Rice v. AdCare Operations LLC et al

Filing 10

OPINION AND ORDER granting Rice's 5 motion to remand. This action is remanded to the Circuit Court of Pulaski County, Arkansas. Signed by Judge J. Leon Holmes on 10/19/2016. (ljb)

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
WESTERN DIVISION
GREGORY RICE as Special Administrator
of the Estate of Fred Rice, and on behalf of
the Wrongful Death Beneficiaries of Fred Rice
v.

PLAINTIFF

No. 4:16CV00599 JLH

ADCARE OPERATIONS LLC, et al.

DEFENDANT

OPINION AND ORDER
Gregory Rice commenced this action in the Circuit Court of Pulaski County, Arkansas on
June 28, 2016, against entities and individuals involved in the operation of Woodland Hills
Healthcare and Rehabilitation, a Little Rock nursing home. Document #2. Gregory Rice represents
the estate of his father, Fred Rice, along with the wrongful death beneficiaries of Fred Rice. Id.
Fred Rice resided at Woodland Hills from February 21, 2014, until his death on May 4, 2015. Id.
at 2-3, ¶ 4. The complaint alleges that Woodland Hills was chronically understaffed in violation of
Arkansas’s Long-Term Care Facility Residents Rights Act, the Arkansas Deceptive Trade Practices
Act, the admission agreement, and the provider agreement; that the failure to adequately staff
Woodland Hills constituted ordinary negligence, medical malpractice, and intentional interference
with a contractual relationship; and that the defendants engaged in a civil conspiracy to violate and
conceal past violations of laws against understaffing. The defendants removed the action to this
Court on August 19, 2016, based on diversity jurisdiction under 28 U.S.C. § 1332(a). Document
#1. Rice has filed a motion to remand. Document #5. For the following reasons, Rice’s motion is
granted.
A defendant may remove a state court action to federal court only if the federal district court
has original jurisdiction. 28 U.S.C. § 1441(a); see also Arnold Crossroads, L.L.C. v. Gander

Mountain Co., 751 F.3d 935, 938 (8th Cir. 2014). District courts have original jurisdiction of all
civil actions where the amount in controversy exceeds $75,000 and there is complete diversity of
citizenship among the litigants. 28 U.S.C. § 1332(a)(1). “Complete diversity of citizenship exists
where no defendant holds citizenship in the same state where any plaintiff holds citizenship.”
OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th Cir. 2007) (citation omitted). Once
an action is removed, a plaintiff may move to remand the action to state court, and the action must
be remanded if the district court lacks subject matter jurisdiction. 28 U.S.C. § 1447(c). The burden
is on the defendant to establish the Court’s jurisdiction by a preponderance of the evidence. In re
Prempro Prod. Liab. Litig., 591 F.3d 613, 620 (8th Cir. 2010).
Although Gregory Rice is a citizen of California, section 1332(c)(2) provides that “the legal
representative of the estate of a decedent shall be deemed to be a citizen only of the same State as
the decedent . . . .” Fred Rice was a citizen of Arkansas and defendants Richard West and Jacquelyn
Campbell are citizens of Arkansas.

The defendants have acknowledged that “as Special

Administrator of the Estate, Mr. Gregory Rice is deemed a citizen of Arkansas.” Document #7 at
2. They argue, however, that Gregory Rice is not pursuing this action in his role as the legal
representative of Fred Rice’s estate but rather as the representative of the wrongful death
beneficiaries. Because the estate does not receive any portion of a recovery in a wrongful death
action under Ark. Code Ann. § 16-62-102(e), the defendants argue that Gregory Rice is not a legal
representative of the estate and is deemed a citizen of California. Document #7 at 3 (citing Steinlage
ex rel. Smith v. Mayo Clinic Rochester, 435 F.3d 913, 920 (8th Cir. 2006) (applying Minnesota
law)).

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The complaint seeks relief for injuries Fred Rice endured during his life time, including, but
not limited to, dehydration, over-medication, failure to schedule grooming and hygiene
appointments, multiple falls, and pressure ulcers. Document #2 at 14, ¶ 34. The complaint also
seeks relief for his death. Id. These are injuries for which Fred Rice could have sought relief, had
he survived, and any recovery for these injuries will go to the estate. See Ark. Code Ann. § 16-62101; McMullin v. United States, 515 F. Supp. 2d 914, 919 (E.D. Ark. 2007). The complaint alleges
both a wrongful death claim and a survival claim.
In Arkansas, survival claims and wrongful death claims are “typically brought by the
personal representative of the decedent and joined in one action.” 1 Howard W. Brill, Ark. Law of
Damages § 34:1 (2015) (citing Dawson v. Gerritsen, 295 Ark. 206, 748 S.W.2d 33 (1988)). The
survival claim—for which the personal representative is the legal representative of the estate as
contemplated by section 1332(c)(2)—destroys complete diversity. See Gustafson v. Zum Brennen,
546 F.3d 398, 402 (7th Cir. 2008). Even if Rice, as a representative of the wrongful death
beneficiaries, is a citizen of California, he is also a representative of the estate, and in that capacity
he is deemed to be a citizen of Arkansas, which destroys diversity jurisdiction.
“A civil action otherwise removable solely on the basis of [diversity jurisdiction] may not
be removed if any of the parties in interest properly joined and served as defendants is a citizen of
the State in which such action is brought.” 28 U.S.C. § 1441(b)(2). Again, West and Campbell are
citizens of Arkansas. They were properly joined and served. Documents #5-2 and #5-3. The
defendants summarily argue that the Court should disregard their citizenship because they were
fraudulently joined. Document #7 at 3. “Fraudulent joinder occurs when a plaintiff files a frivolous
or illegitimate claim against a non-diverse defendant solely to prevent removal.” In re Prempro, 591

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F.3d at 620 (citing Filla v. Norfolk S. Ry. Co., 336 F.3d 806, 809 (8th Cir. 2003)). The defendants
must show by a preponderance of the evidence that Rice’s claims against West and Campbell have
“no reasonable basis in fact and law.” See Filla, 336 F.3d. at 810 (quotation and citation omitted).
The defendants’ bare assertion that Rice does not intend a joint judgment against all the defendants
and that he has focused his allegations on the corporations that operate Woodland Hills, rather than
on the conduct of West and Campbell as a nursing home administrator and director of nursing, does
not satisfy this burden. Document #7 at 4.
CONCLUSION
Rice’s motion to remand is GRANTED. Document #5. This action is remanded to the
Circuit Court of Pulaski County, Arkansas.
IT IS SO ORDERED this 19th day of October, 2016.

________________________________
J. LEON HOLMES
UNITED STATES DISTRICT JUDGE

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