Clayton et al v. Batesville Casket Company Inc et al
ORDER granting pltf's 16 Motion to Remand Case to State Court; the Clerk is directed to send this case file to the Clerk of the Pope County Circuit Court, forthwith. Signed by Judge James M. Moody on 7/25/11. (vjt)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
GARRY CLAYTON and ZELMA MAGBY
BATESVILLE CASKET COMPANY, INC.;
HUMPHREY FUNERAL SERVICE, INC.,
and/or JOHN DOES 1-50; JOHN DOES 51-100;
and JOHN DOES 100-150
Before the Court is Plaintiffs’ motion to remand. (Docket # 16). Plaintiffs’ complaint
was originally filed in the Circuit Court of Pope County, Arkansas on September 30, 2010
naming as Defendants Batesville Casket Company, Inc. (“Batesville”), Humphrey Funeral
Service, Inc. (“Humphrey”), and John Does 1-150.
Plaintiffs, residents of Pope and Johnson Counties, Arkansas, filed this action against
Batesville and Humphrey alleging causes of action arising from the purchase of a burial casket
manufactured by Batesville. Batesville is a Delaware corporation with its principle place of
business in Batesville, Indiana. Humphrey is an Arkansas corporation with its principle place of
business in Russellville, Arkansas. Plaintiffs allege that the casket, purchased from Humphrey
on or about August 5, 1996, was represented and warranted to be leak proof and completely
resistant to air, water or other grave site elements. Plaintiffs contend that the casket was not leak
proof or completely resistant to the entrance of air and water and did not provide the deceased the
Defendant Batesville filed its notice of removal on January 6, 2011, alleging that the
Court has jurisdiction based upon diversity of citizenship. Defendants claim that Separate
Defendant Humphrey was fraudulently joined. Plaintiffs have moved to remand.
The Eighth Circuit has held that when a state court case with non-diverse parties is
removed to federal court, "the petitioner may avoid remand ... only by demonstrating that the
non-diverse party was fraudulently joined." Filla v. Norfolk Southern Ry. Co., 336 F.3d 806, 809
(8th Cir.2003). That court articulated the standard for determining fraudulent joinder as follows:
Where applicable state precedent precludes the existence of a cause of action
against a defendant, joinder is fraudulent.... However, if there is a "colorable"
cause of action--that is, if the state law might impose liability on the resident
defendant under the facts alleged--then there is no fraudulent joinder.... [J]oinder
is fraudulent when there exists no reasonable basis in fact and law supporting a
claim against the resident defendants. Conversely, if there is a reasonable basis in
fact and law supporting the claim, the joinder is not fraudulent.
Id. at 810 (emphasis in original) (internal quotations omitted). The Court should “resolve all
facts and ambiguities in the current controlling substantive law in the plaintiff’s favor.” Id. at
811. The standard outlined in Filla is less demanding than the standard in Fed. R. Civ. P.
12(b)(6). Junk v. Terminix Intern., Co., 628 F.3d 439 (8th Cir. 2010). “Under the Filla standard
‘the district court's task is limited to determining whether there is arguably a reasonable basis for
predicting that the state law might impose liability based upon the facts involved.’ In contrast,
‘[t]o survive a [Rule 12(b)(6) ] motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Id. at 445,
The Court finds that a reasonable basis exists for predicting that liability might be
imposed on Defendant Humphrey. Plaintiffs allege that they purchased a casket manufactured by
Batesville from Humphrey on August 5, 1996. The Complaint was filed more than 14 years
later, on September 30, 2010. Plaintiffs further allege that in the year 2005 they, “learned that
they may have been defrauded and/or warranties had been misrepresented to them by the
Defendants at the time of the purchase.” (Plaintiffs’ Complaint ¶ 13). Plaintiffs state causes of
action for Breach of Contract, Negligence, Breach of Warranty, Strict Products Liability, Tort of
Outrage, Fraud and Constructive Fraud, violations of the “Funeral Rule, ” violations of an Order
of the Federal Trade Commission, Intentional and Negligent Misrepresentation, Fraudulent
Inducement to Enter into a Contract, violation of the Arkansas Deceptive Trade Practices Act,
Mutilation of a Corpse, and Civil Action as Victims of a Crime.
The limitations periods on these claims are at least three years, but no more than five
years. Plaintiffs argue that the doctrine of fraudulent concealment applies creating a question of
fact as to when the Plaintiffs became aware of the fraud. Plaintiffs admit that they became
aware of the alleged misrepresentations and fraud in 2005. Resolving all facts and ambiguities
in Plaintiffs favor as the Court must do in this analysis, the Court cannot state that all Plaintiffs
causes of action are barred by the limitations periods. If fraudulent concealment precluded
Plaintiffs from becoming aware of the alleged misrepresentations and fraud from the date of the
purchase in 1996 to 2005 as alleged, the statute of limitations would begin running upon the
discovery of the alleged fraud in 2005. Plaintiffs filed their action on September 30, 2010.
Accordingly, Plaintiffs causes of action for breach of contract and deceptive trade practices
against Defendant Humphrey, to which a five year limitations period applies, might be viable
under Arkansas law if Plaintiffs discovery of the fraud occurred after September, 30, 2005.
Even in situations where the sufficiency of a complaint against a non-diverse defendant is
questionable, “ ‘the better practice is ... not to decide the doubtful question in connection with a
motion to remand but simply to remand the case and leave the question for the state courts to
decide.’ ” Filla, 336 F.3d at 811 (quoting Iowa Public Service Co. v. Medicine Bow Coal Co.,
556 F.2d 400, 406 (8th Cir.1977)). The Court cannot state that the Plaintiffs have no colorable
claim against this defendant.
For the reasons stated, the Court finds that defendants have failed to carry their burden to
establish subject matter jurisdiction and further finds that this case must be remanded to state
court pursuant to 28 U.S.C. § 1447(c). IT IS THEREFORE ORDERED that plaintiff's motion for
remand (docket entry # 16) is GRANTED. This cause of action is hereby REMANDED to the
Circuit Court of Pope County, Arkansas. The Clerk of the Court is directed to send this case file
to the Clerk of the Pope County Circuit Court, forthwith.
IT IS SO ORDERED this 25th day of July, 2011.
James M. Moody
United States District Judge
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