir c uit_2008 Thi s de c i sion i s br ou gh t t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sity S choo l of L a w Di git al Re posit or y . It h as be e n a c c e pt e d for inclusion in 2008 D e c i sion s b y a n author i z e d a dmini s tr at or of V i l l a no va U nive r sity S choo l of L a w Di git al Re posit or y . F or mor e inform at ion, p le as e c on t a ct Be n j amin . C a rl s on@l a w . vi l l a no va . e du . Re c omme nde d C it at ion " T r us t e e Ge n As s e mb ly v . P att e r s on " (2008). 2008 D e cisio n s . P ape r 188. http://d i git alc ommon s .l a w . vi l l a no va . e du/thir dc ir c uit_2008/188NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT _____________ No. 07-2109 _____________ T H ET R U S T E E S O F T H EG EN E RA L A S S E M B LY OF T HE CHURCH OF T HE L ORD J ESUS CHRI ST OF THEAPOSTOL I C FAI TH, I NC., Appellant , v. ANTHONEE PATTERSON; KENNET H SHEL TON C on sol i dated A pp eal from t he U nit ed S t at es D istric t C o u rt f o r th e E a ste rn D istric t o f P e n n sy lv a n ia ( C i v. N o. 07- 0024) D i s t r i ctC our tJ udge: H onor abl e A ni t a B . B r ody _____________ Nos. 07-2270, 07-2378, 07- 2392, 07-2419 &07-2778 _____________ ANTHONEE PATTERSON, as General Overse er of the Minority Fa ction of TRUSTEES OF TH E GENERAL ASSEMBLY OF THE CHURCH OF THE L ORD J ESUS CHRI ST OF THEAPOSTOL I C FAI TH, I NC., v. KENNET H SHEL TON, individually and as the Gene ral Oversee r of the T RUSTEES OF THE GENERAL ASSEMBLY OF THE CHURCH OF THE L ORD JESU S CH RI ST O F TH E APOS TO L I C F AI TH , I NC . TRU STE ES O F TH E G EN ERALASS EM B LY O F TH E CHURCH O F T H ELO RD J E S U S C H RIS T A N D T H EA P O S T O LIC-2- FAITH, I NC.; I NDIVIDUAL TRUSTEES OF THE TRUSTEES GENERALASSEMBLY OF THE CHURCH OF THE L ORD J ESUS CHR I ST OF THEAPOSTOL I C FAI TH, I NC., J OHN C. S. THOMAS, J . LEON B L I GEN, ERIK SHEL TON, A. WOODARD REAGAN , J OHN R. B ROWN, J AMES H. BROWN, I , AND AN THONYE. LAMB; TH E GENERAL ASSEMBLY OF THE CHURCH OF THEL ORD J ESUS CHR I ST OF THE APOSTOL I C FAI TH, In te rv e no rs in D ist ric t Co urt ANTHONEE PATTERSON, as General Overse er of the Minority Fa ction of TRUSTEES OF TH E GENERAL ASSEMBLY OF THE CHURCH OF THE L ORD J ESUS CHRI ST OF THEAPOSTOL I C FAI TH, I NC., Appellant in No. 07-2270 TRUSTEES OF THE G ENERAL ASSEMBLY OF THE CHURCH OF T HE L ORD J ESUS CHR I ST OF THEAPOSTOL I C FAI TH, I NC., Appellants in No. 07-2378 KENNET H SHEL TON, Appellant in No. 07-2392 GENE RA LASS EM B LY O F TH E CHURCHOF TH E L ORD JESUS CH RI ST O F TH E APOS TO L I C F AI THB Y C HURCH ME MB ERS CA RL TON M ORRI SON , D IAN E T AY L OR , ANDREW SCO TT , A ND C. K AT HE RL I NEWILL IAM S, TRUSTEES AD L I TEM, AND CARL TON MORRI SON, DIAN E T AY L OR , A ND REW SC OT T, AND C . K AT HE RL I NEWILL IAM S (COLLECTIVELY THE ‘ GENERAL ASSEMBLY’ OR ‘I NTERVENORS’), Ap pe lla nts in No. 07-2419 I NDIVIDUAL TRUSTEES OF THE TRUSTEES OF THE GENE RA LASS EM B LY O F TH E CHURCHOF TH E L ORD J ESUS CHR I ST OF THEAPOSTOL I C FAI TH, I NC.; SPEC IFI CALLY, J OHN C. S. THOMAS, J . LEON B L I GEN, ERIK SHEL TON, A. WOODARD REAGAN, ### A lso inv o lv edinth is case are th e In terv en o rs o nap p eal: T h e G en eral A ssem b ly 1 ### of the Chur c h, the I ndi vi dua lTr us t e e s of the Ge ne r a lAs s e m bly of the Chur c h, and the Tr us t e e s of the Ge ne r a lAs s e m bl y of the Chur c h ( the Chur c h Cor por at i on) , who a dopt the ar gum e nt s s e t fo rth i n S he l t on ’ s bri e f. -3- J OHN R. B ROWN, J AMES H. BROWN, I , AND ANT HON Y E. LAM B, Ap pe lla nts in No. 07-2778 C on sol i dated A pp eal from t he U nit ed S t at es D istric t C o u rt f o r th e E a ste rn D istric t o f P e n n sy lv a n ia ( C i v. N o. 06- 5060) D i s t r i ctC our tJ udge: H onor abl e A ni t a B . B r ody ___________ Subm i t t ed U nderT hi r d C i r cui tL . A . R . 34. 1( a) N ovember 21, 2008 ___________ B e f o re : F U E N T E S , H A R D IM A N a n d G A R T H , C i r cui tJudges ( O pi ni on Fi l ed: N ovember28, 2008) ___________ OP I NI ON ___________ G A R T H , C i r cui tJudge : A nt honee Pat t er s on ( “Pat t er s on”) w as a mem berof t he C hur ch of the Lord J es us C hr i s tof t he A pos t ol i c Fai t h ( “the C hur ch”) . I n 1995, Pat t er s on s ued fe l l ow congr egant and then- head of the C hur ch K enneth Shel t on ( “Shel t on”) and hi s br ot herE r i k foran 1 a c c o u n tin g o f f u n d s , a n d f o r a p p o in tm e n t o f a re c e iv e r, a lle g in g m is a p p ro p ri a tio n . ### T h e reco rdin d icates th at th e M ay 8 , 2 0 0 6 aw ardw as also co n f irm ed . Ap p x . 5 1 . 2 ### I t i s que s t i onabl e , howe ve r , i f the May 16, 2006 awar d wa s c onfi rm e d. Appx. 51, 58. Th is appealfrom the c on firm at ion o f the October 3, 200 6 award rem ai ned 3 ### pe ndi ng at the t i m e Patt e r s on fi l e d hi s a c t i on i n the Uni t e d St at e s Di s tr i c t Court for the Ea s t e rn Di s tr i c t of Pe nns yl vani a , on Nove m be r 15, 2006. -4- S h e l t o n f i l e d a c o u n t e r c l a i m f o rf r a u d . Th e p a r t i e s a g r e e d i n 2 0 0 6 t o a rb i t r a t e t h e c l a i ms b e f o re re tir e d M a g is tr a te J u d g e E d w in N a y th o n s . J udge N ayt hons found i n favorof Pat t er s on i n a s er i es of aw ar ds on A pr i l 26, 2006, M ay8, 2006, M ay16, 2006, and O ct ober3, 2006. T he A pr i l 26, 2006 aw ar d w as t he pr i nci pal j udgm entfi ndi ng Shel t on and hi s aff i l i at es l i abl e forvar i ous act s . Pat t er s on p eti ti o n ed to co n firm that aw ard in the P h il ad elph ia C o u rto f C o m m o n P leas. T h at C o u rt c o n f ir m e d th e a w a rd o n J u ly 1 0 , 2 0 0 6 . S h e lto n a p p e a le d . 2 Pat t er s on al s o s oughtt o confi r m t he O ct ober3, 2006 aw ar d, w hi ch aw ar ded d am ag es. S h elt o n o p p o sed the c o n firm ati o n o f th e O ctob er 3 , 2 0 0 6 aw ard . O n Jan u ary 3 3 1 , 2 0 0 8 , the C o m m o n w e a lth C o u rt o f P e n n sy lv a n ia, in ru lin g o n S h e lto n ’s a p p e a l o f Ju ly 10, 2006, r ever s ed t he C our tof C om m on Pl eas ’ confi r m at i on of t he A pr i l 26, 2006 aw ard , an d instructed the C o u rto f C o m m o n P leas to v ac ate a ll o f Ju d g e N ay tho n s’s aw ard s o n the g rou n d s tha t Jud g e N ay tho n s h ad ex ce ed ed the s co p e o f h is au tho ri ty . It t her eupon r emanded t he ca s e t o t he C our tof C om m on Pl eas “t o conductt he pr oper proceed i ng s consi st ent w i t h the foregoing o pini on t o d et erm i ne w hetherA nthonee J. Pat t er s on i s ent i t l ed t o r el i ef pur s uantt o t he Penns y l vani a N onpr ofi tC orpor at i on L aw . ” S u p p . A p p x . 2 3 2 . ### 9 U. S. C. § 1 e t s e q. 4 W hi l e Pat t er s on’ s fede r al appea l of t he D i s t r i ctC our t ’ s or derof di s m i s s al w as 5 pendi ng befor e us , w e w er e not i fi ed thatt he Penns y l vani a Supr eme C our tdeni ed Pat t er s on’ s Pet i t i on forA l l ow ance of A ppeal , t hus l eavi ng undi s turbed the C om m onw eal t h C our t ’ s or dervaca t i ng t he arbi t r at i on aw ar ds and r emandi ng forfur t her -5- Pat t er s on fi l ed a Pet i t i on forA l l ow ance of A ppeal i n t he Supr eme C our tof Penns y l vani a. O n N ovember 15, 2006, Pat t er s on fi l ed a Pet i t i on/ M ot i on t o confi r m t he a w a rd s in th e U n ited S tate s D istric t C o u rt f o r th e E a ste rn D istric t o f P e n n sy lv a n ia pur s uantt o t he Feder al A rbi t r at i on A ct( “FA A ”) . Shel t on and s ever al i nt er veni ng 4 C hur ch ent i t i es m oved t o di s m i s s and/ orvaca t e the pet i t i on forl ack of s ubj ectm at t er j ur i s di ct i on or , al t ernat i vel y , forJ udge N ayt hons ’ s fai l ur e t o s etfor t h a pr operaw ar d, for p a rtialitya n d m isc o n d u c t, fo r e x c e e d in g th e sc o p e o f h is p o w e rs, a n d f o r m a n if e stly di s r egar di ng t he l aw . Supp. A ppx. 128. O n A pri l 6, 20 07 , t he D i stri ctC ou rtheld a t el eph on e con ference t o d i scuss j ur i s di ct i on. T he part i es ar gued thatj ur i s di ct i on w as bas ed upon di ver s i t ys i nce Patt er s on w as f rom F lori d a a n d S h elt o n w as f rom P en n sy lvan ia. H o w ev er, w h en p resse d fu rt h er, couns el forPat t er s on i ndi cat ed t hat“the mi nor i t yt rus t ees ” w er e al s o pl ai nt i ffs – al t hough notnamed i n t he ca pt i on – and t hatcouns el , hi m s el f, w as one of the trus t ees , and he r es i ded i n Penns y l vani a. A ppx. 122. T he D i s t r i ctC our tdi s m i s s ed the ca s e s ua s pont e for la c k o f d iv e rs ity ju ri s d ic tio n . O n A p ri l 25 , 2 0 0 7 , P att erso n fil ed a ti m elyn o ti ce o f a p p ea l of the D istri ct C o u rt ’s di s m i s s al . T hi s C our thas j ur i s di ct i on pur s uantt o 28 U . S. C . § 1291. T he D i s t r i ct 5proceed i ng s. Shel t on had r ai s ed the i s s ues of r es j udi cat a and c ol l at er al es t oppel i n hi s br i ef on 6 appea l t o us . I n l i ghtof ouraff i r m ance of t he D i s t r i ctC our t ’ s di s m i s s al bas ed on l ack of diver si t yj uri sdi ct i on , w e do no tadd res s Sh el t on ’s i ssues. -6- C o u rt ’s ju ri s d ic tio n u n d e r 2 8 U .S .C . § 1 3 3 2 is in q u e s tio n . “ W e r e v i e w d e n o v o t h e D i s t r i c tC o u r t ’ s d i s m i s s a l f o rl a c k o f [ d i v e r s i t y] j u r i s d i c t i o n . ” M e t r o . L i f e I n s . Co . v . P r i c e , 5 0 1 F . 3 d 2 7 1 , 2 7 5 ( 3 d Ci r . 2 0 0 7 ) . T h e F AA d o e s n o t cr e a te in d e p e n d e n t f e d e ra l q u e stio n ju risd ictio n . T h e S u p re m e C o u rt h a s h e ld t hatan i ndepende ntbas i s forj ur i s di ct i on m us texi s t , s uch as di ver s i t y . M os es H . C one M e m ’l H o sp . v . M e rc u ryC o n str. C o rp ., 4 6 0 U .S . 1 , 2 6 n .3 2 (1 9 8 3 ). W e a g re e w ith Shel t on t hatt her e i s i ns uffi ci entevi dence of t he r es i dence of t he part i es t o s at i s fyour d iv e rsityju risd ictio n re q u ire m e n ts. T h e p e tit io n n e e d n o t af f irm a tiv e lya lleg e d iv e rsity juri sd ict ion if t h e p arti es o therw ise p lead the e lem en ts. S ee S m ith B arn ey , Inc . v . S arv er, 108 F. 3d 92, 95 ( 6t h C i r . 1997) ; A verbach v. R i val M fg. C o. , 809 F. 2d 1016, 1019 ( 3d C i r . 1987) . H ow ever , Pat t er s on has nots at i s fi ed thi s s t andar d. W e w i l l aff i r m t he D i s t r i ctC our t ’ s hol di ng t hatt he l ack of di ver s i t yj ur i s di ct i on m andat ed a di s m i s s al of t he act i on. 6 T he mot i on t o expand the r ecor d i s acc or di ngl ydeni ed.