The opinion of the court was delivered by: Sifton, Senior District Judge.
Plaintiff The Brooklyn Hospital Center ("BHC") brought this
action against defendant Diversified Information Technologies,
Inc., formerly known as Diversified Records Services, Inc.
("Diversified"), in the New York State Supreme Court, Kings
County, seeking monetary relief based on claims of breach of
contract, gross negligence, and recklessness. Defendant removed
the case to this Court by filing a notice of removal on April 13,
2000. By notice of motion dated May 12, 2000, plaintiff moved to
remand the case, arguing that defendant failed to file its notice
of removal within thirty days following its receipt of
plaintiff's initial pleading, as required by 28 U.S.C. § 1446(b).
On May 23, 2000, defendant filed a third-party complaint
against third-party defendant Grinnell Corporation, sued
individually and d/b/a Grinnell Fire Protection Systems Company
("Grinnell"), seeking contribution, indemnification, and damages
based on claims of negligence, gross negligence, breach of
contract, and breach of warranty. By notice of motion dated June
28, 2000, Grinnell moved to dismiss the third party complaint for
failure to state a claim for which relief can be granted pursuant
to Federal Rule of Civil Procedure 12(b)(6) or, in the
alternative, to stay the third-party action pursuant to
9 U.S.C. § 3 on the ground that Diversified's action is barred by
enforceable contractual indemnification and arbitration clauses.
For the reasons set forth below, BHC's motion to remand the
case to state court is granted. Because the original action is
remanded, as improperly removed, I do not consider Grinnell's
motion to dismiss.
The following facts are drawn from the submissions of the
parties in connection with these motions and are undisputed
except as noted.
In 1996, BHC sent a portion of its medical and business records
to Diversified for storage pursuant to a contract executed in May
of 1996. A year later, on May 5, 1997, a fire occurred at
Diversified's records storage facility in West Pittson,
Pennsylvania (the "Facility"), at which BHC's records were
stored. The fire destroyed all records stored at the Facility,
including those of BHC.
Before the May 1997 fire occurred, Diversified engaged Grinnell
to perform fire prevention and protection services. On October
23, 1995, Diversified and Grinnell entered into a written
contract (the "inspection contract"), provided to the Court by
Grinnell, according to which Grinnell agreed to provide
inspection services for automatic sprinkler and other equipment
located at the Facility. In this contract, Diversified agreed to
"hold [Grinnell] harmless from any and all third party claims for
personal injury, death or property damage, arising from
[Diversified's] failure to maintain these systems or keep them in
operative condition, whether based upon contract, warranty, tort,
strict liability, or otherwise." (Inspection Contract, at 1.)
On August 5, 1996, Diversified and Grinnell entered into a
second contract (the "construction contract"), pursuant to which
Grinnell agreed to install a fire protection system and auxiliary
equipment in building 8.2 of the Facility. This contract includes
an arbitration clause, which provides:
At the option of [Grinnell], any controversy or claim
arising out of or relating to this contract, or the
breach thereof, shall be settled by arbitration in
accordance with the Rules of the American Arbitration
Association, and judgment upon the award rendered by
the Arbitrator(s) may be entered in any court having
jurisdiction thereof. Any arbitration proceeding
shall be held in Providence, R.I.
(Construction Contract, at 2.)
After the fire occurred but prior to the commencement of this
litigation by BHC, approximately seventeen other actions were
commenced in relation to the fire. These actions have been
consolidated and are pending in the court of common pleas in
Luzerne County, Pennsylvania. Diversified and Grinnell are both
parties to these consolidated proceedings.
On December 23, 1999, BHC commenced the present action by
filing a summons with notice in state court, one of the ways by
which a lawsuit under New York law may be commenced.*fn1 The
summons with notice specified the nature of BHC's claim for
relief and the nature of the relief sought, $3,000,000 in
damages. The summons with notice erroneously stated that "[t]his
action is brought in Kings County because defendant's principal
place of business is 121 DeKalb ...