Serrano et al v. Otis Elevator Company et al

Filing 19

ORDER & REASONS denying 7 Motion to Remand to State Court. Defendant Dacia Paz is DISMISSED as improperly joined. Signed by Judge Sarah S. Vance on 2/6/2017. (mmm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ANGIE SERRANO, ET AL.
VERSUS

CIVIL ACTION
NO. 16-15460

OTIS ELEVATOR COMPANY, ET AL.

SECTION “R” (4)

ORDER AND REASONS
Before the Court is plaintiffs Angie Serrano and Nelly Briceno’s motion
to remand this case to state court.1 For the following reasons, plaintiffs’
motion to remand is denied.

I.

BACKGROUND
On April 3, 2016, plaintiffs Angie Serrano and Nelly Briceno were

injured at the Westin New Orleans Canal Place hotel when the service
elevator in which they were riding malfunctioned and dropped multiple
floors. At the time, plaintiffs were employees of Staff Pro Workforce, LLC,
which was under contract to provide contract workers to the hotel. 2
According to plaintiffs, the drop was forceful enough that Briceno broke her

1
2

R. Doc. 7.
R. Doc. 1-1 at 2 ¶ 2.

leg and a vertebrae in her back, and Serrano was thrown to the ground where
she struck her head. 3
On August 19, 2016, plaintiffs filed suit in the Civil District Court for
the Parish of Orleans. Plaintiffs named as defendants the Otis Elevator
Company, Interstate Management Company, LLC (the entity that provided
hotel management services for the hotel), Canal Place Borrower, LLC (the
owner of the hotel, d/b/a The Westin New Orleans Canal Place), and Dacia
Paz.4 Paz was plaintiffs’ supervisor at the time of their injuries, and plaintiffs
alleged that they notified Paz of similar incidents of elevator malfunctions
before they were injured.5 Plaintiffs’ suit alleged that defendants’ negligence
was the cause of the elevator accident and their injuries. 6 On October 12,
2016, defendants Canal Place and Interstate removed the case to this Court
on the basis of diversity jurisdiction. 7
Plaintiffs now move to remand, contending that incomplete diversity
of the parties renders this Court without subject matter jurisdiction. Indeed,
it is undisputed that Serrano and Briceno, along with defendant Paz are
Louisiana citizens for jurisdictional purposes. Removing defendants Canal

3
4
5
6
7

Id. ¶ 3.
Id. at 1-2.
Id. at 3 ¶ 5.
Id. at 3-4.
R. Doc. 1.
2

Place and Interstate argue that complete diversity exists because Paz was
improperly joined and therefore her citizenship should be ignored. 8

II.

REMAND BASED ON LACKING DIVERSITY JURISDICTION
A.

Improper Joinder Standard

Plaintiffs’ remand motion is governed by the standard for improper
joinder, as set forth below.
A defendant may generally remove a civil action filed in state court if
the federal court has original jurisdiction over the action. See 28 U.S.C. §
1441(a). The removing party bears the burden of showing that federal
jurisdiction exists. See Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th
Cir. 1995). In assessing whether removal was appropriate, the Court is
guided by the principle, grounded in notions of comity and the recognition
that federal courts are courts of limited jurisdiction, that removal statutes
should be strictly construed. See, e.g., Manguno v. Prudential Prop. & Cas.
Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002); Neal v. Kawasaki Motors Corp.,
No. 95-668, 1995 WL 419901, at *4 (E.D. La. July 13, 1995). Though the
Court must remand to state court if at any time before final judgment it
appears that it lacks subject matter jurisdiction, the Court’s jurisdiction is

8

R. Doc. 9 at 1-2.
3

fixed at of the time of removal. 28 U.S.C. § 1447(c); Doddy v. Oxy USA, Inc.,
101 F.3d 448, 456 (5th Cir. 1996).
For diversity jurisdiction to exist, the amount in controversy must
exceed $75,000, and there must be complete diversity between plaintiffs and
defendants. See 28 U.S.C. § 1332(a); Owen Equip. & Erection Co. v. Kroger,
437 U.S. 365, 373 (1978). Here, the parties do not dispute that the amountin-controversy-requirement is met, but they disagree about whether the
complete diversity requirement is satisfied. Indeed, Serrano, Briceno, and
Paz have Louisiana citizenship, which would ordinarily destroy complete
diversity. See McLaughlin v. Miss. Power Co., 376 F.3d 344, 353 (5th Cir.
2004). And when a nondiverse party is properly joined as a defendant, no
defendant may remove the case under 28 U.S.C. § 1332. But a defendant may
remove by showing that the nondiverse party was joined improperly.
Smallwood v. Ill. Cent. R. Co., 352 F.3d 220, 222 (5th Cir. 2003) (Smallwood
I).
The burden of demonstrating improper joinder is a heavy one, as the
doctrine is a narrow exception to the rule of complete diversity. Id. A
defendant may establish improper joinder by showing either (1) actual fraud
in pleading jurisdictional facts, or (2) the inability of the plaintiff to establish
a cause of action against the nondiverse defendant. The test for fraudulent
4

joinder is “whether the defendant has demonstrated that there is no
possibility of recovery by the plaintiff against an in-state defendant, which
stated differently means that there is no reasonable basis for the district
court to predict that the plaintiff might be able to recover against an in-state
defendant.” Smallwood v. Illinois Cent. R. Co., 385 F.3d 568, 574 (5th Cir.
2004) (Smallwood II). The possibility must be reasonable, not merely
theoretical. Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co.,
313 F.3d 305, 312 (5th Cir. 2002).
In analyzing whether a plaintiff has demonstrated a reasonable
possibility of recovery, the district court may “‘conduct a Rule 12(b)(6)-type
analysis, looking initially at the allegations of the complaint to determine
whether the complaint states a claim under state law against the in-state
defendant.’” Menedez v. Wal-Mart Stores, Inc., 364 Fed. App’x 62, 69 (5th
Cir. 2010) (per curiam) (quoting Smallwood II, 385 F.3d at 573).
The scope of the inquiry for improper joinder, however, is even broader
than that for Rule 12(b)(6) because the Court may “pierce the pleadings” and
consider summary judgment-type evidence to determine whether the
plaintiff has a basis in fact for his or her claim. Smallwood I, 352 F.3d at 223
n.8 (citing Travis v. Irby, 326 F.3d 644, 648-49 (5th Cir. 2003)). See also
Hornbuckle v. State Farm Lloyds, 385 F.3d 538, 542 (5th Cir. 2004). In
5

conducting this inquiry, the Court must “take into account all unchallenged
factual allegations, including those alleged in the complaint, in the light most
favorable to the plaintiff.” Travis, 326 F.3d at 649. So, too, must the Court
resolve all ambiguities of state law in favor of the nonremoving party. Id.
Further, the Court must take care not to “mov[e] beyond jurisdiction and into
a resolution on the merits.” Smallwood II, 385 F.3d at 574.

III. DISCUSSION
Defendants argue that plaintiffs’ joinder of Paz was improper because,
according to defendants, Paz has tort immunity under the Louisiana
Workers’ Compensation Act (LWCA), La. Stat. Ann. § 23:1032, et seq., and
therefore there is no reasonable basis for the Court to find that plaintiffs can
recover against the in-state defendant Paz. Defendants do not contest that a
12(b)(6)-type inquiry would reveal a reasonable basis for recovery, but
instead ask the Court to “pierce” plaintiff’s pleadings and conduct a summary
inquiry to determine Paz’s tort immunity under the LWCA. Smallwood II,
385 F.3d at 573.
A.

Louisiana Workers’ Compensation Act

The LWCA provides the exclusive remedy for an employee injured by
the negligent acts of his or her co-employees or employer when those injuries
6

arise out of and in the course of employment. See La. Stat. Ann. §§ 23:1031
and 23:1032; Vallery v. Southern Baptist Hosp., 630 So. 2d 861, 863 (La.
App. 4 Cir. 1995); Chafflin v. John H. Carter Co., Inc., No. 96-2127, 1998 WL
19624, at *7 (E.D. La. Jan. 20, 1998). Therefore, the LWCA provides a
statutory defense to tort claims from employees injured on the job.
The LWCA covers direct employers and employees, but also includes
the concept of “statutory employer.” This is meant to ensure that injured
contracted employees have an effective remedy by making it more difficult
for an entity to avoid workers’ compensation liability by operating through
intermediaries. See Berthelot v. Murphy Oil, Inc., No. 09-4460, 2010 WL
103871, at *3 (discussing history of LWCA). But the “statutory employer”
concept also operates as a defense to tort actions for employers who use
contracted employees. The Act includes two types of statutory employer
defenses, the “trade, business or occupation” defense, and the “two-contract”
defense. La. Stat. Ann. § 23:1061(A)(1). Defendants rely on the “twocontract” defense here.
The “two-contract” theory creates a statutory employer relationship
between a general contractor and the employees of its subcontractors,
regardless of the general contractor’s trade or business. See Allen v. State ex
rel. Ernest N. Moral-New Orleans Exhibition Hall Auth., 842 So. 2d 373,
7

378 (La. 2003). The “two-contract” defense applies when: “(1) the principal
enters into a contract with a third party; (2) pursuant to that contract, work
must be performed; and (3) in order for the principal to fulfill its contractual
obligation to perform the work, the principal enters into a subcontract for all
or part of the work performed.” Id. With this defense, it is “irrelevant
whether the subcontractor’s work is part of the work ordinarily performed
by the principal.” Id. at 379. Thus, under the “two-contract” defense, an
employer is immune from liability for tort claims from subcontracted
employees.
B.

Summary Inquiry

“Ordinarily, if a plaintiff can survive a Rule 12(b)(6) challenge, there is
no improper joinder.” Smallwood II, 385 F.3d at 573. Even so, district
courts may “pierce the pleadings and conduct a summary inquiry” before
slamming the door on a claim of improper joinder. Id. In cases in which a
plaintiff has “stated a claim but misstated or omitted discrete facts that
would determine the propriety of joinder,” a summary inquiry might be
useful. Id. Importantly, the summary inquiry is “appropriate only to identify
the presence of discrete and undisputed facts that would preclude plaintiff’s
recovery against the in-state defendant.” Id.

8

Plaintiffs argue that the inquiry sought by defendants under the LWCA
and the “two-contract” defense would exceed the bounds set out in Smallwod
II. But Courts in this Circuit have addressed the issue of LWCA immunity—
including whether an injured plaintiff was in the course and scope of his or
her employment, and the “two-contract” argument urged here—in the
context of motions to remand for improper joinder. See Collins v. Brice Bldg.
Co., LLC, No. 12-2319, 2012 WL 6049149, at *3-5 (E.D. La. Dec. 5, 2012) 9;
Lebeau v. Marathon E.G. Production Ltd., No. 11-0841, 2011 WL 5920950,
at *6 (S.D. Tex. Nov. 28, 2011) (finding improper joinder because of LWCA
immunity and rejecting argument that inquiry exceeded scope of Smallwood
II); see also Carriere v. Sears, Roebuck and Co., 893 F.2d 98, 100-01 (5th
Cir. 1990) (affirming determination that nondiverse party was improperly
joined because party was entitled to LWCA immunity); Jernigan v. Ashland
Oil Inc., 989 F.2d 812, 816 (5th Cir. 1993) (same); Keating v. Shell Chem.
Co., 610 F.2d 328, 333 (5th Cir. 1980) (instructing district court to determine
if accident occurred while plaintiff was in course and scope of his
employment before deciding question of improper joinder).

Collins considered a motion for summary judgment together
with the motion to remand, but addressed the question of improper joinder
before addressing summary judgment.
9
9

Plaintiffs do not address these cases. Additionally, in arguing that the
inquiry sought exceeds Smallwood II, plaintiffs rely on cases that involve
immunity regimes or other defenses that have no application here. See
Cason v. Chesapeake Operating, Inc, No. 10-1443, 2011 WL 201203, at *1-4
(W.D. La. Jan 18, 2011); Catalano v. Cleggett-Lucas, No. 02-330, 2002 WL
506810, at *2-3 (E.D. La. Mar. 28, 2002). The sole case cited by plaintiffs
concerning the LWCA deals with intentional torts, which are specifically
exempt from the LWCA. See Ohler v. Mobil Oil Corp., No. 91-4192, 1992 WL
28062, at *1 (E.D. La. Feb. 5, 1992).
In Cason, the court found that the inquiry necessary to determine if a
party was entitled to Louisiana law contractor’s immunity would go “far
beyond the summary inquiry envisioned by the Fifth Circuit in Smallwood
and goes directly to the merits of the case.” 2011 WL 201203, at *4 (citations
and internal quotation marks omitted). But Cason dealt with contractor’s
immunity under Louisiana law, La. Stat. Ann. § 9:2771, instead of immunity
under the LWCA.

The statutory requirements for each immunity are

different, and the inquiry required in Cason is much more expansive than is
required here. The same is true of Catalano v. Cleggett-Lucas, cited by

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plaintiffs.10 No. 02-330, 2002 WL 506810, at *2-3 (E.D. La. Mar. 28, 2002)
(finding that affirmative defense of prescription did not bar remand because
to determine its applicability the Court must determine the date of plaintiff’s
addiction to OxyContin, which was unlikely to have clear-cut onset date). See
also Conner v. Kraemer-Shows Oilfield Servs., LLC, 876 F. Supp. 2d 750,
755 (refusing to pierce pleadings because both parties had submitted
multiple affidavits and “dueling interpretations of medical records,” and
“almost all of the material facts” were disputed).
Plaintiffs also point to the case of Ohler v. Mobil Oil Corporation to
argue that the question of LWCA tort immunity should not be determined at
this stage. In Ohler, an employee of Mobil was injured in an explosion at one
of Mobil’s refineries. Mobil removed and the plaintiff moved to remand, and
the defendants similarly argued that the nondiverse defendants were
improperly joined because they were immune from suit under the LWCA.
Ohler, No. 91-4192, 1992 WL 28062, at *1 (E.D. La. Feb. 5, 1992). The Court
found that there was a reasonable basis for liability and granted plaintiff’s

Plaintiffs also cite Cooper v. Brown & Williamson Tobacco
Corp., No. 00-2539, 2001 WL 1677049 (E.D. La. Apr. 12, 2001). But while
Cooper rejected defendants’ improper joinder argument based on an
affirmative defense, the Cooper court made clear that made its decision
largely because the first time defendants mentioned any possible affirmative
defenses was well after the case was initiated and that defendants had not
even pleaded the existence of an affirmative defense. Id. at *1-2.
11
10

remand motion. Id. at *2. But the Ohler Court relied on the fact that the
plaintiff asserted a claim of intentional tort, and claims for intentional torts
are exempt from the LWCA. Id. at *1-2. Therefore the Court could not
determine if the nondiverse defendants were improperly joined without
examining if they committed an intentional tort, which would impermissibly
go to the merits of plaintiff’s claim. Plaintiffs here allege solely negligence,
and therefore Ohler is inapposite.
An examination of the inquiry necessary here reveals that it is
appropriate under Smallwood II. To determine if Paz is entitled to immunity
under the LWCA, the Court must determine (1) if plaintiffs were injured in
the course and scope of their employment; and (2) if Paz is a statutory
employee of plaintiff’s statutory employer. These facts can be determined
without substantial evidentiary analysis or hearings. Thus, the Court finds
that determining the application of tort immunity from the LWCA does not
exceed the scope of the Smallwood inquiry, nor impermissibly enmesh the
Court in the merits of plaintiffs’ case. Smallwood II, 385 F.3d at 574, 574
n.12 (citation omitted); cf. Pitman v. Crane Co., No. 13-83, 2013 WL
1403326, at *5 (E.D. La. Apr. 5, 2013) (after “piercing the pleadings,” finding
defendant had not met burden to show improper joinder because defendant

12

could not show plaintiff had no reasonable basis for recovery without getting
into merits of claim).
1.

Course and Scope of Employment

Plaintiffs argue that their injuries occurred after they completed their
shifts, so they were no longer on duty and thus the LWCA should not apply.11
For an injury to be covered by the LWCA, the injury must both “arise out of”
and “occur in the course of” employment. Harris v. Wal-Mart Stores, Inc.,
205 F.3d 847, 848 (5th Cir. 2000). “The arising out of prong focuses on the
character or source of the risk and on the relationship of the risk to the nature
of employment,” while the “course of employment” prong examines time,
place, and employment activity. Id. (internal quotation marks omitted). A
strong showing on one prong will compensate for a weaker showing in the
other, and vice versa. Id. The Fifth Circuit has observed that Louisiana
courts liberally construe the LWCA “so as to include all services that can
reasonably be said to be within the statute not only when the injured person
seeks its protection, but when he attempts to have himself excluded from the
coverage of the act.” Id. at 849 (citation omitted).

11

R. Doc. 7-2 at 6-7.
13

According to plaintiffs’ own allegations, the injury occurred in the
hotel’s service elevator, on the hotel premises, 12 and plaintiffs’ motion to
remand states that the accident occurred shortly after they finished their
shifts.13 Further, defendant submits the affidavit of David Bilbe, the General
Manager of the hotel, who attests that when the accident occurred, plaintiffs
had not yet clocked out, nor had they turned in their assignments, a
requirement before one can finish his or her shift. 14 Additionally, Bilbe
attests that plaintiffs were still in their housekeeping uniforms when the
accident occurred.15 Plaintiffs submit no evidence in response to Bilbe’s
affidavit and point to nothing indicating Bilbe’s attestations are false, beyond
calling the affidavit “self-serving.”16
Even if the Court were to take plaintiffs’ contested allegation that they
were off-duty as true, the LWCA would still apply.

Louisiana courts

consistently hold that employees are covered by the Act when they are
injured on their employer’s premises, even if they have completed their
shifts. See, e.g., Sislo v. New Orleans Center for Creative Arts, 198 So. 2d

R. Doc. 1-1 at 1.
R. Doc. 7-2 at 6 (“Just before entering the service elevator in
question, Plaintiffs had cleaned their last rooms and completed their shift.”)
(emphasis added).
14
R. Doc. 9-1 at 2 ¶ 8.
15
Id.
16
R. Doc. 12 at 3.
14
12
13

1202, 1208 (La. App. 4 Cir. 2016) (noting that it has “long been well settled,
. . . that [the LWCA] envision[s] extension of coverage to employees from the
time they reach the employer’s premises until they depart therefrom”)
(quoting Carter v. Lanzetta, 193 So. 2d 259, 261 (La. 1966)); Mitchell v.
Brookshire Grocery Co., 653 So. 2d 202, 204 (La. App. 2 Cir. 1995) (“Even if
an employee has finished his day’s work and is in the act of leaving, he is
entitled to a reasonable period while still on the employer’s premises which
is regarded as within the course of employment.”); Bosse v. Westinghouse
Electric, Inc., 637 So. 2d 1157, 1159-60 (La. App. 4 Cir. 1994) (finding that
injuries sustained in elevator accident which occurred approximately 45
minutes before plaintiff’s shift started were covered by LWCA); see also
Harris, 205 F.3d at 851 (finding that injury to off-the-clock employee caused
by physical defect in employer’s premises covered by LWCA).
Plaintiffs cite no case stating that the course and scope of one’s
employment ends at the exact moment his or her shift ends. As the above
authority makes clear, there is no merit to plaintiff’s argument that their
injuries were not in the course and scope of their employment.
2.

Two-Contract Defense

Next, the Court must address whether Paz has tort immunity under the
LWCA pursuant to the “two-contract” defense.
15

In support, defendants

submit a Hotel Management Agreement between Patriot Mortgage
Borrower, L.L.C., and Interstate, in which Interstate agreed to operate the
hotel. 17 Patriot owned the hotel before Canal Place, and assigned its rights
and duties under the Agreement to Canal Place. 18 Defendants also submit
an Agreement for the Supply of Contract Labor between Interstate (as agent
for Canal Place) and Staff Pro Workforce. 19 Bilbe’s affidavit attests that
Interstate entered into the contract with Staff Pro in order to fulfill its
obligations to operate the hotel. 20
All of the elements of the two-contract defense are met here. Canal
Place had a contract with Interstate, and under that contract, Interstate had
to perform the work necessary to operate the hotel. In order to do so,
Interstate entered into a subcontract with Staff Pro, in which Staff Pro (and
its employees) agreed to perform part of the work. This is a clear example of
statutory employment under the two-contract defense. See Collins, 2012 WL
6049149, at *4; Groover v. Scottsdale Ins. Co., 586 F.3d 1012, 1015 (5th Cir.
2009). Plaintiffs admit in their complaint that they were employees of Staff
Pro at the time of the accident. 21 Thus, as plaintiffs make no argument and

17
18
19
20
21

R. Doc. 9-1 at 4.
Id. at 10.
Id. at 12.
Id. at 2 ¶ 4.
R. Doc. 1-1 at 2 ¶ 2.
16

submit no evidence to the contrary, there is no dispute that Interstate is the
statutory employer of plaintiffs.
It is well settled that employees of statutory employers are also
immune from tort liability as statutory co-employees. See Collins, 2012 WL
6049149, at *5 (“[C]ourts have repeatedly held that statutory co-employees
are provided tort immunity.”) (citing Dean v. Baker Hughes, Inc., No. 10385, 2010 WL 5463422, at *4 (W.D. La. Dec. 29, 2010); Calais v. Exxon
Pipeline Co., 430 So. 2d 321, 324 (La. App. 3 Cir. 1983)). Plaintiffs allege
that Ms. Paz’s employment status has not yet been established, but Bilbe’s
affidavit attests that Paz was a W-2 payroll employee of Interstate at the time
of the accident. 22 Paz’s employment status can easily be determined without
substantial evidentiary analysis.

Plaintiffs “dispute” Paz’s status as an

employee of Interstate but offer nothing whatsoever in evidence to put her
employment status in dispute.

Bilbe’s affidavit attests, based on his

knowledge as General Manager of the hotel, that Paz is an employee of
Interstate, and there is no evidence in the record indicating otherwise.
Therefore, Paz’s status as an employee of Interstate is not disputed. Because
Interstate is plaintiffs’ statutory employer, and because Paz is an employee
of Interstate, Paz is also entitled to immunity as a statutory co-employee.

22

R. Doc. 9-1 at 2 ¶ 7.
17

See, e.g., Collins, 2012 WL 6049149, at *5. Therefore, plaintiffs do not have
a reasonable basis for recovery against the nondiverse defendant Paz.
Because plaintiffs lack a reasonable basis for recovery against Paz,
defendants have met their heavy burden in establishing that Paz was
improperly joined. Accordingly, diversity jurisdiction exists, and plaintiffs’
motion to remand must be denied.

IV.

CONCLUSION
For the foregoing reasons, plaintiffs’ motion to remand is DENIED.

Defendant Dacia Paz is DISMISSED as improperly joined.

6th
New Orleans, Louisiana, this _____ day of February, 2017.

_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

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