Summary
holding that plaintiff could not establish cause of action for tortious interference where defendant was corporate officer of corporation that was party to contract
Summary of this case from Ramlett v. Medical Protective Company of Fort WayneOpinion
Civil Action No. 3:01-CV-1150-D
August 24, 2001
MEMORANDUM OPINION AND ORDER
In this removed action, plaintiff Jeffry Wodka ("Wodka"), a Texas citizen, sues defendants Integrated Partnerships, Inc. ("Integrated"), now known as Directfit, Inc., a California citizen, and Les MacFee ("MacFee"), a Texas citizen. Wodka alleges that Integrated is liable for breaching an employment contract with him by unilaterally demoting him without good cause, and later terminating him, at the instance of MacFee. He asserts that MacFee — an Integrated employee — tortiously interfered with his contract with Integrated by slowing down his service to customers, and taking his customers from him, because MacFee wanted the position that Wodka held. Defendants maintain the case is removable based on diversity of citizenship because Wodka has fraudulently joined MacFee as a defendant. Wodka moves to remand the case to state court. For the reasons that follow, the court denies the motion.
Because defendants' June 15, 2001 notice of removal spells plaintiff's first name "Jeffrey" rather than "Jeffry," the court docket and prior orders of this court also misspell his name. The court in this memorandum opinion and order uses the correct spelling.
I
In 2000 Wodka sued Integrated in state court alleging breach of contract. Integrated removed the case to this court, where it was docketed with Judge Lindsay. See Wodka v. Integrated P'ships, Inc., Civil Action No. 3:00-CV-1376-L. Wodka dismissed the case voluntarily approximately one month after Integrated removed it. Several months later, Wodka again sued Integrated in state court, this time joining MacFee as a defendant. Wodka sues Integrated in this second case for breach of contract and also alleges that MacFee is liable for tortiously interfering with Wodka's contract with Integrated. Defendants maintain that MacFee has been fraudulently joined because there is no possibility that Wodka can recover from him for tortious interference.II A
The jurisprudence of, and procedure for determining, fraudulent joinder are well settled. The burden of proving fraudulent joinder is on defendants. They must "show either that there is no possibility that the plaintiff would be able to establish a cause of action against the in-state defendants in state court or that there has been outright fraud in pleading the jurisdictional facts." Pesch v. First City Bank of Dallas, 637 F. Supp. 1530, 1537 (N.D. Tex. 1986) (Fitzwater, J.). The removing party carries a heavy burden when attempting to prove fraudulent joinder. Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 259 (5th Cir. 1995). "The removing party must prove that there is absolutely no possibility that the plaintiff will 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." Id. (quoting Green v. Amerada Hess Corp., 707 F.2d 201, 205 (5th Cir. 1983)). This circuit has clearly established the standard for determining fraudulent joinder: "After all disputed questions of fact and all ambiguities in the controlling state law are resolved in favor of the nonremoving party, the court determines whether that party has any possibility of recovery against the party whose joinder is questioned." Carriere v. Sears, Roebuck Co., 893 F.2d 98, 100 (5th Cir. 1990). The court is to follow a summary judgment-like procedure for disposing of fraudulent joinder issues. Id. This procedure allows the court to pierce the pleadings and look to affidavits and deposition testimony for evidence of fraud or of the possibility that a plaintiff can state a claim against a nondiverse defendant under state law. Id. The procedure does not in any way mitigate the removing party's difficult burden, however, that must be overcome when attempting to prove fraudulent joinder. Id.
B
Defendants' argument is straightforward. They maintain that MacFee cannot be held liable for tortiously interfering with a contract between Wodka and Integrated because MacFee was Integrated's Sales Director and thus cannot qualify as a third party or stranger to the Wodka-Integrated contract who is legally capable of interfering with it. They posit that for such a person to interfere, he must willfully and intentionally perform an act in furtherance of his personal interest, at the corporation's expense. Under Texas law, "[b]ecause a corporate officer's acts on the corporation's behalf usually are deemed corporate acts, a plaintiff must show that the agent acted solely in his own interests." Powell Indus., Inc. v. Allen, 985 S.W.2d 455, 457 (Tex. 1998) (per curiam) (citing ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 432 (Tex. 1997)). "The plaintiff must prove that the agent acted willfully and intentionally to serve the agent's personal interests at the corporation's expense." Id. (citing Holloway v. Skinner, 898 S.W.2d 793, 798 (Tex. 1995)). "A corporate officer's mixed motives — to benefit both himself and the corporation — are insufficient to establish liability." Id. (citing ACS Investors, 943 S.W.2d at 432). "[W]hen determining whether an agent acted against the corporation's interests, we consider the corporation's evaluation of the agent's actions." Id. Defendants have adduced evidence that Integrated has never complained about MacFee's conduct.Wodka does not appear to quarrel with the legal premise of defendants' argument. Instead, he maintains that defendants are unable to show that there is no possibility that he will be able to establish a cause of action against MacFee. He relies on evidence that Integrated did complain about MacFee's actions in causing the loss of customers and client services to be slowed, and in his undertaking certain actions directed toward Wodka. His evidence is deficient, however, because even if it is deemed true and all inferences are resolved in Wodka's favor, the proof fails to support a finding that MacFee's conduct was undertaken solely for his own benefit. Mixed motive-animated acts are not enough. See Morgan Stanley Co. v. Tex. Oil Co., 958 S.W.2d 178, 179 (Tex. 1997) (addressing tortious interference with prospective contractual relationship but applying law applicable to tortious interference with contract) ("We held in Holloway `that the ultimate issue in a case of this nature is whether the corporation's agent acted in a manner so contrary to the corporation's interests that the agent could only have been motivated by personal interest.'" (quoting Holloway, 898 S.W.2d at 797)). Wodka has not adduced evidence that MacFee acted solely for his own benefit or that he conducted himself so contrary to Integrated's interests that he could only have been motivated by personal interest. Piercing Wodka's pleadings and assessing the evidence the parties have introduced, the court is able to say that defendants have proved there is absolutely no possibility that Wodka would be able to establish a cause of action against MacFee for tortious interference with Wodka's contract with Integrated. Accordingly, the court holds that defendants have established that MacFee was fraudulently joined as a defendant and that this is one of the comparatively rare cases in which the citizenship of a nondiverse party may be disregarded.
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Wodka's July 6, 2001 motion to remand is therefore denied.
SO ORDERED.