Kritsch et al v. BP Pipelines of North America, Inc. et al
OPINION AND ORDER GRANTING 28 Motion to Remand, and this case is REMANDED to the Lake County Superior Court. Signed by Senior Judge James T Moody on 2/14/2017. (cc: Lake County Superior Court a certified copy of the order and docket sheet) (jss)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
DANIEL KRITSCH, et al.,
BP PIPELINES OF NORTH AMERICA, INC., )
No: 2:16 CV 477
OPINION and ORDER
Plaintiffs, condominium owners in Munster, Indiana, originally filed this lawsuit
in Lake County Superior Court in the State of Indiana against BP Pipelines of North
America, Inc., and a variety of other affiliated corporate entities (“the BP defendants”),
their homeowners’ association (“HOA”) and its agent, and their property management
company and its agent, claiming that the defendants were liable for damage caused by
the rupture of an underground pipeline near their properties. (DE # 3.) Plaintiffs are all
citizens of the State of Indiana, as are some of the defendants, specifically the HOA and
property management company and their respective agents (“the Indiana defendants”).
All of the BP defendants are citizens of other states, except one, BP Corporation North
America Inc., which is an Indiana citizen.
The BP defendants removed the action to this federal court pursuant to
28 U.S.C. § 1441(a) stating that jurisdiction in this court was appropriate given the
parties’ diversity of citizenship and the amount in controversy, as provided by
28 U.S.C. § 1332(a). (DE # 1.) Plaintiff has now moved to remand the case back to state
court because this case lacks complete diversity of citizenship; the amount in
controversy is not disputed. (DE # 28.) The motion is fully briefed and ripe for ruling.
In order for subject matter jurisdiction to be founded on diversity of citizenship,
there generally must be complete diversity of citizenship — i.e., no plaintiff can be a
citizen of the same state as any defendant. LM Ins. Corp. v. Spaulding Enters. Inc., 533
F.3d 542, 546 n. 1 (7th Cir. 2008) (citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.
Ed. 435 (1806)). Further, for removal based on Section 1332(a) to be proper, diversity of
citizenship must have existed at the time of removal. Harmon v. OKI Sys., 115 F.3d 477,
480 (7th Cir. 1997).
A defendant who seeks to remove an action to federal court has the burden of
establishing that the complete diversity requirement was met. Meridian Sec. Ins. Co. v.
Sadowski, 441 F.3d 536, 540 (7th Cir. 2006); Meyerson v. Showboat Marina Casino P’ship, 312
F.3d 318, 321 (7th Cir. 2002). Thus, when a party opposing federal jurisdiction
challenges the allegations of jurisdictional facts, the party seeking the federal forum
must prove those facts by a preponderance of the evidence. Meridian, 441 F.3d at 543.
District courts are to “interpret the removal statute narrowly,” and any doubts
regarding jurisdiction should be resolved in favor of remand to state court. Doe v. AlliedSignal, Inc., 985 F.2d 908, 911 (7th Cir. 1993).
Plaintiffs argue that this case involves both plaintiffs and defendants that are
citizens of the State of Indiana, destroying diversity of citizenship and rendering
improper the BP defendants’ attempt to remove this case to federal court. The BP
defendants do not dispute that Indiana citizens were once defendants in this case, but
argue that virtually all of the Indiana citizens (specifically, the HOA, property
management company, and their respective agents) settled with plaintiffs during state
court proceedings, leaving only citizens of other states as defendants.1
The record demonstrates that plaintiffs and the Indiana defendants entered into
an “Agreement in Principle to Settle” during mediation, which sets out a series of terms
and conditions subsequent that must occur before settlement is reached. (DE # 30-5.)
The document states: “This is not a final settlement; the settlement will be final after
completion of all of the above.” (Id. at 2.) Further, the record contains the statement of
the mediator in this case, who indicates that the conditions as stated in the “Agreement
in Principle to Settle” have not been accomplished and that the current status of the case
is that it “remains active.” (DE # 31-1 at 2.)
The BP defendants attempt to persuade the court that the Indiana defendants are
merely nominal at this point, by citing a number of non-binding decisions, but those
cases involve the undisputed existence of a “settlement agreement.” See, e.g., Comer v.
The exception is BP of North America Inc., whose participation in this suit is
contested, but the matter is not dispositive with regard to the present motion.
Schmitt, No. 2:15-CV-2599, 2015 WL 5954589, at *3 (S.D. Ohio Oct. 14, 2015) (defendants
were no longer real parties in interest due to settlement agreement, even though
agreement contained contingencies which had not yet occurred); Midwestern Indem. Co.
v. Brooks, 779 F.3d 540, 543 (8th Cir. 2015) (defendant was nominal for removal purposes
when parties had entered into “settlement agreement”); Pulse Eng’g, Inc. v. Fed. Ins. Co.,
No. 1:06-CV-1237-LJM-VSS, 2006 WL 6557899, at *3 (S.D. Ind. Dec. 5, 2006) (same).
Even if these cases were binding, they simply do not apply here because the BP
defendants (who have the burden of proof) have presented insufficient evidence
indicating that the parties in this case actually entered into a settlement agreement.
Rather, in this case, the parties took a first step towards resolution by creating an
“Agreement in Principle to Settle” – an agreement to agree later, if certain conditions
are satisfied. The BP defendants argue that Indiana law, which presumably governs the
parties’ agreements, requires only “reasonable certainty” in a contract’s terms and
conditions, Conwell v. Gray Loon Outdoor Mkting Gp., Inc., 906 N.E.2d 805, 813 (Ind.
2009), but in this case there is no reasonable certainty that the parties intended to enter
into a settlement agreement. The document in question plainly states: “This is not a
final settlement.” (DE # 30-5 at 2.) The parties’ intent could not be clearer. The BP
defendants cite no authority supporting the argument that an agreement in principle to
settle the case later should be construed as a settlement agreement rendering a
defendant nominal for removal purposes, and this court declines to be the first court to
Because the court finds that the Indiana defendants are presently parties in this
case, a fact that in and of itself destroys diversity of citizenship, the court need not
address the parties’ arguments regarding whether BP of North America Inc. (another
Indiana citizen) is a proper defendant in this case; whether it is or not, complete
diversity does not exist and this case must be remanded.
For the reasons set forth above, plaintiffs’ motion to remand (DE # 28) is
GRANTED, and this case is REMANDED to the Lake County Superior Court.
Date: February 14, 2017
s/James T. Moody________________
JUDGE JAMES T. MOODY
UNITED STATES DISTRICT
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