McDonald v. Allstar Recovery, LLC et al

Filing 11

ORDER denying 5 Motion to Remand; finding as moot 6 Motion to Dismiss for the reasons set out in the Order. Defendants AllStar Recovery, Richard Harrigill, and Sterling Gay are dismissed. Signed by District Judge Daniel P. Jordan III on October 23, 2017. (SP)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
ANNA MCDONALD
V.

PLAINTIFF
CIVIL ACTION NO. 3:17-CV-652-DPJ-FKB

ALLSTAR RECOVERY, LLC, ET AL.

DEFENDANTS
ORDER

Plaintiff seeks remand of this tort action stemming from the attempted repossession of
her vehicle. Because the non-diverse Defendant, along with two other Defendants, were not
involved in the events giving rise to suit, those Defendants are improperly joined. Diversity
jurisdiction exists, and Plaintiff’s motion to remand [5] is denied.
I.

Facts and Procedural History
Anna McDonald filed this suit in state court seeking damages for mental anguish,

anxiety, and humiliation, she allegedly suffered when Defendants attempted to repossess her
vehicle. Compl. [3-1] at 1–3.1 It is undisputed that McDonald financed the vehicle, the
installment agreement was assigned to Defendant Credit Acceptance, and Credit Acceptance
referred the account for repossession. See id. at 2; Defs.’ Mem. [10] at 2; Defs.’ Resp. [9] at 3.
The question is whether Defendants AllStar Recovery, LLC (“AllStar”), and its employees,
Richard Harrigill and Sterling Gay, participated in the attempted repossession.
McDonald asserts that they did and says the presence of Mississippi resident Sterling Gay
destroys diversity of citizenship. But Credit Acceptance says McDonald’s account was referred
to Brown & Associates Auto Recovery, Inc., for repossession, not AllStar. So, it argues these
Defendants were not involved in the attempted repossession and are improperly joined. If
1

The Complaint attached to the Notice of Removal [1] is missing page two.

correct, the remaining parties (McDonald and Credit Acceptance) are diverse, so diversity
jurisdiction is proper. McDonald declined to file a reply in support of her motion to remand, and
the time to do so has passed. Accordingly, the Court deems the motion fully briefed.
II.

Standard
Credit Acceptance premises federal jurisdiction on 28 U.S.C. § 1332, which gives the

Court jurisdiction over “civil actions where the matter in controversy exceeds the sum or value
of $75,000, exclusive of interest and costs, and is between . . . citizens of different States.” 28
U.S.C. § 1332(a)(1). That section requires complete diversity between “all persons on one side
of the controversy [and] all persons on the other side.” Harvey v. Grey Wolf Drilling Co., 542
F.3d 1077, 1079 (5th Cir. 2008) (internal quotation marks and citations omitted). Here, the
named parties are not completely diverse, but Credit Acceptance raises an exception to the
complete-diversity rule: improper joinder.
The test for improper joinder “examine[s] if there is arguably a reasonable basis for
predicting that the state law might impose liability [against the non-diverse defendant] on the
facts involved.” Smallwood v. Ill. Cent. R.R. Co., 352 F.3d 220, 223 (5th Cir. 2003). The Court
“ordinarily resolve[s] an improper joinder claim by conducting a Rule 12(b)(6)-type analysis.”
Gross v. Balt. Aircoil Co., Inc., No. 3:13-CV-423-DPJ-FKB, 2014 WL 1153706, at *2 (S.D.
Miss. Mar. 21, 2014). On the other hand, in some cases, “a plaintiff has stated a claim, but has
misstated or omitted discrete facts that would determine the propriety of joinder. In such cases,
the district court may, in its discretion, pierce the pleadings and conduct a summary inquiry.”
Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004). This is such a case.

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III.

Analysis
McDonald alleges that AllStar, Harrigill, and Gay were involved in the attempted

repossession on September 12, 2016, but Credit Acceptance produced undisputed evidence that
McDonald misstated the facts. Specifically, Credit Acceptance says McDonald’s account was
assigned to a different repossession outfit, not AllStar.
First, Credit Acceptance submits the Declaration of Kelly Namel, a legal assistant with
Credit Acceptance, who confirms that the account was referred to Brown & Associates Auto
Recovery, Inc. (“Brown”) for repossession on August 22, 2016. Namel Decl. [9-1] at 3. The
account remained with Brown until September 14, 2016, but repossession was unsuccessful. Id.
The account was never referred to AllStar. Id.
Paige Fox, General Manager of AllStar, also attests that no record of an assignment
during the relevant time period exists in AllStar’s system. Fox Aff. [9-3] at 2. Fox further states
that no employee recalls working on the task of repossessing the vehicle. Id. at 3. And finally,
Credit Acceptance includes affidavits from Defendants Richard Harrigill and Sterling Gay.
Harrigill Aff. [9-4]; Gay Aff. [9-5]. Harrigill affirms that he did not receive an assignment to
repossess the vehicle and did not participate in attempts to repossess the vehicle. Harrigill Aff.
[9-4] at 2. Gay, an owner of AllStar, confirmed Fox’s assessment that there was no record of an
assignment to AllStar in its system and further says that she was not personally involved in the
repossession of the vehicle in any way. Gay Aff. [9-5] at 2–3.
As McDonald declined to file a reply, these evidentiary submissions are uncontroverted.
See Michels v. Safeco Ins. Co. of Ind., 544 F. App’x 535, 539 (5th Cir. 2013) (holding that
“plaintiff must produce at least some controverting evidence”), abrogated on other grounds by
Int’l Energy Ventures Mgmt., L.L.C. v. United Energy Grp. Ltd., 818 F.3d 193 (5th Cir. 2016);

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see also Anderson v. Ga. Gulf Lake Charles, LLC, 342 F. App’x 911, 917 (5th Cir. 2009)
(finding improper joinder based on defendant’s affidavits denying involvement in accident and
noting plaintiffs’ failure to “submit any contradictory evidence”); Badon v. RJR Nabisco Inc.,
224 F.3d 382, 393 (5th Cir. 2000) (“We agree with the district court that, considering
defendants’ affidavits in light of the plaintiffs’ lack of evidence, there is no reasonable basis for
predicting that plaintiffs might establish liability in their conspiracy claim against the in-state
defendants.”) (internal quotations and citations omitted).
Based on these submissions, the Court finds McDonald misstated facts in her
Complaint—specifically, the involvement of AllStar, Harrigill, and Gay in the attempted
repossession. These Defendants are improperly joined and should be dismissed. See Int’l
Energy Ventures Mgmt., LLC, 818 F.3d at 210 (holding that once a court determines that a party
has been improperly joined, that party must be dismissed). Lastly, because Credit Acceptance
and McDonald are diverse, federal jurisdiction is proper. McDonald’s motion to remand is
denied.
IV.

Conclusion
The Court has considered all arguments raised by the parties; those not addressed would

not have changed the outcome. Plaintiff’s motion to remand [5] is denied, and Defendants
AllStar Recovery, Richard Harrigill, and Sterling Gay are dismissed.2
SO ORDERED AND ADJUDGED this the 23rd day of October, 2017.
s/ Daniel P. Jordan III
UNITED STATES DISTRICT JUDGE

2

Defendant Gay separately moved to dismiss the Complaint against her, and Plaintiff did not
respond in opposition. Because the Court finds Gay is improperly joined and should be
dismissed, her motion is moot. See id. at 210 (noting that once district court found defendant
was improperly joined, defendant’s Rule 12(b)(6) motion to dismiss should be considered moot).
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