Ulrich et al v. Zurich North America Insurance Company et al

Filing 44

ORDER Denying 42 Motion for Reconsideration. Signed by District Judge Victoria A. Roberts. (LVer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
WADE C. ULRICH and ANITA SERRA,
Co-Conservators and Co-Guardians of
CARL ULRICH, a Protected Person,
Plaintiffs,
v.

Case No. 2:11-cv-15545
Honorable Victoria A. Roberts

NATIONAL CASUALTY COMPANY,
ALLSTATE INSURANCE COMPANY,
GREAT AMERICAN ASSURANCE,
COMPANY,
Defendants.
/
ORDER
On November 27, 2012, the Court issued an Order (Doc #40) that it would not
permit the parties to stipulate to the addition of a non-diverse defendant, Auto Club
Group Insurance Company (“AAA”) unless they were prepared to have the case
remanded to state court after joinder, as required by 28 U.S.C. §1447(e).
28 U.S.C. §1447(e) says that “[i]f after removal the plaintiff seeks to join
additional defendants whose joinder would destroy subject matter jurisdiction, the court
may deny joinder, or permit joinder and remand the action to the State court.”
On November 6, 2012, Defendant Great American Assurance Company filed a
Motion for Reconsideration (Doc. #42) arguing that the Court misconstrued Defendant’s
original argument and that the Court can exercise supplemental jurisdiction over
Plaintiff’s proposed claim against AAA.
In its discretion, the Court can grant a motion for reconsideration if it is
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demonstrated that a palpable defect misled the Court in its ruling, correction of which
would result in a different disposition. L.R. 7(g)(3). Palpable defects are those which
are "obvious, clear, unmistakable, manifest or plain." Mich. Dep't of Treasury v.
Michalec, 181 F. Supp. 2d 731, 734 (E.D. Mich. 2002).
There is no palpable defect. The Court will be divested of proper jurisdiction after
removal by joinder of non-diverse parties. See Cornerbank, N.A. v. New York Life &
Annuity Corp., 2008 U.S. Dist. LEXIS 94365 (D. Kan. Nov. 18, 2008)(holding that
plaintiff’s proposed addition of non-diverse parties, post removal, triggered and violated
28 U.S.C. §1367(b) and would destroy federal diversity jurisdiction); see also Griffin v.
Lee, 621 F.3d 380 (5th Cir. La. 2010)(declining to exercise supplemental jurisdiction
over claim because barred under 1367(b) in a post removal diversity action); Casas
Office Machs. v. Mita Copystar Am., 42 F.3d 668, 674, n.7 (1st Cir. 1994)(same).
In a post-removal action, the addition of a non-diverse party destroys jurisdiction
and triggers 28 U.S.C. 1447(e). See e.g. Phillip-Stubbs v. WalMart Supercenter, 2012
U.S. Dist. LEXIS 76984 ( E.D. Mich. May 25, 2012) (“A post-removal attempt to add
non-diverse parties, whether by right or by leave, implicates section 1447(e) and
requires the court to exercise discretion and adopt one of the two options available to
it.”); Mackey v. J.P. Morgan Chase Bank, N.A., 2011 U.S. Dist. LEXIS 72301 ( E.D.
Mich. July 6, 2011) (“Because Continental Interiors evidently is a Michigan corporation
with its principal place of business in Michigan, and Plaintiff likewise is a Michigan
resident, the joinder of Continental Interiors as a party would defeat the requisite
complete diversity of citizenship among the parties and destroy this Court's subject
matter jurisdiction, thereby necessitating a remand under 28 U.S.C. § 1447(e)”); Kujat v.
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Harbor Freight Tools USA, Inc., 2010 U.S. Dist. LEXIS 89205 ( E.D. Mich. Aug. 30,
2010)(same).
In this removal action, both Plaintiff and proposed Defendant AAA are citizens of
Michigan. If the Court grants the parties’ stipulation to add AAA as a Defendant, it
would destroy federal jurisdiction and implicate 28 U.S.C. §1447(e). The parties do not
dispute that the application of 28 U.S.C. 1447(e) would require remand.
The Court DENIES Defendant’s motion for reconsideration.
IT IS ORDERED.

s/Victoria A. Roberts
Victoria A. Roberts
United States District Judge
Dated: December 20, 2012
The undersigned certifies that a copy of this
document was served on the attorneys of
record by electronic means or U.S. Mail on
December 20, 2012.
s/Linda Vertriest
Deputy Clerk

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