Opinion
Civil Action No. 03-6204.
May 6, 2004
MEMORANDUM AND ORDER
Currently before the Court are Plaintiffs' Motion for Remand (Docket No. 6), Defendant Ford Motor Company's response in opposition (Docket No. 11), Plaintiffs' reply (Docket No. 15), Defendants' sur-reply (Docket No. 16), Defendant Tom Mellet Auto's Motion to Dismiss (Docket No. 9), Plaintiffs' response in opposition (Docket No. 14), Defendant Sloan Toyota's Motion to Dismiss (Docket No. 12), and Plaintiffs' response in opposition (Docket No. 17).
I. BACKGROUND
Plaintiffs Charles and Lisa Blech, individually and on behalf of their minor children Alexandra and Alyssa ("Plaintiffs"), originally filed suit in May 2002 in the Philadelphia Court of Common Pleas against Defendants Harry Rohlfing ("Rohlfing"), Tom Mellet Auto, Inc. ("Mellet"), and Sloane Toyota, Inc. ("Sloane"). The case arose out of an automobile accident in which Plaintiffs' Nissan Quest minivan was struck from behind by a car driven by Rohlfing. Mellet and Sloane had rented a "loaner" car to Rohlfing while his own car was under repair.
In the case before the Pennsylvania state court, hereinafter referred to as "Blech I," Plaintiffs brought claims against Rohlfing for his negligent driving. Plaintiffs brought claims against Mellet and Sloane for negligently renting a car to Rohlfing and for breaching an alleged contractual duty to investigate Rohlfing's driving record and license. See Blech I Complaint, Pls.' Mot. for Remand, Ex. A (Docket No. 6). Mellet and Sloane won summary judgment without opinion from the state court on October 1, 2003. Plaintiffs appealed and that aspect of Blech I is now pending in Pennsylvania Superior Court. Plaintiffs and Rohlfing entered into a settlement agreement releasing Rohlfing and his insurer State Farm Mutual Automobile Insurance Company from all liability for Plaintiffs' injuries resulting from the car accident with the following caveat:
BUT EXCEPTING that this release shall have the following limitation. Harry E. Rohlfing shall remain unreleased and thus potentially liable to us [the Plaintiffs] IF AND TO THE EXTENT that there may be available any other coverage to Harry E. Rohlfing through a policy of insurance which applies to the motor vehicle accident hereinabove referred to and where that policy is excess to the coverage by the State Farm Mutual Automobile Insurance Company under which the consideration for this release was paid and accepted.
Joint Tortfeasor Release, Pls.' Mot. for Remand, Ex. C (Docket No. 6).
Plaintiffs initiated a second law suit, the instant action, in the Philadelphia County Court of Common Pleas in June 2003 against each of the Blech I defendants and also against Defendants Ford Motor Company ("Ford") and TRW, Inc. Ford and TRW are named defendants for their involvement in the manufacturing of Plaintiffs' Nissan minivan. On November 12, 2003, Ford removed the action to this federal district court with the consent of all Defendants. Plaintiffs are New Jersey citizens; Rohlfing, Mellet, and Sloane are citizens of Pennsylvania; Ford is a citizen of Michigan; and TRW is a citizen of Ohio. Invoking diversity jurisdiction in the notice of removal, Ford claims that Plaintiffs fraudulently joined Pennsylvania citizens Rohlfing, Mellet, and Sloane as nominal defendants. Plaintiffs now seek remand to state court denying Ford's claims of fraudulent joinder.
II. LEGAL FRAMEWORK
A defendant may remove a civil action filed in state court if the federal court would have had original jurisdiction to hear the matter. See 28 U.S.C. § 1441(a). A defendant may not remove an action to federal court based on diversity if any defendant "is a citizen of the State in which such action is brought." 28 U.S.C. § 1441(b). In this circumstance, a defendant may avoid remand only by demonstrating that the plaintiff fraudulently joined the resident defendants. See Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 (3d Cir. 1992); Dontonville v. Jefferson Health System, No. 01-4424, 2002 U.S. Dist. LEXIS 624, *5 (E.D. Pa. Jan. 14, 2002).
Joinder is fraudulent "where there is no reasonable basis in fact or colorable ground supporting the claim against the joined defendant, or no real intention in good faith to prosecute the action against the defendants or seek a joint judgment."Batoff, 977 F.2d at 851; see also Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990). "If there is even the possibility that a state court would find that the complaint states a cause of action against any one of the resident defendants, the federal court must find that joinder was proper and remand the case to state court." Boyer, 913 F.2d at 111 (quoting Coker v. Amoco Oil Co., 709 F.2d 1433, 1440-41 (11th Cir. 1983)). Remand is proper unless the district court determines that the claims against the resident defendants are "wholly insubstantial and frivolous." See Batoff, 977 F.2d at 852. When deciding whether to remand, the district court must not perform a "penetrating" inquiry into state law and decide the case on the merits. See id. at 853; Boyer, 913 F.2d at 112-13 (vacating district court's summary judgment determination and remanding case because district court impermissibly performed a merits-based evaluation of the non-diverse defendants' claims when it had decided not to grant plaintiff's motion to remand). "A claim that can be dismissed only after an intricate analysis of state law is not so wholly insubstantial and frivolous that it may be disregarded for purposes of diversity jurisdiction."Batoff, 977 F.2d at 852
The removing party asserting that a resident defendant has been fraudulently joined carries a "heavy burden of persuasion." See Boyer, 913 F.2d at 111. This heavy burden is appropriate because removal statutes "are to be strictly construed against removal and all doubts should be resolved in favor of remand"Batoff, 977 F.2d at 851.
III. DISCUSSION
A. Fraudulent Joinder
To remain in federal court, Ford must show that the claims against all three resident defendants — Rohlfing, Mellet, and Sloane — are wholly insubstantial and frivolous. Ford argues that any claims against Rohlfing are barred under the release Plaintiffs executed in Blech I. Ford argues that the claims against Mellet and Sloane are barred because Mellet and Sloane won summary judgment on the claims against them in Blech I. Ford also argues that Plaintiffs have no good faith intention to prosecute their claims against Rohlfing, Mellet, or Sloane.
The Court will grant Plaintiffs' motion to remand because Ford has not shown that the Pennsylvania resident defendants are fraudulently joined. First, in the instant law suit Plaintiffs are seeking to recover insurance proceeds from policies held by Mellet and Sloane that allegedly covered Rohlfing at the time of the automobile accident. Such a claim is not precluded by Rohlfing's release, contrary to Ford's contention, because it falls squarely into the exception allowing Plaintiffs to pursue coverage available to Rohlfing through insurance policies other than Rohlfing's State Farm insurance policy. Second, the Court cannot conclude that Plaintiffs are collaterally estopped from bringing the instant claims against Mellet and Sloane because the record available to this Court does not indicate which claims were adjudicated by the state court in the summary judgment orders. Third, to the extent this Court can distinguish the instant claims with those of Blech I, the Court agrees with Plaintiffs that there is "a possibility that a state court would find that the complaint states a cause of action" against Mellet and Sloane. Boyer, 913 F.2d at 111. Last, Ford has not convinced the Court that Plaintiffs have no intention in pursuing their claims against the resident defendants. To the contrary, the exception carved out of the release suggests that Plaintiffs contemplated and intended to pursue future claims if and when they discovered evidence of other insurance coverage.
Accordingly, the Court holds that Plaintiffs did not fraudulently join Rohlfing, Mellet, and Sloane. The Court must remand this case to state court for lack of federal subject matter jurisdiction.
B. Motion for Attorney's Fees 28 U.S.C. § 1447(c) states that "[a]n order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." This Court has explained that an award should be granted "only where the removal of the case was made in bad faith and was clearly without legal support." Willis v. City of Phila., No. 03-5348, 2004 U.S. Dist. LEXIS 2483, *13 (E.D. Pa. Feb. 13, 2004) (granting remand, denying attorney fees, and subsequently denying reconsideration of decision to deny attorney fees). Although the Court does not accept Ford's arguments for removal, they are not "clearly without legal support." Accordingly, Plaintiffs' request for attorney fees is denied.
An appropriate Order follows.
ORDER
AND NOW, this 6th day of May, 2004, upon consideration of Plaintiffs' Motion for Remand (Docket No. 6), Defendant Ford Motor Company's response in opposition (Docket No. 11), Plaintiffs' reply (Docket No. 15), Defendants' sur-reply (Docket No. 16), Defendant Tom Mellet Auto's Motion to Dismiss (Docket No. 9), Plaintiffs' response in opposition (Docket No. 14), Defendant Sloan Toyota's Motion to Dismiss (Docket No. 12), Plaintiffs' response in opposition (Docket No. 17), and for the reasons set forth in the accompanying Memorandum, IT IS HEREBY ORDERED that:(1) Plaintiffs' Motion to Remand is GRANTED;
(2) Plaintiffs' Motion for Attorney Fees is DENIED; and
(3) Defendants' Motions to Dismiss are DENIED AS MOOT.
IT IS FURTHER ORDERED that the Clerk of Court REMAND this case to the Court of Common Pleas of Philadelphia County.