Gilbert v. Alarm One Inc.

          MEMORANDUM OPINION AND ORDER

          MADELINE HUGHES HAIKALA UNITED STATES DISTRICT JUDGE

         This action is before the Court on a motion to remand. (Doc. 9). The plaintiffs, as personal representatives of the estates of James Allman and Barbara Piper Allman, allege that Alarm One, Inc. and ADT, LLC, installers and providers of home monitoring services, are liable for the deaths of James and Barbara Allman in a March 19, 2017 fire. The plaintiffs assert five state law causes of action against the defendants: negligence, wantonness, breach of contract, breach of the Alabama Extended Manufacturers Liability Doctrine, and breach of warranty. (Doc. 1-2, pp. 2-9).

         Despite the presence of Alarm One, a non-diverse defendant, ADT removed the plaintiffs' complaint to federal court on the basis of diversity jurisdiction. (Doc. 1). In its notice of removal, ADT argues that the plaintiffs fraudulently joined Alarm One as a defendant to destroy federal jurisdiction. (Doc. 1, p. 4, ¶ 10). The plaintiffs disagree. (Doc. 9). For the reasons described below, the Court grants the plaintiffs' motion to remand.

         I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         The plaintiffs allege that the ADT system installed at the decedents' home caused the deaths of James and Barbara Allman during a fire. (Doc. 1-2, p. 3, ¶¶ 1-2). On March 11, 2002, the Allmans bought from Alarm One an ADT system equipped with a heat detector and fire alarm. (Doc. 1-2, p. 5, ¶¶ 15-19). The plaintiffs allege that the Allmans paid all monthly charges related to the alarm system. (Doc. 1-2, p. 5, ¶ 20).

         On March 19, 2017 a fire started in the Allmans' kitchen. (Doc. 1-2, p. 5, ¶ 21). The plaintiffs allege that the alarm system did not alert Mr. and Mrs. Allman of the fire or notify authorities. (Doc. 1-2, p. 5, ¶¶ 22, 24). The plaintiffs allege that Mr. and Mrs. Allman died because of “the negligence and breach of contract of [ADT and Alarm One].” (Doc. 1-2, pp. 5-6, ¶¶ 24, 26).

         In this action, the plaintiffs seek punitive damages for the deaths of Mr. and Mrs. Allman.^[1] In their initial state court complaint, the plaintiffs named as defendants ADT Alabama, Corp., Alarm One, Inc., and multiple fictitious defendants. (Doc. 1-1, pp. 3-5). In their first amended complaint, the plaintiffs eliminated as a named defendant Alabama ADT and added defendant ADT, LLC, alleging that ADT, LLC is a “foreign corporation with its principal place of business in Boca Raton, Florida.” (Doc. 1-1, pp. 34-35; Doc. 1-2, pp. 2-4).^[2] The plaintiffs allege that Alarm One and ADT are liable for negligence, wantonness, breach of contract, breach of Alabama's Extended Manufacturers Liability Doctrine, and breach of warranty. (Doc. 1-2, pp. 2-9).

         Citing 28 U.S.C. §§ 1332 and 1441, ADT removed this action to federal court. (Doc. 1). ADT contends that Alarm One is not a legitimate defendant because Alarm One assigned all contractual rights and liabilities to ADT before the fire. (Doc. 1, p. 4). ADT also contends that Alarm One is a non-existent company and therefore not a proper party in interest. (Doc. 1, p. 4). The plaintiffs ask the Court to return this action to state court. (Doc. 9).

         ANALYSIS

         For federal jurisdiction to exist under 28 U.S.C. § 1332(a), there must be complete diversity of citizenship, and the amount in controversy must exceed $75, 000.00, exclusive of interest and costs. 28 U.S.C. § 1332(a); Underwriters at Lloyd's, London v. Osting-Scwinn, 613 F.3d 1079, 1085 (11th Cir. 2012). “[D]iversity jurisdiction is determined at the time of filing the complaint or, if the case has been removed, at the time of removal.” PTA-FLA v. ZTE USA, Inc., 844 F.3d 1299, 1306 (11th Cir. 2016). Generally, when jurisdiction is lacking because, for example, a defendant is a citizen of the state in which the plaintiff filed suit, then a district court must remand the action to state court. But “if a defendant shows that ‘there is no possibility the plaintiff can establish a cause of action against the resident defendant,' then the plaintiff is said to have fraudulently joined the non-diverse defendant.” Florence v. Crescent Resources, Inc., 484 F.3d 1293, 1297 (11th Cir. 2007) (quoting Henderson v. Washington Nat. Ins. Co., 454 F.3d 1278, 1281 (11th Cir. 2006)) (footnote omitted). “In that situation, the federal court must dismiss the non-diverse defendant and deny any motion to remand the matter back to state court.” Florence, 484 F.3d at 1297; see also Henderson, 454 F.3d at 1281.

         The Eleventh Circuit Court of Appeals has identified three scenarios in which a non-diverse defendant may be fraudulently joined: (1) “when there is no possibility that the plaintiff can prove a cause of action against the resident (non- diverse) defendant”; (2) “when there is outright fraud in the plaintiff's pleading of jurisdictional facts”; and (3) “where a diverse defendant is joined with a non-diverse 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 non-diverse defendant.” Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998) (citations omitted). The removing party bears the heavy burden of proving fraudulent joinder. Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir. 1997); see generally Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353 (11th Cir. 1996), abrogated on other grounds, Cohen v. Office Depot, Inc., 204 F.3d 1069 (11th Cir. 2000).

         When deciding a motion to remand, a district court must resolve jurisdictional doubts in favor of remand. Scimone v. Carnival Corp., 720 F.3d 876, 882 (11th Cir. 2013) (“[A]ll uncertainties as to removal jurisdiction are to be resolved in favor of remand.”). With respect to the first fraudulent joinder scenario, the district court may deny a motion to remand when the defendants prove “by clear and convincing evidence that there is no possibility that [the plaintiff] can establish a cause of action against the resident defendant.” Henderson, 454 F.3d at 1283 (internal citations omitted). A plaintiff does not have to a have winning case; “he need only have a possibility of stating a valid cause of action in order for the joinder to be legitimate.” Triggs, 154 F.3d at 1287. “In making its determination, the district court must evaluate factual allegations in the light most favorable to the plaintiff and resolve any uncertainties about the applicable law in the plaintiff's favor.” Pacheco de Perez v. AT&T Co., 139 F.3d 1368, 1380 (11th Cir. 1998).

         A. Sufficiency of the Complaint

         The plaintiffs assert both tort and contract claims. In their amended complaint, the plaintiffs do not indicate which defendant is alleged to have committed each act. (Doc. 1-2). ADT argues that “each of plaintiff's claims does nothing more than generally incorporate the same fact allegations and recite legal conclusions, preventing ADT and the Court from deciphering Alarm One's alleged role in Plaintiff's loss.” (Doc. 20, p. 10). But a state court plaintiff does not have to comply with federal pleading standards when filing a state court complaint. See Henderson, 454 F.3d at 1284 (“[T]he decision as to the sufficiency of the pleadings is for the state courts, and for a federal court to interpose its judgment would fall short of the scrupulous respect for the institutional equilibrium between the federal and state judiciaries that our federal system demands.”). Because the plaintiffs originally filed this action in an Alabama state court, this Court must apply Alabama's notice-pleading standard to evaluate the amended complaint. Ala. Rules of Civ. Pro. Rule 8 (a); see Mitchell v. Mitchell, 506 So.2d 1009, 1010 (Ala. 1987) ...