Shipley v. Helping Hands Therapy

          ORDER

          CALLIE V. S. GRANADE SENIOR UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiff's Motion to Remand. The Magistrate Judge has entered a Report and Recommendation recommending that Plaintiff's motion be denied, to which Plaintiff has filed an Objection. (Doc. 42). After review of the relevant pleadings, the undersigned finds Plaintiff's objection compelling, in part. As such, for the reasons set forth herein below, Plaintiff's Motion to Remand is GRANTED.

         BACKGROUND^[1]

         Plaintiff, Bettye R. Shipley (“Shipley” or “Plaintiff”), commenced this action on October 12, 2017, in the Circuit Court of Hale County, Alabama. (Doc. 1-1at 3). In her complaint, Shipley names as Defendants Helping Hands Therapy/Greensboro Out-Patient Clinic and Sarah Beaugez, PT. (Id.). Shipley asserts that she had a left knee replacement and underwent prescribed physical therapy with Helping Hands Therapy, located in Greensboro, Alabama, to regain strength and range of motion in her left knee. Shipley contends that, on September 8, 2016, Defendant Sarah Beaugez, a physical therapist with Helping Hands Therapy, forced her leg to bend to fourteen degrees beyond her tolerance, and in so doing, caused her left knee replacement to fail. (Id. at 3-4). Shipley contends that she was unable to walk or do anything for two weeks, that she is unable to walk properly and needs another surgery, that she is in constant pain and requires daily pain medication, and that she must use a wheel chair and a riding buggy in order to get around places such as the grocery store. (Id.). Shipley asserts that Beaugez acted negligently and with wantonness, and seeks compensatory and punitive damages. (Id.)

         On October 11, 2018, New Hope LLC d/b/a Helping Hands Therapy/Greensboro Out-patient Clinic filed a Notice of Removal. (Doc. 1). On the same date, Defendant Beaugez filed a notice of consent and joinder in the removal. (Doc. 3). Defendants assert the existence of complete diversity because Shipley is a resident of Alabama; New Hope LLC is a Mississippi corporation, with its principal place of business in Meridian, Mississippi, and its three members are Jia Liu, Roshanda Lankford, and Bailing Wang, residents of Georgia, Mississippi, and Georgia respectively.^[2] (Doc. 1-2). Defendants further contend that Defendant Beaugez was a resident of Mississippi at the time the lawsuit was filed in October 2017 and that she had an intent to remain there at that time. (Doc. 1 at 3).

         With respect to the amount in controversy, Defendants contend that on May 24, 2018, in response to Helping Hands' interrogatories, Shipley claimed to be housebound for most of the time since her injury on September 8, 2016, and that she now requires the use of a cane and has slept in a recliner for over two to three years. She also indicated that she had to have another surgery in January 2018 and that she had filed a claim for disability due to the injuries she sustained as a result of Beaugez's actions. (Doc. 1-1 at 151, Plaintiff's Interrogatory Responses, Nos. 10, 11, and 14).

         Defendants assert that subsequent thereto, Helping Hands issued Requests for Admissions to Shipley requesting that she admit or deny that that her damages exceed $75, 000 and that she would accept more than $75, 000. (Doc. 1, Doc. 1-1 at 161-62). Shipley responded that she was unable to admit or deny the admission requests, and in response thereto, Defendants requested that she amend her discovery responses. (Id.). When Shipley refused to do so, Helping Hands filed a motion to compel in state court and requested an order directing Shipley to supplement her responses by October 1, 2018. (Id.at 6). The state court scheduled the matter for a hearing on November 5, 2018, which was more than one year after Shipley had filed her complaint in state court. Defendants requested that the hearing date be moved up, but Shipley refused. (Id.at 10).

         Defendants contend that this case became removable on October 1, 2018, when Shipley refused to respond to Defendants' requests regarding damages with full knowledge that the one-year limitation for removal was approaching. (Doc. 1-1 at 10). Defendants further assert that Plaintiff's refusal to limit her damages and refusal to agree to moving up the hearing date for the summary judgment motion shows an intent to dodge jurisdictional inquiries in an effort to defeat removal jurisdiction. (Id.). According to Defendants, those refusals, coupled with the injuries claimed and damages sought in Shipley's complaint and interrogatory responses provided Defendants with the evidence necessary to ascertain that Plaintiff was seeking more than $75, 000 and unambiguously establishes that the amount in controversy exceeds $75, 000. Defendants thus argue that the case was timely removed. (Id.)

         Shipley filed her motion to remand on November 8, 2018. (Doc. 10). In her motion to remand, Shipley argues that a record from the Alabama Secretary of State clearly shows that Helping Hands Therapy is an Alabama limited liability company incorporated in Alabama; thus, there is no diversity jurisdiction. (Doc. 10at 4). Shipley further asserts that even if Helping Hands Therapy is a trade name for a Mississippi business, at the time the lawsuit was filed, its principal place of business was Alabama under the “nerve center test” given that all three of its clinics are located in Alabama. (Id. at 5). Shipley contends that Meridian, Mississippi cannot possibly be Helping Hands' “nerve center” because there is no corporate activity occurring there, as all of its clinics are located in Alabama. (Id.)

         With respect to the amount in controversy, Shipley asserts that she “does not intend to waive an argument that the amount in controversy is less than $75, 000” and “that the issue is moot without complete diversity.” (Id. at 7). Plaintiff also contends that contrary to Defendants' assertion, she refused to move up the hearing date in state court because the motion to compel was “obviously frivolous, ” and Defendants' only goal was to try to establish diversity jurisdiction. (Id. at 8).

         In Defendant Beaugez's response in opposition to Shipley's motion to remand (Doc. 16), Beaugez asserts that the sole basis for Shipley's motion is her contention that Helping Hands is a citizen of Alabama. Beaugez notes that Shipley made no argument contesting the amount in controversy and offered no evidence to rebut Helping Hands' showing that the amount in controversy is satisfied. (Id.).

         Defendant Helping Hands also filed a response in opposition to Shipley's motion. (Doc. 14). Helping Hands argues that Shipley's motion actually bolsters Defendants' contention that the amount in controversy exceeds $75, 000. (Doc. 18). According to Helping Hands, Shipley has indicated that she is seeking compensatory and punitive damages for significant physical harm, increased medical costs, pain, suffering and other damages, that she cannot walk properly and is in constant pain and that she takes pain medication daily and uses a wheelchair and riding buggy at places such as the grocery store. Helping Hands asserts that such evidence is sufficient to establish that the amount in controversy exceeds $75, 000. (Id. at 7).

         With respect to diversity, Helping Hands contends that contrary to Shipley's assertions, for diversity purposes, a limited liability company, unlike a corporation, is a citizen of any state of which a member of the company is a citizen, and it matters not where the company was formed or has its principal place of business. (Id.at 6). Helping Hands further contends that the uncontroverted evidence establishes that Helping Hands Therapy, LLC was not formed until March 2018 and that the allegations in Plaintiff's complaint relate to services provided at a clinic operated by New Hope, LLC, which was doing business under the trade name Helping Hands Therapy. (Id. at 5). Additionally, Defendant asserts that at the time this lawsuit was filed, and at the time of removal, New Hope, LLC d/b/a Helping Hands Therapy, had three members, namely Jia Liu, Roshanda Lankford, and Bailey Wang, who were citizens of Georgia, Mississippi, and Georgia respectively. (Id. at 6). Helping Hands also asserts that it has demonstrated, and Shipley has not contested, that she is a citizen of Alabama, and Sarah Beaugez is a citizen of Mississippi. Thus, diversity of citizenship has been established. (Id.).

         On December 4, 2018, Shipley filed her reply to Defendants' response in opposition to her motion to remand. (Doc. 21). In her reply, Shipley argues that the removal was untimely. (Id.at 1). According to Shipley, while Defendants contend that they did not know that the amount in controversy exceeded $75, 000 until October 1, 2008, her factual allegations did not change between the filing of her complaint on October 11, 2017, and October 1, 2018, the date Defendants contend they were on notice that the amount in controversy exceeds $75, 000. (Id. at 2). Shipley also asserts that assuming that Helping Hands is a citizen of Mississippi and Georgia, diversity jurisdiction is still lacking because Defendant Beaugez is a citizen of Alabama notwithstanding her representations to the Court. Shipley avers that Beaugez has an Alabama driver's license, appears to own a car with a current Alabama registration, is registered to vote and has voted in Alabama, and in July 2017 and July 2018, she received two traffic tickets in Alabama, and both tickets reflect an Alabama home address. (Id. at 3-4).

         Defendant Beaugez filed a response in opposition to Plaintiff's response. (Doc. 31). In her response, Beaugez argues that the removal was timely and that at the time the lawsuit was filed in October 2017, she physically resided in Mississippi and had the intent to remain there. (Id.) Helping Hands also filed a response to Shipley's reply (Doc. 30). Helping Hands argues that the removal was timely and that Beaugez was a citizen of Mississippi at the time the Complaint was filed. (Doc. 30). Following the evidentiary hearing on March 6, 2019, the parties filed supplemental briefs, at the Court's directive, on the issue of whether the removal was timely filed. (Docs. 37, 38). Shipley asserts that Defendants' removal was untimely, while Defendants allege that the removal was timely filed and that Shipley waived the timeliness issue by not raising it in her motion to remand. On June 19, 2019, the Magistrate Judge issued a Report and Recommendation recommending that Plaintiff's motion be denied. (Doc. 41). Plaintiff filed the instant objection on July 2, 2019. (Doc. 42).

         STANDARD OF REVIEW

         A removing defendant has the burden of proving proper federal jurisdiction. See Adventure Outdoors, Inc. v. Bloomberg, 552 F.3d 1290, 1294 (11th Cir. 2008); Friedman v. New York Life Ins. Co., 410 F.3d 1350, 1353 (11th Cir. 2005) (“In removal cases, the burden is on the party who sought removal to demonstrate that federal jurisdiction exists.”) (citation and internal brackets omitted); McCormick v. Aderholt, 293 F.3d 1254, 1257 (11th Cir. 2002) (noting that “the party invoking the court's jurisdiction bears the burden of proving, by a preponderance of the evidence, facts supporting the existence of federal jurisdiction.”); Pacheco de Perez v. AT&T Co., 139 F.3d 1368, 1373 (11th Cir. 1998) (“In a motion to remand, the removing party bears the burden of showing the existence of federal jurisdiction.”). Because removal infringes upon state sovereignty and implicates central concepts of federalism, removal statutes must be construed narrowly, with all doubts resolved in favor of remand. See University of S. Ala. v. American Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). Furthermore, “once a federal court determines that it is without subject matter jurisdiction, the court is powerless to continue.” Underwriters at Lloyd's, London v. Osting-Schwinn, 613 F.3d 1079, 1092 (11th Cir. 2010) (citation and internal brackets omitted).

         “Eleventh Circuit precedent permits district courts to make reasonable deductions, reasonable inferences, or other reasonable extrapolations from the pleadings to determine whether it is facially apparent that a case is removable.” SUA Ins. Co. v. Classic Home Builders, LLC, 751 F.Supp.2d 1245, 1252 (S.D. Ala. 2010) (quoting Roe v. Michelin North America, Inc., 613 F.3d 1058, 1061-62 (11th Cir. 2010)). Courts may use judicial experience and common sense to determine whether the case stated in the complaint meets the requirements for federal jurisdiction. Id. ...