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Techota LLC v. CP Home Care Vance LLC

United States District Court, N.D. Alabama, Western Division

April 30, 2018

TECHOTA LLC, Plaintiff,
v.
CP HOME CARE VANCE LLC, et al., Defendants.

          MEMORANDUM OPINION

          R. DAVID PROCTOR UNITED STATES DISTRICT JUDGE.

         This case is before the court on CP Home Care Vance, LLC's Motion to Strike First Amended Complaint (Doc. # 6), Plaintiff's Motion to Remand (Doc. # 20), and Defendants' Motion to Strike Affidavit of Veronica Wilkerson-Fountain (Doc. # 28). A Motion for Temporary Restraining Order and Preliminary Injunction (Doc. # 1-1 at p. 79), three Motions to Dismiss (Docs. # 7, 8, 22), and a Motion to Strike Plaintiff's Jury Demand (Doc. # 11) are also pending before the court. For the reasons outlined below, the court concludes that this case is not properly before this court and is due to be remanded.

         I. Background

         A. Procedural History

         On February 2, 2018, Plaintiff Techota LLC (“Plaintiff” or “Techota”) filed a complaint in the Circuit Court of Tuscaloosa County, Alabama, against CP Home Care Vance, LLC (“CP Home Care”), Parcim U.S. (AL) LLC (“Pacrim AL”), and Parcim U.S. L.L.C. (“Pacrim US” and collectively with Pacrim AL, the “Pacrim Defendants”), alleging (1) breach of contract, (2) rescissions for breach of contract, (3) promissory fraud, (4) suppression, (5) rescission for fraud, and (6) unjust enrichment. (Doc. # 1-1 at p. 3-13). The Complaint also sought an injunction against CP Home Care. (Id. at p. 12). On February 23, 2018, Techota filed its First Amended Complaint which added Von Hales (“Hales”) and Amory Scarbrough (“Scarbrough”) as defendants in the action, sought a second injunction, and added additional claims of conversion and tortious interference with business and contractual relations. (Id. at p. 55-71). The First Amended Complaint alleges that, since the commencement of this litigation, CP Home Care, Hales, and Scarbrough have taken wanton and intentional acts to retaliate against Plaintiff for filing this lawsuit. (Id. at p. 58). On February 27, 2018, Plaintiff filed a Motion for Temporary Restraining Order and Preliminary Injunction (Id. at p. 79-82), a brief in support of the motion (Id. at p. 83-98), and exhibits in support of the motion (Docs. 1-1 at p. 98- 204; 1-2; 1-3 at p. 1-37). On the same day, Defendants CP Home Care, Pacrim AL, and Pacrim U.S. removed this action to federal court. (Doc. # 1). The filings were just starting.

         On March 6, 2018, the flurry really began: CP Home Care filed a Motion to Strike First Amended Complaint (Doc. # 6); the Pacrim Defendants filed a Motion to Dismiss (Doc. # 7); CP Home Care filed a Motion to Dismiss Count VII of Plaintiff's Complaint (Doc. # 8); CP Home Care filed a Counterclaim against Techota, Phyllis J. Robertson (“Robertson”), Shannon Hendon (“Hendon”), Veronica Wilkerson-Fountain (“Wilkerson-Fountain”), and Jeff Bauer (“Bauer” and collectively the “Counter Defendants”) (Doc. # 9); and CP Home Care filed an answer to Plaintiff's Complaint (Doc. # 10). On March 7, 2018, CP Home Care filed a Motion to Strike Plaintiff's Jury Demand. (Doc. # 11).

         This case was reassigned to the undersigned on March 8, 2018. (Doc. # 13). The court held a hearing on this case on March 12, 2018. (Doc. # 14). Following the March 12, 2018 hearing, Plaintiff filed a Motion to Remand (Doc. # 20) on March 21, 2018, and a Motion to Dismiss Counterclaims (Doc. # 22) on March 27, 2018. The Motion to Remand has been fully briefed. (Docs. # 20, 21, 29, 31). On April 4, 2018, CP Home Care and the Pacrim Defendants moved to strike the Affidavit of Wilkerson-Fountain (Doc. # 21-1) from Plaintiff's Motion to Remand. (Doc. # 28).

         B. Parties' Citizenships

         Defendants CP Home Care, Pacrim AL, and Pacrim U.S. removed this action pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. (Doc. # 1 at p. 1). They allege that this case is properly removed under § 1441 because this court has original jurisdiction under § 1332(a). (Id. at ¶¶ 6-7). Section 1332(a) establishes federal jurisdiction for diverse actions “where the matter in controversy exceeds the sum or value of $75, 000.” Count 1 of both the original Complaint and the First Amended Complaint claim that CP Home Care breached a contract by failing to make a payment of $674, 000. (Doc. # 1-1 at p. 4, 61). Therefore, the requisite amount-in-controversy for diversity jurisdiction is met. See 28 U.S.C. § 1332(a).

         Removal based on diversity jurisdiction also requires “complete diversity between all named plaintiffs and all named defendants.” Lincoln Prop. Co. v. Roche, 546 U.S. 81, 84 (2005). Techota is an Alabama limited liability company (“LLC”). (Doc. # 1-1 at p. 3, 55). An LLC “is a citizen of any state of which a member of the company is a citizen.” Rolling Greens MHP, L.P. v. Comcast SCH Holdings L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004).

         The structure of the entities involved in this case is the stuff from which corporate lawyers' dreams are made. Techota has three members: Cahaba Valley Health Services, Inc. (“Cahaba Valley”), Bibb County Health Care Authority d/b/a Bibb Medical Center (“Bibb Medical Center”), and Rubicon Research, Inc. (“Rubicon”). (Doc. # 1 at ¶ 10). Cahaba Valley and Bibb Medical Center are both citizens of Alabama, and Rubicon is a citizen of Tennessee.[1] (Id. at ¶¶ 11-15). Accordingly, Plaintiff is a citizen of both Alabama and Tennessee. See Rolling Greens MHP, L.P., 374 F.3d at 1022.

         Defendants CP Home Care, Pacrim AL, and Pacrim U.S. are all LLCs. (Id. at ¶ 16). Pacrim U.S. is the sole member of Pacrim AL. (Id. at ¶ 17). Pacrim U.S. and CP Home Care have the same single member, CP Holdings LLC. (Id. at ¶ 18). The sole member of CP Holdings LLC is PCII Holding LLC, and Pacrim Capital International Inc. is the only member of PCII Holdings LLC. (Id. at ¶¶ 19-20). Pacrim Capital International Inc. is a Bahamian corporation with a principal place of business in Hong Kong; therefore, Defendants CP Home Care, Pacrim AL, and Pacrim U.S. are all citizens of foreign states. (Id. at ¶¶ 22-23). (Note: This is not a third-year Federal Jurisdiction final exam).

         Defendant Hales and Defendant Scarbrough are both citizens of Alabama and employees of CP Home Care. (Doc. # 1-1 at p. 56). Hales is the Administrator for CP Home Care. (Id.). Scarbrough is a Supply Coordinator for CP Home Care. (Id.).

         Counter Defendants Robertson, Hendon, Wilkerson-Fountain, and Bauer are all former employees of CP Home Care, whose employments were terminated on February 7, 2018. (Doc. # 9 at ¶¶ 3-6). Robertson, Hendon, and Bauer own Rubicon and are all citizens of Tennessee. (Id. at ¶¶ 2, 3-5). Wilkerson-Fountain is a citizen of Alabama. (Id. at ¶ 6).

         II. Motion to Remand Standard of Review

         It has long been recognized that federal courts are courts of limited jurisdiction. Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). Indeed, federal courts may only exercise jurisdiction conferred upon them by Congress. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). Anytime a “federal court acts outside its statutory subject matter jurisdiction, it violates the fundamental constitutional precept of limited federal power.” Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999) (quoting Victory Carriers, Inc. v. Law, 404 U.S. 202, 212 (1971)).

         Generally, any action filed in state court, over which a district court would have original jurisdiction, “may be removed by the defendant or defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a). The burden of establishing subject matter jurisdiction for the purpose of a valid removal to this court is squarely on the removing party. Friedman v. N.Y. Life Ins. Co., 410 F.3d 1350, 1353 (11th Cir. 2005). Federal courts strictly construe removal statutes and resolve all doubts in favor of remand. Miedema v. Maytag Corp., 450 F.3d 1322, 1328-30 (11th Cir. 2006).

         II. Discussion

         On the face of the First Amended Complaint, diversity jurisdiction does not exist here because Plaintiff Techota, Defendant Hales, and Defendant Scarbrough are all Alabama citizens. This destroys complete diversity. See Lincoln Prop. Co., 546 U.S. at 84. CP Home Care and the Pacrim Defendants argue that the citizenships of Hales and Scarbrough should be ignored for the purpose of evaluating complete diversity because (1) First Amended Complaint has no legal effect and (2) Hales and Scarbrough were fraudulently joined to this action. (Doc. # 1 at ¶ 25). The court explores each of these arguments, in turn.

         A. Contrary to Defendants' Position, the First Amended Complaint ...


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