Holsenbeck v. Bravo Carpenters Inc et al

Filing 65

OPINION AND ORDER granting 37 Motion to Remand to State Court; denying 4 Motion to Dismiss; denying 26 Motion to Dismiss for Failure to State a Claim; denying 35 Motion to Remand; denying 40 Motion to Strike; de nying 40 Motion to Dismiss; denying 60 Motion to Dismiss for Failure to State a Claim. Clerk's Notice: Attorneys are responsible for supplementing the State Record with all documents filed in Federal Court. Signed by Honorable Donald C Coggins, Jr on 2/15/2019.(abuc)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
GREENVILLE DIVISION
Monte Holsenbeck,

)
)
Plaintiff,
)
)
v.
)
)
Bravo Carpenters, Inc., D.R. Horton,
)
Inc., Sabino Rico-Zuniga d/b/a Rico
)
Construction, and Rico Construction,
)
LLC,
)
)
Defendants.
)
________________________________ )
Bravo Carpenters, Inc.,
)
)
Third-Party Plaintiff,
)
)
v.
)
)
Sabino Rico-Zuniga d/b/a Rico
)
Construction, and Rico Construction,
)
LLC,
)
)
Third-Party Defendants. )
)

C/A No. 6:18-cv-01391-DCC

OPINION AND ORDER

This matter comes before the Court on Defendant D.R. Horton, Inc.'s [4] Motion to
Dismiss, [26] Defendants/Third-Party Defendants Sabino Rico-Zuniga d/b/a Rico
Construction and Rico Construction, LLC's Motion to Dismiss, [37] Plaintiff's Amended
Motion to Remand, 1 [40] Defendant D.R. Horton, Inc.'s Motion to Strike and, in the
Alternative, to Dismiss Plaintiff's Amended Complaint, and [60] Defendant/Third-Party
Plaintiff Bravo Carpenter, Inc.'s Motion to Dismiss Counterclaim of Third-Party

Plaintiff initially filed a Motion to Remand on August 23, 2018, ECF No. 35, which was
later amended on August 28, 2018, ECF No. 37. Accordingly, the initial Motion to
Remand is denied as moot.

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Defendants, or in the Alternative, Motion to Strike Counterclaim of Third-Party
Defendants. The Motions have been fully briefed and are ripe for review.
I.

Procedural and Factual History
On April 11, 2018, Plaintiff filed a Complaint against Defendants Bravo Carpenters,

Inc. and D.R. Horton, Inc. in the Court of Common Pleas for the County of Greenville,
South Carolina, alleging a non-jury cause of action for negligence arising out of a
workplace injury. ECF No. 1-1. By way of summary, Plaintiff alleges that he was
employed by Professional Cabinetry Installation, which was a subcontractor engaged by
Defendant D.R. Horton, Inc. for the purpose of installing cabinets in a new residential
dwelling. Id. at 6. While working, Plaintiff fell from the second story of a home where
Defendant Bravo Carpenters, Inc., also a subcontractor of Defendant D.R. Horton, Inc.,
"had constructed a set of steps and landing areas on the second floor without a hand
railing, guard railing, or any type of fall protections." Id. at 7. As a result of his fall, Plaintiff
was seriously injured, leading to his initial state law negligence claims against Defendants
D.R. Horton, Inc. and Bravo Carpenters, Inc. Id. at 7–9. Plaintiff served the Complaint
on Defendant D.R. Horton, Inc. on May 9, 2018. ECF No. 1-1 at 2.
On May 22, 2018, Defendant D.R. Horton, Inc. filed a Notice of Removal,
contending this Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332. ECF
No. 1. The Notice of Removal states Plaintiff is a citizen of South Carolina, Defendant
D.R. Horton, Inc. is a foreign corporation organized and existing under the laws of the
State of Delaware with its principal place of business in Texas, and Defendant Bravo
Carpenters, Inc. is a corporation organized and existing under the laws of the State of
North Carolina with its principal place of business in North Carolina. Id. at 2. Additionally,

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Defendant D.R. Horton, Inc. contends the amount in controversy exceeds $75,000.
Therefore, pursuant to 28 U.S.C. § 1332, complete diversity existed and this Court had
subject matter jurisdiction over the case when it was removed.
Following removal, Defendant D.R. Horton, Inc. filed a Motion to Dismiss, which
has been fully briefed. ECF Nos. 4, 10, 20. In its Motion, Defendant D.R. Horton, Inc.
contends it is Plaintiff's statutory employer and, thus, is immune from liability in tort under
the exclusivity provision of the South Carolina Workers' Compensation Act. ECF No. 4.
The parties then filed a Joint Motion to Stay Pending Resolution of Defendant's Motion to
Dismiss, which was granted on June 4, 2018, by the Honorable Bruce Howe Hendricks,
United States District Judge for the District of South Carolina. ECF Nos. 13, 16.
On June 19, 2018, Defendant Bravo Carpenters, Inc. filed an Answer, and, on June
28, 2018, filed a Third-Party Complaint against Third-Party Defendants Sabino RicoZuniga d/b/a Rico Construction and Rico Construction, LLC (collectively, "the Rico
Defendants").

ECF Nos. 22, 23.

The Third-Party Complaint alleges that the Rico

Defendants, citizens of South Carolina, were subcontractors of Defendant Bravo
Carpenters, Inc. and seeks equitable indemnification of any damages owed to Plaintiff.
ECF No. 23. Thereafter, on August 18, 2018, the Rico Defendants filed a Motion to
Dismiss Defendant/Third-Party Plaintiff Bravo Carpenters, Inc.'s Third-Party Complaint as
well as an Answer and Counterclaim. ECF Nos. 26, 27. Defendant/Third-Party Plaintiff
Bravo Carpenters, Inc. filed a Response, and the Rico Defendants filed a Reply. ECF
Nos. 42, 49.
On August 21, 2018, Plaintiff filed an Amended Complaint maintaining its cause of
action against Defendant D.R. Horton, Inc. and Bravo Carpenters, Inc. and adding a

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negligence cause of action against the Rico Defendants. ECF No. 28. A short time later,
on August 23, 2018, Plaintiff filed a Motion to Remand, ECF No. 35, and, on August 28,
2018, an Amended Motion to Remand. ECF No. 37. The essence of Plaintiff's Motions
is that the joinder of the Rico Defendants as parties to the action destroyed complete
diversity, warranting an order of remand under 28 U.S.C. § 1447(e). ECF Nos. 35, 37.
Defendant D.R. Horton, Inc. filed a Response, and Plaintiff filed a Reply. ECF Nos. 41,
44.
In addition to opposing Plaintiff's Amended Motion to Remand, on August 30, 2018,
Defendant D.R. Horton, Inc. filed a Motion to Strike and, in the Alternative, to Dismiss
Plaintiff's Amended Complaint. ECF No. 40. In its Motion, Defendant D.R. Horton, Inc.
contends Plaintiff's Amended Complaint was untimely and improperly filed. To that end,
Defendant D.R. Horton, Inc. argues Plaintiff failed to comply with Federal Rule of Civil
Procedure 15 in filing his Amended Complaint because the Amended Complaint was filed
without the consent of Defendant D.R. Horton, Inc. and without leave of court. Id. at 3.
In its own words, Defendant D.R. Horton, Inc. contends:
As demonstrated by the almost contemporaneous filing of a Motion to
Remand (ECF No. 35), Plaintiff's unauthorized amendment is an attempt to
destroy diversity in order to wrest jurisdiction from this Court while this Court
considers [Defendant D.R. Horton, Inc.'s] dispositive motion. Plaintiff is
improperly attempting to circumvent the requirements of Fed. R. Civ. P. R.
15 (sic) in an effort to forum shop, and evade the Court's ruling on
[Defendant D.R. Horton, Inc.'s] Motion to Dismiss. Each of these actions fly
in the face of the spirit of the Rules.
Id. Plaintiff filed a Response, and Defendant D.R. Horton, Inc. filed a Reply. ECF No.
45, 55.
Finally, on October 5, 2018, Defendant/Third-Party Plaintiff Bravo Carpenters, Inc.
filed a Motion to Dismiss Counterclaim of Third-Party Defendants, or in the Alternative,
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Motion to Strike Counterclaim of Third-Party Defendants.

ECF No. 60.

The Rico

Defendants filed a Response, and Defendant/Third-Party Plaintiff Bravo Carpenters, Inc.
filed a Reply. ECF Nos. 62–63.
As the above demonstrates, the Court has a large number of pending motions
before it in this case. After reviewing the parties' filings and the relevant law, the Court
finds that it lacks jurisdiction in light of Plaintiff's Amended Complaint. Accordingly, as
detailed below, the Court GRANTS Plaintiff's Amended Motion to Remand, ECF No. 37,
and DENIES AS MOOT the remaining motions.
II.

Legal Standard
Federal courts are courts of limited jurisdiction, “constrained to exercise only the

authority conferred by Article III of the Constitution and affirmatively granted by federal
statute.” In re Bulldog Trucking, Inc., 147 F.3d 347, 352 (4th Cir. 1998). Because federal
courts have limited subject matter jurisdiction, there is no presumption that the Court has
jurisdiction. Pinkley, Inc. v. City of Frederick, MD, 191 F.3d 394, 399 (4th Cir. 1999). A
party seeking to remove a case from state to federal court bears the burden of proving
that jurisdiction is proper when it files its notice of removal. Caterpillar Inc. v. Lewis, 519
U.S. 61, 73 (1996). Courts “are obliged to construe removal jurisdiction strictly because
of the ‘significant federalism concerns’ implicated.” Dixon v. Coburg Dairy, Inc., 369 F.3d
811, 816 (4th Cir. 2004) (quoting Mulcahey v. Columbia Organic Chems. Co., 29 F.3d
148, 151 (4th Cir. 1994)).

If federal jurisdiction is doubtful, remand is necessary.

Mulcahey, 29 F.3d at 151.
The right to remove a case to federal court derives solely from 28 U.S.C. § 1441,
which provides that “any civil action brought in a State court of which the district courts of

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the United States have original jurisdiction, may be removed by the defendant or the
defendants, to the district court of the United States for the district and division embracing
the place where such action is pending.” Without jurisdiction based on the presentation
of a federal question, a federal district court has only “original jurisdiction of all civil actions
where the matter in controversy exceeds the sum or value of $75,000, exclusive of
interest and costs, and is between . . . citizens of different States . . . .” 28 U.S.C.
§1332(a).

The diversity jurisdiction statute has “consistently been held to require

complete diversity of citizenship. That is, diversity jurisdiction does not exist unless each
defendant is a citizen of a different State from each plaintiff.” Owen Equip. & Erection Co.
v. Kroger, 437 U.S. 365, 373 (1978) (footnote omitted).
Following removal of a case to federal court, a plaintiff may file a motion to remand
the case to state court. 28 U.S.C. § 1447. "A motion to remand the case on the basis of
any defect other than lack of subject matter jurisdiction must be made within 30 days after
the filing of the notice of removal . . . ." Id. § 1447(c). However, "[i]f at any time before
final judgment it appears that the district court lacks subject matter jurisdiction, the case
shall be remanded." Id. "If after removal the plaintiff seeks to join additional defendants
whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or
permit joinder and remand the action to the State court." Id. § 1447(e). Under § 1447(e),
the district court has broad discretion to decide whether or not to permit joinder of a nondiverse defendant. Mayes v. Rapoport, 198 F.3d 457, 462 (4th Cir. 1999). "In exercising
its discretion under Section 1447(e), the district court [is] entitled to consider all relevant
factors, including: 'the extent to which the purpose of the amendment is to defeat federal
jurisdiction, whether the plaintiff has been dilatory in asking for amendment, whether the

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plaintiff will be significantly injured if amendment is not allowed, and any other factors
bearing on the equities.'" Id. (quoting Gum v. Gen. Elec. Co., 5 F. Supp. 2d 412, 414
(S.D. W. Va. 1998)).
III.

Analysis
Federal Rule of Civil Procedure 1 contains a vitally important, but often overlooked,

mandate that the Federal Rules of Civil Procedure "should be construed, administered,
and employed by the court and the parties to secure the just, speedy, and inexpensive
determination of every action and proceeding." It is with that principle in mind that the
Court turns to the myriad motions pending in this case. While there are many issues that
are contested in these motions, there are three important issues that are uncontested.
First, Plaintiff is a citizen of South Carolina. Second, the Rico Defendants are citizens of
South Carolina. Third, if the Rico Defendants become defendants to Plaintiff's claims,
the Court no longer has subject matter jurisdiction and the case should be remanded to
state court.
Defendant D.R. Horton, Inc. opposes Plaintiff's Amended Motion to Remand on
three grounds: (1) Plaintiff's claims against the Rico Defendants are procedurally
improper as Plaintiff failed to comply with Federal Rule of Civil Procedure 15; (2) the Court
lacks supplemental jurisdiction as to any first party claims against the Rico Defendants;
and (3) Plaintiff's claims against the Rico Defendants, if permissible, should be severed
so as to preserve diversity of jurisdiction. The Court turns first to Defendant D.R. Horton,
Inc.'s argument that the Amended Complaint is not properly before the Court.
Federal Rule of Civil Procedure 14(a)(3) permits a plaintiff to "assert against the
third-party defendant any claim arising out of the transaction or occurrence that is the

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subject matter of the plaintiff's claim against the third-party plaintiff." Plaintiff contends
this Rule permitted him to file the Amended Complaint without seeking leave of the Court
pursuant to Federal Rule of Civil Procedure 15. The Court has reviewed the case law on
the issue and notes that district courts have struggled with determining what procedure
must be followed when a plaintiff brings a claim pursuant to Rule 14(a)(3). See 6 Fed.
Prac. & Proc. Civ. § 1459 (3d ed. Nov. 2018) (noting the lack of guidance as to the specific
procedure courts must apply).
Despite the lack of authority on this issue, the Court need not address the nuances
of the interplay between Rule 14(a)(3) and Rule 15. "In general, if an amendment that
cannot be made as of right is served without obtaining the Court's leave or the opposing
party's consent, it is without legal effect and any new matter it contains will not be
considered unless the amendment is re-submitted for the Court's approval." Straub v.
Desa Indus., Inc., 88 F.R.D. 6, 8 (M.D. Pa. 1980). "However some courts have held that
an untimely amended pleading served without judicial permission may be considered as
properly introduced when leave to amend would have been granted had it been sought,
and when it does not appear that any of the parties will be prejudiced by allowing the
change." Id. "Permitting an amendment without formal application to the court under
these circumstances is in keeping with the overall liberal amendment policies of Rule
15(a) and the general policy of minimizing needless formalities." Id. at 8–9 (citation
omitted).
Here, the Court finds that, even if Rule 15 applies to Plaintiff's Amended Complaint,
the Amended Complaint is properly filed. This case is relatively new, as it was only filed
on May 22, 2018. Almost immediately after the commencement of the case, the parties

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jointly asked the Court to stay the case—including discovery—pending resolution of
Defendant D.R. Horton, Inc.'s initial Motion to Dismiss. The Court granted this Motion to
Stay on June 4, 2018, and the parties have conducted minimal discovery since that time.
In fact, on October 1, 2018, the Court held a telephone conference with the parties and
encouraged Defendant D.R. Horton, Inc. to "produce a limited amount of information
pending resolution of its dispositive motion." ECF No. 59. In a Status Report filed ten
days later, the parties informed the Court that no motion to compel would be forthcoming
as Defendant D.R. Horton, Inc. produced 130 pages of documents to Plaintiff. It is clear
from this that very little has been done in this case, aside from filing numerous dispositive
motions. Therefore, the Court finds that no party will be prejudiced by proceeding as if
Plaintiff's Amended Complaint was filed pursuant to Rule 15. Moreover, the Court makes
a specific finding that it would have granted such a motion to amend had Plaintiff filed
one. While Rule 15 is an important safeguard for the Court to expeditiously and fairly
resolve cases, in this case, the Court disposes of the needless formalities of requiring
Plaintiff to withdraw the Amended Complaint so that it may seek leave (which will be
granted) to refile the Amended Complaint. Accordingly, the Court finds that the Amended
Complaint is properly before the Court.
The Court turns next to Defendant D.R. Horton, Inc.'s second argument, which
claims the Court lacks supplemental jurisdiction over Plaintiff's claims against the Rico
Defendants. The Fourth Circuit has interpreted 28 U.S.C. § 1367(b)'s limitation on the
exercise of supplemental jurisdiction to only apply "to plaintiffs' efforts to join nondiverse
parties." See United Capitol Ins. Co. v. Kapiloff, 155 F.3d 488, 492 (4th Cir. 1998) (citation
omitted). Here, Defendant Bravo Carpenters joined the Rico Defendants as a party;

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Plaintiff did not. Plaintiff merely seeks to add a claim against a party already joined to the
case, which is authorized pursuant to Rule 14(a)(3). The policy underlying Section
1367(b) is to prohibit Plaintiff from manufacturing federal jurisdiction where none would
exist. Id. at 493. That is not the case here.
Finally, Defendant D.R. Horton, Inc. seeks to have Plaintiff's claim against the Rico
Defendants severed. At this stage of the proceedings, the Court cannot make a finding
that the Rico Defendants are a dispensable party subject to severance. Defendant/ThirdParty Plaintiff Bravo Carpenter, Inc.'s case against the Rico Defendants is one for
indemnification, leading to the logical conclusion that the Rico Defendants are potential
joint tortfeasors as to Plaintiff's underlying claims. Under the relevant rules, it would be
premature and inappropriate for the Court to find that a direct claim by Plaintiff against
the Rico Defendants would be dispensable and subject to severance.
IV.

Conclusion
Accordingly, the Court GRANTS [37] Plaintiff's Amended Motion to Remand and

DENIES AS MOOT [4], [26], [35], [40], [60] the remaining motions. This matter is
remanded to the Court of Common Pleas for the County of Greenville, South Carolina.
IT IS SO ORDERED.
s/Donald C. Coggins, Jr.
United States District Judge

February 15, 2019
Spartanburg, South Carolina

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