Parse et al v. Brunswick Cellulose, Inc. et al

Filing 23

ORDER granting in part as to the request for remand, and denying in part as to the request for payment of Brunswick Cellulose's costs and expenses resulting from the removal re 13 Motion to Remand; 13 Motion for Attorney Fees; granting in its entirety Plaintiffs' 14 Motion to Remand. The Clerk is hereby directed to remand this case to the Superior Court of Glynn County, Georgia, for resolution. Signed by Chief Judge Lisa G. Wood on 10/14/2015. (ca)

3ju the aniteb otateo flitrttt Court
for the boutbern flitritt of deorgia
runtuitk flthiion
ANTHONY PARSE and KAYLA
PARSE,

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Plaintiffs,

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V.

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BRUNSWICK CELLULOSE, INC.
also known as BRUNSWICK
CELLULOSE, LLC and GERALD
BAKER,

Defendants.

BRUNSWICK CELLULOSE, INC.
also known as BRUNSWICK
CELLULOSE, LLC,

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CV 215-43

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Third-Party Plaintiff,

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V.

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OWENS AND PRIDGEN, INC. and
NATIONAL TRUST INSURANCE
COMPANY,
Third-Party Defendants.

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ORDER

Third-Party Defendant National Trust Insurance Company
(National Trust") removed this action to this Court on April 3,
2015. Dkt. No. 1. This matter now comes before the Court on
two Motions to Remand separately filed by Defendant/Third-Party

A0 ) 72A
(Ru'. ( (2)

Plaintiff Brunswick Cellulose, Inc., also known as Brunswick
Cellulose, LLC ("Brunswick Cellulose") (dkt. no. 13), and
Plaintiffs Anthony and Kayla Parse ("Plaintiffs") (dkt. no. 14)
National Trust has filed a consolidated Response to the Motions
to Remand (dkt. no. 17), and Brunswick Cellulose has filed a
Reply thereto (dkt. no. 19). Notably, Defendant Gerald Baker
("Baker") and Third-Party Defendant Owens and Pridgen, Inc.
("OPI") have not weighed in or otherwise taken a position on the
issue of remand.
For the reasons that follow, Brunswick Cellulose's Motion
to Remand (dkt. no. 13) is GRANTED in part and DENIED in part as
follows: the Motion is GRANTED to the extent that it requests a
remand of this case to state court, and the Motion is DENIED
insofar as it seeks to have National Trust pay its costs and
expenses, including attorney's fees, incurred as a result of the
removal. Additionally, Plaintiffs' Motion to Remand (dkt. no.
14) is GRANTED in its entirety.
BACKGROUND
On September 8, 2014, Plaintiffs filed suit against
Brunswick Cellulose and its employee, Baker, in the Superior
Court of Glynn County, Georgia. Dkt. No. 1-1,

pp. 18-24.

Plaintiffs' Complaint alleges that on April 9, 2014, Plaintiff
Anthony Parse, an employee of aPI, was injured while performing
work at Brunswick Cellulose's pulp mill in Brunswick, Georgia.
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(Re. 8 82)

I

Id. at p. 19. According to the Complaint, Plaintiff Anthony
Parse was to perform work on a chlorate pipeline at the mill,
pursuant to an agreement between OPI and Brunswick Cellulose.
See id. Plaintiffs seek to hold Brunswick Cellulose and Baker
liable, on the grounds of negligence and premises liability, for
Plaintiff Anthony Parse's injuries, as well as Plaintiff Kayla
Parse's alleged loss of consortium. Id. at pp. 20-22.
Brunswick Cellulose filed an Answer on October 22, 2014,
denying that it or any of its agents acted negligently, and
asserting that the negligence of Plaintiff Anthony Parse—and
perhaps the negligence of other persons or entities for whom
Brunswick Cellulose is not responsible—caused Plaintiff Anthony
Parse's injuries. Id. at pp. 26-32. Shortly thereafter,
Brunswick Cellulose tendered the defense to OPI and its
insurance provider, National Trust. Id. at P. 6. OPI and
National Trust refused to accept the tender. Id. at p. 10.
Accordingly, on February 27, 2015, Brunswick Cellulose filed a
Third-Party Complaint against

OPI

and National Trust alleging

that they breached their duties to defend and indemnify
Brunswick Cellulose. Id. at pp. 4-14.
Specifically, the Third-Party Complaint claims that
Paragraph 6(a) of the agreement between OPI and Brunswick
Cellulose (the "Master Agreement") imposes a duty upon OPI to

3

AC 72\
(Rex.

I

"defend, protect, indemnify and hold harmless" Brunswick
Cellulose and its employees
from and against any and all claims, demands,
liabilities, lawsuits, causes of
action . . . and . . . expenses (including, but not
limited to, attorneys' fees) and costs of every kind
and character arising out of or in any way incident to
any of the work performed by [OPT] . . . or the
employees of [OPT] on account of personal
injuries . . . regardless of whether such harm is to
[OPT or its employees].
Id. at pp. 7-8, 10 (alterations in original) (suspension points
in original). ' Paragraph 6(a) further provides that an exception
to OPI's contractual duty to indemnify arises if the subject
incident resulted "from the sole (100%) negligence of [Brunswick
Cellulose]. " Id. at p. 36. Additionally, the Third-Party
Complaint states that Paragraphs 6 and 11 of the Master
Agreement require OPT to procure and maintain, at its own
expense, "insurance covering the indemnity provisions" and
'"nam[ing]

[Brunswick Cellulose] as an additional insured." Id.

at p. 8 (second alteration in original). The Third-Party
Complaint asserts that OPT purchased a Commercial General

Liability Policy (the "Policy") from National Trust naming
Brunswick Cellulose as an additional insured. Id.
Brunswick Cellulose claims that National Trust's and OPI's
refusal to defend and indemnify Brunswick Cellulose, when

Brunswick Cellulose attached a copy of the Master Agreement as an
exhibit to the Third-Party Complaint. See Dkt. No. 1-1, pp. 35-46.
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4

Brunswick Cellulose denies all liability, constitutes a breach
of the Policy and Paragraph 6(a) of the Master Agreement,
respectively. Id. at pp. 9-11. Brunswick Cellulose also
asserts that if it is not covered under the Policy, then OPI has
breached its duty to maintain adequate insurance coverage for
Brunswick Cellulose under Paragraphs 6 and 11 of the Master
Agreement. Id. at p. 11. Thus, Brunswick Cellulose contends
that National Trust and OPI are jointly, severally, or
individually liable to Brunswick Cellulose for any judgment
entered in favor of Plaintiffs. Id. at p. 12.2
OPI and National Trust received service of the Third-Party
Complaint on March 3, 2015, and March 4, 2015, respectively.
Id. at P. 2; Dkt. No. 13-1, p. 3. On April 3, 2015, National
Trust removed the action to this Court on the basis of diversity
of citizenship. Dkt. No. 1. In the Notice of Removal, National
Trust states that Brunswick Cellulose (a resident of Delaware
and Georgia) asserts third-party claims that are "separate and
independent" from Plaintiffs' tort claims, against National
Trust (a resident of Indiana and Florida) and OPI (a Georgia
resident) for an amount in excess of $75,000. Id. at ¶J 3, 5-7,
14. Although Brunswick Cellulose and OPI are both Georgia
Though not specifically alleged in the Third-Party complaint,
Brunswick Cellulose recognizes in its Motion to Remand that Paragraph
6(a) requires that Brunswick Cellulose establish that the incident at
the pulp mill was caused, at least in part, by the negligence of
another (such as Plaintiff Anthony Parse, OPI, or an OPI employee), to
trigger any indemnity obligation. Dkt. No. 13-1, p. 6.
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(Rex. $ $2)

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residents, National Trust nevertheless maintains that removal is
proper under the fraudulent joinder exception to the complete
diversity rule. Id. at ¶ 8. That is, National Trust contends
that Brunswick Cellulose joined OPI with National Trust for the
sole purpose of destroying complete diversity, as the ThirdParty Complaint neither alleges that aPI and National Trust are
liable jointly, severally, or in the alternative, nor
demonstrates that aPI has any real connection to this case. Id.
at ¶J 9-13.
On May 4, 2015, Brunswick Cellulose and Plaintiffs
separately filed the instant Motions seeking to remand this case
to the Superior Court of Glynn County, Georgia. See Dkt. Nos.
13 14. Contemporaneously with the filing of its Motion,
Brunswick Cellulose filed a Notice of Intent to Assert Fault
pursuant to O.C.G.A. § 51-12-33 against OPI. Dkt. No. 12.
DISCUSSION

An action filed in state court may be removed to federal
district court if the case could have been brought in federal
district court originally. See 28 U.S.C. § 1441(a) (requiring
that the case be one "of which the district courts of the United
Scares have original jurisdiction") . Upon the removal of an
action to federal district court, 28 U.S.C. § 1447(c) ("Section
1447(c)") "implicitly recognizes two bases upon which a district
court may . . . order a remand: when there is (1) a lack of
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subject matter jurisdiction or (2) a defect other than a lack of
subject matter jurisdiction." Hernandez v. Seminole Cty.,
F.3d 1233, 1236-37

(11th Cir. 2003)

Redan, 171 F.3d 1249, 1252-53

334

(quoting Snapper, Inc. v.

(11th Cir.

1999)).

Relevant here is that a federal district court has original
jurisdiction "over all civil actions where the amount in
controversy exceeds $[75,000]

and the action is between the

citizens of different states." Triggs v. John Crump Toyota,
Inc., 154 F.3d 1284, 1287

(11th Cir. 1998)

(citing 28 U.S.C. §

1332 (a) (1)) . Importantly, "[d] iversity jurisdiction requires
complete diversity; every plaintiff must be diverse from every
defendant." Id. (citing Tapscott v. MS Dealer Serv. Corp.,
F.3d 1353,

1355

(11th Cir.

77

1996)).

A "defect other than a lack of subject matter jurisdiction"
might include noncompliance with certain procedural requirements
for the removal of a case. See Hernandez,
(quoting Snapper, Inc.,

Specifically,

334 F.3d at 1236-37

171 F.3d at 1252-53).

For example, the

Section 1447(c) states, in relevant part:

A motion to remand the case on the basis of any defect
other than lack of subject matter jurisdiction must be made

within 30 days after the filing of the notice of removal
under section 1446(a). If at any time before final
judgment it appears that the district court lacks subject
matter jurisdiction, the case shall be remanded. An order
remanding the case may require payment of just costs and
any actual expenses, including attorney fees, incurred as a
result of the removal.
28 U.S.C. § 1447(c).

AO ) 72
(Rc. 8 2)

7

"forum-defendant rule" provides that "a state-court action that
is otherwise removable to federal court solely on the basis of
diversity of citizenship is not removable 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.'" Goodwin
v. Reynolds, 757 F.3d 1216, 1218 (11th Cir. 2014) (emphasis in
original) (quoting 28 U.S.C. § 1441(b)).

Additionally, the

unanimous consent rule states that "all defendants who have been
properly joined and served must join in or consent to the
removal of the action." 28 U.S.C. § 1446(b) (2) (A)
Notably, the doctrine of fraudulent joinder provides an
exception to the jurisdictional requirement of complete
diversity as well as to the aforementioned procedural
requirements. See Triggs, 154 F.3d at 1287 (complete diversity
requirement); Jernigan v. Ashland Oil Inc., 989 F.2d 812, 815
(5th Cir. 1993) (unanimous consent rule); Yount v. Shashek, 472
F. Supp. 2d 1055, 1059 (S.D. Ill. 2006) (forum-defendant rule)
Pursuant to this doctrine, a court evaluating whether a
jurisdictional or procedural defect warrants remand must not
consider the citizenship or consent—whichever applicable—of a
nondiverse defendant that has been joined to the action "solely
in order to defeat federal diversity jurisdiction." See
Stillwell v. Allstate Ins. Co., 663 F.3d 1329, 1332 (11th Cir.
2011) (citing Henderson v. Wash. Nat'l Ins. Co., 454 F.3d 1278,
AO ) 72A
(Rex

8

1281 (11th Cir. 2006)); see also Triggs, 154 F.3d at 1287;
Jernigan, 989 F.2d at 815; Yount, 472 F. Supp. 2d at 1059. In
such circumstances, the nondiverse defendant is said to have
been "fraudulently joined." Stillwell, 663 F.3d at 1332.
In the case at bar, Brunswick Cellulose and Plaintiffs
argue in favor of remand under Section 1447(c) based on the
following procedural defects: (1) that aPI is a citizen of
Georgia, the forum state, and, therefore, National Trust's
removal to this Court violated the forum-defendant rule; and (2)

that OPI never consented to removal, as required by the
unanimous consent rule. See Dkt. No. 13-1, pp. 10-12; Dkt. No.
14-1, pp. 3-5. Brunswick Cellulose and Plaintiffs contend that
the fraudulent joinder exception to these procedural rules is
inapplicable here, because Brunswick Cellulose's claims,
resulting in the joinder of OPI as a third-party defendant, are
meritorious. See Dkt. No. 13-1, pp. 13-20; Dkt. No. 14-1, pp.
5-7. In addition, Brunswick Cellulose requests that the Court
order National Trust to pay Brunswick Cellulose's costs and
expenses, including attorney's fees, incurred as a result of the
removal. Dkt. No. 13-1, p. 20.
In response, National Trust asserts that the unanimous
consent and forum-defendant rules are not applicable here,
maintaining its position that OPI was fraudulently joined as a
third-party defendant for the sole purpose of destroying
AO 72\
(Rc\. 8 82)

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diversity. Dkt. No. 17, Pp. 4-12.

National Trust also objects

to Brunswick Cellulose's request for payment of costs and
expenses, on the basis that its justification for removal was
objectively reasonable.

Id. at P. 12. National Trust further

submits that the Court should (1) sever Plaintiffs' tort claims
from Brunswick Cellulose's third-party claims; (2) remand the
tort action to state court; and (3) sever or dismiss Brunswick
Cellulose's third-party claims against OPI from its third-party
action against National Trust in this Court. Id. at pp. 10-12.
As an initial matter, this Court's obligation to remand
this case sua sponte if subject-matter jurisdiction is lacking
obviates Brunswick Cellulose's and Plaintiffs' arguments for
remand based on any procedural defect relating to the forumdefendant rule. See 28 U.S.C. § 1447(c) ("If at any time before
final judgment it appears that the district court lacks subject
matter jurisdiction, the case shall be remanded.") That is, if,
as Brunswick Cellulose and Plaintiffs contend, aPI was properly
joined as a third-party defendant in this case, the
jurisdictional requirement of complete diversity would not be
met, because both OPI and Brunswick Cellulose are citizens of
the State of Georgia. See Id. § 1332(c) (1) (stating that, for
the purposes of diversity jurisdiction, a corporation is deemed
to be a citizen of every state in which it is incorporated and
of the state in which it has its principal place of business);
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AO 72A
(Rev. 8 82)

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Dkt. No. 1, ¶j 6-7 (asserting that Brunswick Cellulose has its
principal place of business in Georgia, and that OPI is
incorporated and has its principal place of business in
Georgia) . Because the forum-defendant rule applies only as a
limitation on the removal of an action meeting the complete
diversity requirement, see 28 U.S.C. § 1441(b) (2), the forumdefendant rule would not apply as a bar to removal in this case,
eTen accepting Brunswick Cellulose's and Plaintiffs' arguments
as true.
Thus, the Court considers here whether remand is proper
based on a defect in diversity jurisdiction or a procedural
defect relating to the unanimous consent rule. Notably,
National Trust concedes that OPI is a Georgia citizen, see dkt.
no. 1, ¶ 7, and the record reflects that OPI never affirmatively
consented to removal, see Id.; see also Scruggs

V.

Int'l Paper

Co., No. CV411-203, 2012 U.S. Dist. LEXIS 190073, at *3 (S.D.
Ga. Sept. 28, 2012) (requiring that each defendant "place some
affirmative indication of consent in the record") . As such,

if

OPT is a properly joined party, then remand is required based on
both a lack of complete diversity and a lack of unanimous
consent. Conversely, if OPI was fraudulently joined to this
action, then its citizenship and lack of consent are
disregarded, and remand is not warranted on any basis.
Accordingly, the Court's ruling on the fraudulent joinder issue
AO 72A
(Rex. 8 0)

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will be determinative of the issue of remand on both
jurisdictional and procedural grounds. Thus, the Court will
address the fraudulent joinder issue before reaching the
parties' ancillary requests regarding severability and costs and
expenses of the removal.
I.

Fraudulent Joinder
The Court of Appeals for the Eleventh Circuit has

identified three situations in which joinder is fraudulent: (1)
"when there is no 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) "whe[n] a diverse defendant is
joined with a nondiverse defendant as to whom there is no joint,
several or alternative liability and where the claim against the
diverse defendant has no real connection to the claim against
the nondiverse defendant." Triggs, 154 F.3d at 1287 (citing
Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1355 (11th Cir.
1996), and Coker v. Amoco Oil Co., 709 F.2d 1433, 1440 (11th
Cir. 1983)) . The Eleventh Circuit has further determined that
the removing party carries the "heavy burden" of proving by
clear and convincing evidence that fraudulent joinder has
occurred. Stillwell, 663 F.3d at 1332 (citing Crowe v. Coleman,
113 F.3d 1536, 1538 (11th Cir. 1997)); see also Burns v. Windsor
Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994) ("Defendant's
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I

right to remove and plaintiff's right to choose his forum are
not on equal footing . . . where plaintiff and defendant clash
about jurisdiction, uncertainties are resolved in favor of
remand.")
In determining whether a nondiverse defendant has been

fraudulently joined, a court must look to "the plaintiff's
pleadings at the time of removal." Pacheco de Perez v. AT&T
Co., 139 F.3d 1368, 1380 (11th Cir. 1998) (citing Crowe, 113
F.3d at 1538). The court "must evaluate factual allegations in

the light most favorable to the plaintiff and resolve any
uncertainties about the applicable law in the plaintiff's
favor." Id. (citing Crowe, 113 F.3d at 1538). However, the
court is not to weigh the merits of a plaintiff's claim beyond
determining whether it is an arguable one under state law." Id.
at 1380-81 (quoting Crowe, 113 F.3d at 1538)
"[If there is any possibility that the state law might
impose liability on a resident defendant under the circumstances
alleged in the complaint, the federal court cannot find that
joinder of the resident defendant was fraudulent, and remand is

necessary." Florence v. Crescent Res., LLC, 484 F.3d 1293, 1299
(11th Cir. 2007) (emphasis added) (citing Henderson,

454 F.3d at

1284, and Crowe, 113 F.3d at 1540); see also Pacheco de Perez,
139 F.3d at 1380 (stating that the plaintiff need only state a

"colorable claim" against the nondiverse defendant) .
AO 72A
(Re. 8 82)

13

Unlike the

plausibility pleading standard applicable to a motion to
dismiss, which asks for more than a mere possibility of unlawful
conduct by the defendant, "all that is required to defeat a
fraudulent joinder claim is 'a possibility of stating a valid
cause of action." Stillwell, 663 F.3d at 1333 (quoting Triggs,
154 F.3d at 1287) . Thus, the court's "authority to look into
the ultimate merit of the plaintiff's claims must be limited to
checking for obviously fraudulent or frivolous claims." Crowe,
113 F.3d at 1542.
In its Notice of Removal, National Trust cited only the
third fraudulent joinder situation as the basis for removing
this case on diversity grounds, alleging that there is no joint,
several, concurrent, or alternative liability between OPI and
National Trust, and that OPI has no real connection to this
case. Dkt. No. 1, ¶ T 9-13. National Trust now asserts that
OPT's joinder was fraudulent not only under the third scenario
but also under the first—namely, that Brunswick Cellulose cannot
possibly prove a cause of action against OPI. Dkt. No. 17, p.
5.
A.

The Possibility of Brunswick Cellulose Proving a Cause
of Action Against OPI (Situation One)

National Trust contends that Brunswick Cellulose cannot
prove its breach-of-contract claims against OPI on the grounds
of either a failure to indemnify and defend, or a failure to

14

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(Rc 8 82)

I

procure and maintain adequate insurance coverage, as alleged in
the Third-Party Complaint. Id.
1.

Contractual Indemnity Claim

Under Georgia law, a claim of "indemnity" involves "the
obligation or duty resting on one person to make good any loss
or damage another has incurred or may incur by acting at his
request or for his benefit." Cash v. St. & Trail, Inc., 221
S.E.2d 640, 642 (Ga. Ct. App. 1975) (quoting Copeland v.
Beville, 92 S.E.2d 54 (Ga. Ct. App. 1956)). Parties to a
contract may validly agree that one party (the indemnitor) will
indemnify or "save harmless" the other party (the indemnitee)
from claims of third parties, even where the third-party claim
is based on the indemnitee's own fault or negligence. Id.
(citing Martin v. Am. Optical Co., 184 F.2d 528, 529 (5th Cir.
1950)). While no particular words or talismanic phrasing are
necessary, Smith v. Seaboard Coast Line R.R. Co., 639 F.2d 1235,
1239 (5th Cir. 1981), an agreement to indemnify against the
indemnite's own fault or negligence must be set forth in clear
and unequivocal terms, George R. Hall, Inc. v. Superior Trucking
Co., 532 F. Supp. 985, 993 (N.D. Ga. 1982) (citing Binswanger
Glass Co. v. Beers Constr. Co., 234 S.E.2d 363 (Ga. Ct. App.
1977), and Batson-Cook v. Ga. Marble Setting Co., 144 S.E.2d 547
(Ga. Ct. App. 1965)); Cash, 221 S.E.2d at 642.

15

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2)

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Evaluating the factual allegations in the light most
favorable to Brunswick Cellulose as the Third-Party Plaintiff,
and resolving all uncertainties about Georgia substantive law in
its favor, there is more than a mere possibility that Brunswick
Cellulose states a valid cause of action for indemnity against

OPI. Brunswick Cellulose alleges in the Third-Party Complaint
that OPI agreed in Paragraph 6(a) of the Master Agreement to
defend, protect, indemnify and hold harmless" Brunswick
Cellulose and its employees "from and against any and all
claims, demands, liabilities, lawsuits, causes of
action . . . and . . . expenses" that arise out of "any of the
work performed by [OPI] .

. . or the employees of [OPI] on

account of personal injuries . . . regardless of whether such
harm is to [OPI or its employees] ." Dkt. No. 1-1,

pp. 7-8, 10

(alterations in original) (suspension points in original).
Brunswick Cellulose also asserts that aPI breached this agreedupon duty to defend and indemnify by rejecting Brunswick
Cellulose's tender of the defense against Plaintiffs' claims.
Id. at pp. 6, 10.

Further, Brunswick Cellulose contends that if

it is found liable on Plaintiffs' claims, OPI will be obligated
to indemnify Brunswick Cellulose for any judgment entered
against it, in accordance with Paragraph 6(a) of the Master
Agreement. Id. at p. 12.

AC 7 -A
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National Trust's arguments to the contrary do not change
this result. National Trust cites United Parcel Service, Inc.
v. Colt Security Agency, Inc., 676 S.E.2d 22 (Ga. Ct. App.
2009), for its contention that Brunswick Cellulose has no
contractual indemnity claim against OPI, because Plaintiffs do
not allege that OPI is at fault. Dkt. No. 17, p. 6. However,
United Parcel Service, Inc. was factually distinguishable from
this case in that the defendant tortfeasor, unlike Brunswick
Cellulose, did not contend that entities other than the employee
plaintiff were negligent. See United Parcel Serv., Inc., 676
S.E.2d at 24. In addition, National Trust relies on Zaldivar v.
Prickett, 762 S.E.2d 166 (Ga. Ct. App. 2014), rev'd, 774 S.E.2d
688 (Ga. 2015), for the proposition that Brunswick Cellulose
cannot use the apportionment statute, O.C.G.A. § 51-12-33, to
assign fault against OPI on Plaintiffs' claims. Dkt. No. 17, p.
7. As National Trust's counsel recognized at the Motions
Hearing, Zaldivar was overturned on appeal, where the Supreme
Court of Georgia expressly ruled that the apportionment statute
permits a defendant tortfeasor, such as Brunswick Cellulose, to
include a plaintiff's employer as a nonparty against whom the
fact finder may assign fault. Zaldivar, 774 S.E.2d at 697.
2.

Claim for Failure to Maintain Insurance

Georgia law also recognizes a claim for breach of a
contractual duty to maintain adequate insurance coverage. See,
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AO 2A

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e.g., Fleetwood v. Wieuca N. Condo. Ass'n, 354 S.E.2d 623, 623
(Ga. Ct. App. 1987). Construing Brunswick Cellulose's factual

allegations in its favor, it is possible that a Georgia court
could find that Brunswick Cellulose sufficiently states a claim
against OPI on this theory. Brunswick Cellulose alleges that
Paragraphs 6 and 11 of the Master Agreement require OPI to
procure and maintain, at its own expense, "insurance covering
the indemnity provisions" and "nam[ing] [Brunswick Cellulose] as
an additional insured." Dkt. No. 1-1, p. 8 (second alteration
in original) . Brunswick Cellulose also avers that OPI purchased
the Policy from National Trust, presumably naming Brunswick
Cellulose as an additional insured, but that National Trust
refused Brunswick Cellulose's tender of the defense. Id. at pp.
6, 8, 10. As such, Brunswick Cellulose claims that if it is not
covered under the National Trust Policy, then OPI is in breach

of its duty to maintain adequate insurance coverage, and will be
obligated to indemnify Brunswick Cellulose if it is found liable

to Plaintiffs, pursuant to Paragraphs 6 and 11 of the Master
Agreement. Id. at pp. 11-12.
While National Trust argues that Brunswick Cellulose's
claim is premature—as the issue of coverage under the Policy has
yet to be decided, dkt. no. 17, p. 8—this Court is not tasked
with deciding whether Brunswick Cellulose will ultimately
succeed on the merits of this claim. Rather, it is sufficient,
18

AO ) 72A
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at this stage, that there is a possibility that Brunswick
Cellulose could prove a cause of action against OPI for breach
of a contractual duty to maintain insurance.
B.

Joint, Several, Concurrent, or Alternative Liability
Between OPI and National Trust, and OPI's Connection
to the Case (Situation Three)

National Trust argues that the third fraudulent joinder
scenario is present, because Brunswick Cellulose's claims
against National Trust and OPI are based on different contracts
and duties having no common questions of law or fact. Dkt. No.
17, pp. 9-12.
However, even a cursory review of Brunswick Cellulose's
Third-Party Complaint reveals not only that it seeks to hold
National Trust and OPI jointly, severally, or individually
liable for any judgment entered in favor of Plaintiffs, but also
that the claims against the third-party defendants are
interrelated. Brunswick Cellulose claims that the Master
Agreement requires OPI to defend, indemnify, and adequately
insure Brunswick Cellulose against all claims other than those
owing to Brunswick Cellulose's sole negligence, and that OPI
obtained the Policy with National Trust for this purpose. Dkt.
No. 1-1, pp. 7-8, 10, 36. Brunswick Cellulose further alleges
that in rejecting its tender of the defense against Plaintiffs'
claims-for which it denies all liability-OPI and National Trust
breached the Master Agreement and the Policy, respectively. Id.
AO 72

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at pp. 9-11.

Alternatively, Brunswick Cellulose asserts that if

it is not covered under the Policy, such that National Trust is

not in breach of any duty, then OPI nevertheless is in breach of
its separate duty to maintain adequate insurance coverage for
Brunswick Cellulose under the Master Agreement. Id. at p. 11.
As such, Brunswick Cellulose submits that National Trust and OPI
are jointly, severally, or individually liable to Brunswick
Cellulose for any judgment entered against it on Plaintiffs'
tort claims. Id. at p. 12.
Accepting these factual allegations as true, Brunswick
Cellulose establishes several possible scenarios in which
National Trust and OPI could be liable jointly, severally,
concurrently, or in the alternative for any judgment entered
against Brunswick Cellulose on Plaintiffs' tort claims. For
example, Brunswick Cellulose suggests that a ruling in favor of

Plaintiffs would trigger not only OPI's duty to indemnify and
insure under the Master Agreement, but also National Trust's
duty to indemnify under the Policy. In such circumstances,
National Trust could be obligated to cover the full amount of
any judgment, or National Trust could be required to cover any
amount up to the Policy limits, with OPI making up for any
deficiency in the insurance coverage, pursuant to its
contractual obligations. Alternatively, Brunswick Cellulose

asserts that if National Trust owes no duty to Brunswick

A() Th\

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Cellulose under the Policy, a ruling against Brunswick Cellulose

would result in aPI being compelled to fully indemnify Brunswick
Cellulose. Thus, while perhaps OPI and National Trust's alleged

duties arise out of different contracts, those contractual
relationships, duties, and potential liabilities appear to be
related and, to a certain extent, mutually dependent.
National Trust implicitly recognizes the relatedness of the
third-party claims on at least one key factual issue: "whether
the [tort] claims against Brunswick Cellulose fall within the
scope of the Policy's additional insured coverage." See Dkt.
No. 17, p. 10.

While National Trust asserts only that this

issue is relevant to Brunswick Cellulose's claims against it,
see id., the resolution of this question directly affects the
outcome of Brunswick Cellulose's claim against OPI for failure
to maintain insurance. Although National Trust argues that "[a]
finding of no coverage is not ipso facto proof that OPI breached
its contract with Brunswick Cellulose," id. at p. 11, it is
enough that the coverage determination has at least some bearing
on 071's obligation to indemnify Brunswick Cellulose.
C.

Conclusion

Thus, National Trust fails to demonstrate that Brunswick

Cellulose fraudulently joined OPI to this action for the sole
purpose of defeating diversity jurisdiction. Indeed, this is

simply not a case where the Court can conclude, at such an early
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AO 72

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stage

in litigation, that the claims against the nondiverse

third-party defendant are "obviously fraudulent or frivolous."
See Crowe, 113 F.3d at 1542. For these reasons, National
Trust's fraudulent joinder argument fails, and this case is due
to be remanded to state court on the grounds of lack of subjectmatter jurisdiction and a procedural defect in the removal.
II.

Severability

National Trust urges the Court to sever Plaintiffs' tort
action from Brunswick Cellulose's third-party action and remand
the tort action to state court, and to sever Brunswick
Cellulose's third-party claims against OPI from those against
National Trust or dismiss the third-party claims against OPI
entirely. iJkt. No. 17, pp. 10-12. However, the Court finds
that the third-party claims are sufficiently related to each
other, as well as to the underlying tort action. Therefore,
severing these claims into separate lawsuits would be contrary
to the interests of justice and judicial efficiency. Thus,
notwithstanding National Trust's suggestion, remand is proper as
to this action in its entirety.
III.

Costs and Expenses

In its Motion to Remand, Brunswick Cellulose also requests
that the Court order National Trust to pay Brunswick Cellulose's
costs and expenses, including attorney's fees, resulting from
the removal. Dkt. No. 13-1, p. 20. Section 1447(c) states that
AO 72A
(Rex. i82)

22

"[a1n order remanding the case may require payment of just costs
and any actual expenses, including attorney fees, incurred as a
result of the removal." 28 U.S.C. § 1447(c). Nevertheless, a
court may exercise its discretion to award costs and expenses
"only where the removing party lacked an objectively reasonable
basis for seeking removal." Rae v. Perry, 392 F. App'x 753, 755
(11th Cir. 2010) (quoting Martin v. Franklin Capital Corp., 546
U.S. 132, 141 (2005)). viewing the Third-Party Complaint and the
surrounding circumstances objectively, National Trust had
adequate reason to suspect that Brunswick Cellulose might have
joined OPI to this action to preclude its removal. While
National Trust ultimately fails to prove that fraudulent joinder
did, in fact, occur, the Court finds that National Trust's
argument to this end is objectively reasonable. Thus, Brunswick
Cellulose is not entitled to recover its costs and expenses
attributable to the removal from National Trust.
CONCLUSION

Based on the foregoing, Brunswick Cellulose's Motion to
Remand (dkt. no. 13) is GRANTED in part and DENIED in part.

The

Motion is GRANTED as to the request for remand, and it is DENIED
as to the request for payment of Brunswick Cellulose's costs and
expenses resulting from the removal. Additionally, Plaintiffs'
Motion to Remand (dkt. no. 14) is GRANTED in its entirety.

23

A() 72A
2)

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The Clerk of Court is hereby DIRECTED to REMAND this case
to the Superior Court of Glynn County, Georgia, for resolution.

SO ORDERED,

this 14TH day of October, 2015.

LISA GODEEY WOOD, CHIEF JUDGE
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA

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AO 72A
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