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Fairview Park Excavating Co. v. Al Monzo Constr. Co. - 560 F.2d 1122 (3d Cir. 1977)


Where a defendant has a proper cross-claim against its co-defendant, the court has ancillary jurisdiction even though all the parties to the cross-claim are citizens of the same state. The termination of the original claim does not affect this. This is but one illustration of the elementary principle that jurisdiction which has once attached is not lost by subsequent events.


Fairview Park Excavating Co., Inc. (“Fairview”), the plaintiff/appellee, was an Ohio corporation which as a subcontractor provided labor and materials under certain construction contracts for defendant/appellee Robinson Township (“Robinson”). Al Monzo Construction Company, Inc. (“Monzo”), a defendant and the appellant in, was a Pennsylvania corporation, which acted as general contractor to Robinson. Robinson Township Municipal Authority, the defendant/appellee, was a "citizen" of Pennsylvania. Maryland Casualty Co., a defendant/appellant, was a Maryland corporation that became a surety on Monzo's bond guaranteeing payment to subcontractors, laborers and materialmen. This appeal initially presented a jurisdictional question arising out of an action brought by Fairview against Monzo and Robinson for which the construction work in issue was being performed.  After Fairview's claim against Robinson had been dismissed on state law grounds, the district court then dismissed Monzo's cross-claim against Robinson for lack of an independent (diversity) basis for federal subject matter jurisdiction. Monzo contended on appeal that the dismissal of its cross-claim against Robinson was erroneous.


Did the federal district court err in dismissing defendant Monzo's cross-claim against co-defendant Robinson for lack of an independent (diversity) basis for federal subject matter jurisdiction?




The United States Court of Appeals held that where a federal court dismissed a complaint for lack of subject matter jurisdiction, a cross-claim dependent upon ancillary jurisdiction failed as well. This was so because the complaint, to which the cross-claim was ancillary, provided the derivative source of jurisdiction for the cross-claim. However, the district court properly permitted Monzo's cross-claim under Fed. R. Civ. P. 13(g). The ancillary jurisdiction that resulted was not defeated by an adverse decision on the merits on the primary claim. The court noted that its decision normally required a remand for trial on the merits of the cross-claim. However, Monzo had already received the relief it sought against Robinson in a state court. Therefore, its claim was moot and the dismissal of the district court was affirmed.

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