Steele v. Menards Home Improvement Store et al

Filing 14

OPINION AND ORDER taking 7 Objection/Motion to Remand under advisement; granting plaintiff to and including 6/24/2011 to submit an affidavit in support of the Motion to Remand; granting defendants to and including 7/11/2011 to respond to plaintiff's submission; VACATING 9 Scheduling Order and STAYING this action pending resolution of the jurisdictional issue. Signed by Judge Rudy Lozano on 5/27/11. (ksc)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
SHAUN L. STEELE,
Plaintiff,
vs.
MENARDS HOME IMPROVEMENT
STORE and GLADYS FIELDS,
Defendants.

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NO. 3:11-CV-152

OPINION AND ORDER
This matter is before the Court on the Objection to Transfer
and Request to Remand Back to the Circuit Court of Elkhart (DE# 7),
filed by Plaintiff, Shaun L. Steele, a pro se prisoner, on May 5,
2011. For the reasons set forth below, the Court: (1) TAKES UNDER
ADVISEMENT the motion to remand (DE# 7); (2)GRANTS the plaintiff to
and including June 24, 2011, to submit an affidavit in support of
the motion to remand as outlined herein; (3)GRANTS the defendants
to and including July 11, 2011, to respond to the plaintiff’s
submission; (4) VACATES the scheduling order (DE# 9); and (5) STAYS
this action pending resolution of the jurisdictional issue.

BACKGROUND
On March 23, 2011, Shaun L. Steele, a pro se prisoner, filed
this action in Elkhart County Circuit Court against Menards Home
Improvement Store (“Menards”) and one of its employees, Gladys

Fields (“Fields”). (DE# 1). The complaint arose from events that
began in 2007, when Steele allegedly passed a bad check for $57.74
at a Menards store in Elkhart, Indiana. Steele v. Indiana, No.
20A05-0908-CR-469, 2010 WL 286728, at *1 (Ind. App. Ct. Jan. 26,
2010). Menards referred the matter to the county prosecutor, and
Steele was arrested. Id. In the course of the criminal proceedings
Steele demanded a jury trial, but the trial court denied his
request as untimely. Id. Steele was convicted after a bench trial
and sentenced to one year in prison, to be served consecutively to
a sentence he was serving in another case. Id. On appeal, the
Indiana Court of Appeals determined that the trial court erred in
denying

Steele’s

request

for

a

jury

trial

and

reversed

his

conviction. Id. at *3-4. On remand the charges were dismissed but,
by that time, Steele had already served 195 days in prison. (DE 1
at 3; DE 2-1 at 13.)
In October 2010, Steele filed suit in federal court against
the City of Elkhart and various municipal defendants alleging false
imprisonment and related claims. Steele v. City of Elkhart, et al.,
No. 3:10-CV-426-PPS (N.D. Ind. filed Oct. 13, 2010). The case was
dismissed in March 2011 for failure to state a claim against any of
the named defendants. Id.,DE# 15.
Shortly after the dismissal, Steele filed this lawsuit in
state court against Menards and Fields. (DE# 1). In his complaint,
he alleges that he never wrote a check at Menards, and that instead

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some unknown individual stole one of his checks and used it to buy
goods at Menards. (Id. at 2). He claims that Menards and Fields, a
manager at the store, were negligent in failing to adopt and follow
proper procedures for verifying whether he had written the check
before turning the matter over to the prosecutor. (Id. at 2-3). He
alleges state law claims for malicious prosecution, negligence and
defamation, as well as a claim based on his “right to be free from
false arrest under the Fourth, Fifth and Fourteenth Amendments of
the United States Constitution[.]” (Id. at 3).
Menards timely removed the case, asserting that the Court has
both federal question jurisdiction, 28 U.S.C. § 1331, and diversity
jurisdiction, 28 U.S.C. § 1332. (DE# 2). Steele objects and asks
that the case be remanded to state court. (DE# 7).

DISCUSSION
When a plaintiff files suit in state court but could have
invoked

the

original

jurisdiction

of

the

federal

court,

the

defendant may remove the action to federal court. 28 U.S.C.
§ 1441(a); Schur v. L.A. Weight Loss Centers, Inc., 577 F.3d 752,
758 (7th Cir. 2009). The party seeking removal bears the burden of
establishing federal jurisdiction, and the Court must interpret the
removal statute narrowly, resolving any doubt in favor of the
plaintiff’s choice of forum in state court. Schur, 577 F.3d at 758.

3

Jurisdiction is determined from the plaintiff’s filings made at the
time of removal. In re Burlington N. Santa Fe Ry Co., 606 F.3d 379,
380-81 (7th Cir. 2010).
Turning first to federal question jurisdiction, Steele’s
complaint purports to raise a false arrest claim against the
defendants under the Fourth Amendment. (See DE# 1 at 3). Federal
courts

may

exercise

federal

question

jurisdiction

when

a

plaintiff’s right to relief is created by or depends on a federal
statute or constitutional provision. Williams v. Aztar Ind. Gaming
Corp., 351 F.3d 294, 298 (7th Cir. 2003). However, if the federal
claim

asserted

is

frivolous,

it

is

insufficient

to

create

jurisdiction in federal court. In re African-Am. Slave Descendants
Litig., 471 F.3d 754, 757 (7th Cir. 2006); Gammon v. GC Servs. Ltd.
P’ship, 27 F.3d 1254, 1256 (7th Cir. 1994).
Here, Steele’s Fourth Amendment claim is patently frivolous
because the defendants, a private store and its employee, are not
state actors that can be sued for constitutional violations. See
Blum v. Yaretsky, 457 U.S. 991, 1004 (1982); Savory v. Lyons, 469
F.3d

667,

670

(7th

Cir.

2006).

Although

in

some

unique

circumstances a private actor may be deemed to have acted under
color of state law if he conspired with a state actor, Dennis v.
Spark, 449 U.S. 24, 28 (1980), Steele does not plausibly allege any
such conspiracy here. In fact, his complaint can be read to allege
that Fields was not forthcoming with the prosecutor about the

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investigation she conducted and that she did so in order to secure
a

conviction.

(See

DE#

1

at

2-3;

see

also

DE#

8

at

2-3).

Accordingly, the complaint fails to state a non-frivolous federal
constitutional claim, and so federal question jurisdiction is
lacking.
The defendants also assert that diversity jurisdiction exists,
but Steele disagrees. (See DE 2, 7, 11.) The parties’ dispute
centers on two issues. First, they dispute whether Steele was a
citizen of Indiana or Michigan prior to his incarceration. Second,
they dispute whether Fields, an Indiana citizen, is a proper party
to this suit, or whether she was fraudulently joined to defeat
diversity. (See id.) If Steele is a citizen of Indiana and Fields
is a proper party to this case, complete diversity does not exist.
The Court turns first to the issue of whether Fields is a
proper party to this lawsuit. A plaintiff is permitted to choose
his own forum, but under the “fraudulent joinder” doctrine he may
not join a non-diverse defendant simply to destroy diversity.
Schur, 577 F.3d at 763. If joinder of a party is fraudulent,1 a
court

considering

removal

is

permitted

to

“disregard,

for

jurisdictional purposes, the citizenship of nondiverse defendants,
assume

jurisdiction

over

the

case,

1

dismiss

the

nondiverse

The Seventh Circuit has noted that the doctrine is somewhat of a
misnomer, as it does not require proof of fraudulent intent; in most instances
the doctrine applies when the plaintiff has brought a claim against a nondiverse
defendant that “simply has no chance of success, whatever the plaintiff’s
motives.” Schur, 577 F.3d at 763 n.9 (citation omitted).

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defendants,

and

thereby

retain

jurisdiction.”

Id.

(citation

omitted).
Fraudulent joinder is difficult to establish, however, and the
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.” Id. at 764. Put
differently,

the

Court

must

determine

whether

there

is

“any

reasonable possibility” that the plaintiff could prevail against
the non-diverse defendant on a state law claim contained in the
complaint. Id. The defendant faces a “heavy burden” in showing that
the plaintiff has no reasonable possibility of success, and the
standard is even more favorable to the plaintiff than the standard
used for deciding a motion to dismiss under Rule 12(b)(6). Id.
Here,

giving

the

complaint

liberal

construction,2

Steele

asserts that Fields failed to take adequate steps to determine
whether he wrote the check in question, including making minimal
efforts to contact him and failing or refusing to review the video
surveillance which would have shown it was not him writing the
check. He asserts that Fields improperly turned the matter over to
state prosecutors, and that she was not only responsible for the
initiation of false charges, but that she committed perjury at his

2

To determine whether diversity jurisdiction exists the Court must look
to the original complaint, as that was the operative pleading at the time the
defendants removed the case. Burlington N., 606 F.3d at 380. The Court notes,
however, that the substance of the claims against Fields is the same in the
original and amended complaints.

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trial. (DE 1 at 3.) Based on these facts, Steele alleges multiple
state law claims against Fields, including claims for malicious
prosecution,

negligence,

intentional

infliction

of

emotional

distress, defamation, and state constitutional violations. If any
one of these claims has “any reasonable possibility of success,”
Fields cannot be considered a fraudulent party. See Schur, 577 F.3d
at 763. An examination of the very first claim indicates that
Steele has at least some reasonable probability of success against
Fields.
Under Indiana law, “[t]he essence of a malicious prosecution
action rests on the notion that the plaintiff has been improperly
subjected to legal process.” Glass v. Trump Indiana, Inc., 802
N.E.2d 461, 466 (Ind. Ct. App. 2004). To prevail on such a claim,
the plaintiff must show that: (1) the defendant instituted or
caused to be instituted an action against the plaintiff; (2) in so
doing, the defendant acted with malice; (3) the defendant had no
probable cause to institute the action; and (4) the original action
was terminated in the plaintiff's favor. Id. “Probable cause to
commence criminal proceedings” exists when a reasonable inquiry
would induce a reasonably intelligent and prudent person to believe
that the accused committed the crime charged. Id. at 466-67. Malice
may be inferred from a lack of probable cause, the failure to make
a reasonable inquiry, or a showing of personal animosity. Id. at
467. Here, Steele asserts that Fields wrongfully initiated legal

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proceedings against him, at best by failing to make a reasonable
inquiry and at worst by manufacturing the charges against him,
hiding evidence, and perjuring herself at trial. He further alleges
that the charges were ultimately resolved in his favor. Based on
the facts alleged, the Court cannot conclude that Steele has no
reasonable possibility of success against Fields.
In its response to the motion to remand, the defendants do not
independently

analyze

the

viability

of

Steele’s

malicious

prosecution claim or any of his other state law claims. Instead
they make a general argument that Steele cannot state a claim
against Fields in her individual capacity because she was acting
within the scope her employment during these events. (DE# 12 at 24). In support the defendants cite to Hurlow v. Managing Partners,
Inc., 755 N.E.2d 1158, 1161 (Ind. Ct. App. 2001), a case addressing
respondeat superior liability under Indiana law. This argument
misses the mark. Whether an employer is held vicariously liable for
an employee’s conduct does not affect the employee’s own tort
liability. See Gomez v. Adams, 462 N.E.2d 212, 225 (Ind. Ct. App.
1984) (“Where the master’s liability for the act of his servant is
based

solely

upon

respondeat

superior

.

.

.

a

suit

may

be

maintained against both and their liability is regarded as both
joint and several. . . . ); see also Schwartz v. State Farm Mut.
Auto. Ins. Co., 174 F.3d 875, 879 n.2 (7th Cir. 1999) (under
Indiana law “a duty on the part of the individual tortfeasor is a

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pre-requisite to respondeat superior . . . the agent breached a
duty he personally owed the plaintiff and, because it occurred
within the scope of employment, his employer was liable as well
through respondeat superior.” ) (emphasis added). If Fields was
acting outside the scope of her employment, it would mean that
Steele could not hold Menards vicariously liable for her actions,
but it would not impact Fields’ liability for her own actions.
Nothing in Hurlow supports a different outcome, as that case simply
addresses the general parameters for imposing respondeat superior
liability on an employer under Indiana law. See Hurlow, 755 N.E.2d
at 1161-62.
In sum, the defendants bear the burden of establishing that
Fields was fraudulently joined as a defendant, and based on their
submission they have failed to carry that burden. Therefore, the
Court cannot disregard Fields’ citizenship in determining whether
there is complete diversity between the parties.
That leaves the matter of Steele’s citizenship. If he is in
fact a citizen of Indiana, then the parties are not diverse. There
is no dispute that Steele is presently incarcerated in an Indiana
prison serving a sentence for offenses unrelated to this case.
Nevertheless, “incarceration in a state does not make one a citizen
of a state.” Bontkowski v. Smith, 305 F.3d 757, 763 (7th Cir.
2002). Rather, “[a] prisoner is a citizen of the state of which he
was a citizen before he was sent to prison unless he plans to live

9

elsewhere when he gets out, in which event it should be that
state.” Id. (internal quote marks and citations omitted). The
defendants assert that Steele was a citizen of Michigan prior to
his incarceration, relying on documents from the 2007 criminal
case, including a warrant that was issued for Steele’s arrest and
the original charging document, both of which specify a Michigan
address. (See DE# 2-1 at 8-9).
However, Steele asserts that he has not actually lived in
Michigan for several years. (DE# 7 at 1). He asserts that he had a
Michigan address in 2007, and that at some point he unsuccessfully
sought to transfer his parole there, but that he has been an
Indiana citizen since at least 2009, and perhaps earlier. (Id. at
2.)

He

attaches

a

document

from

the

Indiana

Department

of

Correction indicating that in 2009 he was approved for parole (for
a different offense) at his aunt’s home in Elkhart, Indiana. (Id.
at

5).

Notably,

the

state

criminal

docket

submitted

by

the

defendants lists the same Elkhart address for Steele as the one on
the letter from the IDOC. (See DE# 2-1 at 11). Steele also submits
a piece of mail he received at the Elkhart address in March 2010,
and he further claims that he was collecting public assistance in
Indiana at that address in 2011. (DE# 7 at 6).
Steele’s assertions and documentation raise a significant
issue as to whether he was in fact a citizen of Indiana prior to
his most recent incarceration. Although the defendants’ information

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about Steele’s citizenship appears to be outdated, Steele has not
submitted his assertions in the form of a sworn affidavit, making
it difficult for the Court to resolve the dispute. Given Steele’s
pro se status (as well as the Court’s own obligation to ensure that
subject matter jurisdiction exists), the Court will grant him an
opportunity

to

submit

an

affidavit

attesting

to

his

Indiana

citizenship. He should also provide the date when he became a
citizen of Indiana and the date when he was incarcerated on his
current conviction. The defendants will be given an opportunity to
respond to Steele’s submission. Until these additional filings are
made, the motion to remand will be taken under advisement and all
further proceedings will be stayed.
As a final matter, because further proceedings are required to
determine whether this action will proceed in state or federal
court, the schedule previously set by the magistrate judge (DE# 9)
must be vacated.

CONCLUSION
For the reasons set forth above, the Court:
(1) TAKES the plaintiff’s motion to remand (DE# 7) under
advisement;
(2) GRANTS the plaintiff to and including June 24, 2011, to
submit an affidavit in support of the motion to remand as outlined
herein;

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(3) GRANTS the defendants to and including July 11, 2011, to
respond to the plaintiff’s submission;
(4) VACATES the scheduling order (DE# 9); and
(5) STAYS this action pending resolution of the jurisdictional
issue.

DATED:

May 27, 2011

/s/RUDY LOZANO, Judge
United States District Court

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