United States District Court, N.D. Alabama, Northwestern Division
case originally was filed in the Circuit Court of Franklin
County, Alabama,  and subsequently removed here on the basis
of the parties' diversity of citizenship. See 28
U.S.C. § 1332. It now is before the court on
plaintiff's motion to remand,  the motion to dismiss filed
by defendant State Farm Fire and Casualty Company,
motion to dismiss by defendants Sinclair Lawrence &
Associates and Debbie Thorne,  and defendant Crista Madden's
motion for a more definite statement and amended motion for a
more definite statement.
MOTION TO REMAND
Standard of Review
district courts are tribunals of limited jurisdiction,
“‘empowered to hear only those cases within the
judicial power of the United States as defined by Article III
of the Constitution,' and which have been entrusted to
them by a jurisdictional grant authorized by Congress.”
University of South Alabama v. The American Tobacco
Co., 168 F.3d 405, 409 (11th Cir. 1999) (quoting
Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir.
1994)). Accordingly, an “Article III court must be sure
of its own jurisdiction before getting to the merits”
of any action. Ortiz v. Fiberboard Corp., 527 U.S.
815, 831 (1999) (citing Steel Co. v. Citizens for a
Better Environment, 523 U.S. 83, 88-89 (1998)). A
removing defendant bears the burden of proving that federal
jurisdiction exists. See, e.g., Leonard v.
Enterprise Rent A Car, 279 F.3d 967, 972 (11th Cir.
2002); Williams v. Best Buy Co., 269 F.3d 1316,
1319-20 (11th Cir. 2001).
statutes must be construed narrowly, and “all
uncertainties as to removal jurisdiction are to be resolved
in favor of remand.” Russell Corp. v. American
Home Assurance Co., 264 F.3d 1040, 1050 (11th Cir.
2001) (citing Burns v. Windsor Insurance Co., 31
F.3d 1092, 1095 (11th Cir. 1994)). The court must focus upon
jurisdictional facts alleged on the date the case was removed
from state court. See, e.g., Burns, 31 F.3d at 1097
n.13 (“Jurisdictional facts are assessed on the basis
of plaintiff's complaint as of the time of
removal.”) (emphasis in original) (citations
The Allegations of Plaintiff's Complaint
state court action was commenced by the Franklin County
Commission (“plaintiff” or “the
Commission”), which is an Alabama
resident. The Commission sued the following
defendants: (1) Crista Madden, an Alabama resident; (2) State
Farm Fire and Casualty Company (“State Farm”), an
Illinois resident; (3) Lafayette Insurance Company
(“Lafayette”), a Louisiana resident; (4) Sinclair
Lawrence & Associates, Inc., an Alabama resident; and (5)
Debbie Thorn, an Alabama resident.Madden, a former Commission
employee, stole $753, 889.21 from the Commission between 2008
and 2017. State Farm insured the Commission for
employee theft, but it refused to pay the Commission's
claim for Madden's theft. Lafayette insured the
Commission for employee theft under a separate policy
purchased through Sinclair Lawrence & Associates, but
Lafayette also refused to pay the claim. Defendant Debbie
Thorn was an agent for Lafayette.
Commission asserts state law claims for: (1) conversion
against Crista Madden; (2) breach of contract against State
Farm; (3) breach of contract against Lafayette; and (4)
fraudulent suppression against Sinclair Lawrence &
Associates, Lafayette, and Debbie Thorn.
Lafayette's Notice of Removal and Plaintiff's Motion
removed the state case here on February 7, 2019, asserting
federal jurisdiction based upon satisfaction of the
requirements of the diversity statute. See
28 U.S.C. § 1332(a) (“The district courts shall
have original jurisdiction of all civil actions where the
matter in controversy exceeds the sum or value of $75, 000,
exclusive of interest and costs, and is between - (1)
citizens of different States.”).
the Commission is seeking insurance coverage for theft in
excess of $750, 000, it is patently clear that more than the
jurisdictional amount is in controversy. It equally clear,
however, that there is not complete diversity of citizenship,
because defendants Crista Madden, Sinclair Lawrence &
Associates, and Debbie Thorn are Alabama residents, as is the
plaintiff, Franklin County Commission. Even so, Lafayette
asserts that the non-diverse defendants were fraudulently
joined, and their Alabama citizenship should be disregarded.
See, e.g., Wilson v. Republic Iron and Steel
Co., 257 U.S. 92, 97 (1921) (holding that a diverse
defendant's “right of removal cannot be defeated by
a fraudulent joinder of a resident defendant having no real
connection with the controversy”). Plaintiff contests
that assertion in its motion to remand, insisting that the
claims against all non-diverse defendants are valid, and that
those defendants' presence in this case prevents this
court from exercising diversity jurisdiction.
Plaintiff's Claims Against Crista Madden
asserts that Crista Madden was improperly joined under
Federal Rule of Civil Procedure 20 because: Madden is not
jointly or severally liable with the other defendants;
plaintiff's claims against Madden do not arise out of the
same transaction or occurrence as the claims against the
other defendants; and there is no question of law or fact
common to all defendants. See Colormasters, LLC v.
Research Solutions Group, Inc., No. 4:17-CV-0561-VEH,
2017 WL 3605337, at *3 (N.D. Ala. Aug. 22, 2017) (quoting
Triggs v. John Crump Toyota, Inc., 154 F.3d 1284,
1287 (11th Cir. 1998)) (“The Eleventh Circuit . . .
recognizes a third type of fraudulent joinder where ‘a
diverse defendant is joined with a nondiverse defendant as to
whom there is no joint, several, or alternative liability and
where the claim against the diverse defendant has no real
connection to the claim against the nondiverse
defendant.'”); see also Fed. R. Civ. P.
20(a)(2) (providing that persons may be joined in one action
as defendants if: “any right to relief is asserted
against them jointly, severally, or in the alternative with
respect to or arising out of the same transaction,
occurrence, or series of transactions or occurrences, ”
and “any question of law or fact common to all
defendants will arise in the action”).
court agrees. Plaintiff's conversion claim against Crista
Madden is based solely upon Madden's embezzlement of the
Commission's money. Only Madden can be held liable for
that claim, and her liability likely would not be disputed,
considering that she pled guilty to criminal charges that
grew from the theft. In contrast, all of plaintiff's
other claims (for breach of contract against State Farm and
Lafayette, and fraudulent suppression against Sinclair
Lawrence & Associates, Lafayette, and Thorn) relate to
either the issuance or payment of insurance policies. Madden
had nothing to do with those policies, so she would not be
subject to joint and several liability with the other
defendants. Madden's theft did not arise out of the same
transaction, occurrence, or series of events as the insurance
companies' alleged breach of their insurance contracts or
the alleged fraudulent suppression of material facts by
Sinclair Lawrence & Associates, Lafayette, and Thorn.
Finally, plaintiff's conversion claim against ...