Pondexter v. Oruzio et al
MEMORANDUM & ORDER re 12 Motion to Remand to State Court. For these reasons, the Court holds that Teal's Express has been fraudulently joined and thus complete diversity exists in the present action. The Court also finds that def endants have sufficiently alleged that the amount in controversy exceeds $75,000.00. Plaintiff's motion to remand the action to state court is therefore denied. So Ordered by Judge Carol Bagley Amon on 3/20/2017. (Lee, Tiffeny)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
NOT FOR PUBLICATION
MEMORANDUM & ORDER
MORRAS ORUZIO, PAUL DAVE LEE, and
TEAL'S EXPRESS INC.,
AMON,United States District Judge:
On October 3, 2014, plaintiff Robert Pondexter filed a summons and complaint in the
Supreme Court for the State of New York seeking monetary damages from defendants Carlos
Orozco-Morras s/h/a Morras Oruzio ("Orozco-Morras"), Dave Seepaul s/h/a Paul Dave Lee
("Seepaul"), and Teal's Express, Inc.("Teal's Express" or "Teal's")for personal injuries suffered
as a result of an automobile accident.' (D.E.# 1-2,("Compl.").) Defendants removed the case to
federal court on September 29, 2015, on the basis of diversity jurisdiction. (D.E.# I,("Notice of
Removal").) On October 26, 2015, Pondexter filed a motion to remand the case to state court.
(D.E.# 4,("Mot.to Remand").) For the following reasons,the Court concludes that Teal's Express
has not been properly joined and that, as a result, complete diversity exists among the parties. The
Court therefore denies Pondexter's motion to remand.
When determining subject matter jurisdiction, courts may "look outside the pleadings" to
"documents appended to a notice of removal or a motion to remand that convey information
essential to the court's jurisdictional analysis." Romano v. Kazacos. 609 F.3d 512, 520(2d Cir.
'Defendants state in their notice of removal that Morras Oruzio and Paul Dave Lee's names are actually Carlos
Orozco-Morras and Dave Seepaul, respectively. (D.E.# 1
2010)(citing Davenport v. Procter & Gamble Mfg. Co.. 241 F.2d 511, 514(2d Cir. 1957)). The
following facts are therefore drawn from the documents attached to the notice of removal and the
motion to remand in this case as well as the evidence presented in the parties' supplemental filings.
The instant case arises from a complaint filed in the Supreme Court for the State of New
York seeking monetary damages for "personal injuries allegedly suffered by Pondexter as a result
of an automobile accident on August 26,2013." (Notice of Removal H 5.) Pondexter is a resident
of New York. (Id. f 1.) Orozco-Morras and Seepaul are residents of New Jersey. (Id
Teal's Express is incorporated in New York. (Id ^ 9.) Orozco-Morras works for a company
named DT Trucking. DT Trucking was hired by Jake's Cartage to carry out an order of Teal's
Express. Seepaul owns DT Trucking.
The complaint in this case alleges that Orozco-Morras was operating the truck involved in
this accident and that Seepaul and Teal's Express were Orozco-Morras's employers and the
registrant or owner of the truck. (Compl. KH 6-8.) Although Pondexter filed the summons and
complaint in state court on October 3, 2014,(Notice of Removal H 1), defendants were not served
until October 15 or October 16, 2014,(id ^ 3).
On January 12, 2015, defendants answered the complaint in state court. (D.E. # 1-3.) In
their answer, defendants asserted that Teal's Express did not own the truck involved in the accident
or employ the operator of the truck at the time of the accident and denied all allegations to the
contrary. (Id at 2,4.) After attending a number of conferences and submitting discovery requests
to Pondexter,(see D.E. # 4-2,("Pallilo Deck")KH 10-13), on August 4, 2015, defendants mailed
a letter to Pondexter's counsel asserting that Teal's Express "has no relation to the accident at
issue," which included an affidavit by Joseph Teal, Vice President of Teal's Express, making
representations to that effect, and a proposed stipulation of dismissal to that effect. (D.E. # 1-4.)
Over one month later, on September 17, 2015, defendants mailed another letter to Pondexter's
counsel,this time indicating that they planned to remove the case to federal court unless Pondexter
was "willing to stipulate that plaintiff is not seeking damages in excess of$75,000." (D.E.# 1-5.)
The defendants then filed a notice of removal in this Court on September 29, 2015, seeking to
remove on the basis of diversity jurisdiction. (See Notice of Removal.)
In their notice of removal, defendants argued that the Court has diversity jurisdiction over
this case because the non-diverse defendant. Teal's Express, is not properly joined. (Id H 9.) On
October 26, 2015, Pondexter filed a motion to remand the case to state court. (Mot. to Remand.)
The parties treated the motion to remand as an opposition to defendants' notice ofremoval. (D.E.
#5.) On February 11, 2016, the Court denied Pondexter's motion to remand without prejudice
and directed the parties to conduct limited discovery as to the Court's subject matter jurisdiction.
(D.E. dated February 11, 2016.) On August 18, 2016, after the parties completed the limited
discovery and submitted renewed motion papers,(see D.E.# 12,13),the Court directed the parties
to file supplemental briefing in support oftheir respective positions. (D.E. dated August 18,2016.)
The parties subsequently submitted affidavits/declarations in support of their respective motion
and opposition papers, in which they both presented facts from evidence uncovered in the course
of the limited discovery.(^D.E.# 14("Defs. Aff."); D.E.# 15 ("PI. Aff.").)
Defendants may remove an action to federal district court in "any civil action brought in a
State court of which the district courts of the United States have original jurisdiction." 28 U.S.C.
§ 1441(a). The district courts "have original jurisdiction of all civil actions where the matter in
controversy exceeds the sum of$75,000,exclusive ofinterest and costs, and is between...citizens
ofdifferent States." 28 U.S.C.§ 1332(a). The "right to remove a state court action to federal court
on diversity grounds is statutory, and must therefore be invoked in strict conformity v^th statutory
requirements." Lupo v. Human Affairs Int'L Inc.. 28 F.3d 269, 274 (2d Cir. 1994) (citing
Shamrock Oil & Gas Corp. v. Sheets. 313 U.S. 100, 108 (1941)).
One ofthe statutory requirements is that the defendants' notice of removal must"contain
a short and plain statement of the grounds for removal, together with a copy of all process,
pleadings, and orders served upon [them]." 28 U.S.C. § 1446(a). "When a party removes a state
court action to the federal court on the basis of diversity of citizenship, and the party seeking
remand challenges the jurisdictional predicate for removal, the burden falls squarely upon the
removing party to establish its right to a federal forum by 'competent proof.'" R. G. Barry Corp.
V. Mushroom Makers. Inc.. 612 F.2d 651,655(2d Cir. 1979). The Court must therefore carefully
consider whether defendants' notice of removal has adequately established subject matter
For the Court to have subject matterjurisdiction on the basis of28 U.S.C. § 1332, diversity
of citizenship jurisdiction, "complete diversity" is required, meaning that "all plaintiffs must be
citizens of states diverse from those of all defendants." Pa. Public School Emplovees' Retirement
Svstem V. Morgan Stanlev & Co.. Inc.. 772 F.3d 111, 117-18(2d Cir. 2014)(citing Exxon Mobil
Corp. V. Allapattah Servs.. Inc.. 545 U.S. 546, 553 (2005)). Diversity jurisdiction also requires
that the "matter in controversy exceeds the sum or value of$75,000." 28 U.S.C. § 1332.
A. Complete Diversity
Pondexter argues that the Court should remand the case because the parties are not
completely diverse. Pondexter is a citizen of New York. (Notice of Removal H 6.) Although
Orozco-Morras and Seepaul are citizens of New Jersey, Teal's Express, a New York corporation
with its principal place of business in Watertown, New York, is a citizen of New York. (Id UK 7-
9.) If Teal's Express is properly joined, then the parties are not diverse and remand to the state
court would be required. However,"[a] plaintiff may not defeat federal court diversityjurisdiction
by improperly joining as a defendant a non-diverse party with no real connection to the
controversy." Bounds v. Pine Belt Mental Health Care Res.. 593 F.3d 209, 215 (2d Cir. 2010).
In fact, courts may "overlook the presence of a non-diverse defendant if from the pleadings there
is no possibility that the claims against that defendant could be asserted in state court." Briamatch
Ltd.. L.P. V. Phoenix Pictures. Inc.. 373 F.3d 296, 302 (2d Cir. 2004). "In order to show that
naming a non-diverse defendant is a fraudulent joinder effected to defeat diversity, the defendant
must demonstrate, by clear and convincing evidence, either that there has been outright fraud
committed in the plaintiffs pleadings, or that there is no possibilitv. based on the pleadings, that
the plaintiff can state a cause of action against the non-diverse defendant in state court."
Pamnillonia v. RJR Nabisco. Inc.. 138 F.3d 459, 461 (2d Cir. 1998) (emphasis added). In
analyzing fraudulent joinder, the Court is permitted to look beyond the pleadings to resolve the
jurisdictional question. Bldg. & Const. Trades Council of Buffalo. N.Y. & Vicinity v. Downtown
Dev.. Inc.. 448 F.3d 138, 150(2d Cir. 2006).
In their opposition letter, defendants claim that Teal's Express has been fraudulently
joined, and that its citizenship can therefore be ignored for purposes ofdiversity jurisdiction. They
argue that Teal's Express hired Jake's Cartage solely as an independent contractor and thus Teal's
Express cannot be held liable for the actions of Jake's Cartage or any of its own independent sub
contractors. Defendants have presented evidence to support this claim. First, defendants offer
affidavits from the Vice President of Teal's Express and from Dave Seepaul, (D.E. # 1-4,("Teal
Aff."); D.E.#6-1,("Seepaul Aff.")), in which both state that Teal's Express did not own the truck
involved in the accident and that Orozco-Morras was not employed by Teal's Express at the time
of the accident. (Teal Aff.
7-10; Seepaul Aff.
6-8.) Defendants also attach a certificate of
title and vehicle registration showing that Seepaul was the owner of the truck involved in the
accident. (D.E. # 6-1.) Additionally, along with their affidavit/declaration in support of their
opposition, defendants included the transcript ofthe deposition of Joseph Teal—which was taken
during the limited discovery—^to support their arguments. Teal stated under oath that Teal's
Express does not exercise any control over the manner and method ofshipment used by the drivers
selected by Jake's Cartage. (See D.E.# 14-1.) He further testified in his deposition that Teal's is
not involved in the process of selecting the driver or subcontracted trucking company and that
Teal's does not have the authority to stop Jake's Cartage from using any particular trucking
companies to carry out Teal's Express's orders. (Id at 32.)
In response, Pondexter alleges that the defendants are "hiding" a relationship between
Orozco-Morras, Seepaul, and Teal's Express. In response to defendants' argument that Teal's did
not ovm, operate, control, or manage any part ofthe delivery truck or the services rendered on the
date of the incident, Pondexter argues that Teal's Express "was still involved with the services
being rendered on their behalf." (PI. Aff.
27.) In support, Pondexter asserts, inter alia, that
Teal's "was able [to] track the shipment and see whether it had been delivered" via a computer
system that Teal's shared 'with Jake's Cartage and DT Trucking. (Id at H 28.) Pondexter also
asserts that DT and Orozco-Morras were agents of Teal's due to the utilization of Teal's time
keeping system to track Orozco-Morras's hours. (Id 141.) Finally, Pondexter asserts that ifissues
with the delivery arose,including the performance ofDT,customers would contact Teal's Express.
The ultimate determination as to whether Teal's is a proper party rests on whether
Orozco-Morras and/or DT Trucking were acting as independent contractors or employees/agents
for Teal's at the time ofthe incident. Under New York law, as a general rule,"a party who retains
an independent contractor, as distinguished from a mere employee or servant, is not liable for the
independent contractor's negligent acts." Kleeman v. Rheingold. 81 N.Y.2d 270, 273 (1993).
"Control of the method and means by which the work is to be done ... is the critical factor in
determining whether one is an independent contractor or an employee for the purposes of tort
liability." Berger v. Dvkstra. 610 N.Y.S.2d 401,402(1994).
Having reviewed the evidence presented by both parties, the Court finds that there is no
possibility that a trier of fact could find that Teal's exercised operation and control over DT
Trucking or Orozco-Morras. Both Teal and Seepaul testified in affidavits that Teal's Express does
not own the truck involved in the accident and that the driver was not employed by Teal's Express
at the time ofthe accident. In fact, the certificate of title and vehicle registration presented to the
Court shows that Seepaul was the owner of the truck involved in the accident. Teal also testified
in his deposition that Teal's Express does not exercise any control over the manner and method of
shipment used by the drivers selected by Jake's Cartage, nor is it involved in the process of
selecting the driver or subcontracted trucking company. Plaintiffs offer no evidence to dispute
these basic facts. Even though, as plaintiff argues. Teal's express was able to track the shipment
to determine whether it had been delivered via a computer system that Teal's shared with Jake's
and DT, and even though Teal testified that if problems with shipments arose, customers would
call Teal, none of this evidence demonstrates that Teal's had any "control" over Jake's or DT's
actions concerning the shipment. The evidence indicates that Teal's Express hired Jake's Cartage
as a mere independent contractor and Teal's therefore cannot be held liable for any actions of
Jake's Cartage or its independently hired agents. The Court thus finds that defendants have met
their burden of demonstrating that there is no possibility that a claim can be stated against Teal's
Express, and thus, Teal's Express has been fraudulently joined. As a result, complete diversity
exists among the plaintiff and the defendants.
B. Amount in Controversy
The Court finds that the defendants have made sufficient allegations in their notice of
removal that the amount in controversy in the present action exceeds $75,000.00. Indeed, plaintiff
fails to dispute the allegation that the amount in controversy exceeds that amount.
For these reasons, the Court holds that Teal's Express has been fraudulently joined and
thus complete diversity exists in the present action. The Court also finds that defendants have
sufficiently alleged that the amount in controversy exceeds $75,000.00. Plaintiffs motion to
remand the action to state court is therefore denied.
Dated: March <=P ^ ,2017
Brooklyn, New York
s/Carol Bagley Amon
Carol Bagley Am(
United States District Judge
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