Opinion
NO: 02-2907, SECTION: "R"(4)
December 19, 2002
ORDER AND REASONS
Before the Court is plaintiff's motion to amend its complaint. Also before the Court is plaintiff's motion to certify an interlocutory appeal and/or to amend, alter and reconsider this Court's denial of plaintiff's motion to remand. For the following reasons, the Court grants plaintiff's motion for leave to amend. The Court is without jurisdiction to decide plaintiff's motion to certify an interlocutory order.
I. Background
Plaintiff, Jade Marine, Inc., purchased engines from Stewart Stevenson Services, Inc. ("SS") to power a vessel that was under construction. William Marquette, a salesman with SS, recommended that plaintiff purchase four diesel engines manufactured by Detroit Diesel Corporation. Plaintiff followed Marquette's recommendation. After the engines were installed on the vessel, the M/V GENESIS, and the boat was put to sea, plaintiff determined that the engines were wearing out faster than Marquette had indicated that they would. This caused plaintiff to sustain damages when the vessel could not be used because the engines needed repair.
Plaintiff filed suit in state court against Detroit Diesel, the manufacturer of the engines, SS, the company that completed the sale, and William Marquette, the salesman at SS with whom plaintiff communicated. Plaintiff is a Louisiana company. Detroit Diesel is a Delaware corporation and SS is a Texas corporation. William Marquette is a citizen of Louisiana. Defendants removed the lawsuit to this Court asserting that Marquette was fraudulently joined to defeat diversity. The Court denied plaintiff's motion to remand. Now, plaintiff brings two motions. First, plaintiff moves to amend the complaint to state a tort fraud claim against Marquette that was not pleaded in the original state court Petition for Damages. This amendment would defeat diversity jurisdiction and compel the Court to remand the lawsuit. Second, plaintiff moves the Court to certify an interlocutory order for appeal of the Court's denial of the remand motion.
II. Discussion
Plaintiff moves the Court to amend its complaint to add a tort fraud claim against Marquette. A proposed amendment to the section of the complaint entitled "Claims in Contract, Quasi—Contract and Negligence" alleges that the defendants, including Marquette, "fraudulently recommended [the engines] for an improper application." (Motion For Leave to Amend Pleadings, Supplemental and Amending Complaint for Damages, Amended ¶ 18.) The proposed amendments further allege that the defendants, including Marquette, made "intentional fraudulent representations . . . that the Engines provided an appropriate power package for the normal use and application for which they were destined." ( Id. at Amended ¶ 6.) Plaintiff asserts that the defendants, including Marquette, "were already aware of debilitating engineering and design defects and deficiencies with the . . . engines." ( Id. at Amended ¶ 10.) Last, plaintiff alleges that it "reasonably relied to its detriment upon the defendants' fraudulent representations." ( Id. at Amended ¶ 35.)
Through these amendments, plaintiff seeks to join as a defendant Marquette, a resident of Louisiana, which would have the effect of defeating this Court's diversity jurisdiction. The Federal Rules of Civil Procedure provide that leave to amend a pleading "shall be freely given when justice so requires." FED. R. Civ. P. 15(a). Plaintiff is permitted to join Marquette under Rule 20 as long as "there is asserted against [the defendants] jointly, severally, or in the alternative, any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all defendants will arise in the action." FED. R. Civ. P. 20(a). It is clear that plaintiff's claims against Marquette arise out of the same transaction and share common questions of fact with plaintiff's claims against SS and Detroit Diesel. Joinder is therefore permitted under Rule 20.
The Court's decision to join a non-diverse, non-indispensable party turns on such factors as "whether the purpose of the amendment is to defeat federal jurisdiction, whether plaintiff has been dilatory in asking for amendment, whether plaintiff will be significantly injured if amendment is not allowed, and any other factors bearing on the equities." Hensgens v. Deere Company, 833 F.2d 1179, 1182 (5th Cir. 1987); see also Doleac v. Michalson, 264 F.3d 470, 474 (5th Cir. 2001) and Cobb v. Delta Exports, Incorporated, 186 F.3d 675, 677 (5th Cir. 1999). In this situation, the Court has two options. It must either deny joinder or permit joinder and remand the action to state court. 28 U.S.C. § 1447(e).
First, the Court notes that plaintiff was not dilatory in seeking amendment — plaintiff filed the motion to amend within days of this Court's decision to deny plaintiff's motion to remand. Moreover, although this case involves products liability claims, it has, from the beginning, also concerned whether the defendants, including Marquette, communicated to plaintiff that the engines would meet the plaintiff's particular needs and specifications despite defendants' knowledge that defects and problems with the engines might prevent them from doing so. Plaintiff had joined Marquette in the original Petition for Damages but the Court determined that there was no possibility of recovery against him on the claims then asserted. ( See Order and Reasons, November 15, 2002.
Second, Louisiana law recognizes the tort fraud claim that plaintiff asserts against Marquette. Louisiana recognizes a cause of action for intentional fraudulent misrepresentation as to present or past facts. Griffin v. BSFI Western EP, Inc., 812 So.2d 726, 734 (La.Ct.App. 2002); Bunkie Bank Trust Company v. Johnston, 385 So.2d 1264, 1266 (La.Ct.App. 1980); LA. Civ. CODE 2315. Third, and finally, the Court notes that denial of amendment would prejudice plaintiff by requiring plaintiff to fight a two-front war, litigating against Detroit Diesel and SS in federal court while litigating against Marquette, on related claims, in state court. Plaintiff sought to avoid this scenario, which has the potential to lead to inconsistent results, by filing a single state court action against all three defendants.
The Court recognizes that fraud is a serious allegation that is not to be made lightly. But the aforementioned considerations — that plaintiff was not dilatory, that plaintiff's claim against Marquette is recognized under Louisiana law, and that denial of amendment may prejudice plaintiff — outweigh the Court's suspicion that at least part of the reason why plaintiff wants to sue Marquette is to defeat federal jurisdiction. Accordingly, the Court grants plaintiff's motion for leave to amend.
Having granted plaintiff's motion for leave to amend, the Court finds that it is without jurisdiction over this lawsuit and remands the lawsuit to state court for further proceedings. 28 U.S.C. § 1447(e). The Court further finds that it is without jurisdiction over plaintiff's motion to certify an interlocutory order.
III. Conclusion
For the foregoing reasons, the Court grants plaintiff's motion for leave to amend. The Court is without jurisdiction to decide plaintiff's motion to certify an interlocutory order.