Bilmar Limited Partnership v. Prima Marketing, LLC et al

Filing 38

MEMORANDUM OPINION AND ORDER granting plaintiff's 12 MOTION to Remand Case to Circuit Court of Kanawha County; directing that this action is remanded to the Circuit Court of Kanawha County for all further proceedings; in view of this disposition, the court need not address the remaining motions. Signed by Judge John T. Copenhaver, Jr. on 11/27/2013. (cc: attys; clerk of the court for the Circuit Court of Kanawha County) (tmh)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON

BILMAR LIMITED PARTNERSHIP,
Plaintiff,
v.

Civil Action No. 2:13-14391

PRIMA MARKETING, LLC,
7-11, INC., and
DON WENTZ,
Defendants.

MEMORANDUM OPINION AND ORDER

Pending is the motion to remand, filed by the
plaintiff, Bilmar Limited Partnership (“Bilmar”), on July 8,
2013.

Also pending is a motion to dismiss, filed by 7-11, Inc.

(“7-Eleven”) on June 21, 2013, and a second motion to dismiss,
filed by Don Wentz (“Wentz”) on August 28, 2013.
Before the court may consider the merits of the
motions to dismiss, it must first resolve the jurisdictional
question posed by the motion to remand.

McCoy v. Norfolk S. Ry.

Co., 858 F. Supp. 2d 639, 642 (S.D. W. Va. 2012); see also Mayes
v. Rapoport, 198 F.3d 457, 460 (4th Cir. 1999) (observing that
propriety of removal and fraudulent joinder are jurisdictional
questions).

1

I.

Factual and Procedural Background

The dispute in this case arises out of three
commercial leases that were initially entered into by Bilmar and
Prima Marketing, LLC (“Prima”), and then subsequently assigned
to 7-Eleven.

Bilmar, the lessor, is a West Virginia limited

liability partnership.

Compl. ¶ 1.

Prima, the original lessee,

is a Colorado limited liability company.

Compl. ¶ 2.

7-Eleven,

the assignee, is a Texas corporation with its principal place of
business in Texas.

Compl. ¶ 3; Notice of Removal ¶ 8.

The

individual defendant, Wentz, is an employee of Prima and a
citizen of West Virginia.

Compl. ¶ 4; Notice of Removal ¶¶ 13,

17. 1

Bilmar leased three convenience store locations to
Prima. 2

Compl. ¶ 6.

According to Bilmar, the terms of the

1

When analyzing motions to remand in situations, such as this
one, where fraudulent joinder has been alleged, “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.” AIDS Counseling & Testing Ctrs. v.
Grp. W Television, Inc., 903 F.2d 1000, 1004 (4th Cir. 1990)
(internal quotation marks and citation omitted).
2

It is unclear when Bilmar and Prima entered into the initial
leases covering the three convenience stores. Although the
complaint pleads that “[a]ll of the terms and conditions of the
Leases and their amendments are incorporated [in the complaint]
as if each and every term [were] pled in full,” the lease
2

leases required Prima to provide maintenance for all three
properties, and Prima was also responsible for repairing any
damage to the properties.

Id. ¶ 12.

The complaint asserts that

Wentz was “in charge of maintenance, repairs, and upkeep” at the
leased properties.

Id. ¶¶ 4, 26.

At some point during the term of the leases, Prima and
Wentz failed to perform the required maintenance and repairs.
Id. ¶¶ 13-14.

Specifically, Bilmar asserts that Wentz “failed

to repair damage to the” leased properties, “failed to
reasonably protect the store locations from damage,” “failed to
maintain the store premises[,] . . . and allowed the property to
. . . become damaged,” “failed to properly repair land slips,
concrete damage, and store damage, thereby increasing the damage
to the [p]laintiff,” “negligently undertook repairs to the three
store locations and enhanced the damage to the locations,”
“negligently oversaw” repairs, and “made faulty repairs to the
[leased] premises[.]”

Id. ¶ 27.

In June 2012, Prima sought to assign the leases to
7-Eleven.

Id. ¶ 9.

In exchange for Bilmar’s consent to the

documents were not attached to the complaint, and the remainder
of the complaint does not quote or discuss the contractual
language in any detail.
3

assignments, Prima promised to make necessary repairs, see id.
¶¶ 15-16, and 7-Eleven promised to obtain insurance coverage for
the properties listing Bilmar as an insured party, id. ¶¶ 23,
25.

After approximately two months of negotiations, Bilmar

agreed, and the leases were assigned to 7-Eleven on August 31,
2012.

Id. ¶¶ 10-13.

Bilmar now claims that Prima did not carry out the
promised repairs prior to the assignments, and also asserts that
7-Eleven has failed to perform the required maintenance since
the assignments.

Id. ¶ 22.

Bilmar also alleges that 7-Eleven

failed to obtain insurance listing Bilmar as an insured party,
as it promised it would do during the assignment negotiations.
See id. ¶¶ 23-25.

B.

Bilmar commenced this action in the Circuit Court of
Kanawha County, West Virginia on May 13, 2013.

Fairly

construed, the complaint sets forth claims for breach of
contract, fraud, civil conspiracy, and negligence.
Specifically, Bilmar claims that: (1) Prima and 7-Eleven have

4

each breached the terms of the leases by failing to maintain and
repair the leased properties; (2) Prima fraudulently induced
Bilmar to agree to the assignments by promising to make repairs
to the leased properties; (3) 7-Eleven fraudulently induced
Bilmar to agree to the assignments by promising to obtain
insurance for the leased properties listing Bilmar as an insured
party; (4) Prima and 7-Eleven engaged in a civil conspiracy to
fraudulently induce Bilmar to agree to the assignments; and (5)
Wentz was negligent in making and overseeing repairs to the
leased properties, and his negligence caused damage to the
properties.

See Id. ¶¶ 13, 15, 16, 22-25, 27, 28.

On June 14, 2013, Prima and 7-Eleven removed the case
to federal court, asserting fraudulent joinder of Wentz and
invoking this court’s diversity jurisdiction.

On July 8, 2013,

Bilmar moved to remand on the ground that Prima and 7-Eleven
failed to establish fraudulent joinder.

II.

Standard of Review

“A defendant may remove any action from a state court
to a federal court if the action could have originally been

5

brought in federal court.”

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)(1).

Since Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267
(1806), diversity jurisdiction has required “complete diversity”
of citizenship between the parties, meaning that no party may
share a common citizenship with an opposing party.

Id.

The

doctrine of fraudulent joinder, however, 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 joinder:
“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 outright fraud in the
plaintiff’s pleading of jurisdictional facts.”
6

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[.]”

Hartley v. CSX

Transp., Inc., 187 F.3d 422, 424 (4th Cir. 1999).

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 favor.’”

Mayes, 198 F.3d at

464 (quoting Marshall, 6 F.3d at 232–33).

Hartley demonstrates that fraudulent joinder claims
are subject to a rather black-and-white analysis in this
circuit.

Any 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
7

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).

III. Discussion

Bilmar does not dispute that the amount in controversy
is greater than $75,000.

Rather, Bilmar argues that Prima and

7-Eleven have failed to demonstrate that Wentz was fraudulently
joined, and that complete diversity of citizenship accordingly
does not exist.

Prima and 7-Eleven do not allege any actual

fraud in the pleadings, 3 so the relevant question for fraudulent

3

Though they stop short of asserting actual fraud, Prima and
7-Eleven do claim that Bilmar has “no real intention to obtain a
[] judgment” against Wentz and joined him for purely tactical
reasons, as evidenced by Bilmar’s initial failure to serve Wentz
for more than sixty days after filing the complaint. Defs.’
Opp’n at 6. They cite Carter v. Hitachi Koki U.S.A., Ltd., 445
F. Supp. 2d 597 (E.D. Va. 2006), for the proposition that such a
failure to serve a party can be evidence of fraudulent joinder.
Unlike this case, however, the plaintiff in Carter failed to
serve a nondiverse defendant for nearly one year after
initiating the action; and evidence in the record clearly
demonstrated that the nondiverse defendant was not involved in
the case, and therefore not a proper defendant. Id. at 601
(“The only witness . . . who can prove plaintiff’s case has
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joinder purposes is whether Bilmar has any possibility of
recovery in state court against the nondiverse defendant, Wentz.

Bilmar asserts that Wentz may be held liable for
negligence because he was “in charge of maintenance, repairs,
and upkeep,” Compl. ¶¶ 4, 26; and, among other failures, “failed
to properly repair land slips, concrete damage, and store
damage, thereby increasing the damage to the [p]laintiff,” and
“negligently undertook repairs to the three store locations and
enhanced the damage to the locations,” id. ¶ 27.

Bilmar thus

alleges that Wentz’s actions caused damage to the properties or,
as noted, enhanced existing damage.

Id.

Bilmar seeks to

recover the cost of repairing the properties as well as punitive
damages.

See id. at Prayer for Relief.

A.

Under West Virginia law, “[t]o prevail in a negligence
suit, the plaintiff must prove by a preponderance of the
evidence that the defendant owed a legal duty to the plaintiff
and that by breaching that duty the defendant proximately caused
testified unequivocally by affidavit that [the nondiverse
defendant] did not sell the allegedly defective product.”).
9

the injuries of the plaintiff.”

Strahin v. Cleavenger, 603

S.E.2d 197, 205 (W. Va. 2004) (citing Webb v. Brown & Williamson
Tobacco Co., 2 S.E.2d 898, 899 (W. Va. 1939)).

In considering

the claim of fraudulent joinder, the court must determine
whether the plaintiff has a “glimmer of hope” of demonstrating
those four elements of duty, breach, causation, and damages.
The parties focus their dispute on whether Wentz owed any duty
to Bilmar, and thus whether Bilmar can maintain an action for
negligence against Wentz.

B.

“No action for negligence will lie without a duty
broken,” Syl. Pt. 1, Parsley v. Gen. Motors Acceptance Corp.,
280 S.E.2d 703 (W. Va. 1981), and whether a duty exists under a
given set of facts is a complex legal question for the court,
rather than a jury, to decide, Aikens v. Debow, 541 S.E.2d 576,
580 (W. Va. 2000).

In making that determination, courts in West

Virginia begin from the basic premise that all persons in an
organized society are required to exercise reasonable care to
prevent injury to others as a result of their conduct.

See

Robertson v. LeMaster, 301 S.E.2d 563, 566-67 (W. Va. 1983).

10

“However, in order to form the basis for a valid cause of
action, [that general] duty must be brought home to the
particular plaintiff, for a duty owing to everbody can never
become the foundation of an action . . . .”

Id. at 567

(internal quotation marks omitted); see also Aikens, 541 S.E.2d
at 583 (discussing the need to draw a line between providing a
remedy to the injured and creating unbounded exposure to tort
liability).

To define proper limits on the scope of duty, courts
in West Virginia primarily consider whether it was foreseeable
that the defendant’s conduct would lead to the harm suffered by
the plaintiff.

Roberston, 301 S.E.2d at 568.

As the Supreme

Court of Appeals explained in Aikens:
The ultimate test of the existence of a duty to use
care is found in the foreseeability that harm may
result if it is not exercised. The test is, would the
ordinary man in the defendant’s position, knowing what
he knew or should have known, anticipate that harm of
the general nature of that suffered was likely to
result?
541 S.E.2d at 581 (quoting Sewell v. Gregory, 371 S.E.2d 82 (W.
Va. 1988)).

In addition to foreseeability, courts also consider

“policy considerations underlying the core issue of the scope of
the legal system’s protection,” such as “the likelihood of
injury, the magnitude of the burden of guarding against it, and

11

the consequences of placing that burden on the defendant.”

Id.

(citing Robertson, 301 S.E.2d at 568).

In other words, because “negligence in the air, so to
speak, will not do,” Palsgraf v. Long Island R. Co., 248 N.E.
99, 99 (N.Y. 1928) (internal quotation marks omitted), courts
ground the duty inquiry by asking whether, under certain
circumstances, it is proper to impose liability: (1) because the
defendant knew or should have known that his actions would
result in harm to a particular class of plaintiffs; or (2)
because as a matter of policy the nature of the risk dictates
that it should be borne by the defendant rather than the
plaintiff.

The defendants offer two arguments why Wentz owed no
duty to Bilmar in this case.

1.

Prima and 7-Eleven first argue that, to the extent
Wentz owed a duty to repair and maintain the leased properties,
he owed that duty to his employer, Prima, and not to the

12

plaintiff, Bilmar.

Defs.’ Opp’n at 5 (“Wentz was merely an

employee of Prima and, thus, had no duty to [Bilmar].”).

For

its part, Bilmar maintains that Wentz “is not immune from tort
liability . . . simply because he was an employee of Prima.”
Pl.’s Mot. Remand at 5.

Under West Virginia law, employees are not shielded
from individual liability simply because they commit a tort
while acting within the scope of their employment.

See, e.g.,

Syl. Pt. 3, Barath v. Performance Trucking Co., Inc., 424 S.E.2d
602, 602 (W. Va. 1992) (“An agent or employee can be held
personally liable for his own torts against third parties and
this personal liability is independent of his agency or employee
relationship.”); Syl. Pt. 3, Musgrove v. Hickory Inn, Inc., 281
S.E.2d 499, 501 (W. Va. 1981) (same).

Applying this doctrine,

this court has held that employees accused of negligently
carrying out their employment duties are not fraudulently
joined, as long as the other elements of prima facie negligence
are at least arguably present.

McKean v. Wal-Mart Stores, Inc.,

No. 05-176, 2005 WL 1785260, at *3 (S.D. W. Va. July 26, 2005)
(holding that nondiverse warehouse manager was not fraudulently
joined where employee had a duty to inspect door which injured
plaintiff).

Accordingly, the fact that Wentz was acting as an

employee of Prima at the time that he allegedly carried out
13

negligent and faulty work on the leased properties does not
necessarily absolve him of individual tort liability.

2.

Next, Prima and 7-Eleven argue that Wentz did not owe
Bilmar a common law duty to exercise reasonable care because
“Wentz never held himself out to [Bilmar], and [Bilmar] never
hired [Wentz] to render services.”

Defs.’ OPpp’n at 5.

In

effect, the defendants argue that Bilmar, as a third party, was
too remote from Wentz for any duty to exist between them.
Bilmar counters that Wentz did owe a duty to exercise reasonable
care and skill when carrying out his employment duties because
it was foreseeable that the properties would be damaged if he
failed to do so.

As an initial matter, whether Bilmar hired Wentz, or
whether Bilmar and Wentz technically consummated a contract for
services, is irrelevant.

See Syl. Pt. 2, Sewell v. Gregory, 371

S.E.2d 82, 83 (W. Va. 1988)(“In the matters of negligence,
liability attaches to a wrongdoer, not because of a breach of a
contractual relationship, but because of a breach of duty which

14

results in an injury to others.”).

The proper inquiry, outlined

above, is to ask whether considerations of foreseeability and
public policy weigh in favor of, or against, imposing a duty in
this context.

See Bragg v. United States, 741 S.E.2d 90, 99-100

(W. Va. 2013).

In Bragg, the Supreme Court of Appeals recently
considered the circumstances under which West Virginia law will
impose a duty between a defendant and a third-party plaintiff.
In that case, the court held that a safety inspector “owes a
duty of care to the employees whose safety the inspection is
intended to secure,” because “it is foreseeable that harm is
likely to come to such employees if a safety inspection is
negligently performed.”

741 S.E.2d at 100.

The court also

concluded that public policy weighed in favor of imposing a
third-party duty, because “[t]he burden upon the inspector is
merely to perform his or her duties with” ordinary skill, care,
and diligence.

Id.

In reaching its decision, the court relied

in part upon Sewell v. Gregory, a case cited by Bilmar, which
held that home builders owe a duty of care to subsequent, thirdparty homeowners.

371 S.E.2d at 85 (“[A] builder is under a

common law duty to exercise reasonable care and skill in the
construction of a building . . . [and a] subsequent homeowner
can maintain an action against a builder for negligence
15

resulting in latent defects which the subsequent purchaser was
unable to discover prior to purchase.”) (internal quotation
marks and citation omitted).

In that case, not unlike Bragg, it

was foreseeable that the negligent construction of a building
could harm immediate as well as subsequent homeowners.

Id.

And

while that case did not explicitly consider public policy,
implicit in its holding is the notion that homebuyers who are
not aware of latent structural flaws at the time of purchase
should not bear the burden of guarding against the resultant
harms that could have more easily been avoided if the builder
exercised reasonable care and skill in the first instance.

As in Bragg and Sewell, the elements of foreseeability
and public policy both weigh in favor of implying a duty between
Bilmar and Wentz in this case.

First, it is foreseeable that

negligent and faulty repairs to a property will cause harm to
the possessor or owner of the property, and Sewell demonstrates
that the duty to avoid causing such harms exists even if the
workman does not know with certainty the identity of the party
who will be injured.

Second, Sewell and, in a general sense,

Bragg, show that public policy weighs in favor of requiring
workers like Wentz to carry out their ordinary duties with
diligence, care and skill so as not to damage the property on

16

which they are working, rather than requiring third parties such
as Bilmar to insure against the possibility that they will not.

Accordingly, although the Supreme Court of Appeals has
not spoken to the precise question at issue here, the fact that
it has recognized a duty in the circumstances presented in Bragg
and Sewell suggests that Wentz owed a duty to Bilmar to exercise
diligence, care and skill when repairing the leased premises so
as to avoid damaging those premises.

Inasmuch as the court,

with respect to the remand issue, is required to resolve open
legal questions in Bilmar’s favor, the element of duty is
satisfied.

C.

While the parties do not devote their attention to the
remaining elements of breach, causation, and damages, the court
will briefly consider them.

Bilmar has pled that Wentz, inter

alia, “failed to properly repair land slips, concrete damage,
and store damage, thereby increasing the damage to the
[p]laintiff,” and “negligently undertook repairs to the three
store locations and enhanced the damage to the locations,”
Compl. ¶ 27; and, as noted, that these actions caused damage to
17

the properties and enhanced existing damage, id.

Bilmar seeks

to recover the cost of repairing the properties as well as
punitive damages.

See id. at Prayer for Relief.

Though sparse, these pleadings allege the remaining
elements of a negligence claim.

While such “[t]hreadbare

recitals of the elements of a cause of action, supported by mere
conclusory statements, [may] not suffice” to survive a motion to
dismiss under Federal Rule of Civil Procedure Rule 12(b)(6),
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), the standard for
fraudulent joinder is “more favorable to the plaintiff than the
standard for ruling on a motion to dismiss,”

Hartley v. CSX

Transp., Inc., 187 F.3d 422, 424 (4th Cir. 1999).

Moreover,

courts in West Virginia adhere to a more lenient standard for
appraising the sufficiency of a complaint.

As the Supreme Court

of Appeals recently reiterated:
[T]he purpose of a motion under [West Virginia] Rule
12(b)(6) is to test the formal sufficiency of the
complaint.
The trial court, in appraising the
sufficiency of a complaint . . . should not dismiss
the complaint unless it appears beyond doubt that the
plaintiff can prove no set of facts in support of his
claim which would entitle him to relief.
Dismissal
for failure to state a claim is proper where it is
clear that no relief could be granted under any set of
facts that could be proved consistent with the
allegations.
Mey v. Pep Boys-Manny, Moe & Jack, 717 S.E.2d 235, 239 (W. Va.
2011) (internal quotation marks and citations omitted).
18

Under

this more forgiving standard, and resolving factual issues in
Bilmar’s favor, the court cannot conclude that “it is clear that
no relief could be granted under any set of facts” consistent
with Bilmar’s allegations.

Finally, the court is mindful that, in the fraudulent
joinder context, it is the party invoking federal jurisdiction
that bears the burden of demonstrating “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.”

Mayes v. Rapoport, 198 F.3d 457, 464 (4th Cir. 1999)

(internal quotation marks omitted).

In light of the fact that

the defendants have failed to challenge any element of the
negligence claim apart from the existence of duty, they have
failed to demonstrate that Bilmar cannot establish a claim
against Wentz.

IV.

Conclusion

The court ORDERS that plaintiff’s motion to remand be,
and it hereby is, granted.

The court further ORDERS that this

action be, and it hereby is, remanded to the Circuit Court of

19

Kanawha County for all further proceedings.

In view of this

disposition, the court need not address the remaining motions.

The Clerk is directed to forward a copy of this
memorandum opinion and order to counsel of record and a
certified copy to the clerk of the court for the Circuit Court
of Kanawha County.
DATED: November 27, 2013

John T. Copenhaver, Jr.
United States District Judge

20