Henryv. O'Charleys Inc et al
Filing
23
MEMORANDUM RULING re 4 MOTION to Remand filed by Carol Henry and 12 MOTION for Leave to File Amended Notice of Removal with opposition filed by O'Charleys Inc of Tennessee and O'Charleys Service Co. ORDER DENYING [4 ] MOTION to Remand filed by Carol Henry, GRANTING 12 MOTION for Leave to File Amended Notice of Removal with opposition filed by O'Charleys Inc of Tennessee and O'Charleys Service Co. Signed by Magistrate Judge Kathleen Kay on 01/30/12. (crt,Yocum, M)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAKE CHARLES DIVISION
CAROL HENRY, INDIVIDUALLY
AND D/B/A THE PERFECT GIFT
:
DOCKET NO. 11-CV-1330
VS.
:
JUDGE MINALDI
O’CHARLEYS INC., ET AL
:
MAGISTRATE JUDGE KAY
MEMORANDUM RULING
Before the court is a motion to dismiss filed by defendant, Jared Heath (doc. 3), a motion
to remand filed by plaintiff Carol Henry (doc. 4), and a motion to file an amended notice of
removal filed by defendants, O’Charley’s Inc. of Tennessee and O’Charley’s Service Company,
Inc. (doc. 12). For the reasons that follow, the court recommends in a separate Report and
Recommendation that the motion to dismiss be GRANTED. The court further finds that the
motion to remand should be DENIED and the motion to file an amended notice of removal
should be GRANTED.
Background
Plaintiff, Carol Henry, a resident of Louisiana filed a petition for damages (doc.1, att.1,
pgs. 2-4) in the Fourteenth Judicial District Court, Parish of Calcasieu, State of Louisiana on July
15, 2011. Plaintiff alleges that while she was dining at O’Charley’s restaurant located in Lake
Charles, Louisiana, she stepped in water or a similar substance on the floor causing her to slip
and fall and suffer various injuries.
Plaintiff names as defendants O’Charley’s Inc., O’Charley’s Inc. of Tennessee,
O’Charley’s Service Company, Inc., and Jared Heath, manager of the restaurant where the
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incident occurred. O’Charley’s, Inc., a Louisiana company, was never served with the petition.
O’Charley’s Inc. of Tennessee, and O’Charley’s Service Company, Inc., both Tennessee
companies, were served on June 24, 2011, and Jared Heath, a Louisiana resident was served on
June 27, 2011.
On July 15, 2011, defendants, O’Charley’s, Inc., O’Charley’s Inc. of Tennessee, and
O’Charley’s Service Company, Inc. removed the action to this court on the basis of diversity
jurisdiction pursuant to 28 U.S.C. §§ 1332 and 1441. Doc. 1. Defendants allege that: 1) it is
“facially apparent” from the petition that plaintiff’s claim exceeds $75,0001; 2) plaintiff and
defendants O’Charley’s Inc., O’Charley’s Inc. of Tennessee and O’Charley’s Service Company,
Inc. are diverse; 3) defendant, Jared Heath was improperly joined in order to defeat diversity;
and 4) the removal was filed within 30 days of receipt of the initial pleading.
On July 26, 2011, plaintiff filed a motion to remand. Doc. 4. Plaintiff maintains that: 1)
O’Charley’s Inc. is a Louisiana company which destroys diversity; 2) Jared Heath is properly
joined and also a Louisiana resident which destroys diversity; and 3) Jared Heath failed to timely
join in the removal.
On August 16, 2011, defendants, O’Charley’s Inc. of Tennessee and O’Charley’s Service
Company, Inc. filed a motion to amend their notice of removal. Doc. 12. Defendants claim that
their original notice of removal which listed O’Charley’s Inc. as a removing defendant was
defective. Defendants maintain that O’Charley’s Inc. is “neither affiliated with, nor owns and
operates, any O’Charley’s restaurant locations, including the Lake Charles restaurant.”2 Doc. 12,
1
The parties do not dispute that the amount in controversy exceeds $75,000.
Defendants submit the affidavit of Leslie Cherry, Associate General Counsel and Assistant Secretary for
O’Charley’s Inc. of Tennessee and O’Charley’s Service Company, Inc. which states that the company known as
O’Charley’s, Inc. with a domicile address of 1421 Lafayette Street, Gretna, Louisiana and with Charles Larry
Koviach listed as director is not affiliated with O’Charley’s Inc. of Tennessee or O’Charley’s Service Company, Inc.
and does not own or operate the O’Charley’s restaurant in Lake Charles, Louisiana. Doc. 12, att. 5.
2
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Att 1, p. 2.. Further, they maintain that O’Charley’s, Inc. has never been served and has never
retained removing counsel to represent them in this matter. Defendants maintain that they
inadvertently included the similarly named O’Charley’s, Inc. in their notice of removal and
should be allowed to amend their notice of removal: 1) to correct the incorrect statement of
citizenship of O’Charley’s, Inc.; 2) to correct the technical defect of including O’Charley’s, Inc.,
a company with no relation to the restaurant where plaintiff’s alleged accident occurred, in the
notice of removal; and 3) to more fully articulate improper joinder grounds pertaining to
O’Charley’s, Inc.
Plaintiff opposes the motion to amend the notice of removal arguing that the amendment
is not timely because it was not filed within the 30 day period of 28 U.S.C. 1446(b) and that
defendants attempt to make a substantive amendment that adds an entirely new and distinct
jurisdictional basis for removal, that O’Charley’s, Inc. is not a proper defendant. Plaintiff argues
that while technical amendments may be allowed beyond the 30 day period, substantive
amendments are not. Doc. 14.
In response, defendants maintain that the amended notice of removal relies on the same
ground for removal previously articulated, diversity of citizenship. They assert that they are not
asserting a new jurisdictional basis for removal but merely correcting a technical error wherein
they mistakenly named O’Charley’s, Inc. as a party to the removal.
Analysis
1. Motion to Amend the Notice of Removal
An amendment to a notice of removal that makes only technical corrections or additions,
rather than alleging a new basis for federal jurisdiction that did not exist earlier may be allowed
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before judgment and, in some circumstances, even at the appellate level. See 28 U.S.C. § 16533;
Menendez v Wal Mart stores, Inc., 2010 WL 445470 at *2 (5th Cir.2010); Howery v. Allstate Ins.
Co., 243 F.3d 912, 919-20 (5th Cir.2001). After the expiration of the 30 day period for removal,
a notice of removal may be amended to set forth more specifically the jurisdictional grounds for
removal that were imperfectly stated in the original notice. See, e.g., D.J. McDuffie, Inc. v. Old
Reliable Fire Ins. Co., 608 F.2d 145, 146 (5th Cir.1979) (where amendment of removal petition
was allowed to correct jurisdictional allegations in removal petition which were defective or
faulty due to defendants' failure to specifically allege the citizenship of the parties at the time the
suit was brought and at the time the removal petition was filed; missing allegation was not a fatal
omission which could not be cured by amendment).
This court finds that defendants’ amended notice of removal makes only technical
corrections rather than alleging a new basis for removal. Their original notice alleged diversity
jurisdiction as the basis for removal. Allowing the amendment to correctly state the citizenship
of O’Charley’s, Inc., to amend the error of including O’Charley’s, Inc. as joining in the notice of
removal, and to allege that O’Charley’s, Inc. was improperly joined does not change the original
grounds for removal. The amendment merely corrects faulty allegations in the original notice; it
does not make any substantive changes. Accordingly, the court will allow defendants to amend
their notice of removal.
2. Improper Joinder of Jared Heath and O’Charley’s, Inc.
Defendants removed this matter on the basis of diversity, alleging that defendants Jared
Heath and O’Charley’s, Inc. were improperly joined and should not be considered for purposes
of diversity jurisdiction.
3
28 U.S.C. § 1653 provides: “Defective allegations of jurisdiction may be amended, upon terms, in the trial or
appellate courts.”
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The burden of proof for establishing federal jurisdiction is placed on the party seeking
removal. Jernigan v Ashland Oil Inc., 989 F.2d 812, 815 (5th Cir.1993). According to 28
U.S.C. § 1441, “any civil action brought in a State court of which the district courts of the United
States have original jurisdiction, may be removed by the defendant or the defendants, to the
district court of the United States for the district and division embracing the place where such
action is pending.” 28 U.S.C. § 1441(a). If removal is based on diversity of citizenship, the
action is removable only if there is complete diversity and “none of the parties in interest
properly joined and served as defendants is a citizen of the State in which such action is
brought.” 28 U.S.C. § 1441(b).
If removal is based on the claim that non diverse parties have been improperly joined,
then the removing party must establish either “actual fraud in the pleading of jurisdictional facts”
or “an inability of the plaintiff to establish a cause of action against the non diverse party in state
court.” Smallwood v. Ill. Cent. R.R., 385 F.3d 568 (5th Cir. 2004) (citing Travis v. Irby, 326 F.3d
644 (5th Cir. 2003)). Only the latter method is relevant here because defendants did not allege
actual fraud. Thus, the relevant question is whether defendants have shown that there is no
reasonable possibility of recovery against the non diverse defendants in state court. There must
be a reasonable basis for predicting that state law will allow recovery in order to preclude a
finding of fraudulent joinder. A mere theoretical possibility of recovery is insufficient. Travis v
Irby, 326 F.3d 644 (5th Cir.2003).
In reviewing a claim for improper joinder, all factual allegations are evaluated in the light
most favorable to the plaintiffs, resolving all contested issues of substantive fact in favor of the
plaintiffs.
Guillory v. PPG Industries, Inc., 434 F.3d 303, 309 (5th Cir. 2005).
When
considering whether a non diverse defendant has been improperly joined to defeat diversity
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jurisdiction, courts should “pierce the pleadings” and consider “summary judgment-type
evidence such as affidavits and deposition testimony.” Cavallini v. State Farm Mutual Auto Ins.
Co., 44 F.3d 256, 263 (5th Cir. 1995). In conducting this analysis, the Fifth Circuit instructs us
to apply a “standard closer to the Rule 12(b)(6) standard,” McKee v. Kan. City S. Ry. Co., 358
F.3d 329, 333-34 (5th Cir. 2004), where plaintiffs are prohibited from “rest[ing] upon the mere
allegations or denials of [their] pleadings.” Beck v. Tex. State Bd. of Dental Exam’rs, 204 F.3d
629, 633 (5th Cir. 2000).
a. Jared Heath
Plaintiff alleges that Jared Heath was the manager on duty at O’Charley’s on the date of
her alleged accident. In her petition she alleges that all four named defendants were negligent in:
a)
Creating or having actual or constructive notice, prior to the accident, of
the condition that presented an unreasonable risk of harm to [plaintiff],
that being reasonably foreseeable;
b)
Failing to exercise reasonable care;
c)
Failing to take reasonable steps to protect invitees such as plaintiff from
such risks of harm, failing to warn the plaintiff of the existence of such
risks and failing to properly and reasonable inspect or police the area
where the plaintiff fell;
d)
Failing to supervise and/or train Restaurant employees to exercise
reasonable care.
Doc.1, Att.1, ¶5.
In this diversity case, the court applies state law to evaluate the sufficiency of plaintiff's
claims against Jared Heath. Under Louisiana law, an employee may be held liable to a customer
if he has a personal duty to the plaintiff, the breach of which has specifically caused the
plaintiff's damages. Canter v. Koehring Co., 283 So.2d 716, 721 (La.1973). Under Canter, the
following four elements must be satisfied for the employee to be held personally liable:
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1)
The employer must owe a duty of care to the third person, the breach of
which has caused the damage for which recovery is sought;
2)
This duty must be delegated by the employer to the particular employee;
3)
The employee must breach this duty through his own personal fault; and
4)
Personal liability cannot be imposed on the employee simply because of
his general administrative responsibility for performance of some function
of the employment; he must have a personal duty to the plaintiff that was
not properly delegated to another employee.
Id.
Plaintiff maintains that she has stated a cause of action against the manager, Jared Heath
by asserting in her petition that he “failed to supervise and/or train Restaurant employees to
exercise reasonable care.” Id. Plaintiff further relies on her affidavit submitted in connection
with her opposition to the motion to dismiss wherein she states that “[s]oon after she slipped and
fell, Restaurant manager Jared Heath told her there had been similar problems in the same area
of the restaurant.” Doc. 11, Att. 1, ¶ 5. Plaintiff argues that this knowledge imposed a personal
duty on Jared Heath.
Plaintiff relies on the case of Freeman v Wal-Mart Stores, Inc, 775 F.Supp 208, 209
(W.D.La. 1991). In that case, plaintiffs’ petition stated, “[d]efendant, Randy Adams, acting as
manager and supervisor of the Wal-Mart Store . . . failed to adequately supervise and manage his
employees.” The court found that whether or not the manager, Adams breeched an independent
personal duty to the plaintiff was “to be determined by the state court” and then stated that
“[p]laintiffs’ petition state [sic] a cause of action against Adams individually, irrespective of the
probabilities of success.” Id. (emphasis supplied).4
4
This court notes that the Fifth Circuit has determined that the standard to be applied when determining whether a
plaintiff has established a cause of action against a non diverse party is whether or not there is “a reasonable basis
for the district court to predict that the plaintiff might be able to recover against an in-state defendant. Smallwood v.
Ill. Cent. R.R., 385F.3d 568,573 (5th Cir. 2004) The court further stated that a mere “theoretical possibility of
recovery under local law” is not enough. Id.(citing Badon v. RJR Nabisco, Inc., 236 F.3d 282, 286, n.4 (5th
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Defendants contend that Freeman is distinguishable from the present case because the
petition here “contains no specific allegation whatsoever that Mr. Heath individually and actively
contributed to the accident.” Doc. 13, p. 5. Defendants submit that Jared Heath had no personal
duty to the plaintiff but was merely carrying out the technical and managerial aspects of his job
on the date of the alleged accident.
Here, we find that the present case is more analogous to the cases cited by defendants. In
Bertrand v. Fischer, 2009 WL 5215988 (W.D. La.2009), plaintiff allegedly suffered injuries in a
slip and fall at Target. She filed suit against Target, its insurers, and the non diverse manager on
duty at the time of her accident. Plaintiff alleged that the manager was liable to her for “failing
to properly supervise and train employees and for failing to implement a procedure for inspection
and cleaning of store floors.” Id. at *6. This court found the joinder of the manager improper
because the manager did not cause the spill or have personal knowledge of the spill, Target had
not delegated a duty to him to inspect the aisles for spills and plaintiff had failed to provide any
“link between the accident” and the manager. Id. at *7. The court concluded that plaintiff’s
allegations against the manager were for general administrative responsibilities which were not
actionable under Cantor.
Similarly, in Carter v Wal-Mart Stores, Inc., 2005 WL 1831092 (W.D. La. 2005),
plaintiffs were injured when a display rack fell on them while they shopped in Wal-Mart. They
sued Wal-Mart and the non diverse manager on duty at the time of their accident. The court
found that plaintiffs’ “generic” allegations against the store manager for failure to properly
supervise and train employees, were insufficient to state a personal duty on the part of the
manager. Id. at *2.
Cir.2000)). The court’s opinion in Freeman, written before Smallwood was decided, which found that plaintiff
stated a cause of action against the non diverse defendant “irrespective of the probabilities of success” appears to be
in conflict with the standard adopted by the Fifth Circuit and for this reason, this court rejects its reasoning.
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Finally, in Carino v Wal-Mart Louisiana, LLC, 2006 WL 335784 (W.D. La .2006),
plaintiff was injured when he was allegedly bitten by a snake in the garden center at Wal-Mart.
He sued Wal-Mart and the non diverse manager of the store at the time the accident occurred
alleging his failure to “oversee, inspect, manage, warn, act with care, or otherwise generically
prevent” his injuries. Id. at *3. The court found that under Louisiana law, plaintiff’s claims
failed to allege any facts that would support a finding of a personal duty to plaintiff for any nonadministrative type duty.
In the present case, even when viewing plaintiff’s allegations regarding Jared Heath in a
light most favorable to her, she has failed to establish that she could maintain a claim against
him. Plaintiff’s claim that Jared Heath breeched his duty to “supervise and/or train Restaurant
employees to exercise reasonable care” states nothing more than administrative responsibilities.
Further, the affidavit submitted by plaintiff does not establish that Jared Heath either caused the
spill on the date of the accident or had personal knowledge of the spill on the date of the
accident. Her statement that he admitted there had been problems in that area in the past does
not impose a personal duty on him toward plaintiff in this circumstance. In sum, we conclude
that Jared Heath had no personal duty towards the plaintiff. Plaintiff’s claims against Jared
Heath fail to meet the factors set out in Cantor and the court concludes that he is improperly
joined and his citizenship can be ignored for diversity purposes.
b. O’Charley’s, Inc.
In her petition, plaintiff named as a defendant “O’Charley’s, Inc., authorized to do and
doing business in Louisiana, which may be served through its agent for service of process,
Charles Larry Koviach, 1421 Lafayette Street, Gretna, Louisiana, 70053.” Doc.1, Att.1, p.2, ¶1.
Service of process was attempted on this defendant but as reflected in the return notice, service
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was not made for the reason that the party had moved. Doc.4, Att.3, p.2.
In their amended notice of removal, defendants, O’Charley’s Inc. of Tennessee and
O’Charley’s Service Company, Inc. state that O’Charley’s, Inc. is a Louisiana corporation with
no affiliation whatsoever to the O’Charley’s restaurant chain or to the O’Charley’s restaurant in
Lake Charles, Louisiana where plaintiff was allegedly injured.
Thus, they assert that
O’Charley’s, Inc. was improperly joined because plaintiff has failed to state a cause of action
against it. Doc.12, Att.4, p.2.
Defendants attach, as exhibit “A” to their amended notice of removal, an affidavit of
Leslie Cherry, Associate General Counsel and Assistant Secretary for O’Charley’s Inc. of
Tennessee and O’Charley’s Service Company, Inc. Doc.12, Att.5. In her affidavit she states that
she has personal knowledge of “all corporate entities affiliated with O’Charley’s Inc. of
Tennessee and O’Charley’s Service Company, Inc. as well as all restaurant locations owned and
operated by O’Charley’s nationwide.”
Id.
She further states that the entity known as
O’Charley’s, Inc. and its director, Charles Larry Koviach are not affiliated with, owned by or
operated by O’Charley’s Inc. of Tennessee or O’Charley’s Service Company, Inc.
Id.
Additionally, she testifies that O’Charley’s, Inc. and its director, Charles Larry Koviach neither
own nor operate any O’Charley’s restaurant including the restaurant located in Lake Charles,
Louisiana. Id.
Plaintiff does not attempt to oppose the affidavit submitted by Leslie Cherry but rather reasserts her argument that the amended notice of removal was untimely and that it is too late to
make a substantive amendment to the notice of removal. Thus, they submit that O’Charley’s,
Inc., a Louisiana corporation destroys diversity.
For reasons previously stated herein the amended notice of removal will be considered
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and this court finds that there is no reasonable basis for the court to predict that the plaintiff
might be able to recover against O’Charley’s, Inc.. Smallwood v. Ill. Cent. R.R., 385F.3d
568,573 (5th Cir. 2004). Thus, the court concludes that it is improperly joined and its citizenship
can be ignored for diversity purposes.
3. Jared Heath’s Consent to Removal
Plaintiff argues, relying on the case of Getty Oil Corp. v. Ins. Co. on N. America, 841
F.2d 1254 (5th Cir.1988), that the case should be remanded because defendant Jared Heath failed
to join in the removal petition or timely consent to removal.
In Getty, the Fifth Circuit held that under the “rule of unanimity,” all properly served
defendants must timely join in or consent to the removal. The court stated that pursuant to the
first paragraph of § 1446(b), “since the petition must be submitted within thirty days of service
on the first defendant, all served defendants must join in the petition no later than thirty days”
after § 1446(b) is triggered. 841 F.2d at 1262-63.
However, the rule of unanimity espoused in Getty is inapplicable to improperly joined
defendants. See Rico v Flores, 481 F.3d 234, 239 (5th Cir. 2007)(“removing party need not
obtain the consent of a co-defendant that the removing party contends is improperly joined.”);
Jernigan v. Ashland Oil Inc., 989 F.2d 812, 815 (5th Cir.1993)(“[a]pplication of this requirement
[of unanimity] to improperly or fraudulently joined parties would be nonsensical, as removal in
those cases is based on the contention that no other party defendant exists.”).
As this court has found that Jared Heath is an improperly joined defendant, there is no
requirement that he join in or consent to removal. Thus, plaintiff’s argument must fail.
Conclusion
Based on the foregoing, the court hereby GRANTS defendants’ motion to file an
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amended notice of removal. The court further finds that plaintiff has failed to state a claim
against named defendants, Jared Heath and O’Charley’s, Inc. and the court concludes that they
have been improperly joined to this action. The court finds that it has jurisdiction over this
matter pursuant to 28 U.S.C. §§ 1332 and 1441. Accordingly, plaintiff’s motion to remand is
DENIED.
Further and in accordance with the findings contained in this memorandum order, this
court will issue a report and recommendation recommending that the claims against Jared Heath
and O’Charley’s, Inc. be dismissed from this action.
THUS DONE this 30th day of January, 2012.
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