McNeilly v. Norman et al

Filing 34

ORDER: Plaintiff's 32 Objections are OVERRULED; the 31 Memorandum and Recommendation is ACCEPTED; the Magistrate Judge's 18 Order allowing the amendment to the Complaint is VACATED; and the Defendants 9; 27 Motion to Dismiss is GRANTED IN PART and DENIED IN PART. The 27 Motion is GRANTED to the extent that the Plaintiff's claims against the Defendants Southern Health Partners, Inc., Teresa Smith, Crystal Lail, Pamela Patterson, and Manuel Maldonado are DISMISSED WITHOUT PREJUDICE and DENIED to the extent the Defendants sought dismissal with prejudice. Signed by District Judge Martin Reidinger on 8/7/2018. (maf)

THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
CIVIL CASE NO. 1:17-cv-00286-MR-DLH

MARY McNEILLY, Administrator of
the Estate of ARCHIE K. McNEILLY,
JR.,

)
)
)
)
Plaintiff,
)
)
vs.
)
)
ALAN NORMAN, officially as Sheriff )
of Cleveland County,
)
LIBERTY MUTUAL INSURANCE CO., )
as surety for the Sheriff,
)
DURWIN BRISCOE, officially,
)
DAVID GIBSON,
)
A.D. McCRAY,
)
BRITTANY MORTON,
)
JAMES D. OAKS,
)
JORDAN T. PERKINS,
)
M.R. USSERY,
)
TODD A. WYLLYS,
)
R.N. WESTBROOK, each of them
)
Individually and officially,
)
SOUTHERN HEALTH PARTNERS,
)
INC., and
)
TERESA SMITH,
)
CRYSTAL LAIL,
)
PAMELA PATTERSON, and
)
MANUEL MALDONADO, each of
)
them individually,
)
)
Defendants.
)
_______________________________ )

ORDER

THIS MATTER is before the Court on the Motion to Dismiss filed by
Defendants Southern Health Partners, Inc., Teresa Smith, Crystal Lail,
Pamela Patterson, and Manuel Maldonado [Doc. 27]; the Magistrate Judge’s
Memorandum and Recommendation [Doc. 31] regarding the disposition of
that motion; and the Plaintiff’s Objections to the Memorandum and
Recommendation [Doc. 32].
Pursuant to 28 U.S.C. § 636(b) and the standing Orders of Designation
of this Court, the Honorable Dennis L. Howell, United States Magistrate
Judge, was designated to consider the Defendants’ motion and to submit a
recommendation for its disposition.
On May 8, 2018, the Magistrate Judge filed a Memorandum and
Recommendation in this case containing conclusions of law in support of a
recommendation regarding the motion to dismiss. [Doc. 31]. The parties
were advised that any objections to the Magistrate Judge’s Memorandum
and Recommendation were to be filed in writing within fourteen (14) days of
service. The Plaintiff timely filed Objections on May 22, 2018. [Doc. 32].
The Defendants filed their Reply to the Plaintiff’s Objections on June 4, 2018.
[Doc. 33].
This case presents the Court with an issue that has apparently never
previously been addressed: Does Rule 41 of the North Carolina Rules of Civil
2

Procedure serve to confer subject matter jurisdiction upon a federal district
court to address a case that had previously been voluntarily dismissed
without prejudice in state court?
It is clear that, when a plaintiff files a case in state court and thereafter
seeks to remove that case, the federal court does not have subject matter
jurisdiction. American Int’l Underwriters (Philippines), Inc. v. Continental Ins.
Co., 843 F.2d 1253, 1260 (9th Cir. 1988); Shamrock Oil & Gas Corp. v.
Sheets, 313 U.S. 100 (1941). This is true even if the case could originally
have been brought in the federal court. Oregon Egg Producers v. Andrew,
458 F.2d 382, 383 (9th Cir. 1972). This Court is a court of limited jurisdiction,
and only has such subject matter jurisdiction as is conferred on it by the
Constitution and acts of Congress. Exxon Mobil Corp. v. Allapattah Servs.,
Inc., 545 U.S. 546, 552 (2005). The removal statute, 28 U.S.C. § 1441(a),
expressly limits the right of removal to defendants. As such, when a plaintiff
attempts removal, the federal court cannot entertain the case even if the
Court could otherwise have had subject matter jurisdiction over the matter.
Id.; Oregon Egg, 458 F.2d at 383 (“A plaintiff who commences his action in
a state court cannot effectuate removal to a federal court even if he could
have originated the action in a federal court and even if a counterclaim is
thereafter filed that states a claim cognizable in a federal court.”).
3

Here, the Plaintiff originally filed her claims against Defendants
Southern Health Partners, Inc., Teresa Smith, Crystal Lail, Pamela
Patterson, and Manuel Maldonado in state court. She thereafter voluntarily
dismissed th matter without prejudice, pursuant to Rule 41 of the North
Carolina Rules of Civil Procedure. In so doing, pursuant to state statute, the
Plaintiff had one year to re-file her case, even if the statute of limitations had
otherwise expired in the interim. The Plaintiff re-filed her case within that
one-year period, but not in state court. She chose, instead, to re-file in
federal court. The effect is for the Plaintiff to have used North Carolina Rule
41 to remove her case from state court to federal court, notwithstanding the
prohibition against doing so.
The Plaintiff relies, in large measure, on Tompkins v. Log Systems,
Inc., 96 N.C. App. 333, 385 S.E.2d 545 (1989), arguing that she has not
removed her case to this Court, but rather has filed it anew because “a
voluntary dismiss without prejudice of [a state court action] . . . was as if the
suit had never been filed.” Id. at 335, 385 S.E.2d at 347. This quote,
however, shows that the Plaintiff argues form (i.e., dismissal and re-filing)
over substance (the case that was pending in state court now lies in federal
court). That formal argument is dependent upon a legal fiction: it is “as if the
suit had never been filed” in state court. The truth, however, is that the case
4

had previously been filed in state court. Federalism dictates that the federal
court’s limited removal jurisdiction be narrowly construed.

Mulcahey v.

Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994). Therefore,
a jurisdictional argument that relies on form and fiction over substance must
fail. The Plaintiff’s case has, in substance, been removed from state court
to federal court, albeit by an “alternative” procedure. As 28 U.S.C. § 1441(a)
allows removal only by defendants, not plaintiffs, this Court has no subject
matter jurisdiction. Oregon Egg, 458 F.2d at 383.
The Plaintiff argues that she had no choice but to originally file this
action in state court in order to take advantage of the 120-day extension of
the statute of limitations afforded by Rule 9(j) of the North Carolina Rules of
Civil Procedure. The Court takes no position on whether Rule 9(j) could have
been employed in this Court. Even if it could not (as the Plaintiff supposes),
that avails the Plaintiff nothing.

Rule 9(j), just like Rule 41, creates a

procedure unique to North Carolina state courts. These North Carolina rules
cannot expand federal jurisdiction in North Carolina in a manner that is
unavailable in all other states.

Such rules may extend the statute of

limitations (in which the federal courts follow state law), but subject matter
jurisdiction of the United States District Courts is a matter left to Congress,
not to the separate state legislatures.
5

Curiously, the Plaintiff asserts that “the right to file in federal court after
dismissing the state court action is well-established and non-controversial.”
[Doc. 32 at 12 (emphasis added)]. The Plaintiff provides only one oblique
citation to any federal case, Porter v. Groat, 713 F. Supp. 893 (M.D.N.C.
1989), to support that proposition. That case, however, addressed only the
question of whether the statute of limitations extension provision of Rule 41
of the North Carolina Rules of Civil Procedure applied in federal court. See
id. at 896-97. Of course, the federal courts are bound by state statute of
limitations because they are substantive in nature. Guaranty Trust Co. v.
York, 326 U.S. 99, 110 (1945). Porter did not address in any manner the
question of subject matter jurisdiction.
The Plaintiff also argues that the case cannot be dismissed because
this Court has subject matter jurisdiction pursuant to federal question
jurisdiction under 28 U.S.C. § 1331. Whether the Plaintiff could have filed
this matter in this Court is irrelevant. Removal is prohibited to a plaintiff,
regardless of whether the federal court would otherwise have had subject
matter jurisdiction. See Oregon Egg, 458 F.2d at 383.1

The Plaintiff also argues, without any citation to authority, that the Court’s dismissal of
this action “would serve as the second dismissal of the action and could represent a
judgment on the merits for those Defendants under state and federal Rule 41.” [Doc. 32
6
1

It is also noted that the Plaintiff brought this state court action to this
Court via a rather circuitous path. The Plaintiff voluntarily dismissed the state
case and then moved to amend her Complaint in this case to add all the
claims herein against the new Defendants who were the Defendants in the
state case. [Doc. 13]. Notwithstanding the original Defendants’ lack of
consent, the Magistrate Judge granted the motion and allowed the Plaintiff
to amend. [Doc. 18]. Such motion was improvidently granted and should
have been denied as futile because this Court does not have subject matter
jurisdiction over the claims against these new Defendants. For this reason,
the Magistrate Judge’s Order [Doc. 18] allowing the amendment will be
vacated.
Lastly, the Defendants move to dismiss these claims with prejudice.
Since the dismissal, however, is for lack of subject matter jurisdiction, the
dismissal will be without prejudice.
In sum, the burden was on the Plaintiff to demonstrate the existence of
subject matter jurisdiction in this Court with regard to the claims against the
Defendants Southern Health Partners, Inc., Teresa Smith, Crystal Lail,
Pamela Patterson, and Manuel Maldonado, and the Plaintiff has failed to

at 14]. Rule 41(a)(1) of the North Carolina Rules of Civil Procedure, however, provides
that only a second voluntary dismissal “operates as an adjudication upon the merits.”
7

meet that burden. Accordingly, for the reasons set forth above, and after
careful consideration of the Memorandum and Recommendation and the
Plaintiff’s Objections thereto, the Court finds that the Magistrate Judge’s
proposed conclusions of law are correct and consistent with current case
law. The Court therefore overrules the Plaintiff’s Objections and accepts the
Magistrate Judge’s recommendation that the motion to dismiss should be
granted in part and the Plaintiff’s claims against Defendants Southern Health
Partners, Inc., Teresa Smith, Crystal Lail, Pamela Patterson, and Manuel
Maldonado should be dismissed, but that the dismissal should be without
prejudice rather than with prejudice as requested.
IT IS, THEREFORE, ORDERED that the Plaintiff’s Objections to the
Memorandum and Recommendation [Doc. 32] are OVERRULED; the
Memorandum and Recommendation [Doc. 31] is ACCEPTED; the
Magistrate Judge’s Order allowing the amendment to the Complaint [Doc.
18] is hereby VACATED; and the Defendants’ Motion to Dismiss [Doc. 27]
is GRANTED IN PART and DENIED IN PART. Specifically, the Motion [Doc.
27] is GRANTED to the extent that the Plaintiff’s claims against the
Defendants Southern Health Partners, Inc., Teresa Smith, Crystal Lail,
Pamela Patterson, and Manuel Maldonado are DISMISSED WITHOUT

8

PREJUDICE.

The Motion [Doc. 27] is DENIED to the extent that the

Defendants sought dismissal with prejudice.
IT IS SO ORDERED.

Signed: August 7, 2018

9