Sallee et al v. Ford Motor Company et al
MEMORANDUM OPINION AND ORDER GRANTING plaintiffs' 16 MOTION to Remand ; REMANDING the action to the Circuit Court of Montgomery County, Alabama; directing the clerk to take appropriate steps to effect the remand. Signed by Chief Judge William Keith Watkins on 6/27/13. (Attachments: # 1 civil appeals checklist). Certified copy mailed to Circuit Court Clerk, Montgomery County.(djy, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
TARA D. SALLEE, et al.,
FORD MOTOR COMPANY, et al.,
CASE NO. 2:12-CV-1086-WKW
MEMORANDUM OPINION AND ORDER
Before the court is Plaintiffs’ Motion to Remand. (Doc. # 16.) The parties fully
briefed the motion (Docs. # 16, 22, 28), and the matter is ready for adjudication.
Based upon the arguments of counsel and the relevant law, Plaintiffs’ motion to
remand is due to be granted.
This case arises from an accident involving a 1995 Ford Explorer, bearing a
Bridgestone tire manufactured the same year. The accident killed LaTonya Sallee and
Derrick Sagers. The personal representatives of their respective estates bring this suit
on behalf of the estates and Sallee’s and Sagers’s respective minor children and allege
only state law causes of action. Plaintiffs are citizens of Alabama. In their suit,
Plaintiffs name Bridgestone Americas, Inc., and Bridgestone Americas Tire
Operations, LLC (collectively, “Bridgestone”), as well as Ford Motor Company
(“Ford”), none of which are citizens of Alabama. They also name two non-diverse
entities: Woodmere Motors, Inc. (“Woodmere”), which sold the car to Sagers, and
M&D Automotive, Incorporated (“M&D Automotive”), a car repair shop whose
employees mounted the subject tire onto the vehicle in the days before the accident.
In December 2008, after Woodmere sold the car to Sagers1 but before the
accident, Woodmere filed articles of dissolution with the Alabama Secretary of State.
(Doc. # 1-6 at 12.) Just days before the July 2011 accident, M&D Automotive entered
the picture. It inspected the vehicle and the sixteen-year-old tire, previously serving
as a spare, and installed the tire without warning Sagers of its allegedly defective
Days later, Sagers and Sallee headed north from the Montgomery area on
Interstate 85. Shortly after they crossed from Alabama into Georgia, Plaintiffs allege
the tire detreaded. Sagers, who was driving, lost control of the vehicle, and the
ensuing accident killed both Sagers and Sallee.
Plaintiffs brought suit in the Circuit Court of Montgomery County, Alabama.
Woodmere sold Sagers the vehicle in approximately 2007. This approximation is
derived by triangulating from other allegations in the complaint, as Plaintiffs do not specifically
state when Sagers purchased the vehicle. Plaintiffs allege that the subject tire was sixteen years
old when M&D Automotive mounted it on the vehicle in 2011. (Compl. ¶ 13.) Plaintiffs also
allege that when Sagers bought the vehicle from Woodmere, the subject tire was twelve years
old. (Compl. ¶ 13.) Thus, Woodmere sold the vehicle to Sagers four years earlier, in 2007. This
conclusion is further supported by the age of the vehicle, as a vehicle manufactured in 1995
would have been twelve and sixteen years old in 2007 and 2011, respectively.
Bridgestone – with Ford’s consent – removed to this court on the basis that Woodmere
and M&D Automotive were fraudulently joined to avoid remand, and that, in their
absence, the court would have diversity jurisdiction. See 28 U.S.C. § 1441 (allowing
removal of cases over which the United States would have original jurisdiction,
including jurisdiction based on diversity of citizenship and a sufficient amount in
controversy). Plaintiffs have moved to remand, arguing there was no fraudulent
II. STANDARD OF REVIEW
Federal courts owe a “strict duty” to exercise the limited jurisdiction Congress
confers on them. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996); see also
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 357, 377 (1994) (remarking that
federal courts “possess only that power authorized by Constitution and statute”). The
law favors remand where federal jurisdiction is not absolutely clear, and courts must
construe removal statutes narrowly. Miedema v. Maytag Corp., 450 F.3d 1322, 1329
(11th Cir. 2006).
An action is properly removable if the joinder of a non-diverse party is
fraudulent. Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998).
The presence of a fraudulently joined, non-diverse defendant does not defeat diversity
jurisdiction because – once the court determines joinder was fraudulent – it “must
dismiss the non-diverse defendant and deny any motion to remand the matter back to
state court.” Florence v. Crescent Res., LLC, 484 F.3d 1293, 1297 (11th Cir. 2007).
There are three situations in which joinder may be deemed fraudulent: (1) when
there is no reasonable possibility that the plaintiff can prove a cause of action against
the resident (non-diverse) defendant; (2) when there is outright fraud in the plaintiff’s
pleading of jurisdictional facts; and (3) when there is no real connection to the claim
and the resident (non-diverse) defendant. Legg v. Wyeth, 428 F.3d 1317, 1325 (11th
Cir. 2005); Triggs, 154 F.3d at 1287.
The parties agree that the first type – the “no possibility” category – is the
appropriate inquiry here. Under that standard, “[i]f there is even a possibility that a
state court would find that the complaint states a cause of action against any one of the
resident defendants, the federal court must find that the joinder was proper and
remand the case to the state court.” Triggs, 154 F.3d at 1287 (quotations omitted).
The touchstone for analysis is whether there is a potential cause of action. Legg, 428
F.3d at 1325 n.5 (holding that the potential must be more than merely theoretical).
The removing party bears the burden of proving fraudulent joinder, and the
burden is “a heavy one.” Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir. 1997).
The determination is based on the plaintiff’s pleadings at the time of removal, plus any
affidavits or deposition transcripts submitted by the parties, resolving all questions of
fact in favor of the plaintiff. Id. In this way, the inquiry resembles that on a motion
for summary judgment; however, it is different in that the court may not “weigh the
merits of a plaintiff’s claim beyond determining whether it is an arguable one under
state law.” Id.
Bridgestone, joined by Ford, argues that there is no potential cause of action
against either Woodmere or M&D Automotive because Woodmere dissolved and
M&D Automotive never existed or did not exist at the relevant time. Their argument
fails, at least as to Woodmere.
Though Woodmere indisputably dissolved in 2008, its dissolution does not
prevent claims against it. Under Alabama law,2 claims against dissolved entities are
allowed, under limited circumstances, to the extent of its undistributed assets. Ala.
Code § 10A-1-9.22; Ally Windsor Howell, Tilley’s Alabama Equity, § 33:4 (5th ed.
2012) (“[T]he dissolution of a corporation does not prevent commencement of a
proceeding by or against the corporation . . . .”); Richard A. Thigpen, Alabama
Corporation Law, § 17:18 (3d ed. 2007 & Supp. 2011) (stating circumstances under
which claims are not barred and are “enforceable against undistributed assets of a
The parties’ briefing assumes that Alabama law applies on this point, though Plaintiffs
argue Georgia law applies to their substantive, state law claims. Because the parties make this
assumption, so will the court.
dissolved corporation or against a shareholder of a dissolved corporation”). A
dissolved entity may publish a conforming notice in a newspaper of general
circulation, thereby barring certain claims against it not commenced within two years.
Ala. Code § 10A-1-9.22(c). Claims “contingent or based on an event occurring after
the effective date of dissolution” are among the claims barred by a conforming notice.
Id. at § 10A-1-9.22(b)(3). Additionally, a dissolved entity may notify known
claimants in writing of its dissolution after the dissolution’s effective date, thereby
barring claims not brought within at least 120 days from the written notice. Id. at §
10A-1-9.21(b). The claim of a known claimant who did not receive such notice is not
barred, unless there is a conforming notice by publication. Id. at § 10A-1-9.22(c)(1).
Whether Plaintiffs are known or unknown claimants,3 their claims are not
barred by law. Defendants have not satisfied their heavy burden by showing that
Woodmere published a conforming notice of dissolution that would bar unknown
claims against it not brought within two years of the notice under § 10A-1-9.22. Nor
have Defendants shown that Woodmere gave Plaintiffs written notice of its
dissolution, barring known claims against it not brought within a specified time under
§ 10A-1-9.21. Construing the absence of such evidence in favor of Plaintiffs, no
Plaintiffs are almost certainly unknown claimants, as their claims against Woodmere
did not arise until after its 2008 dissolution.
notice was ever published or given, and a claim therefore “may be enforced” against
Woodmere. Id. at § 10A-1-9.22(d)(1).
While Plaintiffs may have little luck recovering against Woodmere, that is
immaterial to fraudulent joinder analysis. “[A] plaintiff's motivation for joining a
defendant is not important as long as the plaintiff has the intent to pursue a judgment
against the defendant.” Triggs, 154 F.3d at 1291. As long as their complaint states
a cause of action and they intend to obtain a judgment against the named defendants,
plaintiffs “have a right to select the forum, to elect whether to sue joint tortfeasors, and
to prosecute their own suit in their own way to a final determination.” Samples v.
Conoco, Inc., 165 F. Supp. 2d 1303, 1320 (N.D. Fla. 2001) (finding homeowners’
claims against resident wood treatment company that had been defunct for eight years,
had not operated for sixteen years, lacked living corporate officers, and had over
$291,000 in unsatisfied judgments entered against it did not make joinder fraudulent,
even if homeowners could not collect judgment). Plaintiffs are the masters of their
complaints and may pursue a judgment, even where a judgment is unlikely to result
Because the court finds that a claim against Woodmere is not barred, it does not
reach the question of whether a claim against M&D Automotive would also be barred.
Woodmere’s presence in the suit means there is at least one non-diverse Defendant
against whom there is a potential cause of action, assuming service can be perfected
on the dissolved entity. Woodmere’s presence in the suit destroys the complete
diversity necessary to make removal jurisdiction proper under 28 U.S.C. § 1441 and
§ 1332. Remand is required.
Nonetheless, it seems possible – perhaps probable – that this case will return
to this court. The 120-day period for service of process on Defendants Woodmere and
M&D Automotive passed on April 13, 2013.4 See Fed. R. Civ. P. 4(m) (establishing
a 120-day deadline for service of process). To date, it appears Plaintiffs have served
neither Woodmere nor M&D Automotive, and service of process will be an obstacle
to claims against those Defendants, whether in this court or in state court. See Ala.
R. Civ. P. 4(b). But the fact that Plaintiffs’ claims against Woodmere and M&D
Automotive are likely to be dismissed imminently if service is not perfected – making
another removal likely5 – cannot figure into the court’s remand analysis. “[T]he
determination of whether a resident defendant has been fraudulently joined must be
For the purposes of Federal Rule of Civil Procedure 4(m), the 120-day period for
service of process on Defendants Woodmere and M&D Automotive – not yet served when the
case was removed – began to run upon removal, not from the filing of the complaint in state
court. Ritts v. Dealers Alliance Credit Corp., 989 F. Supp. 1475, 1478 (N.D. Ga. 1997).
“[T]here is no reason that federal procedural rules should apply retroactively back to the day of
filing,” as “such an interpretation could result in substantial prejudice to plaintiffs.” Id.
The presumptive time limit for removing a case based on diversity jurisdiction is one
year. 28 U.S.C. § 1446(c)(1). That deadline may be extended if the “court finds that the plaintiff
has acted in bad faith in order to prevent a defendant from removing the action.” Id.
based upon the plaintiff’s pleadings at the time of removal,” supplemented by
information, like affidavits, offered by the parties. Pacheco de Perez v. AT&T Co.,
139 F.3d 1368, 1380 (11th Cir. 1998).
In light of this, the court would be remiss if it did not acknowledge the mystery
surrounding the failure to serve M&D Automotive. Mary Coleman is Derrick
Sagers’s mother and the personal representative of his estate, and thus situated as a
Plaintiff. (Comp. ¶ 2.) But she is also intimately associated with M&D Automotive:
Coleman6 was one of its incorporators, and she remains its registered agent for service
of process. (Doc. # 1-6 at 5–7.) When Plaintiffs attempted to perfect service of
process on M&D Automotive, at the address where they insist M &D Automotive
continues to operate, they attempted to serve David Coleman rather than Mary
Coleman, its registered agent. (Doc. # 1-2 at 163.) At the least, these circumstances
raise the specter of a serious conflict of interest.
Accordingly, it is ORDERED that Plaintiffs’ Motion to Remand (Doc. # 16) is
GRANTED, and that the action is REMANDED to the Circuit Court of Montgomery
County, Alabama. The Clerk of the Court is DIRECTED to take appropriate steps to
effect the remand.
She was then known as Mary Sanders. (Doc. # 1-9 at 2.)
DONE this 27th day of June, 2013.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
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