LUKE v. OHEARN et al

Filing 7

ORDER granting 2 Motion to Remand; granting 3 Motion to RemandOrdered by U.S. District Judge CLAY D LAND on 3/20/14 (bsh)

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IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF GEORGIA COLUMBUS DIVISION DANIEL LUKE, * Plaintiff, * vs. * CHACE O’HEARN, CHARLES O’HEARN d/b/a O’HEARN FARMS, INC., COTTON STATES MUTUAL INSURANCE COMPANY, AND COUNTRY MUTUAL INSURANCE COMPANY, * CASE NO. 4:13-cv-535 (CDL) Defendants. * * * O R D E R Country Mutual Insurance Company (“Country Mutual”) removed this action from the Superior Court of Randolph County, Georgia, based upon Defendants diversity Chace of O’Hearn citizenship. and Charles Plaintiff, O’Hearn along d/b/a with O’Hearn Farms, Inc. (“O’Hearn Defendants”), have filed motions to remand (ECF Nos. 2, 3). For the following reasons, those motions to remand are granted. DISCUSSION A civil case filed in state court may be removed by a defendant to federal court if the case could have been brought originally in federal court. 28 U.S.C. § 1441(a). Federal courts have diversity jurisdiction over all civil actions where the amount in controversy exceeds 1 $75,000 and the action is between citizens of different states. “Diversity jurisdiction requires 28 U.S.C. § complete 1332(a). diversity;” plaintiff can be from the same state as any defendant. v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 no Triggs (11th Cir. 1998). The Plaintiff in this action is a resident of Georgia. And although Defendant Country Mutual is a resident of Illinois, the O’Hearn Defendants are all residents of Georgia.1 the O’Hearn Defendants’ citizenship diversity does not exist. O’Hearn Defendants’ is Therefore, if considered, complete Country Mutual maintains that the citizenship should be disregarded because they were “fraudulently joined” in this action. Fraudulent joinder is a judicially created exception to the complete diversity Traditionally, requirement. joinder may be Triggs, deemed 154 F.3d at fraudulent 1287. in two situations: (1) “when there is no possibility that the plaintiff can prove a cause of action against the resident (non-diverse) defendant,” and (2) plaintiff’s pleading “when of there is outright jurisdictional fraud facts.” Id. in the The Eleventh Circuit has also recognized a third type of fraudulent joinder, which misjoinder.” is more precisely described as “fraudulent It is this third type of fraudulent joinder that is implicated here. 1 Cotton States Mutual Insurance Company, which appears to be the predecessor of Country Mutual, is also a resident of Illinois. 2 In the present case, Plaintiff alleges that Chace O’Hearn spilled hot cooking grease on Plaintiff causing severe burns. He has asserted negligence claims against Chace based on his negligence and against the other O’Hearn Defendants based on landowner liability asserts claim a and agency against Country principles. Mutual Plaintiff Georgia’s under also RICO statute, alleging that Country Mutual, which provided liability insurance coverage for the incident in question, provided Plaintiff’s counsel with false and fraudulent information during their investigation of the underlying liability claim. No evidence exists in the present record that there is “outright fraud” in the Plaintiff’s pleading of jurisdictional facts. He Defendants, evidence Complaint of and alleges Country the that a has fraud. claim O’Hearns. a the Mutual “outright” states Defendants, establish properly recovery Defendants is not possible. against residency pointed the the the the resident, Country various Court Furthermore, Therefore, against of no Plaintiff’s non-diverse Mutual resident, to cannot non-diverse Although not clearly articulated in the briefs, Country Mutual is essentially asserting “fraudulent misjoinder” as the basis for its fraudulent joinder claim. Country Mutual maintains that no contention is made by Plaintiff that Country Mutual and the O’Hearn Defendants are joint tortfeasors—the RICO claim applies only to Country Mutual 3 and liability on that claim is separate and distinct from any liability the O’Hearns may have on the negligence-based tort claims. Consequently, Country Mutual argues that the claims are fraudulently O’Hearns misjoined, must be and ignored therefore when the claims determining against the whether complete universally accepted diversity of citizenship exists. “Fraudulent misjoinder” is not a corollary in fraudulent joinder jurisprudence. See, e.g., A. Kraus & Son v. Benjamin Moore & Co., No. CV 05-5487, 2006 WL 1582193, at *5 (E.D.N.Y. June 7, 2006) (expressing reluctance to “[wade] into the uncharted waters of fraudulent-egregious misjoinder” without clear direction from the Supreme Court or Congress); Riddle v. Merck & Co., Inc., Civil No. 06-172-GPM, 2006 WL 1064070, at *7-8 (S.D. Ill. April 21, 2006) (finding nothing in the fraudulent joinder jurisprudence of the Supreme Court or the Seventh Circuit Court of Appeals suggesting that the egregious “misjoinder” of non-fraudulent claims under state procedural rules is a question that implicates subject matter jurisdiction of a federal court); Osborn v. Metro. Life Ins. Co., 341 F. Supp. 2d 1123, 1127-1128 (E.D. Cal. 2004) (declining to apply fraudulent misjoinder theory because unnecessary and because of uncertainty of how to apply it, and finding better rule is for alleged misjoinder to be resolved in state court). Notwithstanding the skepticism of courts from other Circuits, 4 the fraudulent misjoinder Eleventh Circuit. here. theory has been adopted in the And quite frankly, that is all that matters In Tapscott v. MS Dealer Service Corp., 77 F.3d 1353 (11th Cir. 1996), abrogated on other grounds by Cohen v. Office Depot, 204 F.3d 1069 (11th Cir. 2000), the Court explained that under certain circumstances misjoinder of parties could be so “egregious” as to amount to fraudulent joinder. 77 F.3d at 1360. not Perhaps predictably, the Court did define “egregious;” it simply made clear that “mere misjoinder” is not fraudulent joinder. not be joined Procedure or Id. under the Rule Therefore, even if the parties could 20 applicable of the state’s Federal Rules counterpart to of Civil Rule 20, their joinder may not constitute fraudulent joinder, unless it was “egregious.” A finding of “egregiousness” appears to depend upon the extent to which the resident, non-diverse defendant has any “real connection with the controversy” involving the diverse defendant. Id., citing Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921); see also Triggs, 154 F.3d at 1288-90. starting point for the defendant could have been analysis then there whether permissively against the non-resident defendant. appropriate, is obviously joined the in The resident the action If permissive joinder is can be no fraudulent misjoinder; but as noted, a finding of improper joinder is not dispositive of fraudulent joinder. 5 Instead, if permissive joinder is not appropriate, the Court must look closer to determine whether there is such a lack of connection between the claims that not only is joinder improper, but it is clearly or obviously so. The Federal Rules of Civil Procedure permit persons to be joined as defendants in a single action if: “(A) any right to relief is asserted against them jointly, severally, or in the alternative with transaction, respect to or occurrence, or arising series out of of the same transactions or occurrences; and (B) any question of law or fact common to all defendants will arise in the action.” Fed. R. Civ. P. 20(a)(2); see also O.C.G.A. § 9-11-20(a) (using almost identical language in Georgia permissive joinder statute). Plaintiff does not assert a RICO claim against the O’Hearn Defendants; nor does he claim that they are joint tortfeasors with Country Mutual. But this does not mean that Plaintiff’s RICO claim against Cotton Mutual clearly or obviously has no real connection with the controversy between Plaintiff and the O’Hearns. All of the claims in the underlying action arise from the same event—the alleged negligent spilling of grease on the Plaintiff by Chace O’Hearn. the facts It is not obvious at this stage of the litigation that related to that incident will not Plaintiff’s RICO claim against Country Mutual. be relevant to It is beyond dispute that without the incident giving rise to the negligence 6 claims against the O’Hearn Defendants, there would be no RICO claim. causal Of course, the mere presence of a remote “but for” connection is not, standing alone, a sufficient connection to defeat a fraudulent misjoinder claim. But the connection here is less remote than that. It is reasonable to conclude may that how the accident occurred be relevant to whether Country Mutual made false and fraudulent representations related to the underlying claim. insurance coverage that existed for the While the claims are distinct and different, it is not obvious that they do not involve some common issues of law and fact. The Court’s conclusion regarding the relationship between the various claims asserted by Plaintiff joinder is necessarily counterpart. proper under Rule does not mean that 20 or its Georgia Nor does it mean that the trial judge could not sever the claims or that Plaintiff will ultimately prevail on his claim. But that is not the standard this Court must apply. To find fraudulent joinder, the joinder must be shown to be more than impermissible; Country Mutual Consequently, citizenship the of it must simply Court the be has is egregiously not not O’Hearn or carried authorized Defendants, obviously that to and burden. ignore when so. the their citizenship is considered, complete diversity does not exist. 7 Without complete diversity, there is no basis for federal subject matter jurisdiction. CONCLUSION The motions to remand (ECF Nos. 2, 3) are granted, and the Clerk is directed to remand this action to the Superior Court of Randolph County, Georgia. Plaintiffs’ request for fees and expenses is denied. IT IS SO ORDERED, this 20th day of March, 2014. S/Clay D. Land CLAY D. LAND UNITED STATES DISTRICT JUDGE 8

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