Lake et al v. Chase Manhattan Mortgage Corporation et al
ORDER REMANDING CASE FOR LACK OF SUBJECT MATTER JURISDICTION entered by Judge Ortrie Smith. (Kanies, Renea)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
JOHN C. LAKE and SHARON R. LAKE, )
CHASE MANHATTAN MORTGAGE
CORPORATION, et al.,
Case No. 13-0369-CV-W-ODS
ORDER REMANDING CASE FOR LACK OF SUBJECT MATTER JURISDICTION
Plaintiffs, acting pro se, filed this suit in state court on February 4, 2013.
Defendants removed the suit to federal court, alleging there is diversity of citizenship
and more than $75,000 in controversy. One of the Defendants – Millsap & Singer P.C.
– is a citizen of Missouri, but Defendants contend its citizenship should be disregarded
because it was fraudulently joined. The Court disagrees.
Federal courts have an independent obligation to evaluate their jurisdiction. “If
the court determines at any time that it lacks subject-matter jurisdiction, the court must
dismiss the action.” Fed. R. Civ. P. 12(h)(3). The party seeking removal bears the
burden of proving subject matter jurisdiction.
In re Business Men’s Assur. Co. of
America, 992 F.2d 181, 182 (8th Cir. 1993). Federal district courts are “required to
resolve all doubts about federal jurisdiction in favor of remand.” Id.
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). In analyzing fraudulent joinder,
“the district court’s task is limited to determining whether there is arguably a reasonable
basis for predicting that the state law might impose liability based upon the facts
involved.” Id. at 811. So long as there is at least a “colorable” state law cause of action
against the diversity-defeating defendant, joinder is not fraudulent. Id. at 810. In
questionable areas of state law, “the better practice is for the federal court not to decide
the doubtful question . . . but simply to remand the case and leave the question for the
state courts to decide.” Id. at 811 (quoting Iowa Public Serv. Co. v. Medicine Bow Coal
Co., 556 F.2d 400, 406 (8th Cir. 1977)).
Millsap & Singer is named as a defendant in Count III, which alleges claims for
malicious prosecution and breach of fiduciary duty. These are legally recognizable
claims. Defendants contend Millsap & Singer has been fraudulently joined because
Plaintiffs did not allege any facts to support these claims. Keeping in mind Plaintiffs
filed this suit in state court, the real question is whether their pleadings are so clearly
deficient and unsalvageable under state law that the state court would unquestionably
hold Plaintiffs have no claims against Millsap & Singer. The Court cannot reach this
conclusion. Application of state law is primarily the responsibility of state courts.
Moreover, given their pro se status and the fact that amendments to pleadings are
generously granted, it is entirely possible that Plaintiffs can amend their pleadings to
state a colorable claim.
The Court cannot conclude the high hurdle required for declaring a party has
been fraudulent joined has been met. The Court lacks jurisdiction in this matter, so the
case is remanded to state court.
IT IS SO ORDERED.
/s/ Ortrie D. Smith
ORTRIE D. SMITH, SENIOR JUDGE
UNITED STATES DISTRICT COURT
DATE: April 16, 2013
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