Opinion
Case No. 05 CV 1809 BEN (POR).
February 23, 2006
ORDER GRANTING MOTION TO AMEND COMPLAINT TO ADD NEW DEFENDANTS AND REMANDING CASE TO STATE COURT [Doc. No. 3-1]
Plaintiffs Nick and Carolyn Nikzad (collectively "the Nikzads") filed this action for breach of contract, rescission, breach of express warranty, negligence, willful violation of Consumer Legal Remedies Act, remedies under Song-Beverly Consumer Warranty Act, and equitable relief for unfair business practices against Home Depot U.S.A., Inc., dba Expo Design Center ("Home Depot") in San Diego Superior Court on August 22, 2005. Defendant Home Depot removed the action to this Court on September 19, 2005 pursuant to 28 U.S.C. § 1441(a).
As originally filed in state court, the parties in this case were completely diverse and the amount in controversy was over $75,000. Removal was therefore proper. Shortly after removal to this Court, Plaintiffs informed counsel for Home Depot that they wished to amend their Complaint to name Clemens Electric and Construction, Inc. ("Clemens") and Elliot Floor Covering ("Elliot") as the formerly John Doe defendants. (Brehme Decl. ¶ 3). Both Clemens and Elliot are California citizens, and diversity jurisdiction would therefore be destroyed. Home Depot declined to stipulate to the requested amendment. (Brehme Decl. Ex. B). This motion to amend followed.
The Nikzad's motion requests amendment of the Complaint under the liberal standard of Fed.R.Civ.P. 15. Home Depot asserts that the proper standard for amendment to join additional parties after removal is 28 U.S.C. § 1447(e). Because the proposed amendment is really a joinder of parties which will destroy diversity jurisdiction, the Court must consider it under 28 U.S.C. § 1447(e), which provides:
If after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisidiction, the court may deny joinder, or permit joinder and remand to state court.28 U.S.C. § 1447(e). While the Court's decision whether to allow joinder is discretionary, if it does so allow, remand is mandatory. Stevens v. Brink's Home Security, Inc., 378 F.3d 944, 949 (9th Cir. 2004) (holding the district court's decision to allow joinder of the non-diverse defendants was a discretionary decision, but once the non-diverse defendants were joined remand became mandatory). The Ninth Circuit in Stevens also held that a decision to allow amendment to join non-diverse parties and remand pursuant to § 1447(e) is not appealable because the amendment aspect of the order is neither final nor important enough to merit review as a collateral order, and once amendment is allowed, the remand is non-discretionary. Id. at 948-49.
The Court finds that the Nikzads' request to add Clemens and Elliot to its Complaint is reasonable. The Nikzads allege that they contracted with Home Depot for various renovations in their home, and that Home Depot subsequently subcontracted with Elliot and Clemens to do the work in the Nikzads' house. By naming John Doe defendants in their original Complaint, Plaintiffs clearly showed their intentions to add additional defendants when they discovered the identities of those defendants. In a complaint for faulty home renovation, the Court hardly finds it surprising that a plaintiff would wish to include the subcontractors who performed the allegedly shoddy work. And while the Court is duly impressed with Home Depot's assertion that it could surely "make good on a six figure judgment against it" (Def. Mem. at p. 2), as well as its wholly unnecessary submission of its August 31, 2005 Form 10-Q, Defendant cites no authority for the proposition that its substantial assets are reason to disallow the joinder of potentially liable parties.
The Nikzads' counsel offers a declaration that at the time he filed the original Complaint, he was unaware of the true names and identities of Clemens and Elliot, as well as the role each played in the complained of conduct. (Brehme Decl. ¶ 4). Upon ascertaining the necessary information, he moved to add them to the action. (Id.). The Court finds this to be good cause for the amendment. Home Depot fails to demonstrate any prejudice that it would suffer from allowing the joinder of additional parties — discovery has not begun, nor has there been any substantive motion practice.
Plaintiff's Motion to Amend Complaint to Add New Defendants is hereby granted. The Court also hereby remands this action to San Diego Superior Court.
IT IS SO ORDERED.