Opinion
Case No. 2:03CV427DAK.
June 29, 2005
MEMORANDUM DECISION AND ORDER
Plaintiff Amber McCallister moves to remand this action to state court claiming that there is no diversity jurisdiction and removal was improper. Defendants Dorel USA, Inc. and Dorel Juvenile Group Inc. move to realign Defendant Cody McCallister as a Plaintiff. This motion was originally set to be heard September 23, 2003. However, at the hearing, the parties notified the court that Amber Cory McCallister had filed bankruptcy. The Bankruptcy Trustee indicated that the case could proceed. Therefore, the court rescheduled a hearing on the motions for June 20, 2005. At the hearing, the Dorel Defendants were represented by Bryon Benevento. Plaintiff's counsel did not appear. However, the court received a letter from Plaintiff's counsel apologizing for the failure to appear. In any event, the court determined that it would issue a decision based on the parties' briefs. After carefully considering the pleadings, memoranda, and other materials submitted by the parties and the law and facts relating to this matter, and now being fully advised, the court renders the following Memorandum Decision and Order.
BACKGROUND
Plaintiff Amber McCallister is the mother of Zachary McCallister. On May 4, 2001, Zachary was a passenger in a vehicle driven by his father, Cody McCallister, when the vehicle was involved in an accident. Zachary was seriously injured and ultimately died from the injuries he sustained.
The accident occurred when the driver of another car, Gisela Coplin, made a left hand turn into the car being driven by Cody McCallister. Ms. Coplin was at fault and was cited for failure to yield. Cody McCallister was not given a citation for the accident. The McCallisters settled with Ms. Coplin's insurance carrier before bringing this lawsuit.
Plaintiff brought this action in state court against Dorel Industries, Inc., Dorel U.S.A., Inc., Dorel Juvenile Group Inc., and Cosco Inc., alleging strict products liability, negligence, and breach of warranty. Plaintiff also sued Cody McCallister for negligence. The sole allegation against Cody McCallister is that he "failed to use reasonable care in avoiding the collision with Gisela Coplin, which negligence was also a proximate cause of Zachary McCallister's injuries and subsequent death and of the plaintiff's injuries and damages."
The Dorel Defendants removed this case to federal court based on diversity jurisdiction. However, Plaintiff and Cody McCallister are still husband and wife and still live together. Therefore, both of them are residents of Utah. Dorel does not dispute that Cody McCallister is a resident of Utah. However, the Notice of Removal states that he was fraudulently joined as a defendant and the court should realign the parties to properly characterize him as a plaintiff.
At the time the Dorel Defendants removed the action, Cody McCallister had not been served with the action. Four days after removal, Plaintiff served Cody McCallister at his residence. Plaintiff actually accepted service on his behalf. Cody McCallister was served in June 2003 but has not answered or responded. Plaintiff states that she has given him extensions in order to retain counsel.
After the case was removed, Plaintiff filed this Motion to Remand and Defendants responded with their Motion to Realign Defendant Cody McCallister. The motions have been pending for over a year based on Amber and Cody McCallister's joint filing of bankruptcy. However, the Trustee has now agreed that the case can go forward.
DISCUSSION Plaintiff's Motion to Remand and Defendants' Motion to Realign
Plaintiff argues that there is no diversity jurisdiction because she and her husband Cody McCallister are both residents of Utah. Therefore, she asserts that removal was improper because a defendant may remove a case from state court only if the federal court has original jurisdiction over the case. 28 U.S.C. § 1441(a). Defendants argue that Cody McCallister should be formally realigned as a plaintiff to reflect his true interests in this litigation.
1. Realignment of Cody McCallister
Diversity jurisdiction is not "conferred upon federal courts by the parties' own determination of who are plaintiffs and defendants." Northbrook Nat'l Ins. Co. v. Brewer, 493 U.S. 6, 8 (1989). Rather federal courts have "a duty to look beyond the pleadings, and arrange the parties according to their sides in the dispute." Id. "When a federal court examines a case to determine if it has jurisdiction based on diversity, the court must realign the parties according to their real interests in the litigation before determining diversity." Butcher v. Hildreth, 992 F. Supp. 1420 (D. Utah 1998).
Defendants argue that realignment is proper because under Utah law, there can be only one action brought for wrongful death, in which all heirs of the decedent are entitled to share in the judgment. As co-heir of Zachary McCallister and husband of Plaintiff, Cody McCallister will necessarily share in any award in this action. Any judgment against Cody McCallister would be worthless as Cody McCallister would only be paying himself. Cody McCallister's real interest is in obtaining the largest possible verdict for his wife. As a practical matter, Cody McCallister will be a key witness in establishing the damages for plaintiff in the wrongful death action. As Zachary's father, Cody will need to testify as to loss of affection, financial support furnished, etc. Accordingly, Cody should be a plaintiff. If there is any fault on his part, it can be apportioned to him under tort principles the same as any tort plaintiff.
Moreover, on August 12, 2003, Amber and Cody McCallister filed a joint Chapter 7 bankruptcy petition which supports a realignment of the parties in this case. Schedule B of the Debtors' Statement of Financial Affairs lists Amber McCallister's wrongful death claim against Dorel as a contingent asset of the bankruptcy estate, which would be purportedly held jointly by both Cody and Amber McCallister. There is no reference to Amber McCallister's claim against her husband as being an individual asset, nor is there any suggestion that the McCallisters consider Cody McCallister's alleged negligence to be a potential liability of the bankruptcy estate. Therefore, the papers suggest that the McCallisters view the claim against Dorel as a joint asset. Accordingly, Cody should be realigned as a plaintiff to reflect his true interests in the litigation. 2. Fraudulent Joinder
Alternatively, Defendants argue that Cody McCallister's citizenship may be disregarded because he was fraudulently joined as a defendant in this action for purposes of destroying diversity. A joinder is generally considered 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 defendant or seek a joint judgment." Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990). The Tenth Circuit notes that "upon allegations of fraudulent joinder designed to prevent removal, federal courts may look beyond the pleadings to determine if the joinder, although fair on its face, is a sham or fraudulent device to prevent removal." Smoot v. Chicago Rock Island and Pacific Railroad Co., 378 F.2d 879, 881-82 (10th Cir. 1967). Therefore, a "court may pierce the pleadings, consider the entire record, and determine the basis of joinder by any means available." Dodd v. Fawcett Pub., Inc., 329 F.2d 82, 85 (10th Cir. 1964).
Plaintiff claims that Cody McCallister was not fraudulently joined as a defendant to destroy diversity. Plaintiff argues that a plaintiff's motive for joining a defendant is immaterial if the plaintiff has a possible legal claim against the defendant. See Moorco Int'l, Inc. v. Elsag Bailey Process Automation, N.V., 881 F. Supp. 1000, 1006 (E.D. Pa. 1995). Plaintiff contends that Dorel has failed to established that plaintiff has no claim against Cody McCallister under Utah law. Plaintiff asserts that there is at least a possibility that a Utah court would find that she has a claim against Cody McCallister under the facts alleged in the Complaint. The Complaint alleges that Cody McCallister failed to use reasonable care in avoiding the collision and that his negligence was a proximate cause of Zachary's injuries and death.
One whose negligence proximately causes injury to another can be liable for the damages he caused. See, e.g., Reeves v. Gentile, 813 P.2d 111, 116 (Utah 1991). Utah's Liability Reform Act also provides that any person may be joined as a defendant "who may have caused or contributed to the injury or damage for which recovery is sought for the purpose of having determined their respective proportions of fault." Utah Code Ann. § 78-27-41(1). A parent is not immune from suit simply by being a parent. See Farmers Ins. Exch. v. Call, 712 P.2d 231, 235 n. 1 (Utah 1985) (parent-child immunity doctrine does not exist in Utah).
However, there is no factual support for the claims against Cody McCallister. Although Plaintiff claims her husband was negligent in his operation of the vehicle, the investigative report of the accident indicates that the accident was caused by the driver of the other vehicle. The driver of the other vehicle has not been named in this action due to an out-of-court settlement with the McCallisters. Plaintiff has not alleged any specific basis for her husband's negligence — driving too fast, failing to pay attention, etc. Moreover, the factual record demonstrates there is no good faith basis for asserting a negligence action after the other driver has been cited and has settled with the family. There is not unfettered discretion in naming defendants. Defendants rightly ask whether Plaintiff herself should be named as a defendant for negligently entrusting her husband with driving Zachary around. As asserted above, however, any negligence on the part of Plaintiff or Cody can be apportioned to them as Plaintiffs.
Furthermore, the procedural history of this case demonstrates that Plaintiff does not have a good faith intention of pursuing and collecting a judgment against her husband. Plaintiff has not prosecuted her claims as she would against an ordinary defendant. Cody McCallister was not served until after the Dorel Defendants removed the case. And, after Plaintiff accepted service on his behalf, he has not answered or responded. These actions suggest that Plaintiff has no intention of pursuing or collecting judgment from her husband.
The McCallisters' joint bankruptcy petition also supports Dorel's claim that Cody McCallister was fraudulently joined in this matter. Federal law provides that a defendant is fraudulently joined if there is "no real intention in good faith to prosecute the action against the defendant or seek a joint judgment." Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990). It is apparent from the bankruptcy papers that Amber McCallister does not intend to pursue collection of any judgment against her husband. The McCallisters have filed a joint petition and are jointly represented by the same attorney. If Amber actually had a claim against Cody they would have filed separate petitions and Cody should have reported the claim as a potential liability.
Federal law requires the court to determine whether a joinder is fraudulent in light of "the principle purpose of the suit and the primary and controlling matter in dispute." City of Indianapolis, 314 U.S. at 69-70. The primary purpose of this lawsuit is to obtain damages from Dorel on a product liability theory for the benefit of Zachary McCallister's heirs. The negligence action against Cody McCallister is peripheral in nature and lacking in any factual support. Cody McCallister's interests are clearly aligned with Plaintiff's in the product liability action against Dorel. Plaintiff would not have brought any claim against Cody McCallister had she not brought this action against Dorel.
Additionally, the financial and economic interests shared by the McCallisters make it unlikely that Amber McCallister will make a good faith attempt to pursue or collect a judgment against her husband. Any judgment against Cody McCallister is essentially worthless because they would merely be paying themselves. Although it is a high standard, the court concludes that Cody McCallister was fraudulently joined to destroy diversity jurisdiction in this primarily products liability action. Therefore, Plaintiff's motion to remand is denied and the Dorel Defendants' motion to realign Cody McCallister as a plaintiff is granted.
CONCLUSION
For the foregoing reasons, Plaintiff's motion to remand is DENIED and the Dorel Defendants' motion to realign Cody McCallister as a plaintiff is GRANTED.