Desai et al v. Garcia Empire, LLC et al
ORDER entered by Judge Nanette K. Laughrey granting Plaintiffs Neil and Heta Desai's Motion to Remand, Doc. 7, and granting Defendant Garcia Empire, LLC's Motion to Remand, Doc. 9. Signed on 2/13/18 by District Judge Nanette K. Laughrey. (Matthes Mitra, Renea)
UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
NEIL DESAI, et al.,
GARCIA EMPIRE, LLC, et al.,
Case No. 4:17-CV-01055-NKL
Pending before the Court are Plaintiffs Neil and Heta Desai’s Motion to Remand, Doc. 7,
and Defendant Garcia Empire, LLC’s Motion to Remand, Doc. 9.
For the following reasons,
the motions are granted.
The present matter involves an insurance dispute, arising out of an incident between
Plaintiff Neil Desai and an employee of Defendant Garcia Empire, LLC, which resulted in
Desai’s fractured right arm. On October 2, 2017, Neil and his wife, Heta, (“the Desais”)
obtained a judgment against Garcia Empire in the amount of $6,932,831, for damages suffered as
a result of Garcia Empire’s conduct. Prior to entry of the judgment, the Desais and Garcia
Empire entered into a settlement agreement pursuant to Mo. Rev. Stat. § 537.065, which limited
recovery to any insurance coverage provided by Defendant Specialty Insurance Company.
The Desais subsequently filed this lawsuit in the Circuit Court of Jackson County on
November 6, 2017, seeking equitable garnishment under Mo. Rev. Stat. § 379.200.
that statute, Garcia Empire and Seneca are both named as defendants.
On December 21, 2017,
Seneca removed the matter to this Court on the basis of diversity jurisdiction.
The Desais and
Garcia Empire now move to remand, arguing that Seneca failed to obtain Garcia Empire’s
consent to removal, and, alternatively, that equitable garnishment under Mo. Rev. Stat. § 379.200
constitutes a direct action under 28 U.S.C. § 1332, which prevents removal.
Upon removing an action to federal court, the defendant bears the burden of proving by a
preponderance of the evidence that the court has subject matter jurisdiction over the case.
Prempro Prods. Liab. Litig., 591 F.3d 613, 620 (8th Cir. 2010); Hatridge v. Aetna Cas. & Sur.
Co., 415 F.2d 809, 814 (8th Cir. 1969).
“Removal statutes are strictly construed, and any
doubts about the propriety of removal are resolved in favor of state court jurisdiction and
Baumgartner v. Ford Motor Credit Co., No. 07-4084-CV-C-NKL, 2007 WL
2026135, at *1 (W.D. Mo. July 9, 2007) (citing In re Business Men’s Assurance Co. of America,
992 F2d 181, 183 (8th Cir. 1993)).
It is undisputed that there is complete diversity of citizenship among the parties. The
Desais are citizens of Georgia, Garcia Empire is a citizen of Missouri, and Seneca is a citizen of
Delaware and New York. Ordinarily, however, all defendants must consent to removal or the
case will be remanded.
Pritchett v. Cottrell, Inc., 512 F.3d 1057, 1062 (8th Cir. 2008) (“[T]he
failure of one defendant to consent renders the removal defective . . . .”). In the present matter,
Seneca removed the action without Garcia Empire’s consent.
Seneca maintains that Garcia Empire’s consent is not required because it is only a
“[N]ominal defendants, those ‘against whom no real relief is sought,’ need not
join in the petition [for removal].” Thorn v. Amalgamated Transit Union, 305 F.3d 826, 833
(8th Cir. 2002); see also Dumas v. Patel, 317 F. Supp. 2d 1111, 1113 n.5 (W.D. Mo. 2004).
However, most courts limit this “exception” for nominal party defendants “to situations in which
it is clear that the defendant is not a necessary or an indispensable party as a matter of law, the
party has nothing at stake in the litigation, and no real, present claim for relief is being sought
against the party.” Balling v. Bendickson, No. 4:12-CV-860 CAS, 2012 WL 3715810, at *2
(E.D. Mo. Aug. 27, 2012) (citing Maryville Data Sys., Inc. v. Holman, No. 4:05CV1535JCH,
2005 WL 3416470, at *2 (E.D. Mo. Dec. 13, 2005)).
Garcia Empire is a necessary and indispensable party to the litigation, and therefore the
nominal party exception to the unanimous consent requirement does not apply.
Mo. Rev. Stat.
§ 379.200 requires plaintiffs to join both the judgment debtor and the insurance company in
equitable garnishment actions filed under the statute. Glover v. State Farm Fire & Cas. Co.,
984 F.2d 259, 261 (8th Cir. 1993) (recognizing “the plain statutory command that the judgment
debtor be joined in an action under § 379.200”). The requirement remains even where, as is the
case here, the parties enter into a settlement agreement pursuant to Mo. Rev. Stat. § 537.065.
See Id. (“[T]he Missouri legislature had good reason to require that the judgment debtor be
joined in the statutory action, even if that action does not expose the judgment debtor to any risk
of additional liability.”). Therefore, despite the fact that the Desais and Garcia Empire entered
into a Section 537.065 agreement, the Desais were required by statute to join Garcia Empire as a
defendant in this action.
As such, Garcia Empire cannot be considered a nominal party, and
their consent was required for removal.
See Spencer v. GEICO Indem. Co., No.
14-00104-CV-W-GAF, 2014 WL 12607827, at *2 (W.D. Mo. Mar. 25, 2014) (finding that
judgment debtor’s consent to removal required in equitable garnishments pursuant to Mo. Rev.
Stat. § 379.200). Notably, the Court is not alone in coming to such a conclusion. Many other
courts within this District and the Eastern District have similarly rejected the argument that
judgment debtors are merely nominal parties in equitable garnishment actions under Mo. Rev.
Stat. § 379.200.
See, e.g., Bullar v. U.S. Specialty Ins. Co., No. 4:15CV822 JCH, 2015 WL
4243438, at *2 (E.D. Mo. July 13, 2015) (“[Defendant] contends [the judgment debtor’s] consent
was not necessary as they are merely nominal Defendants, whose presence is unnecessary to the
adjudication of this case. Upon consideration the Court disagrees . . . .”); Spencer, 2014 WL
12607827, at *2 (“[The judgment debtor] is not a nominal party to Plaintiff’s claims under
Missouri Revised Statute § 379.200.”); Reed v. ASSURANT, INC., No. 13-01183-CV-W-GAF,
2014 WL 12607826, at *3 (W.D. Mo. Feb. 6, 2014) (The insured defendant “is not a nominal
party to Plaintiff's claims under Missouri Revised Statute § 379.200.”); Demann v. Liberty Mut.
Fire Ins. Co., No. 4:12CV00990 ERW, 2012 WL 3939827, at *2 (E.D. Mo. Sept. 10, 2012)
(“[T]he defendant cannot be a nominal party.”); Kendall v. N. Assur. Co. of Am., No.
09-0539-CV-W-GAF, 2009 WL 2632757, at *2 (W.D. Mo. Aug. 25, 2009) (“Northern's fleeting
argument that ‘the [insured defendants] are merely nominal or formal parties’ is unpersuasive.”).
Seneca maintains that the Court must find that Garcia Empire’s consent is not required
due to a recent Eighth Circuit opinion, Williams v. Employers Mutual Casualty Company, 845
F.3d 891 (8th Cir. 2017).
The Court does not agree. Williams never discusses the unanimity
consent requirement, and the judgment debtor’s consent to removal is not an issue in the case.
Id. Indeed, Williams was removed under the Class Action Fairness Act, which permits class
actions to be removed “by any defendant without the consent of all defendants.” 28 U.S.C. §
1453(b); Blockbuster v. Galeno, 472 F.3d 53, 56 (2nd Cir. 2006).
As such, the motion to
remand in Williams focused exclusively on whether the claim was a class action at all.
Williams, 845 F.3d at 899.
Furthermore, while Williams does refer to the judgment debtor as
“nominal,” it does so only in the context of analyzing whether the consent judgment was
appealable. Id. at 897. Because the issues in Williams are different than those in the present
matter, the Eighth Circuit’s use of the phrase “nominal” in Williams does not suggest an intent to
change consistent case law on an unrelated issue.
Mo. Rev. Stat. § 379.200 requires Garcia Empire to be joined as a defendant in this
action. As such, it is a necessary and indispensable party whose consent was required for
removal to be proper. Because Seneca failed to obtain Garcia Empire’s consent, removal of the
action to this Court is defective, and it must be remanded. Spencer, 2014 WL 12607827, at *2.
The question of whether Mo. Rev. Stat. § 379.200 constitutes a “direct action,” as that phrase is
used in 28 U.S.C. § 1332(c)(1), does not affect the outcome of these motions, and therefore the
Court need not address the issue.
For the foregoing reasons, Plaintiffs Neil and Heta Desai’s Motion to Remand, Doc. 7,
and Defendant Garcia Empire, LLC’s Motion to Remand, Doc. 9, are granted.
s/ Nanette K. Laughrey
NANETTE K. LAUGHREY
United States District Judge
Dated: February 13, 2018
Jefferson City, Missouri
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?