State Farm Fire & Casualty Insurance Company v. Sproull et al
OPINION AND ORDER in case 7:16-cv-03998-MGL; denying (8) Motion to Remand; granting (10) Motion to Consolidate Cases in case 7:17-cv-00234-MGL. Signed by Honorable Mary Geiger Lewis on 6/21/2017.Associated Cases: 7:17-cv-00234-MGL, 7:16-cv-03998-MGL(abuc)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
ROBERT HENRY CAMPBELL,
LADONNA CAMPBELL, and STATE FARM '
JOHNNY R. LEE, as Personal
Representative of the Estate of
Joshua Richard Lee and as Trustee
for the Statutory Beneficiaries
of Joshua Richard Lee, Deceased,
CIVIL ACTION NO. 7:17-00234-MGL
MEMORANDUM OPINION AND ORDER
DENYING PLAINTIFF’S MOTION TO REMAND
AND GRANTING DEFENDANT STATE FARM’S MOTION TO CONSOLIDATE
Plaintiff Johnny R. Lee, as the personal representative of the estate of Joshua Richard Lee
(Joshua) and as the trustee for the statutory beneficiaries of Joshua, deceased, filed this case as an
insurance declaratory action. Pending before the Court are (1) Plaintiff’s motion to remand and (2)
Defendant State Farm Mutual Automobile Insurance Company’s (State Farm) motion to consolidate
this case with State Farm Fire & Casualty Insurance Company v. Horace Mills Sproull, III Pers.
Representative of the Estate of Horace Mills Sproull, IV et al., Civil Action No. 7:16-3998-MGL
(D.S.C) (collectively, the two actions). Having carefully considered the motions, the responses, the
record, the reply, and the applicable law, the Court will deny Plaintiff’s motion to remand and grant
State Farm’s motion to consolidate.
FACTUAL AND PROCEDURAL HISTORY
The Court draws the relevant facts from Plaintiff’s Motion to Remand. Plaintiff is, and
Joshua was, a resident of South Carolina.
On October 11, 2015, Joshua, along with fellow passengers Horace Mills Sproull, IV, and
Sarah VandeBerg, died after the driver of the car they were in (the car), James Robert Campbell
(James), also deceased, lost control of the car and crashed (the accident). Another passenger, Felicia
Ahlborg, survived. Defendants Robert Henry Campbell (Robert) and LaDonna Campbell (LaDonna)
(collectively, the Campbells), the grandparents of James and the owners of the car, are also residents
of South Carolina.
State Farm is a corporation organized and existing under the laws of the State of Illinois with
its principal place of business there. It issued an automobile liability policy to LaDonna, which
covered the car involved in the accident. Additionally, State Farm issued a Personal Liability
Umbrella Policy (PLUP SC Policy) to the Campbells.
On November 22, 2016, a state court judge signed the Settlement Order as it relates to
Plaintiff’s claims of wrongful death and survival against the Campbells. This settlement concerned
the automobile liability policy State Farm issued to LaDonna. In regards to the PLUP SC Policy,
the Settlement Order noted a separate declaratory judgment would determine if additional coverage
would be available.
Plaintiff signed a COVENANT NOT TO EXECUTE (the Covenant) on December 15, 2016,
in favor of the Campbells in connection with the automobile accident. The Covenant relieved the
Campbells from any additional personal liability regarding the accident.
On December 27, 2017, Plaintiff brought a suit against the Campbells and State Farm in the
Court of Common Pleas of Spartanburg County, asserting claims of negligent entrustment and
liability under the Family Purpose Doctrine concerning the PLUP SC Policy.
On the same day, State Farm filed a declaratory judgment action in this Court concerning
claims arising out of the accident for the insurance proceeds of the PLUP SC Policy. State Farm
seeks declaratory relief, pursuant to 28 U.S.C. § 2201, to determine the rights, status, and other legal
relationship concerning claims of negligent entrustment and liability under the Family Purpose
Doctrine made by Felicia Ahlborg, Plaintiff, Horace Mills Sproull, IV, and Sarah VandeBerg.
State Farm subsequently removed Plaintiff’s state court matter to this Court. Plaintiff
thereafter filed a motion to remand, to which State Farm filed a response. Also, State Farm filed a
motion to consolidate, Plaintiff filed his response, and State Farm filed a reply. The Court, having
been fully briefed on the relevant issues, is now prepared to adjudicate both motions.
PLAINTIFF’S MOTION TO REMAND
Standard of Review
“[A]ny 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 . . . to the district court of the United
States for the district and division embracing the place where such action is pending.” 28 U.S.C.
§•1441(a). But, “[a] civil action otherwise removable solely on the basis of the jurisdiction under
section 1332(a) . . . may not be removed if any of the parties in interest properly joined and served
as defendants is a citizen of the State in which such action is brought.” 28 U.S.C. § 1441(b)(2).
It is hornbook law a case filed or removed to this Court under 28 U.S.C. ' 1332 on the basis
of diversity of citizenship mandates there must be complete diversity between all named plaintiffs
and all named defendants. Lincoln Prop. Co. v. Roche, 546 U.S. 81, 84 (2005).
In a case such as this, “[t]he burden of establishing federal jurisdiction is placed upon the
party seeking removal.” Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir.
1994). “From the beginning of the diversity jurisdiction, the rule in actions commenced by plaintiffs
in federal court has been that the citizenship of the parties at the time of commencement of the action
determines whether the requisite diversity exists.” Rowland v. Patterson, 882 F.2d 97, 98 (4th Cir.
The Court is “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)
(en banc) (quoting Mulcahey, 29 F.3d at 151). “Therefore, ‘[i]f federal jurisdiction is doubtful, a
remand [to state court] is necessary.’” Id. (quoting Mulcahey, 29 F.3d at 151). Moreover, any
ambiguity is to be construed against the removing party. Her Majesty The Queen In Right of the
Province of Ont. v. City of Detroit, 874 F.2d 332, 339 (6th Cir. 1989).
When considering a motion to remand, the Court accepts as true all relevant allegations
contained in the complaint and construes all factual ambiguities in favor of the plaintiff. Willy v.
Coastal Corp., 855 F.2d 1160, 1163-64 (5th Cir. 1988). The plaintiff is the master of the complaint
and may avoid federal jurisdiction by exclusively relying upon state law. Caterpillar, Inc. v.
Williams, 482 U.S. 386, 392 (1987).
“If at any time before final judgment it appears that the district court lacks subject matter
jurisdiction, the case shall be remanded.” Id. § 1447(c).
Contentions of the Parties
In Plaintiff=s motion to remand, he alleges this action involves only residents of the State of
South Carolina. According to Plaintiff, the Campbells presence in the lawsuit destroys complete
diversity jurisdiction. Plaintiff also argues diversity jurisdiction does not exist because State Farm
is a resident of the State of South Carolina; but then concedes in his response to State Farm’s motion
to consolidate State Farm is not a citizen of South Carolina.
State Farm asserts this Court possesses diversity jurisdiction over the action because Plaintiff
is a resident of South Carolina, State Farm is a resident of Illinois, and the Campbells, as a result of
their relief from any personal liability through the Covenant, are “nominal” parties and, thus, the
Court should refrain from considering their residence with regard to diversity jurisdiction.
Discussion and Analysis
This case presents a wrinkle that exists in diversity jurisdiction jurisprudence. According to
the Fourth Circuit, a party with no apparent stake in the litigation is deemed a “nominal” party,
Hartford Fire Ins. Co. v. Harleysville Mut. Ins. Co., 736 F.3d 255, 257 (4th Cir. 2013). And, despite
the words of the § 1332 diversity statute, “a federal court must disregard nominal or formal parties
and rest jurisdiction only upon the citizenship of real parties to the controversy.” Navarro Sav. Ass’n
v. Lee, 446 U.S. 458, 461 (1980).
The Court has reviewed the relevant the Covenant as well as the pertinent Settlement Order
from state court. As noted above, the state judge signed the Settlement Order, and the Campbells
signed the Covenant, before Plaintiff filed his complaint in state court. As also already observed,
the Court reviews the record to determine what the citizenship of the parties was at the time Plaintiff
filed his complaint. See Rowland , 882 F.2d at 98.
At the time Plaintiff filed his complaint with the state court, because of the Covenant and
Settlement Order, the Campbells had no personal exposure with regard to the accident. As such,
they have no stake in this litigation whatsoever. Consequently, they are “nominal” parties whose
residency is irrelevant for purposes for diversity jurisdiction.
Inasmuch as Plaintiff has conceded State Farm is not a resident of South Carolina, the Court
need not spill any ink on this contention. Suffice it to say State Farm is a resident of Illinois and
Plaintiff is a citizen of South Carolina. Accordingly, complete diversity exists between State Farm
For these reasons, the Court holds Plaintiff has failed to demonstrate Defendants lack the
requisite complete diversity for this action to be heard by this Court. Therefore, the Court will deny
Plaintiff’s motion to remand.
STATE FARM’S MOTION TO CONSOLIDATE
Standard of Review
“If actions before the court involve a common question of law or fact, the court may: (1) join
for hearing or trial any or all matters at issue in the actions;(2) consolidate the actions; or (3) issue
any other orders to avoid unnecessary cost or delay.” Fed. R. Civ. P. 42.
“[C]onsolidation decisions are ‘necessarily committed to trial court discretion’ and reviewed
only for abuse of discretion.” Am. Whitewater v. Tidwell, 770 F.3d 1108, 1122 n.7 (4th Cir. 2014)
(quoting Arnold v. E. Airlines, Inc., 681 F.2d 186, 192 (4th Cir.1982)) (stating it saw “no basis for
disturbing its judgment about how best to manage its docket[ ]”). “Questions of trial management
are quintessentially the province of the district courts.” United States v. Smith, 452 F.3d 323, 332
(4th Cir. 2006).
Contentions of Parties
State Farm contends the two actions involve common questions of law and fact. They also
maintain judicial convenience and economy will be promoted by a consolidation of the
actions; and the Court’s joining of the two actions will not delay the final disposition of this matter.
According to Plaintiff, if the Court grants his motion to remand, the state court’s final
determination on the issues presented in this suit would be applicable to all parties with similar
interests under the doctrine of res judicata. The final disposition of this matter will not be delayed
if this Court refuses to consolidate.
Discussion and Analysis
The Court need not linger here long. Plaintiff fails to take issue with any of State Farm’s
contentions as to why consolidation is appropriate except to (1) make an argument for remand and
(2) take a position counter to State Farm, but without presenting any argument whatsoever.
As to Plaintiff’s remand argument, it is necessarily moot in that the Court is denying his
motion to remand. And regarding his undeveloped argument, a summary statement of a claim is
insufficient to actually raise a claim. See Russell v. Absolute Collection Servs., Inc., 763 F.3d 385,
396 n.* (4th Cir. 2014) (noting that failure to present legal arguments waives the argument).
Consequently, this “perfunctory and undeveloped claim [by Plaintiff is deemed] waived.” Id.
As such, because the Court agrees with State Farm the two actions entail common questions
of law and fact, consolidation of the two actions supports the twin aims of judicial convenience and
economy, and the Court’s banding of the two actions will not impede the ultimate adjudication of
this action, the Court will grant State Farm’s motion to consolidate.
Wherefore, based on the foregoing discussion and analysis, it is the judgment of this Court
Plaintiff’s motion to remand is DENIED and State Farm’s motion to consolidate is GRANTED.
IT IS SO ORDERED.
Signed this 21st day of June, 2017, in Columbia, South Carolina.
s/ Mary Geiger Lewis
MARY GEIGER LEWIS
UNITED STATES DISTRICT JUDGE
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