United States District Court, D. Hawaii
ADON CONSTRUCTION INC. and GREEN VISION LLC, Plaintiffs,
RENESOLA AMERICA INC.; KIVALU RAMANLAL; et al ., Defendants.
ORDER ADOPTING FINDINGS AND RECOMMENDATION TO DENY
PLAINTIFFS ADON CONSTRUCTION INC. AND GREEN VISION LLC'S
MOTION TO REMAND MATTER BACK TO THE FIRST CIRCUIT COURT OF
THE STATE OF HAWAII
Construction Inc. (“Adon”) and Green Vision LLC
(collectively, “Plaintiffs”) seek remand on the
basis that the Court lacks diversity jurisdiction because
both Plaintiffs and Defendant Kivalu Ramanlal are citizens of
the State of Hawaii. The Magistrate Judge found removal
proper because Plaintiffs failed to state a claim against
Ramanlal and fraudulently joined him. Plaintiffs now object
to the Magistrate Judge's January 6, 2017 Findings and
Recommendation (“F&R”), denying their Motion
settled state law, Plaintiffs cannot state a claim against
Ramanlal for “breach of duty to mitigate damages,
” the sole claim asserted against him. As a result,
Defendants have met their burden of demonstrating that
Ramanlal was fraudulently joined. Because the Court has
diversity jurisdiction in the absence of Ramanlal, the case
was properly removed, and the Magistrate Judge appropriately
recommended denial of Plaintiffs' Motion to Remand. The
Court adopts the conclusions of the F&R and overrules
Complaint And Notice Of Removal
filed a Complaint against Ramanlal and Defendant Renesola
America, Inc. (“Renesola”) in state court on
September 15, 2016, Civil No. 16-1-1741-09, alleging
exclusively state-law claims. Renesola removed the case on
October 20, 2016, without the consent of Ramanlal,
the basis of diversity jurisdiction. See Notice of
Removal ¶ 25 (Dkt. No. 1). Plaintiffs seek $808, 677.55
in compensatory damages and additional amounts in special and
punitive damages. Notice of Removal ¶ 18. Plaintiffs
Adon and Green Vision are citizens of Hawaii. Complaint
¶¶ 1-2; Notice of Removal ¶¶ 2-3.
Renesola is a Delaware Corporation with its principal place
of business in California. Notice of Removal ¶ 4.
Although Ramanlal is a citizen of Hawaii, Renesola contends
that his presence does not destroy diversity because he was
fraudulently joined in this matter. Notice of Removal
contracted to install photovoltaic (“PV”) panels
and systems on residential and commercial properties in
Hawaii. Complaint ¶ 3, attached as Ex. A to Notice of
Removal (Dkt. No. 1-1). Renesola manufactures and supplied PV
panels to Plaintiffs for use in their Hawaii installations.
Complaint ¶ 5. According to Plaintiffs, certain Renesola
PV panels are defective and have been rejected by their
clients. Complaint ¶ 8. They allegedly paid Renesola
over $2.5 million for PV products and installed over 2, 858
Renesola PV panels on residential projects and over 6, 030
Renesola PV panels on commercial projects. Complaint
¶¶ 15-17. The majority of the Renesola PV panels
installed purportedly have visible signs of defects.
Complaint ¶ 29.
contracted to install 80 Renesola PV panels on Ramanlal's
residence in 2013 at a cost of $76, 128.00 (“Ramanlal
Project”). That installation was completed as of
February 2014. Complaint ¶¶ 13-14. On December 3,
2014, Ramanlal sued Adon in the First Circuit Court of the
State of Hawaii, Civil No. 14-1-2463-12, demanding a full
refund of the contract price, $76, 128.00, in part, due to
visible defects to the PV panels (“Ramanlal State Court
Case”). Plaintiffs allege that although Renesola
initially offered to replace certain panels under warranty,
“Renesola has denied fixing the damaged and/or
defective PV Panels/Modules at the Ramanlal Project and
Ramanlal has refused to accept the proposed resolution to
replace 78 out of the 80 Renesola PV [panels].”
Complaint ¶ 38. According to Plaintiffs, they attempted
to work with Renesola to resolve the defective PV panel
issues throughout 2015, but Renesola refused to remedy the
defects, Complaint ¶¶ 41-50, while Plaintiffs
continue to incur damages by having to defend the Ramanlal
State Court Case. Complaint ¶ 39-40.
allege multiple state-law claims against Renesola,
assert a single cause of action against Ramanlal:
“breach of duty to mitigate damages.” Complaint
¶¶ 176-184. That claim alleges that Ramanlal
“failed to exercise reasonable diligence to mitigate
his damages” when he refused to allow representatives
from Renesola to access his property and refused to accept
the replacement of defective PV panels as a remedy in the
Ramanlal State Court Case. Complaint ¶ 180. More
specifically, the Complaint alleges in Count X that-
177. Plaintiff has been injured by Renesola's
intentional, reckless and/or negligent fraudulent,
misrepresentations, breach of contract, unfair competition
and business, as well [as] breach of express warranty
relating to the damages and/or defects in the form of
micro-fracturing, and/or cracking, a defect also known as
“snail trail(s)” on the installed Renesola PV
Panels/Modules at the Ramanlal Project, as well as the 5
178. Plaintiff provided notice and demand to Renesola to
honor their promises, literature and/or representations made
to defend their product and mitigate the damages as alleged.
179. Renesola did visit the 5 Commercial Sites and did
acknowledge and admit to the existence of the damages and/or
defects in the form of micro-fracturing, and/or cracking, a
defect also known as “snail trail(s)” on the
installed Renesola PV Panels/Modules.
180. Ramanlal has failed to exercise reasonable diligence to
mitigate his damages by refusing to allow Renesola
representatives onto the Ramanlal Project and thereafter
refusing to accept the replacement of damaged and/or
defective PV Panels/Modules as a possible remedy.
181. Renesola has failed to exercise reasonable diligence to
mitigate the damages as provided by Plaintiff as they relate
to the Ramanlal Project and 5 Commercial Sites.
182. By each party refusing to cooperate and mitigate their
damages reasonably and fairly, the pending Ramanlal Project
has continued to damage Plaintiff.
183. Plaintiff was forced to mitigate its damages as alleged
by the owners of the 5 Commercial Sites without the
assistance of Renesola by providing a $501, 064.75
damage-charge discount on the agreed-to price of the work.
184. As a direct and proximate result of both Ramanlal and
Renesola [sic] to reasonably mitigate their damages,
Plaintiff has suffered direct, proximate, incidental and
consequential damages, as well as general and special
damages, including but not limited to disparagement of
business reputation, loss of time due to fielding client
dissatisfaction and complaints, service calls, and loss of
profits, business opportunities and contracts in the total
amount of $808, 677.55, including attorney's fees and
costs, in an amount to be proven at trial.
Complaint ¶¶ 177-184.
Ramanlal State Court Case (Civil No.
as plaintiff, sued Adon for installing the defective PV
panels and for the lack of necessary permits, alleging, among
other claims, breach of contract and misrepresentation.
See Ramanlal State Court Case Complaint ¶¶
21-43, attached as Ex. C to Notice of Removal (Dkt. No. 1-3).
On December 1, 2015, Adon answered and counterclaimed. The
Answer asserts the defense that Ramanlal “failed to
mitigate any damage to which [Ramanlal] may be
entitled[.]” Ramanlal State Court Case Answer ¶
49, attached as Ex. D to Notice of Removal (Dkt. No. 1-4).
Adon also brought a Counterclaim for breach of contract
against Ramanlal for “refusing to allow [a] Renesola
engineer access to the worksite to verify if there is a
possible defect and warranty issue, and therefore interfered
with [Adon's] performance on delivery of a satisfactory
product per contract requirements.” Ramanlal State
Court Case Counterclaim ¶ 49, attached as Ex. D to
Notice of Removal (Dkt. No. 1-4).
Ramanlal State Court Case was pending at the time Plaintiffs
filed the instant action against Ramanlal and Renesola in