Opinion
No. 2:98cv175-B-B.
Filed Date: February 16, 1999.
Memorandum Opinion
This cause comes before the court on the plaintiffs' motion to remand and defendant Gregson's motion to dismiss for failure to state a claim upon which relief may be granted. The court has duly considered the parties' memoranda and is ready to rule.
The notice of removal alleges diversity of citizenship and fraudulent joinder of defendant Gregson. The plaintiffs move to remand on the ground that Gregson's Mississippi citizenship precludes removal under 28 U.S.C. § 1441(b). If fraudulently joined, Gregson's citizenship should be disregarded for purposes of removability. See Jernigan v. Ashland Oil, Inc., 989 F.2d 812, 817 (5th Cir.) (citizenship of fraudulently joined parties "is to be disregarded for purposes of determining diversity jurisdiction"), cert. denied, 510 U.S. 868, 126 L. Ed. 2d 150 (1993). The removing party carries a heavy burden in establishing fraudulent joinder and must demonstrate it by clear and convincing evidence. Jernigan, 989 F.2d at 815; B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir. 1981). Fraudulent joinder may be established by showing outright fraud in the plaintiff's pleading of jurisdictional facts. Jernigan, 989 F.2d at 815; B., Inc., 663 F.2d at 549. In addition, "a joinder is fraudulent if the facts asserted with respect to the resident defendant are shown to be so clearly false as to demonstrate that no factual basis existed for any honest belief on the part of the plaintiff that there was joint liability." Bolivar v. R H Oil Gas Co., 789 F. Supp. 1374, 1376-77 (S.D. Miss. 1991). Fraudulent joinder may also be established as follows:
28 U.S.C. § 1441(b) prohibits removal of a diversity action in which any properly joined and served defendant "is a citizen of the State in which such action is brought." Since the plaintiffs are Tennessee citizens, Gregson's Mississippi citizenship does not defeat diversity.
To prove their allegation of fraudulent joinder [the removing parties] must demonstrate that there is no possibility that [the plaintiff] would be able to establish a cause of action against [the nondiverse defendants] in state court. In evaluating fraudulent joinder claims, we must initially resolve all disputed questions of fact and all ambiguities in the controlling state law in favor of the non-removing party. We are then to determine whether that party has any possibility of recovery against the party whose joinder is questioned.
Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42 (5th Cir. 1992), cited in Burden v. General Dynamics Corp., 60 F.3d 213, 216 (5 th Cir. 1995). If "there is no possibility that the state court would recognize a valid cause of action against the non-diverse defendants . . . then those defendants have been fraudulently joined." Burden, 60 F.3d at 217-18. See Laughlin v. The Prudential Ins. Co., 882 F.2d 187, 190 (5th Cir. 1989) ("the court may find fraudulent joinder only if it concludes that the plaintiff has no possibility of establishing a valid cause of action against the in-state defendant").
The plaintiffs move to remand on the ground that "[t]he suit alleges breach of contract and states that the contract was breached at least partially through the actions of Gregson, the employee of Robinson Property Group." The complaint alleges that the plaintiffs and defendant Robinson Property Group entered into a contract and that Robinson Property Group breached the contract "through their [sic] agent Gregson." The complaint further alleges that Gregson "was at all times in the employ of the Defendant [Casino] and was acting within the course and scope of his employment for all acts complained of." Under Mississippi law, the disclosed principal rule applies in the context of contractual duties; an agent for a disclosed principal does not incur personal contractual liability to third parties for acts within the scope of his employment. Thompson v. Nationwide Mut. Ins. Co., 971 F. Supp. 242, 243 (N.D. Miss. 1997) ("Under Mississippi law the agent for a disclosed principal incurs no liability under the contract absent fraud.") (emphasis added) (citing Gray v. Edgewater Landing, Inc., 541 So.2d 1044, 1047 (Miss. 1989)); Wheeler v. Frito-Lay, Inc., 743 F. Supp. 483, 486-87 (S.D. Miss. 1990).
The plaintiffs contend that they have "stated a valid cause of action against Gregson under the theory of respondeat superior." However, the respondeat superior doctrine is used to establish liability on the part of the employer for tortious acts of the employee. See Wheeler, 743 F. Supp. at 486. The complaint does not allege that Gregson has committed any tort independent of the alleged breach of contract. The court finds that the allegations against Gregson do not give rise to any possible liability on his part under state law and, thus Gregson was fraudulently joined. Since Gregson's citizenship does not preclude removal under § 1441(b), the plaintiffs' motion to remand should be denied.
In Mississippi, the "general rule in tort is that the agent or servant, the one whose conduct has rendered his principal liable, has individual liability to the plaintiff." Leathers v. Aetna Cas. Sur. Co., 500 So.2d 451, 453 (Miss. 1986) (emphasis added).
Defendant Gregson has moved to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure. "Taking the facts alleged in the complaint as true, if it appears certain that the plaintiff cannot prove any set of facts that would entitle it to the relief it seeks," dismissal is proper. C.C. Port, Ltd. v. Davis-Penn Mortgage Co., 61 F.3d 288, 289 (5th Cir. 1995). As discussed, supra, the court finds that the complaint does not allege a breach of any duty Gregson owed to the plaintiffs. Accordingly, defendant Gregson's motion to dismiss should be granted.
An order will issue accordingly.