Adkins et al v. Consolidation Coal Company et al
MEMORANDUM OPINION AND ORDER granting plaintiff's 21 MOTION to Remand; and this action is remanded for all further proceedings to the Circuit Court of Kanawha County. Signed by Judge John T. Copenhaver, Jr. on 4/13/2012. (cc: attys; Clerk, Circuit Court of Kanawha County) (taq)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
MELISSA ADKINS, as
Administratrix of the Estate
of Jessie Reuben Adkins,
Civil Action No. 2:11-0285
CONSOLIDATION COAL COMPANY,
a foreign corporation,
CONSOL ENERGY, INC.
a foreign corporation
TODD MOORE, RICHARD MARLOWE,
JAMES BROCK, BRENT MCCLAIN,
WAYNE CONAWAY, JOSEPH MORGAN,
And LARRY MAYLE,
MEMORANDUM OPINION AND ORDER
Pending is plaintiff’s motion to remand, filed May 23,
2011, and defendants’ motion to dismiss, filed May 3, 2011.
Where, as here, a motion to remand and a Rule 12(b)(6)
motion to dismiss are both made, it is ordinarily improper to resolve
the Rule 12(b)(6) motion before deciding the motion to remand.
question arising on the motion to remand as to whether there has been
a fraudulent joinder is a jurisdictional inquiry.
See Batoff v.
State Farm Ins. Co., 977 F.2d 848, 852 (3rd Cir. 1992); cf. Mayes
v. Rapoport, 198 F.3d 457, 460 (4th Cir. 1999) (observing that the
propriety of removal and fraudulent joinder are jurisdictional
For the reasons set forth below, plaintiff’s motion to
remand is granted.
Plaintiff brings this action as the representative of the
estate of her deceased husband, Jessie Reuben Adkins.
resident of Barbour County, West Virginia.
She is a
Consolidation Coal Company (“Consolidation”) and Consol Energy, Inc.
(“Consol”), which is the parent of Consolidation, are Delaware
corporations with principal places of business in Pennsylvania.1
Defendant Richard Marlowe is a citizen of Pennsylvania.
Todd Moore, James Brock, Brent McClain, Wayne Conaway, Joseph Morgan,
and Larry Mayle (“nondiverse defendants”) are all citizens of West
Virginia, and all but Moore were employed by Consolidation.
as well as Marlowe, were Consol employees.
Plaintiff challenges the diversity of defendants
Consolidation and Consol for the first time in her reply memorandum.
As defendants note in their surreply, the Supreme Court recently
clarified the test for determining a business’s “principal place of
business” by adopting, exclusively, the “nerve center” approach.
See Hertz Corp. v. Friend, 130 S.Ct. 1181, 1192 (2010). Inasmuch
as both Consolidation and Consol are controlled and coordinated from
the CNX Center, the companies’ headquarters, located in Canonsburg,
Pennsylvania, a location where senior level management is centrally
located, plaintiff’s challenge is without merit.
The following allegations are taken from the complaint.
Jesse Adkins worked as a miner at Consolidation’s Loveridge #22 mine
in Marion County, West Virginia.
(Compl. ¶ 3).
On the morning of
July 29, 2010, shortly after he began his shift at the mine, a large
rock fell from a nearby roof and rib and crushed Mr. Adkins.
He died later that day.
(Id. ¶ 19).
At all relevant times,
defendants Moore and Marlowe were corporate safety officers for
Consol; Brock was a vice president for Consolidation’s northeast
region; McClain was the superintendent for Loveridge #22 mine;
Conaway was the Safety Director for the mine; Morgan was a foreman
mentor at the mine; and Mayle was a foreman and day shift supervisor
at the mine.
(Id. ¶¶ 6-12).
Plaintiff, Mr. Adkins’ widow, instituted this action in
the Circuit Court of Kanawha County on April 7, 2011.
removed on April 26, 2011, invoking the court’s diversity
The complaint sets forth seven counts against
defendants: Count I is a deliberate intent claim against
Consolidation; Count II is a deliberate intent claim against Brock,
McClain, Conaway, Morgan, and Mayle; Count III is a negligence claim
against Consol, Moore, and Marlowe; Count IV is a vicarious liability
claim against all defendants; Count V is a claim for civil conspiracy
against all defendants; and Counts VI and VII simply request
compensatory and punitive damages, respectively.
(See id. ¶¶
Plaintiff has moved to remand, asserting that the
nondiverse individual defendants defeat complete diversity and that
this court thus lacks subject matter jurisdiction.
to remand, defendants claim that the nondiverse individual
defendants were fraudulently joined solely for the purpose of
defeating diversity jurisdiction.
Defendants have also moved to
dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) on
several grounds discussed below.
Motion to Remand
“A defendant may remove any action from a state court to
a federal court if the case could have originally been brought in
Yarnevic v. Brink’s, Inc., 102 F.3d 753, 754 (4th
Cir. 1996) (citing 28 U.S.C. § 1441).
Federal district courts have
original jurisdiction over actions between citizens of different
states in which the matter in controversy exceeds $75,000, exclusive
of interest and costs.
28 U.S.C. § 1332(a).
The doctrine of fraudulent joinder 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.”
Mayes v. Rapoport, 198 F.3d 457, 461 (4th Cir. 1999).
Our court of
appeals lays a “heavy burden” upon a defendant claiming fraudulent
“In order to establish that a nondiverse defendant has been
fraudulently joined, the removing party must establish
either: [t]hat there is no possibility that the plaintiff
would be able to establish a cause of action against the
in-state defendant in state court; or [t]hat there has been
Id. at 464 (emphasis in original) (quoting Marshall v. Manville Sales
Corp., 6 F.3d 229, 232 (4th Cir. 1993)).
The applicable standard
“is even more favorable to the plaintiff than the standard for ruling
on a motion to dismiss.”
424 (4th Cir. 1999).
Hartley v. CSX Transp., Inc., 187 F.3d 422,
Indeed, “‘the 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
Mayes, 198 F.3d at 464 (quoting Marshall, 6 F.3d at 232–
As Hartley illustrates, fraudulent joinder claims are
subject to a rather black-and-white analysis in this circuit.
shades of gray are resolved in favor of remand.
See Hartley, 187
F.3d at 425.
At bottom, a plaintiff need only demonstrate a “glimmer
of hope” in order to have his claims remanded:
In all events, a jurisdictional inquiry is not the
appropriate stage of litigation to resolve . . . various
uncertain questions of law and fact . . . Jurisdictional
rules direct judicial traffic. They function to steer
litigation to the proper forum with a minimum of
preliminary fuss. The best way to advance this objective
is to accept the parties joined on the face of the complaint
unless joinder is clearly improper. To permit extensive
litigation of the merits of a case while determining
jurisdiction thwarts the purpose of jurisdictional rules.
* * * *
We cannot predict with certainty how a state court and
state jury would resolve the legal issues and weigh the
factual evidence in this case. [Plaintiff’s] claims may
not succeed ultimately, but ultimate success is not
required . . . . Rather, there need be only a slight
possibility of a right to relief.
Once the court
identifies this glimmer of hope for the plaintiff, the
jurisdictional inquiry ends.
Id. at 425-26 (citations omitted).
In determining “whether an
attempted joinder is fraudulent, the court is not bound by the
allegations of the pleadings, but may instead consider the entire
record, and determine the basis of joinder by any means available.”
Mayes, 198 F.3d at 464 (internal quotations omitted).
Inasmuch as defendants do not allege any fraud in the
pleading, the only question for fraudulent joinder purposes is
whether plaintiff has any possibility of recovery in state court
against the nondiverse defendants.
The complaint asserts four
counts against the nondiverse defendants: Count II for deliberate
intent against Brock, McClain, Conaway, Morgan, and Mayle; Count III
for negligence against Moore; Count IV for vicarious liability
against all defendants; and Count V for civil conspiracy against all
Count II: Deliberate Intent Claim Against Nondiverse Defendants
The West Virginia Workers’ Compensation Act generally
immunizes covered employers from suits for damages “at common law
or by statute” resulting from work-related injuries.
W. Va. Code
This immunity is, by West Virginia Code § 23-2-6a,
extended “to every officer, manager, agent, representative or
employee of such employer when he is acting in furtherance of the
employer’s business and does not inflict an injury with deliberate
Immunity is lost, however, by an employer who acts with
Id. § 23-4-2(d)(2).
As set forth below,
it may also be lost by an employee who acts with deliberate intent.
If the deliberate intent exception applies, the injured employee may
file an action for damages in excess of workers’ compensation
Id. § 23-4-2(c).
Section 23-4-2(d)(2) starts with an introductory
provision setting forth in general terms the deliberate intent
exception to immunity.
That provision is followed by subsections
(d)(2)(i) and (d)(2)(ii), which provide two distinct methods of
proving that one has acted with “deliberate intention.”
entirety, § 23-4-2(d)(2) reads as follows:
(2) The immunity from suit provided under this section and
under sections six and six-a, article two of this chapter
may be lost only if the employer or person against whom
liability is asserted acted with “deliberate intention”.
This requirement may be satisfied only if:
(i) It is proved that the employer or person against
whom liability is asserted acted with a consciously,
subjectively and deliberately formed intention to
produce the specific result of injury or death to an
This standard requires a showing of an
actual, specific intent and may not be satisfied by
allegation or proof of: (A) Conduct which produces a
result that was not specifically intended; (B) conduct
which constitutes negligence, no matter how gross or
aggravated; or (C) willful, wanton or reckless
(ii) The trier of fact determines, either through specific
findings of fact made by the court in a trial without a
jury, or through special interrogatories to the jury in
a jury trial, that all of the following facts are proven:
(A) That a specific unsafe working condition existed in
the workplace which presented a high degree of risk and
a strong probability of serious injury or death;
(B) That the employer, prior to the injury, had actual
knowledge of the existence of the specific unsafe working
condition and of the high degree of risk and the strong
probability of serious injury or death presented by the
specific unsafe working condition;
(C) That the specific unsafe working condition was a
violation of a state or federal safety statute, rule or
regulation, whether cited or not, or of a commonly accepted
and well-known safety standard within the industry or
business of the employer, as demonstrated by competent
evidence of written standards or guidelines which reflect
a consensus safety standard in the industry or business,
which statute, rule, regulation or standard was
specifically applicable to the particular work and working
condition involved, as contrasted with a statute, rule,
workplaces, equipment or working conditions;
(D) That notwithstanding the existence of the facts set
forth in subparagraphs (A) through (C), inclusive, of this
paragraph, the employer nevertheless intentionally
thereafter exposed an employee to the specific unsafe
working condition; and
(E) That the employee exposed suffered serious compensable
injury or compensable death as defined in section one,
article four, chapter twenty-three whether a claim for
benefits under this chapter is filed or not as a direct
and proximate result of the specific unsafe working
W. Va. Code §§ 23-4-2(d)(2)(i)-(ii) (emphasis added).
asserts a claim against five of the six nondiverse defendants
pursuant to subsection (d)(2)(ii).
(Compl. ¶¶ 73-76).
Defendants contend that the statutory text of
§ 23-4-2(d)(2)(ii) only permits claims against employers, not
co-employees, and that plaintiff’s claim against the five nondiverse
defendants thus fails as a matter of law.
They emphasize the
differing terminology used in subsections (d)(2)(i) and (ii), noting
that subsection (i) includes the language, “the employer or person
against whom liability is asserted,” whereas subsection (ii) only
references “the employer.”
Plaintiff, on the other hand, points out
that the introductory provision of subsection (d)(2) states that
either “the employer or person against whom liability is asserted”
may lose immunity if they act with deliberate intent.
introductory language, plaintiff maintains, applies to both of the
methods for proving deliberate intent outlined in subsections
(d)(2)(i) and (ii).
The parties each rely upon caselaw in support
of their respective positions that warrants detailed discussion.
Caselaw and Analysis
The court notes at the outset that the West Virginia
Supreme Court of Appeals has had no occasion to address whether a
deliberate intent claim under § 23-4-2(d)(2)(ii) may be pursued
against a co-employee.
And the federal district courts in this
state, when confronted with the issue in the fraudulent joinder
context, have reached divergent conclusions.
The only two published
opinions are Weekly v. Olin Corp., 681 F. Supp. 346, 352 (N.D. W.
Va. 1987) (Kaufman, J.) (“this Court concludes that section 23–4–
2(c)(2)(ii) applies to co-employees”; granting remand), and Evans
v. CDX Servs., LLC, 528 F. Supp. 2d 599, 605 (S.D. W. Va. 2007)
(Johnston, J.) (holding that “co-employees are not subject to suit
under § 23-4-2(d)(2)(ii) because that subsection only provides for
actions against employers;” denying remand).2
The leading case supporting plaintiff’s position is
In Weekly, the court adopted the reasoning that
[T]he introductory language of section 23-4-2(c)(2),
which governs the application of all parts of section
23-4-2 and thus of both subsections 23-4-2(c)(2)(i) and
23-4-2(c)(2)(ii), speaks of “the employer or person”
. . . [T]he two subsections merely represent two
alternative methods of proving liability against either
one or both of the employer and co-owner.
Id. at 352 (emphasis in original).3
The court in Weekly found its
interpretation to be consistent with Bennett v. Buckner, 149 S.E.2d
201, 205 (W. Va. 1966).
Bennett is the only case cited in Weekly
for support of its view that the scope of immunity afforded fellow
employees under section 23-2-6a was intended by the legislature to
be identical to that enjoyed by the employer.
Bennett did indeed
The unpublished federal district court decisions following
Weekly include Goudy v. McElroy Coal Co., No. 10-079, 2010 WL 4179254,
at *4 (N.D. W. Va. Oct. 13, 2010); Burch v. Monarch Rubber Co., No.
06-760, slip op. at 5 (S.D. W. Va. Dec. 8, 2006); Williams v. Hasco
Corp., No. 10-206, 2011 WL 3035272, at *3 (N.D. W. Va. July 22, 2011);
Bledsoe v. Brooks Run Mining Co., No. 05-464, 2011 WL 5360042 (S.D.
W. Va. Nov. 4, 2011).
Those following Evans include King v. Sears Roebuck & Co., No.
1:10–1024, 2011 WL 672065, at *4 (S.D. W. Va. Feb. 14, 2011); Fincham
v. Armstrong, No. 2:08-101, slip op. at 10-11 (N.D. W. Va. Nov. 7,
2008); Stover v. Matthews Trucking, Inc., No. 2:11-cv-180, 2011 WL
6141099 (S.D. W. Va. Dec. 9, 2011) (in motion to dismiss context).
At the time Weekly was published, the statute was codified at
West Virginia Code § 23-4-2(c). The section may now be found at
hold that the purpose of the legislature in adding section 23-2-6a
in 1949 was “to ‘extend’ the same immunity and to accord an immunity
identical with that of the employer to additional persons, including
fellow employees.” 149 S.E.2d at 205.
Overlooked in Weekly is that
the two-tiered deliberate intention definition now found in section
23-4-2(d)(2) was not enacted until 1983, and, thus, did not exist
when Bennett was decided in 1966.
And so, one returns to the language of the statute itself
to determine its meaning, as did the court in Evans.
object in construing a statute is to ascertain and give effect to
the intent of the Legislature.’”
Syl. pt. 2, Cmty. Antenna Serv.,
Inc. v. Charter Commc’ns. VI, LLC, 712 S.E.2d 504, 508 (W. Va. 2011)
(quoting syl. pt. 1, Smith v. State Workmen’s Comp. Comm’r, 219 S.E.2d
361 (W. Va. 1975)).
“‘Statutes which relate to the same subject
matter should be read and applied together so that the Legislature’s
intention can be gathered from the whole of the enactments.’”
pt. 4, id. (quoting Smith, 219 S.E.2d 361).
Moreover, a “cardinal
rule of statutory construction is that significance and effect must,
if possible, be given to every section, clause, word or part of the
Syl. pt. 2, T. Weston, Inc. v. Mineral Cnty, 638 S.E.2d
167, 169 (W. Va. 2006) (quoting syl. pt. 3, Meadows v. Wal-Mart
Stores, Inc., 530 S.E.2d 676 (W. Va. 1999)).
The introductory provision in section 23-4-2(d)(2)
specifies that immunity “may be lost only if the employer or person
against whom liability is asserted acted with deliberate intention,”
adding that this requirement may be satisfied only if either of the
two standards that follow is satisfied.
The first, under subsection
(i), specifies that immunity may be lost if “[i]t is proved that the
employer or person against whom liability is asserted acted with a
consciously, subjectively and deliberately formed intention to
produce the specific result of injury or death to an employee.
requires a showing of an actual, specific intent . . . .”
immunity is lost by an employer for a workplace injury to an employee
inflicted with specific intent; and immunity is lost as well by an
employee who injures a co-employee with specific intent.
The second, under subsection (ii), specifies that immunity
is lost if all of the five factors there stated are proven.
in subsection (ii) does the term “person” appear.
Whereas the term
“employer or person” is specifically set forth in subsection (i),
only “employer” appears in subsection (ii).
So, while “employer”
appears repeatedly throughout subsection (ii), the term “person” is
The contrast is stark and telling.
Surely, the legislature did not intend, by the express
language it used in section 23-4-2(d)(2)(ii), to withdraw immunity
from an employee simply because the employer had actual knowledge
of the existence of the specific unsafe working condition and the
employer had actual knowledge of the high degree of risk and the
strong probability of serious injury or death presented by the
specific unsafe working condition.
Just as surely, the legislature
did not intend to withdraw immunity from an employee simply because
it was the employer who exposed a co-employee to the specific unsafe
Such an unacceptable result is readily avoided
by giving apt meaning to all parts of section 23-4-2(d)(2).
The court concludes that employee immunity may be lost
under section 23-4-2(d)(2)(i), but not under section
This reading of these statutory provisions gives
full meaning to the word “employer” where it appears and the word
“person” where it appears.
Every word, every phrase, and every
clause is construed in connection with the whole statute so as to
harmonize all parts and faithfully apply the language the legislature
What this reading does not do is add words to subsection
23-4-2(d)(2)(ii) that are not there.
So it is that the court discerns that the legislature has
chosen not to withdraw immunity from an employee who has acted in
furtherance of his employment but without specific intent to injure
The legislature may well have done so in order to
protect supervisors and other employees, acting without specific
intent, from suit where the employer, also without specific intent,
is deemed to have inflicted injury under (d)(2)(ii).
employer is customarily liable for the grievous acts of his employees
committed in the course and scope of their employment; and, as between
the employer and its offending employee, it is the employer who is
near always the lone source of funds to redress a deliberate intent
workplace injury – for which the employer remains responsible under
both (d)(2)(i) and (d)(2)(ii).
In any event, though the immunity
afforded employer and employee alike was at one time virtually
identical, that is no longer the case, commencing with the 1983
enactment of what is now section 23-4-2(d)(2).
Inasmuch as Count II deliberate intent liability of
nondiverse defendants Brock, McClain, Conaway, Morgan, and Mayle is
sought only under section 23-4-2(d)(2)(ii), there is no possibility
of deliberate intent recovery against any of the five.
The same five defendants are immunized from the only
remaining counts against them –- Count IV for vicarious liability
and Count V for conspiracy.
The West Virginia Workers’ Compensation
Act provides immunity for covered employers and other designated
persons or entities from suits for “damages at common law or by
statute” resulting from work-related injuries.
W. Va. Code §
23-2-6; id. § 23-2-6a.
Indeed, “[t]he establishment of the workers’
compensation system . . . was and is intended to remove from the common
law tort system all disputes between or among employers and employees
regarding compensation to be received from injury or death to an
employee . . . .”
Id. § 23-4-2(d)(1) (emphasis added).
as plaintiff alleges causes of action in Counts IV and V not excepted
from the immunity conferred by the statutory scheme, there is no
possibility of recovery thereunder against any of the five nondiverse
defendants, Brock, McClain, Conaway, Morgan, and Mayle.
Consequently, fraudulent joinder as to nondiverse
defendants Brock, McClain, Conaway, Morgan, and Mayle is firmly shown
and they are appropriately dismissed.
Count III: Negligence Claim Against Consol and Nondiverse
Plaintiff claims in Count III that Consol along with Moore,
a nondiverse defendant and corporate safety officer employed by
Consol, breached their duty of care to plaintiff’s decedent with
respect to safety operations at Loveridge # 22 mine.
counter that Consol and Moore are immune from common law suit under
the West Virginia Workers’ Compensation Act, which extends the
general immunity of employers “to every officer, manager, agent,
representative or employee of such employer when he is acting in
furtherance of the employer’s business and does not inflict an injury
with deliberate intent.”
W. Va. Code § 23-2-6a (emphasis added).
Consol claims “agent” status for remand purposes on two distinct
grounds; and Moore is treated as its subagent entitled to the same
Consol and Moore advance several arguments in support of
their immunity claims.
Defendants contend that Consol and Moore are entitled to
immunity under § 23-2-6a inasmuch as, at the time of the fatal injury
to Adkins, Moore was an employee of Consol, an entity that, if the
allegations of the complaint are true, was itself an agent of Adkins’
employer, Consolidation, for purposes of agent immunity under §
Defendants argue that Moore, as a subagent of Consol, must
be extended immunity under § 23-2-6a upon application of basic
principles of agency.
Consol’s Role as Guarantor-Administrator
In the Notice of Removal, defendants state that Consol,
and by extension its employee Moore, has statutory immunity pursuant
to West Virginia Code §§ 23-2-6, 6a, 9, “by virtue of being a
‘manager,’ ‘agent’ or ‘representative’” of Consolidation (Not. of
Rem. ¶ 7b).
It is stated that Consol enjoys such immunity in that
Consol is guarantor of Consolidation’s self-insured worker’s
compensation obligations for which Consol provides a surety bond;
and that Consol “utilizes accounting measures and undertakes other
activities which makes possible and undergird [Consolidation’s]
worker’s compensation benefit program.”
(Id. ¶ 7b).
defendants attach to their response to the motion to remand copies
of three supporting documents, consisting of Consolidation’s
Certificate of Self-Insurance, the surety bond and the Unconditional
and Continuing Parental Guaranty.
For Consol’s role as “agent,” defendants rely on Wetzel
v. Employers Service Corp. of W.Va., 656 S.E.2d 55 (W. Va. 2007).
There, the defendant, Employees Service Corp. (“ESC”), was
responsible for administering the worker’s compensation program for
the employer, including processing and paying all valid worker’s
compensation-related payment requests.
The estate of an employee
who died allegedly due to toluene exposure on the job sued ESC for
allegedly contributing to the death by failing to pay various medical
The court afforded immunity to ESC as an “agent” under §
As more fully set forth in the section next below, the
complaint in this case alleges that Consol directly provided safety,
technical and operational support and supervision to Consolidation
at the Loveridge #22 mine; and that Consol and Moore owed a duty to
Atkins and the other miners to do so in order to ensure that federal
and state mine safety standards were complied with to protect the
safety and welfare of all of the miners.
Whether the West Virginia Supreme Court would apply Wetzel
so as to afford “agent” immunity to a worker’s compensation
guarantor-administrator not only for that purpose, but also for
assisting the employer in the operation of the employer’s business,
such as the underground mining operation in this case, is not
necessarily settled by Wetzel.
The possibility remains that a claim
against such an “agent” entity for an on-the-job injury relating to
its additional role in the operation of the underlying business would
not be deemed barred by immunity under § 23-2-6a.
remains at least a “glimmer of hope” that such a claim may succeed.
As Consol’s employee, Moore occupies a position similar to that of
Allegations of the Complaint
According to the allegations in the complaint, Adkins was
employed by Consolidation as a miner and Moore was employed by Consol
as a corporate safety officer.
(Compl. ¶¶ 3, 6).
The Loveridge #22
mine is alleged to be Consolidation’s mine and Consolidation is the
operator of it.
(Id. at ¶¶ 70, 74).
Consol, as the parent company
of Consolidation, is alleged to be the “controller” of the mine and
directly provides safety, technical, and operational support and
supervision to Consolidation at the mine.
(Id. at ¶ 78).
alleged that Consol and Moore owed a duty to Adkins and the other
miners to provide such support and supervision to Consolidation so
as to ensure that federal and state mine safety standards were
complied with in order to protect the safety and welfare of all of
(Id. at ¶ 80).
It is further alleged that Consol and
Consolidation had the power of selection and engagement of persons
responsible for corporate safety and supervision of the mine and
selected and engaged Moore as well as Marlowe, Brock, McClain,
Conaway, Morgan, and Mayle for those purposes.
(Id. at ¶ 87).
allegation, however, is tempered and narrowed by the two allegations
that immediately follow: Consol had the power to control, direct,
and supervise the activities of Moore and Marlowe in all respects
while engaging in their duties of employment (id. at ¶ 89), and
Consolidation had the same power to control, direct, and supervise
the activities of its employees and agents.
(Id. at ¶ 88).
Although the complaint does not state that Consol or Moore
is an agent of Consolidation, Consol and Moore assert that the
complaint alleges that which, if true, describes Consol as the agent
of Consolidation and Moore as the subagent of Consol with respect
to safety, technical, and operational support and supervision at the
While Consol asserts that the allegations of the complaint
describe circumstances that cast the parent Consol as the agent of
its subsidiary, Consolidation, at no point does the complaint
expressly allege such an agency relationship.
Neither does Consol
acknowledge it is in fact and law the agent of Consolidation other
than with respect to its role as guarantor of Consolidation’s
self-insured workers’ compensation obligations for which Consol
provides a surety bond, together with Consol’s utilization of
accounting measures and other activities which make possible and
undergird Consolidation’s workers’ compensation benefit program.
Though some of the allegations of the complaint may be
construed as suggesting that Consol is the agent of its subsidiary
Consolidation, the reverse is also true.
The parent Consol is
alleged to be the “controller” of Consolidation’s Loveridge #22 mine,
from which it could be inferred that Consolidation is the agent of
At the least, that allegation diminishes the defendants’
theory that the allegations of the complaint establish the parent
as an operational agent of its subsidiary -– a relationship which
neither Consol nor any defendant admit.
possibility of recovery against Consol and Moore remains, and
fraudulent joinder as to nondiverse defendant Moore is not shown.
The Public Policy of Guarantor Immunity
Defendants also advance an admittedly novel argument for
immunity based on considerations of public policy, in which they
contend that when a parent company guarantees the workers’
compensation obligations of its self-insured subsidiary, the parent
company acquires the workers’ compensation immunity of that
Defendants assert that because the parent company
Consol guaranteed the workers’ compensation obligations of its
subsidiary Consolidation, Consol and its employee, Moore, should be
afforded the benefits of workers’ compensation immunity.
Defendants cite a single decision of the Supreme Court of Tennessee
See Malkiewicz v. RR Donnelley & Sons, 794 S.W.2d 728
This proposition is not shown to have been adopted
in West Virginia and remains an open question.
Defendants argue that Moore is immune inasmuch as
allegations in the complaint, if accepted as true, demonstrate the
existence of a joint venture between all the defendants such that
the workers’ compensation immunity afforded to Consolidation is
extended to Moore.
See Harmon v. Elkay Mining Co., 500 S.E.2d 860,
864 (W. Va. 1997) (noting that joint venturers share workers’
Under West Virginia law, a joint venture “‘is an
association of two or more persons to carry out a single business
enterprise for profit, for which purpose they combine their property,
money, effects, skill and knowledge.’”
Armor v. Lantz, 535 S.E.2d
737, 742 (W. Va. 2000) (quoting Price v. Halstead, 355 S.E.2d 380,
384 (W. Va. 1987)).
“[A] joint venture arises out of a contractual
relationship between the parties.
written, express or implied.”
The contract may be oral or
Price, 355 S.E.2d at 384; accord
Sipple v. Starr, 520 S.E.2d 884, 892 (W. Va. 1999).
a joint venture are . . . jointly and severally liable for all
obligations pertaining to the joint venture, and the actions of the
joint venture bind the individual co-venturers.”
Armor, 535 S.E.2d.
While the Supreme Court of Appeals has “never formulated
any broad analytical test by which to determine the existence of a
joint venture,” it has identified the “existence of certain
‘distinguishing elements or features' essential to the creation of
a joint venture.”
Armor, 535 S.E.2d at 743.
In particular, “‘[a]n
agreement, express or implied, for the sharing of profits is
generally considered essential to the creation of a joint adventure,
and it has been held that, at common law, in order to constitute a
joint adventure, there must be an agreement to share in both the
profits and the losses.’”
Id. (quoting Pownall v. Cearfoss, 40
S.E.2d 886, 893–94 (W. Va. 1946) (citations omitted).
particular, an agreement to share in the profits has not been alleged.
Thus, a key element of the doctrine of joint venture has not been
alleged and joint venture is inapplicable at this stage.
Viewing all questions of law and fact in plaintiff’s favor,
the court is unable to conclude that plaintiff has no possibility
of a right to relief against nondiverse defendant Moore.
of this, the court lacks diversity jurisdiction.
Based upon the foregoing discussion, it is ORDERED as
That plaintiff’s motion to remand be, and it hereby
is, granted; and
That this action be, and it hereby is, remanded for
all further proceedings to the Circuit Court of
The Clerk is directed to forward copies of this written
opinion and order to all counsel of record and a certified copy to
the Circuit Court of Kanawha County.
DATED: April 13, 2012
John T. Copenhaver, Jr.
United States District Judge
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