Ballard v. Wilderness Resort Hotel & Golf Resort et al
Filing
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MEMORANDUM Opinion and Order signed by the Honorable Edmond E. Chang. For the reasons stated in the Opinion, Glacier Canyon is not fraudulently joined and removal was thus improper for failing to satisfy complete diversity of citizenship. Plaintiff Ballards motion to remand [R. 40] is granted. The case is remanded to the Circuit Court of Cook County. The pending motions to dismiss [R. 24, R. 27, R. 30] are terminated without prejudice in light of the remand. Status hearing of 08/12/2014 is vacated. Civil case terminated. Mailed notice(slb, )
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
LYNN BALLARD, as Special Administrator )
of the Estate of PATRICK PAGE, Deceased, )
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Plaintiff,
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v.
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Wilderness Resort Hotel & Golf Resort;
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Wilderness Hotel & Resort, Inc.; Wilderness )
Resort Construction, LLC; Wilderness
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Hotel & Golf Resort, Inc.; Wilderness
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Development Corporation; Wilderness
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Territory; Wilderness Tennessee
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Entertainment, LLC; Wilderness
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Tennessee Marks, LLC; Wilderness
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Tennessee Property Management, LLC;
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Wilderness Tennessee Rental Management, )
LLC; Wilderness Ventures Holding
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Company, LLC; Wilderness Ventures
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Management Services, LLC; Wilderness
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Tennessee Ventures No. 1, LLC; Wilderness )
Tennessee Ventures No. 2, LLC; Wilderness )
Tennessee Ventures No. 3, LLC; Wilderness )
Tennessee Ventures No. 4, LLC; Wilderness )
Tennessee Ventures No. 5, LLC; and
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Glacier Canyon Lodge, LLC,
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Defendants.
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No. 14 C 00841
Judge Edmond E. Chang
ORDER
Plaintiff Lynn Ballard, administrator of her husband Patrick Page’s estate,
originally brought suit in the Circuit Court of Cook County, Illinois, after her
husband died in a swimming pool accident.1 R. 23-1, Defs.’ Exh. A, Compl. Ballard
1Citation
to the docket is “R.” followed by the docket entry.
alleges that Defendants—multiple corporations and limited liability companies with
potential ties to the pool—negligently operated the pool, leading to the accident.
Defendants removed the case from state court to this Court, but Ballard has now
requested that the Court remand the case back to state court. R. 23, Am. Notice of
Removal; R. 40, Pl.’s Req. Remand. For the reasons discussed below, Ballard’s
request for remand [R. 40] is granted.
I. Background
On December 21, 2011, Ballard’s husband drowned in a swimming pool
located on the premises of Defendant Wilderness Hotel & Resort, Inc. (Wilderness
Hotel). See Compl. ¶¶ 3-4, 14; see also R. 23-4, Defs.’ Exh. D, Lucke Aff. ¶ 6. Ballard
and her husband were both guests at the hotel where the pool was located. Compl.
¶ 12. On December 20, 2013, Ballard, as the administrator of her husband’s estate,
filed this lawsuit in the Circuit Court of Cook County against all eighteen of the
Defendants, alleging that they collectively owned and operated the hotel and the
pool. See id. ¶¶ 3-4. Ballard alleges that Defendants’ negligence caused her
husband’s death, including through the lack of precautionary measures, the lack of
proper lifeguard training and supervision, and the failure to properly maintain the
pool. Id. ¶ 17.
Defendants then removed the case to this Court, asserting diversity of
citizenship as the basis of federal subject matter jurisdiction. R. 2, Notice of
Removal ¶ 5. After the Court issued a jurisdictional inquiry, Defendants filed an
amended notice of removal, and it then became clear that one Defendant, Glacier
2
Canyon Lodge, LLC, is a citizen of Illinois. Am. Notice of Removal ¶ 17.2 This was a
problem because Ballard is also an Illinois citizen. See id. ¶¶ 1, 16. Normally, this
would destroy the complete diversity that is required to support removal to federal
court. Defendants, however, argue that this Court still has subject matter
jurisdiction because Ballard fraudulently joined Glacier Canyon. Id. ¶ 18. In
response, Ballard has moved to remand the case back to state court, arguing that
Glacier Canyon is properly joined. Pl.’s Req. Remand at 1-2.
II. Legal Standard
Ordinarily, the presence of a non-diverse defendant, like Glacier Canyon,
would render removal improper. But where defendants can show that the “joinder”
of the non-diverse defendant was “fraudulent”—that is, when “fraudulent joinder”
applies—then federal courts will disregard the non-diverse defendant for purposes
of determining whether diversity jurisdiction exists. Poulos v. Naas Foods, Inc., 959
F.2d 69, 73 (7th Cir. 1992).3 Defendants must clear a high hurdle to prove
fraudulent joinder: “Fraudulent joinder is difficult to establish—a defendant must
demonstrate that, after resolving all issues of fact and law in favor of the plaintiff,
the plaintiff cannot establish a cause of action against the in-state defendant.”
2Glacier
Canyon, a limited liability company, is considered an Illinois citizen because
four of its members are citizens of Illinois. See Wise v. Wachovia Sec., LLC, 450 F.3d 265,
267 (7th Cir. 2006) (“The citizenship for diversity purposes of a limited liability
company . . . is the citizenship of each of its members.”).
3As the Seventh Circuit explained, “fraudulent” is a term of art in this context, and
not intended to pejoratively characterize the plaintiff’s state of mind in the usual sense of
the term “fraudulent.” Poulos, 959 F.2d at 73. Indeed, “joinder” too is not necessarily precise
because the doctrine applies whether or not the non-diverse defendant was later “joined”
after the initial filing of the complaint, or instead was named in the initial complaint.
3
Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 764 (7th Cir. 2009) (internal
quotation marks and citation omitted). Stated differently, the Court must ask
whether there is “any reasonable possibility that the plaintiff could prevail against
the non-diverse defendant.” Id. (internal quotation marks and citation omitted).
“The party seeking removal has the burden of establishing federal jurisdiction, and
federal courts should interpret the removal statute narrowly, resolving any doubt in
favor of the plaintiff’s choice of forum in state court.” Id. at 758.
III. Analysis
In support of their fraudulent-joinder argument, Defendants filed an affidavit
from Thomas Lucke,4 a member of many of the Defendant LLCs and also the Chief
Operating Officer of Wilderness Hotel & Resort, Inc. See Am. Notice of Removal
¶¶ 7, 9-15, 17; Lucke Aff. ¶ 2. The affidavit states that “no party . . . other than
WILDERNESS HOTEL & RESORT, INC. owned or managed the pool where
Patrick Page allegedly drowned” and also that “no party . . . other than
WILDERNESS HOTEL & RESORT, INC. managed or employed the lifeguards for
4This
Court may consider the Lucke affidavit when evaluating Defendants’
fraudulent-joinder argument. See Faucett v. Ingersoll-Rand Mining & Mach. Co., 960 F.2d
653, 655 (7th Cir. 1992) (considering the defendant’s affidavit when evaluating whether
there was fraudulent joinder). Ballard argues, however, that the Court should not consider
Lucke’s affidavit because it is not dated. Pl.’s Req. Remand at 3-4. But 28 U.S.C. § 1746
only requires that affidavits “substantially” conform with its requirements, see EEOC v.
World’s Finest Chocolate, Inc., 701 F. Supp. 637, 639 (N.D. Ill. 1988), and an additional
affidavit from one of Defendants’ attorneys cures the date problem by stating that Lucke
signed his affidavit sometime between February 19 and February 21, 2014, see R. 44-4,
Defs.’ Exh. D, Clyder Aff. ¶¶ 2-3. In this case, there does not seem to be any particular
time-sensitive issue that makes the day Lucke signed the affidavit particularly meaningful.
Furthermore “decisions on the merits are not to be avoided on the basis of mere
technicalities.” Schiavone v. Fortune, 477 U.S. 21, 27 (1986) (internal quotation marks and
citation omitted); cf. also Pfeil v. Rogers, 757 F.2d 850, 859 (7th Cir. 1985).
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the pool where Patrick Page allegedly drowned.” Lucke Aff. ¶¶ 7, 9. Defendants
argue that, because this is a premises-liability case, this affidavit forecloses any
liability against Glacier Canyon, the key Defendant that destroys complete
diversity. Am. Notice of Removal ¶¶ 21-25. In their view, because Glacier Canyon
did not “own, manage or control” the pool where the accident occurred or “employ or
manage” the pool’s lifeguards, it owed no duty to Ballard and her husband. Id.
¶¶ 21-23; R. 44, Defs.’ Reply Br. at 3.
But the success of Defendants’ fraudulent-joinder argument depends on
whether Defendants have adequately shown that Glacier Canyon and Wilderness
Hotel are two entirely separate entities and, more importantly, two entities without
any overlapping responsibilities. Here, the record demonstrates that there is some
overlap between these two entities. For one, there is evidence that they operate
common entertainment and recreation areas. Resort guests at any one of
Defendants’ locations, for example, have access to facilities common to the multiple
Defendants. See R. 40-2 to -5, Pls.’ Exhs. B-E (attaching screen shots of Defendants’
websites); Compl. ¶ 5 (alleging that all Defendants’ guests have “access [to] the
hotel and resort property, including the various waterparks at the Wilderness
Resort”). Because of Defendants’ overlapping common areas, there is at least a
reasonable possibility—and any reasonable possibility is all that it takes—that
discovery could reveal that Glacier Canyon was involved in operating the pool
where Ballard’s husband died. For instance, discovery could reveal a verbal, if not
more formal, agreement between Glacier Canyon and Wilderness Hotel about how
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the parties would share the pool and other common areas, leaving open the
possibility that multiple parties might have some responsibility for the pool.
Remember, this case is merely at the pleading stage, with no chance for Ballard to
take discovery in order to test Lucke’s affidavit and to explore these factual
theories.
In addition to these overlapping common areas, the grounds for negligence
alleged in Ballard’s complaint also demonstrate that the Lucke affidavit does not
foreclose the reasonable possibility that Glacier Canyon may still be liable. It is true
that the pool itself was on Defendant Wilderness Hotel’s property, see Compl. ¶¶ 34; Lucke Aff. ¶ 6, but Ballard importantly alleges negligence that goes beyond the
mere location or control of the pool.5 For example, the complaint alleges that
Defendants “[f]ailed to implement appropriate policies and procedures” and also
“[f]ailed to provide adequate and/or appropriate supervision to patrons utilizing the
waterparks.” Compl. ¶ 17(c), (f). The complaint also alleges that Defendants not
only failed to supervise their lifeguards—the focus of the Lucke affidavit—but also
failed to supervise other members of their staff, including “resort security staff.” Id.
5Ballard
also argues that the common-defense doctrine defeats Defendants’
fraudulent-joinder argument. See Pl.’s Req. Remand at 9-10. Although the Seventh Circuit
has recognized the doctrine, see Walton v. Bayer Corp., 643 F.3d 994, 1002 (7th Cir. 2011), it
only applies in circumstances where “the showing which forecloses [the plaintiffs’] claim
against the non-diverse defendants necessarily and equally compels foreclosure of all their
claims against all the diverse defendants,” Tile Unlimited, Inc. v. Blanke Corp., 788 F.
Supp. 2d 734, 741 (N.D. Ill. 2011) (alteration and emphasis in original) (quoting Boone v.
Citigroup, Inc., 416 F.3d 382, 391 (5th Cir. 2005)). Because Defendants’ grounds for
fraudulent-joinder do not apply to Wilderness Hotel itself, the common-defense doctrine
does not apply here.
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¶ 17(a)-(b). Finally, the complaint alleges that Defendants failed to timely and
appropriately respond to Ballard’s husband’s condition. Id. ¶ 17(h). Thus, although
the affidavit states that Glacier Canyon does not directly employ the lifeguards or
own the pool, it does not foreclose the possibility that Glacier Canyon may be liable
under any of these other negligence theories.
Finally, at this stage of the litigation, it is difficult to rule out any reasonable
possibility that Glacier Canyon may be liable because the parties likely do not know
yet why or how Ballard’s husband drowned. Additional discovery is therefore
needed to determine the precise cause of the drowning and to rule out that Glacier
Canyon was responsible. Although fraudulent joinder may be demonstrable when
there is a precise question of law for the Court to answer, it is much more difficult
to establish when, as in this case, there are many questions of fact that have yet to
be explored or answered through discovery. Here, given the substantial overlap in
Defendants’ common areas and the unanswered questions about what led to
Ballard’s husband’s drowning, Defendants have not met their burden of showing
that there is no reasonable possibility of finding Glacier Canyon liable. Instead, the
reasonable possibility remains that Ballard can still recover against Glacier
Canyon.
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IV. Conclusion
For the reasons stated above, Glacier Canyon is not fraudulently joined and
removal was improper. Ballard’s motion to remand [R. 40] is therefore granted, and
the pending motions to dismiss [R. 24, R. 27, R. 30] are terminated without
prejudice in light of the remand.
ENTERED:
s/Edmond E. Chang
Honorable Edmond E. Chang
United States District Judge
DATE: August 1, 2014
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