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Urda v. Valmont Industries, Inc.

United States District Court, M.D. Louisiana

May 20, 2019

HARRIS EUGENE URDA AND RACHEL URDA
v.
VALMONT INDUSTRIES, INC., ET AL.

          NOTICE AND ORDER ON MOTION FOR LEAVE TO FILE COMPLAINT IN INTERVENTION AND MOTION TO SUBSTITUTE COMPLAINT OF INTERVENTION

          ERIN WILDER-DOOMES UNITED STATES MAGISTRATE JUDGE.

         Before the Court is a Motion for Leave to File Complaint of Intervention (the “Motion for Leave”)[1] and a Motion to Substitute Complaint of Intervention (the “Motion to Substitute”)[2] filed by Travelers Property Casualty Company of America (“Travelers”) and Aldridge Electric, Inc. (“Aldridge”) (collectively, “Proposed Intervenors”), which were referred to the undersigned. There are no oppositions to the Motions in the record and Proposed Intervenors contend in the Motion to Substitute that no party opposes their intervention in this proceeding.[3]

         For the reasons that follow, by no later than June 7, 2019, Aldridge, (and any other party who so wishes), shall file a supplemental brief addressing: (1) whether Aldridge is a required party to this litigation under Fed.R.Civ.P. 19(a) or (b) in its capacity as a Proposed Intervenor, and (2) if Aldridge is a required party to this litigation pursuant to Fed.R.Civ.P. 19(b), whether this suit should be dismissed for lack of subject matter jurisdiction. Aldridge attach all applicable worker's compensation insurance policies issued by Travelers that have bearing on this matter to its supplemental brief. Since Aldridge is currently a third party defendant[4] in this proceeding, Aldridge shall also brief the potential applicability of Fed.R.Civ.P. 13 in connection with its claims for recovery of worker's compensation insurance benefits paid to Plaintiff.

         I. Background

         Plaintiffs Harris Eugene Urda (“Harris”) and Rachel Urda (“Rachel”) (collectively, “Plaintiffs”) seek damages for injuries allegedly sustained by Harris on January 4, 2018, at a construction site in Plaquemine, Louisiana, when Harris and the crane he was operating were struck by a falling utility power pole.[5] Plaintiff alleges that he was in the course and scope of his employment with Aldridge when the accident occurred.[6] Per their Amended and Supplemental Complaint (“Complaint”), Plaintiffs name Valmont Industries, Inc. (“Valmont”), American Piledriving Equipment, Inc. (“American”), and New South Access & Environmental Solutions, L.L.C. (“New South”) as Defendants, and allege that this Court has diversity jurisdiction under 28 U.S.C. § 1332.[7] Plaintiffs, Louisiana domiciliaries, assert that complete diversity of citizenship exists with respect to Defendants, as Valmont is a citizen of Delaware (place of incorporation) and Nebraska (principal place of business), American is a citizen of Washington (place of incorporation and principal place of business), and New South is a citizen of Mississippi (domicile of ultimate underlying member).[8] Plaintiffs also clearly stated that their damages exceed $75, 000, which satisfied the amount in controversy requirement.[9]

         On March 6, 2019, American filed a Third Party Complaint against Aldridge pursuant to Fed.R.Civ.P. 14(a), wherein American asserted that American and Aldridge were parties to a Rental Agreement in connection with Aldridge's rental of a “vibratory hammer” from American for use at Aldridge's construction site. American asserted that, under the Rental Agreement, Aldridge assumed responsibility for all causes or hazards of loss related to the hammer and was “obligated to defend, indemnify, and hold [American] harmless from any claims, complaints, lawsuits, arbitration litigation, damages, losses…..of any kind which relates to, arises out of, or is alleged to relate to or arise out of the [hammer].”[10] American further alleged that, despite that American provided an operation/maintenance manual outlining the rules of operation and safety for its equipment, Aldridge failed to follow the safety instructions, which led to Harris's injuries.[11]American asserted that this Court has diversity jurisdiction over the Third Party Complaint because American, alleged to be a Washington corporation with a Washington principal place of business, is diverse from Aldridge, alleged to be a Delaware corporation with an Illinois principal place of business. American also asserted that the amount in controversy was in excess of $75, 000 as a result of: (1) Plaintiffs' damages against American for which Aldridge owed indemnity to American, (2) American's defense costs, and (3) American's damages for Aldridge's breach of the Rental Agreement, including attorney's fees and court costs.[12] Alternatively, American claimed that this Court has supplemental jurisdiction over the Third Party Complaint pursuant to 28 U.S.C. §1367, because American's “claims are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.”[13] The Third Party Demand was allowed to proceed because it appeared that Aldridge was diverse from Plaintiffs and the joinder of Aldridge as a Third Party Defendant did not destroy diversity.

         On March 14, 2019, Travelers and Aldridge filed the instant Motion for Leave to intervene in these proceedings.[14] Per their proposed Complaint for Intervention, Proposed Intervenors alleged that Harris was in the course and scope of his employment with Aldridge at the time of the accident, Aldridge had a worker's compensation policy (the “Policy”) through Travelers, and as of the date of the Motion for Leave, Proposed Intervenors “have paid weekly indemnity benefits of $44, 404 and medical benefits of $328, 351.08 to and on behalf of Harris Urda.”[15] Notably, Aldridge asserted that it had a “significant deductible” under the Policy and Travelers asserted that it “continues to pay benefits beyond the deductible.”[16] Proposed Intervenors therefore asserted that, “Under the provisions of LSA-R.S. 23:1101-1103, Intervenors have a statutory right of recovery, reimbursement, credit, and/or offset from the defendants for all workers compensation benefits paid, and to be paid in the future, to the extent any Defendants are found liable for the injuries and damages arising out of the January 4, 2018 accident involving Plaintiff, Harris Urda, ” and further that, “pursuant to the subrogation rights allowed under the laws of the State of Louisiana, [Proposed Intervenors] are entitled by preference and priority to the recovery of benefits paid, and/or a set-off for the total amount of compensation and medical benefits paid, as well as any amounts which may be due in the future.”[17]

         Because subject matter jurisdiction was premised on 28 U.S.C. § 1332, the Court was required to consider whether permitting the intervention “would be inconsistent with the jurisdictional requirements of section 1332, ”[18] particularly because Proposed Intervenors would be aligned with Plaintiffs, not Defendants (see the discussion below). In the Motion for Leave, however, Travelers and Aldridge failed to properly allege their citizenships.[19] Accordingly, on April 3, 2019, Proposed Intervenors were ordered to file a Motion to Substitute their proposed Complaint of Intervention with a pleading that adequately alleged their respective citizenships and to indicate whether any party opposed the intervention.[20] On April 25, 2019, Proposed Intervenors filed their Motion to Substitute, wherein they stated that no party opposed the intervention and attached a proposed Complaint of Intervention that stated as follows: “ALDRIDGE ELECTRIC, INC. (“ALDRIDGE'), a Delaware corporation with its principal place of business in Libertyville, Illinois…and TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA (“TRAVELERS”), a Connecticut corporation with its principal place of business in Hartford, Connecticut….”[21] This Notice and Order is issued to address the lack of diversity between Aldridge as a Proposed Intervenor and Defendant Valmont.

         II. Law and Analysis

         Legal Standards

         Fed. R. Civ. P. 24 provides:

(a) Intervention of Right. On timely motion, the court must permit anyone to intervene who:
(1) is given an unconditional right to intervene by a federal statute; or
(2) claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest.

         Pursuant to 28 U.S.C. § 1367(b), “[i]n any civil action of which the district courts have original jurisdiction founded solely on section 1332…the district courts shall not have supplemental jurisdiction…over claims by persons…seeking to intervene as plaintiffs under Rule 24…when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332.”

         Aldridge as a Required Party

         Aldridge has asserted statutory rights to recovery as an employer who paid worker's compensation benefits to Harris.[22] District courts in Louisiana have previously found that employers and workers' compensation insurers who have paid a plaintiff workers' compensation benefits are intervenors of right in a plaintiff's action against alleged tortfeasors. See Grizer v. CF Industries, Inc. et al, citing Fulford v. Climbtek, Inc., (“Here, ORM alleges that it has paid workers' compensation medical benefits and workers' compensation indemnity benefits under the Louisiana Workers' Compensation Act to and on behalf of Marvin Fulford. Unless ORM is allowed to intervene, it will lose its right to reimbursement. Accordingly, the Court finds ORM to be an intervenor of right under Fed.R.Civ.P. 24(a)(2).”);[23]Youngblood v. ...


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