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Rudolph v. King

United States District Court, M.D. Alabama, Northern Division

October 17, 2019

DAVID KING et al., Defendant.



         I. Introduction

         On April 30, 2019, the Plaintiff filed suit against the Defendants in the Circuit Court of Montgomery County, Alabama. The Plaintiff asserts various claims against the Defendants arising out of a May 2017 agreement between the Plaintiff and Defendants to set up mobile homes. (Doc. 1-1, at 3). In connection with his work setting up mobile homes for the Defendants, the Plaintiff alleges that he submitted over $150, 000.00 worth of invoices, yet the Defendants only issued $34, 000.00 in payment. Id. Moreover, the Plaintiff alleges that the Defendants made statements that induced him to continue working on the mobile homes despite the outstanding invoice balance. Id. Specifically, the Plaintiff contends that Michelle Belcher, an employee of the Defendants and a named defendant in the instant case, made copies of the outstanding invoices and assured the Plaintiff that he would be paid for his work. Id. at 4. The Plaintiff alleges that he relied on Belcher's statement and performed additional work on the mobile homes. Id. at 3. According to the Plaintiff, the Defendants stopped all payments under the agreement in September of 2017. Id. at 4. Based on these allegations, the Plaintiff asserts claims against the Defendants for breach of contract, fraud, fraudulent suppression, negligence, and wantonness. Id. at 5-7.

         On June 3, 2019, the Defendants filed a notice of removal in the United States District Court for the Middle District of Alabama. (Doc. 1). The Defendants founded their notice of removal on diversity jurisdiction, alleging that the Plaintiff fraudulently joined non-diverse defendant Belcher because “there is no possibility that the Plaintiff can establish a cause of action against her.” Id. at 6.

         On July 3, 2019, the Plaintiff filed a motion to remand. (Doc. 9). In his motion, the Plaintiff contends that Belcher has not been fraudulently joined, thus showing a lack of diversity of citizenship in this case. Id. at 2. For the reasons that follow, the Court concludes that the motion to remand is due to be granted.

         II. Jurisdiction

         Defendants FSI Evergreen Estates Property LLC, Meritus Communities, LLC, Meritus Property Management LLC, and Michelle Belcher (the “Defendants”)[1] assert that removal jurisdiction is proper pursuant to 28 U.S.C. §§ 1331, 1332, 1441, and 1446 because the parties are completely diverse and the amount in controversy exceeds $75, 000. The Plaintiff, Rodney Rudolph, disagrees and moves to remand, asserting that the Court lacks subject matter jurisdiction because the parties are not completely diverse.

         III. Standard of Review

         “Federal Courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute.” Dudley v. Eli Lilley & Co., 778 F.3d 909, 911 (11th Cir. 2014) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). In light of their limited jurisdiction, federal courts are “obligated to inquire into subject-matter jurisdiction sua sponte whenever it may be lacking.” Charon-Bolero v. Att'y Gen., 427 F.3d 954, 956 (11th Cir. 2005). When jurisdiction turns on removal, “federal courts are directed to construe removal statutes strictly” and “all doubts about jurisdiction should be resolved in favor of remand to state court.” University of South Alabama v. American Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999). Moreover, “in evaluating a motion to remand, the removing party bears the burden of demonstrating federal jurisdiction.” Triggs v. John Crump Toyota, 154 F.3d 1284, 1287 (11th Cir. 1998) (citing Pacheco de Perez v. AT & T Co., 139 F.3d 1368, 1373 (11th Cir. 1998)).

         IV. Discussion

         A. Fraudulent Joinder Standard

         A state court defendant may remove an action based on either federal question or diversity jurisdiction. Stillwell v. Allstate Ins. Co., 663 F.3d 1329, 1332 (11th Cir. 2011). Removal founded on diversity jurisdiction requires complete diversity between the parties. Id. If complete diversity between the parties does not exist, then the district court must remand the case to state court. Id.

         However, an exception to the complete diversity requirement exists “[w]hen a plaintiff names a non-diverse defendant solely in order to defeat federal diversity jurisdiction . . ..” Henderson v. Washington Nat. Ins. Co., 454 F.3d 1278, 1281 (11th Cir. 2006). This exception, known as “fraudulent joinder, ” requires the district court to “ignore the presence of the non-diverse defendant and deny any motion to remand the matter back to state court.” Id.

         A removing party may establish fraudulent joinder in any one of three ways: first, “when there is no possibility that the plaintiff can prove a cause of action against the resident (non-diverse) defendant”; second, “when there is outright fraud in the plaintiff's pleading of jurisdictional facts”; and third, “where a diverse defendant is joined with a nondiverse defendant as to whom there is no joint, several or alternative liability and where the ...

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