Schroeder v. Schape Fitness, Inc. et al

Filing 13

MEMORANDUM AND ORDER re: 10 MOTION to Remand Case to State Court to St. Louis County Circuit Court filed by Plaintiff Tracy Schroeder; motion is GRANTED. IT IS HEREBY ORDERED that plaintiff's motion to remand (#10) is GRANTED. IT IS FURTHER ORDERED that this case is REMANDED to the Circuit Court for the County of St. Louis, Missouri. Signed by District Judge Stephen N. Limbaugh, Jr on 5/29/18. (CSG)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
TRACY SCHROEDER,
Plaintiff,
v.
SCHAPE FITNESS, INC., d/b/a
CLUB PILATES, et al.
Defendants.

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Case No. 4:17 CV 2943 SNLJ

MEMORANDUM and ORDER
Plaintiff fell off a Pilates exercise machine at an exercise facility owned by
defendant Schape Fitness, Inc., which does business as Club Pilates. Plaintiff brought
this lawsuit against defendant Schape and defendant Balanced Body, Inc., the business
that manufactured, designed, and sold the Pilates machine to defendant Schape. Plaintiff
is a Missouri citizen. Balanced Body is a California citizen. Schape is a Missouri
citizen. Plaintiff brought the lawsuit in the Circuit Court for St. Louis County.
Defendant Schape removed the case to this Court under this Court’s diversity jurisdiction
pursuant to 28 U.S.C. § 1332(a)(1). Plaintiff has moved to remand the matter back to
state court. (#10.)
“Subject matter jurisdiction asserted under 28 U.S.C. § 1332 requires an amount in
controversy greater than $75,000 and complete diversity of citizenship among the
litigants, meaning ‘where no defendant holds citizenship in the same state where any
plaintiff holds citizenship.’” Junk v. Terminix Intern. Co., 628 F.3d 439, 445 (8th Cir.

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2010) (quoting In re Prempro Prods. Liab. Litig., 591 F.3d 613, 620 (8th Cir. 2010)). No
party contests that the amount in controversy here exceeds $75,000. As for diversity of
citizenship between the parties, although defendant Schape and plaintiff are both
Missouri citizens, Schape contends that it has been fraudulently joined to this action to
defeat diversity jurisdiction, and that the motion to remand should be denied.
Fraudulent joinder is defined as “the filing of a frivolous or otherwise illegitimate
claim against a non-diverse defendant solely to prevent removal.” Filla v. Norfolk
Southern Ry. Co., 336 F.3d 806, 809 (8th Cir. 2003). “Joinder is fraudulent when there
exists no reasonable basis in fact and law supporting a claim against the resident
defendants.” Id. at 810 (quoting Wiles v. Capitol Indemnity Corp., 280 F.3d 868, 871
(8th Cir. 2002)). A plaintiff “cannot defeat a defendant’s right of removal by joining a
defendant who has ‘no real connection to the controversy.’” Herkenhoff, 2014 WL
3894642 at *2 (quoting Donner v. Alcoa, Inc., 709 F.3d 694, 697 (8th Cir. 2013)). “[I]t is
well established that if it is clear under governing state law that the complaint does not
state a cause of action against the non-diverse defendant, the joinder is fraudulent and
federal jurisdiction of the case should be retained.” Filla, 336 F.3d at 810 (citing Iowa
Public Service Co. v. Medicine Bow Coal Co., 556 F.2d 400, 406 (8th Cir. 1977)
(emphasis in original)). However, if there is a “colorable” cause of action against the
defendant, “that is, if the state law might impose liability on the resident defendant under
the facts alleged” then there is no fraudulent joinder. Id.

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Plaintiff contends that Missouri state law would impose liability on resident
defendant Schape in this case for its negligence related to plaintiff’s injury. Defendant
Schape, on the other hand, insists that it has been fraudulently joined because (1) plaintiff
signed a waiver and indemnification agreement releasing Club Pilates from any injuries
related to her use of the facility, and (2) plaintiff also signed a contract with Club Pilates
which included an express release (#1 at ¶¶ 15, 16). Schape points out that the plaintiff’s
sole count against it is for negligence, and that Missouri courts have consistently enforced
waivers such as plaintiff’s that release defendant from claims of negligence. See Alack v.
Vic Tanny Int'l of Missouri, Inc., 923 S.W.2d 330, 337 (Mo. banc 1996)
The parties dispute whether the releases are enforceable. In particular, plaintiff
argues that one release is ambiguous because the form includes the placeholder
[IRSLEGALNAME] instead of Schape’s name, and that the other release is between
plaintiff and a different party, “Chesterfield Club Pilates.” Although the Court is
skeptical that plaintiff --- who sued defendant Schape as “d/b/a Club Pilates” --- can
prevail on these arguments, the Court notes that, under Missouri law, a release is an
affirmative defense. See Rule 55.08, Mo. R. Civ. P. This Court has previously held that,
where a resident defendant sets forth the affirmative defense that plaintiff has released its
claims, the plaintiff has nonetheless “stated a colorable claim for negligence” and that a
“Missouri court might impose liability on [the resident defendant] based on the facts
alleged. Hemker v. St. Louis Science Ctr., 4:08-CV-00139 CEJ, 2008 WL 2020210, at *2
(E.D. Mo. May 8, 2008). “The enforceability of the release and the effect of the

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affirmative defense of release upon the case are matters appropriate for consideration by
a Missouri court.” Id. See also Peterson v. Concentra, Inc., 4:07cv387-DJS, 2007 WL
1459826, *2 (E.D. Mo. May 16, 2007) (holding, inter alia, that defendant’s statute of
limitations “argument fails because it constitutes an affirmative defense…and not a
proper basis for a finding of fraudulent joinder on the face of plaintiff’s pleading”).
This Court has, however, found fraudulent joinder existed due to an affirmative
defense. E.g., Herkenhoff v. Supervalu Stores, Inc., No. 4:13-CV-1974 SNLJ, 2014 WL
3894642, at *2 (E.D. Mo. Aug. 8, 2014). In Herkenhoff, this Court noted that “although
this Court recently rejected a statute of limitations argument in another case in which
fraudulent joinder was alleged, it is apparent from the face of the complaint itself that the
two-year statute of limitations bars plaintiff’s claim.” 2014 WL 3894642 at *3 (citing
McGee v. Fresenius Med. Care N. Am., Inc., 4:14cv967 SNLJ, 2014 WL 2993577, *4
(E.D. Mo. July 3, 2014)). Here, of course, defendant Schape does not contend that the
plaintiff fails to allege the elements of a negligence claim. Rather, defendant Schape
supplied the releases, which appear nowhere in the complaint, and would have the Court
analyze its releases and dismiss it as a party based on those releases. Although the Court
“may look to materials in the record, including affidavits, to determine whether they
establish facts supporting claims against the defendant,” Herkenhoff, 2014 WL 3894642,
at *3, it is not entirely clear just how far beyond the pleadings the Court is entitled to go.
“To date, there is no generally accepted standard concerning the necessary conditions as
to when it is appropriate to ‘pierce the pleadings’ to determine the legitimacy of the

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joinder, nor what methodology the district court should use to examine extrinsic
evidence.” § 3641.1 Devices to Defeat Diversity Jurisdiction—Joinder of Nondiverse
Parties, 13F Fed. Prac. & Proc. Juris. § 3641.1 (3d ed.).
Here, notably, plaintiff did not file a reply memorandum in support of her motion
to remand, nor did she explicitly challenge the language of the two releases relied upon
by Schape other than to contest the identification of the parties. However, the case relied
upon by Schape, Alack, held that a release that purported to release claims even for
intentional torts or gross negligence was fatally ambiguous because the release of such
claims is not permitted. 923 S.W.2d at 337. To the extent it is appropriate to analyze the
releases and address Schape’s affirmative defense: one of plaintiff’s releases purports to
release claims for “gross negligence.” (See #12 at 4.) The other release states that Club
Pilates is released “from any and all claims…arising out of…Club Pilates[’s]…passive or
active negligence.” (#12 at 7.) It is possible that a Missouri court would find this
language to be in contravention of Alack. Further, it is not clear that the release --- if
valid --- was adequately conspicuous. 923 S.W.2d at 337. Even considering the release,
then, plaintiff “might have a colorable claim under state law against” resident defendant
Schape. Wilkinson v. Shackelford, 478 F.3d 957, 964 (8th Cir. 2007).
In making a prediction as to whether “there is arguably a reasonable basis for
predicting that the state law might impose liability based upon the facts involved…the
district court should resolve all facts and ambiguities in the current controlling
substantive law in the plaintiff’s favor.” Filla, 336 F.3d at 811. “In situations where the

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sufficiency of the complaint against the non-diverse defendant is questionable, ‘the better
practice is for the federal court not to decide the doubtful question in connection with a
motion to remand but simply to remand the case and leave the question for the state
courts to decide.’” Id. (quoting Fields v. Pool Offshore, Inc., 182 F.3d 353, 357 (5th Cir.
1999). In light of that directive --- and in light of the fact that the complaint, on its face,
states a negligence claim against defendant Schape --- the Court holds that defendant
Schape has not been fraudulently joined, that diversity jurisdiction is therefore not
present, and that the motion to remand shall be granted.
Accordingly,
IT IS HEREBY ORDERED that plaintiff’s motion to remand (#10) is GRANTED.
IT IS FURTHER ORDERED that this case is REMANDED to the Circuit Court
for the County of St. Louis, Missouri.

Dated this 29th day of May, 2018.
______________________________
STEPHEN N. LIMBAUGH, JR.
UNITED STATES DISTRICT JUDGE

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