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Thomas v. Great West Casualty Co.

United States District Court, W.D. Louisiana, Lafayette Division

June 3, 2019

ALTON THOMAS
v.
GREAT WEST CASUALTY CO ET AL

          SUMMERHAYS JUDGE

          REPORT AND RECOMMENDATION

          PATRICK J. HANNA JUDGE.

         Before the Court is the Motion for Leave of Court to File First Supplemental and Amended Complaint and for Remand filed on behalf of Plaintiffs in which they seek leave to amend their Petition to add a non-diverse defendant. (Rec. Doc. 23). Defendants, Great West Casualty Company, Indian River Transport, Co., Clinton K. Hall, and Geico, oppose the Motion (Rec. Doc. 25 and 26), and Plaintiffs have replied (Rec. Doc. 27). The Motion was referred to the undersigned magistrate judge for review, report, and recommendation in accordance with the provisions of 28 U.S.C. §636 and the standing orders of this Court. Considering the evidence, the law, and the arguments of the parties, and for the reasons fully explained below, the Court recommends that the Motion be granted and that the matter be remanded to state court.

         Factual Background

         Plaintiffs filed this lawsuit following an automobile accident on Interstate 10 East in Acadia Parish, Louisiana on March 20, 2017. According to the Petition, Bertha Wilson was driving in the right lane of I-10 East behind a vehicle driven by Robert Vinet in the left lane of I-10 East. Plaintiffs contend in their Motion to Amend that an ice chest became dislodged from Vinet's vehicle, and that he veered right in an attempt to maneuver his vehicle to the shoulder of the roadway. (Rec. Doc. 23-2, at 2).[1] Thereafter, an eighteen-wheeler operated by Clinton Hall, owned by Indian River, and insured by Great West, struck the rear of the Wilson vehicle.

         Wilson and Alton Thomas, on behalf of Wilson's minor children, initially filed this suit in Acadia Parish against Hall, Indian River, Great West, and Geico as Wilson's uninsured motorist carrier. Defendants removed. (Rec. Doc. 1) Hall is a Texas domiciliary; Indian River is a Florida corporation with its principal place of business in Florida; and Great West is an insurance company incorporated and with its principal place of business in Nebraska. (Rec. Doc. 1, ¶VII-VIII). Geico is a Maryland corporation with its principal place of business in Washington, D.C. (Rec. Doc. 1, ¶IX).

         The parties submitted their joint Rule 26(f) report in December 2018. Contained in Defendants' submissions is the statement, “in the alternative, it is Defendants' position that the accident was caused by the fault of Robert Vinet, who was operating a vehicle in front of plaintiff's vehicle in a careless manner and in doing so, created a sudden emergency situation that caused the subject accident.” (Rec. Doc. 20, at 2). Thereafter, on March 13, 2018, Plaintiffs filed the Motion to Amend their Petition at issue seeking to name Vinet and his insurer, GoAuto Insurance Company, as defendants. Plaintiff alleges that Vinet is a Louisiana domiciliary and that GoAuto is a domestic insurance company in Louisiana. (Rec. Doc. 23-1). Plaintiffs contend that they should be permitted to name Vinet and GoAuto as potentially liable parties, which would thus destroy diversity and mandate remand. Hall, Indian River, and Great West oppose the Motion to Amend on the grounds that Vinet has not yet been served. (Rec. Doc. 25). Geico opposes the Motion on the grounds that the proposed amendment is untimely, improperly intended to destroy jurisdiction, and futile since the claims sought to be added are time-barred. (Rec. Doc. 26).

         Applicable Law

         This is a diversity case under 28 U.S.C. §1332. As set forth in Defendants' Notice of Removal, Plaintiffs (Louisiana citizens) are diverse from Defendants, and the amount in controversy exceeds $75, 000. (See Rec. Doc. 1). If Plaintiffs are permitted to amend their Petition to name Vinet (a Louisiana domiciliary) and his insurer, GoAuto (a Louisiana insurer), as defendants, the diversity requirement of §1332 is no longer satisfied, and this Court loses jurisdiction.

         Typically, amendments to pleadings are governed by Federal Rule of Civil Procedure 15(a), which states that leave to amend “shall be freely given when justice so requires.” However, in removed cases, a district court has discretion to either grant or deny the amendment of a complaint when subject-matter jurisdiction is based on diversity, and the plaintiff seeks to amend the complaint to add a nondiverse party. 28 U.S.C. § 1447(e); Schindler v. Charles Schwab & Co., Inc., 2005 WL 1155862, *2 (E.D. La. 2005) (citing Ascension Enterprises, Inc. v. Allied Signal, Inc., 969 F.Supp. 359, 360 (M.D. La. 1997)). See also Doleac ex rel. Doleac v. Michalson, 264 F.3d 470, 476 (5th Cir. 2001). Thus, when faced with a motion to amend a complaint to add a nondiverse defendant in a removed case, federal courts are required to scrutinize the proposed amendment more closely than they would other proposed amendments. Hensgens v. Deere & Co., 833 F.2d 1179, 1182 (5thCir. 1987). Deciding whether to permit an amendment that would destroy the court's subject-matter jurisdiction requires a balancing of the diverse defendant's interest in retaining the federal forum with the plaintiff's competing interests. Id. In such a situation, “the court may deny joinder, or permit joinder and remand the action to the State court.” 28 U.S.C. § 1447(e). The decision of whether to deny joinder or permit joinder and remand is within the discretion of the district court. Hengrens, 833 at 1182.

         In Hensgens v. Deere & Co., the Fifth Circuit identified four factors that should be considered in deciding whether to permit an diversity-destroying amendment: (1) whether the purpose of the amendment is to defeat federal jurisdiction, (2) whether the plaintiff was dilatory in requesting the amendment, (3) whether the plaintiff will be significantly injured if the amendment is not allowed, and (4) whether any other factors bear on the equities. Id. The Court will address each factor in turn.

         1. Whether the purpose of the amendment is to defeat federal jurisdiction.

         In analyzing the first Hensgens factor, courts consider whether the plaintiff knew the identity of the non-diverse defendant when the state court complaint was filed and whether the plaintiff has stated a valid claim against the nondiverse defendant. See, e.g., Fontenot v. Johnson & Johnson, No. 10-CV-162, 2012 WL 2064722, at *4 (W.D. La. Apr. 13, 2012), report and recommendations adopted, 2012 WL 2064848 (W.D. La. June 5, 2012); Richardson v. Wal-Mart Stores Texas, LLC, 192 F.Supp.3d 719, 726 (S.D. Tex. 2016). A plaintiff's possession of a valid claim suggests that the purpose of a proposed amendment is not to defeat diversity. See Tillman v. CSX Transp., Inc., 929 F.2d 1023, 1029 (5th Cir. 1991); Allen v. Walmart Stores, L.L.C., 907 F.3d 170, 186 (5th Cir. 2018). However, the plaintiff's knowledge of the nondiverse defendant's identity upon initially filing suit in state court, yet failure to name him as a defendant at that time, suggests that the motion to amend was intended to frustrate diversity jurisdiction. See Martinez v. Holzknecht, 701 F.Supp.2d 886, 889 (S.D.TX. March 15, 2010) (collecting cases).

         The Court does not find that Plaintiffs' principal purpose in seeking to amend the suit was to defeat diversity jurisdiction. As Plaintiffs submit, they did not file their Motion to Amend until after Defendants submitted their Rule 26(f) report inserts affirmatively indicating for the first time that they intended to rely upon (at least alternatively) the fault of Vinet. Notably, Defendants did not raise Vinet's fault as an affirmative defense in their Answers. (See Rec. Doc. 6 and 10). Thus, although Plaintiffs knew about Vinet at the time of filing suit, they did not anticipate his purported liability to be an issue until Defendants raised it as a defense for the first time in their Rule 26(f) report inserts. Further, the Court is ...


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