Opinion
Case No. AMD 99-693.
July 26, 1999.
MEMORANDUM
This is a personal injury damages action arising out of an accident which occurred in a 7-11 retail store located in Baltimore City. Apparently, while the minor plaintiff was in the store, he reached up and pulled over on himself a self-service coffee display. He suffered severe burns and other injuries.
Plaintiffs, residents of Maryland, filed suit against The Southland Corporation, a Texas corporation which operates and franchises the operation of 7-11 stores, and two Maryland residents who at the time of filing were thought to be the franchisees of the store, Chun and Louis Hankins, in the Circuit Court for Baltimore City. Thus, the diverse defendant, Southland, could not remove the case to federal court because the joinder of the Maryland residents effected a loss of complete diversity and also because the removal statute specifically prohibited removal since the Hankinses were citizens of Maryland, the forum.
Generally, a defendant may remove from state court any civil action over which the federal district court has original jurisdiction. 28 U.S.C. § 1441(a). For removal based on diversity jurisdiction, however, section 1441(b) provides that an action is removable only if "none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." 28 U.S.C. § 1441(b).
Not long after suit was filed, however, it was determined that the Hankinses were not franchisees but that, instead, the store where the incident occurred was a company-owned store. The parties stipulated to the dismissal of the Hankinses from the action. Immediately thereafter, defendant Southland, the sole remaining defendant, timely removed the case to this court on the basis of diversity of citizenship jurisdiction.
In due course after some discovery, plaintiffs moved, with Southland's consent, to amend the complaint. By order entered on June 16, 1999, the amended complaint was deemed filed. The amended complaint added no new factual allegations but it did add claims based on several new legal theories. It also added two defendants. One of those defendants, Jim Roche, the store manager at the time of the occurrence in suit, is a Maryland resident and citizen for purposes of subject matter jurisdiction.
Pending before the court is plaintiffs' motion to remand based on lack of complete diversity. Defendants oppose the motion for remand, and defendant Roche has specifically moved to dismiss the amended complaint. The parties' submissions have been fully considered and there is no need for a hearing.
Whether the joinder of Roche is examined under 28 U.S.C. § 1447(e) or 28 U.S.C. § 1441(b), the analysis is largely the same: the issue is whether Roche was fraudulently joined for the purpose of defeating federal jurisdiction.
Section 1447(e) provides: "If after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court." Plaintiffs argue in part that Southland's failure to object to their motion to amend to add a non-diverse party forecloses its post-amendment objection to plaintiffs' motion to remand. I need not determine this question.
To establish a fraudulent joinder, a defendant must show either:
That there is no possibility that the plaintiff would be able to establish a cause of action against the in-state defendant in state court; or
That there has been outright fraud in the plaintiff's pleading of jurisdictional facts.Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993) (quoting B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir. 1981)) ("The burden on the defendant claiming fraudulent joinder is heavy: the defendant must show that the plaintiff cannot establish a claim against the nondiverse defendant even after resolving all issues of fact and law in plaintiff's favor."). See also id. at 233 ("A claim need not ultimately succeed to defeat removal; only a possibility of a right to relief need be asserted."); Richardson v. Phillip Morris Inc., 950 F. Supp. 700, 702 (D.Md. 1997) (noting that doubts are resolved in favor of remand) ; Freeman v. Bragunier Masonry Contractors, Inc., 928 F. Supp. 611, 612-13 (D.Md. 1996); Birnbaum v. SL B Optical Centers, Inc., 905 F. Supp. 267, 269-70 (D. Md. 1995). Cf. 14A Charles A. Wright, et al., Federal Practice Procedure § 3723, at 353-54 (1985).
In the instant case, defendants have not shown that there is no possibility that Plaintiff could establish a claim of negligence against Roche in state court. Indeed, defendants do not even make such a contention. To the contrary, it seems clear that as the manager of the premises where the accident occurred, even if he were not present at the time of the accident, Maryland's law of premises liability would recognize a duty owed by the manager of a retail store to the business invitees of the enterprise.
Under Maryland law, a negligence claim requires a showing of the following four elements: "(1) a duty owed to the plaintiff by the defendant; (2) a breach of that duty by the defendant; (3) a legally cognizable causal relationship between the breach of duty and the harm suffered: and (4) damages suffered by the plaintiff." Yousef v. Trustbank Savings, F.S.B., 81 Md. App. 527, 535-36 (1990), citing Jacques v. First Nat'l Bank of Maryland, 307 Md. 527, 531 (1986). Two major factors are taken into consideration in determining whether "a tort duty should be recognized in a particular context." Erie Insurance Co. v. Chops, 322 Md. 79, 86 (1991) (citing Jacques, 307 Md. at 534-35). These two factors are: "the nature of the harm likely to result from a failure to exercise due care, and the relationship that exists between the two parties." Id. As one in constructive possession of, and general superintendency over, the premises where the accident occurred, the store manager would appear to owe a duty to any business invitee on the premises. Cf. Shields v. Wagman, 350 Md. 666, 672-73 (1998) ("One relationship that courts have found may justify the imposition of a duty to act affirmatively is the relationship between the possessor of property and one who comes onto the property."). The fact that indemnity might be provided by a master to a servant would not alter this analysis, as no plaintiff is ever foreclosed from seeking relief from a party because full relief might be available against some other party which is jointly and severally liable.
Thus, the diverse defendants are left with the argument that Roche was fraudulently joined, solely to defeat their right to a federal forum. This argument fails because it is clear from the procedural history of the case that plaintiffs have always intended to join the persons in charge of the store at the time of the accident. That is, plaintiffs originally joined the Hankinses, who were thought to be the franchisees of the store. All that plaintiffs have now done, with defendant Southland's express consent, is file an amended complaint to join a defendant who essentially stands in the shoes of the Hankinses. In effect, defendant Southland is estopped from arguing fraudulent joinder given this procedural history.
Even apart from any notion of estoppel, however, I am satisfied that a fair consideration of the "equities" of the case, as urged by defendants, see generally Irizarry v. Marine Powers Int'l, 153 F.R.D. 12, 14 (D.P.R. 1994); Clinco v. Roberts, 41 F. Supp.2d 1080 (C.D.Cal. 1999), militates strongly in favor of remand. Accordingly, I am persuaded that Roche, a Maryland citizen, was not fraudulently joined, but instead his joinder is justified by the exigencies of the case. See n. 3. Thus, the motion to remand shall be granted by separate order entered herewith.
ORDER
For the reasons stated in the accompanying memorandum, it is this 26th day of July, 1999, by the United States District Court for the District of Maryland, ORDERED
(1) That the motion to remand is GRANTED AND THIS CASE IS REMANDED TO THE CIRCUIT COURT FOR BALTIMORE CITY; and it is further ORDERED
(2) That the Clerk of the Court CLOSE THIS CASE and TRANSMIT a copy of this Order and the foregoing Memorandum to counsel of record.