Dent et al v. Chesapeake Appalachia, L.L.C. et al
Filing
31
MEMORANDUM OPINION AND ORDER GRANTING 10 MOTION TO REMAND AND DENYING 13 MOTION TO DISMISS WITHOUT PREJUDICE. This matter is hereby REMANDED to the Circuit Court of Ohio County, West Virginia. Clerk directed to enter judgment. Signed by Senior Judge Frederick P. Stamp, Jr on 2/5/13. (c to Clerk Ohio County Circuit Court)(cc)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
DAVID DENT and SARA DENT,
husband and wife,
Plaintiffs,
v.
Civil Action No. 5:12CV53
(STAMP)
CHESAPEAKE APPALACHIA, LLC,
a foreign corporation,
ROBERT J. DOBKIN,
an individual,
TRUMBULL CORPORATION,
a foreign corporation
and JOHN DOES 1-5,
Defendants.
MEMORANDUM OPINION AND ORDER
GRANTING MOTION TO REMAND AND
DENYING MOTION TO DISMISS WITHOUT PREJUDICE
I.
Procedural History
The plaintiffs, both residents of Ohio County, West Virginia,
filed this civil action in the Circuit Court of Ohio County, West
Virginia, claiming that the named defendants were all liable to
them for damage to the plaintiffs’ property resulting from natural
gas
drilling
and
drilling-related
neighbor’s property.
activities
performed
on
a
The defendants filed a timely notice of
removal and removed this civil action to this Court on the basis of
diversity
jurisdiction
pursuant
to
29
U.S.C.
§§
1332(a)
and
1441(a).
In support of their claim of diversity jurisdiction, the
defendants assert that the amount in controversy of $75,000.00,
exclusive of interest and costs is satisfied, and that complete
diversity exists. The defendants acknowledge that defendant Robert
J. Dobkin (“Dobkin”) is a West Virginia resident and thus not
diverse to the plaintiffs, but argue that this Court should
disregard his citizenship for jurisdictional purposes on the basis
of fraudulent joinder.
In response, the plaintiffs filed a motion to remand, wherein
they ask this Court to remand this civil action to the Circuit
Court
of
Ohio
County,
both
because
defendant
Dobkin
is
not
fraudulently joined, and because the defendants have failed to show
that the amount in controversy has been satisfied.
Defendant
Trumbull Corporation (“Trumbull”) also filed a motion to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6).
Both of
these motions are now fully briefed and ripe for disposition by
this Court. For the reasons that follow, this Court will grant the
plaintiffs’ motion to remand and, finding that this Court lacks
jurisdiction over the merits of this civil action, will deny
without prejudice defendant Trumbull’s motion to dismiss.
II.
Facts1
On October 1, 2010, defendant Chesapeake Appalachia, LLC
(“Chesapeake”) entered into an oil and gas drilling, production,
and removal lease agreement with Dale and Agnes Hall, owners of
approximately 329.159 acres of land located in close proximity to
the plaintiffs’ property (“Hall property”).
1
Specifically, the
For the purposes of this opinion, this Court adopts, for the
most part, the facts as set forth by the plaintiffs in their
complaint.
2
plaintiffs’ property is located directly across GC&P Road from the
Hall property.
As a result of the Halls’ grant of the lease to
Chesapeake, defendants, according to plaintiffs, constructed gas
well drilling sites on the Hall property, which process involved
the construction of an access road from GC&P Road, as well as
drilling pads and drilling wells. The plaintiffs further claim that
the defendants applied a gas extraction method known as hydraulic
fracturing or “fracking” on the Hall property in connection with
the gas well drilling sites and the extraction of gas.
The plaintiffs allege that all of these actions related to the
gas drilling activities on the Hall property have damaged the
plaintiffs’ adjacent property.
The plaintiffs raise state law
claims of negligence, private nuisance, trespass, the tort of
outrage, and invasion of privacy against the defendants.
The
plaintiffs request damages for property damages, personal injuries,
mental and emotional damages, as well as punitive damages.
III.
A.
Applicable Law
Motion to remand
A defendant may remove a case from state court to federal
court in instances where the federal court is able to exercise
original jurisdiction over the matter.
28 U.S.C. § 1441.
Federal
courts have original jurisdiction over primarily two types of
cases: (1) those involving federal questions under 28 U.S.C. § 1331
and (2) those involving citizens of different states where the
amount in controversy exceeds $75,000.00, exclusive of interests
3
and costs pursuant to 28 U.S.C. § 1332(a).
The party seeking
removal bears the burden of establishing federal jurisdiction. See
Mulcahey v. Columbia Organic Chems. Co., Inc., 29 F.3d 148, 151
(4th Cir. 1994). Removal jurisdiction is strictly construed due to
“significant federalism concerns,” implicated by abrogating a state
court
of
the
jurisdiction.
ability
Id.
to
decide
a
case
over
which
it
has
Thus, if federal jurisdiction is doubtful, the
federal court must remand.
Id.
However, when a defendant removes a case that, on its face,
does not present complete diversity, courts are permitted to
utilize the doctrine of fraudulent joinder to examine the record in
more depth to determine whether the non-diverse parties are real
parties in interest to the action.
457, 461 (4th Cir. 1999).
Mayes v. Rapoport, 198 F.3d
Under the doctrine of fraudulent
joinder, a defendant may remove a case on the basis of diversity
jurisdiction even if a non-diverse defendant is a party to the
case, so long as the removing party can prove that the non-diverse
defendant was fraudulently joined to the action.
Id.
Fraudulent
joinder “effectively permits a district court to disregard, for
jurisdictional purposes, the citizenship of certain nondiverse
defendants, assume jurisdiction over a case, dismiss the nondiverse
defendants, and thereby retain jurisdiction.”
Id.
Further, with regard to the amount in controversy, although
courts strictly construe the statute granting removal jurisdiction,
Doe v. Allied Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993), the
4
court
is
not
required
“to
leave
common
determining the amount in controversy.
sense
is
not
apparent
on
the
when
Mullins v. Harry’s Mobile
Homes, 861 F. Supp. 22, 24 (S.D. W. Va. 1994).
controversy
behind”
face
When the amount in
of
the
plaintiff’s
complaint, the federal court must attempt to ascertain the amount
in controversy by considering the plaintiff’s cause of action as
alleged in the complaint and any amendments thereto, the notice of
removal filed with a federal court, and other relevant materials in
the record.
14C Charles Allen Wright & Arthur R. Miller, Federal
Practice and Procedure § 3725 at 73 (3d ed. 1998).
However, the
court is limited to examining only evidence that was available at
the moment the petition for removal was filed.
Chase v. Shop ‘N
Save Warehouse Foods, 110 F.3d 424, 428 (7th Cir. 1997).
IV.
A.
Discussion
Motion to remand
1.
Fraudulent joinder
In their notice of removal, the defendants argue that this
Court has jurisdiction over this case because defendant Dobkin, who
along with the plaintiffs is a resident of West Virginia, was
fraudulently joined in this action.
To establish fraudulent
joinder, “the removing party must demonstrate either ‘outright
fraud in the plaintiff’s pleading of jurisdictional facts’ or that
‘there is no possibility that the plaintiff would be able to
establish a cause of action against the in-state defendant in state
court.’” Hartley v. CSX Transp., Inc., 187 F.3d 422, 424 (4th Cir.
5
1999) (quoting Marshall v. Manville Sales Corp., 6 F.3d 229, 232
(4th Cir. 1993)) (emphasis in original).
A claim of fraudulent
joinder places a heavy burden on the defendants.
at 232.
Marshall, 6 F.3d
“[T]he defendant must show that the plaintiff cannot
establish a claim against the nondiverse defendant even after
resolving all issues of fact and law in the plaintiff’s favor.
A
claim need not ultimately succeed to defeat removal; only a
possibility of right to relief need be asserted.”
(internal citations omitted).
Id. at 232-33
Further, the burden is on the
defendants to establish fraudulent joinder by clear and convincing
evidence.
Rinehart v. Consolidated Coal Co., 660 F. Supp. 1140,
1141 (N.D. W. Va. 1987).
Here, the defendants do not allege outright fraud in the
plaintiffs’ pleadings.
The defendants rather argue that the
plaintiffs do not, and cannot, assert a claim against Mr. Dobkin.
Therefore,
to
defeat
the
plaintiffs’
motion
to
remand,
the
defendants must establish by clear and convincing evidence that,
even resolving all issues of fact and law in the plaintiffs’ favor,
the
plaintiffs
have
defendant Dobkin.
not
alleged
any
possible
claim
against
The defendants have failed to meet this burden.
In support of their notice of removal and in opposition to the
plaintiffs’
motion
to
remand,
the
defendants
argue
that
the
plaintiffs have failed to assert any causes of action “specifically
and solely, against Mr. Dobkin,” but rather have only alleged
claims against the defendants “generally.”
6
ECF No. 1 *6 (emphasis
in original).
The defendants also assert that the plaintiffs have
sued defendant Dobkin in his capacity as a field representative for
defendant
Chesapeake,
and
“‘an
employee
and/or
agent
and/or
apparent agent of Defendant Chesapeake,’ and not in his individual
capacity.” Id. at *7. Accordingly, defendants maintain, defendant
Chesapeake
would
be
liable
for
all
of
his
conduct
through
respondeat superior. This Court finds the defendants’ arguments in
this regard to be without merit.
The defendants’ central argument for the fraudulent joinder of
defendant Dobkin focuses on their assertion that the plaintiffs
have failed, within the five counts of the complaint which assert
causes of action,2 to assert any claims against defendant Dobkin
“solely and/or individually.” ECF No. 16 *6. The defendants argue
that each of these counts are simply directed at the defendants
generally.
The
defendants
admit
that
defendant
Dobkin
is
individually named in what they term the “introductory paragraphs”
which include Count I, but argue that no individual allegations are
made against him in any of the causes of action.
This Court finds
that this argument ignores the plain language of the complaint.
Count I, which presents background of the tortious conduct
alleged against the defendants, raises a number of individual
allegations
against
defendant
Dobkin.
2
Specifically,
Count
I
Count I serves as an introductory paragraph, and asserts the
plaintiffs’ allegations of tortious conduct on the part of the
defendants, Count II asserts the plaintiffs’ demand for punitive
damages, Counts III-VII assert the plaintiffs’ causes of action.
7
alleges that defendant Dobkin made a number of representations to
the
plaintiffs
regarding
remediation
of
complaints
that
plaintiffs had about alleged damage to their property.
the
plaintiffs
specifically
allege
that
the
Further,
defendant
Dobkin
individually committed trespass by driving vehicles and/or heavy
equipment onto the plaintiffs’ property.
All of these factual
allegations are then explicitly included by reference into Counts
III-VII.3
This Court makes specific note that Count V is a claim
for trespass.
It is clear from the allegations in Count I which
are summarized above that, at the very least, the plaintiffs have
alleged a trespass claim against defendant Dobkin specifically and
individually.
Accordingly,
the
defendants’
claim
that
no
individual allegations have been made against defendant Dobkin is
without merit.
This Court finds it necessary to take note of the central case
utilized by the defendants in support of their arguments in this
regard, Kahle v. Chesapeake Energy Corp., No. 5:11cv24, 2011 U.S.
Dist. LEXIS 59974 (N.D. W. Va. June 3, 2011).
Court
found
that
the
individual
In that case, this
defendant,
also
a
field
representative for Chesapeake, was fraudulently joined to a civil
action seeking a declaratory judgment regarding the validity of the
assignment of the plaintiffs’ oil and gas lease.
Id. at *1-*2.
This Court concluded that the individual defendant in that case had
3
Counts II-VII all begin with a paragraph specifically
incorporating all preceding paragraphs in the complaint “as if
fully restated.” ECF No. 1 Ex. 1.
8
been fraudulently joined, because “there [were] no claims asserted
against [the individual defendant] and no relief sought from him.”
Id.
at 13.
Further, this Court did note in that case the
plaintiffs’ assertions that their complaint could be construed as
alleging claims for negligence and trespass.
However, this Court
rejected the plaintiffs’ arguments in this regard because no claim
was made that the individual defendant ever entered their property
until it was raised in the plaintiffs’ motion to remand.
Id. at
*13-*14.
Initially, it is clear that the Kahle case is quite factually
dissimilar to this case.
The plaintiffs were seeking declaratory
judgment regarding the legitimacy of a contractual agreement to
which the individual defendant was not a party.
In the instant
case, no contractual relationship is alleged with any of the
defendants.
Rather,
this
case
is
rooted
entirely
in
tort.
Further, as the plaintiffs argue, and as is noted above, this Court
made clear in its opinion that no claims for trespass or negligence
had been alleged against the individual defendant in the complaint,
and thus could not be considered.
This is obviously not the case
here, as the plaintiffs have alleged specific conduct and causes of
action for both negligence and trespass, among other claims,
against defendant Dobkin.
Accordingly, the defendants’ reliance
upon Kahle is misplaced.
The defendants also argue that, even if tortious conduct has
been adequately alleged against defendant Dobkin, he cannot be held
9
personally liable for that conduct.
The defendants support this
argument with the plaintiffs’ assertion that at all times relevant,
defendant
Dobkin
was
acting
as
a
“field
representative”
and
employee of defendant Chesapeake, and the plaintiffs’ allegation
that as a result of this, Chesapeake can be held liable for his
conduct through the doctrine of respondeat superior. As such, they
argue, any liability for the conduct of defendant Dobkin lies
solely with Chesapeake.
improper.
This Court finds this argument to be
The plaintiffs clearly name defendant Dobkin, “an
individual” as a defendant to this civil action in the caption of
the case.
There is no indication anywhere in the plaintiffs’
complaint that they intend to join defendant Dobkin solely in his
capacity as an agent of Chesapeake, or as simply doing the work of
Chesapeake.
Further, beyond the initial naming of defendant Dobkin as an
individual defendant to this civil action, throughout the complaint
the plaintiffs name a number of alleged individual and independent
conduct of defendant Dobkin which they allege to be tortious in
nature. Notably, the plaintiffs specifically name defendant Dobkin
individually as having “unlawfully and improperly driven” on the
plaintiffs’ property, causing damage to the property.
While this
Court recognizes that the plaintiffs assert in their complaint that
Chesapeake could be liable for defendant Dobkin’s conduct asserted
in the complaint, this in no way indicates that defendant Dobkin
cannot also be held personally liable for the conduct alleged.
10
As the defendants admit, “agency law does not insulate an
agent from liability for his or her torts because an agent’s tort
liability is not based upon the contractual relationship between
principal and agent, but upon the common-law obligation that every
person must so act or use that which he or she controls as not to
injure another.”
3 Am. Jur. 2d Agency § 298.
Further, “[a]n agent
is not relieved from liability merely because he or she acted at
the request, command, or directions of the principal.” Id. “Thus,
an agent may be held liable for his or her own . . . trespass.”
Id. (emphasis added).
Additionally, Negri v. Nationwide Mut. Ins. Co., No. 5:11cv3,
2011 U.S. Dist. LEXIS 92430 (N.D. W. Va. Aug. 18, 2011), the case
cited by the defendants to support this assertion, is likewise not
persuasive.
plaintiffs
Initially, it is important to note that in Negri, the
largely
asserted
claims
directly
related
to
the
contractual relationship between the plaintiffs and the individual
defendants, the plaintiffs’ insurance agent, employer.
The only
claims upon which this Court found that liability could possibly be
found for the individual defendant was in the plaintiffs’ claims
for negligence and the tort of outrage.
However, this Court
ultimately determined that the plaintiffs had failed to allege any
independent conduct of the individual defendant with regard to any
of these claims, but rather simply asserted that the individual
defendant owed the plaintiffs a duty to “reasonably, fairly, in
good faith, and/or in accordance with the law [to] provide the
11
plaintiff with insurance coverage.” Id. at *12. Further, the only
tortious behavior alleged against the individual defendant was the
general negligent conduct alleged against all of the defendants:
failing to provide the plaintiffs with insurance coverage.
Id.
Based upon the generality of the plaintiffs’ allegations in that
case, and the fact that no independent conduct of the individual
defendant had been alleged beyond the general allegations of
tortious denial of insurance coverage alleged against both the
Nationwide
and
the
fraudulent joinder.
individual
defendant,
this
Court
found
Id. at *12-*13.
This is not the case in this civil action. In the plaintiffs’
complaint, defendant Dobkin is alleged to have committed a number
of individual tortious acts outside of the general tortious acts
alleged
against
his
employer,
Chesapeake.
As
noted
above,
defendant Dobkin is alleged to have made individual trespasses on
the plaintiffs’ property. He is also alleged to have made a number
of promises to the plaintiffs which they allege to have been
fraudulent or false. As such, this Court’s conclusions in Negri do
not lend themselves to a similar conclusion here.
The facts of
this case are more similarly aligned with a West Virginia Supreme
Court of Appeals case cited in and distinguished by Negri, entitled
Jarvis v. Modern Woodmen of America, 406 S.E.2d 736 (W. Va. 1991).
In that case, the Supreme Court of Appeals found that an insurance
agent could be found liable in his own right based upon allegations
that he falsified the plaintiff’s deceased husband’s insurance
12
application by omitting the fact that the plaintiff’s husband was
a smoker.
Like
Id. at 740.
in
the
plaintiffs’
complaint
here,
the
individual
defendant was alleged to have engaged in the conduct in the course
of his employment with the plaintiff’s insurer, but because the
conduct alleged was his own, rather than simply general behavior of
the “defendants” in the course of denying benefits, the Court
allowed the case to continue against that defendant.
Id. at 743.
The Court stated, “[a]n agent or employee can be held personally
liable for his own torts . . . and this personal liability is
independent of his agency or employee relationship.
If he is
acting within the scope of employment, then his principle or
employer may also be held liable.”
Id.
For the same reasons, this
Court finds that a possible individual claim has been alleged
against defendant Dobkin, and he is not protected from liability by
respondeat superior.
Accordingly, defendant Dobkin has not been
fraudulently joined to this civil action.
2.
Amount in controversy
Further, this Court finds that even if defendant Dobkin had
been fraudulently joined to this civil action and his citizenship
was disregarded for jurisdictional purposes, this Court would
nonetheless lack subject matter jurisdiction over this case.
The
defendants have failed to satisfy their burden of showing that the
jurisdictional amount of $75,000.00 is in controversy.
The burden
of establishing that the amount in controversy exceeds $75,000.00,
13
exclusive of interests and costs, rests with the party seeking
removal.
Mulcahey, 29 F.3d at 151.
This Court has consistently
applied the “preponderance of evidence” standard to determine
whether a defendant has met its burden of proving the amount in
controversy.
When no specific amount of damages is set forth in
the complaint, the defendant bears the burden of proving that the
claim meets the requisite jurisdictional amount.
Supp. at 23.
Mullins, 861 F.
In such circumstances, the Court may consider the
entire record before it and may conduct its own independent inquiry
to determine whether the amount in controversy satisfies the
jurisdictional minimum.
Id.
The defendants assert that they have met their burden of
proving that the requisite amount in controversy exists in this
case because the plaintiffs’ complaint sets forth a significant
number
of
past,
present,
and
future
injuries
and
damages
sought–fourteen to be exact–and also because punitive damages are
sought.
ECF No. 16 *10.
The defendants also to point the
plaintiffs’ assertions that the defendants’ conduct has caused
cracks in the walls and foundation of their home, as well as damage
to the plaintiffs’ asphalt driveway.
Finally, the defendants note
that the plaintiffs seek compensation for damage to their grass,
landscaping,
defendants
vehicles,
argue
that
furniture,
all
of
trees
these
and
vegetation.
allegations
of
The
damages
“unequivocally exceed $75,000, exclusive of interests and costs.”
Id. at *11.
14
The plaintiffs maintain that, in order for the defendants to
satisfy their burden of proving that the amount in controversy
exceeds $75,000.00, they must present evidence which establishes
the
same.
They
also
note
that
this
Court
has
found
that
speculation regarding the amount in controversy is insufficient to
avoid remand. See McWha v. Otway, 5:06cv164, 2007 U.S. Dist. LEXIS
60246 (N.D. W. Va. Aug. 15, 2007). The plaintiffs further point to
a letter sent from defendant Chesapeake to the plaintiffs on June
6, 2011, offering them $500.00 to settle claims of damage to their
property at that time, as well as a settlement demand letter sent
by the plaintiffs to the defendants following removal which offers
to settle this civil action for $74,999.00.
The plaintiffs assert
that, for all of these reasons, the defendants have failed to meet
their burden of showing that the jurisdictional minimum amount in
controversy is satisfied in this case.
After review of the pleadings, as well as the entire record in
this
case,
this
Court
agrees
with
the
plaintiffs
that
defendants have failed to satisfy their burden in this regard.
the
As
the plaintiffs note, in cases where the complaint does not set
forth any specific amount of damages sought, as is the case here,
the defendants must present actual evidence that the amount in
controversy is exceeded; simple conjecture will not suffice.
See
Bartnikowski v. NVR, Inc., 307 F. App’x 730, 737 (4th Cir. 2009)
(unpublished) (Finding that amount in controversy not shown when
defendant “has put forth no evidence of its own to support [the
15
claimed amount in controversy, but] rather, has only presented a
conjectural argument.”). The defendants have failed to present any
such evidence.
In the notice of removal and the defendants’
response to the plaintiffs’ motion for remand, the defendants
simply restate the damages claimed by the plaintiffs, and make
conclusory assertions that, based upon these claims, the amount in
controversy must be more than $75,000.00.
have
provided
this
Court
with
no
However, the defendants
evidence
to
support
these
conclusions, and this Court can find nothing in the record through
an independent investigation which could inform the Court as to the
amount in controversy in this case.
The defendants argue that this Court should disregard both the
plaintiffs’ demand letter, because it was sent following removal,
and defendant Chesapeake’s 2011 offer, because it was only intended
to settle damages to landscaping which the plaintiffs claimed at
that time.
This Court does not find either of these documents to
be dispositive of the amount in controversy in this case, but it is
important to note that, even if the $500.00 settlement offer sent
to plaintiffs by defendant Dobkin on behalf of defendant Chesapeake
only represented a portion of the damages now sought, it does
provide evidence of the defendants’ valuation of at least that
portion of the plaintiffs’ claim, and that they do not find it to
be worth anywhere near $75,000.00.
Burns v. Windsor Ins. Co., 31
F.3d 1092, 1097 (11th Cir. 1994) (Although settlement offers are
16
not determinative of the amount in controversy, they do “count for
something.”)
Further, regardless of how this Court considers or chooses not
to consider either of these documents, the ultimate conclusion
remains the same. Both the offer and demand letter cut against the
defendants’ assertion that the amount in controversy is met here
but, because this Court finds that the defendants simply have not
presented evidence to support that argument, evidence to refute the
same
is
unnecessary.
Bartnikowski,
307
F.
App’x
at
737
(“Plaintiffs have no burden in these circumstances and are under no
obligation to put forth any evidence.”).
Accordingly, with or
without the settlement offer and demand letter, the defendants have
failed to meet their burden and this matter must thus be remanded
to the Circuit Court of Ohio County.
B.
Motion to dismiss
Based upon the foregoing, this Court determines that it lacks
subject
matter
jurisdiction
to
plaintiffs’ claims raised herein.
address
the
merits
of
the
Accordingly, it is without
jurisdiction to decide the pending motion to dismiss.
Defendant
Trumbull’s motion to dismiss is thus denied without prejudice
subject to refiling in state court if appropriate to do so.
V.
Conclusion
For the reasons stated above, the plaintiffs’ motion to remand
is GRANTED.
Defendant Trumbull Corporation’s motion to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6) is DENIED
17
WITHOUT PREJUDICE.
Accordingly, this matter is hereby REMANDED to
the Circuit Court of Ohio County, West Virginia.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein and to the Clerk of
the Circuit Court of Ohio County, West Virginia.
Pursuant to
Federal Rule of Civil Procedure 58, the Clerk is DIRECTED to enter
judgment on this matter.
DATED:
February 5, 2013
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
18
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