Wolff-Bolton et al v. HCR Manorcare et al

Filing 31

ORDER by Magistrate Judge Jacqueline Scott Corley granting 18 Motion to Remand; denying 20 Motion to Strike. (ahm, COURT STAFF) (Filed on 7/7/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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JUDY WOLFF-BOLTON, et al.,

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Plaintiffs,

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v.

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MANOR CARE-TICE VALLEY CA, LLC,
et al.,

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United States District Court
Northern District of California

Case No.17-cv-02405-JSC

Defendants.

ORDER RE: PLAINTIFFS’ MOTION
TO REMAND REMOVED ACTION
AND DEFENDANTS’ MOTION TO
STRIKE
Re: Dkt. Nos. 18, 20

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Plaintiffs allege violation of patient‟s rights, elder abuse/neglect, negligence, wrongful

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death, and survivorship. Defendants HCR ManorCare et al. removed the action to Federal Court

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on the basis of diversity jurisdiction. (Dkt. No. 1.) Plaintiffs subsequently filed an amended

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complaint for damages, which added two non-diverse defendants to the suit. (Dkt. No. 15 (First

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Amended Complaint (“FAC”)).) Plaintiffs now move to remand the removed action to state court

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on the grounds that the Court lacks subject matter jurisdiction because the parties are no longer

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diverse.1 (Dkt. No. 18.) In response, the Defendants move to strike the Plaintiffs‟ first amended

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complaint because Plaintiffs failed to request leave to amend the complaint despite adding a

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diversity-destroying defendant. (Dkt. No. 20.) After carefully considering the papers filed by the

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parties, Plaintiff‟s motion to remand is GRANTED and Defendants‟ motion to strike is DENIED.2

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FAC ALLEGATIONS
Plaintiffs are the survivors of decedent, Lynn Wolff (“Decedent”), a resident at ManorCare

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Health Services-Tice Valley (the “Facility”) from approximately September 20, 2016 through

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Both parties have consented to the jurisdiction of a magistrate judge pursuant to 28 U.S.C. §
636(c). (Dkt. Nos. 14 & 17.)
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The Court scheduled oral argument for July 6, 2017. When Defendant did not appear at the
scheduled time, the Court took the matter under submission without holding any argument.

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October 12, 2016. (FAC ¶ 2, 10.) The defendants “owned, leased, licensed, operated,

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administered, managed, directed, and/or controlled and are “managing agents” of [the Facility].”

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(Id. ¶ 3.) The FAC names as defendants: (1) ManorCare-Tice Valley, CA, LLC, an LLC with its

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principal place of business in Ohio, but registered to do business in California (Id. ¶ 4); (2)

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ManorCare Health Services-Tice Valley, the actual facility, located in Walnut Creek, CA (Id. ¶ 3);

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(3) HCR ManorCare Inc., a Delaware corporation with its principal place of business in Ohio (Id.

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¶ 5); (4) Heartland Employment Services LLC, an LLC with its principal place of business in

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Ohio, which employs the Facility employees, including Rodger Hogan (Id. ¶ 6); (5) John Gallick,

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the Western Regional Director of Operations for HCR/ManorCare and a citizen of California (Id. ¶

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7); and (6) Rodger Hogan, the Administrator of the Facility and a citizen of California. (Id. ¶ 8.)
Decedent was an elder who had undergone surgery just prior to her admission to the

United States District Court
Northern District of California

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Facility, so defendants knew she was at risk for falls. (Id. ¶ 16.) Despite this knowledge, the

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defendants “did not take adequate steps to prevents falls, did not put fall risk interventions

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including a bed and/or chair alarm into place, did not properly assess or adequately care for

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[Decedent], and did not keep her safe and free from injury at [the Facility].” (Id. ¶ 16.)
On September 22, 2016, Decedent had her first unwitnessed, documented fall at the

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Facility while getting into bed without assistance. (Id. ¶ 17.) Decedent did not have a

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“meaningful and informed assessment for injury” after the fall and no changes were made to

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Decedent‟s care; however, the Facility began giving Decedent Oxycodone regularly for pain,

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which caused her to be “sleepy, confused, and made it difficult for her to get out of bed.” (Id. ¶

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17.)

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Decedent had another documented fall at the Facility on October 2, 2016, but this time it

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was witnessed by a nurse passing by Decedent‟s room. (Id. ¶ 18.) Again, Decedent did not have a

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proper assessment following the fall. (Id. ¶ 18.) On October 5, 2016, Decedent complained about

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pain in her right hip, but Decedent again did not receive a proper assessment and Decedent‟s

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physician was not notified. (Id. ¶ 18.)

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Five days later, Decedent had a third undocumented fall, which was unwitnessed, and
again, her physician did not perform a proper assessment. (Id. ¶ 19.) Still no changes or
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precautions were taken to protect Decedent. (Id. ¶ 19.)
After the three falls and almost no changes to Decedent‟s care, Decedent was discharged

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from the Facility on October 12, 2016. (Id. ¶ 20.) While at home, Decedent was primarily bed

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bound, but complained that her hip and leg were in pain. (Id. ¶ 20.) Decedent received an x-ray,

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which revealed that she had “suffered a right periprosthetic fracture and dislocation, and she

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underwent a right hip resection anthroplasty.” (Id. ¶ 20.) Days later, Decedent died; her death

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was the result of injuries she suffered while she was a resident at the Facility. (Id. ¶ 20.)

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Defendants failed to notify Decedent‟s family of her condition, which caused them emotional

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distress and injury. (Id. ¶ 27.)

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Each of the defendants “had responsibility for meeting the basic needs of [Decedent],

United States District Court
Northern District of California

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including her safety, nutrition, hydration, hygiene and medical care.” (Dkt. No. 26.) Specifically,

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John Gallick and Rodger Hogan are responsible for “mak[ing] and approv[ing] key decisions

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concerning [the Facility]‟s day-to-day operations.” (Id. ¶ 8.) At the time Decedent was admitted

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to the Facility, “[d]efendants knew that according to their plan to increase profits at the expense of

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residents such as [Decedent], the operation of [the Facility] was neither designed, administered,

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nor funded in a manner reasonably necessary to provide adequate care, oversight and integration

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of [Decedent] into [the Facility].” (Id. ¶ 25.)

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Defendants were previously sued as a result of injuries to another resident of the Facility,

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in addition to being cited for violating regulations set by the California Department of Public

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Health. (Id. ¶ 3.) Defendant Rodger Hogan “signed plans of correction” in regards to the

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citations. (Id. ¶ 31.)

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PROCEDURAL HISTORY
On March 21, 2017, Plaintiffs filed this action in state court alleging violation of patient‟s

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rights, elder abuse/neglect, negligence, wrongful death, and survivorship. The following month,

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the then-named defendants removed the action to Federal Court. (Dkt. No. 1.) On May 4, 2017,

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Defendants filed a motion to strike, along with a motion to dismiss. (Dkt. Nos. 8, 10.) On May

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16, 2017, within 21 days of the filing of the Defendants‟ motions to dismiss, Plaintiffs filed an

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amended complaint which added two non-diverse defendants to the suit: Mr. Gallick and Mr.
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Hogan. The FAC also “added facts detailing prior complaints and a history of violations of

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regulations by [d]efendants, corrected the parent company‟s corporate name . . . and added Ohio

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citizen Heartland Employment Services” (Dkt. No 18. at 3.)
Plaintiffs now move to remand the removed action to state court on the grounds that the

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Court lacks subject matter jurisdiction because the parties are no longer diverse. (Dkt. No. 18.) In

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response, Defendants move to strike the Plaintiffs‟ FAC on the grounds that Plaintiffs failed to

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request leave to amend the complaint despite adding a diversity-destroying defendant. (Dkt. No.

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20.)
LEGAL STANDARD

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“A motion to remand is the proper procedure for challenging removal.” Leo v. Alameda

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United States District Court
Northern District of California

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Cnty. Med. Ctr., No. 06-03799, 2006 WL 2669001, at *1 (N.D. Cal. Sept. 18, 2006). A district

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court must remand a removed action “if at any time before final judgment it appears that the

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district court lacks subject matter jurisdiction.” 28 U.S.C. § 1447(c). Courts must “strictly

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construe the removal statute against removal jurisdiction.” Gaus v. Miles, Inc., 980 F.2d 564, 566

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(9th Cir. 1992). “Th[is] „strong presumption‟ against removal jurisdiction means that the

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defendant always has the burden of establishing that removal is proper.” Id.
In federal courts, subject matter jurisdiction may arise from either “federal question

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jurisdiction” or “diversity of citizenship” when the amount in controversy exceeds $75,000. See

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Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). Defendants removed on the grounds of

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diversity jurisdiction.
DISCUSSION

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Plaintiffs move to remand pursuant to 28 U.S.C. Section 1447(c) on the grounds that the

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Court lacks subject matter jurisdiction because with the filing of the FAC, and, in particular, the

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addition of Mr. Gallick and Mr. Hogan as defendants, the parties are no longer diverse. (Dkt. No.

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18 at 23.) Defendants contend that Mr. Gallick is actually a resident of Pennsylvania; however,

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they do not dispute that Mr. Hogan is California citizen, so diversity would still be destroyed by

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Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the
ECF-generated page numbers at the top of the documents.
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the FAC.
Plaintiffs did not have the unilateral right to add the individual defendants to the complaint.
Although Federal Rule of Civil Procedure 15(a)(1)(B) allows parties to amend a pleading as of

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right 21 days after service of a responsive pleading or 21 days after service of a motion under Rule

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12(b), (e), or (f), district courts have held “that when an amendment would deprive the court of

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subject matter jurisdiction, a party may not rely on Rule 15(a) to amend a pleading without leave

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of court; such an amendment must instead be analyzed pursuant to section 1447(e).” Dooley v.

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Grancare, LLC, No. 15-3038, 2015 WL 6746447, at *2 (N.D. Cal. Nov. 5, 2015); see also Chan v.

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Bucephalus Alternative Energy Grp., LLC, No. 08-04537, 2009 WL 1108744, at *3 (N.D. Cal.

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Apr. 24, 2009) (holding that the permissive amendment under Rule 15(a) does not apply when a

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United States District Court
Northern District of California

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plaintiff amends her complaint after removal to add a diversity-destroying defendant).

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28 U.S.C. Section 1447(e) provides that “[i]f after removal the plaintiff seeks to join

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additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny

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joinder, or permit joinder and remand the action to the State court.” Defendants argue that

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because Plaintiffs did not move for leave to amend, the Court should strike the FAC and not even

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analyze whether joinder is appropriate. See Dooley, 2015 WL 6746447 at * 2; Peralta Cmty. Coll.

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Dist. v. United Nat. Ins. Co., No. 04-03287, 2004 WL 2254621, at *1 (N.D. Cal. Oct. 5, 2004).

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However, even where a plaintiff did not move for leave to amend, some courts have exercised

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their discretion under section 1447 to determine if joinder is appropriate. See, e.g., Chan v.

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Bucephalus Alternative Energy Grp., LLC, No. 08-04537 JW, 2009 WL 1108744, at *3 (N.D. Cal.

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Apr. 24, 2009). In Chan, the court held that plaintiff‟s amended complaint was beyond the scope

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of Rule 15(a) because it joined a defendant that would destroy diversity. However, the court

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nonetheless denied the defendant‟s motion to strike the amended complaint and remanded the case

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to state court because it found that joinder was appropriate under section 1447(e).

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This Court believes the better approach is to presently consider whether joinder is

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appropriate, rather than strike the FAC, deny the motion to remand, and then decide the issue after

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Plaintiffs file a formal motion for leave to amend and another motion to remand. Requiring

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Plaintiffs to file a motion for leave to amend, and thus requiring a whole new round of briefing, is
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not consistent with Rule 1‟s command that the Court and the parties construe, administer and

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employ the Federal Rules of Civil Procedure “to secure the just, speedy, and inexpensive

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determination of every action and proceeding.” Fed. R. Civ. P. 1. Thus, the Court will proceed to

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whether joinder under section 1447 is appropriate.

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Courts consider several factors when deciding whether to exercise their discretion to allow
an amendment that would add a diversity-destroying defendant:

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(1) whether the party sought to be joined is needed for just
adjudication and would be joined under Federal Rule of Civil
Procedure 19(a); (2) whether the statute of limitations would
preclude an original action against the new defendants in state court;
(3) whether there has been unexplained delay in requesting joinder;
(4) whether joinder is intended solely to defeat federal jurisdiction;
(5) whether the claims against the new defendant appear valid; and
(6) whether denial of joinder will prejudice the plaintiff.

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IBC Aviation Servs., Inc. v. Compania Mexicana de Aviacion, S.A. de C.V., 125 F. Supp. 2d 1008,

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1011 (N.D. Cal. 2000). Courts “look at the factors as a whole” when analyzing whether a

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diversity-destroying amendment should be allowed. Id. at 1013. “Any of the factors might prove

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decisive, and none is an absolutely necessary condition for joinder.” Yang v. Swissport USA, Inc.,

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2010 WL 2680800 * 3 (N.D. Cal. July 6, 2010). Additionally, many of the factors can be looked

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at together because they are “intertwined”—such as whether joinder is desired solely to defeat

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diversity and whether the claim against the diversity-destroying defendant is valid. Sabag v. FCA

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US, LLC, No. 16-CV-06639 CAS (RAOX), 2016 WL 6581154, at *6 (C.D. Cal. Nov. 7, 2016).

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United States District Court
Northern District of California

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A.

The new defendants sought to be joined are needed, even if not necessary

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Federal Rule of Civil Procedure Rule 19 requires joinder of parties “whose absence would

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preclude the grant of complete relief, impede the putative party's ability to protect its interests, or

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would subject any of the parties to the danger of inconsistent obligations.” Sandhu v. Volvo Cars

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of N. Am., LLC, No. 16-04987, 2017 WL 403495, at *2 (N.D. Cal. Jan. 31, 2017). Plaintiffs

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contend that it is not yet known whether failure to join these defendants would preclude the grant

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of complete relief. (Dkt. No. 26 at 6.)

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Regardless of whether Mr. Hogan is a necessary party under Rule 19, “amendment under §
1447(e) is a less restrictive standard than for joinder under Fed. R. Civ. Proc. 19.” IBC Aviation
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Servs., Inc., 125 F. Supp. 2d at 1012 (holding that joinder of a diversity-destroying defendant was

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required where he was more than “tangentially related” to the claims). A party should be joined

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under section 1447(e) “when failure to join will lead to separate and redundant actions” but

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joinder will not be allowed “when defendants are only tangentially related to the cause of action or

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would not prevent complete relief.” Sandhu, 2017 WL 403495, at *2 (internal citations and

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quotations omitted) (holding that courts should consider whether a party can obtain complete

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relief, not just primary relief, without the party sought to be joined). Plaintiffs claim that Mr.

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Hogan is a necessary party because while Decedent was a resident of the Facility, all of the

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defendants (including Mr. Gallick and Mr. Hogan) “had a substantial caretaking or custodial
relationship, involving on-going responsibility for” her. (FAC ¶ 10.) Thus, failure to join could

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United States District Court
Northern District of California

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lead to separate and redundant actions because Mr. Hogan is more than tangentially related to the

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cause of action.

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To show that joinder is not necessary, Defendants cite Washington v. Daley, 173 F.3d

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1158, 1167 (9th Cir. 1999), in which the court denied joinder of Indian Tribes because they were

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adequately represented by the United States. Washington is distinguishable because the federal

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government represents Indian Tribes as the trustee of the Indian tribes' rights. Id. Here, we do not

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yet know whether any of the originally-named defendants adequately represent Mr. Hogan.

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B.

The statute of limitations is not a bar

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Defendants emphasize that the statute of limitations would not prevent a separate action

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against Mr. Hogan. (Dkt. No. 24 at 5.) True, but it would not be judicially efficient. See Dollens

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v. Target Corp., No. 11-03265, 2011 WL 6033014, at *3 (N.D. Cal. Dec. 5, 2011) (holding that

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because the case was in its early stages, “the interests of efficiency and justice would be served by

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allowing claims against both Target and Ms. Moya to be resolved in one action.”)

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C.

The delay in requesting joinder has been explained

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Joinder was not significantly delayed, as Plaintiffs filed an FAC within 21 days of

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Defendants‟ initial motion to dismiss and motion to strike. Defendants contend that Plaintiffs

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have not explained why they did not initially add Mr. Gallick and Mr. Hogan to the suit. Not so.

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Plaintiffs assert that they did not include Mr. Gallick in their initial complaint because they did not
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discover his responsibilities in regards to the Facility until Plaintiffs were preparing an opposition

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to Defendants‟initial motion to strike. (Dkt. No 18 at 5.) In preparing their opposition, Plaintiffs

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also discovered that Mr. Gallick is the supervisor of Mr. Hogan and “that together Mr. Gallick and

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Mr. Hogan could be considered the governing body of the Facility in that they make and approve

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key decisions concerning the Facility‟s day-to-day operations” (Id. at 5-6; FAC ¶ 30 (citing 42

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C.F.R. Section § 483.75(d))). Additionally, Plaintiffs did not discover until after filing their

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complaint that Mr. Hogan signed the plans of correction in response to citations the Facility

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received and thus that “Hogan made promises to the State to correct failures which have led to

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safety hazards and actual injury to residents.” (Dkt. No. 26 at 7.) Courts have excused delayed

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joinder for much longer periods of time. See, e.g., Clinco v. Roberts, 41 F. Supp. 2d 1080, 1083

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United States District Court
Northern District of California

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(C.D. Cal. 1999) (holding that six weeks after filing his initial complaint was not an unreasonable

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amount of time to file an amendment).

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D.

Joinder is not intended solely to defeat federal jurisdiction

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“Suspicion of diversity destroying amendments is not as important now that § 1447(e)

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gives courts more flexibility in dealing with the addition of such defendants.” IBC Aviation

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Servs., Inc., 125 F. Supp. 2d at 1012; see also Sabag, 2016 WL 6581154, at *6 (holding that

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because the plaintiff‟s claim against the diversity-destroying defendant was facially legitimate, the

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plaintiff‟s motive was not solely to defeat federal jurisdiction).

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Defendants contend that because Plaintiffs “cannot recover more or different relief” by

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adding Mr. Hogan, this is evidence that Plaintiffs added Mr. Hogan to the suit solely to defeat

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diversity. (Dkt. No. 24 at 7.) As support Defendants cite Farrugia v. Allstate Ins. Co., No. 07-

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00212, 2007 WL 781782, at *2 (N.D. Cal. Mar. 8, 2007), in which the court denied the plaintiff‟s

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motion for leave to amend to join an insurance agent as a new defendant. Farrugia is

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distinguishable, however, because there the court reasoned that adding the defendant was a futile

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exercise because “California courts have recognized the general principle that an agent or

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employee of an insurance company is not liable to an insured while acting in the scope of the

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agency or employment.” Id. Further, the plaintiff did not explain why joinder was delayed. Id.

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Here, in contrast, the Court cannot conclude that the claim against Mr. Hogan is futile and
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Plaintiffs have provided an explanation for the delayed joinder.
Defendants also cite Buttons v. Nat'l Broad. Co., 858 F. Supp. 1025, 1027 (C.D. Cal.

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1994), for the proposition that diversity-defeating joinder should not be allowed if a plaintiff‟s

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monetary damages could be fully satisfied by other diverse defendants. In Buttons, however, the

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court also found that “plaintiff ha[d] not made out a strong case for joinder” because the diversity-

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destroying potential defendants had no responsibility over the production or content of the show,

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which was the subject of the claim. Id. Here, Plaintiffs allege how Mr. Hogan has responsibility

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over the Facility.

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E.

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The claims against the new defendants appear valid

“The existence of a facially legitimate claim against the putative defendant weighs in favor

United States District Court
Northern District of California

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of permitting joinder under section 1447(e).” Taylor v. Honeywell Corp., No. 09-4947, 2010 WL

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1881459, at *3 (N.D. Cal. May 10, 2010). Viewing the allegations in a light most favorable to

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Plaintiffs, it appears that Plaintiffs have a valid claim against Mr. Hogan. Mr. Hogan has a

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substantial interest in the action because he and Mr. Gallick are “the managing agents for the

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Facility, and the people who truly make the decisions.” (Dkt. No 18. at 4.)

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F.

Denial of joinder will prejudice Plaintiffs

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Finally, courts consider any prejudice to a plaintiff that would result from denying joinder,

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such as forcing a plaintiff “to choose between redundant litigation arising out of the same facts and

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involving the same legal issues or foregoing its potential claims against [the proposed new

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defendant.]” IBC Aviation Servs., Inc. 125 F. Supp. 2d at 1013. Defendants assert that Plaintiffs

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will not be prejudiced if their motion is denied because their claims “do not personally implicate

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Rodger Hogan.” (Dkt. No 24 at 7.) However, as stated above, Plaintiffs assert that Mr. Hogan is

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liable because of his influence over the Facility. Thus, Plaintiffs would be prejudiced by having to

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pursue two separate lawsuits if joinder is not allowed. (Dkt. No. 26 at 10.)

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***
Ultimately, the decision to allow joinder and remand the case is at the discretion of the

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court. After reviewing the relevant factors, the Court finds that joinder is appropriate. Mr. Hogan

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was directly involved in the conduct at issue in the lawsuit; Plaintiffs have satisfactorily explained
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their minimal delay in naming him as a defendant; and to deny joinder could result in inconsistent

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verdicts and a waste of resources.
CONCLUSION

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For the reasons stated above, the Court permits the joinder of Mr. Hogan as a Defendant

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pursuant to 28 U.S.C. § 1447(e). Accordingly, Defendants‟ motion to strike is DENIED and

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Plaintiffs‟ motion to remand is GRANTED. This action is remanded to the Superior Court for

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Contra Costa County.

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IT IS SO ORDERED.
Dated: July 6, 2017

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United States District Court
Northern District of California

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JACQUELINE SCOTT CORLEY
United States Magistrate Judge

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