Bartelmay et al v. Body Flex Sports, Inc. et al

Filing 13

Memorandum Opinion and Order For the reasons stated herein, the Court lacks subject matter jurisdiction because complete diversity among the parties does not exist. Bartelmay's 7 Motion to Remand is granted. The case is remanded to the State court from which it was removed. Judge Benita Y. Pearson on 6/18/2013. (JLG)

PEARSON, J.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
LEONARD W. BARTELMAY, et al.,
Plaintiffs,
v.
BODY FLEX SPORTS, INC., et al.,
Defendants.

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CASE NO. 4:13cv767

JUDGE BENITA Y. PEARSON

MEMORANDUM OF OPINION AND
ORDER [Regarding ECF No. 7]

Pending is the Motion to Remand to State court filed by Plaintiff Leonard W. Bartelmay
(“Bartelmay”) who is joined in the instant lawsuit by co-Plaintiff Anthem Blue Cross Blue Shield
of Texas (“Blue Cross”). ECF No. 7. Defendants Body Flex Sports, Inc. (“Body Flex”) and
Kmart Corporation (“Kmart”) responded. ECF No. 10. The Court has been advised, having
reviewed the record, the parties’ briefs, and the applicable law. For the reasons that follow, the
Court grants Bartelmay’s motion and remands the case to State court.
I. Background
Bartelmay alleges that he suffered personal injuries as a result of defective exercise
equipment that was manufactured and supplied by Defendants. ECF No. 1-2 at 21-22.1 Blue
Cross asserts a right of subrogation to Bartelmay’s claim. ECF No. 1-2 at 22. As a result of his
injuries, Bartelmay asserts causes of action pursuant to the Ohio Product Liability Act, O.R.C. §
2307.71 et seq., as well as common law causes of action asserting negligence, breach of express
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Page numbers in this Memorandum of Opinion and Order refer to the Page ID# in the
electronic filing system.

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and implied warranties, and strict liability. ECF No. 1-2 at 22-25.
Plaintiffs filed the Complaint in the Mahoning County, Ohio, Court of Common Pleas on
February 27, 2013. ECF No. 1-2. Defendants filed a Notice of Removal on April 8, 2013
pursuant to 28 U.S.C. § 1441 and based on diversity jurisdiction pursuant to 28 U.S.C. § 1332(a).
ECF No. 1 at 1.
In the Complaint, both Kmart and Blue Cross are named as corporations with their
principal places of business in Illinois, making them both citizens of Illinois for the purposes of,
diversity jurisdiction. ECF No. 1-2 at 20-21; see § 1332(c)(1). Defendants do not dispute that
Kmart and Blue Cross share citizenship and are non-diverse entities. ECF No. 1 at 4-5.
In the Notice of Removal, however, Defendants argue that Blue Cross is an improperly named
plaintiff because the statute of limitations applicable to its subrogation claim has expired and also
that Blue Cross is fraudulently joined in the lawsuit. ECF No. 1 at 1. As a result, Defendants
argue that the citizenship of Blue Cross should not be considered for diversity jurisdiction
purposes. ECF No. 1 at 1. The Court, unsatisfied with Defendants’ Notice of Removal given the
non-diverse parties on the face of the Complaint, ordered the parties to file supplemental briefs
regarding the properness of Blue Cross as a plaintiff. ECF No. 6.
In response to the Court’s Order, Bartelmay filed a Motion to Remand arguing that
Defendants failed to establish complete diversity among the parties as required by § 1332(a).
ECF No. 7 at 51-52. Bartelmay argues that Blue Cross is a properly named plaintiff and its
shared citizenship with Kmart deprives the Court of subject matter jurisdiction. ECF No. 7 at
52-54. Defendants responded, urging the Court to exercise its discretionary authority under Fed.

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R. Civ. P. 21 to drop Blue Cross from the instant lawsuit, thereby conferring subject matter
jurisdiction to the Court. ECF No. 10 at 62.
II. Legal Standard
Pursuant to 28 U.S.C. § 1441(a), “any civil action brought in a State court of which the
district courts of the United States have original jurisdiction, may be removed by the defendant or
defendants, to the district court of the United States for the district and division embracing the
place where such action is pending.” District courts have original jurisdiction over civil actions
that arise under Federal law, see 28 U.S.C. § 1331, or that involve parties of diverse citizenship
and exceed $75,000 in controversy, see 28 U.S.C. § 1332. “[D]iversity jurisdiction does not
exist unless each defendant is a citizen of a different State from each plaintiff.” Owen
Equipment and Erection Co. v. Kroger, 437 U.S. 365, 373 (1978) (emphasis in original).
A court is required to remand the case “[i]f at any time before final judgment it appears
that the district court lacks subject matter jurisdiction.” 28 U.S.C. § 1447(c). In deciding a
motion to remand based on whether subject matter jurisdiction exists, “a court generally looks to
the plaintiff's complaint, as it is stated at the time of removal, and the defendant's notice of
removal.” Gentek Bldg. Prods., Inc. v. Sherwin-Williams Co., 491 F.3d 320, 330 (6th Cir. 2007)
(citing Miller v. Grugirich, 763 F.2d 372 (9th Cir. 1985)). “A court may, however, look at
subsequent pleadings and proceedings in a case . . . to the extent that they ‘shed light on the facts
as they existed at the outset of the litigation and on the actual interests of the parties.’” Hrivnak
v. NCO Portfolio Mgmt., 723 F. Supp. 2d 1020, 1024 (N.D.Ohio 2010) (citing American
Motorists Ins. Co. v. Trane Co., 657 F.2d 146, 151 n. 3 (7th Cir. 1981)). A district court has

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“wide discretion to allow affidavits, documents and even a limited evidentiary hearing to resolve
disputed jurisdictional facts.” Ohio Nat. Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th
Cir.1990) (citations omitted).
A defendant seeking removal on the basis of diversity jurisdiction has the burden of
proving by a preponderance of the evidence that complete diversity and amount in controversy
requirements are met. See, e.g., Gafford v. Gen. Elec. Co., 997 F.2d 150, 155 (6th Cir. 1993),
overruled on other grounds by Hertz Corp. v. Friend, 130 S.Ct. 1181, 1192-93 (2010). The
removal petition is to be strictly construed, and the district court must resolve all disputed
questions of fact and ambiguities in the controlling State law in favor of the non-removing party.
Coyne v. American Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999).
III. Analysis
A court usually looks to the pleadings at the time of removal in order to ascertain whether
it has subject matter jurisdiction over the dispute. Gentek, 491 F.3d at 330. A determination of a
district court’s subject matter jurisdiction can be attacked facially or factually. Id. Defendants
launch both types of attacks by arguing that Blue Cross is an improperly named plaintiff, a facial
attack, and that Blue Cross is a nominal party that has been fraudulently joined, a factual attack.
ECF No. 1 at 1.
A. Facial Attack – Defendants’ Assertion of Blue Cross’ Misjoinder
Defendants facially attack the Court’s jurisdiction by arguing that Blue Cross is an
improperly named plaintiff because the statute of limitations for Blue Cross’ subrogation claim
has expired. ECF No. 1 at 1, 5. Bartelmay argues that Blue Cross is a properly named plaintiff

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with a viable subrogation claim against Defendants pursuant to Ohio law. ECF No. 7 at 51-53.
A facial attack questions merely the sufficiency of the pleading. Ohio Nat’l Life Ins. Co.,
922 F.2d at 325. In assessing a facial attack on subject matter jurisdiction, the court accepts the
allegations in the complaint as true. Id. The Complaint names Blue Cross as a co-plaintiff and
asserts a right of subrogation to Bartelmay’s personal injury claims. ECF No. 1-2 at 20, 22.
Pursuant to Ohio law, an insurer-subrogee stands in the shoes of the insured-subrogor and
has no greater rights than those of its insured-subrogor. Chemtrol Adhesives, Inc. v. Am. Mfrs.
Mut. Ins. Co., 42 Ohio St.3d 40, 42, 537 N.E.2d 624, 628 (1989). When the insured’s claim
against a tortfeasor is based on negligence, the insurer’s subrogated claim is also necessarily
based on negligence, rather than on the insurance contract. Ohio Mut. Ins. Assn., United Ohio
Ins. Co. v. Warlaumont, 124 Ohio App.3d 473, 475, 706 N.E.2d 793, 794 (Ohio App. 12th Dist.
1997) (citing State Farm Mut. Auto Ins. Co. v. Rossi, No. 89-T-4247, 1989 WL 149319 (Ohio
App. 11th Dist. Dec. 8, 1989)). Logic dictates that when an insured’s tort claim is subject to a
statute of limitations, so too is the insurer’s subrogation claim. United States Fid. & Guar. Co. v.
Buckeye Union Ins. Co., No. L-85-377, 1986 WL 11418, at *4 (Ohio App. 6th Dist. Sept. 30,
1986).
In the instant case, Defendants contend that Blue Cross’ subrogation claim is time-barred
because it was filed after the applicable statute of limitations period had expired. ECF No. 1 at 5.
In Ohio, personal injury claims must be brought within two years of the alleged injuries. Ohio
Rev. Code § 2305.10. Bartelmay alleges that his injuries occurred on March 4, 2010. ECF No.
1-2 at 21. Bartelmay originally filed the Complaint, which did not include Blue Cross named as

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a co-plaintiff, on March 1, 2012. ECF No. 1-1. Bartelmay re-filed the Complaint, which
included Blue Cross as a named co-plaintiff asserting a right of subrogation to Bartelmay’s
claim, on February 27, 2013, after the applicable statute of limitations had expired. ECF No. 1-2
at 20.
Pursuant to Ohio law, persons who must be joined for just adjudication include those who
have “an interest relating to the subject of the action as an assignor, assignee, subrogor, or
subrogee.” Ohio Civ. R. 19(A)(3). In Holibaugh v. Cox, 167 Ohio St. 340, 148 N.E.2d 677
(1958), the court held that, “the assignor and the partial assignee become parties united in interest
and . . . the insured or the insurer must be joined as parties to the action.” Id. at 346 (emphasis in
original). Once a plaintiff has properly commenced an action within the applicable statute of
limitations, the subrogee gains the benefit of the subrogor’s timely commencement of the action.
See id. (holding that assignee insurer was properly joined as a plaintiff despite the expiration of
the period of the statute of limitations); see also Adkins v. Orefice, No. 12CA0015, 2012 WL
6674485, at *3-4 (Ohio App 2d Dist. Dec. 21, 2012) (reaffirming the principle that the unity of
interest between the insured and the insurer allows the insurer to gain the benefit of the insured’s
timely filing).
The Court finds that Blue Cross is a properly named plaintiff in the instant case.
Bartelmay originally filed the Complaint on March 1, 2012, within the two year statute of
limitations period pursuant to O.R.C. § 2305.10. ECF No. 1-1. Consequently, Blue Cross gains
the benefit of Bartelmay’s timely commencement of the action against Defendants and is not
barred by the expiration of the statute of limitations from bringing its subrogation claim. See

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Holibaugh, 167 Ohio St. at 346, 148 N.E.2d at 682; Adkins, 2012 WL 6674485 at *3-4.

B. Factual Attack – Defendants’ Assertion of Blue Cross’ Fraudulent Joinder
Defendants contend that Blue Cross is a nominal party that has been fraudulently joined for
the sole purpose of destroying diversity jurisdiction. ECF No. 1 at 1. Bartelmay disavows that
Blue Cross was joined to deprive the Court of diversity jurisdiction and maintains that Blue Cross
is a proper plaintiff with a viable subrogation claim against the Defendants pursuant to Ohio law.
ECF No. 7 at 48-51.
Presumptive truthfulness is not accorded to the allegations when assessing a factual attack
on a court’s subject matter jurisdiction. Ohio Nat. Life Ins. Co., 922 F.2d at 325. To resolve a
factual issue, the court must weigh the evidence to determine whether there is or is not subject
matter jurisdiction. Id. In Coyne, the court articulated the standard of proof for fraudulent joinder:
To prove fraudulent joinder, the removing party must present sufficient evidence that
a plaintiff could not have established a cause of action against non-diverse defendants
under state law. However, if there is a colorable basis for predicting that a plaintiff
may recover against non-diverse defendants, this Court must remand the action to
state court. The district court must resolve “all disputed question of fact and
ambiguities in the controlling . . . state law in favor of the non removing party.” All
doubts as to the propriety of removal are resolved in favor of remand.
183 F.3d at 493 (citing Alexander v. Electronic Data Sys. Corp., 13 F.3d 940, 949 (6th Cir.
1994)).
The Court finds that there is insufficient evidence to conclude that Blue Cross was

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fraudulently joined.2 Defendants argue that “it is clear” that Bartelmay joined Blue Cross with the
intent to deprive the Court of subject matter jurisdiction. ECF No. 10 at 61. The non-moving
party’s motivation for joining a non-diverse party, “is immaterial to [the] determination regarding
fraudulent joinder.” Jerome Duncan v. Auto-By-Tel, L.L.C., 176 F.3d 904, 907 (6th Cir. 1999).
Moreover, it is a well established principle that “[t]he well-pleaded complaint rule generally
provides that the plaintiff is the master of [her] complaint.” Loftis v. United Parcel Service, Inc.,
342 F.3d 509, 515 (6th Cir. 2003) (quoting Alexander, 13 F.3d at 943). The Court concludes that
Blue Cross is a properly named plaintiff with a viable subrogation claim against Defendants
pursuant to Ohio law, which is sufficient to find “a colorable basis to conclude that [Blue Cross]
will recover against [Kmart].” Coyne, 183 F.3d at 493. Therefore, the Court is required to remand
the instant case to State court.
C. Defendants’ Request Pursuant to Fed. R. Civ. P. 21
Defendants urge the Court to exercise its discretionary authority pursuant to Fed R. Civ. P.
213 to drop Blue Cross from the instant case, thereby conferring diversity jurisdiction to the Court
pursuant to § 1332(a). ECF No. 10 at 62.
Because the Court has concluded that Blue Cross is a properly named plaintiff in the instant

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In their Notice of Removal, Defendants “reserve the right to respond accordingly” if the
Court determines that Blue Cross is “joined.” ECF No. 1 at 7. The Court, finding that
Defendants had ample opportunity to assert their fraudulent joinder argument in response to the
Court’s Order, ECF No. 6, and Bartelmay’s Motion to Remand, ECF No. 7, does not extend
another opportunity.
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Rule 21 provides that “a court may at any time, on just terms, add or drop a party.” Fed.
R. Civ. P. 21.
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case with a viable subrogation claim against Defendants pursuant to Ohio law, and Defendants
have not provided sufficient evidence to demonstrate that Blue Cross was fraudulently joined, the
Court chooses not to exercise its discretionary authority under Rule 21 to drop Blue Cross.

IV. Conclusion
For the reasons stated above, the Court lacks subject matter jurisdiction because complete
diversity among the parties does not exist. Bartelmay’s Motion to Remand is granted. The case is
remanded to the State court from which it was removed.

IT IS SO ORDERED.

June 18, 2013
Date

/s/ Benita Y. Pearson
Benita Y. Pearson
United States District Judge

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